After a year of skirmishes at the fringes of public awareness, the protagonists for and against local government reorganisation are about to do serious battle. Tom Belford reviews the developments that will bring the prospect of amalgamation into sharper focus in the months ahead.

By the end of October Parliament is expected to enact a local government reform bill that streamlines the local reorganisation process. The aim of the bill is to upset the status quo.

The prospect that it will do so has rattled the likes of Napier politicos like Barbara Arnott, Stuart Nash and Bill Dalton. And encouraged the broad-based ranks of A Better Hawke’s Bay.

Napier versus Hastings on the hockey turf… typical dysfunctional rivalry

Back in July, I made a submission to the Local Government and Environment Select Committee in support of the bill.
I had just spent many hours in June watching our councils deal with public submissions to their respective Long Term Plans (LTPs).

It’s a spectacle that underscores the need to consolidate our local bodies. Time after time submitters were forced to plead the same case before two or three councils; councils were repeatedly ignorant of, at odds with or sniping at one another’s priorities and policies; or they simply played pass the baton with submitters’ requests and proposals.

Here’s just a sampling of the many issues where inconsistency, buck-passing and/or lack of regional cohesion frustrated submitters and good government alike …

International hockey turf – affected three councils, with three points of view. Duplication on its face, or a sound way to capitalize upon the sport’s popularity? Temporary stalemate. Back to the drawing boards.

Tourism support – Hawke’s Bay Tourism asked for money to support a regional events strategy (two years in the making) that supposedly all councils support. But all declined to fund! Instead, Mayors Yule and Arnott floated the idea of a bed tax to generate Hawke’s Bay promotion funding, but the Regional Council (HBRC) rejected that idea outright.

Haumoana beach protection – HDC effectively kicked the decision out of touch till after next election, while complaining that HBRC has been inappropriately removed from (even hostile to) arriving at a consensus solution to the problem. HBRC blew the property owners off.

Public health issues – District Health Board staff dutifully trudged around to each council to submit, trying to make the same underlying concerns look ‘unique’ to each council. And ditto for the needs of Sport Hawke’s Bay, Sustaining Hawke’s Bay Trust, Art Deco Trust and other community groups.

Te Mata Peak Visitor Centre – high drama as the only regional project truly deserving of the term ‘regional’ fought for funding. However, project proponents threatened a deal which HDC had made with HBRC (HDC wanted 100% of its share of the HBRC ‘regional facilities’ booty allocated to the above-mentioned international hockey turf — i.e., leaving no money for the Visitor Centre). Ultimately, HBRC bowed to the merits of the Centre, and awarded it $500,000. The case needed to be made three times to three councils (not counting a second time to NCC, which had misplaced the paperwork).

Film Hawke’s Bay – a group that tries on an oily rag to lure film, TV and commercial producers to Hawke’s Bay, where they’ll spend hundreds of thousands on the ground. FHB pleaded to three councils; only one saw the logic for the region and partly funded, leaving the group twisting in the wind.

GE-Free Hawke’s Bay – HDC, which has most of the farmland at risk, responded warmly, talking about adding protective rules in its District Plan and even providing national leadership. HBRC more or less yawned, not quite ‘getting’ the case made by local farmers for protecting and even enhancing the value of the region’s agricultural output, but deigned to participate in a forum to discuss the issues.

Airport runway extension – same submission was made to HDC and NCC, the two territorial councils that own shares. Meanwhile, our Regional Council has nothing to do with this vital piece of regional infrastructure.

Te Taiwhenua o Heretaunga – leading Mãori voice in the region … multiple issues had to be presented to multiple councils.

Sewage treatment – HDC and NCC have funded identical plants a few kilometers apart. The Central Hawke’s Bay Council, after more than a year of nursing along an upgrade scheme with full support of the Regional Council (which purchased and planted forest land on which to spread expected effluent), decided at the last moment in its LTP process to adopt instead an entirely different and untested approach, calling into question its own competence and poking a stick in the Regional Council’s eye.

Over the last few years, I have spent well over one thousand hours watching firsthand the dysfunction of councils’ planning and decision-making in Hawke’s Bay. If members of the Select Committee witnessed just a portion of this nonsense, they would better understand the parochialism, missed opportunities and transaction costs caused by our multi-body governance arrangement.

It would also be clear why the structural changes required will not be initiated by the councils themselves.
The intent of the reorganisation provisions of the government bill is to empower those who seek more effective local governance – and the positive change that will enable in their communities. It is the most rare mayor, councilor or council who will take such initiative to change their status quo.

Assuming the bill is passed, reorganisation proponents in Hawke’s Bay are poised to submit a reorganisation proposal to the Local Government Commission. By the end of the year, the people of Hawke’s Bay can be debating a concrete proposal, rather than speculating about the fear-mongering claims of politicians protecting their patches.

Fresh insight

In the meantime, an independent study examining the impediments to Hawke’s Bay’s social and economic betterment has been completed. The report, prepared by a seasoned local government executive and consultant, Peter Winder, was funded by the Regional Council, but prepared under terms of reference approved by the region’s five councils.
The project so far has drawn upon existing studies and plans prepared by councils, conducted its own updating research, and freshly interviewed 60 or so community leaders.

Winder’s ‘phase one’ report, which examines the problems and opportunities for the region, has just been made public.
Winder examined the benefits of shared services (he notes little progress in HB) and full regional amalgamation. He observes that regional amalgamation would deliver far greater ratepayer savings than shared services ($25 million per annum versus $3 million), and questions whether the community can maintain local government costs that are increasing faster than the growth of both the domestic economy and wages. Indeed, he questions the future viability of the Wairoa and CHB Councils.

That said, Winder considers the greater importance of amalgamation rests in enabling a single strategic plan and stronger “transformational leadership”, which he relates to energizing social and economic improvement initiatives.
It will be intriguing to see how individual mayors and councils interpret Winder’s report, and how they respond if they don’t care for his findings or their implications.

While the Winder report(s) await digestion, important results from reorganisation are already being reported from Auckland.

Doing more with less

In a July NZ Herald article, Rodney Hide cited some remarkable fiscal results so far from local government reorganisation in Auckland.

In 2009 when the transition began, there were 10,000 staff across the eight councils; there are now 8,000 … a reduction of 20%. Says Hide: “The cut was not from front-line staff and service delivery but to management as duplication was eliminated in establishing the one council.” Hide claims the savings total $94 million in wages alone each year … or about $1 billion in savings over 10 years.

Checking on Hide’s claims, BayBuzz found that the figures came from Auckland’s new Long Term Plan.

In his LTP message, Auckland chief executive Doug McKay reports:

“We are delivering on the promise of amalgamation and the $81 million in cost savings we produced in the first full year of Auckland Council are just the beginning. A further $50 million in costs will come out during the first year of the LTP (2012/2013). These savings are material; every $14 million we manage to reduce in costs is the equivalent of a 1% rates reduction.”

And from Auckland’s 2012-2022 LTP:

“The council has an efficiency programme to leverage savings from the amalgamation and build a culture of value for money. The programme has been successful in identifying ongoing efficiency gains and other cost savings of $81 million from 2011/2012; permanently reducing the general rates requirement by this amount.

… the council is forecasting that over the next six years a further $107.2 million of permanent ongoing savings will be realised, so that total savings of $188.2 million per annum will be achieved by 2017/2018. These savings are projected to accumulate to $1.7 billion over the full 10-year period of this plan.

In general, these savings represent the reduced cost of delivering the same service levels planned by the legacy councils. The savings will primarily come from improved procurement practices, process automation, system rationalisation, resource optimisation and enhanced commercial management.”

Says Mayor Len Brown, in his LTP message: “We have found $1.7 billion in cumulative savings and efficiencies
within the LTP while maintaining council service levels.”

McKay notes that the average rate increase across Auckland for the past eight years was 5.7%, while the new LTP holds the average rates increase to 3.6% in the first year and no more than 4.9% in subsequent years.

At the same time Rodney Hide credits Brown with doubling public capital investment in Auckland infrastructure, from $1 billion to $2 billion per year.

Local reorganisation opponents in Hawke’s Bay are spitting tacks, and attempting to discredit the figures,
which have been approved by the Auditor General.

But Hide sums it up simply: “The Auckland Council is doing more with less.”

What about Hawke’s Bay?

‘Doing More With Less’ is not a bad aspiration for amalgamation in Hawke’s Bay.

And politically, any reorganisation must deliver fiscal savings to ratepayers.

Recently the DomPost reported survey findings from Wellington residents that underscored the importance of rate savings to the voters, saying:

“Many Wellingtonians would support a super city if they could save $2 per week. Survey results show that a $100 saving on their annual rates bill would be enough to persuade the 59 per cent of Wellington residents who opposed amalgamation to change their minds. And for 31 per cent it would take a saving of only 20c a week, or $10 a year.”

As indicated by the Auckland results, reorganisation savings and efficiencies are more likely to reduce the growth of local government spending in our region over time, and deliver more bang for the buck, as opposed to yielding cuts in current rates paid. But with the reductions evidenced in Auckland – and projected for Hawke’s Bay by the Winder report – the savings opportunity is nevertheless very significant, making reorganisation well worth the candle.

There’s no question that matters of the wallet strongly influence most ratepayers.

But savings aside, many in the community who think seriously about the region’s future and work constantly to achieve better outcomes also see enormous benefits in unified strategic planning and investment. The ‘vision thing’ has its place as well in the case for reorganisation.

In addition, those who interact the most with our local councils on a day-to-day basis, from contractors to community groups, see heaps of benefits merely in the time they will save and the consistency of regulations and outcomes they can expect if council consolidation occurs.

So stay tuned … BayBuzz expects plenty of action on the reorganisation front before the year is out.

Apart from BayBuzz, you can follow the debate most closely on the website of reorganisation advocate, A Better Hawke’s Bay – www.abetterhb.co.nz. Sign up there for their updates.

And for a contrary view on amalgamation, try this website – www.recessmonkey.org.nz – maintained by Stuart Nash’s former campaign manager.

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