Like many local authorities in New Zealand, Hastings District Council (HDC) has faced inflationary cost increases.
These financial pressures were exaggerated by Cyclone Gabrielle’s February 2023 visit.
HDC covers 5,229 square kilometres, in which Cyclone Gabrielle damage destroyed nineteen bridges and culverts, caused hundreds of major slips, with 161 additional bridges needing repair. This damage was said to be around $1 billion.
Funding cyclone recovery
The Labour-led government signalled after the cyclone they required councils, such as HDC, to contribute to the infrastructure rebuild.
For HDC this was calculated at $230 million, consisting of $50 million for the voluntary buyout programme of Category three houses, $170 million of transport network costs, and $10 million of three waters and other costs.
In 2024, HDC began formulating its Long Term Plan (LTP) for its next ten years.
In view of these financial pressures, Mayor Sandra Hazelhurst created a LTP Working Group of five councillors to work with officers on a financial strategy.
One of the big decisions of the LTP working group was the paying of the $230 million of HDC’s share of cyclone-related costs.
The group recommended to HDC to repay the $230 million over 16 years – rather than the normal 25 years.
This would save money by repaying quicker.
The roading network recovery would take place between seven and ten years, which would keep the cyclone recovery front of mind to advocate for more government funding. This work has been significantly undertaken by the Regional Recovery Agency.
I knew of one lesson from the 1931 Hawke’s Bay earthquake, that the further away from a disaster event, the harder it was to get support. Havelock North, for example, was still paying off its government recovery loan in the 1960s.
While the details have yet to be finalised, it was pleasing to see an additional $219 million for roading recovery allocated from the Government’s May 2025 budget to the five councils in Hawke’s Bay.
After the local body re-organisation creating HDC in 1989, discontent in the rural sector led to the creation of urban rating area (RA1) and a rural one (RA2).
While most of the cyclone damage occurred in rural RA2, the rates burden for this smaller group of ratepayers would mean financial hardship for many, if not all.
It was recommended, and adopted by HDC, that the cyclone recovery costs would be shared with the urban ratepayers.
Funding business as usual
After the cyclone recovery costs, the LTP working group’s focus then turned to business-as-usual (BAU) for operational and capital expenditure.
The increase in costs for BAU would be not insignificant due to inflation impacts and cyclone flow-on effects, such as insurance.
The LTP working group sought an independent review that HDC’s capital programme – particularly Three Waters, which averaged $67 million per year over the 10 year LTP – was justifiable.
The working group wanted to “avoid catastrophic failure of infrastructure of assets”. “Sweating assets” to the brink of failure, not only involves service disruption, but is also costly.
The HDC Three Waters capital programme got a tick from the reviewers.
In addition the working group requested from officers a savings from BAU expenditure. What was not wanted was to disrupt HDC as an organisation, but council officers to target specific costs or activities.
This would involve $2.7 million of savings over the 24/25 and 25/26 years.
Council reviewed any service cuts to save costs, and some hard decisions had to be made, such as closing the Frimley pool and shutting Splash Planet earlier than planned.
Without these savings the rate increases would obviously be higher.
A resolution was also suggested by the working group that any expenditure incurred outside the LTP must be approved by councillors. This would restrict any expenditure being made which made HDC’s financial position worse.
All the LTP working group recommendations were adopted by HDC, and the $2.7 million savings were found.
After public feedback from the 2024 LTP consultation, HDC decided to reduce the proposed 25% rate increase to 19%.
This would involve borrowing $22 million to bridge the gap for the lost rate revenue – in other words an unbalanced budget.
Calling for ‘bureaucratic waste’; or ‘slashing wasteful spending’ is an easy thing to do (especially in election year) to itching ears wanting a rates relief saviour.
While each council is different, the number of activities performed by HDC is immense.
Those aiming to glide onto the Council table as capped financial super-heroes, advocating radical cost-cutting, I believe, need to have a plan rather than making broad statements, and should clearly state how they will achieve this. We can then assess their sensibility, and any cuts to service levels.
Future councils may well ask should we be undertaking certain activities or do so in partnership with others, for example senior housing.
Can we form more partnerships with private enterprise to make ratepayer dollars to go further for city developments?
Creation of what are termed as nice-to-have projects, could be assisted by willing, resourceful citizens.
Our history has plenty of examples of this.
Michael Fowler FCA, is a chartered accountant, historian, Hastings District Councillor and chair of the Mayoral Advisory Finance, 2024 LTP Working Group and Performance and Monitoring Standing Committee.
Thanks, Michael. Unfortunately, this is just a buck pass from all Councils. There have been multiple natural disasters in Hawkes Bay jurisdictions which they have chosen not to learn from. The 2020 floods was one recent example prior to Cyclone Gabrielle. Now HDC and NCC want to build on flood prone land, intensify areas that are prone to flooding and build on our fertile soils according to their FDS and PDP reports. Their own internal officers (no doubt the ones that have faced the chopping block in the round of NCC cuts) have told them infrastructure will not cope and it will result in more disasters and more payouts. Learn from history, Council, or be prepared to face the music when the inevitable occurs. I’d laugh if lives had not already been lost. Also the farcical race based review after Cyclone Gabrielle – iwis, please look at your Maori committee leadership for answers, they’ve known about the problems for years also.
I wouldn’t be a councillor for love nor money – no matter what they do they will be “wrong” and subject to abuse by many of the voters (and non-voters given the turnout at election time). They do everything they can to the best of their ability – those that spout all sorts of cost saving promises are very quickly brought back to reality if elected and their promises immediately become excuses. In my opinion, humble or not, councillors do a thankless job pretty well – but the point about learning from history is well made – there are many reasons to do, or not to do, something where history shows a possible way through or a reason to stop a project. That’s one reason for Knowledge Bank’s gathering of personal accounts of Gabrielle’s effects – for use in future deliberations by HDC in particular.
Anyone promising “rates relief” is either a fool or a fraud or both. They either do not understand how local government works, or do but don’t care. Unless, that is, they are prepared to campaign to change the fundamental way councils work. See, the base problem is that councils make decisions and then ignore the result. In part because when they say “long term” they are lucky to be looking 30 years ahead, and coupled with that are looking to support the current productive businesses of the region. Not the general populace; not the sustainable environment. They also seem to naively believe that when they make a decision everyone affected will conform and adopt best practice to support it. All of their monitoring and enforcement actions sit within this framework. (They are of course aided and abetted in this by central government policy, which does not wish to give councils too much power – but happily passes on responsibility.) So, for example, when major climatic events like cyclones occur, and millions of tons of forestry slash cause $2 billion damage (and that’s just HB) to infrastructure, councils act surprised. They should not be; their consent conditions were too lenient, their monitoring regime almost non-existent, and their enforcement actions woefully inadequate. They might grumble mock outrage and lobby government to beef up their powers to change things, but when nothing happens after six months or so they sit down and shut up and pass on the bills to the general ratepayers. So, you want to alter this? Be a force for real radical long-term change, not another pop-up BAU candidate, and make the conditions fit for purpose and the abuser pay. (Instead of, as HBRC did, rewarding the forestry companies with rates relief!!!) Apply this model to all council planning (another example: ongoing low-lying subdivision) and you will see how short-sighted and current powerbroker-friendly your so-called “holistic” council is. Rates relief? Only if you’re already reaping the benefits…..
Grant and Bruce, the books don’t lie. There are so many things the Council could cut that are nice to haves, tighten their belts and do those things at a later date that wont impact the community. Agree that the right infrastructure is important to spend money on but new Council offices for HDC and NCC, ratepayers money to the homeless, $ to projects that could have been funded by the million $ iwis have already received from taxpayers – people have had enough of this lot. Majority will be gone in October, they are completely out of touch with their people. Step up good people, I’ll vote for you. Majority of the current lot – not.
I completely agree with the need for careful and considered planning when it comes to council finances. As Michael pointed out, it is not about making drastic cuts or taking an axe to the budget just for the sake of it. However, one area that warrants more attention is what the council has already publicised as potential cuts to reduce the debt burden.
While the LTP working group has found savings, like the $2.7 million reduction in BAU expenditure, there are still questions around the specific cuts that have been made, and whether those decisions were the most strategic ones. For example, the closure of the Frimley pool and reducing the operating hours at Splash Planet have been tough decisions, but are they truly the best way to save money in the long term, or just the easiest option on the table?
Rather than simply looking at “slash and burn” solutions, I would like to see more transparency and a deeper exploration of what council has considered in terms of cutting costs and whether other, less disruptive, options could be on the table. Are there any further areas of inefficiency, or more partnerships with private or community-based organisations that could be pursued to ease the financial strain without compromising services?
The idea is not to avoid necessary reductions, but to make sure we are reducing costs in the most effective and sustainable way, without cutting into the core services that the community relies on. It is about finding that balance and perhaps looking at a broader range of options that have not been fully explored yet.
I fully acknowledge the immense challenge Cyclone Gabrielle placed on Hastings District Council and our wider region. But in times like these, our community deserves leadership with a proven track record—leadership grounded in fiscal responsibility, smart prioritisation, and the courage to say “no” when necessary.
In 2007, the Manawatū District was facing double-digit rate increases year after year. That’s why I stood for council—because someone had to do something. I knocked on every door in Feilding, and was elected with more votes than any sitting councillor.
From 2007 to 2012, as a Manawatū District Councillor, our team kept rate increases at or below inflation every year. We achieved this by cutting back on consultants, focusing spending on core infrastructure, and putting a stop to vanity projects. It wasn’t always easy or popular—but it worked. Ratepayers weren’t hammered, and essential services still got delivered.
I agree with Councillor Fowler that disaster recovery requires urgency and strategy. But there’s a key difference: responsible councils plan ahead and know how to stretch a dollar. Hastings ratepayers didn’t cause Cyclone Gabrielle—yet had a 19% rates hike, followed by another 15% this year, and tens of millions in new debt to fund “business as usual.” That’s not resilience. That’s financial mismanagement.
Councillor Fowler points to a $2.7 million saving over two years as a major achievement. But when HDC’s capital programme spends $67 million a year, that’s barely a token gesture. Shutting pools and cutting community services while continuing to fund non-essential projects isn’t hard decision-making—it’s poor prioritisation.
Yes, councils have many responsibilities. But that’s precisely why councillors must be willing to ask: Should we still be doing this? Not every issue needs a consultant. Not every shiny idea needs a cheque book. I’ve been in Council—I know how to encourage council Management through tough times while protecting the ratepayer.
After living in Hawke’s Bay for more than a decade, I’ve watched with disappointment as Council wasted ratepayer money—like buying the AOG building for $1 million only to sell it two years later for $150,000, or spending another million dollars upgrading Civic Square.
I’m the only mayoral candidate with a real record of keeping rates to inflation ethically. I’ve worked as part of a team to encourage the CEO to cut bureaucracy, find savings, and protect essential services.
Councillor Fowler warns of so-called “rates relief saviours.” I say: beware of career politicians who’ve sat at the table for years and now want re-election for simply doing the bare minimum and funding vanity projects.
Leadership isn’t about protecting the status quo. It’s about standing up for the people who pay the bills—before they’re pushed to the edge.
—Steve Gibson
Mayoral Candidate, Hastings District Council
Mr Gibson
Thank you for your reply.
The $2.7 million was operational savings – not from the capital programme of $67 million.
Happy to sit down with you and take you through all of the HDC financial strategy if you wish so you canunderstand it properly. It’s all public domain information.
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