21 December 2021
Media: Local Democracy Reporter
Topic: Terax
Enquiry
I have some comments from various members of the community regarding Terax I would like to provide to the council for the right of reply.
The mayor is also invited to comment in reply if she wishes / where appropriate.
There is also a comment from Stuart Crosby which may be considered critical of the directors of Terax, so Stavros may wish to respond to that as one of its directors.
If there are comments the council and or mayor would like to make, can I please have those by 2pm today.
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COMMENTS
Fletcher Tabuteau said the same decisions likely wouldn’t have been made today with the council debt levels what they were, as the council ended up “spending a lot of money”.
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Tabuteau, a former MP and NZ First deputy leader, believed it would have been better to get commercial partners on board to help fund the project, or seek more funding from the government to carry more of the risk.
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Reporoa Residents and Ratepayers Association committee secretary Karen Barker said Terax was, in her opinion, a “hugely ill-advised project” that successive councils had “endorsed”.
“We think ratepayers should be concerns about how this project continued for so long, cost so much and for no benefit at all.”
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Rotorua district councillor Raj Kumar said he believed “vanity and ego” played a part in the funding of the project.
“We have wasted a lot of money on Terax.
“It is still money that should be invested wisely, we are not there to squander money.”
He said Terax was an example of a council being commercial, while now it had gone too far the other was and was “trying to become socialist” with an emphasis on well-being.
“We have to learn from mistakes we have made. Ratepayers are not an open cheque book.”
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Local Government NZ president Stuart Crosby said he believed councillors making decisions about Terax made decisions in good faith based on the information they had in front of them from council officers.
He said it was ultimately always down to councillors to make decisions and on a project like Terax there was a “degree of risk” and it was a question of whether or not it was an “acceptable risk” or a good investment.
Councillors also had a fiduciary duty to constituents – to be good stewards of public money – and had to “have the courage to say stop” and accept sunk cost.
He said it was not unusual for councils to get involved in projects like Terax, but it “can be unusual to commercialise it”.
Crosby believed elected members had done their best on behalf of ratepayers with the information provided to them by council officers, and he said the viability of the project was ultimately down to its directors.
He said the council could have partnered with other local authorities to spread the financial risk of the project, but it would be unfair to say Terax was a bad investment, without having been in the shoes of elected members at the time.
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Curtin University local government expert Dr Andy Asquith said Terax reinforced that councils were not a business but accountable to citizens, not shareholders.
“Their job is not to make money, it’s to provide services to all the citizens.
He said it also showed the skills require in a commercial environment were very different to those in the public service, and council officers were “making decisions they’re not really qualified to make”.
However, he said elected members should also take responsibility.
“It would appear no one was really asking the ‘why’ question.”
He said the risk the council took with Terax was “clearly” inappropriate.
“What was the difference between that and the councillors going to the casino?”
He believed due diligence “wasn’t done as it should have been” in the case of Terax, and he believed council officers had too much influence over councillors – something he said was called “bureaucratic capture”.
“Councillors need to stand up and need to have a far better calibre, and better training and development, and chief executives need to understand the democratic process and their role.”
He believed Rotorua Lakes Council had not been transparent enough about the full story of Terax, and a lack of openness on issues like it led to disengagement from voters.
“The default model is secrecy.”
Response
From Stavros Michael, DCE Infrastructure and Environment:
A technological solution to dealing with wastewater sludge was investigated and attempts were made to also realise some commercial benefit but ultimately, Terax did not deliver what the council of 2008 had anticipated. I can’t comment about the thinking or decisions made prior to my time but Council decided in July 2018, on recommendation from the directors, to wind up the company, having withdrawn funding the previous year.
Please note: Mr Michael was a director for about 6 months prior to the July 2018 decision.
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Media: Stuff
Topic: Lobbying to prevent more MIQ in Rotorua
Enquiry
Benn from Stuff here, dropping you a line to ask for some comment from Mayor Steve?
To provide some background, I'm working on a summer story about the lobbying that went on here against Rotorua hosting an additional MIQ facility.
I'm seeking comment from a number of people involved, so of course wanted something from Steve too.
I wanted to ask:
When he announced Christchurch would be the location for the additional MIQ facility, Minister Chris Hipkins said Rotorua was considered, but "rejected primarily because of health and MIQ workforce constraints“.
Does Steve think lobbying, especially from the Lakes DHB, helped make this constraint clear to the Minister?
This issue seemed to attract a genuine consensus, politically, in Rotorua, with Todd McClay, Rawiri Waititi and Tamati Coffey all on the same page - again does Steve think this helped making the case that Rotorua was not suitable for additional MIQ?
Response
Reporter was advised Mayor Chadwick is currently on leave, was provided with her previous statement about this HERE and indicated he could use that for his article.