Wednesday, February 25, 2015

Mike Butler: Amalgamation cons by the pros


A proposal being steadily pushed on to Hawke’s Bay residents is to absorb the councils of Hastings, Napier, Wairoa, and Central Hawke’s Bay, plus the Hawke’s Bay Regional Council, into one super council with five local boards, and a Maori board, with the headquarters in Napier.

Amalgamation is a central government initiative, with similar proposals in Northland and Wellington at the same time as the Hawke’s Bay push. I presented the case against amalgamation to 54 people at a public meeting at the Havelock North Community Centre yesterday.

For the benefit of those unfamiliar with Hawke’s Bay, Wairoa and Central Hawke’s Bay are 174km apart while Hastings and Napier are 20km from each other.

The word is that despite massive advertising and repeated long-winded articles in the Hawke’s Bay Today newspaper from a small group of well-heeled individuals, any support that may have existed for amalgamation is declining.

Debate appears confined to parts of the Hawke’s Bay Today newspaper, which circulates around 20,000 copies to an area with 150,000 people. Outside that, interest in the issue appears limited and knowledge about it virtually zilch.

A proposal to amalgamate Hastings and Napier was voted down in 1999. Hastings was 67.6 percent for amalgamation. Napier was 76 percent against.

If a vote was held today, and if Hastings voted 67.6 percent for and Napier was 76 percent against, it would only take a 50 percent vote in both Wairoa and CHB for the proposal to be sunk.

Apathy is the not-so-secret weapon of the pro-amalgamation group -- that if no one objects a transition to amalgamation is self-starting.

The government is controlling the whole amalgamation process in the three districts and in Hawke’s Bay, Hastings mayor Lawrence Yule is simply a pawn of the government.

Legislation was changed in 2012 removing the possibility of Napier and other communities of interest voting down amalgamation. Now, should residents demand a vote, any majority vote must be region-wide and the Local Government Commission would count on a Hastings yes vote.

The Local Government Commission which is driving this amalgamation has members who were all hand picked for their pro-amalgamation stand.

Chairman Basil Morrison is a National Party favourite for these sorts of positions because he does whatever his master wants. Mr Morrison was president of Local Government NZ and his deputy and successor is Lawrence Yule.

Auckland was first up for the current amalgamations so we can learn from Auckland what is likely to happen in Hawke’s Bay, Northland, and the area from Wellington to Masterton should these areas amalgamate.

Voters in all these areas must be aware that amalgamation in Auckland:

• Hiked rates by 8 percent in year 1.
• Increased debt by 30 percent in year 1
• Cost jobs and increased jobs.
• Meant fewer councillors.
• Brought powerless local boards.
• Set up a Maori board.
• Started local race-based spending.
• Involved iwi in building consents.

Much of the information you need about the impact of amalgamation is available in a detailed study of the Auckland amalgamation that took place on November 1, 2010, in its Supercity Project.

In the section Value for Money the report notes that the per capita rates increase in Auckland in the 2010-2011 year was 8 percent. Auckland rates increases since 2010 have always been more than inflation.

2011 to 2012 rates increased 3.94%, CPI increase was 4%;
2012 to 2013 – 3.6%, CPI 1%;
2013 to 2014 – 2.9%, CPI 0.9%;
2014 to 2015 – 2.5%, CPI 0.8%.

These increases are headline rates increases only. Some increases in Point Chevalier were 13.6 percent, 20.2 percent, and 30.3 percent. A change in the handling of water rates, with the introduction of user pays in 2012, meant that user charges were largely put on top of existing rates.

The same Auckland University of Technology study showed a large increase in the Auckland Council’s combined debt from 2010 to 2011 – from $4.4-billion to $6.3-billion. – 43 percent.

Ballooning council debt is evidence of a council failing to live within its means. The Hastings District Council already has the biggest debt in Hawke’s Bay, at $78-million, compared with Napier’s $4-million.

The sole quantified financial benefit argued in the proposed Hawke’s Bay amalgamation is that of $10-million a year that is floated without context but when put in context the saving is minimal.

When you compare the projected savings of $10-million a year with total expenditure of the five Hawke’s Bay councils, of $273.7-million, the savings are just 3.7 percent.

The Hastings District Council could immediately save $5-million by not proceeding with the proposed 100-room CBD hotel, and $12-million by canning a proposed civic centre development.

But the Supercity study shows that the numbers of local government staff in Auckland have increased, as did consultancy services.

The Local Government Commission predicted 7907 full-time equivalent staff would be needed in Auckland by July 2012 with a total wage spend of $513-million. But by June 2014, there were 8441 full-time equivalent staff – with a total wage spend of $702-million.

The Auckland amalgamation showed total employee numbers up 7 percent on predictions and a wage bill up 37 percent.

Then there is the financial blowout on Auckland Council information technology costs.

The Auckland IT system for the eight local bodies that merged in 2010 had an approved budget of $71-million. But by 2014, the total cost was $171-million - $100-million over budget. That is an increase of 140 percent.

Auckland has problems with fewer councillors, toothless local boards, and a Maori board full of appointees with its runaway race-based agenda. The Local Government Commission plans to replicate all that plus the rates rises and increased debt, in Northland, Hawke’s Bay and from Masterton to Wellington.

In Hawke’s Bay, Napier, Wairoa and Central Hawke’s Bay oppose amalgamation. Members of the Hastings District Council and the Hawke’s Bay Regional Council are split.

The Hastings mayor persuaded the Hastings council to put $50,000 into a somewhat light-weight pro-amalgamation advertising campaign prompting the Napier, Wairoa, and Central Hawke’s Bay councils to fund a glossy anti-amalgamation booklet. Ratepayers objected.

With the Hastings council pushing amalgamation, the assumption was that Hastings people were also for amalgamation, and this along with the larger population of the Hastings district appeared to help the Local Government.

But the appearance of our group, Hastings Against Amalgamation, just two weeks ago, ended the assumption that Hastings is an amalgamation zone.

The Local Government Commission is going through a process. Agitation by the small group of well-heeled individuals two years ago in Hawke’s Bay was taken as “demonstrable support” for amalgamation.

The Local Government Commission prepared a proposal and invited submissions last June of which 83 percent were opposed – although a number of opposing submissions from Napier were essentially the same submission signed with different names.

The commission prepared a “position paper” in November and advised that opinions wider than the one percent who submitted would be surveyed and that survey would take place around February.

Once a final proposal is released, possibly in late March, Hawke’s Bay people will have 60 days to petition for a poll. A petition would require 10 percent of the total number of voters in a district – 5100 for Hastings or 800 for Wairoa.

In other words, the signatures of 800 Wairoa people would trigger a regional vote on the proposal. That vote could take place from July to September. No signatures, no poll, and the transition to amalgamation would begin.

The pro-amalgamation lobby has not convincingly presented either the need for or the benefit of amalgamation.

Auckland did not have a chance to vote on the proposal. Amalgamation was imposed. Northland, Hawke’s Bay, and Wellington do have a vote.

Simply stated, if you don’t want amalgamation, vote against it.

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