Council puts ‘big pants’ on
Greedy contractors may be overcharging the Hamilton City Council, a property expert has warned, while the city’s top dog says staff need to get staunch when dealing with contractors.
The comments came as mayor Paula Southgate and two senior councillors delivered a briefing on the draft 2024-34 longterm plan to a Waikato Chamber of Commerce event this week.
Commercial property expert Mike Neale, managing director of NAI Harcourts, queried the value the council received from some existing contractors, referencing what he said was a massive over-run on the new Waikato River bridge. Most people go ‘how is that possible?’,Neale said. “I do wonder whether contractors see council as a bit of a cash cow. I just have the feeling that there should be better bang for buck in having those discussions [over contracts].”
Southgate said there were moves to cut contractor costs by 10% through the long term plan process, also pointing to the existing pause on several transport projects.
Vervoort stood up to describe how the council tested the market through public tendering or through a preferred supplier panel, which was itself the result of a tendering process. “So I don’t think there’s any better way than actually testing the market on big projects.”
Vervoort then wondered if Neale’s comment related mostly to managing contracts, noting market conditions had tightened. “When things are tight people get more litigious and they become eagle-eyed and put a lot more scrutiny on things, and consulting firms and contractors will actually try ... [to ensure] that they’re extracting as much value from the contract as well.”
He predicted the contracting “game” would be like that for another two years and said “some of my guys are having to put their big boy pants or big girl pants on, and put flak jackets on, and we’ll do our best for the city”.
Southgate acknowledged contracts did sometimes overrun on costs, but there were others where contractors took a lot of pride in delivering under budget.
Meanwhile, asked about the joint Waikato local government co-operation body Co-Lab’s ability to increase efficiency, Southgate noted more potential for regional cooperation between councils over water services now Three Waters had been ditched.
Finance committee chairperson Maxine van Oosten said Co-Lab was a great vehicle for collective action “where we know there can be savings made by acting together”.
But economic development committee chairperson Ewan Wilson said: “Let’s be honest. Co-Lab will not be successful until smaller councils accept that they long-term may no longer need to exist.”
He said if Three Waters had proceeded there would have been few staff left at smaller Waikato councils. Wilson felt a business would aim to have a lot of cohesion between its various parts in a “commonsense” way.
“But we don’t do that in local government.”