JOINT SUBMISSION To THE LOCAL GOVERNMENT COMMISSION

Central Hawke's Bay District Council- Report
To:
Council
FROM:
Chief Executive
DATE:
6 March 2014
FILE REF:
coui-1100
JOINT SUBMISSION To THE LOCAL GOVERNMENT COMMISSION BY
SUBJECT:
CHBDC, NCC & WDC ON THE DRAFT PROPOSAL FOR
REORGANISATION OFLOCAL GOVERNMENT IN HAWKE'S BAY
,. O SUMMARY
The purpose of this report is to
Obtain approval from Council on the joint submission from Central Hawke's Bay
District Council, Wairoa District Council and Napier City Council to the Local
Government Commission on the Draft Proposal for Reorganisation of Local
Government in Hawke's Bay.
2.0
RECOMMENDATION
This reportconcludes by recommending
That Council approve the joint submission from Central Hawke's Bay District Council,
Wairoa District Council and Napier City Council on the draft proposal for reorganisation
of Local Government in Hawke's Bay and forward to the Local Government
Commission by 7 March 2014.
The reason forthe decision is.
The Councilis required to give effect to the purpose of local government as prescribed
by Section 70 of the Local Government Act 2002.
3.0
BACKGROUND
The Local Government Commission is consulting on the "Draft Proposal for
Reorganisation of Local Government in Hawke's Bay". Submissions on the draft
proposal are sort by the 7 March 2014. While the three councils along with others in
the region have sent in the own submissions it was thought a joint submission from
three of the affected councils in Hawke's Bay would help high light to the commission
the concerns abouttheir draft proposal in its current form.
4.0 ASSESSMENT OF OPTIONS
Option I
That Council approve the joint submission from Central Hawke's Bay District Council,
Wairoa District Council and Napier City Council on the draft proposal for reorganisation
of Local Government in Hawke's Bay and forward to the Local Government
Commission by 7 March 2014.
Option 2
That Council does not agree to be part of the joint submission from Central Hawke's
Bay District Council, Wairoa District Council and Napier City Council on the draft
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proposal for reorganisation of Local Government in Hawke's Bay to the Local
Government Commission.
5.0 STATUTORYIMPLICATIONS
The recommendation meets all statutory requirements as set out in the Local
Government Act 2002 Amendment 2012.
John Freeman
Chief Executive
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Submission to the Local Government Commission: Draft Proposal forthe
Reorganisation of Local Government in Hawke's Bay
Napier City Council
This is a Joint Submission
made n behalfof:
Wairoa District Council
Central Hawke's Bay
District Council
Contact details:
Napier
Bill Dalton
bill. dalton@napier. govt. nz
Private Bag 6010
Napier 4142
06) 834 4198
PO Box54
06) 838 7309
Wairoa
Craig Little
craig@wairoadc. govt. nz
Wairoa 4160
Central Hawke's Bay
Peter Butler
peter. butler@chbdc. govt. nz
PO Box 127
06) 857 8060
Waipawa 4240
Napier City Council
Which councils is most
relevant to your home or
business?
Wairoa District Counci
Central Hawke's Bay
District Council
Do you wish to appear
before the Commission at
public hearings?
YES
Do ou su. oort alloran cart of the draft ro OSal?
Napier City Council, Wairoa District Council and Central Hawke's Bay District Council does
not support this proposal.
Introduction and Summary of Key Points
This joint submission has been prepared by Central Hawkes Bay District Council, Napier
City Council and Wairoa District Council(the Councils) in response to the Local Government
Commissions (LGC) DraftProposalforReorganisation of Local Government in Hawke^
Bay. This submission is in addition to those that the Councils have made separately.
The Councils are supportive of improvements that will allow us to more efficiently and
effectiveIy meetthe current and future needs of our diverse communities. We are also
supportive of taking a coordinated regional approach on those matters where this is in the
best interest of our diverse communities and will ensure a sustainable thriving Hawke's Bay.
However, this must be balanced with an appropriate level of local democracy, representation
and decision-making to ensure that the diversity of our communities is accounted for.
Local democracy is riotjust about providing communities with the services and infrastructure
that best meettheir preferences, priorities and needs as efficiently and effectiveIy as
possible. It is also about listening, advocating and working in partnership, building pride and
celebrating the unique attributes that make our communities special.
The Councils do not believe that the reorganisation proposed by the LGC:
. will result in a Council which understands its diverse communities
. will provide all communities of the Hawke's Bay with fair or effective representation
. is the best option for improving the effective and efficient delivery of local services and
infrastructure
. finds the right balance between regional governance that focuses on the integrated and
sustainable development of the Hawke's Bay as a whole, and the need for decisions
which are important to and impact on local communities to be made at a local level
The Councils are also of the view that:
. no decisions regarding the reorganisation of the Hawke's Bay should be made until after
there is certainty around whether local boards are a real option
. the estimated savings of the amalgamation do not outweigh the potential financial costs
or nori-financial costs such as loss of local representation and decision-making,
disruption to service delivery and loss of momentum on important local and regional
projects
. amalgamation is notthe right way to achieve a shared vision or "single voice" forthe
Hawke's Bay
5
Fair and Effective Representation
When determining representation arrangements forthe Hawkes Bay, the Local Government
Commission must be guided by the principles of"fairand effective representation for
individuals and communities within the distribt' as set outin the Local Electoral Act 2001
(LEA).
Fair representation is defined, in the LEA, in relation to the number of people
represented by each elected Councillor and the principle is designed to ensure equality
of representation for all parts of a council area. In the case of an amalgamation also
seems reasonable to consider whether the proposed level of representation is equitable
with current levels of representation.
Effective representation is not defined in the LEA but relates to representation for
identified communities of interest, within the district. This needs to take account of the
nature and locality of communities of interest and the size, nature and diversity of the
district or region as a whole.
Reduced Representation
The proposed Hawkes Bay Council will resultin reduced representation for allresidents of
the Hawkes Bay.
This reduction in representation will be greatest forthe residents of Wairoa and the
Central Hawkes Bay Districts. The proposed Hawke's Bay Council would have lower
levels of representation that other unitary councils and lower levels of representation
than local councils of a similar population size. This is inequitable.
With fewer elected councillors and a single Mayorforthe whole of the Hawkes Bay
area, communities will have less access to decision-makers and will result in councillors
losing touch with the issues facing their communities. This loss of representation is
unacceptable.
ineffective Representation for Communities offriterest
The proposed representation arrangements will not ensure that the diverse interests and
needs of the Hawke's Bays distinct and diverse communities of interest are taken into
account.
The Draft Proposal results in large ward areas and an overallreduction in the number of
councillors. Many communities of interest, particularly minority communities, rural, small
or distinct communities of interest, will not be directly represented on the governing body
of the new Hawkes Bay Council.
Different communities have particular issues and concerns and differing interests,
priorities and preferences for council services. They also differ in their ability to pay for
services and infrastructure. Ifthey are not directly represented on the governing body of
the Hawkes Bay Council, their views cannot be appropriateIy addressed by the new
Council.
The predominantly rural parts of the Hawkes Bay will be under-represented relative to
urban areas of the Hawkes Bay. Three councillors will be elected from the three
predominantly rural wards and six councillors will be elected from the two urban wards.
This will mean that the decisions of the Hawkes Bay Council will tend to reflectthe
preferences and priorities of the urban communities and service levels more appropriate
to urban areas are applied to rural areas. This will result in a loss of prosperity and
community cohesion in these areas and this will in turn have a negative impact on the
Hawke's Bay region as a whole.
o
Local Representation andDecision-making by Community Boards orLocalBoards
Neither local boards nor community boards will provide the same level of effective local
representation or local decision-making as that provided by the current district and city
councils within the Hawke's Bay. However, local boards would be preferable to community
boards as they provide the community with greater certainty of representation and local
decision-making in the longer term.
Community boards or local boards are proposed as a mechanism for providing an
additional level of representation for communities of interest. Distinct communities of
interest are more likely to be effectiveIy represented on boards than on the governing
body of the Hawkes Bay Council.
There is no certainty that some or all community boards would not be abolished, by the
Hawkes Bay Council, at some point in the future. In this respect, local board would
provide greater certainty of local representation as (assuming the current provisions of
the Bill are enacted as they are currently drafted) once established they could only be
abolished by another reorganisation scheme.
However, irrespective of whether community boards or local boards were putin place
most of the decisions that impact on communities, including the setting of budgets,
Hawke's Bay-wide strategies, policies, bylaws and levels of service will be made by the
governing body of the Hawke's Bay Council. In this respect neither local boards nor
community boards provide the same level or local representation or local
decision-making as a local council.
An integrated regional approach
Amongstthe stated advantages of the proposed Hawkes Bay amalgamation are that it will:
. lift the regions performance through better integration and co-ordination
. provide the opportunity to integrate, simplify and develop one consistent set of
strategies, plans, policies and bylaws across the whole Hawkes Bay
. facilitate a 'whole of Hawke's Bay' approach by providing strong leadership and better
integration of local government services
However, the development of a consistent set of integrated strategies, plans, policies and
bylaws forthe Hawkes Bay is likely to require considerable resource and time. This means
that the stated advantages will take considerable time to be fully realised.
Auckland Council provides the most recent New Zealand example of the time required
to develop a set of integrated strategies, plans, policies and bylaws following on from an
amalgamation. Auckland Council achieved much in its first electoral term, including the
adoption of, the Auckland Plan, a Long-term-plan and an integrated notified Unitary
Plan.
Butthere is still much to be done. We understand that many of these 158 bylaws have
yet to be reviewed and that it will take until October 2015 for Auckland to have a full
suite of integrated, consistent, region-wide bylaws. A streamlined legislative process
has been introduced to allow the Auckland Unitary Plan to be operative within
approximately 3-4 years of being notified. This means that, whilstthe timeframe has
been reduced it will take 6-7 years forthe new integrated Auckland Unitary Plan to
become operative.
Achieving a Shared Vision forthe Hawke's Bay
Amalgamation is notthe right way to achieve a shared vision or"single voice" forthe
Hawke's Bay - effective, inspiring visions which resonate and catalyse communities,
leaders, business and organisations are achieved:
. through open and genuine discussion, debate, and engagement
. by local leaders and communities working together
A shared vision is the outcome of a shared journey, which results in strong working
relationships, community buy-in, a collective sense of ownership and a collective will to work
together to make it happen. Once a shared vision forthe Hawkes Bay is agreed - then the
right governance arrangements and mechanisms to deliver on it can be determined, in
discussion with the community.
Inspiring visions which resonate and catalyse communities, leaders, business and
organisations are not achieved by legislative requirement or by redrawing boundaries.
Lifting the Region's Economic Performance
The figure below shows the longer-term trend in annual economic (GDP) growth in the
Hawke's Bay region in comparison to New Zealand as a whole, since 2004.
The graph shows that economic performance is cyclicalfor both New Zealand and forthe
Hawke's Bay and that economic growth has been improving overthe lastfew years, It also
shows that, in terms of annual growth, the Hawke's Bay is currently out-performing New
Zealand as a whole.
Hawke's Bay Region and NewZealand annual economic growth track since 2004
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Source. ' NewZealandlnstitute of Economic Research
The Hawke's Bay is already taking a coordinated approach to economic development.
Business Hawke's Bay (BHB) launched in February 2012, is accountable for coordinating
economic development coordination throughoutthe region through the Chamber of
Commerce, the local and regional council and a range of other organisations such as the
Ministry of Social Development, Tourism Hawke's Bay and Food Hawke's Bay.
BHB is directed through an independent Board comprising business leaders from key local
industries across the region and implements key economic development strategies and
projects with the aim of making the Hawke's Bay the best regional place to visit, work, invest,
live and grow. BHB focuses on activities associated with agency collaboration, primary
sector growth, visitor growth, business investment and development and skills, capability
and workforce optimisation.
8
The fullimpact of BHB and a collaborative regional approach to economic development will
take time to be fully realised, but indications are positive. It is likely that an amalgamation on
the scale proposed by the LGC would disrupt collaborative relationships and may result in a
loss of momentum.
Promised benefits of amalgamation tend riot to be realised
Amalgamation tends to be premised on the idea that it will result in:
. significant savings and efficiencies from economies of scale and scope and reduced
duplication
. savings overtime will outweigh the costs of amalgamation
. improved financial sustainability
. better standards and service levels and more effective service delivery
. enhanced strategic and technical capability within councils
However, it has been found, internationally, that:
. the estimated savings from amalgamation are typically notrealised or any savings
resulting from efficiency gains are used to improve service levels or provide additional
services - meaning that they do not resultin an overall reduction in rates
. in relation to rates revenue there are always winners and losers - with some residents
paying more and some paying less
. the financial sustainability of councils is not always improved after amalgamation
In our view, the estimated savings of the amalgamation, assuming that they were realised,
do not outweigh the potential financial costs or non-financial costs such as loss of local
representation and decision-making, disruption to service delivery and loss of momentum on
important local and regional projects.
Efficiencies could be achieved with less disruption and loss of representation
Through Hawke's Bay Local Authority Shared Services Ltd (HBLASS)the Councils have
recently investigated taking a shared service approach to activities such as building control,
information management and geographic information systems (GIS) and council call centres.
These investigations have generally suggested that while there may be broader benefits to
taking a shared services approach efficiency, savings resulting from the consolidation of
council operations or activities are likely to be modest.
In our view this suggests that the case for amalgamation resulting in significant efficiency
savings is overstated.
In addition to taking a coordinated approach to economic development, the Hawke's Bay
Councils are already working together on around 30 initiatives, ranging from the
development of joint strategies and plans, collaborative community services, joint contracting
and procurement and investigating further opportunities for shared services to deliver
efficient and effective outcomes forthe community.
A shared services approach works well as Councils can consider the relative benefits to their
community, including costs and efficiencies and ability of the initiative to deliver services
which meetlocal preferences, and choose whether or not to participate in a particular
initiative. Where there are efficiencies and benefits Councils can capitalise on these without
losing local representation and decision-making.

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