Future Wellington - An Issues Paper on local government reform in the Wellington region

Rt Hon. Sir Geoffrey Palmer (Chair), Sue Driver, Sir Wira Gardiner, Bryan Jackson.

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Preface 2

Tell us what you think 4

Summary of issues for consultation 5

Chapter 1: How the Panel came about 10 • Purpose• BackgroundtotheestablishmentofthePanel• TermsofReferenceforthePanel

Chapter 2: Who are we? 14• TheWellingtonregion• Currentlocalgovernmentarrangements

Chapter 3: Constitutional, legal and policy context 20• LocalgovernmentandtheConstitution• Thedemocraticimperative• Thelegalcontext• Thepolicycontext• TheMäorirepresentation

Chapter 4: Governance issues for Wellington 33• Achangingmandatefromcentralgovernment• Localdemocracy• Effectiveness–strategy,planninganddecisionmaking• Efficiency–useofresourcesandcapabilities• Keyissuesandopportunities

Chapter 5: Rates, finance and efficiency 60• Introduction• Settingthecontext–fundingandfinancialmanagement• OverviewofthefinancesoftheWellingtonregion’slocalauthorities• Realisingefficiencysavingsfromlocalgovernmentreform

Chapter 6: Options 77

Appendix 82

Contents

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Preface

Themechanismsoflocalgovernmentarenottopofmindformostofthepeoplewhoselivesareaffectedbyit.Manythinkthatthejoboflocalgovernmentistoprovidethedrainsandsewagedisposalfacilities,fixthelocalroadsandbridges,takeawaytherubbish,anddeliverareliablewatersupply.Inordertodelivertheirserviceslocalgovernmentleviesratesonpropertyowners.

Ifonlylifeweresosimple.TheactualandreallifedetailsoflocalgovernmentintheWellingtonRegionexhibitmanifoldcomplexitiesthatneedtobeunderstoodbeforeanyattemptcanbemadetochangethem.HowmanypeoplereallyknowwhattheGreaterWellingtonRegionalCouncildoescomparedwithaCityorDistrictCouncil?Howdecisionsaremade,whomakesthemandwhopaysforthemareofcriticalimportancenotonlytothequalityofthosedecisionsbutalsothedemocraticlegitimacyoftheexerciseofpublicpower.Localgovernmentinvolves:

• Publictransport

• Publicfacilities,suchaslibraries

• Regulationofsomecommercialactivitiesinthepublicinterest,suchasrestaurantsandbars

• Thedrawingupofenvironmentalplans

• Theissuingofresourceconsents

• Planning,devisingstrategyandadvocacy

ThisIssues PaperistheworkofanIndependentPanelappointedbytheGreaterWellingtonRegionalCouncilandthePoriruaCityCouncilaspartofaprocessofinvestigatinglocalgovernmentreformintheWellingtonregion.ThePanelhasbeengivenclearbutwiderangingTermsofReferencethataresetoutinthispaper.

TheissuesunderreviewbythePanelhavebeenthesubjectofseriousconsiderationwithintheregionsince2009.TheIssues Papersetsoutandreliesuponsomeofthedetailedanalyticalworkthathasalreadybeendoneonthetopic.TheissueshavebeendiscussedbytheWellingtonRegionalMayoralForum,butnoagreementwasreached.TheGreaterWellingtonRegionalCouncilproposedthatanindependentPanelbeestablishedtoconsidertheissues,althoughonlythePoriruaCityCouncilagreed.TheotherCouncilsintheregiondecidedtogoinotherdirectionsastheywereentitledtodo.Manyofthemareconductingtheirownconsultationsandhaveproducedtheirownmaterialaboutthewayforward.

ThesituationfacedbythePanelisthereforeoneofclutterandconfusionthatwillmakepublicconsultationdifficultandcoherencehardtoachieve.ButthePanelisdeterminedtopushaheadbecauseitisconvincedtheissuesareofprimeimportancetothefutureofthepeoplewholivewithintheregion.

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TherearethreefeaturesdrivingtheinvestigationthePanelisconducting.ThefirstisthecreationoftheAucklandsupercity.ThathaschangedthefaceoflocalgovernmentinNewZealandandremovedthepreviouspatternofuniformity,necessarilyopeninguplocalgovernmentgovernanceissuesfortherestofthecountry.Second,therehasbeenapronouncedeconomicdeclineintheWellingtonregionthathasserioussocialandeconomicimplications.IntheviewofthePaneltheseneedurgentlytobeaddressed.Third,therehasbeentheNewZealandGovernment’sreviewoflocalgovernmentBetter Local GovernmentandtheintroductiontoParliamentoftheLocalGovernmentAct2002AmendmentBill2012thatintendstochangetherulesaboutamalgamationsandfacilitatethem.Allthesedriversareanalysedinthispaper.

Inthepublicdebatethathasalreadytakenplacetherehasbeenmuchfocusonstructures.ThePaneldoesnotseetheprimeissueinthatway.Theexerciseisabouttheneedsofratepayersandresidentsandhowtomeetthoseneeds.ThePanelistshaveawiderangeofexperience.Thatdiversityshouldbeastrength.ThePanelhasfounditeasytoworktogether.MostimportantlythePanelhasnovestedinterestinanyoutcomeotherthanonethatadvancestheinterestsofthepeoplewholivehere.SofarthePanelhasnoviewsonwhatthebestoptionisinchartingthewayforward.ButinthispaperthePanelisaskingsharpandhardquestions.ThePanelwantsasmuchpublicfeedbackaspossible.Theissuesareimportanttoeveryonewholiveshereeveniftheyarenottopofmind.

GeoffreyPalmerChair, Wellington Region Local Government Review Panel

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TellthePanelwhatyouthink

ThroughouttheIssues PaperthePanelhasraisedsomesignificantquestionsaboutgovernanceoftheWellingtonregion.ThesearesummarisedintheSummary of issues for consultationsectionbeginningonpage5ofthisIssues Paper.

ThePanelisveryinterestedinyourresponsestotheissuesandquestionsinthispaper,aswellasanyothermattersyouwouldliketoraiseinrespectoftheWellingtonRegionLocalGovernmentReview.

ThereareanumberofchannelsthroughwhichyoucanprovideuswithyourviewsandfeedbackontheissuesthePanelhasraised:

• DownloadacopyoftheIssues Paperandasubmissionformatwww.wellingtonreviewpanel.org.nz

• Leaveyourfeedbackonlineathttp://feedback.wellingtonreviewpanel.org.nz

• Byemailingyoursubmissionorfeedbacktoinfo@wellingtonreviewpanel.org.nzormailingitto:

IssuesPaperWellingtonRegionLocalGovernmentReviewPOBox11-646MannersStreet

• Publicmeetingsarealsobeingorganisedforanumberofcentresthroughouttheregion.Pleasevisitthewebsitewww.wellingtonreviewpanel.org.nzformoredetails

TheinvitationtorespondtothesequestionsisopenuntilFriday 7 September 2012.

What the Panel is interested in hearing about

InthinkingabouthowyourespondtothequestionsitisimportanttorememberthePanel’staskistoconsideranumberofissuesinrelationtolocalgovernmentgovernanceintheWellingtonregion.

Theseissuesrangefromcitizenengagementinlocalgovernmentdecisionmaking,andtheimpactofdemographicchangesonplanningdecisions,throughtoachievingmoreintegratedinfrastructureplanning,andimprovingalignmentoflocalgovernmentwithcentralgovernment,theprivatesectorandthecommunitysector.ThefullTermsofReferenceforthereviewcanbefoundonthewebsite:www.wellingtonreviewpanel.org.nz.

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Summaryofissuesforconsultation

1. TheindependentWellingtonLocalGovernmentReviewPanelhasbeenestablishedtoassessgovernancemodelsfortheWellingtonRegionandidentifyanoptimalone.ThepurposeofthisIssues PaperistoprovideacontextforthePanel’sconsultationsuponitsTermsofReferenceanddefineissuesuponwhichitwishestohearviews.

2. TheWellingtonregionishometonearlyhalfamillionpeople.TheunitsofLocalGovernmentinvolvedintheareaunderreviewaretheWellingtonCityCouncil,thePoriruaCityCouncil,theKapitiCoastDistrictCouncil,theHuttCityCouncil,theUpperHuttCityCouncil,theMastertonDistrictCouncil,theCartertonDistrictCouncil,theSouthWairarapaDistrictCouncilandtheGreaterWellingtonRegionalCouncil.

3. Therearethreefactorsthathavestimulatedthereview.TheNewZealandGovernmenthasintroducedaBillofParliamenttoreformaspectsoflocalgovernmentandtofacilitateamalgamationoflocalgovernmentunits.IthastakenstepstoensurelocalgovernmentcontributestotheGovernment’sbroaderagendaofbuildingamorecompetitiveandproductiveeconomyandimprovetheefficiencyandcosteffectivenessofthedeliveryofpublicservices.

4. SincelocalgovernmentinNewZealand“dependsuponthepoliciesandexpectationsofcentralgovernment”peopleexpressingviewstothePanelneedtobeawareoftheNewZealandgovernment’slocalgovernmentpolicythatissummarisedinthepaper.Centralgovernmentischanginglocalgovernment’srole.ThecreationoftheAucklandsupercityhaschangedthefaceoflocalgovernmentinNewZealandandremovedthepreviousuniformframework.Economicadversityhashittheregionrequiringbettermeasurestocombatitandstrongeradvocacy.

Doyouthinklocalgovernmentshouldbedoingmoretosupporteconomicgrowthanddevelopmentintheregion?Doyouthinkmoreneedstobedoneintheregiontoimprovetheresilienceofourinfrastructuretobetterprepareforhazardevents?

ThePanelwantstoknowwhatWellingtonpeoplethinkofwhathashappenedinAuckland.Whatimplications,ifany,doyouthinkthecreationoftheAucklandsupercityhasfortheWellingtonregion?

Thepoliticalcultureandthedemocraticimperativerequirethatlocalgovernmentleadingdecisionmakersareelected.Yettheparticipationratesinlocalbodyelectionsaresolowastobeacauseforconcern.Inthe2010localelectionswithintheWellingtonregionthevoterturnoutrangedfrom39percentto57percent.Whydoyouthinktheturnoutatlocalgovernmentelectionsissolow?Doesitmatter,andifitdoes,whatcanbedoneaboutit?Wouldlargerunitsoflocalgovernmentwithwiderresponsibilityattractbettercandidatestorunforofficeandmakethevotersmorelikelytovote?Shouldothermeasuresbeadoptedtomakeiteasierforpeopletovote?

Therehavebeenbigdebatesforabout30yearsinNewZealandaboutMäorirepresentationinlocalgovernmentandtheobligationsoflocalgovernmenttorecognisetheTreatyofWaitangi.Itisanissuethatevincesstrong,evenpolarised,views.InanyreorganisationoflocalgovernmentwithintheWellingtonregionhowshouldtheissueofMäorirepresentationbedealtwith?

TheAucklandRoyalCommissiondevelopedfourprinciplesforshapingAucklandGovernance:common identity and purpose; effectiveness; transparency and accountability; and responsiveness.ThePanelthinksthosecharacteristicsofgoodlocalgovernancefitwellwiththePanel’sTermsofReferenceandwillbeusefultoguidethisreview.Doyouagree?IstheresomethingimportantthatthePanelhasmissed?

Thepanel’spreferredframeworkforexaminingthegovernanceissuesisbasedonthethreethemesoflocaldemocracy,effectivenessandefficiency.Doyouagreewiththesecriteria?

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Doyouthinkcouncilsintheregiondoagoodjobatengagement,bothatthelocallevelandattheregionallevel?

ItappearstothePanelthatthechallengeforlocalgovernmentistobeorganisedinsuchawaythatlocalorneighbourhoodengagementanddecision-makingisauthenticwhileatthesametimetheregionalcommunityisabletomakedecisionsonissuesthatspanalargerareaandimpactonmorepeople.Doyouthinkthecurrentarrangementsallowthistooccur?Isthebalanceright?

ItalsoseemstothePanelthatleadershipisimportantatboththelocalandregionallevels.Doyouthinkthechallengesfacingtheregionwarrantastrongerregionalleadershipapproachwithstrongvoicesspeakingfortheregion?Ifamovetostrengthenregionalgovernancewereproposed,howcouldlocalleadershipbemaintainedorenhanced?

SomeCouncilsengagelocalcommunitiesthroughaCommunityBoard,othersdonot.DoyouthinktheuseofCommunityBoardsshouldbemorewidespread?

Effectivenessinstrategy,planninganddecisionmakingisanimportantdriverofsuccessfulgovernance.Itisalsoaboutunderstandingwhatfunctionsrequirearegionalviewandwhatfunctionsaremoreappropriatelyperformedatthelocallevel.Whatviewsdoyouhaveonthisissue?

IntheeventthatlargerunitsoflocalgovernmentareintroducedintheWellingtonregiondoyouseeanyadvantagesordisadvantagesintheAucklandLocalBoardmodel?

Doyouthinktheregionneedstodevelopaunifiedvisionandstrategicdirection,andifso,shoulditbeamandatoryrequirement?

Spatialplanningisagoodwaytoconsidercomplexandlargeinfrastructureissuesandguidedecision-makingonstrategicissues.WhatarethekeyissuesfortheWellingtonregionthatwouldbenefitfromsuchanapproach?TheAucklandlegislationrequiresaspatialplantobedrawnup.ButthereisnothingcomparableinWellington.WouldsuchaplanbenefittheWellingtonregion?

Whatdoyouthinkarethekeygrowthmanagementissuesforyourcommunityortheregion?Doyouthinkcouncilsneedtotakeacloserlookattheseissues?

Localplanningprocessesdiffersignificantlyaroundtheregion.Doyouthinkthereisvalueinamoreconsistentapproachbasedonmodelsthathavedemonstratedsuccess?

Therehavebeensomeefficiencygainsintheregionthroughsharedservicesapproachesbuttheycantakeconsiderableresourcestoputinplace.Shouldmoreeffortbeputtowardsasharedservicesmodel,ordoyouthinkefficiencygainswouldbegreaterfromreorganisation?

Doyouthinkthereisbenefitinconsideringamoreintegratedregionalapproachtothemanagementofwaterinfrastructureservicesintheregion?

Individualcouncilsintheregionspendsignificantresourcesonthemanagementandmaintenanceofkeyinfrastructuresuchasroads,stormwater,wastewater,watersupply,recreationalfacilitiesandcommunityfacilities.Doyouthinkthereisbenefitinmanagingthesethroughamoreregionalapproach?

WhatroleshouldCouncilControlledOrganisationshaveinfuturegovernancearrangements,howshouldtheybeorganisedandwhatareasshouldtheycover?

WouldasystemofintegratedconsentshaveadvantagesfortheWellingtonregion?Wouldtherebeadvantagesinaregionalapproachtotheadministrationofregulatoryactivities?

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Whatchanges,ifany,needtobemadeinregardtothehandlingoftransportissuesbylocalgovernmentintheWellingtonregion?

5. Animportantfacetoflocalgovernmentisaboutrates,finance,debtandcosts.TheseissuesarecomplexbutthePaneltakestheviewthatitmustanalysethem.

6. ThefinancialimpactoflocalgovernmentontheWellingtonregionissignificant.Thecurrentfundingrequirementoflocalauthoritiesisbeingsubstantiallymetthroughratesandusercharges.The“amalgamated”financialstrengthofWellington’slocalauthoritiescouldbebetterleveragedforthebenefitofratepayersacrosstheregion.

7. EachLocalAuthorityhasacommonresponsibilityundertheLocalGovernmentAct2002tomanageitsfinancesinamannerthatpromotesthecurrentandfutureinterestsofthecommunity.Theactualapproachandstrategyadoptedbyeachlocalauthoritydiffers.TheimpactofthesedifferencespresentsasignificantchallengeinanyfutureshapeorformoflocalgovernmentforWellington.Forinstance,theadoptionofasingleratingsystemwouldaffectthedistributionandallocationofratesonabroaderbase.Ratepayersinoneareaarelikelytobeinterestedhowthecostofcurrentandfutureissuesinotherareaswouldaffectthem.Forexample,HuttratepayersmayaskwhytheyshouldpayforWellington’sdebtorleakyhomesliabilities;WellingtonratepayersmaybeconcernedatfundinganyinfrastructuredeficitintheHutt;WellingtonCBDmaybeconcernedwithanadditionalratingimpostunderasingleratingsystemthatincludesasignificantbusinessratingdifferential.

8. Financialstrategiesadoptedbyeachlocalauthorityidentifyanumberofsignificantfinancialchallengesandissuesinthecurrenteconomicenvironment.Affordability,willingnesstopay,fairnessandallocationoffundingneedsaresignificantissuesforlocalauthorities.

9. Theactualfinancialimpactforindividualratepayersorcommunitieswillnotbeknownuntilthefinalshapeofanyreformisdeterminedanduntilcurrentdifferencesinpolicyandfundingapproachesarereconciled.ThistooksometimeinAuckland.Intheend,Auckland’spreferencewastofundmostactivitiesonaregionalbasis,provideforfundingofspecificlocalneedsandtomanageorequalisetheimpactoffundingextremesonacasebycasebasisasrequired.

10. Efficienciesandsavingsfromamalgamationandsharedservicesmodelscanreasonablybeexpectedtoamountto2.5-3percentbasedontheAucklandexperience.Therearemanyexamplesofsimilarorunifiedservicesthatcouldbeprovidedonamoreefficientregionalbasis.Itneedstobeappreciatedthattoimplementsharedservicesmodelstakessignificanttime,negotiationandeffort.

11. Efficiencysavingsmayassistinaddressingthefinancialchallengesandpressuresfacedbylocalauthorities.Aucklandandoverseas’experienceshowsefficiencysavingsfromlarge-scaleamalgamationsarelikelytoberealisedoverthemediumtolongterm.Short-termsavingsandefficienciesmaybeoffsetbyadditionaltransitionandintegrationcosts.

12. RatingandfundingtoolsavailabletolocalauthoritiesundertheLocalGovernmentAct2002couldprovideflexibilitytofundlocalservicelevelneedswhilealsoprovidingfortheallocationofcoststospecificcommunitiesifitwerefairandequitabletodoso.

WouldtherebeanadvantageinasingleratingsystemfortheWellingtonregion?

Howcoulddifferencesincurrentservicelevels,levelsofinvestmentandinratingandfundingpoliciesbemanagedacrosstheWellingtonregion?

Whatisthebestwaytoaddressandfundlocalandregionalservicelevelandinvestmentneedsandrequirements?

Howshould“legacyissues”andlocalfundingneedsbeaddressedacrosstheWellingtonregion?

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Legacyissuesareissuesofpastorganisationsfollowingachangeofsomesort,suchasdifferentdebtlevelsanddifferentapproachestorating.

DoyouconsiderthatefficiencysavingscouldbeachievedbyfashioninglargerunitsoflocalgovernmentintheWellingtonregion?

HowimportantareefficiencysavingsfromchangestotheshapeoflocalgovernmentacrosstheWellingtonregionrelativetoothertangibleandintangiblebenefitsthatmaybederivedbychangingtheshapeoflocalgovernmentacrosstheregion?

WhatlevelofefficiencysavingswouldberequiredinorderforyoutosupportachangeinthestructureoflocalgovernmentintheWellingtonregion?

WheredoyouconsiderthereisthegreatestopportunitytodayforoperationalandfinanceefficiencysavingswithinyourlocalauthorityoracrosstheWellingtonregion?

13. ThePanelisexpectedtoassesspossiblelocalgovernmentoptionsfortheWellingtonregion“andidentifyanoptimalone,whichmayincludeeitherstructuraland/orfunctionschanges”.

14. InordertofocustheconsultationthePanelnowsetsoutwhatitconsidersthoseoptionstobe.IfpeoplethinkthereareothersthePanelwouldbepleasedtoconsiderthem.

15. Thereareanumberoffunctionaloptionsavailable,coveringservicedeliveryandplanning.Thefunctionsarethosecurrentlyentrustedtolocalgovernmentbylaw.Theycanbecarriedoutinavarietyofways:Councilscandoeverythingthemselveswiththeirownstaffortheycancontractservicesout.

16. Theoverallaimmustbetoreducecostsasmuchaspossibleandthereareanumberofwaysinwhichtheefficienciesmaybeimproved.

• Option1:SharedServices.Councilscooperatetosharethecostsofdeliveringtheirservicesonanadhocbasisasthesynergiesappearandagreementscanbereached.Thisisthestatusquo

• Option2:Prioritisedsharedserviceswithstrongcollaboration.Thiscouldinvolveregionaljointventures,extendingtheuseofCouncilControlledOrganisationstomanagekeyservicesandinfrastructure.Thiswouldinvolveadeliberateandproactivedriveforsharedservices

• Option3:ServicesprovidedbyoneCouncilonbehalfoftheothers.Forexample,intheprovisionofpayrollservices.Thiswouldfacilitatethedevelopmentofcentresofexcellence

• Option4:Regionalplanningforparticularservices,assetsandinfrastructure.ThiscouldincludebindingregionalspatialplanningasinAuckland,aswellasregionalplanningfortransport,landuseamenitiesandnaturalhazards

• Option5:Harmonisedregulatoryprocesses-adeliberateregionalprogrammetoachieveconsistentregionalisedprocessesinresourcemanagement,buildingandresourceconsents

• Option6:GreateruseofCouncilControlledOrganisationstocarryoutfunctions

17. ThePanelisoftheviewthatform(structuresandsystems),shouldfollowfunction(roles,responsibilities,activitiesandmandateslaiddowninlegislation).ThePanelalsotakestheviewthatthereisnolongeraone-size-fits-allmodelforlocalgovernmentinNewZealand.Citizensneedtofashionarrangementstailoredtotheparticularcircumstancesoftheregion.

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• Option1:Themostobviousoptionisnochange.Thestatusquooptionisalwayspopularwhenthereisnoagreementuponwhatshouldreplaceit

• Option2:RetaintheRegionalCouncilwithanexpandedregionalcouncilroleforspatialplanning.Amalgamationsofterritorialauthoritiescouldbeconsideredandtherearevariouscombinationsforthat.Communityboardsareanothervariableinthismix

• Option3:Two-tierlocalgovernmentwherethereisregionalrating,anddeliveryofregionalservicesbyasingleregionalcouncil.Localcouncilsasnowsetupwouldoperatelocalservicesandcommunityfunctionsinaccordancewithdefinedstatutoryprovisions.Allserviceswouldbefundedthroughasingleregionalratingsystem

• Option4:Twosub-regionalunitaryauthorities.ThefirstwouldbenamedWairarapaandcompriseSouthWairarapa,CartertonandtheMastertonDistrictCouncils.Thesecond,namedWesternLowerNorthIslandwouldcompriseWellingtonCity,Porirua,Hutt,UpperHuttandKapitiCoastcouncils.TheRegionalCouncilwouldbeabolished.Localboardscouldbeincludedtoenablelocalrepresentationonbehalfoflocalcommunities

• Option5:AsingleunitaryauthoritysimilartoAucklandbutwithfeaturestailoredtolocalcircumstancesandconditions.Thereareanumberofconsiderationswithinthisoptionincludingwhetherlocalboardsareadoptedorthepresentcouncilboundariesarekept,orcommunityboardsareused

WhatcombinationofchangeswouldbestallowtheWellingtonregiontoaddressthestrategicissuesitfaceswhileavoidingunnecessarycostsorchangeforchange’ssake?

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1PricewaterhouseCoopers,Wellington Regional Councils Governance Review October 2010(PricewaterhouseCoopers,2010)at52.

Purpose of the Wellington Local Government Review Panel

18. TheWellingtonLocalGovernmentReviewPanel(thePanel)isanindependentgroupsetupbyGreaterWellingtonRegionalCouncilandPoriruaCityCounciltoexamineexistinglocalgovernmentarrangementsintheWellingtonregion.

19. ThePanelhasbeensetupinresponsetothedecisionbyGovernmenttomakesignificantchangestothelegislativeframework,theLocalGovernmentAct2002,guidinghowlocalgovernmentoperatesandmanagesitsbusiness.

20. ThePanelcomprises:

• RtHon.SirGeoffreyPalmer(Chair)

• SueDriver

• SirWiraGardiner

• BryanJackson

Background to the establishment of the Panel

21. Localgovernmentreform,andWellingtonregion’sconsiderationofreform,hasbeendiscussedregularlysincetheOctober2009CentralGovernmentpackageofreformstoimprovethetransparency,accountabilityandfinancialmanagementoflocalgovernment.AtthesametimeamalgamationoflocalgovernmentintheAucklandregionoccurredtocreatetheAucklandCouncil.AkeydriveroftheAucklandreformwasimprovedintegrationinregionalplanningandservicedeliverysothatthenewcitycouldsupporteconomicgrowth.

22. TheformationofthenewAucklandCouncilhasnaturallysparkedspeculationwithinotherregions,andparticularlythosecentredonmajorcities,aboutwhetheramalgamationcouldberightforthem.TheneedfortheWellingtonregiontospeakwithonevoiceaboutourinvestmentandgrowthpotentialwasidentified.

23. Sincethen,discussionwithintheWellingtonregionhasfocusedontherisksof“imposedreform”versus“changefromwithin”.TherehasbeenagreementthattheWellingtonregionneedstobewell-positionedtoengagepositivelywithcentralgovernmentinresponsetoanycentralproposalforreform.Evenbetter,itmaybepossibletopre-emptimposedreformbyhavingaclearregionalviewandapositiveself-initiatedproposalforchange.

24. In2010,theWellingtonRegionMayoralForumcommissionedPricewaterhouseCooperstoconductaRegionalGovernanceReview.TheOctoberreport1recommendedcontinuingthediscussiononreformandsuggestedsixpossiblescenarios:

• Statusquo–donothing

Chapter1:HowthePanelcameabout

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• Strengthenedregionalcouncil–centralisingmoreregionalfunctions

• Clustersofterritorialauthorities–Wairarapa,HuttValley,Wellington/PoriruaorWellington,Porirua/Kapiti

• Two-tierlocalgovernment–regionalcouncilandfewerlocalcouncils

• Twosub-regionalunitaryauthorities–WairarapaandWellington

• Asingleregionalunitaryauthority

25. InJune2011,theregion’sCouncilsmadethePricewaterhouseCoopersreportpublic.Somethensoughtsubmissionsfromthepublic.Only165regionalsubmissionswerereceived,thelargestproportionfromGreaterWellingtonandPoriruaCitywhoactivelysoughtfeedback.Generalthemesthatemergedwerethatsubmitters:

• Preferredchangeoverstatusquo

•Wantedchangefromwithin,notimposed

•Wantedlocaldemocracytobemaintained.Thiswasaviewofbothsupportersandopponentstochange

•Wereconcernedthatchangesmightleadtohigherratesand/orreducedservices

26. Expectationsandunderstandingofpotentialefficiencybenefitsofamalgamationsarecontentious.However,someofthebenefitsthatsubmittersexpectedfromgovernancechangeincluded:

• Strongerregionalleadership

• Abetterrelationshipwithcentralgovernment

• Betterregionaldecisionmakingconcerningtransport,wateranddisasterresponse

• Asingleregulatoryauthorityandconsistentapproachtoregulation–reducedcompliancecosts;easierforbusinessanddevelopers

• Reducedcompliancecosts;easierforbusinessanddevelopers

• Improvedefficiency–economiesofscale,reducedduplication,increasedfocusonservices,improvedfinancialmanagement

• Services,improvedfinancialmanagement

• Improvedcapability-moretechnicalexpertise,enhancedstrategicmanagement

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27. TheresultsofsubmissionsanalysisbyMartinJenkinsLtdwerereportedbacktotheMayoralForuminSeptember2011.Inaddition,MartinJenkinsdraftedfurtherconsultationmaterialtoassistcouncilswiththenextstageofcommunitydiscussions.However,atthetimeanddespitethiswork,nofurthercommitmentwasmadeattheMayoralForumtoadvancethereviewofgovernanceinajointandconsistentmanner.

28. InOctober2011,severalGreaterWellingtonRegionalCouncillorspreparedapaper“Some ideas on local government reform in Wellington – neighbourhood decision with pan-regional strategy”.Thiswasalsoincludedonawebsitewww.shapethefuture.co.nzwhichwaslaunchedbyagroupofcross-regionalsupporterstostimulatediscussion.

29. Keentokeepprogressingthecommunitydiscussionongovernancechangeintheregion,theGreaterWellingtonRegionalCouncilandPoriruaCityCouncilinitiatedtheestablishmentoftheindependentWellingtonLocalGovernmentReviewPaneltoassessgovernanceissuesintheregion.

The Panel’s Terms of Reference

30. ThePanelhasbeenaskedtoprepareareportthatwill:

a. AssesspossiblelocalgovernmentoptionsfortheWellingtonregionandidentifyanoptimalone,whichmayincludeeitherstructuraland/orfunctionalchanges

b. Containadescriptionofthepreferredmodelandhowitwouldoperate,includinglevelsofdecision-making,functions,governancearrangementsandaproposedapproachtofinancialarrangementsconcerningrates/otherrevenue,debtandliabilitymanagement

c. Ifthepreferredoptionincludesanychanges,outlinetransitionarrangements,includingapproximatecostsandatimeframeforimplementation

31. ThereportmaybeusedbytheGreaterWellingtonRegionalCouncilandPoriruaCityCounciltoformthebasisofasubmissionforreorganisationtotheLocalGovernmentCommission.

32. Incomingtoitsconclusions,thePanelwillneedtobesatisfiedthatitsrecommendationsmeetthedifferentneedsofWellington’sregional,ruralandurbancommunitiesandwillstrengthentheabilityoftheregiontomeetfuturechallenges.Inparticular,thePanelhasbeenaskedtoconsider:

a. Appropriatelocations/levelsfordecisionsonanddeliveryoflocalgovernmentfunctions

b. Institutionalarrangementsthatwillembedenhancedopportunitiesforcommunity/neighbourhooddecision-makingonlocalissuesandmeaningfulcitizenengagementinthedevelopmentofregionalpolicyanddeliveryoptions

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c. Theroleoflocalgovernmentinfosteringculturalidentityandcommunitycharacter

d. Theroleandrepresentationofiwi/Mäoriintheproposedmodel

e. Challengesfacedbylocalgovernmentindeliveringcostlyandcomplexinfrastructure

f. Theprovisionoflocalandregionalfacilitiesandamenities

g. Waysofenhancingtheeffectivenessandefficiencyofplanningandregulatoryprocessesacrosstheregion

h. Howbesttoachieveintegratedplanning,includingfortransportandlanduse,todeliveroptimaleconomicandenvironmentaloutcomes

i. Howchangesindemographicswillimpactontheregionanditsconstituentparts

j. Theroleoflocalgovernmentinassistingtheregiontobegloballycompetitive

k. Waysinwhichtheregion’slocalgovernmentcouldbetteralignwithcentralgovernmentanditsagencies,forexamplehealth,education,andpolice

l. Waysinwhichtheregion’slocalgovernmentcouldbetteraligndeliverywiththeprivatesectorandthecommunity/NGOsector

m. Theimpactofanyproposedchangesonlocalgovernmentfinancesandrevenuemodels,includingratesandthemanagementofassets,debtandotherliabilities

n. RationaleandcriteriaforanyControlledOrganisationsandothermodelsofarms-lengthservicedelivery

o. Thecostsandbenefitsofthestatusquoandofanypreferredoptionforchange

p. Howandbetweenwhichpartiesthefinancialcostsofanytransitionshouldbeapportioned

q. AnyotherissuesthePanelconsiderrelevant

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2StatisticsNewZealand,“Subnationalpopulationestimatestablesat30June2011:estimatedregionalcouncilareas”(2011)<www.stats.govt.nz/browse_for_stats/population/estimates_and_projections/subnational-pop-estimates-tables.aspx>

3“LonelyPlanetAcclaimforthe‘CoolestLittleCapitalintheWorld”Wellington NZ(onlineed,November12010)<www.wellingtonnz.com/media/lonely_planet_acclaim_coolest_little_capital_world>

4StatisticsNewZealand,Journey to work data for the Wellington Region: Census 2006(2006)<http://www.stats.govt.nz/browse_for_stats/people_and_communities/Geographic-areas/commuting-patterns-in-nz-1996-2006/car-bus-bike-or-train.aspx>

The Wellington region

33. TheWellingtonregionhaslongbeencharacterisedbythediversityofitscommunitiesandthestrengthofitsculture,economyandpeople.Thereare,however,challengesaheadthatneedtobeaddressed.

34. TheofficialWellingtonregioncoverstheareaaroundWellingtonCity,thecitiesofLowerHutt,PoriruaandUpperHutt,andtheirruralhinterlands.TheregionextendsuptheKapitiCoastasfarnorthasOtakionthesouthernfringeofHorowhenua.EastoftheRimutakaRange,Wairarapahasamuchmoreruralfeel.Farmingandotherproductiveusestakeplaceoverextensiveriverplainsandhillcountry.TheruralhinterlandisservicedbythetownsofMasterton,Carterton,Greytown,FeatherstonandMartinborough.

35. Theregion’speoplehaveastrongsenseofcommunity,fosteredbytheirsenseofplacewithintheruralareas,towns,suburbsandcitiesinwhichtheyliveandwork,aswellastheirinterestsandpassions.Theseareallkeytobuildingastrong,sociallysustainableandconnectedregion.

36. Thedesiretoextendthissenseofconnectednessbeyondneighbourhoodsisalsoreflectedinpeople’smobilityastheymovearoundtheregiontolive,workandplay.

37. Inordertounderstandwhatchangespeoplemaywantfortheregionitisfirstnecessarytoappreciatetheregion’scharacteristics.

People

38. TheWellingtonregionishometonearlyhalfamillionpeople2andisNewZealand’sthirdmostpopulatedarea.AtitsheartisWellingtoncity,praisedbyLonelyPlanetasthe“coolestlittlecapitalintheworld”.3

39. Eachdayover30,0004peopletraveltoWellingtoncityfromthroughouttheregiontowork.Thesecommutersshareastrongcommondesire-alifestylewheretheycantakeadvantageofbig-cityopportunitiesduringweekdayswhilelivingthe“goodlife”atweekends.Thisisalsoreflectedbythelargenumberofresidentswhohaveasecondhomeorbachinanotherterritorialauthorityarea.WhileWellingtoncityattractsthemostcommuters,asignificantnumberoftheregion’scommuterstraveltootherpartsoftheregiontoworkeachday.

40. Wellingtoncity’scompactandaccessiblecentralbusinessdistricthasencouragedanincreasingnumberofresidentstooptforinner-cityapartmentlifestyles,offeringbothworkandrecreationopportunitiesrightontheirdoorsteps.

Chapter2:Whoarewe?

15

5MinistryofEducation,Schools Directory(2012).<http://www.educationcounts.govt.nz/directories/list-of-nz-schools>

41. Theregion’speopletendtobemoreeducatedthanthoseofotherregions-thereisahigherthannationalaverage46.3percentofpeopleaged15yearsandoverwhohaveapost-schoolqualification.

42. Theregion’s86,000studentsareservicedby196primary/intermediateschools,38secondaryschoolsand16compositeschools.Andtheregion’syoungpeoplehaveaccesstoawiderangeofpost-secondaryschooleducationoptions.5

43. ThemaintertiaryeducatorsareVictoriaUniversityofWellingtonandMasseyUniversity,andthesearecomplementedbytheWellingtonInstituteofTechnologyandWhitireiaNewZealand.

44. Manynationalspecialisteducationprovidersarealsobasedintheregion,includingtheNewZealandInstituteofSport,NewZealandSchoolofMusic,ToiWhakaariNewZealandDramaSchool,NewZealandSchoolofDanceandtheFilmandTelevisionSchool.Therearemorethan39,600studentscompletinghighereducationintheregion,including3,800internationalstudents.

45. WellingtonregionissecondonlytoAucklandinmanystatisticsrelatedtobreadthofethnicity.Inthe2006censusWellingtonhadthesecond-highestAsianpopulation(8.4percent,Auckland18.9percent)andthesecond-highestPacificIslanderpopulation(8.0percent,Auckland14.4percent).Some26.1percentofWellingtonianswerebornoutsideNewZealand,secondtoAuckland(40.4percent).

46. TherearesixrecognisedtangatawhenuaiwiintheWellingtonregion.Theseare:NgätiRaukawaandÄtiAwakiWhakarongotaiontheWestCoast,RangitäneandNgätiKahungunuintheWairarapaandNgätiToaRangatiraandTaranakiWhänuiwhohaveinterestsacrossthefourcitiesofWellington.

47. ThestrongpresenceoftangatawhenuatogetherwithresidentsfrommanyethnicbackgroundsincludingEuropean,PacificIsland,ChineseandIndian,whohavelivedintheWellingtonareaforwellover100years,providearichdiversityoflifestyles,annualeventsanddiningexperiences.

48. Themorerecentarrivalofpeoplesfromaroundtheworldisreflectedintherichculturallifeofcommunitiesregionwide.

Economy

49. TheeconomicclimatefacingtheWellingtonregionisfundamentallydifferenttowhatiswasbeforethecurrentglobaleconomiccrisis.Economicgrowthhasslowed,jobsarehardertofind,andthelackofdisposableincomeisaffectingmostaspectsofourlocaleconomy,particularlytheregion’sretailandtourismsectors.

16

6Infometrics,2011 Annual Economic Profile for the Wellington region(2011)at37Infometrics(2011)abovenote6at38BERL,UpdatedatasetforGenuineProgressIndexreport,(June2012).9Infometrics(2011)abovenote6at710Infometrics(2011)abovenote6at46.

50. RecenteconomicreportingshowsthattheWellingtonregionaccountedfor12percentofallgoodsandservicesproducedinNewZealand(GDPorGrossDomesticProduct)in2011.Thisamountedto$20,717millionofactivityinourregionaleconomy,up0.8%fromayearearlier.NewZealand’sGrossDomesticProductincreasedby1.6%overthesameperiod.6

Figure 1, Annual average GDP growth (2000-2011)7

51. AnequallyimportantmeasureisthelevelofGrossDomesticProductproducedperheadofpopulation(GrossDomesticProductpercapita).Thistellsussomethingaboutthelevelofrealwealthbeingcreated.Theregionhascontinuedtoperformwellinthisareacomparedtothenationalaverage,buthasbeenlosinggroundinrecentyears.

52. In2011ourregionalGrossDomesticProductpercapitadroppedfrom$53,479in2010to$52,3538,stillhigherthanthenationalaveragebutdecreasingnevertheless.AsignificantamountofthisdecreasecanbeattributedtothedeclineofthegovernmentsectorandthedecreaseinfinancialservicesduetoheadofficesmovingtoAuckland.Whilemanyotherindustriesintheregionaredoingwell,theyarenotdoingwellenoughtomakeupfortheshortfall.

53. Asimilarsituationappliestoemploymentgrowthintheregion,whichhasbeenlosinggroundoverthelongterm,andrecentlywhencomparedtothenationalaverage9.

Figure 2, Annual average employment growth (2000-2011)10

17

11Infometrics(2011)abovenote6at65

54. Fortunately,theregionhassomeadvantagesfromwhichtodrawfrom.First,peopleintheregionaresmart.Around47percentoftheregion’sworkforceisemployedinknowledgeintensiveoccupations(comparedtoanationalaverageofjustover32percent).11

Table 1. Employment in knowledge intensive industries (2011)

55. TheWellingtonregionalsohassignificanttertiaryeducationandresearchresources,whichareallimportantcontributorstoWellington’seducation,skillsandresearchinfrastructure.

56. DiverseandvibrantenterpriseexistsintheWellingtonregionincludinggovernmentandprofessionalservices;screen,digitalandICT;designandinnovation-ledmanufacturing;tidalenergy;andhigh-endfoodandwine.

Culture, heritage, sport and environment

57. Withapopulationrichinheritage,culturesandlanguages,theregion’ssocial,culturalandeconomicopportunitiesarenumerous.AddingtothiswealthofchoiceanddiversityaresomeofNewZealand’stopattractionsspanningurbanandrurallandscapes.

Arts

58. Asthecapital,Wellingtonsustainsmanyvibrantartisticandculturalenvironments.

59. TheregionhousesmanynationaltreasuresintheMuseumofNewZealandTePapaTongarewa,andthesoontoreopenNationalLibrary.It’salsohometosomeofNewZealand’soldestMäorihistory–datingbackatleast650yearswitharchaeologicallysignificantsitesinSouthWairarapa.WellingtonisalsohometotheNewZealandSymphonyOrchestraandRoyalNewZealandBallet.

60. ThebiennialInternationalFestivaloftheArtsattractsthousandsofregionalvisitorstoitsperformances,concertsandexhibitions.TheFringeFestival,ashowcaseforlocaltalent,runsconcurrently.LivetheatresincludeDownstage,CircaandBats.

18

12AbsolutelyPositivelyWellingtonTourism<http://live.wellingtonnz.com/page/facts-and-stats.aspx>13JazialCrossley“TouristsSpend$1.4binWellingtonin2011”The Dominion Post(NewZealand,3July2012)at<www.stuff.co.nz/dominion-post/business/7212111/Tourists-spend-1-4b-in-Wellington-in-2011>

61. MuseumsandgalleriessuchasAratoiMuseuminMasterton,ExpressionsUpperHutt,Wellington’sCityGallery,theMuseumofWellingtonCityandSea,VictoriaUniversityofWellington’sAdamArtGallery,theDowseArtMuseuminLowerHutt,PetoneSettlers’Museum,andPatakaMuseumandGalleryinPorirua,andMaharaGalleryinWaikanaeallattractvisitorsfromthroughouttheregion.

62. Andthereismuchtobeproudofinourcreativity.Wellingtonhasbeenthehomeofalivelyandsuccessfulcreativecommunityresponsiblefornationallyandinternationallysuccessfulperformers,suchastheFourmyula,JonStevens,Shihad,UpperHuttPosse,FatFreddy’sDrop,thePhoenixFoundationandtheBlackSeeds.SincefilmdirectorPeterJackson’sfilmstudioswerebuiltinMiramarinthe1990s,Wellingtonhasbecomeanimportantfilm-makingcentre.WetaStudiosandWetaWorkshop,alsobasedinMiramar,areworldleadersindigitalanimationandspecialeffects.Film-makerandperformerTaikaWaititiandcomedianstheFlightoftheConchordsarerecentWellingtonsensationsintheperformingarts.

Natural environment

63. EasyaccesstoopenspacesmeansWellingtonoffersalmostunlimitedrecreationalandsportingactivitiesincludingmountainbiking,surfing,fishingandtramping.Themajorityofresidentslivewithinthreekilometresofthecoast.

64. Theregionhasalmost900parks,forests,reservesandfacilities12.Fiveregionalparksarewithintheregion’sboundaries,aswellasKapitiIslandNatureReserve,PukahaMtBruceReserve,MatiuSomesIsland,TaputerangaMarineReserveandKapitiMarineReserve.

65. Theregionboastsmorethan250leisureandinformalrecreationareas,350environmentalandheritagesitesand70sportsgrounds.Thewiderangeofcampingandtouristattractionsbringmorethan4.5milliontouriststotheregioneachyear13.

Current local government arrangements

66. ThestructureoflocalgovernmentintheWellingtonRegioncomprisestheGreaterWellingtonRegionalCouncilandeightTerritorialAuthorities:

• CartertonDistrictCouncil

• HuttCityCouncil

• KapitiCoastDistrictCouncil

• MastertonDistrictCouncil

• PoriruaCityCouncil

• SouthWairarapaDistrictCouncil

19

• UpperHuttCityCouncil

•WellingtonCityCouncil

67. Withineachlocalauthoritytherearetypicallyanumberofsub-councilstructures,forexamplecommunityboards;councilcommitteesandothersub-ordinatedecision-makingbodies;jointcommitteeswithotherlocalauthoritiesorpublicbodiessuchastheWellingtonRegionalStrategyCommittee;andCouncilControlledOrganisationssuchasCapacityInfrastructureLtd.

68. ThefunctionsofGreaterWellingtonRegionalCouncilgenerallycomprise:

• Resourcemanagement,includingtheRegionalPolicyStatementthatguidesregionalanddistrictplans,andregionalplansthatregulatethequalityofwater,soil,airandthecoast

• Biosecurity,concerningthecontrolofregionalplantandanimalpests

• Rivermanagement,floodcontrolandmitigationoferosion

• Regionallandtransport,includingplanning,railownershipandcontractingofpassengerservices

•Wholesaledrinkingwatersuppliedtotheregion’scities

• Parksandrecreation

• RegionaleconomicdevelopmentthroughtheWellingtonRegionalStrategy,sharedwithterritorialauthorities

• Civildefenceemergencymanagement,sharedwithterritorialauthorities

69. ThefunctionsofDistrictandCityCouncilsgenerallycomprise:

• Communitywell-beinganddevelopment

• Environmentalhealthandsafety,includingbuildingcontrol,civildefence,andenvironmentalhealth

• Localinfrastructure-developmentandmaintenanceoflocalroadingandtransport,sewerage,water/stormwater

• Recreationandculturalfacilities,suchasparksandlibraries

• Resourcemanagementincludinglanduseplanninganddevelopmentcontrol

20

14WPMorrell,The Provincial System of Government(WhitcombeandTombsLimited,Christchurch,1964),preface.

15KAPalmer,Local government in New Zealand(2ed,LawBookCo,Sydney,1993)at23.

Local government and the constitution

70. TheconstitutionalpositionoflocalgovernmentinNewZealandrequiressomeanalysisinordertoappreciatethecontextintowhichthisprojectfits.ThepurposeandfunctionoflocalgovernmenthasalwaysbeenthesubjectofvigorousdebateinNewZealandandsoitshouldbe,becausetheissueinvolvesthedistributionofpublicpowerandthedemocraticaccountabilitiesfortheuseofthatpower.

71. NewZealandhaslongbeenknownasaunitarystatewithacompleteabsenceofthefederalismthatcharacterisescountriessuchasAustralia.ThatmeansNewZealandhasfewerlayersofgovernmentthantheAustraliansandarenotovergovernedinthatsense.NewZealand’straditionofstrongcentralgovernmenthaslongbeenestablished-butithasnotalwaysbeenso.

72. Whenself-governmentwasestablishedinNewZealandin1852,thecountryenjoyedelectedprovincialassembliespresidedoverbyelectedsuperintendents.Theprovincialcouncilsmadelawsandadministeredmanymatters.Thepoliticssurroundingthemwasvigoroustosaytheleast.IntheviewofleadinghistorianWPMorrell,thiswas“aninterestingconstitutionalexperiment.Itpossessedaconstitutionwhichattemptedtocombinetheadvantagesofthefederalandunitarysystemsofgovernment.”14Significantaggregationofpowersofdecisioninlargeunitsoflocalgovernment,asisnowhappeninginAuckland,marksareturntoapositionforthatregionthatisreminiscentoftheearlierprovincialsystem.Provincialgovernmentwasabolishedin1876.

73. Whenprovincialgovernmentwasabolishedlittleconceptualthinkingwasdoneaboutwhattypeoflocalgovernmentshouldreplaceit.Solocalgovernmentevolvedfromapracticalcontrivancelackinganydevelopedconstitutionalconceptionofthepowerswithwhichitshouldbeentrusted.Andinmanywaysthelevelofrigorousthinkinghasnotprogressedmuchsincethen.ThepublicdiscussionandconsultationsurroundingthePanel’sactivitiesmayallowsomeofthatgaptobeaddressed.

74. PartlybecauseofthishistoryNewZealandhasnoplacereservedinitsconstitutionalarrangementsforlocalgovernment.Obviouslylocalgovernmentofsomesortisanecessitybutinwhatformandwithwhatfunctionsisnotclear.InNewZealandlocalgovernmentisthecreatureofthecentralgovernment.EveryelementofitsactivitiesissubjecttocontrolbyactsofParliament.AsProfessorKennethAPalmerhaswritten,“Thetheoryandplaceoflocalgovernmentinthepoliticalsystemdoesnotderivefromanyformalconstitutionalentitlement.”15Perhapsthisperceivedlackcanbeaddressedbythecurrentreview“ConsiderationofConstitutionalIssues”thatisunderway.ButitisincontestableasmattersnowstandthatinconstitutionaltermslocalgovernmentinNewZealanddependsuponthepoliciesandexpectationsofcentralgovernment.

Chapter3:Theconstitutional,legalandpolicycontext

21

75. TheprimestatutecurrentlygoverningtheconductoflocalgovernmentistheLocalGovernmentAct2002.WhilethisActislikelytobeamendedbyabillcurrentlybeforeParliament,atpresentitprovidesthefollowingstatementofpurpose:

ThepurposeofthisActistoprovidefordemocraticandeffectivelocalgovernmentthatrecognisesthediversityofNewZealandcommunities;and,tothatend,thisAct—

(a)statesthepurposeoflocalgovernment;and

(b)providesaframeworkandpowersforlocalauthoritiestodecidewhichactivitiestheyundertakeandthemannerinwhichtheywillundertakethem;and

(c)promotestheaccountabilityoflocalauthoritiestotheircommunities;and

(d)providesforlocalauthoritiestoplayabroadroleinpromotingthesocial,economic,environmental,andculturalwell-beingoftheircommunities,takingasustainabledevelopmentapproach.

76. TheLocalGovernmentAct2002AmendmentBill2012asintroducedtoParliamentproposestorepealparagraph(d)assetoutaboveandreplaceitwiththefollowingwords:

“providesforlocalauthoritiestoplayabroadroleinmeetingthecurrentandfutureneedsoftheircommunitiesforgood-qualitylocalinfrastructure,localpublicservices,andperformanceofregulatoryfunctions.”

77. Thepreciseeffectoftheproposedchangeisnoteasytoassess,butclearlytheintentionistoreducetherangeoflocalgovernmentspheresofconcernandbringgreaterconcentrationandfocustotheiractivities.

78. TheuniformpatternoflocalgovernmentinNewZealandhasbeenchangedbytheadventofwhathasbecomeknownastheAuckland“supercity”–AucklandCouncil.Thatdevelopmentwasprecededbyacomprehensiveandhighquality2008reportofaRoyalCommissionchairedbyretiredHighCourtJudge,theHon.PeterSalmon.16TheothertwomemberswereDameMargaretBazleyandDavidShand.ThecentralrecommendationoftheRoyalCommissionwasthedissolutionoftheAucklandRegionalCouncilandallseventerritorialauthoritiestobereplacedbyanewsingleunitaryauthoritynamedtheAucklandCouncil.AfteralongandsometimesfraughtprocessthecentralrecommendationwasimplementedbutwithsomesignificantchangescomparedtotheblueprintoftheRoyalCommission.ThenewstructuresaresetoutintheAucklandCouncilLocalGovernmentAct2009.17

79. TheAucklanddevelopmentsplayedasignificantroleinthe

discussionsthatledtotheappointmentofthePanel.ThecreationoftheAucklandCouncilhasimplicationsforotherCouncilsinNewZealandandforthewholepatternoflocalgovernment.

16AucklandGovernance,ReportoftheRoyalCommissionon,includinganExecutiveSummary,SummaryofSubmissionsandResearchPapers,Volumes1-4(AJHRH2,March2009)at35.

17ThecompletelegislationpackageinrelationtoAucklandCityiscontainedinthreestatutes:LocalGovernment(AucklandCouncil)Act2009,LocalGovernment(AucklandTransitionalProvisions)Act2010,LocalGovernment(TamakiMakaurauReorganisation)Act2009.

22

ThechangewasclearlynecessaryintheviewofthePanelbutitinvolvesalargeaggregationofpublicpowertothenorthoftheWellingtonregion.ThishasimplicationsfortheWellingtonregionthatthisIssues Paperwillattempttoanalyse.

80. AftertheAucklandchangesscholarlycommentsuggestedthattheprofoundreformsofAucklandgovernancehaveimplicationsforallcommunitiesinNewZealand.18ThethenMinisterforLocalGovernment,theHon.RodneyHide,announcedareviewoftheconstitutionalstatusoflocalgovernment.19Issuesofstructurewereraisedincludingtheusefulnessofunitaryauthoritiesinmetropolitanareas,andthefunctionsandfundingoflocalgovernment.OneofthemostcontroversialissuesfacedinAucklandwasthequestionofMäorirepresentationinlocalgovernment,anissuethePanelcanvasesinthisIssues PaperintheWellingtoncontext.

81. AfterAucklandvariousdiscussionshavebeenheldandavarietyofproposalsmadeforthestructuralreformoflocalgovernmentinotherareasofNewZealand.TheweaknessesthatdrovetheAucklandreformsincludedduplicatedandfragmentedservices,competingleadership,thelackofasharedvisionfortheAucklandregion,fragmenteddecision-makingprocesses,factionalismandweakaccountability,areallissuesthatneedinvestigationinWellington.TheGovernment’ssolutionforAuckland,however,differedinimportantwaysfromtheRoyalCommission’sblueprint.ThisPanelwillexaminethosedifferencesandhowtheymayimpingeontheoptionsavailablefortheWellingtonregion.

82. Theacademicanalysiscitedinthischapterhassuggestedthataone-size-fits-allapproachtothelocalgovernmentissuesnowfacingNewZealandisunlikelytowork.20GiventhetapestryuponwhichthePanelhasbeeninvitedtoweavethePanelwillbearthatinmindandtrytofashionexistthatapplytothecircumstancesthatexistwithintheregionofWellington.

83. AfurtherdevelopmentthathasimportantconstitutionalsignificanceandonethathasbeenfrequentlybeenoverlookedistheexistenceofRegionalCouncilsaroundmostpartsofNewZealand.ThesewerebroughttolifepartlybecauseoftheprospectoftheResourceManagementAct1991.Theboundariesarebasedinlargemeasureonwatercatchments.Theenvironmentallogicofthatapproachwasbothnecessaryandobvious.Butwhenitcomestoboundariesandamalgamationsthesenaturalboundariesneedtobeconsidered.Itmakeslittlesensetoerectnewboundariesforterritorialauthoritiesbymergerandignoretheimplicationsthathasfortheresourcemanagementfunctions.ThepassingoftheResourceManagementActwasasignificantdevolutionofpowertoarevisedlocalgovernmentstructure,revisedinthesenseofadivisionofpowersbetweenterritoriallocalauthoritiesandRegionalCouncils.IfaRegionalCouncilisabolishedontheAucklandmodelwithaunitaryauthorityreplacingitandanumberofterritorialauthorities,thentheultimateboundariesmatteragreatdealinenvironmentalterms.ThePanelnotes

18ChristineCheyne,”TheAucklandEffect:WhatnextforotherCouncils?”inJeanDrage,JeffMcNeill&ChristineCheyne(eds)Along the Fault Line-New Zealand’s Changing Local Government Landscape(DunmorePublishing,Wellington,2011at41.

19HonRodneyHideSmarter government-Stronger Communities: towards better local governance and public services(OfficeoftheMinisterofLocalGovernment,April2011).

20ChristineCheyne,abovenote18at57

23

thattheapplicationoftheResourceManagementActisunderfurtherreviewasitwritesthisIssues Paper.21RegionalCouncilsalsohaveimportantresponsibilitiesintheareaoflandtransportandinparticularintherequirementtopreparearegionallandtransportstrategyeverysixyears.

84. OnefurtherissuewithconstitutionalimplicationsinvolvestheproposalintheLocalGovernmentAct2002AmendmentBillabouthowamalgamationsoflocalauthoritiescantakeplacewithoutareferendum.TheLocalGovernmentCommissionhasstatutoryresponsibilitiesinrelationtoproposedamalgamations.Butultimately,asthelawstands,amalgamationproposalshavetobecarriedbyreferendumintheterritoriallocalauthorities.IfthechangeproposedisagreedbyParliamentthatwillnolongerbethecase.TheBillasintroducedprovidesinSchedule1:

Ifafinalproposalhasbeenissuedunderclause 18(1)(a) or (b),affectedelectorsmaydemandapolltodeterminewhetherornotthefinalproposalistoproceedandbecomeareorganisationscheme.

(2)Apollmaybedemandedundersubclause(1)byapetitionof10%ormoreofelectorsenrolledaseligibletovoteintheaffectedarea.

85. Theclearintentionofthatprovisionistofacilitateamalgamationsandreorganisations.Itmakesthemeasiertoachieveandquitehighhurdlesmustbejumpedinordertosecureareferendum.

86. Inconclusion,itseemsthattheuniformpatternoflocalgovernmentinNewZealandhasbeenchangedbytheadventoftheAucklandCouncil.Thispresagesamorepowerfulformoflocalgovernmentinoneareanowandpossiblyotherslater.Otherwisewhychangethereferendumprovisions?Theimplicationsofthesedevelopmentshavetobecarefullyweighedgiventheabsenceofanyconstitutionalprotectionoflocalgovernment.

The democratic imperative

87. ItiswidelyacceptedinNewZealandthatlocalgovernmentmustbeconductedalongdemocraticlinesbutthereisnotagreatdealofanalysisastowhatthismeansinpracticalterms.NewZealandersacceptlocalgovernmentdecisionmakersmustbeelectedandinrecentyearstherehasbeensomeinnovationintheelectoralsystemavailableinlocalgovernmentelections.

88. ThechoiceofvotingsystemsundertheLocalElectoralAct2001arebetweenFirstPastThePostmethodofvotingusedinparliamentaryelectionsbeforetheintroductionofMMPin1996)ortheSingleTransferableVotesystem.SingleTransferableVoteproceedsonthebasisofvotingbyorderofpreferenceforthecandidatesandaquotaforelectioniscalculatedfromthenumberofvotesandnumberofpositionstobefilled.Afirstcountoffirstpreferencesisconductedandanycandidatewhoequalsorexceedsthequotaiselected.Thenthereisa

21ResourceManagementActPrinciplesTechnicalAdvisoryGroup,TagReport of the Minister for the Environment’s Resource Management Act 1991(February2012).

Whatimplications,ifany,doyouthinkthecreationoftheAucklandsupercityhasfortheWellingtonregion?

24

distributionofsurplusvotesabovethequotaforanycandidateinaccordancewiththevoters’furtherpreferences,bringingtheelectionofanycandidatewhoreachesthequota.

89. TheSingleTransferableVotesystemisusedinsomeplaces,notablytheWellingtonregion.Ofthelocalgovernmentunitsintheregion,theSingleTransferableVotesystemisusedbyWellingtonCity,PoriruaCityandtheKapitiDistrictCouncil.GreaterWellingtonalsoresolvedtointroducethesystematthenextelections.Councilscanresolvetochangetheelectoralsystembutthepublicalsohastherighttodemandapolltodecidewhatelectoralsystemtouse.

90. AhealthydemocracyrequiresanengagedpublicandintheviewofthePanelitisamatterofconcernthatparticipationratesinlocalgovernmentelectionsaresolow,despitetheintroductionofpostalvoting.Ifvotingpercentagesareasoundmeasureofpublicapathytowardlocalgovernmentthentheremustberealconcernaboutwhatthevotesrepresent.Theyhavenotreached60percentlevelofeligiblevotersvotinginlocalgovernmentelectionsanywhereintheGreaterWellingtonareaoverthepast10years.

91. Voterturnoutinthe2010localgovernmentelectionsintheWellingtonregionwere:

• RegionalCouncil 43percent

•WellingtonCity 40percent

• HuttCity 40percent

• PoriruaCity 39percent

• UpperHuttCity 44percent

• KapitiDistrict 49percent

• MastertonDistrict 54percent

• SouthWairarapaDistrict 52percent

• CartertonDistrict 57percent

Source:LocalAuthorityElectionStatistics2010,DepartmentofInternalAffairs.22

92. Effectivedemocracyanddemocraticaccountabilitybothdependonthelegitimacyoftheelectedrepresentatives,andverylowturnoutfiguresrobslocalgovernmentofbothitslegitimacyandimportance.ThePanelisinterestedinexploringduringtheconsultationsthereasonsforvoterindifferenceandwhatmaybedonetoremedyitandrevitaliselocalgovernmentwithingreaterWellingtonregion.

22DepartmentofInternalAffairs,Local Authority Election Statistics 2010(Wellington,2011)at48,66,77,86

25

93. InPresidentAbrahamLincoln’sfamousGettysburgaddresshesuggestedtheAmericanCivilWarprovidedanewbirthoffreedom“thatthisgovernmentofthepeople,bythepeople,forthepeopleshallnotperishfromthisEarth.”23Thisaphorismisoftenthoughttocontaintheessenceofdemocraticgovernment.Butifpeopledonotparticipateintheelectionoftheirrepresentativesthenotionisrobbedofitsrelevance.Ittookcenturiestodeveloptheuniversalfranchiseandifitisnotexercisedonceattainedthereisnocorelefttothesystem.Democracyinvolvesmajorityruleandifthemajoritydoesnotvotetheelectedrepresentativesdonotrepresentproperlythosewhomtheygovernandthosewhomtheytax.

94. Theacademicanalysisintheareaoflocalgovernmentelectionssuggestvoterturnouthasdeclinedsincelocalgovernmentwasmassivelyrestructuredin1989.24Therewasanincreasein1989attributablelargelytoone-offlocalevents.In2007thenationalturnoutlevelswere44percent,levelsnotseensincethe1960s.GavinBeattiesuggeststhereareatleastfourimportantfactorsatwork:theinstitutionalarrangementsaroundlocalelections,thecharacteristicsoftheelectorate,electorbehaviourandlocalissues.Age,occupationandethnicityofelectorsareimportant.Anotherimportantfactoristhemanydifferentvotingcategories.Therearevotingpapersformayor,localcouncils,districthealthboard,communityboardsinsomeareas,theregionalcouncil,andinsomeareaslicensingtrusts.Allthisputselectorstoalotoftroubletosortoutwhattheythinkaboutalltheissues.AsBeattieputsit,ifcentralgovernmentisseriousaboutencouraginghighervoterturnout“itshouldaddresstheimpactonvoterturnoutforuptosixorsevendifferentelectionissues,requiringtheuseoftwodifferentelectoralsystemsandconsiderationoflistsofperhaps40ormorecandidates.”25

95. Aftertheuseofpostalvotingwasmademandatoryin1989turnoutwentupto57percentandlaterdroppedback.Newoptionsandenhancementsneedtobefoundtoincreasetheturnout.E-votingcouldbeavailableinthefuturebutotherenhancementsmaybemorequicklyavailable.Possiblyalongertermthanthepresentthreeyearsmayincreasetheinterestandtheturnout.Otherfactorsthatinfluenceturnoutarethenatureoftheterritorialauthority,thepopulationsize,whetheritisacityoradistrict,andwhetheritisinNorthIslandorSouthIsland.Smallerandmoreruralcouncilshavehigherturnoutsthanmoreurbanandcitycouncils.TheSouthIslandterritorialauthoritiesdobetteronturnoutthanthoseintheNorthIsland.Onefactorthisraisesiswhethertheturnoutisafactortobeconsideredasmitigatingagainstthedesirabilityoflargerauthorities.Butthefactorknownas“comparativesalience”isalsoimportant-howelectorsseetheimportanceoflocalgovernmentcomparedtoParliamentandcentralgovernment.Anotherfactoristhatitishardtosecuremuchinformationorknowledgeaboutmanyofthecandidatesinlocalgovernmentelections.Andthereisoftenlittlepublicityabouttheactivitiesoflocalgovernmentthatbringtheissuestopublicattention.ThePanelhasalreadyreachedthetentativeviewthatthatnotmanypeopleknowmuchaboutlocalgovernment.Somebasiceducationincivicsmaybegreatlybeneficial.

23DanielJBoorstin(ed)AnAmericanPrimer(TheNewAmericanLibrary,NewYork,1968)at437.24GavinBeattie“AGlassHalfEmptyorHalfFull?”inAlong the Fault Line,abovenote18(Wellington,2011),at91.

25GavinBeattie,abovenote24,at104.

26

96. Voterturnoutmaygoupiflocalbodyelectionswereheldonlyeveryfouryears.Thatissueisunderconsiderationinrelationtoparliamentaryelections.Further,theintroductionoftermlimits,saythreefour-yeartermsforcouncillors,mayincreaseinterestinlocalgovernmentandprovideitwithnewfaces.

97. ThereareanumberofotherelementsbesideselectionsthatareaimedatensuringlocalgovernmentinNewZealandisdemocraticandaccountabletothepeople.Insummarytheyare:

• TheLocalGovernmentOfficialInformationandMeetingsAct1987thatensuresopennessandprovidesamechanismforpeopletogetinformationaboutwhatlocalgovernmentisdoing

• TheinvestigationandreportingbytheofficeoftheOmbudsmenoncomplaintsbymembersofthepublic

• Publicattendanceatcouncilmeetingsalsoprovidedforinthe1987Act

• BylawsmadebylocalgovernmentthatarecontrarytotheBillofRightsAct1990areinvalid

• InvestigationsoflocalgovernmentbytheAuditor-General.TheAuditor-Generalisthewatchdogoverlocalgovernmentfinancialmatters.Extensivelegalrequirementsareimposedbystatuteonlocalgovernmentconcerningmanagementstructures,annualpolicyandactivityreports,financialperformancereportsandaccountingmatters

The legal context

98. WhatlocalgovernmentcanandcannotdoisthesubjectofextremelylengthyActsofParliamentofconsiderablecomplexity.Manyofthesestatutesaremorecomplexthantheyneedtobe.Parliamentkeepsaratherwaryeyeonlocalgovernment.Butthebottomlineisclear.ParliamentmakestherulesunderwhichlocalgovernmentinNewZealandoperates–anditcanalterthematanytime.

99. Manyofthemostimportantlawsarementionedinprevioussectionsofthischapter.Iftheirinterpretationbecomesanissue,thatisdeterminedbythecourts.ThusasenseoffreedomtomakedecisionscanbeovertakenbydecisionsoftheJudgesintheHighCourtandbeyond.Legalanalysisandlitigationcan–andoftendo-impedetheeffortsoflocaldemocracy.

100. ThepurposeoftheLocalGovernmentAct2002hasbeendescribedbylegalcommentatorDeanKnightasintendingtoenablelocalauthoritiestoworkwithcommunitiestomeettheirchangingneedsandaspirations.Hesays:26

“Theschemeismulti-layered,incorporatinganoverarchingpurposeandhigh-levelprinciples,strategicplanningprocesses,andindividualdecision-makingprinciples.”

101. Judicialreviewandthemechanismsofadministrativelaw

Whydoyouthinktheturnoutatlocalgovernmentiselectionsissolow?Doesitmatter,andifitdoeswhatcanbedoneaboutit?Wouldlargerunitsoflocalgovernmentwithwiderresponsibilityattractbettercandidatestorunforofficeandmakevotersmorelikelytovote?Shouldothermeasuresbeadoptedtomakeiteasierforpeopletovote?

27

provideanextensivesystemofchecksandbalancesagainstlocalauthoritieswhodonotfollowthelawintheirprocesses.ThecheckoftheOmbudsmenandtheAuditor-Generalarealsosignificant.

102. ThelawimposesheavyrequirementsontheprocessesbywhichCouncilsmakedecisions.Ofparticularimportancearethegeneralprinciplesofconsultationsetoutinsection82oftheLocalGovernmentAct2002:

“(1) Consultationthatalocalauthorityundertakesinrelationtoanydecisionorothermattermustbeundertaken,subjecttosubsections(3)to(5),inaccordancewiththefollowingprinciples:

(a)thatpersonswhowillormaybeaffectedby,orhaveaninterestin,thedecisionormattershouldbeprovidedbythelocalauthoritywithreasonableaccesstorelevantinformationinamannerandformatthatisappropriatetothepreferencesandneedsofthosepersons;

(b)thatpersonswhowillormaybeaffectedby,orhaveaninterestin,thedecisionormattershouldbeencouragedbythelocalauthoritytopresenttheirviewstothelocalauthority;

(c)thatpersonswhoareinvitedorencouragedtopresenttheirviewstothelocalauthorityshouldbegivenclearinformationbythelocalauthorityconcerningthepurposeoftheconsultationandthescopeofthedecisionstobetakenfollowingtheconsiderationofviewspresented;

(d)thatpersonswhowishtohavetheirviewsonthedecisionormatterconsideredbythelocalauthorityshouldbeprovidedbythelocalauthoritywithareasonableopportunitytopresentthoseviewstothelocalauthorityinamannerandformatthatisappropriatetothepreferencesandneedsofthosepersons;

(e)thattheviewspresentedtothelocalauthorityshouldbereceivedbythelocalauthoritywithanopenmindandshouldbegivenbythelocalauthority,inmakingadecision,dueconsideration;

(f)thatpersonswhopresentviewstothelocalauthorityshouldbeprovidedbythelocalauthoritywithinformationconcerningboththerelevantdecisionsandthereasonsforthosedecisions.

(2) AlocalauthoritymustensurethatithasinplaceprocessesforconsultingwithMäoriinaccordancewithsubsection(1).

26DeanKnight“JudicialSupervisionofLocalDecision-Making”inAlong the Fault Line,abovenote18at179,180.

28

(3) Theprinciplessetoutinsubsection(1)are,subjecttosubsections(4)and(5),tobeobservedbyalocalauthorityinsuchmannerasthelocalauthorityconsiders,initsdiscretion,tobeappropriateinanyparticularinstance.

(4) Alocalauthoritymust,inexercisingitsdiscretionundersubsection(3),haveregardto—

(a)therequirementsofsection78;and

(b)theextenttowhichthecurrentviewsandpreferencesofpersonswhowillormaybeaffectedby,orhaveaninterestin,thedecisionormatterareknowntothelocalauthority;and

(c)thenatureandsignificanceofthedecisionormatter,includingitslikelyimpactfromtheperspectiveofthepersonswhowillormaybeaffectedby,orhaveaninterestin,thedecisionormatter;and

(d)theprovisionsofPart1oftheLocalGovernmentOfficialInformationandMeetingsAct1987(whichPart,amongotherthings,setsoutthecircumstancesinwhichthereisgoodreasonforwithholdinglocalauthorityinformation);and

(e)thecostsandbenefitsofanyconsultationprocessorprocedure.

(5)WherealocalauthorityisauthorisedorrequiredbythisActoranyotherenactmenttoundertakeconsultationinrelationtoanydecisionormatterandtheprocedureinrespectofthatconsultationisprescribedbythisActoranyotherenactment,suchoftheprovisionsoftheprinciplessetoutinsubsection(1)asareinconsistentwithspecificrequirementsoftheproceduresoprescribedarenottobeobservedbythelocalauthorityinrespectofthatconsultation.”

103. Themanylevelsoflegalconstraintuponlocalauthoritiessuggesttheyneedtobevigilanttoensuretheiractivitiesarewithinthefourcornersoftheirstatutes,otherwisethecourtswillintervene.

The policy context

104. NewZealandlocalgovernmentischanging.Thispanel’sreportandreviewtakesplaceinthemidstofsignificantchangesthatareinthecourseofparliamentaryconsideration.ThesingleuniformpatternhasbrokendownasaresultofdevelopmentsinAucklandandthedemandsproducedbytheChristchurchearthquakes.

105. Therearemanyquestionsaroundthecapacityofsmalllocalauthoritiesatdeliveringplanningservicesandinfrastructure.

106. RegionalCouncilshavebeenquestioned.TheydonotexistforNelson,Tasman,MarlboroughorGisborne.Therehavebeencallsfortheirabolitioninsomequarters.Theirexistencesometimes

29

makesitdifficulttoidentifyanauthoritativevoice.Therearefrequentlydisagreementsbetweenterritorialauthoritiesandregionalcouncils.

107. TherearealsoconcernsabouttheperformanceofthecoreenvironmentalandtransportfunctionsofsomeRegionalCouncils.TheCanterburyRegionalCouncil’sperformancewassuchthatcentralgovernmentintervenedbylegislationandcommissionerswereappointedtocarryoutthefunctions.Somesaythetwolevelsoflocalgovernmentshouldbecomeone.

108. ThecreationoftheEnvironmentalProtectionAuthoritymayhavesomeimpactonregionalgovernance.ThesepossibilitieshavebeendiscussedbyDrJeffMcNeillinarecentpaper.27Heremarks“…onesensesalackofanycoherentvisionforregionalcouncils,orregionalgovernance.Ratheronesensesamuddlingthroughratherthananycoherentorcomprehensivestrategy.”

109. ItisnotonlyAucklandCouncilandtheeconomicslowdownfuellingpolicychangeinlocalgovernment-theNewZealandGovernmentisalsoresponsible.Hon.MrHide’svisionwasarticulatedinspeechesandinthedocument“Smarter Government-Stronger Communities: towards better local governance and public services.”28Thisdocumentconcentratedonthestructure,functionsandfundingoflocalgovernment.IthasnowbeensupersededbytheMarch2012governmentpolicydocument.

110. Afterthe2011generalelectionanewMinisterofLocalGovernment,theHon.DrNickSmith,wasappointed.FollowinghisresignationtheHon.DavidCarterwasappointedMinisterofLocalGovernment.InMarch2012,DrSmithpublishedanewblueprint“BetterLocalGovernment.”29Thatdocumentsetsoutaneight-pointreformprogramme.ItincludedsomefeaturesofAucklandgovernanceinnovationsextendedtothewholecountry.Thespecificelementsoftheprogrammeinclude:

• Refocusthepurposeoflocalgovernment

• Introducefiscalresponsibilityrequirements

• Strengthencouncilgovernanceprovisions

• Streamlinecouncilreorganisationprocedures

• Establishalocalgovernmentefficiencytaskforce

• Developaframeworkforcentral/localgovernmentregulatoryroles

• Investigatetheefficiencyoflocalgovernmentinfrastructureprovision

• Reviewtheuseofdevelopmentcontributions

27JeffMcNeill“DecidingattheRightLevel:Regions,CouncilsandLegitimacy”inAlong the Fault Line,abovenote18at121.28HonRodneyHide,abovenote19.29NewZealandGovernment,Better Local Government(March2012).

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111. ThisisahighlyspecificagendaandhasalreadyledtotheintroductionoftheLocalGovernmentAct2002AmendmentBill2012.OfparticularimportancetothisPanel’sreviewisthestatementthatthelegislation“willenabletheLocalGovernmentCommissiontoconsidercouncilreorganisationproposalsintimefortheOctober2013localgovernmentelections.”Thepaperstressesconcernwiththenationalaverageincreaseofratesthathasbeenmorethandoubletherateofinflation.ThelocalgovernmentproportionofGrossDomesticProducthasgrowntoreachfourpercent.Directsalarycostshaveincreased.Localgovernmentdebthasquadrupledoverthepastdecade.ItisclearwhatthepolicyofcentralgovernmentisandthePanelwillpaycloseattentiontoit.SubmitterstothePanelneedtobeawareofthemaswell.

Mäori representation

112. Onesignificantconstitutional,legalandpolicyissuethatarisesinanyreorganisationoflocalgovernmentintheWellingtonregionconcernsMäorirepresentation.ThishasbeenacontroversialissuewithinlocalgovernmentinNewZealandfor20years,culminatinginaspiriteddebateoverthewayinwhichMäoriissuesshouldbetakenintoaccountinthearrangementsforthenewAucklandCouncil.IntheeventthatthePanelrecommendschangeitwillhavetodealwiththisissue.ThePanelisfortunatehavingwithinitsmembershiprespectedkaumätuaSirWiraGardinerandhewillassistthePanelinunderstandingtheviewsofMäorionrepresentationintheregion.

113. TheissuegoesbacktotheTreatyofWaitangi.ItisclearthattheTreatyofWaitangiisanintegralpartofNewZealand’sconstitutionalarrangements.Whatisnotclearisthenatureandextentofthatintegralpart.TheTreatyisnotanordinarylaw.Itisnotgivengeneraleffectbystatute30.ButanumberofstatutesrequiretheexecutivegovernmenttoactconsistentlywiththeTreaty.TheCabinetManualrequiresthatMinistersindicateforbillstheyareresponsibleforthatthebillcomplieswith“theprinciplesoftheTreatyofWaitangi”.31ButintheendtheextentoftheTreaty’sapplicationdependsonspecificActsofParliament.

114. ThereareprovisionsintheLocalGovernmentAct2002thatrefertothemannerinwhichMäoriissuesaretobetreatedbydecisionmakers.Section4isimportantinthisregard:

InordertorecogniseandrespecttheCrown’sresponsibilitytotakeappropriateaccountoftheprinciplesoftheTreatyofWaitangiandtomaintainandimproveopportunitiesforMäoritocontributetolocalgovernmentdecision-makingprocesses,Parts2and6provideprinciplesandrequirementsforlocalauthoritiesthatareintendedtofacilitateparticipationbyMäoriinlocalauthoritydecision-makingprocesses.

115. The“facilitationrequiredunders4hasbeeninfusedthroughsubsequentsections”oftheAct.32TheserecognisetheneedtofocusonMäoriparticipationandtoprovideforcontributionindecision-making.Section14laysdowntheprinciplethat“alocal

30MatthewSRPalmer,The Treaty of Waitangi in New Zealand’s Law and Constitution(VictoriaUniversityPress,Wellington,2008)

31WellingtonCabinetOffice,Cabinet Manual 2008at[7.60].

PeopleexpressingviewstothePanelneedtobeawareoftheNewZealandGovernment’sLocalGovernmentpolicy.

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authorityshouldprovideopportunitiesforMäoritocontributetoitsdecision-makingprocesses.”Section81isevenmorespecific:

(1)Alocalauthoritymust— (a)establishandmaintainprocessestoprovideopportunities

forMäoritocapacitytocontributetothedecision-makingprocessesofthelocalauthority;

(b)considerwaysinwhichitmayfosterthedevelopmentofMäoriand

(c)providerelevantinformationtoMäoriforthepurposesofparagraphs(a)and(b).

(2)Alocalauthority,inexercisingitsresponsibilitytomakejudgmentsaboutthemannerinwhichsubsection(1)istobecompliedwith,musthaveregardto—

(a)theroleofthelocalauthority,assetoutinsection11;and(b)suchothermattersasthelocalauthorityconsidersonreasonablegroundstoberelevanttothosejudgments.

116. TheResourceManagementAct1991,astatutethatlocalgovernmenthasakeyroleinadministering,requiresinsection6(e)“therelationshipofMäoriandtheircultureandtraditionswiththeirancestrallands,water,sites,waahitapuandothertaonga”tobetreatedasamatterofnationalimportance.Section8requiresdecisionsmakers“shalltakeintoaccounttheprinciplesoftheTreatyofWaitangi”.IntheBayofPlentyalocalactprovidingforMäoriconstituenciesfortheBayofPlentyRegionalCouncilwasenactedin2001.

117. TheRoyalCommissiononAucklandgovernancerecommendedtherebethreeMäorirepresentativesonthemainAucklandCouncil.TwocouncilorsweretobeelectedatlargebyvotersontheMäorielectoralroll.OnecouncilorwastobeappointedbytheManaWhenuaForum,anewbodytobeappointedbymanawhenuafromthedistrictoftheAucklandCouncil.33

118. However,theGovernmentrejectedthatrecommendationandestablishedaMäoriStatutoryBoardinstead.TheBoardisindependentoftheAucklandCouncil.ItassiststheAucklandCounciltomakedecisions,performfunctionsandexercisepowersbypromotingcultural,economic,environmentalandsocialissuesofsignificanceformanawhenuagroupsandmataawakaofTamakiMakarau.ThelegislationprovidestheBoardwiththreeimportantroles.ItmustappointamaximumoftwopeopletositasmembersoneachoftheAucklandCouncil’scommitteesthatdealwiththemanagementandstewardshipofnaturalandphysicalresources.TheBoardcanalsoasktheAucklandCounciltoappointapersonorpersonstositasmembersonanyotherCouncilcommittees.TheAucklandCouncilmustprovidetheBoardwithinformationthatitneedstoperformitsfunctionandmakedecisions.TheBoardmustalsoensurethecouncilactsinaccordancewiththeTreatyofWaitangi.AndtheAucklandCouncilmustmeetwiththeBoardatleastfourtimeseachfinancialyeartodiscusstheBoard’sperformanceandfunctions.

32KennethPalmerLocalAuthoritiesLawinNewZealand(BrookersLtd.,Wellington,2012)at1021.

33AucklandGovernance,Volume1abovenote16at33-34.

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119. TheMäoriStatutoryBoardhassignificantpowersandanannualbudgetofmorethanthreemilliondollars.

120. Well-establishedMäorirepresentationarrangementsarealreadyinplacewithinlocalgovernmentintheWellingtonregion.ThisincludesAraTahi,anon-statutoryregionalcommitteethatconsidersmattersofstrategicimportancetomanawhenuaiwi.TheterritorialauthoritiesintheWellingtonregionalsohavevariousarrangementsandcommitteesinplacetoengagewithMäori.

121. Amoreformalarrangementexistsattheregionallevelforresourcemanagementmattersthroughthejointcommitteefornaturalresourcemanagement–TeUpokoTaiao.TeUpokoTaiaoisaCouncilCommitteepartnershipbetweenGreaterWellingtonandthesixmanawhenuaiwioftheregion.Itspurposeistoleadtheregionalplandevelopmentandoverseemajorresourceconsentdecisions.

122. ClearlythereareanumberofapproachesavailabletodealwiththeissueofMäorirepresentationwithinanyreorganisationoflocalgovernmentwithintheGreaterWellingtonarea.ThisisanimportantissueuponwhichthePanelwishestoconsult.

InanyreorganisationofLocalGovernmentwithintheWellingtonregionhowshouldtheissueofMäorirepresentationbedealtwith?

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34LocalGovernmentAct2002AmendmentBill2012,Schedule3,clause21.

A changing mandate from central government

123. ThepreviouschapterontheconstitutionalandlegalcontexthighlightsthedominantnatureofcentralgovernmentinfluenceonlocalgovernmentmandateinNewZealand.Thisisacontextthatisundergoingsignificantchange,mostnotablythroughcentralgovernment’sBetter Local GovernmentreformsandchangestotheResourceManagementAct1991.Understandingthechangingnatureoflocalgovernment’smandateisanimportantstartingpointforunderstandingcurrentandfuturegovernanceissuesintheWellingtonregion.

124. ThemostrelevantchangesarethosebeingconsideredintheLocalGovernmentAct2002AmendmentBill2012(theBill).ThesechangesareakeypartoftheBetter Local GovernmentreformpackagecontributingtotheGovernment’sbroaderagendatobuildamorecompetitiveandproductiveeconomy,andimprovetheefficiencyandcosteffectivenessofdeliveryofpublicservices.Aimingformoreeffectiveandefficientlocalgovernment,theGovernment’sproposedchangestotheLocalGovernmentAct2002sendastrongsignaltolocalgovernmentthatitneedstodothingsdifferentlyinordertocreateanenvironmentconducivetosustainedeconomicgrowth,including:

• Reducingredtape

• Limitingdebtandminimisingtheratesburdenonhouseholdsandbusinesses

• Ensuringcost-effectiveprovisionofgoodqualityinfrastructure

125. Councilstructuresobviouslyplayanimportantroleinallofthesematters.Recognisingthis,theBillproposeschangestoenableamorestreamlinedprocessforconsideringlocalgovernmentreorganisation.Forexample,undertheproposedchanges,acitizens-initiatedpollonareorganisationproposalwouldonlybeconsideredbytheLocalGovernmentCommissionifsignatureswerereceivedfrommorethan10%oftheaffectedarea34.Importantly,whilethechangesdostreamlinetheprocess,theBillascurrentlywrittendoesnotprovidethescopeorflexibilitytoconsidernewgovernancestructuresakintothosecurrentlyinplaceinAuckland.ThisisanimportantissuetoconsiderforthePanel.

126. OtherworkstreamsundertheBetter Local Governmentreformsstronglyreflectthethemesofefficiencyandcosteffectiveness:

• AnEfficiencyTaskforcehasbeensetuptolookatoptionsforstreamliningLongTermPlanprocessesandfinancialreportingpractice

Chapter4:GovernanceissuesforWellington

34

35ResourceManagementActPrinciplesTechnicalAdvisoryGroup,abovenote21.36BERL,BERL Regional Rankings 2011(March2012)at7.23.

• TheProductivityCommissionisconductinganinquiryonregulation,includingthebalanceoffunctionsallocatedtolocalgovernmentbycentralgovernmentandwaystoimproveregulatoryperformanceinthesector

• AnInfrastructuretaskforce,yettobeannounced,istoconsiderhowgoodqualityinfrastructurecanbedeliveredatleastcost

• AreviewbytheOfficeoftheAuditor-Generaloneffectivenessandfairnessofdevelopmentcontributions

127. Resourcemanagementisanotherareaofimportantlocalgovernmentresponsibilitywherecentralgovernmentisfocussingitsattention.ThisisoffundamentalimportancetolocalgovernmentstructuresbecausethedivisionofresponsibilitiessetoutintheResourceManagementAct1991)iscloselyalignedtoscaleofissues,catchmentsandecologicalsystems.ArecentlyreleasedMinistersTechnicalAdvisoryGroupreportonResourceManagementActprinciples35suggestsaneedforchangestosections6and7oftheAct,regardingmattersofnationalimportance.Someoftherecommendationsinthereport,shouldtheybecarriedthrough,areofinterestfromagovernanceperspective,including:

• Theneedforgreaterattentiontomanagingissuesofnaturalhazards.ThereportrecommendsRegionalCouncilsshouldhavetheleadfunctionofmanagingalltheeffectsofnaturalhazards.Italsorecommendsthereshouldbeonecombinedregionalanddistrictnaturalhazardsplan

• NewprocessestobeadheredtobyResourceManagementActdecisionmakers,forexampletoachievetimely,efficientandcost-effectiveresourcemanagementprocesses;andtopromotecollaborationbetweenlocalauthoritiesoncommonresourcemanagementissues

Economic slowdown

128. TheWellingtonregion,liketherestofNewZealand,iscontinuingtofeeltheeffectsoftheglobalfinancialcrisis.Economicgrowthhasslowedsignificantly,thejobmarkethaswithdrawnandtheresultantlackofdisposableincomehasnegativelyaffectedretailandtourismactivitiesthroughouttheregion.

129. WhilehavingtheseatofGovernmentlocatedinWellingtonhashelpedtocushiontheeffectsofeconomicdownturnsinthepast,theongoingnatureofthecurrentcrisiscombinedwithcutstothepublicserviceisstartingtohaveasignificantimpactontheoverallregionaleconomy.Reflectingthis,recenteconomicreportingconfirmstheWellingtonregionislosinggroundwhencomparedtotheperformanceofsomeregionsandNewZealandasawhole.TheperformanceofAucklandinparticular,hasimprovedsignificantlyoverrecentyears.36

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TheWellingtonregionneedstostrivetoimproveitsrelativeregionalpositionifitistoprosperinthefuture.

130. Sowhatdoesthismeanforlocalgovernment?Itiscleartheregionwillstruggletomakeanyprogresswithoutworkingtogether.TheconnectedandinterdependentnatureoftheWellingtoneconomy,particularlyaroundemploymentlocation,requirescollaborationandajoined-upapproach.TherecentlyrevisedWellingtonRegionalStrategy2012goespartoftheway,butthereismorethatlocalgovernmentintheregioncandofromaninfrastructureandservicedeliveryperspectivetofostermorerobust,resilientgrowthoverthelongterm.Therearealsoissuesaboutduplicationandoverlapwiththeactivitiesoflocalauthorities.

Resilience

131. Aresilientregionisonewherelocalgovernmentcanrespondquicklyandeffectivelytochangesorparticulareventsthatoccurintheregion.Someexamplesofsignificantchangecanincludelongperiodsofloworuneveneconomicgrowth,anagingpopulationandclimatechange.Examplesoflargeeventsmightincludestormsandearthquakehazards.

132. TheWellingtonregionaleconomyisrelianttoalargeextentonthegovernmentbeinghousedintheWellingtoncitycentralbusinessdistrict,andthoughthesizeofthepublicsectorfluctuates,itstillrepresentsasignificantproportionoftheregion’seconomy.However,aresilientregionwillperformwellinallareasoftheregionandisresponsivetoavarietyofeconomicopportunities.Theimpactoftheon-goingworldwideeconomiccrisisandtheprospectofamajorhazardeventoccurringincreasestheneedforamorerobustanddiverseeconomyinthefuture.Buildingontheregion’shighworldrankingintermsofliveabilitywillbeonewaytoattractandretaintalentedpeopleandbusinesses.

133. Theneedfortheregiontobepreparedforalargehazardeventisparticularlyimportantbecauseitislocatedinanareaofhighearthquakerisk.Intheeventofalargeearthquake,forinstanceofmagnitude7.5ontheWellingtonFault,therangeofhazardsthatcouldoccurincludefaultrupture,liquefaction,landslides,landsubduction,floodingandtsunami.Thesewillaffectallpartsoftheregion,notjustWellingtoncity.Thehazardrisktotheregionismagnifiedduetotheregion’srelianceonalimitednumberofarterialtransportlinksallofwhicharesituatedclosetotheregion’sfaultlines.Further,theregion’sportsandairportareatriskfromliquefactionanditslifelineutilities,forexamplewater/wastewater,gas,electricityandtelecommunications,arealsohighlysusceptibletofaultrupture.

134. TheCanterburyearthquakesprovideatimelyreminderofthedevastationthatcanbecausedfromahazardevent.Thisdevastationisfeltinmultiplestages,whicharetheinitialemergency/liferecoverystage,longertermdeconstructionofbrokenbuildingsandinfrastructureandthelongerterm

Whiletheperformanceoftheeconomyisdependentonawiderangeoffactors,localgovernmentprovidesfoundationinfrastructureandplaysanimportantroleinsupportingeconomicdevelopment.Areyouconcernedwiththeeconomicperformanceoftheregion?DoyouthinklocalgovernmentshouldbedoingmoretosupporteconomicgrowthanddevelopmentintheWellingtonregion?

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rebuildingofthecity.Localgovernmentmustbepoisedreadytorespondeffectivelyatallstagesofthehazardrecoveryprocess.

135. TheWellingtonregionhasaheightenedawarenessofearthquakerisk.However,itisstilldifficulttoplanforandunderstandtherepercussionsofahazardeventincluding,forexample,thelossofjobsresultingintheneedforpeopletomoveoutoftheregion.AlargeproportionofworkersintheWellingtoncentralbusinessdistricttravelindailyfromallotherpartsoftheregion.Amajorhazardeventcouldaffectaccesstotheworkplaceandresultinlossofjobs.

Funding and investing in core infrastructure

136. Fundingandinvestingincoreinfrastructureisaconstantchallengeforlocalgovernment.Acrossthecountry,localandregionalcouncilshavesignificantcommitmentstomaintainandimprovebasiccommunityinfrastructure–thefoundationofournationalandregionaleconomies.Manyoftheseprojectsarelargeandcomplexandrequiresignificantfundingoverthelongterm.ThesituationisnodifferentintheWellingtonregion.

Demographic change

137. TheRegion’spopulationdemographicsareundergoingsignificantchange;mirroringthechangeoccurringinNewZealandandmuchofthedevelopedworld.InNewZealand,theAucklandregionwillhavethelion’sshareofnewpopulationgrowthoverthecoming20years,between55percentand70percent37ofallnewgrowth,followedbyCanterburywitharound10percentofnewgrowth.TheWellington,WaikatoandBayofPlentyregionswillhavesimilarratesofgrowthofbetween5percentand9percent.

138. WhiletheWellingtonregion’spopulationisnotexpectedtodeclineduringthenext30yearscomparedwithsomeotherregions,populationcharacteristicswillchangemarkedlytooneofanagingpopulation.

139. Withintheregion,thedemographicchangewillbemoremarkedinsomeareasthanothers.IntheprovincesofWairarapaandtheKapitiCoast,anagingpopulationwillbecomeasignificantissueultimatelyleadingtopopulationdeclines.ThePoriruaCitypopulationcanbedescribedasyouthful,WellingtonCitycontinuestobecharacterisedbyalargeworking-agepopulationandpopulationintheHuttValleyremainssimilaracrossallagegroups.

140. Theshiftingpopulationdemographicswillbringbothchallengesandopportunitiesfortheregion.Whiletherewillbereducedunemploymentoverall,someareaswillstruggletoattractworkerstosupporttheirlocaleconomies.Localgovernmentwillneedtoincreasetheirfocusontheneedsandservicesofanagingpopulation.Forexample,greaterattentiontoplanninganddesignforalessmobilepopulationwillneedto

37NJackson“DemographicTrendsandLocalGovernmentreform–NZandWellington”NationalInstituteofDemographicandEconomicAnalysis,UniversityofWaikato(presentedtotheAdministrationofPublicAdministrationConference:RethinkingLocalGovernment,Wellington,April2012)

Naturalhazardsandmajorhazardeventshavelittlerelevancetopoliticalboundaries.Whatshouldtheregionbedoingtoimprovetheresilienceofourinfrastructureandtoenabletheregiontobetterprepareforsuchhazardevents?

Thetrendstowardsamoreageingpopulationarelikelytochangethedemandforservicesandaffectdifferentcommunitiesindifferentways.WhatissuesdoyouthinkthePanelneedstobethinkingaboutinthisreview?

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occurifpeopleareto“ageinplace”.Lastly,theabilityfortheagingratepayerpopulationtofundlocalgovernmentrateswillbeasignificantissueforcouncils;promptingtheneedforlocalgovernmenttoreviewwhatservicesareprovidedandwhereandtowhatlevel.

Technological change

141. Theworldisexperiencingatechnologicalrevolutionwithincreasingreliancebeingplacedontechnology,inparticularpersonaldigitaldevices,toprovidereal-timeresponsestoconsumerqueries.Theopportunitytoembracetechnologyiscurrentlyonlylimitedbypeople’saccesstoitandtheirwillingnesstoengagewithit.Therolloutofultra-fastbroadbandwillreduceaccessissuesformuchofthecountryovertimeandpeople’swillingnesstoengagewilllikelyincreasewithinthenextgeneration.Therearethreeaspectsoftechnologicalchangethatareparticularlyimportantforlocalgovernment.

142. First,localgovernmentwillneedtoadoptnewformsofengagementandcommunicationtoengageallsectorsofthepopulationinitsdecision-makingprocesses.Youngpeoplewillexpecttobeabletoengagewithlocalgovernmentusingonlinetoolsmobiledevisesandsocialmedia.Theimmediatechallengeforlocalgovernmentistoprovidescopefortraditionalmethodsofengagementwhileembracingdigitalengagement.Afurtherchallengewillbetoconsiderhowtoplacethesamevalueoninformationgatheredfromavarietyofengagementtools.

143. Technologyadvancesarealsochangingthewaypeopleworkandlive.Thereareincreasingopportunitiesforpeopletoworkfromhomeeitherpart-timeorfull-time;affectingtraditionaltravelpatterns.Onlineshoppingisincreasinglybecomingasignificantplayerintheretailmarketwhichmay,intime,affecttheviabilityofsomeretailcentres.Localgovernmentservicesarealsoincreasinglybeingmadeavailableonline,reducingtheneedforphysicalofficespaces.Theprovisionofe-booksbylibrariesisoneexampleofthis;aservicethatwillsignificantlychangethewaylibrariesprovidetheirservicestolocalcommunities.

144. Afurtherchallengeforlocalgovernmentishowtoembracethesetechnologicaladvancesand,atthesametime,supportvibrantspacesforpeopletogatherandremainintouchwiththeircommunity.Localgovernmentcanprepareitselfforthesechangesbyadoptingflexiblewaysofworkingwiththecommunitynowandrequiringpeopletoplan,designanddevelopadaptablebuildings,spacesandinfrastructure.

Case studies on local government reform

145. UnderstandingwhathasbeendoneelsewhereisanimportantpieceofcontextforthisReview.

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146. AsignificantamountofanalysishasbeencarriedoutrecentlyinNewZealandandAustralia,whichprovidessomeimportantinsightsintothedrivers,processesandoutcomesoflocalgovernmentreform.

147. OfparticularrelevanceistheAucklandRoyalCommissionreportwhichprovidesawealthofknowledgeoneveryaspectoflocalgovernmentinthethenAucklandregion.Whileitisnotpossibletosummarisethefindingsofsuchacomprehensivereportinthispaper,ithasbeenusefulforthePaneltoconsideritsfindings.

148. ThefollowingGuidingPrinciplesforShapingAucklandGovernance38areparticularlyhelpfulbecausetheyhavewiderapplicationonoutcomesforlocalgovernmentreform:

• Common identity and purpose

The new structure should encompass the interests of the entire Auckland city-region and foster a common regional identity and purpose. Auckland needs an inspirational leader, inclusive in approach, decisive in taking action, a person able to articulate and deliver on a shared vision, and who can speak for the region. The new structure should support better coordination of key services and infrastructure, and foster integrated planning and decision making. The urban core should be recognised as critical to the economic vitality of the region, and rural values and areas protected.

• Effectiveness

The structure should deliver maximum value within available resources, in terms of cost, quality of service delivery, local democracy, and community engagement. It should allow services to be delivered locally, where appropriate. It should also be more efficient than the current system, and provide improved value for money.

• Transparency and accountability

Roles must be clear, including where decision making should be regional and where local. Appropriate accountability must be achieved for delivering outcomes, use of public funds, and stewardship of public assets. Institutions should work in an open manner and should communicate clearly about their activities, how much they spend, and the results.

• Responsiveness

The structure should respect and accommodate diversity and be responsive to the needs and preferences of different groups and local communities. It should be inclusive and promote meaningful public participation. It must be nimble in responding to change.

38AucklandGovernance,volume2abovenote16at309

TheAucklandRoyalCommissiondevelopedfourprinciplesforshapingAucklandGovernance:common identity and purpose; effectiveness; transparency and accountability; and responsiveness.HowrelevantdoyouthinkthesearefortheWellingtonregion?

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149. AnotherusefulreferencepointforconsideringlocalgovernmentreformintheWellingtonregionisthereportConsolidationinLocalGovernment–AFreshLook39,preparedjointlybytheAustralianCentreofExcellenceforLocalGovernment,LocalGovernmentAssociationofSouthAustraliaandLocalGovernmentNewZealand.ByexamininglocalgovernmentreformprocessesandcasestudiesinAustraliaandNewZealand,thereportfoundthereweregenerallyfourbroadstrandsinthedebateaboutlocalgovernmentreform.AswiththeAucklandprinciples,theseprovidesomeveryusefulinsightsintothedriversbehindlocalgovernmentreform:

• Efficiency: Many local government inquiries have asserted that consolidation, for instance amalgamations, shared services and so on, will inevitably result in greater efficiencies and cost savings for local governments, creating the potential for them to do more with less. This was the prevailing theme in the 1990s amalgamations in Tasmania, Victoria and South Australia, in particular, but also influential in other jurisdictions. These apparent certainties have been both endorsed and challenged by academics in Australia and overseas. In this project we have re-examined the available evidence both from Australia and overseas from the perspective that we do not have a preferred outcome, and in recognition that the different jurisdictions have significantly differing operating environments.

• Strategic capacity: In recent years the need or desire to strengthen local government’s strategic capacity to play an expanded and more prominent role has emerged as a key variable in programs of local government reform. This developing view of the role of councils requires that they are not just financially robust but also have the skills and resources ‘to be high capacity organisations with the requisite knowledge, creativity and innovation to enable them to manage complex change.40 This rationale for consolidation may be particularly relevant in metropolitan areas and rapidly developing regions, especially in view of recent federal initiatives for metropolitan planning and regional development. It is also linked to new concepts of local government’s role such as ‘place-shaping’ and in the UK - ‘Total Place’. This dimension of change requires an assessment of changes to local governments’ strategic capacities, which have been developed as a result of consolidation activities.

• Service delivery: Many assertions have been made that consolidation would generate improvements in service delivery, although there are few studies which actually examine the post-consolidation experience of those who receive local government services. This dimension of consolidation was examined in order to evaluate the contribution of local government restructuring in enhancing, or diminishing, service delivery. We can hypothesise that responses might vary according to particular services, given that the threshold population size for particular services is different: for example, the optimum threshold size for

39AustralianCentreofExcellenceforLocalGovernment,ConsolidationinLocalGovernment:AFreshLook(May2011)Volume1.

40CommentfromQueenslandLGReformCommission,2007citedinAustralianCentreofExcellenceforLocalGovernment,abovenote39at4.

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refuse collection may well be smaller than for water supply. The research, then, sought evidence relating to the question of whether or not there have been service enhancements or deterioration as a result of consolidation.

• Local democracy: A number of researchers have focused attention on impacts on the broader roles of local government, beyond service provision, as a consequence of consolidation. They have drawn attention to the quality of local representation and the increasing difficulties of undertaking this effectively in larger councils. In contemporary Australia and New Zealand, a range of approaches has been adopted to enhance local democracy through mechanisms such as community councils or boards, precinct or ward committees, improved community engagement and the like, and many local governments also have available to them technologies aimed at enhancing the representative role of councils and of individual elected members.

Characteristics of good local governance

150. ThePanelwasalsoreferredtoaseriesofcharacteristicsforgoodlocalgovernment41.ThePanelagreedthesewereausefulstartingpointfordefiningwhatgoodlocalgovernmentisandhasincludedthembelowforthisreason.

• Strategic: capable of generating a shared vision for the region, and developing and delivering on regional and local strategies and plans to make it happen in a reasonable timeframe

• Ensuring engagement and decision making occurs at the right level: Providing for authentic neighbourhood engagement and decision making on local issues while allowing the regional community to make decisions on issues that span a larger area and impact on more people

• Integrated and co-ordinated: enable an integrated approach to key regional networks, infrastructure, assets, amenities, and services; making the most of the scarce resources and capabilities available across the region

• Resilient and adaptive: able to accommodate changing circumstances, including unexpected and high impact events, and are resilient into the future

• Representative and responsive: represents and can be used by diverse communities to serve their own needs and aspirations; provides individual citizens with opportunities to access decision makers and to influence decisions on the issues that matter to them

• Transparent and accountable: are transparent and provide clear accountabilities for delivering outcomes, using public funds, and stewardship of public assets

41MartinJenkins&Associates,WellingtonRegionGovernance:draftmaterialforconsultation(2011).

ThePanelthinksthesecharacteristicsofgoodlocalgovernancefitwellwiththePanel’sTermsofReferenceandwillbeusefultoguidethisreview.Doyouagree?IstheresomethingimportantthatthePanelhasmissed?

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• Financially sustainable: cost-efficient, financially viable and have adequate and appropriate funding tools to support activities

• Effective and efficient: deliver the core local government services to citizens effectively and efficiently

Is there a case for change?

151. DeterminingwhetherthereisacaseforchangeisakeyfocusofthisIssues PaperandliesattheheartofthislocalgovernmentreviewintheWellingtonregion.

152. Reflectingtheimportanceofthisquestion,thePanelhasdevelopedaframeworktohelpdefineandorganisetheissuesandevaluatethesuitabilityofthecurrentgovernancearrangements.Theframework,basedonthethreethemesof local democracy, effectiveness and efficiency,hasbeendevelopedspecificallyforthisreview.ItdrawsfromresearchandearlierworkonlocalgovernmentreformcommissionedbytheWellingtonMayoralForum42,buttakesgreatercognisanceofthecurrentcontext-includingGovernment’sBetter Local Government reformpackageandtheTermsofReferenceforthePanel.

Local democracy

153. Democracyisthebasisofourpoliticalcultureandsomethingthatneedstobeensuredunderanygoodgovernancearrangements.

154. Inalocalgovernmentcontextitinvolvesactivecitizenengagementandrepresentationthatresultsindecisionsthatarelong-lastingandacceptedbythelocaland/orregionalcommunity.Indoingsoit:

• Allowslocalviews,knowledge,needsandperceptionstoinfluenceregionaldirection

• Providesamechanismforadvocacy/representingcommunityviewstootherbodies,suchascentralgovernment

• Actstobuildandpromotelocalidentityandbringcommunitiestogether

• Balancesbothshorttermandlongertermstrategicoutcomesforcommunities

155. Gooddemocraticlocalgovernmentwillenableandenhancecitizenparticipation,includingbygroupswhomightnottraditionallyhavetheirvoicesheard.Itshouldutiliseknowledgefromabroadspectrumofthecommunity.

42MartinJenkins&Associates,Review of the Wellington Regional Strategy(May2011).

Thepanel’spreferredframeworkforexaminingthegovernanceissuesisbasedonthethreethemesoflocaldemocracy,effectivenessandefficiency.Doyouagreewiththesecriteria?

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How well are people engaged?

156. Determininghowwellpeopleareengagedthroughlocalgovernmentprocessesdependsontwokeyfactors:thelevelofengagementandthequalityofengagement.

157. Thelowlevelofvoterturnoutintherecentlocalgovernmentelectionsseemstoindicatethelowlevelofcitizenandcommunityinterestintheirlocalgovernmentrepresentation.Likewise,theretendstobelessengagementonstrategic,districtandregionalissues,suchaseconomicdevelopment,urbanformandinfrastructurenetworks.However,therecentengagementonproposalsbyGreaterWellingtonregardinglocalbusservicesinWellingtonCityattractedmorethan6000responses43anddemonstratesthehighlevelofengagementwhencommunitiesandneighbourhoodsfeeldirectlyaffected.

158. Thenatureofengagementonstrategicandregionalissuesdoesn’tmeantheyarelessimportantthanlocalissues.Itdoes,however,indicatetheyareharderissuestoresolveandachievetractiononwiththepublic.Thisneedstoberecognisedinfuturegovernancearrangements.

159. Levelsofengagementshouldalsobemeasuredintermsofthequalityofengagement.Thisisrelevantatalllevels,anddependsontheauthenticityoftheprocessandtowhatextentthoseengagedareabletoinfluenceoutcomes.Clearlythisiseasiertoachieveatalocallevelbutitisstillimportantforwiderstrategicandregionalissues.Therearesomeexamplesintheregionwhereplace-basedneighbourhoodandvillageplanningisdoneverywell.Lookingahead,thereisarealopportunitytobuildonandexpandthesesuccessestothewholeregion.

Our communities of interest are changing

160. Localgovernmentboundariesdefinecommunitiesbylocationbuttherehavealwaysbeencommunitiesofinterestthatgobeyondboundaries.Physicalboundariesareirrelevanttoweb-basedtechnology,andwiththechangingnatureofsocialmedia,communitiesofinterestarestartingtoencompasslargerproportionsofthepopulation.However,connectiontoaplaceremainsstrongandcommunitycharacterisseenasimportant,aswitnessedbythefrequentuseoftheterm“village”todescribeasuburborneighbourhood.

161. Individualswillgenerallybeinvolvedinarangeofrelationshipsandnetworksandwillaffiliatetobothgeographiccommunitiesandcommunitiesofinterest.

Preserving and enhancing neighbourhood identity

162. ResidentsintheWellingtonregionhaveasenseofplaceatbothlocalandregionallevel.Localgovernmenthasastrongroleinenhancingthecharacterandidentityoflocalplacesbutresidentsdonotalwaysagreewithcouncilsonthewayforward.

43GreaterWellingtonRegionalCouncil,Wellington City Bus Review (2012)<www.gw.govt.nz/wellington-city-bus-review/>

Engagementwiththecommunityisacriticalroleforlocalgovernment.Doyouthinkcouncilsintheregiondoagoodjobatthis–atlocalandregionallevels?

Akeychallengeisforlocalgovernmenttofosterauthenticlocalorneighbourhoodengagementanddecisionmakingwhileensuringthewiderregionalcommunityissimilarlyengagedataregionallevel.Doyouthinkthecurrentarrangementsenablethistooccur?Isthebalanceright?

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163. Theconceptofsubsidiarity,whichsuggeststhatdecisionsshouldbemadeascloseaspossibletothecommunityaffected,wouldrequiredecisionmakingatneighbourhoodlevel,providedthosedecisionsdidnotimpactadverselyonothersfurtherafield.

164. TherearealreadyexamplesofthisinlocalgovernmentintheWellingtonregionbutthereispotentiallyopportunitytoenhanceneighbourhooddecisionmaking.Localpeoplearenotonlysensitivetotheircommunityneeds,butoftenhaveahighdegreeofdetailedknowledgeaboutthefunctioningoftheircommunities.Wherepossiblethisshouldbeutilisedtomakedecisionsthatsuittheneighbourhood.

165. Currently,onlysomecouncilshavecommunityboards.Theboardsthatdoexisthavevaryingdegreesofdelegationonlocalissues.Theexistenceoftheseboardsinmanycasesisassociatedwithpreviouschangestolocalgovernmentstructure.CommunityBoardsareastructuralresponsetothedemandforneighbourhooddecisionmaking.Otherresponsesmightincludebetteruseofonlinetoolsthatareincreasinglyexpectedbyyoungercitizens,whotendtobeabsentfromthemoreformaldecision-makingprocessesoflocalgovernment.

Leadership is important at local and regional levels

166. Leadershipisanaspectoflocaldemocracythatisimportantforbothneighbourhoodsandthewiderregionalcommunities.

167. Atthelocallevel,leadershiphasinthepastbeenmorerecognisedamongdistrictsorcitiesthanattheregionallevel.HavingMayorswhoareelectedatlargeisakeyreasonforthis–andprovidesasenseoflegitimacyfortheparticularplatforminwhichmayoralcandidatesseekthecommunityvote.TheapproachtolocalleadershipisalsointhemindsofthecurrentGovernment.TheLocalGovernmentAct2002AmendmentBill2012currentlybeforeParliamentislookingtoextendmayoralpowerstoenableMayorstotakemoreofapolicyleadandhavegreatercontroloncommitteeappointmentsandthelike44.ItisinterestingtonotethattheBill,ascurrentlywritten,doesnotproposechangestofurtherrecognisetheleadershiproleofchairsofregionalcouncils.Chairsofregionalcouncilsareelectedbytheirpeersandthusthelevelofcommunityrecognitionreliesonthepublicprofileofthepersonconcerned.Recognitionoftheregionalleadershiprolehasalwaysbeendifficult,andwithoutfurtherchangesislikelytobeanongoingissueforregionalcouncils.

168. Theneedforeffectiveleadershipattheregionallevelisnecessary,particularlywhendealingwithstrategicissuesorwherecollaborationacrosscityordistrictboundariesisrequired.TheestablishmentofthenewAucklandCouncilandcurrentleadershipstructuresinCanterburyasaresultoftheissuesbeingfacedareevidenceoftheimportanceofregionalleadership.ThestrategicchallengesbeingfacedintheWellingtonregionsuggestthatregionalleadershipwillcontinuetobeanimportantcomponentoflocaldemocracy.

44LocalGovernmentAct2002AmendmentBill2012,clause16.

SomecouncilsengagelocalcommunitiesthroughCommunityBoards,othersdonot.DoyouthinktheuseofCommunityBoardsshouldbemorewidespread?

Doyouthinkthestrategicchallengesfacingtheregionwarrantstrongerregionalleadership?Ifamovetostrengthenregionalgovernanceisproposed,howcouldlocalleadershipberetainedorenhanced?

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Possible pointers from Auckland

169. Aucklandhas21electedlocalboardsthatwereestablishedbylegislationwhenthenewAucklandCouncilwascreated.DecisionmakingissharedbetweentheAucklandCouncilandthelocalboards.Theboards’rolesaresetoutintwoimportantprovisionsoftheAucklandCouncilLocalGovernmentAct2009.Sections13and16outlinethefunctions,dutiesandpowersofthelocalboardsandtheirdecision-makingresponsibilities:

“13(1)Alocalboardhasthefunctions,duties,andpowersconferredonalocalboardbyorunderthisActoranyotherenactment.

(2)Withoutlimitingsubsection(1),alocalboard—

(a)mustexercisetheresponsibilitiesconferredonitbysection16(1);and

(b)mustmonitorandreportontheimplementationofthelocalboardagreementforitslocalboardarea(inaccordancewithsection23);and

(c)mustcommunicatewithcommunityorganisationsandspecialinterestgroupswithinitslocalboardarea;and

(d)mustundertakeanyresponsibilitiesordutiesthataredelegatedtoitbythegoverningbodyundersection31orAucklandTransportundersection54;and

(e)mayconsiderandreportonanymatterofinterestorconcerntothelocalboard,whetherornotthematterisreferredtoitbythegoverningbody;and

(f) mayexerciseanypowersthataredelegatedtoitbythegoverningbodyundersection31orAucklandTransportundersection54.

16(1)Eachlocalboardisresponsibleanddemocraticallyaccountablefor—

(a)thedecisionmakingoftheAucklandCouncilinrelationtothenon-regulatoryactivitiesoftheAucklandCouncilthatareallocatedtothelocalboardinaccordancewithsection17;and

(b)identifyingandcommunicatingtheinterestsandpreferencesofthepeopleinitslocalboardareainrelationtothecontentofthestrategies,policies,plans,andbylawsoftheAucklandCouncil;and

(c)identifyinganddevelopingbylawsspecificallyforitslocalboardarea,andproposingthemtothegoverningbodyundersection24;and

IntheeventthatconsolidatedlocalgovernmentunitsareintroducedintheWellingtonregiondoyouseeanyadvantagesordisadvantagesintheAucklandlocalboardmodel?

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(d)theagreementreachedwiththegoverningbody(assetoutinthelocalboardagreement)inrespectoflocalactivitiesforitslocalboardarea.

(2)Incarryingouttheresponsibilitiesdescribedinthissection,alocalboardmustcomplywiththerequirementsofsections76to82oftheLocalGovernmentAct2002asifeveryreferenceinthosesectionstoalocalauthoritywereareferencetoalocalboard.

(3)Incarryingouttheresponsibilitiesdescribedinthissection,alocalboardshouldcollaborateandco-operatewith1ormoreotherlocalboardsinthesituationswheretheinterestsandpreferencesofcommunitieswithineachlocalboardareawillbebetterservedbydoingso.”

Effectiveness - strategy, planning and decision making

170. Effectivenessinstrategy,planninganddecisionmakingisanimportantdriverofsuccessfulgovernance.

171. EffectivenesswasakeyplatformfortheAucklandRoyalCommissionandisattheheartoftheLocalGovernmentAmendmentAct2002AmendmentBillandassociatedBetter Local Government reforms.Thetheoryisrelativelystraightforward–bydoingourstrategy,planninganddecisionmakingbetterandmoreeffectively,localgovernmentwillbebetterplacedtorespondtotheeconomic,social,culturalandenvironmentalchallengesfacingNewZealandandtheregion.

172. Inpracticethismeansamoredifficultpropositiontoconsider,althoughitiswellknownthateffectivenessofstrategy,planninganddecisionmakinggoeshandinhandwiththe‘strategiccapacity’ofanorganisation.TheQueenslandLocalGovernmentReformCommissiondirectlyreferredtostrategiccapacityasbeing“…wherecouncilsarenotjustfinanciallyrobustbutalsohavetheskillsandresourcestobehighcapacityorganisationswiththerequisiteknowledge,creativityandinnovationtoenablethemtomanagecomplexchange”.45Strategiccapacityisbeingincreasinglyrecognisedasabasicrequirementtoallowcouncilstofunctioninaneffectivewayinthe21stcentury.46

173. Effectivenessisalsoaboutunderstandingwhatfunctionsrequirearegionalviewandwhatfunctionsaremoreappropriatelyperformedatthelocallevel.ThisquestiongoestotheheartofthecurrentdebateonlocalgovernmentreformintheWellingtonregion,andhasbeenthefocusofearlierreportscommissionedbytheWellingtonMayoralForum,includingthePricewaterhouseCoopersreportanddraftmaterialforconsultationpreparedbyMartinJenkinsLtd47whichhasbeenusedtoinformthefollowingsections.AlistoflocalauthorityfunctionscollatedbytheAucklandRoyalCommissionhasbeenappendedtothisreport.

45CommentfromQueenslandLGReformCommission,2007citedinAustralianCentreofExcellenceforLocalGovernment,abovenote39,Volume1at4.

46AustralianCentreofExcellenceforLocalGovernment,abovenote39,Volume1at4.47MartinJenkins&Associates,abovenote41.

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174. Economic,socialandinfrastructuresystemsdonotrecogniseelectoralboundarylines.Forthisreason,itmakessenseforsomefunctionstobeplannedand/orco-ordinatedregionally.Theseincludeactivitiesorassetsthatareinterconnected,accessedbytheregionasawhole,orspanlocationsandcommunities.Examplesofdecisionsthatrequirearegionalviewinclude:

• Overallaccessandtransportnetworkdesignandfunding

• Economicdevelopment,businessdevelopmentfacilitation,educationandworkforcedevelopment,tourismpromotionandvisitorattraction

• Solidwastemanagement

• Provisionofmajorregionalamenitiesandopenspaces

• Landusemanagementframeworks

• Emergencypreparednessandresponse

175. Otherfunctionsaremoreappropriatelyperformedatthelocallevel.Theseincludeactivitiesorassetsthataresituatedoraccessedbylocalcommunities,orculturallyoreconomicallytiedtoalocation.Examplesincludelocalroadmaintenanceandstreetscaping,beautificationprogrammes,localamenityinvestment,communitydevelopment,localparkdesign,noisecontrol,parking,touristinformation.

176. Gettingthebalancerightbetweenregionaleffectivenessandlocaldecisionmakingwillbeakeychallengeinthisreview.Inherenttensionsoftenexistbetweenlocalandregionalpriorities,andinsomecasesitwillbeimportantthatbothaspectsareprovidedforinthestructuresanddecisionmakingprocesses.Economicdevelopmentisanexamplewherebothregionalandlocaldirectionandinputcanbebeneficial–localcommercialareasmayhaveparticularneedsarisingfromtheirlocationwhereasothermacro-economicissuessuchastransportplanning,regionalamenitiesandsupportforbusinessarebetterundertakenattheregionallevel.

Developing a unified vision and direction for the region

177. DevelopingaunifiedvisionanddirectionisdifficultunderthecurrentgovernancearrangementsintheWellingtonregion.AgreementhasbeenreachedontheWellingtonRegionalStrategyforeconomicdevelopment,butthechallengehasbeentheimplementationoftheStrategywithterritorialauthoritieshavingtomakefinancialandothercommitments.

178. Whilesomeavenuesexistfordevelopingaregionaldirectiononkeyissues,suchaseconomyviatheWellingtonRegionalStrategy,transportviatheRegionalLandTransportStrategy,andresourcemanagementviatheRegionalPolicyStatement,thesearedealtwithseparatelythroughdifferentcommittee

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structuresandthereisnosinglemandatedleaderorinstitutionprovidingaunifiedvisionanddirectionfortheWellingtonregion.

179. TheMayoralForumhasprovidedanavenuefordiscussiononregionalstrategicissues,butitdoesnothaveaformalmandatetoconsidertheseissuesandnodecisionisbindingonCouncils.MayoralForummeetingsarealsoclosedtothegeneralpublicandothercouncillors.

Is a regional spatial plan needed?

180. Spatialplanningisapossibleapproachtodevelopingaunifiedvisionanddirectionfortheregion.Aspatialplanisanintegratedplanningframeworkthatbringstogetherawiderangeofissues,suchaseconomy,environment,transport,andsetsouthowandwhenaregionwillgrowanddeveloptowardtheunifiedandcompellingregionalvision.Whilespatialplanningisnotnewtolocalgovernment,therecontinuestobeahealthydebateastowhatdevelopingaregionalspatialplaninvolves,particularlyinthecontextoftherecentlyreleasedAucklandPlan.

181. Spatialplanning,whendonewell,canhavemultiplebenefitsforaregion,particularlyinrelationto:

• Effectiveinvestmentdecisions:regionalspatialplansprovideopportunityformoreefficientuseofexistingandnewinfrastructureinvestmentandmoreeffectivestrategicinvestmentdecisions.Effectiveinfrastructureinvestmentanddeliveryisvitaltoahealthyeconomy

• Improvedintegrationandrelationships:thecomplexandmulti-layerednatureofregionalissuesmeansthereisaneedforafargreaterlevelofintegrationofdecisionsandservicesbetweenallpartieswhoinfluencegrowthanddevelopment–acrossallfourwell-beings.Regionalspatialplanningprovidesameanstosignificantlyimproveintegrationacrossalltiersofgovernment

• Scopeandinfluence:themajorityofspatialplanningissueswillextendwellpastcityanddistrictboundariesandthereforeregionalboundariesaremoresuitedtodefinespatialplanning“areas”.Aregionalspatialplanwillhaveagreaterabilitytodeliveralevelofconsequence

• Improvedabilitytodealwithcomplexlanduseissues:spatialplanningprovidesanimprovedabilitytoaddresscomplexlanduseissuesassociatedtomatterssuchastransportinfrastructureinvestment,floodprotection,waterqualityandresidentialgrowthmanagement

• Efficiency:combiningorusingresourcesonaregionalbasisislikelytobemoreefficientthanifitisdoneonanindividualbasisbyeachlocalauthority

Doyouthinktheregionneedsatransparentandformalmandatetodevelopaunifiedvisionanddirectionfortheregion?

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182. Infrastructureinvestmentislikelytobecomeatopicofmajordebatebetweendifferentgeographiccommunitiesinlightofeconomicconstraintsandthephysicalimpactofpopulationandclimatechange.Atpresentthereislittleopportunityforintegratedplanninganddeliveryandthismaybealostopportunitytoenhancedecisionmakingandthereforetheresilienceoftheregion.

183. WhilesomeelementsofanintegratedAucklandstylespatialplanwereincludedintheinitialWellingtonRegionalStrategy2007throughthechapteronurbanform,thisstruggledtoachievetheambitionssetoutintheStrategy.Tothiseffect,thereviewoftheWellingtonRegionalStrategy2007notedthat48:

“Whileprogresshasbeenmade,manyofthe‘GoodRegionalForm’activitiesprogresseddidnotmatchthelevelofambitionintheStrategy.Themostsignificantregionalformissueslikelytoinfluencetheregionanditseconomyoverthecomingdecades,suchasurbanintensification,aregionalapproachtotheCBDandregionalcentredevelopment,havenotbeentackled.Thecooperationbetweencouncilshasfallenshortofstrategicengagement.”

184. ItisthePanel’sviewthatiftheWellingtonregionisaimingformoreeffectivelocalgovernanceitneedstodemonstratesuccessintacklingthesesignificantregionalissues.

Opportunities to improve regulatory planning

185. Regulatoryplanningisakeyfunctionoflocalgovernment,andiscarriedoutinmanydifferentareas.ThissectionfocusesonregulatoryplanningundertheResourceManagementAct.

186. LocalandregionalgovernmentbothhaveplanningresponsibilitiesundertheResourceManagementAct.Regionalcouncilsmustpreparearegionalpolicystatementwhichsetsoutthekeyresourcemanagementissuesfortheregionandprovidespolicyguidanceonhowtomanagethoseissues.Regionalcouncilsmayalsoprepareregionalplansthatincludeobjectives,policiesandmethodsincludingrulestoaddressspecificenvironmentalissues.Territoriallocalauthoritiesmustprepareadistrictplantomanagetheeffectsoflanduseactivitiesontheenvironment.Districtandregionalplansneedtogiveeffecttotheregionalpolicystatement.

187. ThefirstsuiteofResourceManagementActplanspreparedintheregionresultedinawidevarietyofapproachesandprovisionstomanagesimilarissues.Somecouncilsweremoreeagertoembracethe“effects-based”philosophyoftheResourceManagementActintheirplans.Otherschosetolargely“rollover”manyprovisionsfromtheirpreviousTownandCountryPlanningActplans.SincetheadoptionoftheirfirstResourceManagementActplans,mostcouncilshavebeeninastateofconstantreviewwithnumerousplanchangesbeingpreparedintheregion.Acomplexplanningenvironment

48MartinJenkins&Associates,asaboveat42at6.

Spatialplanningisagoodwaytoconsidercomplexandlargeinfrastructureissuesandguidedecisionmakingonregionalstrategicissues.WhatarethekeyissuesfortheWellingtonregionthatwouldbenefitfromsuchanapproach?

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hasemergedasaresult,anissuethathasbeenhighlightedformuchofthecountryandwhichtheGovernmentisseekingtoaddressinitsreformsoftheResourceManagementAct.TheProductivityCommissionreviewofregulationwillconsiderthesetypeofissues.

188. TheReportoftheRoyalCommissiononAucklandGovernancealsoconsideredtheissueofcomplexityinplans,andinparticularoutlinedsomeoptionstoconsider.Theseincluded:

• Reducingthenumberoflocalauthoritiesandthusthenumberofplans

• Requiringtheproductionoffewerdistrictplanswhetherornottherearefewerlocalauthorities

• Requiringcommonstandardstobeadoptedindistrictplansthroughouttheregion

• Removingunnecessaryoverlapsinjurisdictionbetweenterritorialauthoritiesandtheregionalcouncil

• Requiringtheproductionoffewerregionalplans/policystatements

• Providingcall-inpowersforproposalsofregionalsignificance

• Providingforasingleplanningagencyforgrowthareasofregionalsignificance

189. TheAucklandCouncilhasproducedaspatialplancoveringa20-30yearstrategyforAuckland’sgrowthanddevelopment.TheCouncilisworkingtowardsthenotificationofaunitarycombinedplanundertheResourceManagementAct.Thisplanwillreplacesevendistrictplans,fourregionalplansandoneregionalpolicystatement,andwillincludeprovisionstoaddressthefunctionsofbothregionalanddistrictcouncils.CombinedplansarenotnewundertheResourceManagementAct.OneofthemostprominentandsuccessfulexamplesofacombineddistrictplanistheplanpreparedbythethreeWairarapadistrictcouncils.However,whatmakestheAucklandplanprocessparticularlyuniqueisthesheerscaleoftheworkinvolved,thelargegeographicalareacoveredandtherangeofissuesthatmustbeaddressed.

190. InconsideringthecomplexplanningenvironmentintheWellingtonregion,thereisscopetoconsidermorecollaborativewaystoprepareplanningdocuments.ThreeissuesinparticularhavebeenhighlightedbelowasexamplesofwhyamorecollaborativeapproachisneededattheResourceManagementActplanninglevel.

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Freshwater management

191. Inaworldwhereaccesstofreshwaterisbeingincreasinglyconstrained,freshwaterisoneNewZealand’smostsignificantnaturalassets.Thepotentialeconomicadvantagesitprovidesrequireeveryonetoaimforitsbestmanagementanduse.

192. Inthepastdecade,sincethefirstResourceManagementActplanswereprepared,landuseintensificationhasmovedawayfromareasofplentifulwatertoareaswheretherearesignificantseasonallimitsonwateravailability.Irrigationschemescanaddresswateravailabilityissues.HoweverthefirstsuiteofResourceManagementActplanshavebeenfoundtoberelativelyineffectiveinrespondingtowaterqualityissuesandanever-increasingdemandforfreshwater.

193. Recentwork,includingthatoftheLandandWaterForum,49hasresultedinamuchgreatercollaborativeunderstandingoftheissuesandpotentialsolutions,includingtheneedforabetterwaytoallocatewater,ratherthanthecurrent‘first-in,first-served’approachundertheResourceManagementAct.

Growth management

194. Toachievearesilient,vibrantandgrowingeconomy,theregionneedstoplancommercialandindustrialareasmoreeffectively.Ratherthanhavingcouncilseffectivelycompetewitheachotherforagreatershareoftheretailmarket,ortoprovideagreaterproportionoftheindustriallandandusingdistrictplanstoachievethis,amoreeffectiveapproachwouldbetoworktogethertoenhancetheregion’scompetitiveness,enablingittobemoreattractivetoNewZealandandinternalinvestors.

195. WhilesomepolicygainshavebeenmadethroughtheinitialWellingtonRegionalStrategy2007andincorporatedintotheProposedRegionalPolicyStatement,therewillstillbesomekeyissuesforlocalauthoritiestoaddressinpreparingtheirsecondgenerationdistrictplans,whichwouldideallybenefitfromamorecollaborativeandintegratedapproach.Theseissuesinclude:

• Theslowanduneven,orevendeclining,rateofgrowthacrosstheregion

• Themarkedlydifferentvalueofresidentialandcommercial/industriallandacrosstheregion,affectingtheeconomicsofdevelopingparticularlandusesindifferentpartsoftheregion

• Increasingcommunityawarenessofthetimeandcostsincurredwhencommuting

196. Evenwithagrowthmanagementstrategyinplace,theseissuesdemonstratethatnosinglesolutionwillwork.Anon-goingcollaborativeapproachcould,however,improveconsistencyandintegrationintheplanningprocess.

49LandandWaterForum(April2012),SecondReportSetting Limits for Water Quality and Quantity Freshwater Policy and Plan making through collaboration.

Whatdoyouthinkarethekeygrowthmanagementissuesforyourcommunityortheregion?Doyouthinkcouncilsneedtotakeacloserlookattheseissues?

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Managing natural hazards

197. TheResourceManagementActcurrentlysetsoutmanagingnaturalhazardsasafunctionforbothregionalanddistrictcouncils.Theexactrelationshipbetweenthesefunctionshaslongbeenagreyarea.Notsurprisingly,therecentlyreleasedTechnicalAdvisoryGroupreportreviewingSection6andSection7oftheResourceManagementActhasidentifiedtheneedforstrongerregulatoryplanningformanagingnaturalhazards.TheTechnicalAdvisoryGroupreportrecommendsthat“regionalcouncilsshouldhavetheleadfunctionofmanagingalltheeffectsofnaturalhazards.Territorialauthoritiesaretoretaintheircurrentfunctioninregardtonaturalhazards”.50

198. Managinghazardsmoreeffectivelyandefficientlyisanissuethatistopofmindforlocalandcentralgovernmentpoliticians;suggestingthatthetimingisrighttopursuearegionalapproachtoasetofdistrictlevelplanningtoolstomanagetheeffectsofhazardsintheregion.

Neighbourhood planning and place shaping

199. Improvingtheeffectivenessoflocalgovernmentisnotjustaboutbettermanagingregionalissues.Italsorequiresdevelopingmoreeffectiveandconsistenttoolsfordecision-makingatthelocalcommunitylevel-theregion’ssuburbsandvillages.

200. Theplaceswherepeoplelive,workandplayaretheplacestheywillfeelmostconnectedwith.Aperson’ssenseofbelongingisenhancedbytheirexperiencesoflivingin,andinteractingwith,theirlocalcommunity.Further,havingastrongconnectionwiththeircommunitytendstoengenderadesiretonurtureitandbeinvolvedindecision-makingprocessesthataffectit.

201. Place–shapingasaconceptwasreferredtointheAucklandGovernancereportbytheRoyalCommission.TheRoyalCommissionconsideredtherewasaroleforlocallevelgovernancewhichwould,amongotherthings,includehelpingtobuildandshapelocalidentityandrepresentthelocalcommunity,inadditiontothecreationofasingleunitarycouncil.

202. Twenty–onelocalboardswereestablishedaspartofthere-organisationoflocalgovernmentinAuckland.Theirroleistomakedecisionsonlocalmatters,providelocalleadershipandsupportstronglocalcommunities.Localboardsarerequiredtopreparealocalplanthatsetsoutthevalues,prioritiesandvisionidentifiedbythecommunitiesinthelocalarea.Inparticular,theplansidentifykeyprojectsandprogrammesthatthelocalboardisproposing,outlineadvocacythatthelocalboardwillundertakeonbehalfofthecommunity,outlinehowthelocalboardproposestosetlocalservicelevelstomeetcommunityaspirationsandhowtheseservicelevelswillbefunded,andwhothelocalboardwillworkwithtoimplementthelocalboardplan.

50ResourceManagementActPrinciplesTechnicalAdvisoryGroupabovenote21at15,s1.8.

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203. Place-shapingisessentiallyaboutvillageandtowncentreplanning.Itisaboutlocalpeopledecidingwhattheywantfortheircommunitiesandthenimplementingthevision.TherearesomeverysuccessfulexamplesofvillageandtowncentresplanningintheWellingtonregion,buttherearealsoexamplesofcouncilsthathavestruggledtoimplementcommunity-basedplans.PoriruaCityCouncil’svillageplanningprogrammeisoneofthemoresuccessfulprogrammes,whichhasreceivedinternationalrecognitionattheInternationalLiveableCommunitiesAwardsforitsapproachinempoweringlocalcommunities.

204. ThereviewoflocalgovernancestructuresintheregionwouldcreateanopportunityforlocalgovernmenttobuildonthesuccessfulvillagecentreplanningachievedinPorirua’slocalcommunitiesbyadoptingthosemodelselsewhereacrosstheregion.Thiscouldensurethatlocalcommunitiesaregiventheopportunitytoexperiencethesamefeelingofempowermentinnurturingthedevelopmentoftheirowncommunity.

Possible pointers from Auckland

205. Asoutlinedabove,theAucklandCouncilhasalsocompletedimportantstrategicplanningdocuments.Inparticularthe30-yearstrategic,spatialplanknownastheAucklandPlanhasbeencompleted.ThePanelhasexamineditandfindsitimpressive.Itisworthsettingoutwhatthelawrequiresinthisregard:

“(1)TheAucklandCouncilmustprepareandadoptaspatialplanforAuckland.

(2)ThepurposeofthespatialplanistocontributetoAuckland’ssocial,economic,environmental,andculturalwell-beingthroughacomprehensiveandeffectivelong-term(20-to30-year)strategyforAuckland’sgrowthanddevelopment.

(3)Forthepurposesofsubsection(2),thespatialplanwill—

(a)setastrategicdirectionforAucklandanditscommunitiesthatintegratessocial,economic,environmental,andculturalobjectives;and

(b)outlineahigh-leveldevelopmentstrategythatwillachievethatdirectionandthoseobjectives;and

(c)enablecoherentandco-ordinateddecisionmakingbytheAucklandCouncil(asthespatialplanningagency)andotherpartiestodeterminethefuturelocationandtimingofcriticalinfrastructure,services,andinvestmentwithinAucklandinaccordancewiththestrategy;and

(d)provideabasisforaligningtheimplementationplans,regulatoryplans,andfundingprogrammesoftheAucklandCouncil.

Localplace-shapingprocessesdiffersignificantlyaroundtheregion.Doyouthinkthereisvalueinamoreconsistentapproachbasedonmodelsthathavedemonstratedsuccess?

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TheAucklandlegislationrequiresaspatialplantobedrawnup.ThereisnothingcomparableinWellington...wouldsuchaplanbenefitthisregion?

(4)Thespatialplanmust—

(a)recogniseanddescribeAuckland’sroleinNewZealand;and

(b)visuallyillustratehowAucklandmaydevelopinthefuture,includinghowgrowthmaybesequencedandhowinfrastructuremaybeprovided;and

(c)provideanevidentialbasetosupportdecisionmakingforAuckland,includingevidenceoftrends,opportunities,andconstraintswithinAuckland;and

(d)identifytheexistingandfuturelocationandmixof—

(i)residential,business,ruralproduction,andindustrialactivitieswithinspecificgeographicareaswithinAuckland;and

(ii)criticalinfrastructure,services,andinvestmentwithinAuckland(including,forexample,servicesrelatingtoculturalandsocialinfrastructure,transport,openspace,watersupply,wastewater,andstormwater,andservicesmanagedbynetworkutilityoperators);and

(e)identifynationallyandregionallysignificant—

(i)recreationalareasandopen-spaceareaswithinAuckland;and

(ii)ecologicalareaswithinAucklandthatshouldbeprotectedfromdevelopment;and

(iii)environmentalconstraintsondevelopmentwithinAuckland(forexample,flood-proneorunstableland);and

(iv)landscapes,areasofhistoricheritagevalue,andnaturalfeatureswithinAuckland;and

(f)identifypolicies,priorities,landallocations,andprogrammesandinvestmentstoimplementthestrategicdirectionandspecifyhowresourceswillbeprovidedtoimplementthestrategicdirection.”

206. TheActgoesontosetouthowtheplanwillbedeveloped,adoptedandimplemented.Centralgovernment,infrastructureproviders,communities,theprivatesectorandtheruralsectorareallinvolved.

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Therehavebeensomeefficiencygainsintheregionthroughsharedservicesapproachesbuttheycantakeconsiderableresourcestoputinplace.Shouldmoreeffortbeputintoasharedservicesmodel,ordoyouthinkefficiencygainswouldbegreaterfromreorganisation?

Efficiency – use of resources and capabilities

207. Deliveringgovernmentfunctionsandservicesinthemostefficientwayisakeydriverforcentralandlocalgovernmentreform.

208. Centralgovernmenthasembarkedonanambitiousprogrammeofmergingsimilargovernmentdepartmentsinanefforttoreducecostsfrom“backroom”functionssuchashumanresources,informationtechnologyservicesandfinance.

209. Localgovernmentisalsofacedwiththeneedtodeliveritsservicesmoreefficiently.Someofthecurrentreasonsforthisincludesignificantcostsincreasesassociatedwithinfrastructurerenewal,earthquakestrengtheningofpublicassetsandemergingissuessuchastheleakybuildingscrisis.Theimpactofthesecostsonratepayersissignificantandcouncilsacrossthecountryarestrugglingtokeepraterisesaffordablefortheirlocalcommunitiesgiventhecurrentstagnanteconomy.

210. Creatingamoreefficientlocalgovernmenthasalready

beenmentionedinthispaperasakeydriverbehindtheGovernment’sBetter Local Governmentreformprocess,whichaimsforbetterclarityaboutcouncils’roles,strongergovernance,improvedefficiencyandmoreresponsiblefiscalmanagement.

211. IntheWellingtonregion,localgovernmenthasbeenactive

intakingamore“sharedservices”approachinsomeareas.ExampleswherecouncilsintheregionworktogetherincludeCivilDefenceEmergencyManagement,deliveryofwaterservicesforWellingtoncity,HuttcityandUpperHuttcity,librariesandfacilitationofregionaleconomicdevelopment.ThecouncilsintheWairarapahavebeenparticularlyactiveinpursuingefficienciesthroughtheircombineddistrictplanandexistingsharedservicearrangementsonmatterssuchaswasteandruralfire.51

212. ThelaunchoftheWellingtonRegionEmergencyManagementOfficeisthemostrecentexampleofasharedapproach.DrivenbytheneedforamoreeffectiveandefficientapproachtoCivilDefenceEmergencyManagement,theWellingtonRegionEmergencyManagementOfficeisanamalgamationofalloftheregion’scivildefenceemergencymanagementpeople,resourcesandfunctionspreviouslyprovidedbytheWellingtonregion’sninecity,districtandregionalcouncils.

213. ThePanelisaware,however,thatbiggerdoesnotalwaysmeanbetterormoreefficient.ResearchintootherlocalgovernmentreformsacrossNewZealandandAustralia52suggeststhatwhileconsolidationreformsareoftenmotivatedbytheneedtocreatecostsavingsbycreatingeconomicsofscale,savingswerenotoftenapparentintheyearsthat

51MorrisonLow,Assessment of options for joint management and service delivery Final Report(May2012).

52AustralianCentreofExcellenceforLocalGovernment,abovenote39,at40.

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followedthereforms.Instead,whatwasoftencreatedwereso-called“economiesofscope”.Thatis,localgovernmentbecamefarmoreeffectiveinachievingdesiredoutcomesduetoanincreasedstrategiccapacity.Thatstrategiccapacitywasinpartafunctionofincreasedsizeandresourcelevel,butalsocombinedtheknowledgeandexpertiseofstaff.

Key issues and opportunities

Towards more integrated management of water services

214. Theprovisionandmanagementofwaterservicestobusinessesandhouseholdsacrosstheregionisacorefunctionoflocalgovernment.Italsorepresentsamajorareaofspendformostlocalauthoritiesintheregion;withmajorlong-terminvestmentdecisionsbeingneededinthenearfutureregardingnewbulkwatersuppliesandenhancementstoexistinglocalnetworks.

215. Atpresenttheseissues,whichrequirelong-terminvestmentdecisions,arebeingaddressedindifferentways.Forexample,anewbulkwatersupplyforthefourcitiesoftheregioniscurrentlybeinginvestigatedbyGreaterWellingtonRegionalCouncil,whichisalsoinvestigatingsmallerstoragereservoirsaroundWellingtoncityforemergencyresponsereasons.KapitiCoastDistrictCounciliscurrentlyinvestigatingnewwatersupplyoptions.Inadditiontoneedingadditionalwater,15ofthe20watertreatmentplantsacrosstheregionareeitherungradedorgradedDorE,whichindicatesahighlevelofrisk.ManyoftheCouncilsarealsocurrentlyupgradingtheirwastewatertreatmentsystemssotheirdischargescanmeetcurrentwaterstandards.Thesesystemsareexpensiveandsmallercouncilsrelyheavilyonoutsourcingtoundertakeplanning,deliveryandoperation.Giventhis,itmakessensetolookattheefficienciesthatmightbegainedfrommanagingwateracrosstheregioninadifferentway.

216. PricewaterhouseCooperscarriedoutareviewoftheregion’swater,wastewaterandstormwateractivitiesandnetworksin2010.Itsreviewrevealedthatavarietyofmechanismsareusedtomanagethethreewaterassetsacrosstheregion,including:

• GreaterWellingtondeliversbulkwatertoUpperHutt,LowerHutt,WellingtonandPorirua,whereasMasterton,Carterton,SouthWairarapaandKapitiallmanagetheirownwatersupplies

•WellingtonandLowerHuttestablishedaCouncilControlledOrganisationin2004(CapacityInfrastructureServices)todelivertheirreticulatedsupplyofthethreewaterassetstohouseholdsandbusinesses.In2008,CapacitywascontractedbyUpperHuttCitytoalsoprovidethesameservices

53PricewaterhouseCoopers,abovenote1at35.

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217. Perhapsunsurprisingly,thePricewaterhouseCoopersreviewrecommendedanewapproachwasnecessary.Theirreportnotedthat“theintegrationoftheregion’swaterservicesisagoalthatthecouncilsshouldseektoachieve”.

218. Anumberofbenefitsareexpectedtooccurasaresultofhavinganintegratedregionalapproachtowatermanagement.Perhapsthemostsignificantistheimprovedstrategiccapacitythatwillbeachievedbypoolingtechnicalstaffintoonecoreteam.Thiscouldenablemoreeffectiveoutcomesforwaterservicesattheregionalandlocallevels,andshouldimprovelong-termplanning.Improvedcosteffectivenessandreductioninrisktopublichealthcouldresultfromimprovedmanagementofthewaterassetandinfrastructure.

Harmonising regulation and regulatory processes

219. Theadministrationofregulatoryprocesses,particularlyintheareasofenvironmentalhealth,buildingandresourceconsents,isasignificantfunctionforlocalgovernment.Thereisscopeinsomeoftheseareas,morethanothers,toremoveunnecessaryduplicationoftasksrequiredbylegislation.Thegoalshouldbetoidentifyastreamlinedwayofcarryingouttheseregulatoryfunctionstoachievegreaterregionalefficiencies.

220. CouncilfunctionsundertheBuildingActrepresentanobviousareaforgreaterefficiency.Peoplecarryingoutworksunderthebuildingcodehavetocomplywiththesamerequirementsirrespectiveofwhichdistricttheyarein.Thismeanstheknowledgeandskillsheldbybuildingconsentstaffinthevariousdistrictsaretransferabletootherdistricts.

221. Theopportunityfortheregion’scouncilstointegratetheirbuildingconsentsteamcouldleadtogreaterefficienciesandimprovetheabilityofunder-resourcedcouncilstodelivertheirfunctionseffectively.Itislikelythatcertainaspectsofthesefunctions,suchassiteinspections,couldstillneedtobebasedfromlocalcentres.

222. Achievingefficienciesinregionalresourceconsentprocessingwillbemorerestrictedbecauseofthenumberofregionalplansthatexist,andofthedifferentapproachestakentomanagingparticularissues.Butthereareopportunitiestoachieveamoreconsistentapproachtotheseregionalprocessesbysharingknowledgeoninternalprocessesthathavebeendevelopedbyeachofthecouncils.Otherideasthathavebeensuggestedpreviouslyincludecreatingtemplatesfortherangeofresourceconsentformsrequiredandsharinginformationtechnologysoftwaresolutions.

Other infrastructure

223. Roads:Territorialauthoritiesareresponsibleformaintainingthemajorityoftheroadingnetworkintheregion,outsidethestatehighwayswhicharemanagedbytheNewZealandTransportAgency.Puttingasidethestrategicplanningfor

Doyouthinkthereisbenefitinconsideringamoreintegratedregionalapproachtothemanagementofwaterinfrastructureservices?

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roads,whichiscarriedoutviawell-establishedprocessesattheregionallevel,thecostsofmaintainingandupgradingroadscomprisesasignificantcomponentoftheoverallbudgetforcouncilsintheregion.Thiscanbeproblematic,particularlywithsmallercouncilswithexpansiveroadnetworksandsmallpopulations,suchasthoseinWairarapa.Forexample,roadingisthelargestsingleareaofexpenditureofeachoftheWairarapaCouncils;in2011/12theircombinedbudgetwasapproximately$18.4million54.

224. Asharedapproachorintegrationintoalargerentityoffersopportunitiesforefficiencygains,primarilythrougheconomiesofscale.Asharedorlargerassetmanagementfunctionmayalsoenablelocalgovernmenttodeliverahigherstandardofassetmanagement.

225. Solid Waste:Themanagementofwasteintheregionisanareawherethecouncilshavebeencollaboratinginrecentyears,particularlyatthepolicylevel.UndertheWasteMinimisationAct2008,councilsarerequiredtodevelopWasteManagementandMinimisationPlansby2012.ThecouncilsintheWellingtonRegionagreedtoprepareajointplan,whichwasdevelopedin2011andiseffectiveuntil2017.Thoughallcouncilswereinvolvedincontributingtothedevelopmentoftheplan,includingcarryingouttherequiredwastemanagementassessment,efficiencieswereachievedbyavoidingthepreparationofindividualplansbyeachauthority.

226. TheWellingtonRegionWasteManagementMinimisationPlan55outlineshowtheCouncilsintendtooversee,facilitateandmanagearangeofprogrammesandinterventionstoachieveeffectiveandefficientwastemanagementandminimisation.However,theCouncilswillimplementtheseprogrammesandinterventionsthroughtheirrespectiveinternalstructuresresponsibleforwastemanagement.Thissuggeststheremaystillbescopeforafurtherintegrationofwastemanagementservicesattheoperationallevel.

227. Corporate services:Considerationofgovernancearrangementswillpresentsomeopportunitiestoachieveefficiencygainsfromcorporateservicesandback-officefunctionssuchasinformationtechnologyservices,humanresources,financeandprocurement.

Council Controlled Organisations

228. CouncilControlledOrganisationsarebusinessunitsrunatarm’slengthfromcouncilswiththeirownboardofdirectors-inwhichoneormorelocalauthoritiescontrol50percentormoreofthevotes,orhavetherighttoappoint50percentormoreofthedirectors.ThereareseveralCouncilControlledOrganisationsamongCouncilsintheregion,including:

• CapacityInfrastructureServices-thepublic-facingdeliveryarmofwaterservicesforWellingtoncityandHuttcity

• CentrePortLtd

54MorrisonLow,abovenote51at67.55CouncilsoftheWellingtonRegion,Wellington Region Waste Management and Minimisation

Plan 2011-2017(2011)at8.

Individualcouncilsintheregionspendsignificantresourcesonthemanagementandmaintenanceofkeyinfrastructuresuchasroads,stormwater,wastewater,watersupply,recreationalfacilitiesandcommunityfacilities.Doyouthinkthereisbenefitinmanagingthesethroughamoreregionalapproach?

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• GrowWellington–theregion’seconomicdevelopmentagency

•WellingtonWaterfrontLtd

• PositivelyWellingtonTourism

229. ComparedtoAuckland,whichhassevensubstantiveandpowerfulCouncilControlledOrganisations,includingAucklandTransportandWatercareServicesLtd,thecurrentapproachinWellingtonisconsideredfairlyminimal.IntheWellingtonregion,onlyGrowWellingtonandCentrePortareformallyconstructedtooperateataregionalscale.Therearealsonumerouscouncil-ownedentitiesthatarenottechnicallyCouncilControlledOrganisations,includingtheWellingtonRegionalStadiumTrustandtheWellingtonZooTrust.ItisalsoworthnotingthatAucklandTransport,oneoftheAucklandCouncilControlledOrganisations,hasthesamerolethattheGreaterWellingtonRegionalCouncilhasforregionaltransportplanningandtheownershipoftransportinfrastructure.

230. OpinionisdividedabouttheunderlyingphilosophyofCouncilControlledOrganisations.SomearguethatCouncilControlledOrganisationsareusefulvehiclesforintroducingcommercialdisciplineandfocusintodecisionmakingthatwouldotherwisebecloudedbypoliticalconsiderations.OthersarguethatalthoughCouncilControlledOrganisationsareusefulforareaswherethereiscommercialcompetition,theyareinappropriateforareasofmonopolyservicedorwheretheserviceisfundedbyratepayers.

Learnings from Auckland

231. TheAucklandexperienceisarichsourcefromwhichtomineimportantissuesofgovernanceandefficiency.

232. Thefirstofthoseissuesiswhetherscalemakesadifference.Alargerentitywithmoreresources,betterfundingandbetterstaffwithmoreskills,maybeabletodoabetterjobthansmallerunitsthatlacktheseadvantages.Further,wheretherearetwotierstheremaybeinefficienciescomparedwithonetier.ItseemscleartheAucklandCouncilhasalreadyachievedefficiencysavingsofupto$80millioninthefirstyear.Over10yearsitisplannedtodeliver$1.7billionefficiencysavingswhileprovidingmoreorthesamelevelofservice.56

233. InAucklandthereisnowasystemofintegratedconsents.Theformerdistrictandregionalconsentinghasbeencombinedintoonesystem.Therearelikelytobeanumberofadvantagesforconsumersofcouncilservicesandinhowefficientlythoseservicesaredelivered.AucklandnowhasaregionalaccountmanagementapproachtosupporttheCouncil’stop25clients.Therearestandardisedapplicationformsthathelptoprovideconsistentcustomerservice.Acentralisedteamhasbeenestablishedforcommercialconsents.Aconsentsteamhasalsobeenestablishedforspecialisedmajorinfrastructureconsents,

56“AucklandCounciladoptsitsfirstlong-termplan”(28June2012)Auckland Council<www.aucklandcouncil.govt.nz/EN/newseventsculture/OurAuckland/News/Pages/longtermplan20122022adopted.aspx>

WhatroleshouldCouncilControlledOrganisationshaveinfuturegovernancearrangements,howshouldtheybeorganisedandwhatareasshouldtheycover?

DoyouthinkefficiencysavingscouldbeachievedbyfashioninglargerunitsoflocalgovernmentintheWellingtonregion?

WouldasystemofintegratedconsentshaveadvantagesfortheWellingtonregion?

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Wouldtherebeadvantagesinaregionalapproachtotheadministrationofregulatoryactivities?

WhatchangesneedtobemadeinregardtotransportintheWellingtonregionandwhatapplicationcouldtheAucklandmodelhave?

includingpre-applicationmeetingsinordertoimprovecustomersatisfaction.

234. InAuckland,newintegratedsystemsarebeingsetuptoadministerregionalregulatoryactivities,suchasbuildinginspections,buildingconsents,resourceconsents,foodlicenceapplications,liquorlicences,householdrefusecollection,recyclingfromhouseholds,andlibraries.Therewouldappeartobeadministrativeandcostadvantagesinsuchanapproach.

235. TransportisabigitemintheactivitiesoftheAucklandCouncil.ACouncilControlledOrganisation,AucklandTransport,establishedbythelegislationisresponsibleformanagingthetransportnetwork,includingpublictransportinfrastructureownedbytheCouncil.ThepurposeofAucklandTransportistocontributetoaneffectiveandefficientlandtransportsystemtosupportAuckland’ssocial,economic,environmentalandculturalwellbeing.

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Introduction

236. ThePanel’stermsofreferencedirectittoconsider,amongarangeofmatters:

“m.Theimpactofanyproposedchangesonlocalgovernmentfinancesandrevenuemodels,includingratesandthemanagementofassets,debtandotherliabilities

and

o.Thecostsandbenefitsofthestatusquoandofanypreferredoptionforchange”

237. ThefinancialimplicationsofanylocalgovernmentreformacrosstheWellingtonregionwillbeofsignificantinteresttoratepayersineachlocalauthorityarea.AstheAucklandexperiencehasshown,akeychallengewithanyfuturestructuralreformwouldbehowtoaddresscurrentdifferencesinstrategy,servicelevelsandfundingandfinancialpoliciesandhowtoeffectivelymanagetheimpactthatapotentialsolutioncouldhaveonratepayers.

238. EachLocalAuthorityhasacommonresponsibilityundertheLocalGovernmentAct2002tomanageitsfinancesinamannerthatpromotesthecurrentandfutureinterestsofthecommunity.However,actualdecisionsregardingservicelevelsandthefundingandfinancialstrategiesandpoliciesadopteddiffer.Insomecasesthedifferencesaresignificant.Thatis,perhaps,notunexpected.

239. Eachlocalauthorityhasauniquesetoffundingandfinancialpolicies,includingratingpolicies,whichhavebeendevelopedtomeettheneedsofthecommunitythatthelocalauthorityserves.TheeffectthatanylocalgovernmentreformacrosstheWellingtonregionmayhaveonthesepoliciesandthedistributionoffundingrequirementsacrossratepayersislikelytobecarefullyscrutinised.TherecentexperienceofAucklandCouncilmovingtoasingleratingsystemhighlightsthefinancialchallengeandimpactatanindividualratepayerlevelofmovingfromthestatusquotoasingleregionalpolicy.

240. Eachlocalauthorityhasrecentlyadoptedanew10-yearlong-termplan.ForthefirsttimesincetheintroductionoftheGovernment’stransparency,financialmanagementandaccountabilityreformseachlong-termplanincludesafinancialstrategy.Inbroadterms,thissetsouteachlocalauthority’sapproachtomanagingthecostofitsactivitiesanditsfinances.

241. Mostfinancialstrategiesidentifiedthesignificantfinancialpressureandconstraintsthatthelocalauthoritywasfacing.TheglobalfinancialcrisisanditsimpactontheNewZealandeconomyisclearlyaffectinglocalauthoritiesandtheircommunities.Financialstrategiesclearlyindicatethechallengeofbalancingthefinancialissuesfacedbylocalauthoritieswiththeimpactthishasonaffordabilityforratepayers.

Chapter5:Ratesandfinance

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242. Itisclearfromthelong-termplansadoptedthatlocalauthoritiesacrosstheWellingtonregionareresponsibleforthecollection,managementandstewardshipoflargeamountsofpublicmoney.Eachlocalauthoritycollectsthemajorityoffundingforitsactivitieseitherthroughitsgeneralpowertorateorthroughdirectusercharges.Infinancialterms,thecontributionoflocalgovernmenttothelocaleconomyissignificant.

243. Differencesinservicelevels,costofservicedelivery,ratingandfundingpoliciesandthefinancialstrategiesadoptedbyeachlocalauthorityinvariablypresentachallengeforthePanelinbeingabletoclearlyarticulatetheactualextentorfinancialimpactofanylocalgovernmentreformatanindividualratepayerlevel.Atamacrolevel,theAucklandexperiencehighlightsthatsignificantefficiencysavingsandoperationalefficiencycanreasonablybeexpected,andthesesavingswouldaccruetoallratepayers.

244. Inbroadterms,thePanelappreciatesthatratepayerswillbeparticularlyinterestedin:

• Howanylocalgovernmentreformwouldaffecttheratespaidbyindividualratepayersorgroupsofratepayers(commercialandresidential)

• Howtheintegrationoffundingandfinancialpoliciesorthedevelopmentofaregionalratingsystemwouldaffectthedistributionorallocationofratesandthedirectchargesfortheuseoflocalauthorityservices

• Howuniqueormoreisolatedfinancialissuesorchallengesfacedbyonelocalauthority(forexample,settlingleakyhomesclaims,ormanagementoftheregion’srivers)wouldbemanagedonaregionalbasis

•Whatlevelofefficiencysavingscouldbeexpectedfromanyreformofthecurrentgovernancemodel,howtheseefficiencysavingswouldbedistributedandthetimeframesoverwhichefficiencysavingswouldberealised

• Thecostofmaintaininglocaldemocracyandrepresentation

245. Toassistitinitsconsultation,thePanelhaslookedateachlocalauthority’scurrentandforecastfinances.Itnotedthesignificantfinancialissuesandchallengesfacedbyeachlocalauthorityandthedivergenceinhoweachlocalauthorityhassetaboutmakingitsfundingdecisions.Whereappropriate,thePanelhasdrawnfromtheexperiencefromAuckland,particularlyinrelationtohowAucklanddealtwiththeintegrationofdifferentpoliciesthroughtransitionandsetup,theidentificationofpotentialefficiencysavingsandhowtheseimpactedindividualratepayers.

246. ItisclearfromtheAucklandexperiencethatsignificantefficiencysavingswereexpectedandthatAucklandCouncilappearstobemakingprogressindeliveringthese.Itisalso

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clearthebenefitswillflowdifferentlytodifferentratepayersdependingonanyfinalimplementationanddesignissues.ThePanelisinterestedinunderstandingwhethertherewouldbeanexpectationofsignificantefficiencysavingsinWellingtonandwhatexpectationratepayerswouldhaveinmanaginganydifferencesincurrentpoliciesandstrategies.

247 IntheremainderofthissectionthePanelbrieflyoutlinesthe:

• Obligationonlocalauthoritiestomanagetheirfinances

• Policiesandstrategiesadoptedbylocalauthoritiesinmanagingtheirfinances,andkeydifferencesbetweenlocalauthorities

• CurrentstateoffinancesofeachofthelocalauthoritiesintheWellingtonregionandforecastchangesoverthenext10years

• Generalfinancialissuesandchallengesthatlocalauthoritiesfaceandhowthesearereflectedintheirfinancialstrategiesandlong-termplans

• EfficiencysavingsthatmaybeexpectedfromanyreformorrestructuringofWellington’slocalauthorities

• SignificantfinancialandfundingissuesthatthePanelisseekingcommentandfeedbackon

Setting the context – funding and financial management

248. Undersection101(1)oftheLocalGovernmentAct2002eachlocalauthorityintheWellingtonregionmust:

…“manageitsrevenues,expenses,assets,liabilities,investmentsandgeneralfinancialdealingsprudentlyandinamannerthatpromotesthecurrentandfutureinterestsofthecommunity”.

249. UndertheLocalGovernmentAct2002eachlocalauthorityisrequiredtopreparealong-termplan,coveringaperiodof10years,andanannualplanasappropriate.Adequateandeffectiveprovisionmustbemadeineitherthelong-termplanorannualplanfortheexpenditureneedsofthelocalauthority.Thefundingneedsforeachlocalauthoritymustbemetfromthosesourcesthateachlocalauthoritydeterminestobeappropriate.

250. Inadditiontothesebroadobligations,section100oftheActrequiresthateachlocalauthoritymaintainabalancedbudgetunlessitdecidesthatitisfinanciallyprudentnottodoso.Section102oftheActrequireseachlocalauthoritytodevelopandadoptspecificfundingandfinancialpoliciesinordertoprovidepredictabilityandcertaintyaboutthesourcesandlevelsoffundingitreceives.

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251. Withinthelegislativeframeworkforfinancialmanagementeachlocalauthorityhastheflexibilitytodeterminethefinancialandfundingpoliciesthatareappropriatetomeetitsexpenditureneedsandbestpromotesthecurrentandfutureinterestsofthecommunity.

252. Recentchangestothetransparency,accountabilityandfinancialmanagementwithwhichlocalauthoritiesmanagetheirfinanceswereintroducedaspartofthe2010LocalGovernmentActAmendmentAct.However,localauthoritieshaveretainedtheflexibilitytomanagetheirfinancesinaccordancewiththeprinciplesandframeworksetoutintheLocalGovernmentAct2002.

253. Inlookingatthelong-termplansofeachlocalauthoritythePanelnoted:

• Localauthoritiesareresponsibleforthecollection,managementandstewardshipoflargeamountsofpublicmoney

• Thefinancialstrategies,andfundingandfinancialpolicies,differintermsofthefinaldecisionsmadebyeachlocalauthority

• Comparabilityoffinancesbetweenlocalauthoritiesisinfluencedbydifferencesinthestrategiesandpoliciesadopted

• Thereareanumberofactivitiesandservicesthatare“similar”acrosslocalauthoritiesbutwherepricingandfundingdecisionsdiffer

254. Asanexample,thePanelnotedthedifferencesinlocalauthorities’decisionsregardingthefundingofswimmingpools.Thefollowingtablehighlightsthedifferentfundingdecisions:

Table 2: Local Authority Funding Policy for Swimming Pools – 2012/13

Local Authority Local Authority Funding Policy Swimming Pool Entry Prices

% funded from Rates

% funded from User Charges and Other Revenue

Adult Child Pre-school

Wellington 60% 40% $5.70 $3.50 $1.20

Hutt City 60-79% 20-39% $4.50 $3.00 N/A

Upper Hutt 40-65% 35-60% $5.10 $4.10 $3.10

Porirua 35-50% 50-65% $5.00 $3.00 N/A

Kapiti 75% 25% $4.50 $2.20 $1.20

South Wairarapa 60-70% 30-40% $3.00 $2.00 N/A

Carterton 100% 0% N/A N/A N/A

Masterton 70% 30% $5.10 $3.60 N/A

Greater Wellington Regional Council

N/A N/A N/A N/A N/A

Source: 2012/22 Final LTPs, local authority funding policies or websites for entry prices Notes: 1 Exception is Khandallah pool (Adult $2; Child $1), 2 College students and children 5-14 years, 3 Under 1 year old = $2, 4 Fees in table are for Arena Aquatic Centre. Cannons Creek pool fees are $3.40 adult, $1.00 child, 5 College students and children under 12, 6 Based on UAGC, 7 Under 15 years or student, 8 No charge with adult. Additional under 5 = $1.00

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255. ThePanelunderstandsthatthefinalimpactofanyreformataratepayerorcommunitylevelwillultimatelydependon:

• Thefinalshapeofanyreformtothestatusquo

• Howcurrentdifferencesinfundingandfinancialpoliciesaremanagedoraddressed(forexample,whetherasingleratingsystemisdevelopedandhowthismanagesorequalisesdifferencesinstrategyandpolicythatexisttoday)

Auckland experience

256. OneofthechallengesfacedbyAucklandCouncil,postamalgamation,wastherequirementtoproduceasinglesetoffundingandfinancialpolicies,includingasingleratingsystem,andtothenmanagetheimpactonindividualratepayersandusersofservices.Forexample,thedevelopmentofaregionalfundingandfinancialpolicyforswimmingpoolsimpactedManukauCityratepayerswhohadpreviouslyenjoyedfreeaccesstothelocalauthority’sswimmingpoolspriortoamalgamation.Similarly,thedevelopmentofasingleratingpolicyforAucklandaffectedthefinaldistributionandallocationofrates.

257. InthecaseofAuckland,thedevelopmentofasinglesetoffundingandfinancialpoliciesweremanagedaspartofthetransitionandset-upoftheAucklandCouncil,oraspartofthedevelopmentofAucklandCouncil’s2012-22long-termplan.Thefinalimpactonindividualratepayersoftheshifttoasinglesetoffundingandfinancialpolicieswasnotknownpriortoamalgamation,althoughtherewasanexpectationthattheCouncilwouldneedtocarefullymanageorequaliseanyextremefundingandratingchangesormovements.

Financial pressures and challenges

258. Eachlocalauthoritywasrequiredtoadopta10yearlong-termplanby30June2012.Thelong-termplanscoverthefinancialperiodsfrom2012/13–2021/22.Section101AoftheLocalGovernmentAct2002,anewrequirement,requireseachlocalauthoritytoprepareandadoptafinancialstrategythatcoverseachyearofthelong-termplan.Inbroadterms,thepurposeofthefinancialstrategyistofacilitatemoreprudentfinancialmanagementbyoutliningthelocalauthority’sstrategyandapproachtomanagingitsfundingandexpenditureneedsovertheperiodofthelong-termplan.

259. EachWellingtonlocalauthorityhasidentifiedthosefactorsthatareexpectedtohaveasignificantimpactonthelocalauthorityduringtheperiodofthelong-termplan.Itisclearfromthesestrategiesthateachlocalauthorityisforecastingthatitwillcontinuetooperateinanincreasinglychallengingoperatingandfiscalenvironment.Thecurrentfinancialandeconomicenvironmentisplacingsignificantpressureonlocalauthoritiestomanagetheirfinancesbothprudentlyandinamannerthatcarefullymanagestheaffordabilityoftheirplansonratepayers.

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TheactualimpactonratepayersorusersofCouncilservicesmaynotbeknownuntilafteradecisionhasbeenmadeaboutanyfutureshapeorformoflocalgovernment.WhatdecisionsregardingthefinancialimplicationsofanychangetothestatusquowouldyoulikethePaneltoaddresspriortoanyfinalrecommendation?

Individuallong-termplanshaveidentifiedspecificfinancialissuesandchallengesthatmaybeuniqueormaybemoresignificanttoonelocalauthoritythananother(forexample,makingprovisionforthesettlementofleakyhomesclaims,fundingrivermanagementorrespondingtoearthquakestrengtheningrequirements).Whatapproachwouldyourecommendindetermininghowbesttoallocatethefundingrequirementsforactivitiesthatweremoreuniquetooneparticularlocalauthority?

260. Examplesoftheissuesidentifiedinthefinancialstrategiesinclude:

• Theimpactofthecurrentstateoftheeconomy,particularlyinthewakeoftheglobalfinancialcrisis,onlocalauthoritiesandindividualratepayers

• Forecasteconomicandpopulationgrowth

• Changingdemandsonservicelevelsandlocalauthorityactivities

• Pressuresoncurrentorplannedlocalorregionalinfrastructure

• Pressuretomaintaintheaffordabilityofcurrentplansandactivitiesandtherelatedissueofratepayer’swillingnesstopay

• Balancingtheallocationofratesrequirementacrossdifferentratepayergroups

• Dealingwithsignificantfinancialoroperationalissues(such,asleakyhomes,earthquakestrengthening)

Overview of the finances of the Wellington region’s local authorities

ThePanelhassetoutbelowahigh-levelsummaryofthefinancesofeachlocalauthorityintheWellingtonregion.Thefinancialsummaryillustratestheindividualandaggregatedimpactofeachlocalauthority’s:

• Sourcesofrevenueandfunding

• Ratingsystemsadoptedandthenatureandextentofratesfunding

• Forecastoperatingandcapitalexpenditureforeachlocalauthority

• Balancesheet,itsassets,liabilitiesandequity

• Currentandforecastlevelsofborrowing

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261. TheinformationoutlinedinthissectionillustratesthatthefinancialimpactoflocalgovernmentontheWellingtonregionissignificant.Asthemajorityoffundingforlocalauthorityactivitiesandinvestmentisfundedfromrates,userchargesorborrowing,itsupportsthepropositionthatthereissignificantpublicinterestinthewayinwhichthefinancialaffairsoflocalgovernmentaremanaged.

262. Itisalsoclearfromthesummarisedfinancialinformationthatthe“aggregated”financialsizeandstrengthofWellington’slocalauthoritiesprovidesanopportunityfromwhichtoconsideralternativegovernanceandservicedeliveryoptionsfortheregion.

Sources of revenue and council funding

263. AllofWellington’slocalauthoritiesrelyonthecollectionofrates(generalrates,targetedratesandwatercharges)forthemajorityoftheirfundingrequiredforoperatingpurposes.

264. Atanaggregatedregionallevel,63%oflocalauthorityoperatingfundingisprovidedfromratesandlevies.Afurther18%oftheregion’sfundingisderivedfromfeesandusercharges,11%fromoperatinggrantsandsubsidiesand7%providedfromfueltax,finesandinfringementfees.

265. Despitethesizeoflocalauthoritybalancesheetsonly1%ofthefundingrequiredforoperatingpurposesisderivedfrominterestanddividendsoninvestments.

Table 3: Forecast Sources of Operating Funding – 2012/13

Local Authority Total Operating Funding $000

Revenue from Rates (General, Targeted, Water Usage) $000

Revenue from Fees and Charges $000

Other Sources of Revenue $000

% of Revenue from Rates

Average Rates Revenue per resident

Wellington $365,289 $239,567 $97,421 $28,301 66% $1,335

Hutt City $131,079 $91,306 $29,570 $10,203 70% $935

Upper Hutt $38,057 $30,228 $5,505 $2,324 79% $787

Porirua $58,751 $46,490 $9,883 $2,378 79% $958

Kapiti $58,639 $47,180 $9,654 $1,805 80% $1,021

South Wairarapa $18,551 $11,057 $604 $6,890 60% $1,244

Carterton $11,211 $8,514 $1,431 $1,267 76% $1,199

Masterton $32,836 $24.040 $5,800 $2,996 73% $1,063

Greater Wellington Regional Council

$218,523 $90,258 $4,448 $123,817 41% $201

TOTAL WELLINGTON REGION

$932,936 $588,640 $164,316 $179,981 63%

Source: 2012/22 Final LTPs, Funding Impact Statement adjusted for calculation Targeted Rates for Water Supply, Residents as per LTP

Long-termplanshighlightdifferencesinthewaythatlocalauthoritiesplanforandfundindividualservices.Howcoulddifferencesincurrentservicelevels,levelofinvestmentandinratingandfundingpoliciesbemanagedacrossthegreaterWellingtonregion?Shouldfeesforsimilarservicesbestandardisedacrosslocalauthoritiesoracrosstheregion?Whatisthebestwaytoaddressandfundlocalandregionalservicelevelandinvestmentneedsandrequirements?

Howshould“legacyissues”andlocalfundingneedsbeaddressedacrosstheWellingtonregion?

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Figure 3: Summary of Forecast Sources of Operating Funding Wellington Region Local Authorities – 2012/13

Source: 2012/22 Final LTPs, Funding Impact Statement adjusted for calculation Targeted Rates for Water Supply

Summary of local authority rating systems and policies

266. Theratingsystemandpoliciesadoptedacrosstheregionvariesbetweenlocalauthorities,owingtotheflexiblepowersprovidedbytheLocalGovernment(Rating)Act.Individuallocalauthoritieshaveadoptedaratingsystemthatmostappropriatelyandequitablyfinancestheneedsoftheircommunities.

267. Ratingsystemsmayvaryonthevaluationbaseused,thelevelofuniformannualgeneralcharges,theuseoftargetedratesandratingdifferentialsforcertainclassesofratingunits,policiesonthepostponementandremissionofrates,andthewayinwhichwaterchargesarestructuredandlevied.Thepercentageofratesfundingraisedfromgeneralratesalsovariesconsiderablyacrosstheregion.

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268. Ahigh-leveloverviewoftheratingsystems,policiesandsourcesofratesfundingadoptedbyeachlocalauthorityforthe2012/13financialperiodissummarisedinthefollowingtable.

Table 4: Summary of Local Authority Rating Systems, Policies, Rates Funding Sources – 2012/13

Local Authority Rating Valuation Basis (General Rate)

Maximum Differential on Commercial General Rate*

% of Rates from General Rates

% of Rates from Targeted Rates

% of Rates from Water Usage

Total Rates Collected ($000)

% of Total Income from Rates

Wellington CapitalValue 2.80 53% 42% 5% $239,567 66%

Hutt City CapitalValue 3.56 68% 19% 13% $91,306 70%

Upper Hutt CapitalValue 2.65 57% 42% 1% $30,228 79%

Porirua CapitalValue 3.50 79% 11% 10% $46,490 79%

Kapiti LandValue - 19% 66% 14% $47,180 80%

South Wairarapa

LandValue 2.00 67% 13% 20% $11,057 60%

Carterton CapitalValue 2.00 70% 30% 0% $8,513 76%

Masterton CapitalValue 2.00 57% 42% 1% $24,040 73%

Greater Wellington Regional Council

CapitalValue - 30% 70% 0% 90,258 41%

Source: 2012/22 Final LTPs, Funding Impact Statement adjusted for calculation Targeted Rates for Water Supply * Excludes Greater Wellington’s targeted transport rate

Auckland experience

269. OneofthechallengesfacedbytheamalgamationoftheAucklandlocalauthoritieswasthedevelopmentofasingleregionalratingsystem.From1July2012Auckland’ssingleratingsystemsawthemajorityofratescalculatedonanAuckland-widebasis,althoughtheCouncilwillcontinuetouselocaltargetedrateswhereappropriate.Significantly,Auckland’srateswillbecalculatedonacapitalvaluebasis,achangefromthemixoflandandannualvaluemethodsusedbypreviouscouncils.Theratingpolicywillintroduceauniformannualgeneralchargeof$350.Therewillbethesameproportionofratecollectedfromresidentialandnon-residentialsectorsaspreviously.Thebusinessdifferentialrateistobereducedfrom2.63timesresidentialto1.73bytheendofthe10-yearlong-termplan.

Importance and significance of commercial/business rating base

270. Mostlocalauthoritiesacrosstheregionhaveacommercialorbusinessdifferentialontheirgeneralrates.Insimpleterms,theeffectofthedifferentialistoredistributeorreallocatetheimpactofgeneralratesfromtheresidentialsectortothecommercialorbusinesssector.Inaddition,localauthoritiesmayhaveseparatecommercialorbusinesstargetedrates.

WouldtherebeadvantageinoneratingsystemforthegreaterWellingtonRegion?

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271. Thesignificanceandimportanceofastrongcommercialandbusinesssectorisnotonlyisitvitalfortheregion’seconomy,itisalsointegraltothewaylocalauthoritiesmanagetheirratingandfundingdecisions.

272. Eachlocalauthorityareagenerallyhasacentralbusinessdistrictorcommercialarea.Withintheregionthesize,scaleandregionalimportanceofWellington’sCentralBusinessDistrictissignificant.Fromaratingandfundingperspective,approximately$84-$86mofratesandwaterchargesareforecasttobecollectedfromthecommercialCentralBusinessDistrictinthe2012/13financialperiod.Thisincludesatargeteddowntownlevyof$13.6m.Thedifferentialonthecommercialgeneralrateissetat2.80for2012/13.

273. OfthetotalratescollectedbyWellingtonCityCouncil

approximately36%isderivedfromcommercialratepayersintheWellingtonCentralBusinessDistrict.Ofthetotalratesfundedfromthecommercial,industrialandbusinessusesector,approximately78%isderivedfromcommercialratepayersintheWellingtonCentralBusinessDistrict.

Forecast operating expenditure: 2012/13 – 2021/2

274. Operationalexpenditureprovidesforday-to-dayoperationsandservicesdeliveredbyeachlocalauthority.Itincludesexpenditureonservicessuchaswastedisposal,watersupplyandmaintainingroads,issuingbuildingconsents,operatingrecreationalfacilities,andmaintainingparksandgardens.Italsoincludesthecostofbackofficefunctions(suchasfinance,informationtechnologyandhumanresources),governance,policyandplanning.

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275. Ahighlevelsummaryoftheforecastoperatingexpenditureforeachlocalauthorityfor2012/13,andinaggregateoverthe10-yearperiodofthelong-termplan,issummarisedinthefollowingtable:

Table 5: Forecast Operating Expenditure 2012/13 – 2021/22

Local Authority Forecast Operating Expenditure 2012/13 – 2021/22

Finance Expense $000

Depreciation and Amortisation $000

Other Operating Expenditure (incl. Personnel) $000

Total Operating Expenditure 2012/13

Total Operating Expenditure 2012/13 – 2021/22

Wellington $22,647 $91,703 $264,830 $379,180 $4,346,840

Hutt City $4,000 $31,688 $95,587 $131,275 $1,463,865

Upper Hutt $1,459 $11,734 $31,742 $44,935 $529,132

Porirua $3,547 $18,146 $48,447 $70,140 $814,504

Kapiti $8,474 $13,383 $41,091 $62,948 $790,846

South Wairarapa $608 $4,204 $11,300 $16,112 $181,082

Carterton $520 $3,272 $8,375 $12,167 $142,730

Masterton $3,032 $9,739 $22,845 $35,616 $406,480

Greater Wellington Regional Council

$8,173 $31,720 $215,255 $255,148 $3,119,209

TOTAL WELLINGTON REGION $52,460 $215,589 $739,472 $1,007,521 $11,794,688

Source: 2012/22 Final Long-term plans, Financial information sourced from Prospective Statement of Comprehensive Income.

276. Wellington’slocalauthoritieswillincurapproximately$1billionofexpenditureintheprovisionanddeliveryoftheiroperatingservicesandactivitiesinthe2012/13financialyear.Overtheperiodofthelong-termplan,operatingexpenditureisforecasttototalapproximately$11.9billionduringthenext10years.

277. InaccordancewiththebalancedbudgetprovisionsoftheLocalGovernmentAct2002,eachlocalauthoritymustfundtheoperatingexpensesthatitwillincurinthedeliveryofitsservices,unlessitdeterminesthatitisfinanciallyprudentnottodoso.

Forecast capital expenditure programme: 2012/13 – 2021/22

278. Inadditiontoexpenditureforoperatingpurposes,eachlocalauthorityisplanningtoinvestinthecurrentandfutureassetsandinfrastructurewithineachoftheirareas.Fundingforcapitalinvestmentisgenerallyderivedfromborrowings,capitalgrantsandsubsidies,developmentandfinancialcontributionsorcashsurplusesfromoperatingactivities(principallyfromfundedlevelsofdepreciation).

Arethereexamplesofservicesandactivitiesprovidedatalocalauthoritylevelthatcouldbemoreefficientlyprovidedonaregionwidebasis?

Consideringtheactivitiesandservicelevelsprovidedbyyourlocalauthorityhowdothesecomparetoactivitiesandservicelevelsprovidedbyotherlocalauthorities?

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279. Ahigh-levelsummaryoftheforecastcapitalexpenditureprogrammesforeachlocalauthorityoverthe10-yearperiodofthelong-termplanissummarisedinthefollowingtable.

Table 6: Forecast Planned Capital Expenditure 2012/13 – 2021/22

Local Authority Total Forecast Planned Capital Expenditure 2012/13 – 2021/22

CAPEX-Tomeetadditionaldemand$000

CAEPX-Improvelevelsofservice$000

CAPEX-ReplacementofExistingAssets$000

TotalforecastCAPEX2012/13–2021/22

Wellington $42,784 $421,088 $974,952 $1,438,824

Hutt City $0 $211,524 $231,681 $443,205

Upper Hutt $0 $47,874 $73,867 $121,741

Porirua $77,551 $34,072 $100,987 $212,610

Kapiti $13,694 $149,967 $127,456 $291,117

South Wairarapa $417 $10,917 $40,195 $51,529

Carterton $2,286 $2,967 $37,101 $42,354

Masterton $1,278 $31,113 $88,642 $121,033

Greater Wellington Regional Council

$23,083 $454,417 $76,991 $554,491

TOTAL WELLINGTON REGION

$161,093 $1,363,950 $1,751,872 $3,276,903

Source: 2012/22 Final Long-term plans, financial information sourced from Funding Impact Statement.

280. Overtheperiodofthelong-termplanlocalauthoritiesareplanningtoinvestapproximately$3.3billioninnewandexistingassetsandinfrastructurewithintheirlocalauthorityareas.Ofthisinvestment53%willbeinvestedintherenewalorreplacementofexistingassets,and42%willbeinvestedinassetsandinfrastructureinordertoimprovetheirservicelevels.Only5%ofthetotalplannedinvestmentisplannedtomeetadditionaldemand,withtwolocalauthoritiesplanningnonewinvestmentinthisarea.

Figure 4: Forecast Capital Investment over the period 2012/13 – 2021/22Source: 2012/22 Final Long-term plans, financial information sourced from

Funding Impact Statement

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Size and scale of local authority assets, liabilities and equity

281. Wellington’slocalauthoritiesareresponsibleforthemanagementofsignificantportfoliosofassetsandliabilities.

282. Atanaggregatedlevel,assetsmanagedandunderthe

stewardshipoftheregion’slocalauthoritiesamountto$13.1billion.Themajorityoftheseassetsrepresenttheinfrastructure(water,sewerage,roadinginfrastructurenetworks)andcommunity/operational(libraries,swimmingpools,recreationcentres)assetswithineachlocalauthorityarea.Assetsalsoincludeinvestmentsbylocalauthoritiesinsubsidiaryandassociateentities.Oftheregion’sassets,approximately51percentareunderthemanagementandstewardshipofWellingtonCityCouncil.

283. Totalliabilitiesacrosstheregionare$1.296billion,themajority

ofwhichisrepresentedbyCouncildebtandborrowings(referseparatesectionbelow).

284. Ahigh-levelsummaryoftheequity,liabilitiesandassetsofeachlocalauthorityissummarisedinthefollowingtable:

Table 7: Summary of Local Authority Equity, Liabilities and Assets – As at 30 June 2011

Local Authority Total Equity $000 Total Liabilities $000

Total Assets $000

Assets as a % of Region’s Assets

Wellington $6,196,356 $487,401 $6,683,757 51%

Hutt City $1,149,105 $109,279 $1,258,384 10%

Upper Hutt $576,071 $27,986 $604,057 5%

Porirua $1,083,992 $63,209 $1,147,201 9%

Kapiti $737,766 $91,841 $829,607 6%

South Wairarapa $362,639 $11,708 $374,347 3%

Carterton $145,676 $4,419 $150,095 1%

Masterton $669,498 $37,241 $706,739 5%

Greater Wellington Regional Council*

$939,446 $462,489 $1,401,935 10%

TOTAL WELLINGTON REGION $11,860,550 $1,295,573 $13,156,122

Source: 2010/11 Annual Reports (Wellington Regional figures include Greater Wellington Rail) * These are group accounts as substantial assets are held outside the council entity

Current and forecast levels of local authority borrowings

285. Borrowingsaregenerallyusedbylocalauthoritiestofundtheupgradeandrenewalofexistingassets,andtoconstructorpurchasenewassets.Whenlocalauthoritiesinvestinneworupgradingofassetssuchasswimmingpools,libraries,sportsstadiums,roadingassets,landfillsandsewagetreatmentplants,thebenefitsoftheseassetsflowtothecommunityacrossmanyyears.Borrowingisgenerallyconsideredthemostcost-effectiveandprudentwaytofundsuchcapital

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expenditurebecauseitspreadsthecostoftheassetoverthefuturegenerationsofratepayerswhowillbenefitfromtheuseoftheasset.Theuseofborrowingsasasourceoffundingforcapitalinvestmentgenerallysupportstheprincipleofinter-generationalequity.

286. Borrowinglevelsaremanagedbyindividuallocalauthoritiesinaccordancewiththeirfinancialstrategiesandspecificborrowinglimitsandtarget,developedduringthelongtermplanningprocess.Thereissignificantvarianceinborrowingstrategies,parametersandpracticeacrosstheregion.

287. Ahigh-levelsummaryoftheactualandforecastlevelofborrowingsandindebtednessacrosstheregionissummarisedinthefollowingtable:

Table 8: Summary of Local Authority Borrowings (Actual and Forecast)

Local Authority Actual Borrowings 30 June 2011 $000

Forecast Borrowings 30 June 2013 $000

Borrowings per resident 2012/13

Forecast Borrowings 30 June 2022 $000

Forecast Movement in Borrowings 2012-2022

Wellington $341,525 $373,668 $2,082 $532,355 42%

Hutt City $77,993 $68,725 $703 $56,255 (18%)

Upper Hutt $20,745 $24,972 $650 $50,154 101%

Porirua $41,766 $53,058 $1,093 $52,499 (1%)

Kapiti $71,266 $135,190 $2,926 $188,079 39%

South Wairarapa $8,420 $10,138 $1,141 $16,711 65%

Carterton $1,636 $9,414 $1,326 $10,988 17%

Masterton $28,491 $52,005 $2,299 $54,174 4%

Greater Wellington Regional Council

$112,616 $182,248 $2,696 $375,436 106%

TOTAL WELLINGTON REGION

$704,458 $909,418 $1,336,651 47%

Source: 2010/11 Annual Report (actual borrowings as at 30 June 2011), 2012/22 Long-term plans (forecast borrowings 30 June 2013, 30 June 2022), Residents as per 2012/22 long-term plans

288. TotalborrowingsfortheWellingtonregionareforecasttobe$909.418millionattheendofthe2012/13financialperiod,increasingto$1,336.651millionby30June2022.

289. Borrowinglevelsforindividuallocalauthoritiesvary

significantly,andarelikelytobeinfluencedbythesizeandscaleofbothhistoricalandplannedcapitalinvestmentprogrammes.Ingeneral,localauthoritiesareplanningsignificantlevelsofcapitalinvestmentovertheperiodoftheirlong-termplans,eithertoreplaceorupgradeageinginfrastructure,tomeetchangingdemandsonassetservicelevelsortoeffectivelyplanandmanageforecastgrowth.

290. Inaddition,borrowinglevelswillbeinfluencedbythefinancial

strategiesandpoliciesadoptedbylocalauthoritiestomanagethelevelofborrowings(prudentialborrowingratiosandtargets),developingstrategiestospecificallyrepayborrowingsorinfundingcertainfinancialliabilitieswhereitisconsideredfinanciallyprudenttodoso(fundingsignificantliabilitiesetc).

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57PricewaterhouseCoopersabovenote1.

Eachlocalauthorityhasadifferentfinancialstrategyandapproachtotheuseandmanagementofdebtandborrowing.Borrowingisgenerallyusedtofundcapitalinvestment,principallytomeetadditionaldemandorimprovelevelsofservice.Thenatureandextentofcapitalinvestmentplanningacrosstheregiondiffersasdoesthemanagementofdebtandborrowing.Acrosscertainactivities,localauthoritiesarehavingtoinvestmoreheavilytoaddressinfrastructurequalityandservicelevelissues.Whatisthebestwaytoaddressandfundlocalinvestmentneedsandrequirements?Howwouldyouaddressthefundingimplicationsofcurrentlevelsofdebtandborrowingwithineachlocalauthorityarea?

WhatissuesorconcernswouldyouforeseefrommanagingtheaggregatedborrowingsfromWellington’slocalauthoritiesonaregionalbasis?

291. Reductionsinborrowinglevelsoftheperiodofthelong-termmayresultfromalowerlevelofinvestmentinnewassets,deferralofcapitalexpenditure,changestothetimingofassetrenewals,theavailabilityofsurpluscapitalfunding,decisionstofundborrowingreductionsorthesaleofassetsandtheapplicationofsaleproceedstorepayborrowings.

Auckland experience

292. OnamalgamationtheborrowingsofeachlocalauthorityintheAucklandregionwerecombinedintotheoverallAucklandCouncilgroup.Asperthedraftlong-termplanAucklandCouncilborrowings(WholeofGroup)wereforecasttoincreasefrom$5.4billionattheendofthe2012/13financialperiodto$12.5billionbytheendofthelongtermplan.Borrowingsaremanagedandfundedonaregionwidebasis,exceptforasmallportionofborrowingsfundedbyacitycentreupgradetargetedrate.Thismeansthatlegacyborrowingsfrompreviouslocalauthoritiesarenowmanagedonaregionalbasisandhavenotbeenattributedtoratepayersinthosepreviouslocalauthorityareas.GiventhesizeofCouncil’sborrowingportfolioandthelimitedsizeandcapacityofliquidityintheNewZealandmarket,AucklandCouncilhasthepowertoborrowmoneyoffshore.ItistheonlylocalauthorityinNewZealandpermittedtoraisefinancingoffshore.

Realising efficiency savings from local government reform

293. InthepreviouspagesweprofiledthefinancialsizeandscaleofeachWellingtonlocalauthorityaswellasthecombinedimpactthattheninelocalauthoritieshaveonthegreaterWellingtonregioneconomy.ThefinancialscaleoflocalgovernmentoperationsintheWellingtonregionissignificant.Fundingoflocalgovernmentactivities,operationandinvestmentinvolvessignificantamountsofpublicmoney.

294. TheRoyalCommissionintoAucklandGovernancenotedthatmanyofthesubmissionsmadetotheCommissioninsupportofchangewereoftheviewthattheamalgamationofindividuallocalauthoritiesshouldresultinsignificantcostsavings.TheCommissionacceptedtheimportanceoffinancialsavingsandefficiencies,althoughitnotedtherewereotherequallyimportantissuesinconsideringtheimpactandbenefitoflocalgovernmentreformacrosstheAucklandregion.

295. InthecaseofAuckland,theCommissionidentifiedthatproposalsforstructuralchangecouldbeexpectedtoresultinestimatedefficiencysavingsofbetween2.5percentand3.5percentofthetotalexpenditureplannedbythethenlocalauthoritiesthatmadeupthegreaterAucklandRegion.TotalestimatedsavingsandefficienciesforAucklandwereestimatedatbetween$76millionand$113mperyear.

296. The2010PricewaterhouseCoopersstudy57,commissionedbytheWellingtonMayoralForum,drewonUKresearchthat

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58RhysAndrewsandGeorgeBoyne,CardiffUniversity,Size, Structure and Administrative Overheads: An Empirical Analysis of English Local Authorities(2006).

59MorrisonLow,abovenote51.

wasundertakenintothesizeoflocalgovernmentanditsrelationshiptoefficiency58.Inthatresearch,itnotedthattheUnitedKingdomGovernment(DepartmentforCommunitiesandLocalGovernment2006)statedtheprimaryreasonforencouragingthedevelopmentofunitarystructuresandanewtwo-tiermodelwastomakesubstantialefficiencygains.

297. Theresearchconcludedthatadministrativecostsdofallasthesizeoftheorganisationincreases.Inadditiontoloweradministrativecoststheresearchfoundthatlargerauthoritiesalsodevotedahigherproportionofresourcestothefrontline.Theresearchwasquantitativeandsowasnotconclusiveastowhethertheloweradministrationcostswereasaresultofgreaterefficiencyorgreaterpurchasingpower.Theresearchnoted:

“…localauthoritieswithasmallclientpopulationarelikelytoreapefficiencygainsonadministrativecostsbyreorganisingintoalargerunitorbysharingbackofficefunctions.”

298. Inadditiontoconsideringstructuralopportunities,boththe2010PricewaterhouseCoopersstudyandthemorerecentMorrisonLowstudy59commissionedbytheWairarapalocalauthoritiesconsideredoptionsforgreatersharingofservices,orsharedservicearrangements.Thepremiseofenhancedsharedservicearrangementsbeingthatefficiencysavingscouldreasonablybeexpectedifcurrentlocalserviceprovisionanddelivery(includingbackofficefunctions)wereefficientlyandeffectivelyreorganisedandprovidedonaregionwidebasis.

299. ThePanelalsonotesthattheexperienceandexpectationfromrestructuringorreorganisationofoperatingunitsandservicedeliveryfromwithinthecentralgovernmentandhealthsectorsfurthersupportsthecasethatefficiencysavingscanbeachievedthroughamalgamation,integrationandsharingofservices.Thisisparticularlythecaseintheareaofbackofficefunctions.

300. ThePanelhasnotundertakenanydetailedanalysisormodellingofefficiencysavingsthatcouldbegeneratedbyreorganisingcurrentgovernanceandoperationalstructuresintolargerstructure.NorhasthePanelassessedthepotentialefficiencysavingsthatcouldbegeneratedfromthegreateruseofsharedservices.

301. ThePanelacceptstheimportanceofefficiencysavingsneedingtobecarefullyconsideredinthecontextofthewaythatexistingstructuresandservicedeliveryisstructuredacrosstheWellingtonregiontoday.ThePanelnotesthatthereareanumberofexamplesoflocalauthoritiesworkingtogether,combiningresourcesorperformingactivitiesinaconsistentcoordinatedmannertoday(forexample,watermanagementservices,emergencymanagement,jointventurearrangementsforlandfillsetc).

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DoyouconsiderthatefficiencysavingscouldbeachievedbyfashioninglargerunitsoflocalgovernmentintheWellingtonregion?

HowimportantareefficiencysavingsfromchangestotheshapeoflocalgovernmentacrosstheWellingtonregionrelativetoothertangibleandintangiblebenefitsthatmaybederivedbychangingtheshapeoflocalgovernmentacrosstheregion?

WhatlevelofefficiencysavingswouldberequiredinorderforyoutosupportachangeinthestructureoflocalgovernmentintheWellingtonregion?

WheredoyouconsiderthereisthegreatestopportunitytodayforoperationalandfinanceefficiencysavingswithinyourlocalauthorityoracrosstheWellingtonregion?

302. However,thePanelconsidersthatsufficientweightcanbegiventotheevidenceofefficiencysavingsfromtheAucklandexperience,andthatidentifiedinthePricewaterhouseCoopersstudy,tosuggestthatthereshouldbeareasonableexpectationofefficiencysavingsfromareorganisationofthecurrentgovernanceandservicedeliverystructuresofWellingtonlocalauthorities.

303. Efficiencysavingscouldbereasonablyexpectedinthefollowingareas:

• Unifiedor“common”areasofactivityofservice(forexample,procurement,backofficesystemsandfunctions,informationtechnology,financeandhumanresources)

• Commonregulatoryfunctions,activitiesandprocesses(forexample,consentsandlicensing)

304. ThePanelnotesthatiftheWellingtonregionweretodeliveralevelofefficiencysavingscomparabletotheexpectationidentifiedintheAucklandCommissionreport(2.5percent-3.0percent)thenthiswouldtranslateintooperationalefficiencysavingsofbetween$300m-$360macrosstheWellingtonregionovera10-yearperiod.Asimilarlevelofefficiencysavingsontheregion’scapitalinvestmentprogrammeswouldreducethecapitalinvestmentrequiredbybetween$81m-$99m,andpotentiallyreducethelevelofborrowingsrequiredtofundsomeofthisplannedinvestment.

Auckland experience

305. ThePanelnotesthatAucklandCouncilhasrecentlyreporteditisontracktoachieveitsforecastlevelsofsavingsandefficiencies.InitsfirstyearofoperationtheAucklandCouncilhasreportedefficienciesof$81million.Overtheperiodofthe2012-2022long-termplantheCouncilisforecastingafurther$1.7billioninefficiencysavings(moreorsameservicelevelsforlesscost).

306. TheAucklandexperiencehighlightsthatefficiencysavingsaremorerealisticallyexpectedinthemediumtolongterm.Theprocessandtimeframesofreorganisationandintegrationtaketime.Short-termefficiencysavingswouldbepartiallyoffsetbythecostsassociatedwithrestructuring,reorganisationandintegration.

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60AustralianCentreofExcellenceforLocalGovernment,abovenote39.

Chapter6:Optionsforgovernance

307. ThePanel’sTermsofReferencerequiresitto“…assesspossiblelocalgovernmentoptionsfortheWellingtonregionandidentifyanoptimalone,whichmayincludeeitherstructuraland/orfunctionalchanges”.Thissectionexaminesanumberofoptionsandtheirstrengthsandchallenges.

308. ItisimportanttonotethatthePaneliscurrentlyseekingawiderangeofinputandthereisnopreferredoptionindicatedatthisstage.Asaresultofconsultationandconsiderationofotherresearchandanalysis,thePanel’sfinalreportwill:

• Containadescriptionofthepreferredmodelandhowitwouldoperate,includinglevelsofdecision-making,functions,governancearrangementsandaproposedapproachtofinancialarrangements(rates/otherrevenue,debtandliabilitymanagement)

• Ifthepreferredoptionincludesanychanges,outlinetransitionarrangements,includingapproximatecostsandatimeframeforimplementation

What are the options for local government in the Wellington region?

309. Assetoutintheprecedingchapters,thereisacaseforabetterapproachtolocalgovernmentintheWellingtonregion.Whatisnotyetapparentiswhattheoptionsare,andwhattheymeanforeveryone.Doesitmeanmajorchangeorsimplydoingthingsbetter?

310. Whenfacedwithasetoforganisationalandfunctionalissues,thereisatendencytoimmediatelyfocusonstructuralformandphysicaloptionsforchange.Whilethisisanunderstandableresponseforsomepeople,itisalsoproblematicbecauseitdefaultstoconsideringsolutionsbeforehavingworkedthroughtheissues.AstherecentresearchintolocalgovernmentconsolidationinAustraliaandNewZealandstates:

a. Toomuchattentionisfocusedontheinstitutionalarrangementsofthelocalgovernmentsystemineachjurisdictionratherthanonthefundamentalissueofthesocietalfunctionsperformedbylocalgovernmentanditschangingrole.60

311. Itfollowsthen,thatform(structuresandsystems)shouldfollowfunction(roles,responsibilities,activities,mandates).Asdescribed,localgovernmentinNewZealandandtheWellingtonregionincludesaverywiderangeoffunctions,services,facilities,activitiesandrelationships.

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61AustralianCentreofExcellenceforLocalGovernment,abovenote39.

Change

312. Change,byitsnature,canbechallengingandpotentiallycomplex.ThePanelrecognisesthatmanyoptionscouldbeconsideredforlocalgovernmentintheWellingtonregion–rangingfromthe“nochange”orstatusquo,totheotherendofthespectrumwithfar-reachingorganisationalandboundarychange,possiblyresultinginlittleresemblancetocurrentstructuresandsystems.

313. TherecentAustralianresearchintoconsolidation61identifiesthefollowingcontinuumofconsolidation,althoughaspectsofeachcanbecombined:

Regional collaboration > Shared services > Boundary change > Amalgamation

314. Ofcourse,therearemanycombinationsofoptionsthatcouldbeconsidered.Carefulthoughtisneededon:

• Thetypeofchange

• Thewayinwhichchangeshouldbemanaged(scale,sequence,timing)

Possible structural and functional local government options for the Wellington region

315. Thereisnotaone-size-fits-allmodelthatcanbeusedthroughoutNewZealand,letaloneintheWellingtonregion.Localgovernmentisacomplexanddiverseinstitutionandsectorwithinvolvementinaverywiderangeofactivities,services,functions,facilitiesandrelationships.Itisbothaservicedeliveryagencyandthelayerofgovernmentclosesttothecommunity.Itisacreatureofstatutewithwellover100Actsandregulationstoabidebyoradminister.TheseaspectsneedtobeborneinmindwhenoptionsforlocalgovernmentinWellingtonarebeingconsidered,alongwithotherdynamicssuchasphysicalgeography,population,service,activity,facility,history,andexistingstructuresandframeworks.

Wellington regional governance options

316. BeforethePanelcanformanopiniononapreferredoption,itisimportantthatcitizensandratepayershavetheopportunitytoexpresstheirviews.Thiswillhelptogaugetheoverallinterestforchangeandanyparticularareasforimprovement,enhancementordevelopment.Thissectionsetsoutseveraloptionsforcollaborativeorsharedservicesandstructuralform.

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62LocalGovernment(AucklandCouncil)Act2009,Part6.

Whatareyourviewsonthecollaborativeandsharedserviceoptionsdescribedinthetable?Arethereanyothercollaborativeandsharedserviceoptionsthatshouldbeconsidered?

Collaborative and shared service options

317. Earlierreferencehasbeenmadetosomeofthecollaborativeandsharedservicesoptionsforlocalgovernmentasawhole.ThistableprovidesadescriptionofsomeofthecollaborativeandsharedserviceoptionsfortheWellingtonregion.TheremaybeotheroptionstoconsiderandthePanelwelcomesyourviews.

COLLABORATIVE AND SHARED SERVICE OPTIONS

Description

Ad hoc shared services - status quo

Thisisthecurrentsituation.Opportunitiesareidentifiedandtakenupastheyarise.ExamplesincludetherecentregionalisedCivilDefence/EmergencyManagementserviceforallCouncils;deliveryofwaterservices(Wellington,HuttandUpperHuttCityCouncils);andWellingtonandPoriruaCityCouncils’managementofSpicerLandfillinPorirua.

Prioritised shared services and collaboration

Thiswouldbeamoredeliberateandproactiveregionaldrivetowardsharedservicesandcollaborationwithregionaljointventures,jointcommitteesbetweencouncils,andextendingtheuseofCouncilControlledOrganisationsataregionalleveltomanagekeyservicesandinfrastructure.Itwouldrequireasenseofurgencyandcommitmenttoadefinedprogrammeofworkbetweentherespectivepartiestopursuechange.Ifthisisunlikely,thenlegislativechangewouldberequired.

Services provided by one council on behalf of others

Thisisgenerallyinrelationtoserviceplatformsfororganisationalfunctionandbusinessmanagement.Itimpliesdevelopingspecialisedcentresforspecificserviceswithinoneorpossiblytwocouncils.Examplescouldincludeprovisionofpayrollservices,informationtechnology,andprocurement.Thereisanassumptionofsomesavings,althoughasdiscussedearlier,thesemaynotberealisedimmediately.

Regional planning for particular services/assets/infrastructure

Agreaterprioritisationandmoredeliberateregionaldrivetowardregionalplanninginspecificareas.Forexampleaccessandtransportnetworkdesign;fundingeconomicdevelopment(includingtourismpromotionandvisitorattraction);solidwastemanagement;provisionofmajorregionalamenitiesandopenspaces;landusemanagementframeworks;andemergencypreparednessandresponse(recentlyinitiated).

Harmonised regulatory processes

Adeliberateregionalprogrammetoachieveconsistent,harmonised,regulatoryprocessesinresourcemanagement,buildingandresourceconsents.

Regional spatial planning

AshastakenplaceinAuckland,aspatialplanwouldsetoutanintegratedregionaleconomic,environmental,infrastructureandsocialplanningframework.Itwouldenabledifferencestobereconciledwithinasingleplan,ratherthanbetweenindependentplansproducedbyseparatecouncils.Itwouldalsoenableamoredeliberateandcoordinatedinterfacewithgovernment-fundedservices,programmesandpolicies.Itisimportanttonotehowever,thatAucklandCouncilhastheonlystatutorymandateforspatialplanning.62

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Structural options

318. ThistableprovidesageneraldescriptionofsomeofthestructuraloptionsforlocalgovernmentintheWellingtonregion.TheremaybeotheroptionstoconsiderandthePanelwelcomesyourviews.

STRUCTURAL OPTIONS

Description

No change – status quo

Eight Territorial Authorities:•CartertonDistrictCouncil•HuttCityCouncil•KapitiCoastDistrictCouncil•MastertonDistrictCouncil•PoriruaCityCouncil•SouthWairarapaDistrictCouncil•UpperHuttCityCouncil•WellingtonCityCouncil

Functionsincludelocalinfrastructure(water,wastewater,stormwater,roads);communitywellbeinganddevelopment;localeconomicdevelopment;environmentalhealthandsafety;recreationandculturalfacilities;resourcemanagement;landuseplanninganddevelopmentcontrol;andcommunityadvocacy.Somecouncilsalsohavecommunityboards.

One regional council:•GreaterWellingtonRegionalCouncil

Functionsinclude:resourcemanagement;biosecurity;rivercontrol;floodmanagement;regionallandtransport;regionaleconomicdevelopment;andbulkwatersupply.

RegionalcouncilplusexpandedregionalcouncilroleAmalgamatedlocalcouncils

TheregionalcouncilwouldhaveanexpandedmandateforspatialplanningArangeofoptionsforlocalcouncilamalgamationcouldbeconsideredacrosstheregion(variouscombinationsofthecurrenteightTerritorialAuthorities)Communityboardscouldstillbeanoption

Two-tierlocalgovernment

ThecurrentorganisationswouldchangethroughfunctionandformAllrateswouldbecollectedbytheregionalcouncilAregionalcouncilwouldhavearegional focusanddeliverregionalservices,spatialplanningetcLocalcouncilswouldhavealocal focusandberesponsiblefordeliveryoflocalservicesandcommunityfunctionsinaccordancewithdefinedstatutoryprovisionsTherewouldbearangeofoptionsforlocalcouncilamalgamationacrosstheregion,thatisvariouscombinationsofthecurrenteightTerritorialAuthorities

Unitaryauthorities(2+)withlocalboards

Oneormoreunitaryauthoritiescouldbeformedacrosstheregion(combinedregionalandlocalfunctionsplusaspatialplanningmandate)Localboardstoenablelocalrepresentationanddecisionmakingonbehalfoflocalcommunities(Aucklandmodel–seedescriptionbelow)

Regionalunitaryauthoritywithlocalboards

Allexistingcouncils,areasandfunctionscombinedintooneorganisationfortheregion(combinedregionalandlocalfunctionsplusaspatialplanningmandate)Localboardstoenablelocalrepresentationanddecisionmakingonbehalfoflocalcommunities(Aucklandmodel–seedescriptionbelow)

Boundaries BoundarychangeswilloccurwithanyamalgamationoptionsatlocalcouncillevelBoundariescouldalsochangeifitwasdeemednecessarytorealignanarea,forexampletobetterrecognisenaturalcatchmentsBoundariescouldalsochangeattheregionallevelatthecurrentboundarywithManawatu-Wanganui(forexampletoaddressthecurrentanomalyattheborderofMastertonandTararuaDistrictCouncils)

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Whatareyourviewsonthestructuraloptionsdescribedintheprevioustable?

Arethereanyotherstructuraloptionsthatshouldbeconsidered?

Whatcombinationofoptions(structural,collaborativeandsharedservices)wouldbestenabletheregiontoaddressthestrategicissuesitfaces,whileavoidingunnecessarycostsor“changeforchange’ssake”?

Auckland Council’s Local Boards: one model of a local democratic structure

319. LocalboardshavebeenestablishedinAuckland(s10LocalGovernment(AucklandCouncil)2009)toenablelocalrepresentationanddecisionmakingonbehalfoflocalcommunities.Theirfunctionsassetoutins16oftheActinclude:

• Decisionsonnon-regulatorylocalmatters

• Negotiatingstandardsoflocalservices

• Identifyingandcommunicatinglocalviewsonregionalstrategies,policies,plansandbylawstotheAucklandCouncil

• Developingthree-yearlocalplansandnegotiatinglocalagreementswiththeAucklandCouncil

• ProvidinglocalleadershipanddevelopingrelationshipswiththeAucklandCouncil,thecommunity,communityorganisationsandspecialinterestgroupsinthelocalarea

• ProvidinginputtoCCOplansandinitiatives

• IdentifyinganddevelopingbylawsforthelocalboardareaandproposingthemtotheAucklandCouncil

• Monitoringandreportingontheimplementationoflocalboardagreements

• AnyadditionalresponsibilitiesdelegatedbytheAucklandCouncil

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Appendix1–AucklandRoyalCommissionlistofactivitiesundertakenbyregional,cityanddistrictcouncils

AsdescribedintheIssues Paper,thebreadthoflocalgovernmentactivityisverywideanddifficulttodescribeingeneralterms.The2009reportoftheRoyalCommissiononAucklandGovernancefeaturedaveryusefullistofactivitiesthatwascollatedbytheCommissionbasedonasurveyofAucklandterritorialauthoritiesinJuly2008.TherewillbesomevariationbetweencouncilsacrossNewZealandinthewaythatworkisdescribedoraligned.Ratherthanprepareaseparatelist,ortrytorenamesomeoftheactivitiesastheymightbemorecommonlyknownintheWellingtonregion,theactivitiesbelowarelistedintheorderthattheyappearinAppendix3.2AucklandGovernance,Volume1:Reportpages108-110.

Activities

Affordablehousingadvocacy Airqualitycontrol(environmentalandhealth)

Animalcontrol,impounding,welfare Artgalleries

Artsandculture Assetandliabilitymanagement

AucklandRegionalHoldings Beachcontrol

Beautification Biosecurity

Broadband Brothels–controloflocationandsignage

Buildingconsents,processing,advice,andcompliance

By-laws(widevariety)andenforcement

Businesssupport Citizenandcustomercontact

Cemeteries Citizenshipservices

CitizensAdviceBureaux Climatechange

Civildefenceemergencymanagement Coastalenvironmentdevelopmentcontrol

Closedlandfillsmanagement Communitycentres,halls,andfacilities

Coastalplanningandmanagement Communitydevelopment,partnerships,servicesandsupport

Communitydevelopment Communitygrantsandlevies

Communitynoticeboards Communityplanning

Corporateservices Council-controlledorganisations

Crematorium Crimeprevention

Culturalheritageconservation Democracyandgovernance

Democracyservices Districtplanning

Districtpromotion Dogcontrol

Economicdevelopment Educationandemploymentadvocacy

Entertainmentandculturalvenues Environmentalhealthcontrol

Environmentalmonitoring Eventspromotion

Farminginparks Filmfacilitation

Fireprotection Floodprotection

Foodpremiseslicensing Forests

Gamblingandgamingmachinepolicy Gardens

Graffiticontrolandremoval Grants

Harbourmaster Hazardregister

Hazardoussubstancescontrols Hazardsmanagement

Health–advocacyandprogrammes Holidayparks

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Landdevelopment Landdrainage

Landinformationmemoranda(LIMs) Landmanagement

Landuseplanning Landfills

Libraries Liquorlicensing

Managementofsocialfacilities Mäorirelations

Marinaoperations Migrantsettlementfacilitation

Museums Naturalheritageconservation

Noisecontrol Parkingcontrol

Parkingplaces Parksandreserves

Passengertransportpolicyandfacilities Pensionerhousing

Planning Playgrounds

Pollutionresponse Pounds

Propertyinformationmemoranda(PIMs) Propertymanagement

Publicinformation Publictransportplanning

Quarries Rating

Recreationandsportprogrammes Recreationcentres

Recycling Refusetransferstations

Regionalanddistrictleadership Regionalgrowthplanning

Regionalparks Regionalplanning

Regionalsocialdevelopmentstrategy Resourceconsentsprocessingandmonitoring

Revenuecollectionandmanagement Roadassetmanagement

Roadconstruction Roadmaintenance

Roadsafety Safetyinpublicplaces

Sharedservicedevelopment Shareholdingsandinvestments

Sistercityprogrammes Socialwell-beingadvisorygroup

Sportsgroundsandvenues Stormwatermanagement

Streetfurnitureandtrees Swimmingpools

Toilets–public Touristfacilitiesandinformation

Towncentreandbusinessprecinctspromotion Transportnetworkmanagement

Transportpolicyandplanning Treasuryanddebtmanagement

Urbanandruraldesign Vehicletestingstation

Visitorservices Walkingandcyclingstrategy

Walkways Warmemorials

Wastemanagement Wastewater

Waterqualitymonitoring Watersupply

Wharfmanagement Zoo

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