Bankruptcy Looms for Ponzi Mangawhai

Two Oceans, two Harbours, two versions of reality.... The number "2" comes up a lot with this Ponzi saga. Doubling of rates is the use of "2" that worries most Mangawhai rate payers. (see background here.) Especially those on fixed incomes who were not consulted when Kaipara Council was persuaded to double the size of its sewage scheme.....

... and of course there's the double-take, double-act, of Mayor Tiller and even Ex-Local Government Minister Nick Smith. Smith had the gumption to use this Ponzi example is a reason for over-hauling local government, and going ahead with local government mergers. What Mangawhai needs is an accountable and democratic Council - not a bigger one that's further away.

This Ponzi is a real doozy. Council has been influenced by property speculators to go ahead with a much bigger sewage scheme. Council was persuaded the sewage project had to be bigger, enable even more land to be developed, because then the returns from rates and developer levies from all the new subdivision enabled by the scheme would not only pay back the investment (fantastic!) - but Council would reap further benefits (even more fantastic) and be able to spend on other projects. Dream on....

This is one hell of a Ponzi scheme, and the thing is, Council can't escape criticism. Not only can it not escape criticism, but it alone has to be liable for losses. Why should existing ratepayers - whose benefit from this high risk investment - has already been paid for, be required to pay the Ponzi costs of a failed property speculation?

And this is where "2" really comes into its own. Kaipara District Council has double-crossed the Mangawhai community by allowing itself to be influenced by vested interests (who carry no risk), and expecting ratepayers to pay for policies which did not meet Local Government Act duties. Members of the Mangawhai public who did their best to get Government Watchdogs to audit Council processes have been let down totally. No wonder there's anger. The elephant in the room here is Central Government. It, and its agencies, stood by and did nothing...

I well remember being on North Shore City Council when it sold its shares in Auckland International Airport for around $80 million. The meeting was in confidential, but the halls and corridors were filled with brokers and dealers advising what price to sell at and what to do with the money. They wanted Council to invest the money in the stock exchange. Councillors got all excited. It was only the sober voice of the Chief Finance Officer who calmed everyone down and advised: "put it in the bank. This is public money. Council is not in the business of taking risks with public money..."

Pity there wasn't a similar voice of reason on Kaipara District Council when it voted and took out bank loans - in "public excluded" meetings - that underwrote speculative property development at Mangawhai.