Leaving aside parliamentary elections, the dam, amalgamation and various council meltdowns have dominated Hawke’s Bay political news lately.

The Dam

Legal appeals to the High Court challenging the final decision of the Board of Inquiry (BOI) have placed the Ruataniwha dam proposal in limbo.

The appeals have been filed by Fish & Game and Forest & Bird. The Environmental Defence Society has indicated they will support the challenges as well. These groups argue that in modifying (some would use the term “softening”) its stance from its draft decision, largely in response to HBRC/HBRIC objections, the BOI acted improperly in view of the legislation governing its process.

At the centre of dispute is whether farmers – and the dam — would indeed be held accountable for meeting nitrogen (DIN) limits in the catchment, and thereby give effect to national water quality objectives. The BOI appeared to say ‘Yes’ in its draft decision, but ‘No’ in its final decision.

In predictable style, the Regional Council’s publication, Our Place, minimised the situation, reporting “the appeals are only expected to take a few days in court”. That disingenuous formulation might accurately state the actual court time involved. However, the reality is that, given the High Court’s schedule, the appeals are not expected to be heard until November at best, and possibly not until next year.

The effects of that schedule are serious. Perhaps most important, since the outcome will determine the toughness of water quality standards for the Tukituki catchment, farmers in the Central Hawke’s Bay footprint of the proposed water storage scheme will be skittish about signing the 35-year water purchase agreements required for the dam to proceed.

As of this writing, no CHB farmer has publicly indicated they have signed a water agreement. And while it says farmers are indeed signing up, HBRIC has not confirmed any specifics to regional councillors. A minimum of 40% of the dam’s water must be contracted, unconditionally, as a key prerequisite of HBRC approving the project.

Without evidence of firm farmer commitments, HBRIC’s quest for private investors and a government loan is placed in suspense as well.

Speaking of investors … the Central Hawke’s Bay District Council (CHBDC) will NOT be bringing any money to the table. CHBDC voted against making a $5 million investment in the dam, responding to CHB ratepayers’ lack of appetite for the additional council borrowing that would be required.

As reported by Hawke’s Bay Today, Councillor Mark Williams said it all: “I think I can say this council is unreservedly in favour of the dam going ahead but somewhat divided about the investment. We should not be borrowing money to invest in the dam – if it was such a good investment I would have considered it, but I have been convinced by submitters it’s not a good investment.”

In other words, wishful thinking and rally speeches are in ample supply in CHB; real cash is not.

And finally, if the legal dispute is not resolved until next year, and these other conditions are not met until thereafter, actual construction would be pushed back a year, requiring re-negotiation – and perhaps re-pricing – of the construction contract.

Another legal hurdle

Meantime, HBRIC managed to step into more poo, when it quickly filed a pre-emptive (i.e., first come, first served) consent application to take for itself all additional 15 million cubic metres of water authorized by the Board of Inquiry to be extracted from the Ruataniwha aquifer. In other words, cornering the market … pre-empting all other potential users of additional aquifer water.

This consent application was filed 17 May. Councillors only found out about it in mid-July – not from HBRIC, not from HBRC staff – but only ‘through the grapevine’. Since then, JB Bostock has filed a consent application for some of the aquifer water.

The HBRIC application will go before an independent hearings panel, which will be confronted as well with the Bostock and potentially other consent applications and/or opposing submissions. Clearly another extended legal brouhaha is in the making.

Board of Inquiry plan for Tukituki challenged in High Court

Until this matter is resolved, and access to the aquifer water awarded, the final water delivery strategy for
the storage scheme cannot be budgeted or implemented.

As legal costs mount and delays occur, there are other financial implications. Understandings with earlier investors, now departed, allowed these development costs of the project to be treated as part of HBRC/HBRIC’s capital investment in the scheme. It’s not clear that any new investor would agree to those terms.

And in any event, as the development costs increase (now in excess of $16 million), they eat into the $80 million that has been allocated as the topline investment HBRC is considering, leaving less money for construction.

Finally, while HBRC awaits these outcomes, the expensive secondment of Andrew Newman to HBRIC as its chief executive continues, with only ‘interim’ leadership at the Regional Council.

All in all, a murky business.

Amalgamation on simmer

By comparison, the pathway for an amalgamation decision seems crystal clear.

The Local Government Commission (LGC) has reported it is working on boundary definitions (related to water catchment management and the Taupo and Rangitikei districts adjoining Hawke’s Bay) and further consultation on Maori representation issues.

With the general election imminent, the LGC issued a “stocktake” indicating:

“The Commission will avoid issuing any proposal, either final or draft, during the regulated period for the 2014 general election. It wishes to minimise the risk of voter confusion if the general election and a local government reorganisation poll were conducted in close proximity to each other.

“In addition, the Commission is concerned to avoid possible ambiguity or uncertainty over the rules for advertising and expenses if a local poll was conducted during the general election campaign period.”

It is now anticipated that the LGC would issue its final reorganisation proposal for Hawke’s Bay after the election and before year’s end. If they do so, a 60-day window occurs during which voters can petition for a region-wide poll on the recommended plan.

Assuming such a petition succeeds (highly likely since all parties support a poll), the popular vote could occur in the late February or March window.

At present, most of the political ‘noise’ surrounding amalgamation emanates from the Napier constituency campaign of Stuart Nash, for whom the issue is defining, and the occasional clash of letters to the editor. If Nash is elected, perhaps his focus will shift to parliamentary business and national affairs, with Bill Dalton reasserting himself as the champion of local anti-amalgamation advocates.

Mayor Dalton and others recently raised a fuss at Local Government NZ, succeeding in getting that organization to endorse revising the legislation that currently requires polls on local government reorganisation to be decided by region-wide majority (as opposed to giving veto to any affected district).

If a National-led government returns to power, such a revision is very unlikely. Assuming Hawke’s Bay votes on a reorganisation plan next year, you can bet the ranch that the outcome will be decided by region-wide majority.

And where are the voters? Mayor Dalton has touted a Napier City Council-commissioned survey of Napier residents which found that 68% of respondents opposed amalgamation and 20% supported, with 12% undecided.

Mayor Yule has noted with bravado that, “The final vote on the detailed proposal is the only poll that matters” (DomPost, 16/08/14), but it’s fair to say that positions have hardened for many residents, at least in Napier where, since the October 2013 local elections, a succession of candidates have steadily whipped up anti-amalgamation fears.

Reorg issues

When the final reorg proposal is on the table and the real campaign begins, two issues are likely to dominate – local identity/authority and debt burdens.

In July legislation was approved that empowers the LGC to include more robust local boards as a second tier of governance to any unitary authorities they might recommend. The LGC has signalled that is their intent as they move to a final reorganisation proposal for Hawke’s Bay.

Residents eager to retain local authority over close-to-home decisions may conclude that local boards, with jurisdiction over most of the non-regulatory matters territorial councils now control, will address their concern.

As for potential debt shifting, which seems to preoccupy many in Napier, the latest Annual Plans of Hastings and Napier for 2014/15 are instructive and definitive.

In that fiscal year, Hastings will take in just shy of $66 million in rates revenue, and pay $4,455,000 of that to service debt. Thus 6.75% of Hastings ratepayers’ rates payments will go to interest repayment. With 30,211 rateable properties, this means the average Hastings ratepayer is paying $147.46 for HDC interest.

By comparison, Napier will take in a bit more than $47 million, of which $3,860,642 will service debt. Thus 8.2% of Napier ratepayers’ rates payments will go to interest repayment. With 24,858 rateable properties, the average Napier ratepayer is paying $155.31 for NCC interest.

$147 versus $155. Sooner rather than later, one hopes, voters will get it straight. Debt disparity is a bogus issue.

What’s $1 million here and there?

But don’t look for accuracy in numbers from Mayor Dalton anytime soon.

As finance chairman in the Arnott dynasty, one assumes the councillor would have been deeply inquisitive
about plans for the district’s most visible (and second most expensive) project, the overhaul of the museum.

But apparently that wasn’t the case. Or at least Mayor Dalton has done his best to distance himself from the major miscalculations of space required and visitor revenue. The visitorship and associated revenue estimates have become a joke.

Frimley Pool in Hastings has seen better days

And the space foul-up has led to a frantic search for a Plan B. However, that search seems overtaken by Ngati Kahungunu Inc’s proposal that they could do a much better job hosting and displaying, not storing away, Maori taonga in a Hastings-based cultural centre.

And then there’s the Art Deco bus fiasco – $1.1 million to establish the service, 99 passengers on average per week, a $250,000 operating loss in 2013/14, sold for $50,000. “Our critics are climbing all over us on the loss of something a little over $1 million”, complains Mayor Dalton (HBT,07/08/14).

Again, vastly unrealistic patronage assumptions. Who at the Napier City Council comes up with these estimates? And are they still there, plotting the Council’s next commercial adventure?!

Arguably, at the time these grossly wrong museum and bus estimates were made, Dalton and fellow councillors didn’t actually get anything wrong; rather, they simply dozed through the entire Mayor Arnott and Chief Executive Neil Taylor reign.

Not that things have gone better at the Hastings Council.

There, the latest $1 million bungle seems to be the Frimley swimming pool. The aquatic centre has been allowed to deteriorate, despite funding set aside in 2012 for upgrading. Said councillor Malcolm Dixon: “I think there are a few people within council who should be embarrassed with the situation they’ve allowed the aquatic centre to get to over the last 15 years.” (HBT, 06/08/14)

Mayor Yule’s explanation is that spending priorities have necessarily shifted, given the cost and urgency of paying for the earthquake strengthening newly discovered to be required for the Opera House. But that’s another story.

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2 Comments

  1. At 100 million cubes per annum at 23 cents/ cube our Ruataniwha dam has a gross annual return of $23 million, at around 12 years to return the estimated $ 275 million cost without interest or cost overuns included any Tui billboard in the country would give that investment a Yeah Right. Without a moisture deficit analysis of the area I can’t comment on the area to be serviced by the water but I feel it is not as large as expected given the summer dry history. As 40% of the water has to be signed up to meet the HBRC criteria to continue with the dam I would lay odds that Fenton Wilson isn’t putting any personal investment on the line, just the ratepayers as per usual

  2. Never underestimate the deviousness of HBRIC. They are now selling “deep” water as part of their attempt to reach the contracted volume to achieve the preconditions for “financial close”. How did they get ownership of the Aquifer water? Have they “jumped the gun” on their resource consent application for the “tranche 2” water? Don’t expect any answers from HBRIC, they would not even tell the elected Councillors what they were doing.

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