Ed Said - Playing the waiting game

 

It was initially expected there would be an early decision to the February hearing on the rates issue but, with his Honour Judge Paul Heath presiding over the South Canterbury Finance case, any result may be as much as a year away. Then there are several aspects to the case where the judge possibly needs to examine very closely, local government laws and by-laws.

Then consider this.

Firstly there is the letter of the law which may see the situation as black and white. The judge might well see things this way too. However, next there is the spirit of the law where, despite what the law actually says it may be more appropriate to find perhaps a ‘grey’ area where there is some compromise from both sides. Thirdly there is the interpretation of the law which is the discretion of the judge. In the meantime, all the residents of Mangawhai can do is wait until said decision is delivered.

So, should the court find in favour of ratepayers, what then? Will the rates demand be adjudged null and void? Will that then mean the Council has a $60M-plus debt to overcome and will that then mean KDC is put into receivership as many predict?

Depending on the state of a business, receivers may attempt to trade their way back into solvency. However, as many see Kaipara literally bankrupt, the only other way to settle debt is to sell assets and in this case, Kaipara’s assets are, simply, land. Don’t be fooled. If receivership happens then the receivers will have even less empathy for the Kaipara than that of which the Commissioners are accused, and will do whatever necessary to wipe the debt within a specified, and usually non-negotiable, time period.

Assets presently not being used include pockets of land, the possible sale of which is an emotive issue at present but, though their disposal will ease the situation, actually won’t go very far towards paying the multi-million dollar debt. However, consider other council-owned real estate such as the pony club grounds, a large proportion of the golf course and Mangawhai Park just as an example, and receivership might not look so rosy.

Another bone of contention at present is the debate over Unitary Authority – one body of governance over the entire northern area. Meetings thus far indicate the majority to be against this move. Submissions in Whangarei indicated that the proposal to ring-fence the Mangawhai debt for six years was not a long enough period for Whangarei ratepayers to take on Mangawhai debt in the event the UA was accepted.

Alternatively, the Mangawhai Residents & Ratepayers Association (MRRA) chair has said WHEN (not IF) the judge delivers his verdict rendering the rates bill null and void, Mangawhai will want to be ring-fenced AGAINST Whangarei’s debt rather than apart from it. Evidence that there are indeed two sides to every argument.

So… be careful what you wish for. The MRRA learned this when wishing for the demise of the Council to be replaced by Commissioners. The antidote is seen as being worse than the illness. Similarly, regardless of the judge’s decision, the MRRA may well win the battle but lose the war.

Just my humble opinion.

Cheers,
Rob
 

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