$1m blowout in proposed council governance

The governance structure of a Hawke’s Bay Council, as detailed in the Local Government Commission’s final proposal, is likely to cost over $1-million more each year than the current five-council structure, Mike Butler of Hastings Against Amalgamation said today.

Hawke’s Bay people will vote on the proposal from August 24 this month.

The likely new governance cost of this proposed 56-member-plus-appointees structure could be $3.7-million. It has one less elected representative but adds numerous appointees, Mr Butler said.

The total governance costs for all of the five current Hawke’s Bay councils, with 57 elected members all together, according to a report in the Hawke’s Bay Today on salaries on Saturday, July 11, 2015, total just over $2.5-million each year.

The final proposal is for a total of 56 elected members, with one mayor, 18 councillors, and 37 local board members. There are also a number of appointees, with the regional planning committee having 10, but no specified number either for a Maori board or a natural resources board.

The current structure has nine regional council members (one of whom is the chair), four mayors, and 40 councillors (Hastings 14, Napier 12, Wairoa six, Central Hawke’s Bay eight). Hastings also has a rural community board comprising four elected members and two councillors.

Salary levels for a Hawke’s Bay council may be extrapolated from the level of remuneration in Auckland. A super council mayor could earn $240,000, a deputy mayor $120,000, and 18 councillors $95,000 each, Mr Butler said.

Local boards could cost a total of $1-million, while the regional planning committee, a Maori board and a natural resources board could cost $250,000 each.

The estimates recorded here are conservative because governance administration costs are not included.

This is not the only analysis of the likely costs. In a report titled “Hawke’s Bay amalgamation proposal: Cost estimates for elected officials”, Franks Oglivie said:

A common misconception is that council amalgamation will save expenditure on elected officials. This is a red herring. Pay and rations for elected officials are a tiny fraction of a council’s operating budget. The real argument over efficiencies should be around council services and staff. But even if politician pay was the issue, it seems likely the public are wrong to expect material savings from merging councils.

These figures make a mockery of claims by the Local Government Commission and by the pro-amalgamation lobby group A Better Hawke’s Bay that the proposed structure will bring savings simply because it doesn’t, Mr Butler said.

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