Draft Proposal for Reorganisation of Local Government in Wellington - Questions and Answers
Councils are set up by the Local Government Act. They have functions and powers under that and other Acts, like the Resource Management Act, the Reserves Act, the Building Act, the Land Transport Management Act, and many others.
In New Zealand there are 78 Councils. Currently the Wellington region has nine councils: four district councils, four city councils and one regional council. The Local Government Commission has concluded that, despite good intentions, it has proven difficult to unite behind a single vision for the region and achieve our potential with so many councils. For example, there are more than 300 operative plans across the nine councils.
Reorganisation is not a debate just restricted to Wellington. Auckland was restructured more than three years ago into a single council/local board model, and other regions in the country are also considering making similar changes. There is growing evidence that many councils around New Zealand lack the resources, capability or scale to meet major upcoming challenges such as building and maintaining infrastructure (including roads and wastewater plants), or attracting new jobs and investment. The Local Government Commission has recognised this as the case for some of Wellington’s councils.
It’s been 25 years since the last restructure of local government in Wellington, and the Commission has agreed with a number of the Wellington councils that now is a good time to change the way Wellington governs itself in order to make the most of the entire region’s potential while strengthening local decision-making.
The LGC is an independent statutory body – effectively an independent Commission of Enquiry - that is mandated to consider applications to change local government arrangements made by any local government entity, members of the public or the Minister of Local Government.
The Local Government Commission is proposing combining the nine current councils into a unitary council (called the Greater Wellington Council) which will cover the whole region. See the full draft proposal on the Commission’s website: http://www.lgc.govt.nz/the-reorganisation-process/reorganisation-current-applications/view/wellington-region-reorganisation/?step=main
Under the draft proposal Wellington will have a council made up of a governing body and 8 local boards.
In summary the governing body will have:
Major regional-scale delivery such as spatial planning, infrastructure, economic development and environmental protection will be handled by the council while local boards will be given legally binding powers to make local decisions. Local boards will operate along similar lines to current councils, with a wide mandate that will be protected by law.
The council will have responsibility for the region-scale decisions, for example:
Local boards will be the cornerstone of local democratic arrangements under the proposed structure – a key part of the new Greater Wellington Council. They will effectively take over the local responsibilities of current councils, while the governing body of the new council will have regional responsibilities.
The local boards will, for example:
The Local Government Commission, in its Draft Proposal for Reorganisation of Local Government in Wellington, has identified a number of reasons why the status quo needs to be changed. A number of the reasons relate to the challenges that are coming up, rather than just looking at the region today. However, there are some pressing issues facing us now that also suggest change is necessary.
It is the view of the Local Government Commission that the current structure of local government is limiting our ability to adequately meet the economic and environmental challenges facing the Wellington region and to reach our full potential. Some of the problems with the current arrangements are:
Wellington currently over-governed
With a population of less than 500,000 people Wellington has nine councils, eight mayors, one regional council chair, 95 other councillors and 57 community board members. Just in elected representative remuneration, it costs ratepayers in the region $5.3m per year. On top of that ratepayers pay $2.6m a year for the nine council chief executives.
Too many plans but no spatial plan
We currently have 321 plans in the region, but no overall plan for how the region is to develop. Each local council has ambitions for growth but these ambitions are not coordinated and are not always complementary. While the Mayoral Forum is talking about preparing a regional spatial plan, they have talked about this now for many years and, even if a plan is started, it will be very hard to reach agreement and its implementation will rely only on the goodwill of all nine councils. The region does not have a good track record with this type of approach.
Our economy is lagging
While many Wellingtonians might feel that Wellington is doing “okay”, our economy is lagging behind the rest of the country. In the year to April 2014, when the New Zealand economy was otherwise growing strongly, the Wellington region lost 5000 jobs, while Auckland and Canterbury gained 50,000. Population and new business growth is also flat.
The Wellington regional economy is especially tenuously positioned in the event of a natural or economic disaster. Without reform, regional infrastructure and core service provision will come under increasing pressure
We can’t speak with one voice
Wellington, like the rest of NZ, has some issues that can only be addressed at a regional-scale. These include transport, climate change, environmental standards (especially cleaning up our waterways), economic growth and natural hazards. As the Commission notes in its proposal, there have been extensive attempts in the region to undertake regional-scale decision-making through collaboration, with limited success and high transaction costs.
Furthermore, in Wellington it has proven difficult to get agreement between councils on a cohesive regional vision. We have nine “visions” which don’t all align, and nine spokespeople for the region who are often saying contradictory things. This limits our ability to influence the government and to present ourselves as being attractive to new investors.
There are some big financial challenges facing many of our councils
The Commission has highlighted significant variations in the financial positions of the current councils and some big challenges ahead. It especially singles out the issues the Hutt Valley and Wairarapa communities are soon going to face with the forecasted declines in working age populations, at the same time huge infrastructure costs (mainly for the renewal of aging pipes and related assets) will hit those communities.
The Commission has estimated around 50% of the existing water pipes and 40% of wastewater pipes in the region are in poor or very poor condition. The cost of replacing them, which is currently largely unbudgeted, is between $1.7 billion and $2.6 billion. Some councils (e.g. Wellington City and Greater Wellington Regional) have strategic investments that offset the need to rely on ratepayers to fund their asset renewals. Other councils don’t have investments. Kapiti Coast District is in the worst position as it already has relatively high debt.
A shared services approach isn’t working
There has been a lot of time and effort put into shared services between councils but success has been limited to date. Even in the often cited case of water (which for the four cities in the region is now serviced by a council controlled company jointly owned by five councils), assets and decision making remains largely in the hands of shareholder councils. Without amalgamation, it is likely that councils will continue the trend of delivering shared services via the company model which transfers power to commercial boards, a further step removed from the community. In addition, shared service models are flawed in that councils are bound to place local interests ahead of regional interests, resulting in territorial disputes at the expense of regional cohesion.
Unlike existing community boards, which are largely advisory and operate at the whim of the council, the powers and functions of local boards will be determined initially by the Local Government Commission and their functions and funding will be protected under local board plans and local board funding policies, which must be adopted by the council. The boards will also have dedicated administrative support and will operate under statutory council procedures. Community boards operate in a much more informal way than local boards.
No, it is a manageable size, particularly when you consider the role proposed for local boards which will operate along similar lines to current councils with the exception of regional issues. Even when taken as a region, the proposed united council would cover a population three times smaller than Auckland’s.
Under the proposed model, local residents in Masterton and Miramar will have just as much, if not more, say in the provision of local services via local boards whose functions are enshrined in law. Meanwhile, the united council will have the resources and capacity to manage big ticket items like roading, water and economic development.
Local democracy and identity is absolutely critical. It is part of what makes Wellington great and sets us apart from other parts of New Zealand, such as Auckland. The proposed changes will preserve what’s special about Wellington and our various communities, and will enable communities to strengthen their identities. This will be done with local boards that control issues directly relevant to local communities like local events and streetscape planning and improvements.
Local board functions are protected under the Local Government Act, which also requires that a unitary governing council give local boards sufficient funding to carry out those functions.
The Commission has proposed the council retains area offices and service centres throughout the region – in the same places as current council offices and service centres. This would be locked in for at least five years after the establishment of the council and local boards. While the new council and the local boards will make the decision in the future about retaining these offices, it is highly likely that they would be retained in the long term. The local boards would be located in the area offices, along with council staff who will be carrying out the local board and council functions. Access to the council processes and documents will therefore continue as they do now.
Contacting local councillors and local board members will be very similar to how people do that now. The area offices will provide meeting points and councillors and board members will continue to make themselves available to be contacted as councillors do now.
No. Since Auckland was formed the law has been changed to take account of lessons learned there. Wellington doesn’t need an Auckland style super city. At less than one-third of Auckland’s size, Wellington faces quite different challenges. We need solutions that reflect Wellington’s values and strengths. The Auckland ‘Super City’ was designed in part to better manage urban sprawl and rapid growth. The challenge for Wellington is to protect and strengthen local communities, while working together to remove barriers to economic growth and attract more businesses and people to the region.
There are three significant differences between the Auckland “super-city” and the proposal for Wellington, and many smaller differences. The three major differences are: the role and form of local boards, the powers of the mayor and the use of council controlled organisations (CCOs).
Role and form of the local boards
The local board model being proposed in Wellington has some significant differences from what has operated in Auckland. First it is based on existing council boundaries. In Auckland the board boundaries were set right through the middle of existing communities.
Second, the board functions will be set up properly on day one and their funding secured. Functions and funding will be protected under changes the Government has made to the Local Government Act. Importantly, all the councils in the region will be part of a Transition Committee that the Local Government Commission will set up to oversee the transition to the new organisation. There will be proper administration/support for boards in place on day 1. This was not the case in Auckland and the council and boards are still working on retrofitting these arrangements. The same issues will not happen in Wellington.
Powers of the Mayor
The second key difference between Auckland and Wellington is the powers of the Mayor – the Mayor of a unitary council in Wellington will have fewer powers than the Mayor of Auckland. The Auckland Mayor’s powers are set up under special Auckland legislation. A Wellington Mayor will have the same powers as the current Mayors in Wellington.
Use of Council Controlled Organisations (CCOs)
Auckland has a number of CCOs that carry out the work of the council. CCOs are companies owned by a council which have a commercial board of directors. In Auckland there are CCOs for activities such as transport (Auckland Transport) and water (Watercare Services Limited). The nature of CCOs means that the community has less opportunity to participate in the decisions of the company than they would if the council or local boards carried out those activities.
The Local Government Commission has not proposed any CCOs for Wellington. The activities undertaken by the Auckland CCOs have been allocated to either the proposed council or local boards. This retains democratic decision-making for services that the community pays for through rates and which people generally want to be able to influence.
The Commission considered a number of applications that included a separate Wairarapa unitary council. As a consequence it considered a number of reports, including some which it commissioned itself, to investigate the viability of a stand-alone Wairarapa Council. It concluded that Wairarapa on its own would not be a reasonably practicable option (the test in the Act for any new council). On page 133 of Vol 2 of its draft decision the Commission provided the following reasons for its conclusion:
The Commission concluded that it could not be satisfied that a single Wairarapa Council would have the necessary resources to carry out its combined regional and district council functions and responsibilities now or in the future.
Eight democratically elected local boards will look after services in their local areas. These boards will have boundaries based on the current local council boundaries, except that Wellington City will be broken into three and Wairarapa will be combined into one local board area. For Wellington City residents this will really put the “local” back into local government. The local boards will be freed from the burden of providing large infrastructure and will be able to focus on genuine community issues.
The proposed united council will have representatives elected from the same communities which elect the local boards. Because the current Wellington City Council will be broken up, there will not be one power block. The current Wellington City area will have eight members on the council of 21 councillors and one mayor.
The proposed structure does, though, recognise the importance of the Wellington City CBD to the rest of the region by creating a specific Lambton ward and Lambton local board.
The Commission is proposing to effectively retain the current Greater Wellington Regional Council arrangements. It is proposing a committee of the council, to be called a Maori Board, with membership from each mana whenua iwi and councillors. This board would have an advisory role to ensure the council was meeting its legal obligations regarding Maori participation into decision-making. It is also proposing to retain the regional council’s Te Upoko Taiao – Natural Resources Committee. This committee is responsible for the regional natural resources plan and has membership of 7 Maori nominated by iwi and 7 councillors.
The Commission has also provided in its draft proposal for local boards to have relationships with Maori, although it hasn’t specified the form of those relationships.
Any new unitary authority would inherit the assets as well as the liabilities (debt) of each existing council. The picture varies across the region: some areas have minimal debt but a low capital base; others have greater debt offset by significant assets and investments.
The Commission’s draft proposal has a lot of information about debt and investments. The consideration of debt is complicated. Issues such as the condition of current infrastructure and the need of some councils to borrow new money in the short term to replace or upgrade existing assets, and the off-setting of debt by on-going income through investments means that debt cannot be thought about on its own. The Commission concluded that only Masterton and Kapiti Coast will present debt issues for the new council. As a proportion of the overall region, the cost of infrastructure in these areas is small so the issues should be manageable.
This can’t be known in advance. It is expected that the streamlining of service delivery will lead to efficiency gains and costs savings over time.
According to the Local Government Commission, when Auckland moved to a single rates system, 122,000 ratepayers had increases and 220,000 had decreases. The average rates increase for the year from July 2013 was 2.9 percent.
The Commission’s draft proposal has a single rating system for the region based on capital values. This would not come into effect until 2019 – effectively retaining the rating system in each district/city as currently exists for another five years.
It’s way too early to know what the implications are for current employees of the nine councils. However, we do know there will be only one chief executive as opposed to the nine that we currently have. Major reforms often lead to redeployment and other changes to the employment mix. Frontline staff may be less affected than senior managers.
The Commission has invited submissions on its draft proposal. A submission form can be found on the Commission’s website.
Submissions will be received up until 2 March 2015. After that time the Commission will hold public hearings of submissions. It will also conduct a survey of regional residents.
The Commission will consider all the feedback and decide whether or not to release a final proposal. This decision is expected mid 2015.
If the Local Government Commission releases a final reorganisation proposal the community can trigger a “yes/no” poll by 10% of people on the electoral roll in any territorial area signing a petition. If there’s one thing that all the councils in the region agree on it is that they would support a poll. A poll could happen late next year/early 2016. If the majority of those voting in the poll vote “NO” then no change happens. If a majority vote “YES” then the region goes into a transition arrangement ahead of reorganisation.