Wayne's world

Far North Mayor Wayne Brown has been ticked off for the way he juggles his roles. Photo / Sarah Ivey

A critical Auditor-General's report shows that Far North Mayor Wayne Brown still courts controversy

Wayne Brown hates paying rates almost as much as he enjoys baiting bureaucrats.

The head of the Far North District Council has never hidden his aversion to what is the main source of council income.

"I really dislike paying rates and taxes," he wrote in his Browny Points column in the Northland Age last year.

No surprise there: Brown seized the mayoralty five years ago on a platform of bringing bureaucracy to heel, user charges and minimal rates rises for Far North residents.

Hugely successful as a company director and property developer, his public roles have shown him capable of making a positive contribution - but with considerable collateral damage. His time as Auckland's health board chief may have righted the balance sheet but on the debit side were slanging matches with doctors, uproar over a plan to rename the Starship children's hospital and the Labtests conflict-of-interest debacle.

In the Far North, he got offside with council staff and observers suggest a climate of fear remains. A first-term directional shift came when his council doubled the length of the rates holiday which subdividers could claim, a sweetener to encourage development. Brown obtained clearance from the Auditor-General's office so he could vote in support of the measure.

But it's the lengths Brown has gone to, since 2004, to minimise council charges on his Kerikeri property development that have earned the Auditor-General's displeasure.

Brown's company Waahi Paraone (the Maori translation of Wayne Brown) Ltd has been ordered to pay the bulk of a $150,000 contribution for sewerage connections for the upmarket subdivision as well as nearly $20,000 in withheld rates and penalties. Auditor-General Lyn Provost has rebuked Brown for blurring the boundaries of his mayoral role by:

Writing formally to the council chief executive about the rating issues using mayoral letterhead,

Regularly speaking with and corresponding directly with council staff, and

Using his council executive assistant to follow up on the rating issues with council staff.

"His role as Mayor does not create a shortcut for resolving legal or other disputes about rates," Provost's report concludes. "... Mr Brown has been unwise in the way he has pursued this dispute. We encourage Mr Brown to separate his personal and official roles more carefully in future..."

Which, in the delicate language favoured by the public sector watchdog, amounts to a yellow card.

Characteristically, Brown has fired back in less measured tones, saying Provost's report is "riddled with errors" (and worse) and accusing her of sending it to the media rather than just posting it on the Auditor-General's website.

He told the Weekend Herald: "People are trying to think that because you are the mayor you get special treatment. What this is saying is that when you are the mayor you don't even get anything like the treatment that the average man in the street does."

Which is exactly the Auditor-General's point, isn't it?

Provost is standing by her findings which followed a lengthy inquiry. "The report sets out where we found the evidence did not support Mayor Brown's views."

Brown's feud with his council finance department relates to his upmarket Alderton Park subdivision, a staged development begun well before his mayoralty bid.

The subdivision will eventually have 72 lots but by agreement with the council no more than 12 lots are connected to the council sewerage system each year. The dispute centres on the development contribution for the sewerage connections - a charge usually paid upfront by developers and recouped in the sale price - and argument over whether sewerage rates have been correctly levied.

The irony, given Brown's dislike for bureaucracy, is that the council seems to have bent over backwards to accommodate the development. In 2003, Brown agreed to pay $150,000 as the contribution for sewerage, a lower-than-normal sum for the type of development, Provost's report says.

A year later, he struck a deal to pay the development contribution only once the lots were connected to the council system. In land-only deals, this might occur after the sections were sold - meaning buyers would have to pay the development charge of around $6000 a section.

The Property Council says it has never heard of such an arrangement, allowing the developer to potentially escape the development charge.

The Auditor-General had problems with it, too, noting the arrangement had "an uncertain legal basis".

"The council went outside normal processes to help Mr Brown's subdivision to proceed. With the benefit of hindsight, this may not have been a wise decision.

"It is also unclear whether the council could legally require the purchasers of these lots to pay these development contributions."

Brown maintains it was common practice in 2004 for the Far North council to allow developers to delay the payment. He felt: "If everyone else can be deferred why the hell shouldn't I be?"

He says the council's flexibility acknowledged the staged nature of the subdivision and problems with raw sewage from the council's system spilling on to his land, which delayed the development.

But last year the council decided to end the arrangement. The report says this was because it was having problems collecting the contribution. But Brown says it was stopped on the Auditor-General's recommendation.

And at least one buyer was unhappy to receive a council demand to pay the development charge.

According to the report, she found out she was liable only when the council refused to issue a building code compliance certificate [issued after a house is built] until the contribution was paid. She claimed that Brown had told her that all contributions had been paid. The council then agreed to reduce the amount payable. Brown challenged staff over this and said he had told the purchaser she would have to pay."She just thought she would chance her arm," he says.

Other buyers contacted by the Weekend Herald say their obligations were spelled out in their sale and purchase agreement and have no issues with the arrangement.

The council's decision to end the deferred development charge agreement and seek payment of the balance of the $150,000 triggered haggling over how much the developer still owed.

Meanwhile, relations with the rates department had deteriorated over another issue - Brown's objection to a higher-than-expected rates bill for four lots after their rates remission period had expired. It seems the council forgot to adjust his rates in the first year after expiry, benefiting the company. The next year, when full rates were levied on the four lots plus a further 12 lots, he queried the increase in his sewerage rates and "many discussions" ensued. Brown withheld the disputed rates payments for the 16 lots "as well as those for other properties," the report says.

Last September, the council's lawyers wrote to the mayor seeking payment of the balance of the $150,000 as well as the outstanding rates. Brown paid most of the rates owing but withheld the sewerage rates and the outstanding development contribution and invited the audit office to investigate.

He paid up promptly in May when Provost signalled her finding in the council's favour. Waahi Paraone Ltd was asked to pay $76,487, on top of $21,100 already paid, in development contributions and $19,300 in unpaid rates and penalties.

This is not the first time Brown has taken on the council's rates department and lost. In 2003, he was ordered by the High Court to pay nearly $13,000 in unpaid rates for the Four Square shop he owns at Mangonui. He had refused to pay rates since he bought the property in 1999, claiming the shop's location - built on poles over the water - put it outside the council's boundaries.

I put it to Brown that a running battle with the council rates department might seem fair game to a developer but is inappropriate to wage from inside city hall.

"Well, nobody that voted for me didn't know what I did for a quid. People voted for me because they also are not mad about our staff and our rules. They expect their elected representatives to represent them as ratepayers whereas a lot of elected representatives seem to think they represent the staff to attack the ratepayers. Well, I am definitely in the other camp - [though] not to attack the staff ..."

"If I was just an ordinary developer this would have been solved years ago but because I'm a mayor and people like you stick your noses in ... It's very hard to do it when you are the mayor."

Wayne Brown
* Chairs: Clothing company Coastlines, Waahi Paraone Ltd, Alderton Construction.
* Former chairman: Transpower, Vector, Land Transport Safety Authority and Auckland, Northland and Tairawhiti district health boards.
* Past directorships: Kordia Group, Maori Television, Vector and Surfdistco Ltd.