Amalgamation Supporters Admission of Own Failures

Published HBT 11 Aug 2015

Very soon the people of Hawke’s Bay will have to decide on the future shape of local government in this area. 

A major claim made by the Local Government Commission and echoed by others is that one council will provide Hawke’s Bay with a stronger voice especially when dealing with Central Government. The interesting thing is many of those making such such a claim are, or have been, our representatives already, yet their performance seems seriously wanting.  Perhaps their support for amalgamation is actually an admission of failure and they are simply trying to bury their past failures by creating a new council. After all it will take many years before the failures or success of amalgamation become apparent. 

Both the Mayor of Hastings and Deputy Mayor Cynthia Bowers are about to start their 3rd decade on council, nearly fifteen of those in their present very powerful positions. For eight of those years the Mayor has also been President of Local Government New Zealand a position that he tells us puts him in weekly contact with the Prime Minister. This surely is as a strong a voice as we are ever likely to have. Remember the Mayor reminds ad nauseam of just how badly we are doing compared with the rest of New Zealand. 

There are others who also seem to have failed us. Since 2005 we have been represented in Parliament by Craig Foss and Chris Tremain two enthusiastic amalgamation supporters. Both emblazoned their vehicles with the statement “Supporting the Bay” and both were Cabinet Ministers, surely an excellent position to have pushed Hawke’s Bay’s case. There is scant evidence of their making any great achievements benefiting Hawke’s Bay.

Another recent writer casting aspersions on non amalgamation supporters was former Tuki Tuki MP Rick Barker who spent from 1993 to 2005  representing us, and also occupying a Cabinet position in the Clark/ Cullen Labour Government. For the record  Deputy Prime Minister and Minister of Finance Michael Cullen also resided here during this time. Other than building a new Courthouse in Hastings there is little evidence Rick made any significant difference to our economic performance. Even when he and Russell Fairbrother lost their seats, prompting a panic visit by Prime Minister Clarke, supported by an entourage of ministers and MP’s, nothing actually changed. 

A couple of other regular writers are former Regional councillor Ewan Mc Gregor who just happens to be the husband of Hastings Deputy Mayor Cynthia Bowers, and John Harrison who was a very successful businessman but now seems to have had a serious falling out with Napier Mayor Bill Dalton. I cannot remember either Ewan or John pushing for amalgamation when they were councillors. 

Clearly the idea we will have a stronger voice with Government after amalgamation is utter rubbish. The problem is not the structure of local government, but the very people who have convinced us they are the right people to represent us.  

As already mentioned the Mayor and Deputy Mayor of Hastings are now starting their third decade, Rick Barker has reinvented as a Regional Councillor, whilst Craig Foss is now in his 4th term as local MP. Perhaps these people who have already had their opportunity to give us a stronger voice with Central Government, could now explain why they have failed?

It should be remembered that Mayor Yule has expressed interest in the top elected position if all five councils are merged. Unfortunately he has not given an undertaking he will not take on other roles at the same time as he has done previously. There are no statutory limitations to stop this happening. History suggests if indeed he does become Mayor of Hawke’s Bay there will be no improvement in our fortunes.

Whilst the Mayor points out the Hastings District Council is the only one to support amalgamation, the full story has not being disclosed. For a start fully one third of councillors are either totally opposed or have serious reservations about the whole proposal, whilst about half have at least some concerns. The support is actually driven by a small “tight five”, group  who almost always vote as a block to support Mayor Yule, be it animal control, speed limits, or amalgamation. 

Its unclear at this stage what the likely outcome will be, though there are clear indications it could fail. The Local Government Commission refused to release the results of their phone survey, but a privately commissioned survey showed significant opposition. This issue will dictate the future of Hawke’s Bay. It must not be decided by a minority who may not represent the true feelings of the majority. Unlike the Auckland merger we at least have a choice and every one of us must ensure we take advantage of this opportunity to make our wished known. Then once the outcome is known we must all accept the result and get on with making Hawke’s Bay a better place.

Jetstar will boost Hawke's Bay

Published HBT 1/08/15

The recent visit by Jetstar senior managers was very encouraging and we rolled out a great welcome mat that must surely have impressed upon them that we are serious. This is a once in a lifetime opportunity and It is absolutely essential that Hawke’s Bay is one of the four new destinations to be included in the airlines new regional services. Both the costs and risks are minimal yet the economic benefit could well be of the order of $50 million annually. Its a pity those who have committed so much energy and money promoting amalgamation that offers a measly $10 million annual benefit, have not shown a modicum of interest in this issue. 

With over 120 000 urban population we are surely near the top of the list. We are the 5th largest urban area in the country, and of the areas under consideration second only to Hamilton, and way ahead of Rotorua, Palmerston North, New Plymouth, Nelson and Invercargill. 

Our Auckland flights already carry more passengers than any of the other routes under consideration. In fact the numbers out of Hamilton, Tauranga and Rotorua appear so low, one wonders why Jetstar are considering them at all.  

We need to get real. Six hours by car from Auckland or eight hours in a bus, or four hours from Wellington by car, and five in a bus, and goodness knows how long for Christchurch, is a big disincentive to people thinking of visiting. Assuming of course the roads are open and not closed as both SH5 and the Manawatu George have been of late. We not only compete with places that are conveniently close to Auckland by road, but also places much further away but with significantly lower air fares. 

High airfares have been our achilles heel for years. Hawke’s Bay travellers are generally well aware of our horror prices.  Air New Zealand have even effectively admitted  their prices are high by suddenly advertising a range of attractive specials the very day Jetstar executives arrived in town, demonstrating clearly the brighter future ahead of us, if only we can get them to come here. 

Further evidence of our high prices is illustrated by distorted travel statistics. One survey found 50% of local flyers were on business, yet nationwide surveys show this group make up only 15-20% over all. The reason for this disparity has to be that the most price sensitive categories, visiting friends and family, or holiday makers, are clearly choosing not to fly here. Perhaps we should be asking ourselves if they choosing not to come here at all. 

Jetstar will bring airfares down just as they did on main trunk flights six years ago and Hawke’s Bay travellers could save a whopping  $25 million a year. People who now drive will find flying affordable. At the same time reduced airfares will stimulate demand from both visitors and locals.  BERL research estimates air travel has a price elasticity of -1.6%.  meaning a 25% reduction in airfares could result in nearly 200 000 more people travelling by air each year. If just half are visitors and each each spends only $250 during their stay, the local economy will be another $25 million richer.  

Some of the 100 new jobs Jetstar expects to create will be here in Hawke’s Bay but Air New Zealand employment is unlikely to be affected because demand overall will increase.    

Fortunately we have built a longer runway despite the opposing efforts of a negative and visionless minority. It may not be required for the Q300 Jetstar aircraft, but the longer runway may be decisive as it means both Jetstar and Air New Zealand will be able to bring their larger A320 pure jets into Hawke’s Bay for either a scheduled or non scheduled services. Do not be surprised if Air New Zealand suddenly start flying jets into Hawke’s Bay despite claiming they will not do so. They have used this tactic before to counter increased competition and may well do so again.  

Increased Funding for Tourism

The Hastings District Council recently voted seven votes to six in favour of supporting a Hawke’s Bay Regional Council proposal to substantially increase funding for tourism promotion. This was part of the HDC submission to the Regional Councils draft Long Term Plan (LTP). The proposal will result in $900 000 of increased expenditure after 3 years of which about half or $450 000 annually could be charged to Hastings ratepayers. This is equivalent to about a 0.75 % average increase in Hastings rates, though the billing will come from the HBRC not the HDC.

That 6 councillors voted against shows real concern about the idea. Had just one councillor voted otherwise the outcome would have been different and this could have put pressure on the Regional Council and Hawke’s Bay Tourism for greater disclosure and more meaningful dialogue, though it would not necessarily have prevented the increase because that decision will be made by the Regional Council.

HDC has a duty of care to ensure ratepayers money is spent wisely. Clearly six councillors were not convinced this had happened. The concern was about insufficient consultation, lack of supporting information, and also failure to have a meaningful in-house discussion between Hastings councillors and staff. Whilst Hawke’s Bay Tourism did make a presentation some weeks ago, there had been no warning, no agenda, and no details. It must be remembered that this is not like purchases from the supermarket where there is a choice to buy or not to buy. When councils decide to do something ratepayers must pay whether they agree or not. 

The lack of meaningful discussion by HDC councillors is a real concern because suddenly we were told the submission had already been made without councillors having been involved. The choice was to withdraw it, make clear it was a staff not councillor submission, or accept the submission without a closer examination. Effectively Councillors were being asked to support something they had had no input into. The decision to uphold the submission was made by a majority of just one. Its probably worth mentioning that of the seven councillors supporting the proposal most were those representing or with close connections to the rural wards, whereas those who opposed were mainly from the urban wards, where of course most of the funding burden will fall.

The importance of tourism to the local economy was not being questioned, however any proposal to double funding to the tune of nearly a million dollars a year needs close examination. The increased funding presumably means advertising though there have been no details, no in depth examination of the proposals by either HDC staff or councillors, no specifics on how the money is to be used, nor has there been any opportunity to examine the past claims and the resulting performance of Hawke’s Bay Tourism. Effectively the decision was made on the basis of spurious, unsubstantiated, generalised claims.  

We were told there had not been time to consult meaningfully with councillors but I had been asking repeatedly when were were going to examine the request and was assured each time that it was “in hand”. To suddenly have the matter sprung on councillors “as done” is simply not acceptable. 

I personally have concerns about the Regional Council ability to manage this activity. Historically the track record of tourism under Regional Council control has not been satisfactory. The Regional Council has no skin in the game as all publicly provided tourism facilities including the airport are owned by the Napier or Hastings councils. Nor do It see any relevant experience or expertise within Regional Councillors or Regional Council staff. It is not part of their core environmental responsibilities, but is the result of a historical inability of the Hastings and Napier Mayors and others to resolve priorities. As a result responsibility for governance and funding of tourism was handed over to the HBRC in a sort of cop-out. 

I have recently written other “Talking Points” highlighting poor decision making by the Hastings District Council and I believe this is a further failure by the Council to act in the best interests of their ratepayers. 

Charter Club Funding Fiasco

Published HBT 20 May 2015

The decision by the National Service Club members to reject a Hastings District Council merger proposal is an own goal for the council who seem to believe that if enough money is thrown at a problem it will go away. We have seen similar thinking with the Opera House and other recently delayed or cancelled projects. The most recent idea was to support a merger of various service clubs with nearly $2 million of ratepayer funding. 

Many chartered clubs are experiencing declining support. The Hastings, Napier and Napier Cosmopolitan Clubs have all closed. Members now tend to be older and a further strengthening of drink driving laws is likely to be eating into members involvement. The RSA, Hibernian and Heretaunga Clubs have already merged, the RSA premises in the centre of town have been sold and must soon be vacated, and new premises are proposed on the Heretaunga Club site away from the CBD. The National Service Club on edge of the Hastings CBD seem to be holding their own as evidenced by members rejection of the merger plan, although their premises will need some earthquake strengthening sometime in the future.  

The reasons for Council getting involved are unconvincing. The project was poorly conceived, poorly researched, and should never have been presented to council. The Mayor who was the driving force was in China and unable to attend the special council meeting called at short notice to supposedly discuss the issue. 

It has been reported that I had walked out of this public excluded council meeting when the issue was being discussed though I prefer to say I was not willing to continue taking part in a process I considered  farcical. I believed it wrong that both the media and public were prevented from hearing details of a proposal to spend nearly $2 million of ratepayers money. There was a lack of  transparency and an inability or unwillingness to answer many crucial questions, plus it was clear I was going to have no impact on the outcome. The entire process seemed staged to endorse an outcome that had already been decided on. 

Specifically some of my concerns were:

- The Clubs were not represented so councillors had no opportunity to question those running these organisations.

- The only accounts provided were for the RSA  March 2014 financial year. There were no forecasts, budgets or other estimates for the proposed combined clubs which meant councillors could not asses the financial viability of the new entity. 

- It was claimed a new city centre premises will benefit the Hastings CBD which clearly is already struggling, yet no evidence was provided to demonstrate linkage between the clubs and the CBD,  even though both the RSA and National Service Clubs are presently within walking distance of the shops. Additionally only the RSA will be shifting and the National Service Club will remain close to the CBD. 

- No membership history was provided so past and future trends could not be determined, nor was there any information on how many members use the facilities on a regular basis. 

- Claims the viability of the three clubs would have been enhanced failed to account for the additional risk of their taking on significant debt which could have imperilled rather than secured their future. 

- Some councillors claimed a similar combined facility in Blenheim proved it would work, yet no specifics on membership, financials, or other matters were provided. 

My own view is this matter has been handled in a highly unsatisfactory manor without councillors being given much of the information needed to make a wise decision. The cost in staff time is unknown but must be considerable and a figure of $10 000 seems possible. Whilst some public consultation had been proposed people are busy with their jobs, family and other issues, and rely on good governance by their councillors to make sure their money is spent wisely. Expecting widespread and representative community involvement in submissions is unrealistic. This yet another example of council being steamrolled into supporting an idea of doubtful benefit. Yet had it proceeded debt and rates for everyone would have increased. 

Council Wastes Ratepayer Funds

Published HBT 2 May 2015

The Te Mata Trust Board must be disappointed at having to abandon their proposed Peak Visitor Centre having already spent $320 000 on the project, but as Hastings District ratepayers will effectively be paying most of the bill, it is perhaps they who should be the most disappointed. 

At the same time the proposed $12.5 million Civic Square development also looks likely to be shelved, but again not before a million dollars has been spent. Shortly after I was first elected to the HDC in 2010 at least another $250 000 dollars was spent on the velodrome project, which was also abandoned when it failed to make even the short list for $7 million of government funding. 

The Hawke’s Bay Opera House also looks likely to cost ratepayers upwards of $20 million for earthquake strengthening, only a decade or so after $15 million was spent on a major upgrade. Since then ratepayers have been burdened with around $15 million more in operating grants and debt servicing costs, meaning with strengthening the total outlay will be around $50 million, or nearly the total rates income for the council for a whole year. 

These sorts of issues are not confined to the Hastings Council. The new $18 million museum in Napier has failed to deliver on it’s key promises with only about 5% of the annual 600 000 anticipated visitors actually paying to get in, whilst operating deficits could top $4 million annually. Also it is only able to store a fraction of the total collection, contrary to earlier assurances. 

There are other projects of questionable financial certainty embedded in the Hastings LTP including a proposed $5 million investment into a Hastings CBD hotel, surely suspect when no other developer appears interested, and especially risky when a similar competing private development is already underway in nearly Havelock North. A sixth aquatic facility costing between $10 - 20 million to build with unrevealed ongoing ratepayer implications is also included in Council Long Term Proposals.    

That Local government is responsible for providing parks, libraries, halls, infrastructure, and all manner of services is not in dispute. What needs to be questioned is the process councils use to decide on major investments when they fail to either deliver any meaningful benefit, or end up creating unplanned costs when completed. More basic and less ambitious projects generally seem to provide much greater value. The new facilities on Marine Parade in Napier, the new hockey turf at the Sports Park, the skate park in the Hastings CBD and the new BMX facility in Havelock North are all  examples of ratepayers money providing real and significant benefits with minimal on going cost implications.  

The enthusiasm behind these grand ideas seems to overwhelm both common sense and good governance. Rather than being demanded by the wider community, the drive for these ideas comes primarily from a small number of elected officials, frequently the Mayors, or council staff. Failure to correctly asses the risks and potential for costly failure, seem consistent with Local Government culture. Local government generally place the emphasis on cost control, because quite simply there are no corresponding income streams. Council staff are highly qualified, very skilled and very experienced in things to do with pipes, roads and many other areas, but generally lack experience in the world of consumers, markets, and competition. Unfortunately only a minority of councillors are experienced in the world of profit, loss, and risk as well. 

So in the case of both the Visitor Centre and Civic Square projects, funds were allocated and spent without any realistic consideration of market demand, operating costs, or other financial issues.  I also believe the justification for the proposed Aquatic Centre is superficial, inaccurate and misleading, and there have been no estimates of patronage, operating costs, revenues or the likely impact a new pool might have on the performance of existing pools. 

Committed councillors and staff create a very powerful alliance, and when combined with council processes and procedures a situation is created that is almost impossible to stop. For the record I have consistently voted against both the Civic Square and aquatic proposals and many others because I could see no real justification for them. I sometimes get the impression that the most enthusiastic are keen to see these achievements added to their trophies 

The private sector also gets things wrong but both shareholders and customers can opt out when dissatisfied plus mistakes can be offset through tax losses. Council mistakes are backed up by the unlimited access to the bottomless pit of ratepayer funding, and there is nothing those who are forced to pay can do about it. Misadventures waste money that can never be recovered, and opportunities for better uses of the funds are lost.  For instance the estimated $1 million spent on Civic Square could have paid for an extension to the 80 metre rock wall protecting the road to the Clifton Motor Camp, whilst the money spent on architects and other aspects of the Peak Visitor Centre project could have provided  permanent shade at the new CBD skate Park. Both these alternative projects are affected by financial restraints. 

If these sorts of mistakes are to be avoided in the future there must be a change in governance. Proposals that are not accompanied by full financial details including whole of life cost estimates and other critical information should never reach the council debating chamber and must be rejected if they do.  Failures must be investigated by independent authorities such as the audit office, with appropriate penalties for non compliance. 

If those responsible for these unwise decisions had to pay for their mistakes they might be more inclined to take greater care with other peoples money

Missing Airport Directors

Published HBT 6 April 2015

The proposed name change for Hawke’s Bay Airport could be just a prelude of what may be following.  

At the recent March half year report to HDC Councillors, Board Deputy Chair Jim Scotland excused airport Chairman Tony Porter with the explanation he was in Christchurch. Six months previously board member Sarah Park provided a similar reason for the Chairman’s absence. These absences may or may not be connected but apparently Mr Porter is quite ill, and whilst we wish him a full recovery,  this situation is both irregular and highly unsatisfactory. 

It also appears that a second director Stuart Webster has left for the USA, without a return ticket. If so it means that two of the four appointed directors have ceased to function in their governance roles. Significantly there appears to have been no mention of either of these issues by the two remaining directors when meeting with either the Hastings District or Napier City Councils. It is not believable that the Mayors, senior staff and others are not aware of this situation. This raises a great many questions.

-Why have these issues been hidden from Councillors and the public?

-When did Mr Porter become ill?

-When did Mr Webster leave the country?

-When did either of these directors last attend a board meeting?

-Are the missing directors still being paid by the airport ?

-Why are they still listed as directors in the most recent airport accounts provided to councillors? (half year to 31/12/2014).  

-Are the Mayors and senior managers of the Hastings and Napier councils aware of the situation and if so when were they notified?

-What is the role of Government?

-Who else is aware of the situation?

Could it be that Government is planning to transfer their shares in the airport to Mana Ahuriri Inc as part of the Y55 settlement, and the failure to disclose is due to an expectation of the claimants taking up the board positions. Whilst this has been a possibility for some time it would effectively transfer total control of a vital piece of Hawke’s Bay infrastructure because Government actually owns slightly more than than 50% of the airport shares. The lack of transparency is unacceptable and it is high time those in the know, reveal what they know.

No Reason to Change Airport Name

Published HBT 27 March 2015

Meaningful consultation is needed before a final decision is made to change the name of Hawke’s Bay Airport. Discussions with Mana Ahuriri and the HDC were informal and in my view amounted to an ambush with insufficient warning given to consider the ramifications such as financial implications.

Most airports have aligned their names and 3 letter IATA codes with city names. Mangere was changed to Auckland(AKL), Rongotai to Wellington(WLG), Harewood to Christchurch(CHC), and Momona to Dunedin(DUD) to name a few. Hawke’s Bay Airport (NPE) is actually an exception though the brand Hawke’s Bay is well recognised. Australia also aligns airport and city names as in Sydney, Melbourne, and Brisbane. Whilst John F Kennedy Airport in New York (JFK) has been used to as an example of where alignment doesn’t apply, not naming airports after their host cities generally happens only in super cities with multiple airports such as in London (Heathrow, Gatwick, Luton, Stanford).

Adding the name Ahuriri to Hawke’s Bay Airport will be confusing and costly. To people outside of Hawke’s Bay the word is unknown except perhaps in North Otago where apparently there is another Ahuriri. The implications with GPS navigation systems, maps, telephone directories and all manor of things have not been considered, and the name may be ignored by the aviation industry.

By all means use the name Ahuriri for the access road to the airport industrial zone, the terminal building, or even the entire area of land uplifted during the1931 earthquake, but not the airport. That it is Te Reo is irrelevant. Renaming the airport Ahuriri simply has no merit.