THE PUBLIC INTEREST

The vested interests of the Nelson City council and its talking parrot the Nelson Mail, give rise to a stark ethical irony.
The huge irony involved in the interaction between this dangerous coupling, is that the ethics and morals of the concept of "the public interest" and "the public good", get flushed down the gurgler.
The Mail's constant carping at, and putting down of council critics, is problematic to say the least.
If the Mail was properly tending to its own fundamental fourth estate duty and reason for being, of looking after the the public interest and the public good, then the critics would all be out of a job tomorrow.
Instead of running interference for the council and its incompetent economics, the Mail should be taking the lead and denouncing any council profligacy and imprudence, itself. Again, the silence is deafening.
However I suppose it is expecting to much to ask a rabidly left wing media to criticise a rabidly left wing council.
I also expect that it is asking to much of the Mail to criticise one of its own largest customers and paymaster.
And none of this says anything about the councils own ethical duties to the public, to tend to the public good and the public purse with care and prudence.

DEBT: PENIS ENVY

The Nelson City council and its ventriloquists dummy the Nelson Mail, are envious that the Tasman District council is not receiving the same harsh criticism of its proposed debt levels.
The Nelson Mail is parroting its puppet master's concerns, that its critics seem to be treating its paymaster in a biased and unfair manner.
If the Mail took the puppet masters arm out of its intestinal tract for long enough to be able to think for itself, then it would be obvious that the reason that its paymaster is receiving that flack, is not just because of the singular issue of debt alone.
The reason for that flack is instead, the deadly toxic combination of taking a mortgage holiday in conjunction with adopting that level of debt.
If the only way the council can afford to pay for that level of debt, is to stop paying other debts, in other words by taking a mortgage holiday, then the alarm bells should be clamouring throughout the fourth estate. Instead the silence is deafening.
The Tasman council understands the dangerous inter-reaction of that toxic combination and therefore avoids that particular lunacy like the plague.
The reason that the Nelson council so deservedly receives such uneven criticism is that unlike Tasman, it is reckless enough to undertake that very lunacy.

DEBT: BEFUDDLEMENT

The Nelson City council must be deeply intoxicated by debt if it is prepared to triple its debt levels based solely on the transparently wrong justification of debt to equity ratio.
Debt to equity ratio is a business model yardstick, that quite simply does not translate to infrastructural government.
That both the council and the Nelson Mail are prepared to justify such indebtedness simply and solely on such flimsy ideology, is an outright condemnation of their economic nous, rather than a defence or justification of it.
Iceland and all the American and European banks and financial institutions and freddie mac, fannie may, Chrysler and General motors, would all have been complying with their debt ratios, when they went down the gurgler.
Banks and financial institutions are required to comply with debt ratios by law, and if they were not, then the boards of those organisations would all be in jail by now.
Economists universally agree that the global finacial crisis has been brought about by that very reliance on such expanding debt, and as a result that debt argument has been comprehensively discredited to such a degree, that globally organisations are scrambling to claw back debt levels to survive.
Council is seriously out of touch with economic reality in attempting to apply that debt ratio justification and in perversely clinging to such badly discredited dogma.
The critics are right to question why council is adopting the very course of action that has brought the rest of the world to its knees.

RATES: DECEIT

The deceit that the Nelson City council is indulging in over rates increase information, is becoming apparent.
This Hands up mob's, come hell or high water, vested interest driven intention, to forcibly impose a PAC on the community, no matter what the cost to the ratepayer, is driving council to extreme lengths of deceit, in their attempts to hide the real level of rates imposition and economic harm, that this hare brained white elephant will inflict.
The LTCCP rates increase data was structured in such a way that it was impossible to understand whether the declared percentage increases were the figures before or after the mortgage holiday manipulation.
The way the data was presented, forced the reader to the conclusion, that the stated rate increase of 12.65% was the figure before manipulation, and that the mortgage holiday sham brought the increase down significantly from that point.
It is now obvious that visual misdirection was involved in that sleight of hand.
It is also clear, that the declared 12.65% figure, was the end figure after manipulation, and the actual underlying rate increase is well in excess of that.
Recent information coming to light indicates that council had actually publicly admitted, that the real rate increase, is in fact 16.00%.
That 16.00% figure certainly fits with the fact, that the general rate increase is in practice, panning out at somewhere between 14.00% and 21.00%.
No wonder they are so desperate to hide that information.

ZERO CONSULTATION

It is absolutely amazing how the Nelson City council can just totally ignore the entire statutory planning process when it suits, and when it wants to spend money on its vested interests.
The latest example of this sort of improper expenditure is the Theatre Royal.
Council has approved a couple of million bucks worth of financial committals to the Theatre Royal, without any planning notification or consultation whatsoever.
They have achieved that significant piece of expenditure by adding it, sight unseen into the confirmed LTCCP, without ever declaring that intention to the public, via the draft LTCCP.
Because of that slieght of hand, the public have never been notified, or consulted about that intended expenditure, in total contravention of every part of the legislative planning process.
If that intended expenditure has never been declared in the published draft plan, then clearly the public were kept in the dark about that expenditure, and were thus unable to give any sort of assent, informed or otherwise, silent or otherwise.
This despotic totalitarian council are as usual, giving a one finger salute to democracy.

RATES: SHAM

The stark realities of the Nelson City councils Claytons rate increases are now starting to be revealed, with reports coming to light about the size of the individual general rate increases that are being imposed.
Increases that have been heard of so far, are in the range of a staggering 14% to 21% percent.
If this trend of general rate increases, of nothing lower than 14% continues, then that situation is even worse than previously assumed, and is a blunt demonstration of the consequences of that idiotic and unnecessary mortgage holiday.
While the council are crowing about their falsely engineered 3.2% rate increase, the underlying reality is that the underpinning general rate increase, which is the bulk of the rates, is being pushed up at this astonishing speed.
That rate of increase is planned to continue over the next six years, after which council will then start clawing back the postponed charges in addition to increases of this magnitude, which have already been locked into place.
The future rates outlook for Nelson is bleak if this trend is confirmed.

DESPOTIC COUNCIL

The Nelson City council is giving a one finger salute to the whole concept of democracy.
Despite the community giving unequivocal directions, by a clear cut majority, about the mortgage holiday and the performing arts centre, this fascist dictatorial council has blatantly rejected those democratic directions out of hand, and is now rowing it own waka on its own course of outright vested interest.
It must now be obvious even to the most obtuse supporters of the hands up flock, that this gang is driven by a conflicted agenda of massive vested interest.
This mob's vested agenda is so heavily in conflict with the very idea of democratic representation and consultation, that they are prepared to openly reject and flout those very constitutional principles of democratic government, in order for their vested interests to prevail over the community's majority wishes and democratic directions.
These autocratic despots cannot be left to run wild with public monies to satiate their every personal whim and desire, while laying waste to the public purse, and imposing such an intolerable and unecessary economic burden on the community.
The quicker this tyrannous rabble can be got rid of the better.

LTCCP: SPIN BEGINS

The Nelson City council is already cranking the spin machine into gear in its attempt to hide all the other bits of deceit, that they have already indulged in during during the LTCCP.
That spin has started with the latest issue of council's propaganda rag, Live Nelson, proclaiming that the general rate, will increase by more than 3.2%.
That little gem of a quote will probably join councils now infamous rugby cup quote, that the WRC multi million dollar expenditure exercise, "Could cost more than ZERO".
Well this present rates statement, is in exactly the same vein as its WRC little brother, because the the general rate increase, as declared in the estimates, was actually a planned increase of 12.65%, but now that the overall rate increase has been bumped up slightly, so also will the general rate increase be bumped up slightly, probably to somewhere around 13%.
Wouldn't it be great to be able to drive your own domestic economy with such rose tinted glasses, because, if you did, I suspect that you would not survive for very long, before you got flushed down the dunny.

PAC: MORE CONTEMPT

Wow, the Nelson City council are so contemptuous of the public that they treat us like morons. A cheaper performing arts centre is planned, Yeah right.
Well if thats the case, then council needs to go back to skool and learn some basic mathematics.
Because the public private partnership deal has collapsed around councils ears, means that the ratepayers will now have to pick up the whole tab for the entire project.
The LTCCP made it very clear that the $32.5M cost was just the ratepayers share of the project, with the private partners share being additional to, or on top of that figure.
Now that the private partner has evaporated into thin air, then the ratepayer gets to shoulder the entire burden, of the whole project.
However because council has kept the full cost of the whole project secret, then that figure is an unknown quantity.
But on the presumption that the partnership was an equal partnership, then that figure could have been anywhere up to $65M or more.
Even though the $4M cost of the land purchase might drop out of the equation, that still does not create a cheaper project, no matter what sleight of hand is used.
It is entirely contemptuous of the public for council to even attempt to call that increased cost committment, a price reduction. What a load of bollocks.
In fact the land deal has apparently already soured, and may well become a contractual nightmare, that could end up costing ratepayers dearly.

LTCCP: ARROGANCE

What extreme ignorance and arrogance of the Nelson City council to claim that the public do not understand basic economics and budgeting.
This council claim that they have some sort of god given insight into economics, that mere mortals are not privvy to.
They state that the public cannot apply sound domestic economic fundamentals to council budgeting, and that only they have the ability to perform that sort of black magic.
What a load of old bull chips. This council is made up of lay people that put their pants on one leg at a time, like the rest of us, and no degrees in economics are listed among their ranks.
So what council induction course did they attend that gave them that mystic black knowledge.
Economists throughout history have compared running national and corporate economies with running domestic economies. They have stated time and again that the budgetary principles and skill sets are exactly the same.
Some even say that household economists have a far greater challenge because they do not have the luxury of being able to fall back onto draconian powers of force to take money from other peoples pockets to balance their budget.
The domestic economist also understands the universal truth that one must live within their means, and their budget, and unlike this council, they also fully understand the deadly consequences that will occur if they stop paying their bills.
Stopping payment on council bills will bequeath a terrible legacy upon ratepayers. The bill collector and the bailiff will eventually come knocking, demanding payment.

PAC: SECRECY

So, the Nelson City council are playing the secrecy game again.
The performing farce centre arrangements have fallen over, and that is politically embarrassing for council, so they are resorting to secrecy, claiming that the public think that the project is further ahead than it really is.
It is not as far ahead as the public think, because the project has fallen over again, and the public private partnership has evaporated, causing them to return to the drawing board.
But even though it has fallen over again, council are still trying to keep that project locked into the LTCCP, and that is a ridiculous planning sham.
The public private partnership project that was notified in the LTCCP has evaporated and no longer exists, and to pretend otherwise is a planning deceit.
But more importantly, that project cannot be replaced without going through a completely new planning round.
New notification and consultation is required because all the previous parameters and cost sharing and financial arrangements and implications have all so radically changed, that the existing project no longer meets any of the legislative planning requirements.
Because the nature of the project and the cost implications have all so radically changed, council is now required to renotify and reconsult the public before it can insert this new project into the LTCCP.
But it is impossible for council to meet the LTCCP legislative planning requirements to fully inform the ratepayers, if that very information and those very details are being withheld from the public and being kept secret.

PAC: TOO FAR AHEAD

So the Nelson City council claims that the public thinks, that the performing arts centre project is more advanced than it really is.
Well whoopty doo. That is a complete load of old double speak that is being trotted out here.
The public are fully entitled to not only presume, but to also know with certainty that this vexed project is a lot further advanced than council is letting on, because legislation requires that it be that advanced, before it can be allowed into the LTCCP.
Those legislative prerequisites demand that the project be advanced to the point that the public are able to be accurately notified as to the full nature of the project, and in particular, to be completely informed of the full cost implications and their detailed impact on the rates burden.
If the project is not advanced enough to meet those specifications, then quite simply it should not be in the LTCCP.
In its indecent and premature haste to commit the community to this project, council has put it into the LTCCP, and as a result, the public are entitled to presume that council are complying with those legislated planning requirements.
After all there is a statutory presumption enshrined in New Zealands constitutional arrangements that requires government to act in accordance with the law at all times.

LTCCP: SERIES: 7 of 7

QUESTION.
As stated at the beginning of this mini-series those questions posed were considered to be relevant and compelling questions.
However to conclude, Bullchips would add one further question of its own.
That question is; "If these were the private and personal finances of any Nelson City council individual, would they make exactly the same decisions and use their own monies in exactly the same way they have been prepared to commit public monies?"
The public finance act demands a far higher than normal standard of care and accountability, than any private funds, with those imposed fiduciary duties amounting to a form of risk averse parsimony.
The guardians of any public funds are meant to administer the public purse to a high standard of prudence and care.
The Nelson City council gives scant regard to those standards, and instead treats hard earned public monies in a particularly cavalier manner, for the purpose of funding vested interests and implementing vested agenda.
It is way past time that the public watchdogs savaged this wayward council and brought it under close scrutiny and tight control.

LTCCP: SERIES: 6 of 7

QUESTION.
The most marked demonstration of the toxic nature of the underlying consequences underpinning this mortgage holiday, is the massively disproportionate shift in the share of the funding burden that is shunted onto ratepayer shoulders.
A fundamental rating principle exists that a maximum of only 50% of council's total revenue needs should be raised through rating.
That principle was again confirmed by the recent commission of inquiry into rates. In fact the commission went further and strongly recommended that, that 50% limit, should be reduced even beyond that point.
However this mortgage holiday requires quite the opposite, and the 50% funding limit massively blows out to in excess of 65%.
The word massive is used because that increase is a geometric increase rather than a simple arithmetic increase. Thus the increase is a compounding multiplier, which is in reality, a hugely disproportionate and exponential shift in the funding burden.
What advice has this lay council sought or received as to the sustainability, affordability, prudence, and the many other effects of that magnitude of a shift in the funding burden.

LTCCP: SERIES: 5 of 7

QUESTION.
The worst consequence of this mortgage holiday is via the underlying doubling of rates that is required to underpin and sustain it.
The planned trebling of debt and trebling of interest, imposes funding needs that lock double digit rate increases into place - for at least ten years.
The council estimates reveal underlying rate increases, of the order of 12.65%, 13.29% and 11.06% - underpinning this mortgage holiday.
However the government has repeatedly announced that double digit rate increases are wholly unacceptable. The government has also loudly signalled its intention to introduce an inflation based rates cap.
When that rates cap is imposed, the double digit rate increases, already locked into place, will not be able to be realised, and will instantly become a deficit.
Those double digit rate increases will turn into minus or negative rate increases, and will be deficit funded.
What expert advice or report has this lay council sought or received on the economic and financial consequences, of having double digit, deficit rates funding, locked into place, for at least ten years?

LTCCP: SERIES: 4 of 7

QUESTION.
Unanimous economic advice, publicly warns that disproportionate and counterproductive costs are well known consequences of taking mortgage holidays.
Given the certainty of that expert public advice, what steps has this council taken to appraise itself of, and quantify, those certain and inevitable consequences?
A cursory analysis of the estimates reveals the inevitable consequences underlying and underpinning this mortgage holiday. In round figures they are essentially - a tripling of debt, a tripling of interest, and a doubling of rates.
What advice was sought or received by this lay council, to quantify and consider the costs and consequences, of the inevitable underpinning effects, caused by this radical action?
What cost benefit analysis was undertaken prior to approval - as required by legislation?
Where are the reports briefing this lay council on the costs, consequences, affordability, and sustainability of such major increases in debt, interest, and rates?

LTCCP: SERIES: 3 of 7

QUESTION.
Not a single economist has been reported in NZ or Australian media, as being in favour of suspending loan repayments, other than as an instrument of absolute last resort.
Economists call these mortgage holidays, "Holidays from Hell", and have all strongly recommended against them, unless such dire financial difficulties exist, that there is nowhere else to turn.
The logic given for that advice is that the costs of taking such draconian action, are generally so disproportionate and counter productive, that it can actually bring about a ruinous opposite outcome, rather than the intended rescue.
Given this unanimous expert advice, then what dire financial difficulties of last resort, exist with the public purse, that forces council to take this radical action, which will impose such disproportionate and counter productive costs onto ratepayers?
What advice has this lay council sought or received, that justifies and causes them to discard such such compelling expert counsel, and dismiss it out of hand?

LTCCP: SERIES: 2 of 7

QUESTION.
World economists unanimously declare that the root cause of the global economic crisis is the all pervasive reliance on debt - and in particular, incessantly escalating levels of debt, being used to sustain economic performance and growth.
Faced with this collective wisdom, identifying the root cause of this universal collapse of national and corporate economies, administrations everywhere are desperately scrambling to claw back and reduce debt to proper, principled levels.
That being so, then what expert economic advice, has this lay council sought or received, which justifies it, to so comprehensively reject and refuse that collective expert wisdom, and to instead, perversely increase debt levels by over 300%?
What advice has this lay council received that gives it the assurance and certainty to embark upon the very course of action that has brought the rest of the world to its knees?

LTCCP: SERIES: 1 of 7

DUTY BOUND
The Nelson City council has stated in writing that it has neither sought nor received any advice or reports on its mortgage holiday decision.
All boards of governance are legally, and duty bound, to seek all the advice and information necessary, to properly and fully inform themselves, before taking any decision, on any matter, outside of their own expertise or cognisance.
That precautionary best practice is an absolute duty, particularly when member's funds, and liabilities are at risk.
Disregard of those fundamenatal fiduciary duties and best practice obligations, whether by omission or comission, is by definition imprudent, negligent, and reckless.
This council mortgage holiday decision flies in the face of the collective wisdom of economic experts, and without the production of any credible advice to the contrary, must be regarded as entirely arbitrary, whimsical, and ill-informed

LTCCP: DUTY BOUND

The Nelson City council has confirmed in writing that it has not taken any economic or financial advice about its decision to take a mortgage holiday; a decision which imposes a trebling of debt, a trebling of interest and a doubling of rates.
One organisation has just publicly released its submission to the LTCCP which canvasses the view that council was ethically and duty bound to take advice.
The submission expresses its stance on that duty and then poses five questions with regard to council's actions, which it deduces, are entirely whimsical.
That stance and those questions are so relevant and compelling, that bullchips will repeat them verbatim over the next six blogs

PAC: RESURRECTIONS

It appears that the Nelson City council has secretly resurrected the Millenium trust, to put pressure on the TDC, to join the performing arts centre fiasco.
The trust's functions and commitments had long ago, been taken over by, and absorbed into the council.
However submissions were recently being made to the TDC, under the name of the Millenium Trust.
Those submissions were demanding that the TDC participate in and provide, significant funding for the PAC financial albatross.
If the Millenium trust has been resurrected, and is now alive and well, then presumably its ten million dollar funding committment, is also resurrected and alive and well.
Yippee! Ten million bucks less, for the ratepayers to get suckered into.