Funding Tourism Promotion

Published HBT 27 Jan 1016  

The heading in HBT Tourism Big drain on Ratepayers  was somewhat misleading as the item was about  the funding of tourism promotion . This is the unedited version. 

We expect our councils to spend ratepayers’ money wisely.

In late 2014 Hastings District Councillors were asked by Tourism Hawke’s Bay to support its submission to the Regional Council requesting a $900 000 a year increase in funding. The request was made during an unexpected appearance by Tourism Chair, George Hickson and GM Annie Dundas. No information was supplied in advance, minimal details were provided on how the money would be spent and nothing useful was provided  to help councillors with any subsequent deliberations.  Plus there was no consultation between Hastings councillors and staff, despite an assurance from the Mayor on 18 Feb 2015 that the proposal would be subject to scrutiny.  

On 28th May 2015, councillors were surprised to learn staff had already made a supporting submission to the HBRC and were given the options of withdrawing the submission, making clear it was a staff, not councillor submission or accepting the submission without an in-depth examination. The last option was approved by 7 votes to 6 and effectively supported a $450 000 a year Regional Council rates increase for those in the Hastings District. This is equivalent to a 0.75% increase in Hastings rates. Subsequently the Regional Council decided to stage the increase over 3 years. 

The Regional council’s involvement goes back to 2004 when former Napier Mayor Barbara Arnott and current Hastings Mayor Lawrence Yule seemed quite willing to hand over responsibility for the management of the regional development agency Vision 20/20 despite being at odds over the direction and worth of the organisation. 

However the Regional Council’s lack of involvement in tourism, plus an absence of staff or elected councillors with relevant expertise in the visitor industry soon showed up with increasing dissatisfaction from tourism providers. On taking over in September 2004, a new organisation Hawke’s Bay Inc was created with farmer and former Regional Council chairman Ross Bramwell at the helm. Disasters piled up. The first CEO  left after just 10 months in the job and the second lasted only a year. The organisation’s accounts were subsequently described as a “dogs breakfast”(HBT 27 April 2007).  In March 2008 a 3rd CEO took office, and  on 1 July 2009 the organisation was renamed Venture Hawke’s Bay. In May 2010 the 3rd CEO departed following revelation of a $250 000 unfunded expenditure blowout for the 2009/10 financial year. 

In 2014  the tourism and economic development functions of the Regional Council were split up again, leading to the creation of Tourism Hawke’s Bay which combined the ratepayer funded tourism operations of Venture Hawke’s Bay with the member funded Wine Country Tourism Association. Whilst Tourism Hawke’s Bay initially received both private and ratepayer funding private funding contributions now seems to have ceased. 

It is far from clear just how much impact Tourism Hawke’s Bay is having on our visitor industry. Both the Hastings and Napier councils have invested heavily in creating attractions including Splash Planet, the Regional Sports Park, the Museum, Aquarium, and Kennedy Park plus they fund and operate many non-commercial sporting and recreational facilities. In addition the two councils also engage in their own promotional and advertising activities.  

Napier is the driver of tourism in Hawke’s Bay, provides some 2/3rds of regional commercial accommodation and has a long history of successfully managing its tourism destiny. Whilst giving lip service to the co-operation between the City Council and Tourism Hawke’s Bay in reality the city seems to be forging ahead on its own. In the past year Napier has ramped up support for major spectator sports events including the Waikato Hawkes Bay Ranfurly Shield match, Melbourne Storm vs Dragons league match, All Blacks vs Argentina Rugby test and the recent Elite Road National Championships. 

There are also a great many non-council created events including Art Deco, Horse of the Year Show, the Mission and other concerts plus the Woman’s International Hockey Festival now in its 3rd year. 

Whilst Tourism Hawke’s Bay has bought us the  “Big Easy”  weekend with about 1500 cyclists and the high end food extravaganza “FAWC" with about 4000 ticket sales, these are actually small numbers. 

There seems to be a reluctance to challenge the role and performance of Tourism Hawke’s Bay but this hands off approach means that those who are actually providing the facilities and events have no say. Perhaps this is because Tourism Hawke’s Bay presentations are very slick and carefully stage-managed to prevent meaningful examination of the information provided. 

That tourism is a vital part of our economy is not in doubt but doubling the ratepayers’ contribution for visitor promotion and events creation to almost $2 million justifies a robust examination of the organisation, their performance, and plans. 

This whole saga shows contempt for those who have no say in whether they pay or not and Hastings councillors should have done more to protect their interests.

The pretendors

The clammer for unearned credit - blog published only 

We have now been experiencing the benefits of aviation competition in Hawke's Bay for nearly two months and although it’s early days it seems there has been a leap in the number of people travelling by air as well as a significant reduction in airfares.  Jetstar have alrady added 150 additional seats a day each way between Napier and Auckland (from February this will increase by a further further 50 seats each way.) More Air New Zealand “grab a seat” deals are appearing on my phone than ever before and for travel only days, not months away.   

For over 10 years I campaigned for competition. For all this time these efforts were frustrated and blunted by the Mayor of Hastings and former Mayor of Napier Barbara Arnott. All sorts of other so called Hawke’s Bay leaders have been conspicuous for their lack of support rather than action. Now however that Jetstar has arrived these very same people are trying to claim they have also been trying to get competition for years. Of course in the public domain there are records that suggest otherwise. For instance Napier’s new Mayor Bill Dalton  famously said:

- to Hawke’s Bay Today June 19th 2013, “ Air New Zealand were not price gouging on Hawke’s Bay services”. 

- and to Radio New Zealand Sept 5 2014   “Jetstar could damage Hawke’s Bay” 

Flying to Auckland a few of weeks ago I discovered a statement from Bill Dalton in the Jetstar inflight magazine claiming “We have been trying to get competition into the Hawke’s Bay skies for years.  it’s going to make Napier a much more affordable place to visit.”  

This is a graphic demonstration of just how disingenuous these people can be. I always felt Mrs Arnott was especially determined to achieve nothing and wondered if she was trying to mollify the Clarke/ Cullen government who were clearly opposed to the runway extension, at a time when the Napier Council were trying to obtain significant Government funding for the museum extension. Around this time  Hastings Mayor Lawrence Yule was also seeking government contributions first for the Opera House upgrade, then subsequently the velodrome project. Perhaps he was also compromised by his role as president of Local Government New Zealand

Hastings Mayor Lawrence Yule is another trying to gain undeserved credit for himself. Following the launch of the new Jetstar service he was reported as being a long time proponent of getting competition into the regions airways (HBT 2 Dec 2015 )  and claimed “As a region we have worked for this for four years”  adding “so many people had worked hard with undaunted determination to get another regional airline into Hawke’s Bay”. In my view he clearly was not talking about himself. He also clearly did his best to make sure I was not involved in any official effort. 

Of course eventually luck was on our side. As a result of the mining slowdown in Australia and the reduction in fly- in/ fly-out  workers five Q300 aircraft became surplus to QANTAS/Jetstar requirements allowing them to be transferred to New Zealand. 

Others who seem to have forgotten how disengaged they previously were includes Chamber of Commerce head Wayne Walford. There is no evidence of Chamber involvement in getting improved air services since the departure of Murray Douglas some years ago. Tourism Hawkes’s Bay Annie Dundas is another conspicuously absent from the ranks of those calling for better air services. She has certainly been much more conspicuous since Jetstar executives first arrived back in August 2015. Perhaps its worth  mentioning it had been a priority when I was an elected board member of the privately funded  Wine Country Tourism Association prior to her arrival some five years ago.Of course  Air New Zealand had covered their base’s by having their General Manager of Online and Leisure Dave Simmonds appointed to the Tourism Hawke's Bay board.

I have always been critical of our MP’s for their lack of meaningful support. Certainly Rick Barker did nothing to help, however I have come to accept it was only after Chris Tremain and Craig Foss became our MP’s, and National the Government that the insurmountable impediments dissolved away.   

The thing to remember is whilst all these individuals try to get a share of the credit for Jetstar’s arrival the fact is that once Jetstar had decided to move into  provincial New Zealand, they were effectively committed to coming to Hawke’s Bay. Our airport was already in the top four busiest provincial airports in the country, and additionally the Auckland Hawke’s Bay route carryied more passengers than any other provincial connection. It was a no brainer.

In the event either Jetstar or Air New Zealand decide on a further upgrade of air services we at least now have a runway suitable for domestic jet services if not trans-Tasman. 

Strengthening the Opera House

Published HBT Friday 9 Dec 2015

The Hastings District Council is about to start the consulting process on the future of the Hawke’s Bay Opera House and former Municipal Buildings. These iconic Hastings structures are judged earthquake prone suggesting they could collapse with catastrophic consequences in a major shake. Initial indications suggest it will cost $10 million to fix the Opera House and $24 million for both buildings, depending partly on the extent of strengthening undertaken.  Whilst 34% of code for new structures will comply with the law, engineers regard 67% as the minimum acceptable target if strengthening work is undertaken. Nor do we want a repeat situation if standards are further enhanced. 

This is not an exact science and these are not precise figures. Different engineers have different interpretations, and in at least one other local instance a more invasive structural investigation has produced an entirely different assessment. It has also been suggested the council’s risk analysis is incorrect.

It is a great pity problems such as unreinforced brick columns were not identified when $15 million was spent on the previous major upgrade just a decade ago, even if council has been exonerated by a report it commissioned. This was the first of Mayor Yule’s think big projects and its perhaps worth remembering at the time both he and Chief executive were professional engineers.  

Clearly the softening up process has already started. The Mayor has claimed (HBT 24/11/15) that already $20 million is in the budget somehow implying there is already cash in hand. This is not true. It still has to be borrowed and Hastings debt, costs, and rates will increase as a result.  A statement “that keeping the Opera House is a no-brainer”   from internationally acclaimed urban designer and member of the independent work group, James Lunday (27/11/15) has no substance  and is simply intended to sway public opinion. The group has provided no financial estimates, no operating forecasts, no indications of proven public need, and has no councillor representation. Nor does there seem to have been any attempt to establish if the facility is still fit for purpose. For instance it appears the stage is not acceptable to either the National Orchestra or NZ Ballet company. 

Even more troubling is the apparent inclusion of the $12.5 million Civic Square upgrade that was initially put on hold following the Opera House assessment, plus additional money for a CBD hotel. Together these could easily cause council debt to increase by $40 million and the impact on rates will be profound. Once built these facilities will create even more as yet unspecified ongoing operating expenditures, and as before will likely contribute nothing towards interest costs or capital repayments.  Significantly the HDC has actually made significant savings since the Opera House doors were closed.  

With some councillors already claiming they have not heard a single voice in opposition to spending such a huge sum of ratepayers money it is clear the community needs to get involved or the decision will be foist upon them without their true involvement. People of all persuasions must make their views known if the decisions made by councillors are to reflect the communities views.

These are architecturally unique heritage buildings and visually Hastings would seem a very different place without them. However it is not entirely clear whether the enthusiasm is for the architecture or as a place of assembly. Inevitably the consultation process will be flawed because council will pitch it in a way that tilts opinion towards the outcome it wants, and most of those making submissions are likely to also be of that persuasion. We cannot listen to just the shrillest and most emotive voices.  

Ideally this decision should be decided by referendum but this option will likely be ignored because it might produce an unwanted outcome in the same way the referendum on amalgamation failed to produce the desired result.  

The airport name is important

Published HBT 31Oct 2015

The Airport directors have decided to accept the name Ahuriri Airport Hawkes Bay despite significant public opposition back in May when the idea was first mooted and rejection of the idea by the Hastings District Council. Certainly Napier City Councillors did approve the proposal with just one dissenting vote but, interestingly, there were no subsequent formal discussions between the airport board and HDC and NCC councillors. It is the Board’s failure to appreciate the commercial implications that should be of greatest concern. Apparently only three of the four directors were actually present when the decision was made though it has not been revealed who was absent.  

The issue of the airport name and ownership should not be confused. The claimant group Mana Ahuriri has first right of refusal on the crown’s 50%  share of the airport business so may become the major shareholder sometime in the future. However, so far there appears to be no formal agreement with government to sell, or the claimant to purchase. Unfortunately,  Mana Ahuriri has not disclosed it’s expectations and may simply be seeking a source of income which might impede airport services. Or it may be far less of an impediment to progress than the Crown has been. 

Most New Zealand airport names are aligned with their city locations, exceptions being Hood aerodrome in Masterton  where scheduled services have ceased and Richard Pearce airport in Timaru where flights are minimal. Similarly, in Australia names such as Mascot and Eagle farm have been displaced by Sydney and Brisbane, though in the worlds largest cities with multiple airports name alignment is often impractical. Interestingly the correct names for Heathrow and Gatwick are actually London Heathrow (LHR) and London Gatwick (LGW). 

Branding is crucial in the  commercial world. Think Coca Cola, McDonalds, The Warehouse and many other well known names. Branding is recognition and reputation. Millions are spent creating brands and protecting them. It is essential Hawke’s Bay also has a strong and consistent brand. We  promote Hawke’s Bay as a visitor destination, we have a Hawke’s Bay Chamber of Commerce and a Hawke’s Bay Regional Council, and had our councils  amalgamated we would have had a Hawke’s Bay Council. Other Maori organisations elsewhere have acknowledged the importance of effective branding. Ngai Tahu has retained the name Shotover Jet in Queestown, and are a major shareholder in Whale Watch Kaikoura.  Tainui does not add their tribal name to the country’s largest shopping mall in Hamilton, which is  simply called“The Base.” 

Airports need common sense, logical names because they are the gateways to destinations, not destinations in their own right. As the names Hawke’s Bay, Napier and Hastings are the only well recognised names outside of Hawke’s Bay these are the names we should stick to.  Sensibly, the airport name was changed from Beacons aerodrome to Hawke’s Bay Airport 50 years ago. Notice Jet Star only ever mentioned Napier as it's new destination and even Air New Zealand use the destination Napier/Hastings. 

This proposed name change is simply a continuation of the board’s very narrow focus on the airport business with little apparent concern about its wider and much more important infrastructural role. In 2004 I challenged the then board’s acceptance of the infamous PWC report on direct Trans Tasman services, which I considered inaccurate and highly misleading. Even when given details  of the inappropriate assumptions and erroneous statistics, the board failed to take any corrective action.  

Only a month ago I challenged Chairman Tony Porter’s claim that airport profitability was limited by the Commerce Commission to a 6.99% weighted average cost of capital. As I was aware of this claim I had previously approached the Commission and had obtained confirmation that there was no such limit on the profitability of Hawke’s Bay Airport. Perhaps significantly Mr Porter is the last remaining director from 2004. 

Of course the name issue might not have been a problem had Napier’s former  Mayor, Barbara Arnott and, current Hastings Mayor, Lawrence Yule, not effectively boosted airport profits and therefore its attractiveness to Mana Ahuriri by agreeing to lease the council owned airport land to the airport business for just $1 a year, rather than insisting on a realistic rate of return for the council owners. This action will effectively transfer millions of ratepayers dollars to the crown, and eventually to Mana Ahuriri if ownership is transferred,.

Lets not cause unnecessary confusion because of cultural expedience. Other than Hawke’s Bay Airport the only other names that should be considered are Napier Airport or Napier/Hastings Airport, which at least would provide consistency with the 3 letter IATA code NPE used world wide to identify our airport. 

Lets not cause unnecessary confusion because of cultural expedience. Other than Hawke’s Bay Airport the only other names that should be considered are Napier Airport or Napier/Hastings Airport, which at least would provide consistency with the 3 letter IATA code NPE,  which is used world wide to identify our airport. 

Council Blighted by "Tight Five"

 A slightly edited version Published HBT 13 Oct 2015

The Hastings District Council decided recently by 10 votes to 3 that it would trial free parking in the CBD in the hope that it might lift the number of shoppers and boost retail spending. This, according to the Mayor, is a decision that will cost ratepayers $211 000 in lost revenue during the 4 month trial, and, depending on the extent of lost income from fines, could cost between $500 000 and $900 000 for a full year. The higher figure is nearly 2% of the Councils annual rates income. There was no research to support the claim of an increase in shoppers or retail turnover. In fact, one of the two other cities to have trialled free parking found it had made little difference. 

Now, whilst the parking issue was decided by 10 votes to 3 - and this is a significant majority, the votes in opposition were all urban ward councillors (including this writer) whilst of the 10 votes in favour, five were from the group I have nicknamed the “tight five” because of their unwavering support for Mayor Lawrence Yule. They include the Deputy Mayor and the Chairs of three of the four all powerful standing committees. Significantly, the Mayor has sole right to appoint these Chairmen and seems able to rely on their votes, perhaps because historically those who have taken an independent position have subsequently been demoted.  

A feature of this voting block is that, of the Mayor and 14 HDC councillors, five also have strong rural connections, either representing rural wards, living in or having close historical associations with the rural hinterland (i.e. retired farmers). Two of these are now starting their 3rd decade on council and one is approaching that milestone. Essentially the “tight five” and rural groups are the same people with just one addition or deletion. As a result of  their unwavering support the Mayor can normally count on six of the eight votes required for an outright decision and, on some occasions when councillors are absent, the decision has effectively already been made before any debate has occurred. In addition the Mayor has  a casting or additional half vote which allows him to force any issue in the event of a deadlock. 

Use of this block voting is a regular feature of HDC decision making. Recently the tight five  supported a resolution to use two million dollars of ratepayer’s money to fund the amalgamation of the RSA and National Service Club, without rigorous due diligence. Ratepayers were only saved from this expense because the National Service Club members rejected the proposal. 

In another example the same group has repeatedly supported the spending of $12.5 million upgrading Civic Square, the area surrounding the library and Art Gallery, plus a further $5 million supporting a CBD hotel, based on essentially emotive justification. For the moment, Civic Square is on hold because of the undefined but clearly substantial cost of strengthening the Opera House, However it has already cost ratepayers around a million dollars for design and consultation, and this amount looks likely to be written off. 

Yet again the rural/tight five group has without exception, supported the Mayors hard-line Animal Control policies that have resulted in many pets being euthanised and the reprehensible treatment of many owners. Rural folk seem to have a quite different view of animals to those living in urban areas. Of course all elected members do support the council position on menacing and dangerous dogs plus the registration of all dogs. 

Earlier this year the group also voted as a block to oppose the restoration of the 100Kph speed limits on Farndon and Brookfield Roads following widespread public objection when the lower limits were introduced a year earlier and despite the assessment by council roading engineers that the roads were suitable for the higher speeds. On this occasion the decision went against the wishes of the Mayor’s “tight five” by just one vote.

It must be remembered that most council spending and the vast majority of regulatory activities relate to urban activity which of course is where the majority of people live. Think of potable water, sewerage, storm water and rubbish collection, sports facilities and all the rest of council spending, then add all the regulatory issues such as parking wardens, liquor management, and animal control and its easy to see that councils are primarily involved in urban activity. In contrast, rural interest is mostly concentrated on roads and bridges, yet it is the councillors with rural loyalties who effectively are deciding the outcomes of many issues that are mainly urban, and often don’t affect rural communities at all.  

The repetitive block voting by the tight five/rural group means the Hastings District Council is making far too many poor decisions. Some are subsequently reversed, but often the outcome is higher costs and therefore higher rates and charges. Whilst most of this burden falls on urban ratepayers, rural ratepayers need to realise they are often required to contribute to these additional costs. 

Readers no doubt realise that five or six people do not total an absolute majority, but the reality on most issues is that this number is sufficient to decide the outcome. Interestingly, if Napier Mayor Bill Dalton is successful with his proposed boundary realignment, the rural power base that is deciding the outcome of many Hastings issues might be reduced. 

Amalgamation Postscript

 Published HBT 18/09/15

The votes are in and counted and the community has rejected a single council for Hawke’s Bay. Whilst many people agree change is necessary they were clearly not convinced amalgamation was the right way forward. It might have been a different result but for one official organisation, one group of people and one individual. 

The official organisation is, of course, the Local Government Commission which has made a complete hash of the whole process. It’s one standard plan for local government throughout the country was unimaginative, unrealistic and unjustified. The NO message was clear from the Far North, emphasised by Winston Peter’s bi-election win. It was also clear in Wellington where both the Wairarapa and the Hutt Valley were more than willing to combine into single councils, but the Commission’s determination to have just one council covering all of the lower North Island scuttled any chances of change. And now it has failed in Hawke’s Bay where the Commission was determined not to listen to the voices of concern and instead barged ahead. Stuart Nash’s election win was clear evidence of what was to follow. 

Including Wairoa, two hours driving from the Bay cities, was mad and shows  just how out of touch these people were. The LGC failed to provide the details necessary to help people make a decision. The promised cost savings kept shrinking and in any case were based on the Winder report for which neither the wider community nor most Councillors had any input, nor were they given any opportunity to question the author. In the case of the Hastings District Council those consulted were hand picked by the Mayor, clearly in the expectation they would kowtow to the official council position. Much was made of reducing in the number of councillors from the present 57 but the proposed plan had at least 56 and many of these were appointees and not elected. There was no democracy costing but independent estimates were the cost of democracy would increase by over $1 million a year. No management organisation was specified, no staff reductions detailed, and the likely salaries and other benefits for key staff in the new organisation were not mentioned.  

The  failure by the  LGC to release results of their telephone survey suggested they must have known it’s proposal was already dead in the water. Clearly by not reappointing Basil Morrison  and the other Commissioners, Government has signalled it’s lack of confidence in this failed team. 

The group that probably contributed most to the amalgamation defeat was, A Better Hawke’s Bay, and its successor Amalgamate Hawke’s Bay. If nothing else it’s campaign proved money is not everything. These people spent a huge but undisclosed sum pushing their agenda, but failed to appreciate the negative aspects of their campaign. The leaflets, hundreds of signs, excessive newspaper and radio advertising plus the audio assaulting mobile loud speakers left people asking just who was providing the funding, how much was being spent, and what did they hope to gain?  The slogans were seen as superficial, inappropriate, and meaningless. Even the claim that amalgamation would bring Jetstar to Hawke’s Bay had to be dropped when that outcome was achieved before the vote had even started. The claim of increased fish numbers was simply fanciful. Even the tone of much of their correspondence was a serious put off to many even though those of the opposite view used the same sort of language at times.  People expected better from those claiming to be the region’s elite.

A major mistake was the selection of speakers for the great amalgamation debate. While including Mayor Yule was predictable, Rick Barker seemed all bluster and no preparation, whilst Ngahiwi Tomoana apparently had nothing to say so he got out his guitar for a sing along. 

The last put off was Mayor Yule himself. Whilst clearly a favourite of the pro-group, whose support could be taken for granted anyway, it did not work with many undecided voters many of whom  felt it was an attempt to create a further extension to his 21 years in Local Government, plus a means to disown many of Hastings well known problems. Additionally rushing off to China in the middle of voting may not have been wise. 

One matter is clear. This was a Government initiative and since it has failed so miserably and predictably, perhaps the Crown should now compensate local councils for the costs and disruption caused by the whole sordid and unnecessary business. 

Support Jetstar

Published HBT 2 Sept 2015

Jetstar’s imminent arrival with cheaper airfares is a fantastic Christmas present. Air New Zealand are already dropping their prices in response, despite claiming for years we were not being overcharged. Some may remember Group GM Louise Struthers (HBT Feb 10 & 23) denying Air New Zealand fares were excessive. 

Of course to retain Jetstar we must support them. Diehard Air New Zealand supporters should remember cheaper airfares have only arrived because of the new kid on the block, whilst those who suddenly find air travel is affordable, should remember last time they went by bus because the airfares were so high. 

Lower fares will grow the market for both airlines and whilst the national carrier might earn a bit less, they recently announced a $330m record profit. Air New Zealand is a ruthless organisation that has buried many competitors including Origin Pacific and Trans Air. They have also unceremoniously dumped unwanted destinations such as Westport and Whakatane, and would do so to us if it suited them. We owe them nothing and need to understand their only loyalty is to themselves.