Council votes to sue ex CEO for cost overruns

By Mike Dinsdale

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Kaipara District Council former ceo Jack McKerchar. Photo / Annette Lambly
Kaipara District Council former ceo Jack McKerchar. Photo / Annette Lambly

The controversial Mangawhai Community Wastewater Scheme ended up costing ratepayers around $57 million - far more than the initial $10.8m estimate. And now the Kaipara District Council is suing its former CEO Jack McKerchar for his handling of the "botched" system.

The financial burden on the council from the scheme led to the Government appointing commissioners to run the council last year and yesterday the commissioners voted to pursue Mr McKerchar through the courts, saying he needed to be held to account for his role in the failings around the controversial sewage system. Mr McKerchar had not responded to Northern Advocate efforts to contact him by edition time to respond to the KDC action.

Kaipara ratepayers were told the final scheme would cost no more than $10.8 million when it was first announced in 2003, then $37 million in 2009, while at the same time the council had taken out a loan for $57.978 million for the scheme.

In a report condemning the decision-making around the scheme last year, Auditor General Lyn Provost said the council's decision to basically double the size of the project from $35.6 million to an estimated $57.7 million "wasn't appropriate."

Kaipara chairman of commissioners John Robertson said Mr McKerchar left the council in October 2011 after reaching a financial settlement with former elected members. Since then, there have been repeated calls from Kaipara ratepayers to hold Mr McKerchar accountable for his role in the botched Mangawhai scheme, Mr Robertson said.

"Commissioners noted that the Statute of Limitations meant council could only try to hold Mr McKerchar to account for his actions during the last six years. Legal advice also suggests that the settlement agreement Mr McKerchar signed with the former council may impact on the success of any legal action.

"Notwithstanding those issues, there is an important principle here. Some members of the community have noted that the Council might not get much back from Mr McKerchar in monetary terms but they still believe it is important that he is held to account and we agree," Mr Robertson said.

Mr Robertson said the report released by the Auditor-General in December last year clearly identified a number of failings during the time Mr McKerchar led the council.

" ... Council failed to assess and set rates legally; it failed to ensure a number of statutory requirements were met and it failed to manage its finances prudently. Mr McKerchar should be held to account for his role in those failings," Mr Robertson said.

He said the council also accepted strong legal advice that there was no legal basis upon which Kaipara District Council could bring damages claims on behalf of the Kaipara community against former councillors.

- NORTHERN ADVOCATE

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