Clarification: This story's original headline was amended to clarify that New Plymouth ratepayers have not yet been charged.
The New Plymouth District Council building. File photo. Photo: RNZ / Robin Martin
An urgent review of New Plymouth District Council's (NPDC) annual plan has revealed that it has hiked residential rates by 12.8 percent, rather than the 9.9 percent indicated.
The blunder equates to $102 per ratepayer or $3.1 million.
The error was discovered as part of a review ordered when the NPDC approved its annual plan in May, exclusive of GST, meaning it could've forgone $20m in revenue.
New Plymouth Mayor Neil Holdom took personal responsibility for the mistakes and recommended that councillors approve a one-off rebate for ratepayers at an extraordinary meeting next week.
That would require the NPDC to find $3.1 million in savings elsewhere.
It was not the only mistake in the latest review.
The review and subsequent report produced by Simpson Grierson also identified a resolution wording error relating to industrial water use.
The rates resolution wording would need to be amended to ensure properties on a restricted water flow were able to be charged $418 for each cubic metre of water as intended.
This gaffe could've cost the council $1.4m in lost revenue.
Holdom said he was extremely disappointed by the errors and the impact they could have had on the community.
"As mayor, I take responsibility for the integrity of the information we use to make decisions. Councillors acted in good faith based on the data presented to us.
"We now know that information was flawed, and the safeguards we had to verify the validity of that information and the assumptions behind it have failed.
"I want to offer my sincere apology to our community. You deserve better. The buck stops with me, and I am committed to ensuring we learn from this, fix the underlying issues, to rebuild public confidence and find a way to put this right."
Holdom said the reporting errors did not affect the validity of the rates, but the council was taking action to mitigate their impact.
At an extraordinary meeting on 22 July, the NPDC council would decide between the following options:
- Retain the 12.8 percent residential rate.
- Provide a one-off remission (refund) for all residential properties to ensure the average residential increase equals 9.9 percent, costing up to $3.1m.
- Reconsider the commercial rating differential drop this year from 4 to 3.
Holdom said improvements to NPDC's internal processes and checks would be implemented immediately following the findings of the independent review.
Chief executive Gareth Green proposed structural changes to strengthen financial capability and oversight within the organisation.
"On behalf of the NPDC organisation, I wish to offer my sincere apologies to the mayor and councillors, and our entire community, for the failure of our systems and processes that led to these errors."
"As the leader of the staff organisation of NPDC, it is my responsibility to ensure that we have adequate safeguards to ensure that every piece of advice we provide our elected members is accurate and robust.
"That clearly has not been the case in this instance, and this failing shows that change is required."
Green said he was committed to implementing changes swiftly and building back the trust and confidence of the community.
Holdom said councillors would also be asked to update council policy to implement an independent review of all future financial plans.
"This situation highlights the risks of insufficient specialist financial experience, particularly in local government."
Holdom said that while Audit NZ signed off on the long-term planning process that included the incorrect rating assumption, "the community rightly expects that process to provide assurance [that] the underlying models and data are robust".
"That assurance did not eventuate in this case. We owe it to our community to be honest, to take ownership, and to do better. That's exactly what we are doing."
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