Audit NZ clears council CEO
Discussions with developers over Hamilton’s central city park were above board, an Audit NZ report has found.
However, there’s room for improvement in how Hamilton City Council deals with urgent matters and emerging opportunities, according to the review.
In September 2017, Mayor Andrew King proposed bowling a block of central Hamilton buildings to extend a city park.
During the process, chief executive Richard Briggs spoke to two city developers about whether they’d be willing to sell buildings in the area.
Auditors were called in to review the process after suggestions Briggs’ actions gave the two city developers an advantage.
That wasn’t so, the Audit NZ report concluded, though council’s usual processes weren’t followed for the park proposal.
Some of King’s involvement also blurred the lines of management and governance, the report said.
King first presented his vision of extending Victoria on the River (VOTR) to his fellow councillors in a September meeting, during a publicexcluded session.
Briggs ‘‘initiated’’ the item, Audit NZ said, but King had talked publicly before about wanting to open the CBD up to the river – including in his mayoral campaign.
The September meeting was the first councillors heard of the central city park plan, though, and they were surprised by the informal discussions with developers.
King shared his vision and sought council support for considering it in the long-term plan, the audit report said.
Recent sales of properties in the area between VOTR and the proposed Waikato Regional Theatre site – the area proposed for the park – had lent an air of urgency to the project.
The ‘‘urgency and commercial sensitivity’’ of the project were the reasons the usual processes weren’t followed, Audit NZ said, but all councillors had a chance to debate the idea and to vote on how it progressed.
They were concerned there wasn’t enough information – including on cost – and also that King said he’d discussed whether one ‘‘party’’ would be willing to buy properties and ‘‘hold them for the city’’.
Councillors voted on instructions for the chief executive, the report said, though there may have been some ‘‘differences in understanding’’.
The instructions included working out whether property owners in the area were willing to sell and at what cost, and getting design drawings and potential costs.
Briggs phoned two
property owners – developers Matt Stark and Leonard Gardner – and found out they had their own vision for the park area.
They’d already discussed it with other relevant property owners, the audit report said.
Briggs then stopped all discussions to avoid potential competition between the visions.
However, it’s not clear why he needed to arrange an October meeting with the mayor and the two property owners to discuss their respective visions, Audit NZ wrote.
King also briefed the architect on the vision for the concept designs, the report said, which may have blurred the lines between governance and management.
Any extra information for management should have come from the council as a whole, Audit NZ wrote.
‘‘We acknowledge the mayor has a different view of this issue.’’
The eventual concept designs produced were not the ‘‘passive park’’ vision the mayor shared with his peers in September, the report said.
The cost estimates shown to councillors in December were based on the passive park, however, as staff preparing costs information didn’t have the concept designs.
The audit report also looked into whether Stark and Gardner gained any material advantage through their conversations with Briggs – and found they didn’t.
All but one of their relevant property purchases were made well before the discussions, the report said, and those properties had been offered to Hamilton City Council on favourable terms.
The exception was 222 Victoria Street.
It was bought by Foster Construction – of which Gardner is a director and shareholder – after talking to Briggs.
The building is situated between two properties which Foster bought in June 2017 and had offered to sell at cost price to city council.
‘‘It is reasonable to conclude that the purchase of 222 Victoria Street was the result of council declining to purchase the two flanking properties from Mr Gardner, not the result of Mr Gardner’s discussions with the chief executive,’’ the review said.
Foster and Stark also registered a company called VOTR2 WRT Ltd in November 2017.
Audit NZ was satisfied that the verbal agreement to do this dated to a liquidation sale in August 2017 – before they spoke with Briggs.
The audit report had recommendations for council, including the development of guidelines on what information is needed in project proposals, and a process for dealing with urgent ones or opportunities.
It also advised that council stick closely to its procurement policies in future work on the central city park, and be cautious around conflicts of interest.
Council’s usual processes weren’t followed for the park proposal.