Can Napier and Hastings continue to exist with an invisible Berlin Wall between them? Or can they call a truce and form a united front before someone does it for them? Kathy Webb investigates.

Na-Pure and Ha-Stinks

It’s an old expression, and childish, but it encapsulates perfectly the sibling-style rivalry and petty jealousies that have dragged Napier and Hastings apart for as long as anyone can remember.

Two small provincial cities with just 20km of highway between them, economies and populations inextricably intertwined, they face basically the same challenges and issues at every turn. But they’ve niggled and squabbled and gone their own respective ways, seemingly forever.

One airport for the region? Let’s fight about it for a decade.
One hospital for the region? Over my dead body.
A university? Argue over location until both lose it.

Fact: When the two cities’ newspapers merged in 1999, an irritated Napier man phoned the new newspaper to complain that he resented reading Hastings death notices among the Napier ones.

The pettiness is more subtle these days, although not hard to find. And it’s not confined to everyday people. “Napier is the only official city in Hawke’s Bay”, says a website about Napier, because “Hastings is administered as a district”. The Napier City, Hastings District and Hawke’s Bay Regional councils have all recently installed completely different new computer systems, and all criticise the other two for not working toward shared software.

It defies explanation.

According to Statistics NZ, at the time of the 2006 Census Napier had a usually-resident population of 55,359. Hastings District had 70,842, Wairoa had 8484, and Central Hawke’s Bay 12,957. That’s a regional total of 147,642.

Governing those people are 53 elected representatives, making one representative for every 2,792 people in a regional population that isn’t growing. Apart from their five sets of elected representatives, the councils have five separate bureaucracies, five separate information technology systems five rating systems, five district plans, five different sets of by-laws and policies, and so on.

Why? Apparently we and all our communities are so different from each other it’s impossible to have just one set of everything. And of course we don’t entirely trust each other. And we’re not having our rates money spent to benefit another part of the region.

How did this start? No one seems to know, although one theory is that its genesis was competition between the cities to be regional bases for central government offices and services.

To be fair, the past two decades have seen a degree of unity at the highest levels of each council. That has at least achieved first tentative steps pencilled in toward rationalisation of services to ratepayers. But history doesn’t inspire much hope. Attempts to unify the cities’ library services collapsed after 18 months of negotiation. And while moves were being made toward a joint contract for kerbside rubbish collection, Hastings went ahead and let one for the unusually long term of six years. That cost Napier an extra $100,000 for a 44-month contract, just to get its maturity date aligned with the Hastings one.

Some people told Baybuzz shared services are about as good as it’s going to get; others say nothing useful will ever come from tinkering around the edges, that full amalgamation is necessary if Hawke’s Bay is to survive and thrive in a super-sizing world. Yet another says amalgamation is needed but won’t happen because vested interests will scare the voters.

Napier Councillor Bill Dalton and Hastings Councillor Wayne Bradshaw believe there is no mood for amalgamation, and that shared services are the most realistic first-base. As they see it, shared services such as libraries, dog control, parking management, insurances, liquor licences, health regulations for restaurants, waste management, and tendering out Council requirements such as rates accounts could eventually achieve all the benefits of amalgamation without the upheaval, while leaving each Council’s political wings to do their own thing.

However, Mr Bradshaw also believes both cities have left it a little late; that there is now a plan in the Beehive to effect Auckland-style amalgamations around the country and effectively hand the Government control of key assets such as water and transport nationwide.

Councillors Bradshaw and Dalton have probably had the highest profiles in promoting Napier-Hastings unity in recent times. They planned a co-ordinated campaign last year and each went head-on with his respective Council to win agreement for investigations into extensive shared services. “It’s hard to divorce shared services and amalgamation, but shared services creates immediate efficiencies. I’d have thought that would be a top priority for Councils, but it’s only since Bill and I raised the issue last year there’s been some momentum. It should have been done years ago, so our rates wouldn’t be as high as they are now, but political agendas come before practicalities,” Mr Bradshaw says.

He believes Hawke’s Bay is in the firing line for a shotgun wedding initiated by Wellington, “a la Auckland”. “Lawrence Yule is the go-to guy for Wellington. There’s a whole lot going on that we’re not being told the truth about. This sort of thing doesn’t happen by default. It’s well thought out and planned behind the scenes for the desired outcome,” he says.

“Mr Yule wants to appear to be a superior communicator, so you put it out there to try to get buy-in to the process, but you would have thought he would talk to his own Council before announcing it, but he didn’t. Councillors were shocked. The first we heard about it was from the media. “The issue is, why do we want amalgamation, but we are not having that debate. How can anyone make a decision out there on the basis of political rhetoric? We also have to look at participation in any vote. Is a 40 per cent turnout a mandate?”

Mr Dalton says “Napier is leading the way” in looking for shared services, evidenced by its preparedness to spend $100,000 aligning its waste collection contracting dates with Hastings. “I object strenuously to the idea of a shotgun wedding. We should continue to work co-operatively. It will become apparent in the future that it’s working so closely we might as well be one, or that we have milked all the savings to be had, so why amalgamate. There are some trying to force the issue as a political agenda, not as a real benefit.”

“I’m not totally anti-amalgamation, but if it happens now it will be a forced marriage. There is no mood for it in Napier,” Mr Dalton says.

Despite the pessimism of Councillors Bradshaw and Dalton, the Hastings and Regional Councils, under pressure from the Hawke’s Bay Chamber of Commerce, have agreed to begin studies of the potential for amalgamation, each putting $50,000 into their budgets for independent research. Napier has not set aside any money for research and says it will not formally discuss the issue until next year.

Mayor Barbara Arnott told the Chamber “we believe that if amalgamation is to occur for 2013, then the research relating to any proposal should be easily achieved within the three years following the 2010 election. It is important that the research is appropriate for the time and the Councils who are involved in the process of change.”

The reluctance is almost palpable. The trouble is – history.

Historical Histrionics
In 1988, a reform-minded Labour government announced a nationwide shake-up of local government.

Napier escaped with only minor tweaking to its boundaries, and in October 1989 became a 104 square kilometre political island surrounded by the Pacific Ocean and the new 5217 sq km Hastings District, which was created by the amalgamation of Hastings City, Hawke’s Bay County, and Havelock North Borough.

A new entity, the Hawke’s Bay Regional Council, was formed to overlay and manage natural resources across the entire area from Wairoa to Central Hawke’s Bay. It scored ownership of the Port of Napier, a hefty endowment of land raised out of the sea by the 1931 Hawke’s Bay Earthquake, and was instantly a very wealthy entity. Napier also got some earthquake land, which gave it a nice nest egg. Hastings got none.

By 1989, Hastings owed $32 million. The county owed $1.5m, and Havelock North about $2m, so their fears of being lumbered with urban debt were understandable.
Their amalgamation with the city was indeed an arranged and forced marriage. Their howls of protest were ignored in Wellington, but no sooner was the wedding breakfast over than the post-nuptial fallout began.

Near-anarchy took hold in Hastings within months, when a group of angry farmers announced they were setting up a new, breakaway rural council. They had a typewriter and a tin shed as its headquarters. Things got nasty. The late Jeremy Dwyer, who had been elected mayor of the new Hastings district, received death threats and found himself dragged into the hardest battle of his political career as he tried to hold together the new constituency.

Napier got in too. Its mayor at the time, Alan Dick (now chairman of the Regional Council) and Mr Dwyer had already crossed swords, so few were surprised when Mr Dick opted to help the farmers by supporting their breakaway application to the Local Government Commission. It was perhaps the lowest point ever for Napier-Hastings relationships. The two mayors conducted a bitter and public war of words before the rural revolt was resolved. The breakaway committee had won some exacting concessions for rural ratepayers, including the ring-fencing of urban debt with urban ratepayers.

Neither did things run smoothly on Hastings’ other flank. A dark mood of resentment in the cultured circles of Havelock North climaxed in the hiding of the borough’s mayoral chains and some oil paintings in a limestone cave in the Te Mata hills for a while, to keep them out of the clutches of heathen Hastings.

Ever the optimist, Mr Dwyer decided in 1999 to test the political winds with a referendum on amalgamation of Hastings District and Napier. Napier voters rejected it by two votes to one, while Hastings voters favoured it by two votes to one.

Change of Heart
It was against this historical background that the current mayor of Hastings, Lawrence Yule, suddenly announced six months ago that the focus of his fourth mayoral campaign, later this year, would be to advocate the amalgamation of Napier and Hastings.

Only weeks before, as Auckland absorbed the full import of the super-sizing amalgamation to be foisted on it by central government, Mr Yule, also president of Local Government New Zealand, had dismissed the need for any such change in Hawke’s Bay. There would be initial savings from efficiencies, he said, but history suggested those would be short-lived because a new council structure would quickly find new ways to spend ratepayers’ money.

Mr Yule’s apparently abrupt change of heart took everyone by surprise, including Hastings District Councillors, to whom he had breathed not a word before calling a press conference and announcing his amalgamation strategy.

So why did he change tack?

If Hawke’s Bay doesn’t get its act together, it will be left behind, he says. There is no plot, no plan, just the fact that a simple rationalisation or sharing of council services isn’t going to cut the mustard. A far more comprehensive re-organisation is essential if Hawke’s Bay is ever to present itself with a unified focus and capitalise on its many assets, he says.

Auckland is set to become a super-city of 1.4 million. It will be a formidable power within local government, with a very loud voice into central government ears. Next up to the blocks will be Wellington region. Waikato, Nelson and Canterbury are already looking at their options to re-organise and up-size their political clout.

Hawke’s Bay will bury its fragmented head in the sand at its own peril, Mr Yule says. “To get our share of resources and facilities, we need to be completely regional in our approach, not two populations of 60,000 or 70,000 each, who sometimes compete. It’s not the best way of getting a share of the action.”

The region as a whole must work to counteract the ageing of its population (over-65-year-olds are predicted to make up 26 per cent of it by 2045), get the most out of business and tourism opportunities through assets such as the port and airport, and put more focus on the management of natural resources, including water harvesting.
“The regional council alone can’t do that. They are doing some good work in some areas, but the territorial authorities need to be lined up with that to maximise some opportunities.”

People now appear to be generally more comfortable with the concept of a regional government, Mr Yule says. “Particularly in the past two years, people have been asking me about it, can it happen here? And I look out five, 10, 20 years and see the challenges we face. We have some of the best schools in the country, climate, good quality of life. People want to live here, and if they could find employment they would move here in a jiff.”

The regional, Napier and Hastings councils draw in $150 million of rates a year between them. A leaner bureaucracy could achieve savings of 10 per cent, which would free up $15 million dollars a year, he says. “Even $10 million could make our province grow,” Mr Yule says. He cites the three separate information technology systems installed in recent years by the Napier, Hastings and regional councils, and shakes his head.

The Government has no political appetite for any more super-sizing of councils this year, he says, but eventually — maybe five or 10 years away — it will. And change will come to Hawke’s Bay. It would be better if the region took the initiative now, and worked out its own preferences.

Mr Yule is proposing a new two-tier system, mainly for Napier and Hastings but with the door open to Central Hawke’s Bay and Wairoa if they wish to be part of it. [You can read his proposal here:]

He hopes people will consider his plan and throw in more suggestions. And if, after investigation, consultation and a referendum, voters opt for a new form of regional governance that doesn’t comply with current law, a Hawke’s Bay MP could be dispatched to Parliament with a request for a law change. The government has already indicated its willingness to listen, he says. By the same token, “if people don’t want it, it won’t happen.”

Let’s See the Information
If there really is a good case for amalgamation, it will be obvious in the information that arises from an in-depth study during the next several years, says Mayor Arnott.
“I think people need proper facts rather than emotional stuff, and not giving them the impression that it will save them in their pockets. The conversation should be had, but let’s have a decent conversation, with proper information, and see where people get to. At the moment, the information is thin on the ground.”

The Napier mayor is in no doubt that, unlike the re-organisation proposal put to referendum in 1999, the Regional Council should be included in any new proposal.
“It has to be part of it. Without it, there is no point in going forward.”

In the meantime, Napier is doing its best to promote service sharing – “co-operation is important” – says Mayor Arnott. She, too, cites the example of three completely separate IT systems, and each Council’s apparent disinclination to consult the other Councils before buying.

She doesn’t dispute that Napier City Council owes itself and others $57 million, but says it has a long-developed culture of restraint in spending and rates increases. “Over the past 10 years we have had the lowest rate increases across the board. We’re one of the lowest in New Zealand.”

She doesn’t believe “outrageous claims” that a unitary authority could save $10 million of ratepayers’ money each year.

It Ain’t Broke
“If it ain’t broke don’t fix it,” says Regional Council chairman Alan Dick.

There’s no need for upheaval. There’s not a lot of money to be saved. Cooperation is developing and some good things are taking shape. Sure, there’s always scope for more sharing of services, such as combined rating, bulk purchasing, or fleet management. But there are fundamental differences that must be protected, and the worry is that if a Council becomes too big, it becomes too remote and cumbersome, he says. “Economies of scale become dis-economies of scale.”

Hawke’s Bay will benefit from the Regional Council’s recent decision to use its significant wealth ($415m worth of assets including $111m of property and the $117m Port of Napier) not simply to grow more wealth, but to help build infrastructure such as the proposed water harvesting dams in Central Hawke’s Bay, which could boost the regional economy by $300m and year, and create 2000 jobs.
“It can bring significant forces to bear for change at a higher strategic level,” Mr Dick says.

“Would a single authority embark on that, or would it build new swimming pools and sports grounds? I think I know what the answer would be.”

Neither does he have any confidence that a unitary council would give due weight and funding to the management of natural resources. “There appears to be an indication that unitaries get overwhwelmed by territorials’ pressures, and some unitaries might not perform their natural resource management functions as well as they should.”

No Pressure, But…
The Government has no plans to force amalgamation on Hawke’s Bay or anywhere else — yet. So say Hawke’s Bay’s two National Party MPs, Chris Tremain and Craig Foss.

The Government’s priority is Auckland’s re-organisation, “and it is vital that it is implemented correctly.” However, once that process is complete, “we expect that the new unified Auckland council will provide many benefits for its residents and ratepayers and will serve as a positive example for other regions to follow”, the pair say in a joint statement.

In the meantime, “we would expect that our Councils constantly explore any and all areas where they could co-operate and provide better services, more planning certainty and a reasonable expectation of lower rate increases for Hawke’s Bay. We believe that there is a general acceptance for the need of a synchronisation and alignment of Councils’ priorities and plans so that Hawke’s Bay is able to compete as best as possible with competing regions. We do not have a preference over any particular process, as this must be decided locally.”

Rodney Hide, as Minister of Local Government, can initiate a reorganisation for any area, but “will not be considering reorganisation proposals for other councils while the reform of Auckland governance is underway”.

A Poll is a Waste of Time
Murray Douglas is chief executive of the Hawke’s Bay Chamber of Commerce, and doing his PhD in Australian local government reform. He’s highly cynical about prospects for either meaningful service-sharing or full amalgamation in Hawke’s Bay.
There is a deeply-embedded culture of resistance to change among the region’s political leaders and administrators, he says, and they will do their utmost to protect their own patches.

Service sharing could bring some financial benefits, but amalgamation would be even better, he says.

His own preference would be something like a unitary council with a series of community boards that would be given maximum autonomy. “That would be power to the people.” It would achieve “dynamic efficiencies” and give power back to a tired, disillusioned and cynical electorate, he says.

Mr Douglas believes there’s more of a mood in Napier these days for political unity, but says he wouldn’t assume the same level of support as in 1999 from Hastings voters. “Hastings is more confident these days, and fed up with Napier’s reluctance, and it can’t be stuffed stuffing around with it anymore.”

However, he says, the issue is all but dead.

“A poll in New Zealand is a waste of time, full stop. The officers are not even thinking about how to do better with shared services, let alone amalgamation, which won’t happen if it’s left up to voters because council bureaucracies and leadership, who don’t want change, will scare them into retaining the status quo. The general population are badly informed and go along like sheep. That’s the same the world over. A residential neighbourhood fears whatever is fed into their ears.”

The administration of Hawke’s Bay needs a rocket under it, Mr Douglas says. “Where is Telecom’s office in Hawke’s Bay? There isn’t one. And big councils don’t need to have customer offices. The paradigm of modern local government is that you should be able to pay your rates at the post office, or leave your Hastings library book at the Napier library if you live in Napier. It would be easy, but at the moment it’s unlawful.”

“If we took a blank sheet of paper and sat down to design a system of local government, surely we wouldn’t end up with what we have now,” Mr Douglas says.
“Our council sits in a horseshoe with its back to the public. In Portsmouth, Virginia, it’s the other way around. And meetings are streamed live. There is a worm device, with which people can instantly indicate agreement or disagreement with what is being said. That is democracy.”

Sidebars (as published in BayBuzz Digest, April 2010)

Nearly The End Of The World

“It’s a raid,” screamed the front page headline.

Hawke’s Bay County Councillors, aghast at the impending forced merger of their council with those of Hastings City and Havelock North Borough, saw only destruction ahead. All they had worked for, all they had achieved, was about to be seized and ruined by their profligate, debt-ridden urban cousins. The Hawke’s Bay Herald-Tribune, carried the tale of their worst fears.

It was 1989, and similar scenarios were being played out all around the country as central government gave local government a huge shake-up.

The Hawke’s Bay County Council found little comfort in being part of history. With long, proud traditions, carefully husbanded resources, and considerable assets accumulated, it had negligible debt. Its elected farmer representatives scrutinised every project from the construction of stopbanks to the grading and shingling of the smallest country roads. It debated at length one day whether the fruit and vege stall on Havelock Road should be allowed to stock imported bananas when the rules clearly stipulated that only produce grown on site should be on the shelves.

This was an organisation that attended to its duties and saw no need for change, let alone dissolution. Its brand new building on the corner of Omahu Road and Oak Avenue in Hastings had been built only a year before, to carry the council through its next 100 years.

But the political landscape around it had changed. The end was nigh.

The Bigger Picture

The old Hawke’s Bay County Council stonewalled for years as cramped Hastings City begged it to designate some land for new housing. Eventually, the county selected a large area of stony wasteland out west of the city boundary. The land was a former riverbed. No good for sheep, cattle or cropping, and therefore useless.

The new suburb of Flaxmere — the home of too much trouble and grief ever since — was established on what was later discovered to be some of the best red-wine growing land outside Bordeaux.

Our Governors

Napier has a mayor and 12 councillors
Hastings has a mayor and 14 councillors
Wairoa has a mayor and 6 councillors
Central Hawke’s Bay has a mayor and 8 councillors
Hawke’s Bay Regional Council has a chairman selected from 9 councillors

Five Grand Poobahs and 48 “rank & file” councillors
Population of Hawke’s Bay: Approximately 148,000

Debt and Crime Divide

Debt is often cited as a reason for Napier to fear union with Hastings, but Mr Douglas says both Councils owe roughly the same amount per head of population.
“Napier has been concealing its debt for a long time. They say net debt is $15m, but it was $37m in 2009, and will be $57m this year. They can say that quite lawfully because they fund a lot of that internally from endowment money from land. They lend money to themselves. It’s naughty but it’s lawful.”

On the basis of its 2006 Census population, each Napier resident would owe $1030 this year. On the same basis, each Hastings resident would owe $1129.

Mr Yule says Hastings debt is higher than Napier’s because it hasn’t had the benefit of income from earthquake-produced leasehold land. Despite that, its debt is no higher per head of population than Napier’s, and his proposal would ring-fence each city’s existing debt with its existing ratepayers.

Crime is another fear factor often thrown into the debate. Does law-abiding city X want to merge with crime-ridden city Y? Latest police statistics show Napier with a higher crime rate than Hastings, although there appears to be little firm ground from which anyone can throw stones.

In 2008/09, Hastings had 1,131 crimes reported per 10,000 head of population. That was up from 1,097 in 07/8, and 1,099 in 06/7. Napier had 1,321 reported crimes per 10,000 head of population in 08/9, up on 1,243 in 07/8, and down on 1,336 in 06/7.

Can Napier and Hastings continue to exist with an invisible Berlin Wall between them? Or can they call a truce and form a united front before someone does it for them? Kathy Webb investigates.

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