Something tells me this year will be especially challenging for our region’s councils and their ratepayers.
And that’s even making the optimistic assumption that life in the shadow of Covid-19 remains relatively ‘normalised’.
Life will be anything but ‘normal’ for many of the region’s businesses. Those who rely on exporting and importing, which is most of our primary sector, will be dealing with serious blockages and delays in their supply chains, an issue addressed in two articles elsewhere in this magazine. And our hospitality industry will continue to feel the impact of missing overseas visitors and a likely winter fall-off in Baycationers.
But whatever the business sector turmoil, our councils will roll on.
And the major issues confronting them will be: facing the grim reality of their pending Long-Term Plans (LTPs) for 2021-22 onward, water management and security, and, at least for the Regional Council, the controversy over dedicated Māori seats on the Council.
Public debate and political skirmishing will focus on these questions:
1. How much ratepayer money to levy over the next three years – with the assumption these increases will be significantly larger than in the past?
2. Who will control costs for and delivery of the region’s core water services?
3. How big will our water demand/ supply shortfall be over the next 50 years, and how will that gap be closed and/or who will get the water?
4. Should governance of natural resources in the region include dedicated Māori seats on the HB Regional Council?
Any one of these makes for plenty of political heat. Add them all up …!!
Plus, willingly or not, our councils will be dragged into the nation’s two greatest challenges – meeting our housing needs and addressing climate change.
While our 53 local government elected officials probably don’t view it this way, this year’s crop of pending LTPs actually raise critical questions about the affordability of local government in Hawke’s Bay.
Without significant central government bailouts, at least two of our councils (CHB and Wairoa), possibly three (Napier) can’t afford to deliver the most fundamental of services – delivery of drinking water and disposal of wastewater and stormwater. More on this in a moment.
Each of the councils will be proposing significant rate increases in their LTPs, largely driven by finally addressing previously unmet infrastructure needs. Hastings District Council is proposing rate increases of 6.8% next year, 6.5% in year two, and 5.3% in the third (and averaging 7% in rural areas due to roading costs). While other councils are still weighing their LTP options, and coy about them, the Central HB District Council is well along and its rate projections tell a grim story.
CHBDC is consulting on rate increases of 7.8% in each of the next two years, and 5.8% in the third … and some out-years include increases over 10%. This reflects gruesome but commendable honesty.
As the LTP consultation document says: “For decades, the Council has historically held rates at an artificially low rate, instead of funding depreciation or putting aside reserve funds for the renewal of our core infrastructure assets.”
Read Amy Shanks’ interview with Mayor Alex Walker in this mag. The mayor uses words like “sobering”, “frightening”, and “heartbreaking” to describe her community’s financial distress.
This fiasco didn’t suddenly arise from nowhere on her watch, but she’s too much the politician to levy a charge of malfeasance against derelict former CHB mayors and administration.
And one might look at previous Napier City Council regimes and find the same pattern of neglect.
At the northern end of Hawke’s Bay, in comments to BayBuzz Mayor Craig Little attributes Wairoa’s budget challenges to central government. “The challenge we have is the lack of investment by Central Government where the funding it provides does not match the legislative requirements they set. Therefore, Councils struggle to meet the standards set by Central Government with the amount of money they give us.”
He elaborates: “For the past century, while the Central Government spending trajectory has continually gone up, Central Government funding to Local Government has remained the same, literally flatlined. We go out to consultation and our communities tell us what they want but we can’t always achieve these aspirations because so much of our budget is sucked up in Central Government legislative requirements.”
Mayor Little might be careful what he wishes for. The current Government, having lavished Primary Growth Fund and Covid ‘recovery’ money on our councils for economic stimulus projects, nevertheless displays a clear tilt toward central control and direction, be that in terms of infrastructure management or freshwater environmental standards.
One might conclude that Wellington regards local councils as either fundamentally inept or politically afraid of their ratepayers.
Nowhere is this more apparent that with respect to local management of water services (drinking water, wastewater, stormwater) – the so-called ‘Three Waters’ initiative of the Ardern Government.
Here the Government has recognised a nationwide infrastructure problem for which it so far has committed $761 million to fix.
However, a recent study conducted for our region conservatively estimates that more like $605 million will be required here alone to bring Hawke’s Bay’s ageing water systems up to modern world standards in terms of safety, reliability and environmental performance. That amount, almost twice the $313 million forecast in our councils’ existing long-term plans, is considered conservative.
With these rate implications:
Average three water rates
|Council||2018/19||Enhanced status quo 2031/2032|
|Central Hawke’s Bay District||$1,536||$3,867|
Hence the refreshing honesty in CHB’s future LTP.
The Government has already allocated $50 million across the region to begin to address the problem ($10 million went to Mayor Little’s Wairoa Council).
But there are serious ‘fishhooks’ attached reflecting Government’s serious doubts that our provinces are well-organised or capable of effectively managing this core responsibility.
In handing over Government’s $50 million, Local Government Minister Nanaia Mahuta made it plain: “The financial investment from the Government is contingent on local councils opting in to the Government’s wider water reform programme. The cumulative effect of increasing capital costs, infrastructure maintenance and upgrades, enhanced standards and environmental challenges mean that the current operational and governance arrangements for water are not sustainable and consolidation is required.” [Editor’s italics]
Continuing: “Today’s announcement will lend the reform programme’s initial stages very real impetus and Councils will need to sign up to the wider reform agenda in order to access the Government’s funding.”
The Government’s preferred arrangement is to create a small number of multi-regional water authorities to make these decisions and run the water systems (in our case, from Palmerston North).
Our local political leaders are horrified by that prospect, which would remove control over the next biggest chunk of their budgets after roads, and eviscerate their balance sheets (by moving all those assets, which underwrite borrowing, off councils’ books)! They’ve conjured up a new regional ‘Authority’ to achieve economies and fairness across the region, but must sell that plan to Government. Stay tuned on that one!
We can’t leave a discussion of water without addressing water security.
Here the ball is in the HB Regional Council’s court.
HBRC is part way through a Regional Water Assessment that aims to project the region’s water supply and demand fifty years into the future. This ‘water accounting’ should be completed by mid-year.
Assuming demand outstrips supply (under current policies and capacities), the Assessment will proceed to identify a full range of ‘policy interventions’ for closing the gap. And that’s where the fun will begin.
Such interventions – some focused on reducing or managing demand and some on increasing supply – are envisioned to run the gamut from greater incentives (regulation?) for water conservation and efficiency through to changed land use and farming practices to physical water storage in any number of scenarios.
The Regional Council already has some $30 million from the Primary Growth Fund on hand to explore the ‘supply augmentation’ side of the equation. In Central Hawke’s Bay, some of those funds will be used to experiment with ‘managed aquifer recharge’, where winter and high-flow water is captured and channelled into storage ponds from where it can filter down into the aquifer. On the Heretaunga Plains, the leading contender for water storage is enlargement of an existing reservoir outside Bridge Pā, again capturing high flow water (in this case from the Ngaruroro River) and releasing it into waterways to support summer low-flows.
The HBRC position, at least rhetorically, seems to be that storage options are probably a last, but necessary resort – they would not be implemented unless the contribution that water conservation and efficiency measures, coupled with water-retaining land management practices, is gauged with more precision and deemed insufficient to close the water deficit. That analysis is underway.
Whatever rationality might ultimately underpin the Assessment, without doubt different sectors and water users will advocate to protect their claims on the water. It will be the Regional Council’s responsibility to protect the environment from the irrigator, industry and municipal onslaught.
Complicating vexing resource management matters for the Regional Council is its fractious relationship with Māori leaders in the region, who post-Treaty settlements are flexing their new muscles in the political process.
Readers might recall that back in July 2018, Toro Waaka, then co-chair of the HBRC’s Regional Planning Committee (RPC) called on Government to replace councillors with commissioners. He considered the Regional Council a hopeless cause when it came to either protecting the environment in general or advancing Māori interests in particular.
The RPC is unique to Hawke’s Bay and was created by law. The committee consists of Māori representatives, one each selected by each of the nine Treaty claimant grouping in the region, and the nine elected regional councillors.
Per the legislation, the RPC has a prescribed focus on RMA-related matters coming before the Regional Council, but that said, even interpreting and agreeing upon the scope of the Committee’s mandate has been contentious. And the resolution of any given issue has been made often impossible by a requirement for an extraordinary majority to agree on any action (with 80% agreement required, 4-5 members can block any action … and frequently have).
The legislation provides no path for navigating beyond such disagreement, so decisions on critical issues have been left ‘twisting in the wind’ for months and, in the case of the hugely-important TANK plan change (which would – if ever adopted – govern water quality and allocation over the Heretaunga Plains) even years.
A 12-member Māori Advisory Committee also exists, with members appointed by each of the four Ngāti Kahungunu Taiwhenua in the region. This Committee can advise on any matter before the Council, but to some there’s the rub … the Committee advises only.
Into this fray has leapt the contentious issue of mandating dedicated Māori seats on the HBRC, to be elected only by voters on the Māori roll. This proposal was considered by Council at the end of last year, with a decision taken to conduct a non-binding poll on the matter at the time of the 2022 local body elections. The two elected Māori already serving on the Council were divided on the issue.
This outcome infuriated many in the Māori community, who had wanted (and expected) councillors to approve Māori seats on the day.
Ngāti Kahungunu iwi chair Ngahiwi Tomoana blasted the current councillors as racist for demurring on immediate creation of dedicated Māori wards.
Since then, the Government has initiated legislative change that would remove existing provisions enabling 5% of voters to petition for a binding poll if their council approved Māori seats (i.e., a mechanism to overturn or ratify that action). This provision is deemed by some as an unfair barrier to improving Māori representation; others see it as democracy in action.
In any event, the Government has given councils until May 21 to adopt Māori seats if they wish them to be in place for the October 2022 local body elections.
So, in that context, on February 24 the Regional Council again takes up the issue of dedicated Māori seats (unfortunately, this magazine went to press on the 23rd!). By the time you are reading this, HBRC Councillors will have decided to:
• Adopt Māori seats outright in time for the 2022 election,
• Conduct a high-speed ‘consultation’ process meant to inform a May Council decision on how to proceed, or,
• Let the existing decision stand, which calls for a non-binding poll on the issue at the October 2022 election.
Check the BayBuzz website for our analysis of the outcome and the issues raised.
Whatever the decision on February 24, it is certain that the appropriateness of Māori seats will be debated in the community – formally as part of a special consultation process leading to a final decision in May, or ‘spontaneously’ as a result of ‘unhappiness’ with the decision either way … whether to defer the matter further or to proceed immediately.
In sum, whether your favourite courtside seat is at the Regional Council or one of the territorials, the year ahead promises some illuminating tests of political courage, with significant issues of money, accountability, economic viability and governance being contested.
And that’s without getting into the two mega-challenges in which our councils need to be – at least – fast followers … housing and climate change.
As Mark Sweet observes in his mag article, Housing in crisis, concerns over housing are ubiquitous these days. Some would say it’s a central government issue, let local bodies focus on reserves, leaky museums and road repairs. But elected local officials are on the front line dealing with the homeless, awarding consents, earmarking land, building ‘communities’ in the broader sense. They clearly have a stake and a role to play in any solution. And our councils do seem to be stepping up.
Similarly with climate change. Again, as addressed in my article, Climate update, policy leadership must come from central government, and the Labour Government has been handed an excellent blueprint by the Climate Change Commission. Further, one of the RMA ‘replacement’ acts announced by Government will set the framework for dealing with our sea and storm threatened coastal areas.
But most of the actions will be taken by individuals and businesses – and councils – in their home communities and regions. Here in Hawke’s Bay we will (or will not) deal with flooding, change farming practices, purchase EVs, embrace solar power, build green offices and commercial building, insulate homes, plant trees – make the day-to-day decisions and behaviour changes that show we are determined to take on the threat posed by global warming.
This won’t happen spontaneously. And it won’t happen from Wellington. It will require steady, vocal leadership from our local elected leaders leveraging their own individual visibility and the resources of their councils – setting local goals and challenging us to meet them.
So I foresee a heavier-than-usual workload for our councils and councillors in the year ahead. Just when they thought they might be getting a breather from the exceptional Covid-19 challenge of 2021.
But hey, we’ve got a small army of 49 councillors and 4 mayors in Hawke’s Bay, they ought to be able to divvy up the workload!