The Weight of Risk and the Risk of Waiting

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A paper I presented at the Oil & Gas Symposium, Hastings District Council, 11 October 2013.

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Chamber of Commerce Q+A

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The Gisborne Chamber of Commerce asked candidates five questions, these are my responses…

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I have enjoyed first term on Council, part of that was on the Chamber Executive and I’d like to see those links strengthened a little more as I think Brian Wilson and myself acted as a useful conduit between the Council and Chamber on a number of issues.

I think I’ve been able to make intelligent, sensible and considered contributions to Council and I’ve helped raise the quality of discussion, debate and decision-making.

I’ve had a focus on increasing public involvement in planning and decisions and been a strong advocate for the city and the district as a whole.

I have listened to residents and ratepayers (even after being elected!), worked well with others (who don’t always share the same values and views) and helped make good decisions in the best interest of the region as a whole.

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1. What do you see as the GDC’s role in contributing to economic development and growth in this region?

Council has a key role in a number of areas contributing to economic development:

  1. Providing good quality infrastructure, predictable regulation & consistent planning
  2. Collecting and disseminating information that helps the community make informed decisions on the direction for the district
  3. Advocating for the district at central government – ensuring our big issues are nationally significant issues.
  4. Facilitating relationships between stakeholders to realise opportunities and achieve sustainable solutions in the best interest of the district where there are competing priorities.

Some of functions within these areas, particulatly information gathering and sharing, advocacy and relationship brokerage could be devolved to an Economic Development Agency run separate to Council. But the Mayor and Council have a critical leadership role in advocating on behalf of the region – especially on things like roading, new costs being imposed by central government legislation, etc. And political leadership can help broker mutually beneficial relationships with industry, iwi, land owners, research institutions, entrepreneurs, etc.

Council can also have procurement and banking policies that benefit the local community in different ways.

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2. What is your view of the core role of council? Do you consider there are any current council activities that do not fit this role?

Under new legislation the purpose of local government is now to provide quality infrastructure, regulation & essential services. Opposition parties have pledged to revert the purpose back to promoting sustainable development and local cultural, environmental, social and economic wellbeing.

I’m not completely wedded to Council providing social housing. I have argued it could be sold to a Charitable Trust, housing cooperative or something like ECT but wouldn’t want to see them go to private ownership. I’m also open to Council not owning any or all of its commercial assets (WOF station, holiday park, farms) if there are compelling financial reasons to divest from these enterprises. We need an urgent review of Council asset ownership to identify options and the benefits of retaining or releasing these enterprises.

Tauwhareparae Farms are being well run but I’m not convinced we need to retain them. They were acquired to supplement port income and will always provide low value compared to capital committed, as the trees appreciate so will the capital value. There is no legal risk in selling them and my preference would be as Margaret Thorpe suggests to land-bank them via OTS as they are subject to Treaty claims. This will ensure we get a premium price, they are retained in local ownership and we demonstrate goodwill to the traditional owners.

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3. Businesses have to live within their means, or face the consequences. What is your view with regard to GDC achieving the same discipline around keeping rates increases in check?

Significant savings have been made by previous and current CEO to trim as much as possible. More ‘savings’ could be found but that depends on what we want to give up and what quality of life we can tolerate.

I campaigned on rates rises at or below inflation and we have achieved that. The ‘razor gang’ didn’t make any significant savings. I also campaigned on getting more predictable rates system with smaller variations year on year and we are making good progress on this through the participatory rates review process.

Council league tables suggest we are now one of the most financially sustainable and we rank 26 out of 73 councils for cost of rates.

Councillors are financially conservative and understand the limits of affordability for residents, but the WMT suggests this is not the case. That massive blowout and the need to address some basic first suggest some of the fancy projects need to be reviewed while we attend to the basics first.

If the community has things they think we should stop doing or not start they have the opportunity every year and we listen to that feedback.

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4. What is your position with respect to the re-opening of the Gisborne to Napier rail line?

The railway line a billion dollar public asset that is lying idle while Gisborne and Wairoa businesses scream out for it to make our products more competitive. Some people say logs will never go South on it but there are massive forests between Napier and Gisborne that will provide the anchor business for the line so that containerised seasonal produce and timber coming out and fertiliser going to Gisborne can be transported by rail instead of trucks. Coastal shipping is unlikely to ever be viable if the rail is operating.

More trucks on the road means more cost in maintenance, more congestion and more danger for other motorists – it also means more cost for local businesses and more competition from other places that have lower freight costs.

With the support of 10,000 signatures and $20,000 given by local businesses and residents, we commissioned a study that demonstrated the lack of rigor in the government’s position and the potential for a realistic business case if roads and rail were considered on a level playing field by central government.

A different government next year will reinstate the line if the local business consortium is unable to raise the funds required. Some candidates say they don’t don’t support ratepayers funding the line operation – that has never been a realistic option – but Council could be a stronger advocate for the line.

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5. If you were elected to the council, what activities or actions would you take to ensure Gisborne becomes an even better place to work, live and play?

I will keep doing what I have been:

–  all of the above, plus…

–  working with the IT sector to establish local computer hubs for young people and families with few opportunities to access IT, career pathways via the Techxpo and partnership with major NZ telcos

– advocating for more central government support for our district (transport, rail, imposed costs, renewable energy, forestry carbon credits, aquaculture, etc.) and working with iwi and other stakeholders on these issues

– leading a gang transformation project focused on employment and working with employers and support services

– review commercial assets

– keep rates at or below inflation

– continue support for better commuter cycling and walking infrastructure

– more emphasis on local housing issues – affordable, healthy housing for everyone, not provided by Council but Council facilitating government, community and private sectors working together

– continue emphasising the importance of opportunities for public input on issues like forestry harvest rules, petroleum exploration applications, legislative submissions, etc.

– continue work on Māori land issues – Council working with landowners to look at how to make the land more productive and/or revert to indigenous forest

–  continue supporting illegal dumping prevention and removal, and more ambitious waste minimisation targets.

– continue bringing diverse parts of the community together to address complex issues

– continue voluntary involvement in a wide range of community groups and local issues.

What would you do with 40 million dollars?

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The possible sale of the Tauwhareparae farms should be part of a review of all council owned property says City Ward district councillor Manu Caddie who is making it part of his election policy for the October local government elections.

While he is not committed to a sale at present he feels the financial returns from the farms do not justify the capital investment they represent. One possible solution would be  to have the Office of Treaty Settlements buy them on behalf of the traditional Maori owners.

Mr Caddie is frustrated that a promised review of the council’s business units has not yet happened, mostly because of staffing issues following the departure of the chief financial officer and the delay in finding a replacement until after the rest of the staffing restructure was completed.

“Philosophically I have no problem with the council owning commercial entities provided they have either a strong income earning capacity or provide some other significant social, cultural or environmental benefit,” he said..

“I have complete confidence in the governance, management and operations of the farms, they are in the top ten performing units in the district and I believe those responsible for maximising profits from them are doing a good job of getting the best out of them. I also agree with Hilton Collier that there are opportunities for innovation and value-adding along the supply chain that the directors could focus more resources on.

“However, the financial returns provided by the farms do not justify the capital investment they represent.

“I disagree with the assessment that the return on investment has been over 15 percent for the last ten years. Including the land value in the ROI is dishonest accounting as it is not realised until the asset is actually sold and land values can go down as easily as they go up, though admittedly it is less fickle than some other investment options.

“If we took the actual dividends paid, and perhaps even a portion of the capital reinvestment retained, it seems term deposits and even conservative options like Government bonds would have delivered millions more to offset income that the council otherwise derives from our rates.

“Some sectors of the community have a strong emotional attachment – our rural councillors have tended to favour retention of the farms no matter what, though I have heard a number of farmers are keen to see council ownership reviewed as soon as possible.

“The farm directors and managers over the years have been responsible stewards of the land by committing significant Overlay 3A areas to reforestation, though I would like to know more about the biodiversity offsetting proposed that would allow them to clear a substantial Protected Management Area of indigenous vegetation that will take some time to replicate elsewhere.

“The farms have significance for local Māori and competing Treaty claims on the land meant that they were left out of settlements to date. So there is an option here that would take the risk out of the valuation price not being realised if the property went to market as the Office of Treaty Settlements would be obliged to purchase for no less than the latest registered valuation.

“That option would guarantee that the farms will be retained in local ownership rather than being snapped up by an absentee owner. It would also provide a significant gesture of goodwill from the people of Gisborne to the traditional ‘owners’ of the area and combined with other investment capital from Treaty settlements could pursue some of the innovation potential.

“So, at this stage I’m not saying I am committed to the sale but I am very motivated to have a thorough and independent review of council retaining ownership.

“We should not let politicians get in the way of the facts! I think we need to have a good long look at the likely scenarios should we decide to sell or retain the farms and what protections can be put in place to ensure councillors don’t just squander any proceeds on popular projects that could diminish rather than enhance the overall financial position of council,” said Mr Caddie.

Ask Ratepayers Before Deciding on Extra $2 Million for Theatre

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Expecting ratepayers to fork out an extra $2.1 million dollars for the War Memorial Theatre without asking if they support the decision is unacceptable according to District Councillor Manu Caddie.

Mr Caddie was responding to news that the War Memorial Theatre upgrade will cost $9.6m instead the $7.17m budgeted and approved in Council’s Ten Year Plan.

Staff and some councillors are recommending an extra $2.1million is borrowed because debt is lower than forecast and the expense is ‘therefore affordable’ and ‘not luxurious’.

“I beg to differ. Spending an extra $2million of ratepayers money really needs to go to them before a decision is made” said Mr Caddie.

“The community was told 70 percent of the Theatre funds would come from external sources, now it looks like that could drop to closer to 50 percent and $4.25m worth of rates would be used to make up the difference.”

“The Theatre is a important part of our civic infrastructure and used by many parts of the community, but it now has a much higher price tag than the $6.8m estimated in 2011 and the $7.2m approved in the Ten Year Plan last year.”

Mr Caddie says he could be agreeable to upping the Council contribution to 33 percent which would require $1,050,000 of loan funds, but still believes it would require a special consultative procedure if the decision was to be made before the next Ten Year Plan.

“We couldn’t find even $15,000 for the Skate Park, a Council-owned asset that is used by more people in one weekend than the War Memorial Theatre sees in a month, so I really can’t stomach committing over $2million without proper public consultation.”

“While the loan swaps we are locked into may mean there are advantages in spending on bringing projects forward, we really need to get some sense of the cost for replacing Council administration buildings before rushing into unplanned spending.”

Mr Caddie says Council should go back to the organisations that have granted funds for the project so far.

“First we need to explain that the project has cost a huge amount more than the best estimates we got in 2011 and see if they are willing to add up to 25 percent to their grant to help cover the difference. If that is not an option then we need to explain it may take require longer than expected to secure the funds. The project is not planned to be completed until 2016 so we have some time still.”

Mr Caddie said he is impressed with the external funds secured by Council staff and the War Memorial Theatre Trust and would be willing to help find the additional funds required from external sources.

The matter will be debated by Council at their meeting next Thursday 5 September.

Are we all Placemakers?

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While the Cycle and Walkways have consistently been the most popular of the Major Projects in the Council’s Ten Year Plan, the Navigations Project has been one of the least popular and most controversial. Both projects are arguably about ‘placemaking’ and economic development – cycleways focus on making the city a more attractive, healthy and liveable city, the Navigations Project is more about telling local history stories to locals and visitors.

Research recently published by an initiative called the Project for Public Spaces and promoted by the Institute of Public Governance at the University of California Berkeley has explored the links between placemaking and economic growth in communities.

The research suggests creation of great public spaces is good for the economy, but only when it’s truly community-driven, open and inclusive. The more attached to a place local people are, the higher a city or region’s economic activity: “Placemaking, in other words, is a vital part of economic development.” True placemaking involves an open process that welcomes everyone who wants in, which provides the opportunity for residents — who may or may not know each other — to share ideas and be heard.

“The end result should be a space that’s flexible enough to make room for many different communities, and encourage connections between them.” Or, the flip side:  “If Placemaking is project-led, development-led, design-led or artist-led, then it does likely lead to… a more limited set of community outcomes.”

The success of the cycle ways and inner-harbour development will depend on the level of ownership we all have in the planning and implementation of both projects.

The study also argues that communities can change governance for the better “by positioning public spaces at the heart of action-oriented community dialog, making room both physically and philosophically by re-framing citizenship as an on-going, creative collaboration between neighbors. The result is not merely vibrancy, but equity.”

Gisborne District Council has not had a great history of fostering public participation in planning and decision-making, usually opting for the minimum required. In fact the Consultation Policy adopted in 2008 specifically excluded citizen empowerment from the continuum of public involvement.

“Place Governance” on the other hand is a process by which decisions about places are made not from the top down, but by a collaborative process involving everyone. The Gisborne Fresh Water Advisory Group is a move toward this approach as it involves a wide cross-section of the community. However the FWAG falls short of real Place Governance because it is an exclusive group of organisations, meetings are not open to the public and the process is still controlled by Council.

The key actors in a Place Governance structure are not official agencies that deal with a few prescribed issues, but the people who use the area in question and are most intimately acquainted with its challenges. Officials who strive to implement this type of governance structure do so because they understand that the best solutions don’t come from within narrow disciplines, but from the points where people of different backgrounds come together.

I know some residents along the Taraheru River are concerned about how a boardwalk from Campion College to Grey Street may impact on the views, river access, tranquility and largely unspoiled riverfront they currently enjoy. While this project is on hold for the time being it will be essential for the residents, river users, iwi representatives, walkers and cyclists to work through how we can best utilise the public spaces along the river as this project proceeds. And I’m confident Council will ensure that happens.

Rushed RMA Reforms Revisited

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A Government presentation in Gisborne yesterday on planned changes to the Resource Management Act and freshwater management provided only one side of the story according to a Gisborne District councillor.

“Of course it is the job of the Minister for the Environment and her officials to paint the proposed changes in the best light possible and they did a good job of that” said Manu Caddie. “But there are a lot of concerns about these changes in different parts of the community and the two week timeframe for providing feedback is incredibly tight.”

Mr Caddie has organised another workshop for people interested in discussing the changes in more depth at Gisborne District Council starting 6.30pm next Thursday 21 March.

“The Minister was quite upfront about trying to push these changes through quickly and while the topic may not be as sexy as the Marriage Equality Bill or Asset Sales, the long-term ramifications for the natural environment, habitat protection and community involvement in decision-making are huge.”

Mr Caddie said he is particularly concerned about planned changes to decision-making that will give central government greater powers and reduce opportunities for local control of environmental regulation.

“The RMA was one of the most progressive pieces of legislation in the world in terms of participatory democracy and local control of local issues. Limiting the opportunities for public submissions and the right to appeal a decision will reduce the diversity of information available to decision makers and the quality of decisions.”

Mr Caddie said increasing the influence of commercial interests in decision-making and reducing the level of consideration given to environmental protection may reduce ‘red tape’ for big business and property developers but also impacts on habitat protection and the health of local ecologies.

“There are a few good things in the changes that would bring some more consistency and speed up minor resource consents but there are many aspects to the proposals that will further erode the few protections currently in place for the natural environment.”

Local Māori who spoke at the meeting yesterday expressed a desire to see more co-governance arrangements for resource management, particularly decisions about waterways. Proposed changes allow Māori a range of consultation opportunities in water management processes but stop short of sharing final decision-making with iwi or hapū.

Mr Caddie said he is also available to meet with any group or individual interested in discussing the proposed changes.

ENDS

Resources:

MfE Discussion Paper: http://www.mfe.govt.nz/publications/rma/improving-our-resource-management-system.html

Deepening Democracy

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‘The Death of Socrates’

The controversial decision of the Local Government Commission on the GDC Representation Review has provided another opportunity to look at local democracy in more depth. The status quo was preferred by a slim majority of councillors but like in 1998 the Commission took into account the law and the views of submitters and ultimately required changes in the structure of elected members.

It is great to see my rural colleagues committed to ensuring all voices in the district are heard and the ‘quiet’ residents “have their needs listened to and met.” I agree we need to ensure those groups that traditionally have not had a strong voice around the Council table are better represented and contribute to decision-making.

To this end perhaps we should be reviewing the current content and effectiveness of the GDC Consultation Policy passed by the previous Council?

That policy commits Council to “partner with the public in each aspect of a decision, including the development of alternatives and the identification of the preferred solution.” The policy says “We will look to you (citizens) for direct advice in formulating solutions and incorporate your advice into the decisions to the maximum extent possible.” My short time on Council has suggested there is much room for improvement in this regard.

The last Council specifically excluded ’empowerment’ and putting ‘decision-making in the hands of the public’ from the spectrum of public engagement in the Consultation Policy. I guess it may come down to a philosophy of governance. Some people believe elected representatives are put into office to make decisions on behalf of the public who wish to have little input in decisions that affect them. Others of us believe our role is to encourage as much public participation in local decision-making as possible. Maybe I’ve packaged the proposals in unhelpful ways, but most of my efforts in this regard haven’t been very successful to date.

Community Boards were one example and something we could have included in the Representation Review if there was greater willingness to look at ways to improve our democratic processes locally. 42 submitters (including a number living in rural areas) argued for Community Boards through their Representation Review submissions compared to only 11 submitters who said they did not support Community Boards.

Wainui/Okitu Residents and Ratepayers Association submission specifically requested a Community Board for their community as they argued Wainui/Okitu is a community of interest as defined in the legislation. They also suggested other rural communities may benefit from community boards.

While highly effective in the overwhelming majority of districts that have Community Boards, the request for community boards was rejected by the majority of councilors.

It is encouraging to see that the majority of councilors support special treatment for some parts of the population, in this case depending on where you live or own property. As Turanga iwi have successfully demonstrated through their Treaty settlements, indigenous peoples are also entitled to special treatment in local government arrangements and it will be interesting to see how this works out under the new statutory committee to be established between Council and iwi.

Consultation Policy goals we can and will do better on include: promoting a sense of ownership of its decisions by the people of the district; providing an opportunity for meaningful input into decisions; creating an awareness of the diversity of opinion within the community; and showing leadership.

15 years after the last changes were made in representation arrangements some will say we are closer to fair representation and others will say we are not, but hopefully we can keep taking important steps toward empowered participation.