Earlier this year at the Conversations Transport Event in March, I think it was, Mayor Goff spoke about the debt situation of Auckland, that the Council had reached its debt to revenue ratio of 270% and could not borrow any more without a downgrading of S&P rating. He went on to say that they had solved the problem by creating a Special Purpose Vehicle with a Government Department raising $800 million that would not appear on Council’s balance sheet but on the balance sheet of the Government department.

I was intrigued by this being aware of the Enron scandal and the role of SPVs in the failure of that company. I wrote to Mayor Goff and asked him for more details. At least a month later I received a communication from the City Treasurer John Bishop. When I spoke to John he explained to me that Auckland could not have a SPV unless there was some why for it to have an income and anyway the law needed to be changed to allow it. I told him to listen to the Youtube video of the Mayor’s speech and see for himself. I had listened to it with someone else 4 times and he clearly refers to a SPV.

After making enquiries he came back and said that it was to do with housing… but failed to resolve my question really. What was Goff talking about?

Now your article suggests that this is a second proposal for a SPV. I have to ask exactly what is the current indebtedness of Auckland? It just feels wrong that Auckland Council is deliberately going out of its way to disguise its indebtedness in this manner and failing to tell the truth to its current lenders?

Furthermore it suggests that the Enron mentality is taking hold in Auckland Council. As a small business person I am a little aware of how to run a business and I am very very concerned about what looks to me like a totally unsustainable and very expensive business model that the current Council/CCOs are.

Not to mention what looks like a corrupt system of “preferred contractors” gaming ratepayers on the delivery of poor quality and costing a fortune for the privilege. Not to mention the “revolving door appointments” which are signing off the contracts for their former employers and failing to ensure quality control and accountability. Something is very very wrong at present in Council and it just seems to keep getting worse?

How many SPVs does Auckland have or propose to have? And how much is its indebtedness both on and off balance-sheet?