The CEO, Kapiti Coast District Council

16 September 2020

Dear CEO,

 Re: Gateway — the Consultation over, the new evaluation

The KCDC website now states the following:

The application made a solid case for government funding and we are now working through a process, having listened to community and elected member concerns, to test some of the assumptions made in the indicative business case. 

This includes looking at a range of options for how the centre might operate, should Council decide to proceed with the establishment of the Gateway at this time.

This  statement raises a number of concerns.

First, it states that KCDC has listened to the community. The listening has , according to the statement, now concluded.  I am unaware of any “Listening”. With regard to my own submissions all my correspondence to yourself and the mayor has been ignored and not responded to. Only information requests have been answered.

Please indicate how this further consultation has taken place-

(a) enumerate upon all the “Community concerns” listened to

(b) how was the evidence obtained at these “Listening events”

(c) who attended

(d) who listened

(e) how was the evidence obtained recorded

(f) what was the method used to carry out a fair and genuine evaluation of these concerns.  In other words the community needs to know that a genuine re-evaluation has taken place and not a public relations exercise enabling the council to say it consulted.

Second, it says KCDC is now going, ” to test some of the assumptions made in the indicative business case”. What is the test and how is the test being carried out. It is our understanding, after reading the information available on the KCDC web site, that the business case is based on the Bevin report and unsubstantiated assumptions contained in the application form to the PGF.

Addressing unsubstantiated assumptions — Page 2 of the Application states:

economic impacts are: 

  • ∙  Revenue $5.91 million 
  • ∙  Net Household Income $1.13 million 
  • ∙  Employment 27 persons 
  • ∙  Value Added/GRP $2.24 million 

Current and forecast Kāpiti Coast Visitor Spending economic impact scenarios show by 2030 (with 45,000 visitors or a 12.5 percent per annum increase in visitor numbers to Kāpiti Island only, let alone the rest of the district), total annual revenue could be up to $16.26 million and employment up to 72 persons. 

None of those figures are substantiated by any reference to the modelling template used, nor is there any indication as to how visitor numbers are guaranteed to grow 12.5% per annum. That is why we need to know how the test KCDC is currently undertaking is being carried out.

There is only one expert report on the table at the moment. We would suggest that this Bevin report needs to be peer reviewed and KCDC has already been asked to pay for NZIER to carry out that review. (Three requests have been made not a single one has been replied to). Please explain how KCDC can test the Bevin Report and its assumption of visitor numbers exploding to 58,000, without having that report peer reviewed. As we understand it none of the councillors or council staff doing your “test” have any expertise in economic forecasting.

At page 14 of the application it states:

The total annual visitor limit to the Island is 58,000 and currently only 15,000 people are visiting, which means visitation is only at 25 percent. 

This is not only unsubstantiated, it is factually incorrect. It is has been arrived at by multiplying the maximum number of visitors allowed per day: 160 x 365 days a year = 58,400. No bad weather, sailings every day, visitors flocking throughout the winter months. So can you please indicate how the special committee is testing such fictional figures, and more importantly, whether, having concluded the business case is based on fictional numbers there is no viable business case supporting the project.

Another example of what appears to be unsubstantiated assertions made in the application to the PGF  appear at [14]:

No additional funding for this project will be required in the future. 

The proposed model of operation (which is still currently under development) will involve paid employees and volunteers. This is a model successfully used elsewhere to undertake similar services. Kāpiti Coast District Council will financially support the operations of the Centre in the initial years; however, the ultimate objective is for the Centre to be largely self-sufficient. Opportunities have been identified for how this could be achieved through commercial activities, corporate partnerships, community giving initiatives, and specific grants to support educational, cultural and environmental programmes/events on a case-by- case basis. An operating budget (attached) with projections out to 2027/28 is attached. 

The unsubstantiated material is highlighted in yellow. How will the “test” ensure there is substantiation-ie there is hard evidence to back up these assertions? In your reply please (a) List the commercial partnerships naming the companies involved, (b) the specific grants relied upon stating who is grantor, who is grantee, (c) a copy of “This is a model successfully used elsewhere to undertake similar services”.

Another matter

In preparing this letter I came across 3 further documents that you have not put on the KCDC website, though they were part of the application to the PGF. These are:

  1. Feasibility Report p[15]
  2. Design statement p[8]
  3. Business Case p[15] — this appears to be different to the Bevin report.

I emailed you last evening noting the absence of the Gnatt Report at [27] and the Budget Spreadsheet at p [28], and seeking their immediate release. Please release these latest “finds”.

This letter is in itself a litmus test. If there is no response, answering the questions raised, it will be hard evidence of the vacuity of KCDC’s press release assertions that actual consultation has taken place and the red flags raised have been given the consideration any reasonable person would give them.

Thanking you in anticipation of your timeous response,

Yours faithfully,

C.B. Ruthe