This is a guest post by Franks & Ogilvie colleague Pam McMillan

Here’s another council with a debt problem, protesting ratepayers, and operating without a valid long term plan . Rosanne Jollands, a candidate, found out the Council had been excluding the public on the topic. Now there’s a  story in the Taupo Times  The Council has been meeting behind closed doors and wants the government legislative wand to fix the LTP problem retrospectively.

The LTP problem started last year when they adopted the LTP prior to receiving an audit report from Audit New Zealand. They must have it before the LTP can be adopted. So it is not valid. Under section 93 of the Local Government Act 2002 a local council must at all times have a long term plan. The LTP was controversial as it planned to change rating  from land value to capital value, and assumed rate increases of more than 7 per cent over the following three years.

Unless there is some unforeseen and urgent need for revenue, rates must be set in accordance with the LTP and funding impact statement of the financial year (s 23 Local Government (Rating) Act 2002). So there is a good argument that without a valid LTP rates levied since July 2012 are not valid.

It appears the Council has been advised to formally re-adopt the LTP and then ask the Minister of Local Government for a validating Order in Council. An Order in Council is usually confined to matters of form or procedure rather than major issues of substance (s 261 of the Local Government Act 2002). There may be a question whether the LTP would have been adopted if there had been consultation on it with the benefit of the Audit Report.

Taupo ratepayers were consulted on the LTP in early 2012 without it. There was major protest against the change in valuation basis, and the increases.

Alternatively the council could seek a local bill validating the LTP and the possibly invalid rates. That is how the Kaipara District Council Commissioners plan to fix some of the legal problems for Kaipara (Kaipara District Council (Validation of Rates and Other Matters) Bill).

[SLF comment – this highlights again the uselessness of secrecy, and the mess created by thinking that participatory democracy (formal public planning and seemingly endless consultation processes) could replace the protections abolished when councils were given powers of general competence. Successive governments will whittle away the unproductive consultation nonsense, but probably without putting in place effective alternative protections against arrogant uses of the local coercive and taxing powers.]