What is a CUO?
That is my acronym for a CCO, an inaptly named Council Controlled Organisation.
I like to call them Council UNCONTROLLED Organisations.
Councillors, Local Board members and especially ratepayers experience undue difficulty in engaging in dialogue with them. I was therefore totally gob-smacked when I read a report presented to my Local Board, the Henderson-Massey LB, on 17 April 2014. The report was entitled “Local Board input into the council-controlled organisations current state assessment.” It claimed “CCOs were seen to deliver well for Auckland, and significant progress has been made over the last 3 years.”
I’ll comment on 3 CUOs I’ve had dealings with:
Auckland Transport (AT)
In September 2011 some residents of Te Atatu Rd and Edmonton Rd were advised that parts of their properties had been identified as necessary for road widening. The letter was signed by Mohammed Alsakini from AT and enclosed a pamphlet stating “Auckland Council has authority to acquire land under the Act (Public Works Act) and to negotiate compensation for that land. It is responsible for ensuring that the compensation is negotiated fairly in the interests of both ratepayers and affected landowners.”
In October 2011 TPOG (Te Atatu Property Owners Group) was formed to share information.
In November 2011, at a meeting with Mr Alsakini and Mr Rasool from Auckland Transport I was told it was “too early to discuss individual cases.”
In December 2011 Owena Schuster from Auckland Transport advised me they would like to set up a meeting with me to “talk through” TPOG’s concerns. TPOG’s secretary and I attended the meeting that was chaired by Roger Wilson. He opened by saying we were there to look at the big picture but I reminded him we had been invited to talk through our concerns. I produced a typed list of 23 concerns. After we reached the third item it was clear he was not in a position to have an informed discussion.
In late January 2012 Auckland Council Property Limited advised us it had been appointed by Auckland Transport to negotiate.
In February 2012 I expressed my concerns in a detailed letter to Mike Lee, Councillor Board member of AT.
A lengthy time-consuming course of frustration then ensued.
In November 2012 Michael Riley, AT, wrote a “Cease and desist” letter to me. I responded immediately and also complained to the CEO, David Warburton. I had great difficulty in getting a response so complained to the Board Chairman, Lester Levy. Lester Levy said he regarded Mr Riley’s letter as “constructive”. Mr Levy also said he was a great believer in people meeting face to face. Three times I offered to meet him but he declined.
TPOG members were concerned at the parsimonious offers they were receiving for compensation. We continued to share information.
Eventually most TPOG members settled for two to three times what they were first offered. I was offered $20,000 – settled for $47,000.
Another member offered $12,000 settled for $40,000.
Another member offered $12,000 settled for $43,000.
How does Auckland Council “ensure” Fair compensation?
Watercare
When the new billing system of monthly accounts was introduced in August 2012 it produced a flood of errors and a flood of complaints.
My understanding of a contract had always been that it was a document setting out a formal agreement!
Not so, in the case of Watercare, if you look at the reverse side of your bill you will see “By receiving our water and wastewater services you are deemed to have accepted our customer contract. A copy of the contract is available on our website.”
Watercare claimed the monthly billing system was brought in because the majority of Aucklanders wanted it. I don’t accept that for a moment. There are about 550,000 water bill payers in Auckland. Does Watercare have signatures from 275,000 people saying that is what they want? – No!
How well do Watercare handle complaints?
Well in my case, my first bill was an assessment for about 4 times what it should have been. On 9 August 2012 I rang Watercare’s advertised number of 442 2222 and ended up in circumlocutory argument. Eventually I rang 539 7720 to discuss the matter with the Revenue Manager, Michael Graham. I sent him 8 specific questions by email.
On 23 August 2012, having received no answers, I emailed a formal complaint to Mark Ford, CEO, Watercare.
An hour later a Courier van arrived and delivered me a threatening letter from Sally Fitzgerald, Partner, Russell McVeagh. It accused me of intimidating Watercare staff and threatened to go to the Police. At 5 pm I sent an email to Sally Fitzgerald refuting her allegations and asked her to substantiate them.
On 28 August 2012, at 2.10 pm I spoke to Sally and told her I would lodge a complaint with the NZ Law Society unless she withdrew her allegations and threats and apologised. At 2.51 pm she emailed me “I am happy to offer you my apology in respect of recent correspondence. As discussed, the allegations I made in the letter are withdrawn.”
Auckland Council Investments Limited (ACIL)
In 2002 Waitakere City Council bought an apple cool store for $3.85m and leased space to the Film Industry.
In 2003 WCC invested another $880,000 into the project.
In 2005 at a meeting of Waitakere City Councillors (public excluded) it was decided to enter into a Public/Private partnership to expand the Film Studios. The anticipated returns were 6% – 14% pa. The original proposal was $6m (existing land and buildings WCC), $9m cash (private), $1m cash (Government grant)
In June 2006 WCC voted to enter into a joint venture with Tony Tay. Bob Harvey said “We looked here and overseas and we’re delighted to have Tony Tay and his team on board. They bring proven construction experience and commercial nous and are committed to the film and television industry as a whole.”
In July 2006 60,000 $100 shares in Prime West Ltd (now AFSL)were issued to Waitakere Properties Ltd and 75,000 to Tony Tay Trust Ltd.
On 29 June 2010 Tony Tay Group Ltd went into liquidation.
On 1 July 2010 following my growing concern about Tony Tay’s involvement as the major partner in the Film Studios I expressed it to all Councillors. The majority were dismissive but I must thank Paul Mitchell for at least being prepared to ask questions.
On 8 July 2010 I expressed my concerns at the Henderson Community Board meeting.
On 1 November2010 with the advent of the new Supercity ACIL became the body charged with supervision of AFSL (Auckland Film Studios Ltd). I expressed my concerns about the Film Studios to Gary Swift, ACIL’s CEO. I asked him why an unsecured loan had been advanced by Waitakere Properties Limited, a ratepayer entity. He told me he didn’t feel he had the right to ask such questions.
On 17 January 2011 Len Brown expressed confidence in the Film Studios on a talkback session on Radio Live.
On 19 January 2011 I had a meeting with Doug McKay, the new CEO of Auckland Council at which I expressed my very deep concern about Tony Tay’s involvement in the Film Studios.
Two days later Gary Swift stated “AFSL is trading at a small loss but the Board are hopeful that further TV or film productions will restore profitability. The Board are confident that costs can be contained.”
On 1 February 2011, Tony Tay Film Ltd, the majority shareholder in AFSL, was placed in receivership.
On 3 February 2011 I addressed the Henderson-Massey Local Board on the matter.
On 4 February 2011 I received an email from Doug McKay stating “As you predicted. Where to from here is what’s exercising my mind. Any ideas welcome.”
On 9 February 2011 I put in a LGOIMA request to Auckland Council seeking information on the Film studios.
On 10 February 2011 I addressed Auckland Councillors on the issue at a meeting of the Accountability and Performance Committee. I outlined a brief history of the Film Studios and said as they were not self-supporting it was time to quit them.
On 11 February 2011 Bob Harvey rang me and told me he had taken legal advice and threatened to sue me. I told him to get a life.
On 13 February 2011 it was revealed AFSL would have to repay $1m to Government if it ceased to operate as a Film Studio before 1 September 2014.
On 15 February 2011 the Western Leader quoted Penny Hulse as saying “If the company gets into trouble we still own the land and building. The ratepayers don’t need to be worried. There are no great losses at stake.” This demonstrated she did not have a clear understanding of the proposal she had voted for in May 2005.
On 2 March 2011 a report to the ACIL Board showed the Council’s share of its investment in AFSL had been written down from $6m to $3.329m.
On 7 March 2011 Gary Swift advised me they were extending their time to respond to my request of 9 February.
On 17 March 2011 I emailed Doug McKay chasing up my request dated 9 February.
On 18 March 2011 I received a letter dated 16 March 2011 from Wendy Brandon, General Counsel for Auckland Council advising me my entire LGOIMA request from 9 February 2011 was denied.
On 20 March 2011I lodged a complaint with the Ombudsmen.
On 23 May 2011 the Ombudsman advised “Auckland Council has notified an extension of time for its response to the notification of your complaint.”
On 3 August 2011 it was announced Auckland Council would buy the Tay shares for $1.5m. Gary Swift said “We have decided it’s a good investment and we will be 100 per cent owners, which is what it used to be when the Waitakere City Council started it in 2002.” In a media release by Angela Jones, Gary Swift described it as “an exciting opportunity.” This made AFSL a CCO 100% owned by Auckland Council.
On 4 August 2011 I applied to the Company Secretary, Graham Wakefield, for a copy of the accounts. I met resistance.
On 9 August 2011 I rang Gary Swift to ask why I had not been supplied with the accounts. He said “We’re working on it, there are some issues to be resolved, I don’t want you sending me reminders.”
On 11 August 2011 I complained to the Ombudsmen as any member of the public has the right to the most recent accounts of a CCO owned more than 50% by Council.
On 16 August 2011 I received the accounts.
On 18 August 2011 the Ombudsmen wrote to say that as I had now received a response they would be taking no further action.
On 1 September 2011, in his report to the ACIL Board Gary Swift stated “Gary Osborne asked the company to provide him with a copy of the financial statements for AFSL. As AFSL is now a CCO that information had to be provided.” __Pity that wasn’t the response on 4 August!
On 13 September 2011, in response to my LGOIMA request of 9 February, some 7 months earlier, The Ombudsmen accepted the Council’s stance that “We are unable to provide the information sought by Mr Osborne.”
On 12 July 2012, in his report to the ACIL Board Gary Swift noted “The company was successful in having the valuation of the property for rating purposes reduced from $12.9m to $9.15m.” —- Wow, what a success!
In the ACIL accounts the book value of AFSL dropped from $5.067m as at 31 July 2012 to $4.803m on 31 August 2012.
30 June 2013 Operating Profit for 12 months $59,199 as compared with Operating Profit for 15 months to 30 June 2012 $441,203
21 November 2013 Tony Tay and his wife Selina were declared bankrupt.
My only comfort, if you can call it that, is that I have found many other ratepayers who have felt fobbed off in their dealings with CUOs.
Accountability in Auckland Council 