$468 million: QLDC's 3 year external spend equals $28k per ratepayer

Analysis.

$468 million is almost half a billion dollars – that’s how much the Queenstown Lakes District Council has spent on external suppliers since 2018 – just three years.

Here's our analysis of the latest annual QLDC spending data released to Crux under official information legislation, showing a massive increase in council expenditure on external consultants and contractors at a time when serious flaws in the council's financial procurement processes have still not been fixed.

Of course, the council has income and debt to help cover this increased spend, but it still equates to almost $28,000 for every single QLDC ratepayer over the three year period.

Council debt at June 30 2021 was $161.9 million up from $118 million just 12 months earlier. When the Queenstown Airport Corporation is included (75% QLDC owned) total debt increased from $187 million to $243 million in the past 12 months.

Council Debt - including Queenstown Airport Corporation

• 2019/2020. $187 million debt
• 2020/2021. $243 million debt

We’ll follow up this analysis with answers to specific questions from QLDC over the next weeks, but you can access the full list here and contact us with any questions that you may have about any items of public expenditure.

From our last review of this information, we discovered (via ZQN7 Ltd) a major problem with QLDC’s financial controls that resulted in an extraordinary council meeting to fix the problem – a problem so serious that day to day council operations were not possible if the rules were followed.

In spite of serious criticism from the Office of the Auditor General, QLDC has still not fixed the procurement problems that resulted in "jobs for mates" and external consultant budget overspends not being properly controlled. 

The findings of a major inquiry into QLDC’s handling of the Crux ZQN7 investigation by the Office of the Ombudsman is expected in the next few weeks.

2018 – 2021 – What we discovered.

The first point to make is that QLDC expenditure on external consultants, contractors, statutory payments, community grants and funding has increased – dramatically.  

• 2018/2019   $124,062,209
• 2019/2022   $129,017,551
• 2020/2021    $176,607,833

Here’s the big-ticket items – and the services those companies provide. The totals are from the start of the 2018 financial year until October 2021 (part of the current 2021/2022 financial year). The Crux official information request (LOGOIMA) excluded any items of less than $25,000 and produced a list of 589 contractors and consultants. Note that Mayor Jim Boult is on the advisory board of Downer NZ, QLDC's largest single supplier. Crux is not implying anything improper about this connection.

Construction and utility companies.

• Downer NZ Ltd. $48,640,524
• Fulton Hogan  $25,434,565 + $4,640,073 + $6,517,475 (three different offices)
• HEB Construction $18,021,328
• Naylor Love  $4,224,710
• Ryal Bush Transport Ltd.  $8,459,362
• Veolia Water. $37,769,471
• Whakatipu Transport Programme Alliance $11,841,002
• Whitestone Contracting Ltd $3,357,826
• Waste Management Ltd  $15,831,940

QLDC's then in-house lawyer Alice Balme in court during the council's failed defence of action by the Wānaka Stakeholders Group. She is linked to major external legal partners of the council.

QLDC is remarkably lawyered up with a total legal spend during this three-year period approaching $20 million – especially considering that QLDC has their own senior in-house lawyer.

Until recently that lawyer was Alice Balme who joined QLDC from Auckland firm Meredith Connell in early 2016. She left QLDC in April this year to become a partner at Wynn Williams, Queenstown. From the data below, the combined spend by QLDC with those two particular law firms is around $ 9 million dollars over three years.

Ms Balme appeared in court during the QLDC's unsuccessful defence of a Judicial Review brought by Wānaka residents as a result of what they saw as incomplete consultation by the council over the expansion of Wānaka airport.

The judge ruled in favour of the residents, forcing the council granted lease over Wānaka airport to be declared unlawful.

QLDC's main legal partners - expenditure 2018 - 2021.

• Meredith Connell  $4,962,203
• Simpson Grierson $3,883,734
• Lane Neave $4,835,799
• Wynn Williams $3,905,798

Companies that manage and consult on property and construction projects continue to be big QLDC earners.

• APL Property. $2,869,685
• BECA Ltd. $13,718,221
• WSP.    $8,088,851
• Scope Resources Ltd $12,100,505

A new supplier to QLDC is Recreation Services Ltd – who mow grass and look after parks.

Good money in gardening - over $15 million to Recreational Services Ltd

Here’s what they said about their new QLDC contract on their website:

“Queenstown Lakes District Council are one of our newest clients with our contract only commencing back in March 2018. Since starting the contract we have been blown away by the natural beauty of the area and excited at the opportunity to touch base with locals who are passionate about Queenstown’s' beautiful parks and green spaces like we are.”

• Recreational Services Ltd   $15,023,593

A consulting company called Creospace that designs playgrounds was paid $576,879 this year by QLDC.

QLDC also spends quite a lot of ratepayer money on ads in local media – over $500,000 during this period. Crux does not take any money from QLDC to protect our editorial independence.

• ODT/Mountain Scene $143,356
• Lakes Weekly Bulletin $103,880
• Wānaka Sun $137,015
• Mediaworks local radio $90,609

On our initial review of the QLDC payments list the following items appeared unusual or noteworthy. Our methodology was to check the supplier against public records (NZ Government company and solvency records) as well as other internet sources including the supplier’s own website and their list of other clients.

$786,640 for the inspection of spa pools?

One individual being paid by the council is Jason Wilkinson trading as Regulatory Compliance Services with the total amount of $786,640 being paid since 2018. The company was only registered in January 2018, the same year QLDC paid $236,777 for supplied services. The company has no website with Mr Wilkinson only having 2 connections on LinkedIn, showing a background as a plumber in Auckland.

Mr Wilkinson was not available when contacted by Crux today, but his company is listed by Trading Standards as being qualified to undertake the inspection of swimming pools.

We’ve discovered on previous searches that QLDC consistently spends a fortune on two unusual items – portable toilets and agricultural lime.

• AB Lime $3,974,660
• Exeloo $2,066,605

A lot of us complain about the lack of parking in the district. QLDC spent $579,312 with Global Integrated Solutions Ltd that is in the business of parking meters.

Finally, at a time when the Queenstown business community is talking about little else than essential economic diversification, the QLDC funding for Startup Queenstown Lakes is static at $220,000 a year, less than the cost of QLDC hosted (but externally funded) leadership seminars ($184,990 plus $65,920) provided by Leadership Lab Ltd at Millbrook for the region’s “valuable and vulnerable leaders.”

Take some time to look through the full schedule. We’ll be submitting this article to QLDC for their response … and taking a deeper look at the numbers over the next few weeks.