City Voice: ‘Why not rob a bank?’ – Cr. Morrison

John Morrison at Clyde Quay… “rebel”

By Simon Collins

REBEL Wellington City Councillor John Morrison says the council may as well “rob a bank” if it is willing to break the law on how it funds the cost of the city’s new sewerage plant.

Morrison, one of seven councillors elected on Mayor Mark Blumsky’s Wellington Alive ticket at the 1998 election, refused to join a compromise which the other Alive councillors and their Labour coalition colleagues put forward over waterfront development last month. Last week he voted against the group on three more Wellington Alive proposals to:

• Sell the Clyde Quay and Evans Bay marinas;

• Close the Mobile Library; and

• Breach the Local Government Act by not funding depreciation on the Moa Point sewerage plant, the Happy Valley sludge-to-fertiliser plant or the state-funded part of roadworks.

This last proposal is aimed at cutting the rates by about $4 million by paying for new capital investment out of borrowing instead of ‘depreciation – an allowance for replacing existing assets, which is paid for out of rates. Morrison, a former NZ cricketer, resents being “sneered at” by Wellington Alive colleagues for not supporting this rates reduction.

“Why don’t we go and rob a bank then?” he asks. “Of course I’m in favour of less rates for the public, but we must do things legally.” He also spoke passionately against the sale of the two marinas, saying they were “not ours to sell” as councillors were the “caretakers” for future generations.

“I think the foreshore, in particular in such prime positions as Lambton Harbour, Clyde Quay and Evans Bay, are very sacred territory,” he says. He says councillors were “ambushed” by a late move on Friday (3 March) by Labour councillor Sue Piper and Alive’s Chris Parkin to reverse an earlier committee decision and close the Mobile Library.

“I had no pre-warning,” he says.

“I have been pretty amazed with so many issues that are pre-decided long before committee and council. To some degree the debate is a charade. The Mobile Library is a classic example.”

Morrison says he had been “very uncomfortable for some time” with having to be a “foot soldier” for the coalition, and feels “a lot happier” since he started taking an independent line.

His shift stopped the sale of the Evans Bay marina on 1 March. Councillors voted 9-8 against selling either the marina or land leased by the Evans Bay Yacht Club.

However, Cr Ruth Gotlieb switched sides to produce a similar 9-8 vote to sell the Clyde Quay marina and Royal Port Nicholson Yacht Club site in Oriental Bay. Gotlieb says she voted in line with the yachties’ wishes, as the sales were opposed by the Evans Bay club but supported by the wealthier Port Nic.

The chair of the steering group of owners at Clyde Quay, Arthur Stewart, says the Port Nic club and boat shed and mooring owners believe they can run the facility better than the council did. They are forming a trust which is looking at installing a boardwalk along the water’s edge and making other improvements.

But Evans Bay Commodore Paul Sara says his club simply didn’t have the $500,000 that the council wanted for its site plus a further $300,000-$400,000 required for repairs to the sea wall.

“We are actually providing a community service,” he says. “We have the Pacific Island Church waka and waka belonging to other clubs, and we are strong on youth training.”

In contrast to these close votes, Morrison was joined by only three left-wing councillors – Stephanie Cook, Bryan Pepperell and Mary Varnham – in opposing the move to stop setting aside $4.6 million a year to replace the sewerage and fertiliser plants and state-funded roads. The council’s director of business improvement, Andrew McKenzie, said in a report that there was no need to set aside replacement funds for these three items because:

• The sewerage plant was being maintained by Anglian Water for 21 years and would be returned to the council after that time with at least 25 years of life expectancy left.

• The council was “at this point not planning to replace the [sludge-to-fertiliser plant] at the end of its useful life – it will be either sold or scrapped”.

• The cost of replacing the state-funded part of the roads would be met by the government, not the council.

He conceded that: “Not funding the depreciation will be inconsistent with the intergenerational equity principle, as the current users will not be paying for their portion of the use of that asset.”

But he said the current formula meant the council was setting aside $49 million a year to replace its assets, yet only spending $31 million this year on replacements. The other $18 million, plus a further $6 million funded from borrowing, was going into new assets such as a new “dock” and other changes at Taranaki Wharf. McKenzie’s proposals would cut funding for replacements (depreciation) by $4.6 million, forcing the council to either fund that much of its spending on new assets out of borrowing or asset sales, or cut its capital spending.

Victoria University accounting professor Don Trow says the move sounds “sensible” because there is no need to fund depreciation on assets that will not be replaced, or where changing technology will allow them to be replaced much more cheaply.

Accountant David Underwood says he suggested the change last year because there was no need to allow for replacing assets such as sewerage plants which last forever as long as they are maintained. “You replace bits as you go along.”

Underwood says that in his view the change is legal under the Local Government Act which requires councils to set operating revenues “to cover all projected operating expenses”.

However, Cr Mary Varnham says ratepayers should set aside money to replace the $147 million sewerage plant during its whole expected life of 46 years, not just the second half of that period after the plant is handed back from Anglian Water. That means ratepayers would set aside more than the city spends on replacing other assets in each year until the plant is replaced.

She says it’s “unbelievable” that council officers could state that the sludge-to-fertiliser plant would be “sold or scrapped” after 20 years, as the council had made no such decision.

“What are we going to do with the sludge after that?” she asks. “There will be a cost if we don’t replace [the plant]. So the argument that we are not going to depreciate it is completely ludicrous.”

She also believes the council should not assume it will get government funding to replace existing roads, as future government policies are unknown.

• Public meetings on the council’s draft annual plan start on 4 April. The plan will be available from 3 April; submissions close 4 May. Ph 801 3646.

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