Philip Jacobs on behalf of the Whakatāne Action Group

Over the past nine months, members of the Whakatāne Action Group (WAG) have attended Whakatāne District Council meetings, undertaken independent research, written opinion pieces for the Beacon, participated in community conversations across many platforms and held monthly public meetings.

As a result, WAG has developed some understanding of how council works and formulated a number of concerns beyond the simplistic call to “stop the spending” so well enunciated during the long-term plan public consultation.

In this report, WAG lists its concerns about things going on at the council to encourage community debate.

But alas for some, WAG does not have detailed plans and solutions to resolve its concerns – partly because council’s many public-excluded meetings prevent WAG from turning over every rock, partly because WAG has limited research resources, and in any case because it is the function of council to respond to community concerns.

And for those who are interested, WAG will not be putting forward or endorsing any candidate at the October 2025 council elections.

WAG wants willing independent members of the community to nominate for the elections, develop and promote their own policy agendas and be aware of WAG’s concerns.

n Whakatāne District Council debt

WAG’s greatest concern is ballooning debt. The four previous councils over 12 years increased borrowing on average by $5 million per year (from $27m to $87m).

This council in the past 27 months has nearly doubled its debt (to $164.5 million at September 30, 2024) by borrowing $77.5 million at an average of $34.4 million per year – nearly seven times the average borrowing of the twelve years before.

And the Whakatāne District Council’s 2024-34 Long-Term Plan has debt nearly doubling again to $318 million at June 30, 2030.

The key driver of council’s burgeoning debt is revealed in a graph published on page 32 of Volume 2 of the 2024-34 Long-Term Plan.

The graph shows that since 2022 council has been running large operating deficits, now spending tens of millions of dollars every year on operating costs more than council receives in rates and other income.

Fully aware of this situation, council passed this resolution on August 5, 2024: “That the council resolves that the unbalanced budget position projects an operating deficit until 2028/29 and that it is financially prudent.”  

WAG begs to differ – five years is taking too long to resolve an urgent problem and even if council can scrape into a small surplus around 2029/30 how will ratepayers pay back $70-plus million plus of excessive operating costs offloaded onto future ratepayers through additional borrowing.

At a presentation to council on December 12, WAG stated “It is WAG’s view that council borrowing and debt is out of control because spending is not well managed”. Do you agree?

n Excessive rates rises

Over the long-term, rate rises across local government in New Zealand have exceeded rises in the Consumer Price Index.

To a large extent this is caused by increasing services supported by increasing council staff numbers (which in Whakatāne have increased by 6 percent per year over the past five years – 73 FTE positions).

And, this is despite the fact that according to Business and Economic Research Ltd (BERL) “historically, the Local Government Cost Index (LGCI) has always grown more slowly than the Consumer Price Index”.

The Local Government Act has also not been helpful by providing for local authorities “to play a broad role in promoting the social, economic, environmental, and cultural well-being” of their communities.

These four well-beings are now being removed from the Act by the Government in an attempt to force councils back to the basics to reduce rate rises and unnecessary debt.

There is also the debatable matter of the reduction in the uniform annual general charge rates from 24 percent to 20 percent of total rates, which council used to moderate rates’ increases on lower-value properties at the expense of high value (typically farm and business) properties.

In these difficult economic times, WAG is concerned that struggling farm and business ratepayers have been forced to subsidise basic council services uniformly used by all ratepayers.

n Stopping the Rex Morpeth Hub redevelopment

During the 2024-34 Long Term Plan development a $100 million-plus redevelopment of the Rex Morpeth Hub (RMH – including the War Memorial Hall) was promoted.

After 70 percent of public submission responders rejected two redevelopment proposals in favour of retaining and maintaining the existing facilities, council decided to continue the RMH redevelopment through a slower $7.8 million initial works and planning phase with the intention of making a final go/no go decision on the overall project during the development of the 2027-37 Long-Term plan.

WAG is of the firm view that the Rex Morpeth Hub redevelopment initiative initial works and planning should be stopped now and if that requires a necessary public consultation process, then so be it.

Council’s ongoing operating deficits, burgeoning debt, need to focus on Three Waters and required response to the “back to the basics” local government reform completely undermine any justification for the RMH redevelopment project for the foreseeable future.

Let’s stop the RMH redevelopment now and save as much of the $7.8 million initial works and planning funds as possible.

n Stopping the boat harbour project

The Boat Harbour (marina) project needs to be stopped now. To think that Whakatāne-owned pleasure boats moored in Tauranga would relocate to a new Whakatāne boat harbour, to think that there would be enough boats moored in Whakatāne to create hundreds and hundreds of full-time marine services jobs in Whakatāne, to think that a one-hour cruise to the river mouth would be acceptable, to think that the river channel will never need to be maintained, to think that unquantified chemical contamination on the site could be easily resolved and to think that a boat harbour could be a secure profitable business venture was always folly underpinned by unrealistic dreams.

Once and for all, it is hoped that council has learnt its lesson and will give up its penchant for development projects.

Stop the boat harbour now, sell off the Wally Sutherland site and progress a substantial sell down of all investment properties to reduce council debt.

Council must leave development projects to professional property developers. If property developers will not finance development initiatives, they are not viable and council needs to stop picking up poisoned chalices.

n Responding to Local Government Reform

On August 21, the Government announced a range of local government reform initiatives intended to force councils “back to the basics” and to do the basics “brilliantly”.

On December 16, the Government announced progress to date on local government reform with an expectation that legislation would be progressed in mid-2025 before the October 2025 local government elections.

The Government’s local government reform programme reflects its concerns about council financial mismanagement as evidenced by excessive ongoing rate rises and burgeoning local government debt.

By removing the well-being purpose provisions from the Local Government Act, the National Government hopes to curtail council spending on nice-to-haves and refocus activities on core service provisions.

To date, council has not responded to local government reform and this is a major concern of WAG.

The three delegations of council’s Living Together Committee still include the words “well-being” and council has not responded to local government reform (and indeed the current difficult circumstances) by cutting back on well-being nice-to-haves, reducing staff numbers, cancelling the RMH, cancelling the boat harbour, and indeed cancelling the $436K Mitchell Park upgrade.

n Going through the eye of the Three Waters needle

The new National Government’s emerging Water Services Well Done reform programme requires the Whakatāne District Council to develop a 30-year financially sustainable Water Services Delivery Plan by early September 2025 – immediately before the October 2025 local government elections.

The Water Service Done Well programme brings to the table the formal separation (ring fencing) of three waters activities and funding from other council programmes and encouragement for the establishment of joint (regional) Council Controlled Organisations to deliver water services over wider areas (supported by an additional lending limit carrot).

WAG is concerned that the council’s response to the new National Government Water Service Done Well programme will be seriously flawed based on limited and inaccurate information, political concerns about Council Controlled Organisations, a limited public consultation process, ongoing Matata Sewerage Scheme discussions, the Eastern Bay Spatial plan development and the binding need to rush to finalise its plan by early September 2025.

Also of concern to WAG is the cost of the required 30-year Water Services Delivery Plan. In the face of great uncertainty, the Whakatāne District Council must close its cheque book immediately and reserve all of its financial resources (delay, delay, delay) to maximise its chances (and choices) of passing through the eye of the Three Waters needle.

Readers should not think that this is a pre-election issue that will be done and dusted by September 2025.

Without doubt, re-elected and new councillors after October 2025 will inherit responsibility for implementing council’s Three Waters Delivery Plan and dealing with all of the inadequacies of the flawed and rushed plan development.

n Summary

WAG is publishing its concerns at this time, so the community knows what we will be fighting for, observing, and chasing up through 2025.

WAG will send its concerns to the mayor, current councillors and all candidates for the October 2025 council elections, seeking their responses.

WAG intends to publish their responses (or failure to respond) during the August/September/October election period, so voters can include each candidate’s responses to WAG’s concerns in their voting considerations.

Beyond the October 2025 council elections, WAG will continue to promote its concerns and hold the elected mayor and councillors to account for their election promises and decision- making on council.