We’ve had a unified Auckland Council since 2010 – it replaced seven district/ city councils and one regional council, in the largest local government restructure in New Zealand since 1989. With such a major, complicated process, it’s a given that it won’t have been perfect: things that could have been done better, and things that should be revisited now that we’re seven years on.

At a more basic level, we can simply ask if Auckland’s boundaries are in the right place.

Since 2010, at least two areas have considered splitting off again (Waiheke and North Rodney, with the entertainingly named NAG website). There’s also been quite a bit of growth just outside the Auckland Council’s southern border in Pokeno. Most of these new Pokeno residents work in Auckland, and they may use various other Auckland services too.

In this post, I’m going to look at the “splitters”, Waiheke and North Rodney, and in the next post I’ll look at whether Auckland’s boundaries should be extended to the south.

So, how did Auckland’s boundaries come to be the way they are today? Let’s take a quick look at the history.

The 1989 Reforms

In 1989, New Zealand had a local government overhaul, the biggest in more than a century. Counties and boroughs were scrapped, replaced by district/ city councils.

The 1989 reforms dramatically reduced the number of local government authorities across NZ – from around 220 independent councils to 70. This was supposed to make councils more efficient (economies of scale, etc), with the tradeoff being a loss of local representation.

The tension between having cost-effective councils (meaning lower rates) and local representation (meaning more local democracy) is still important today. People wanting change – amalgamations, splitoffs etc – need to recognise this tension. The basic theory is that a larger council should be more efficient, but will struggle to reflect all the local wishes, and vice versa for a smaller council. If you’re arguing against that theory, you should really be bringing some solid evidence.

Unitary what?

You don’t hear the word “unitary” much outside of the Unitary Plan, but it’s an important one for councils. The 1989 reforms established two levels of local government: regional councils and territorial authorities. These levels have different functions. In simple terms, regional councils look after the environment and other ‘region-wide’ functions which tend to work beyond territorial boundaries. Those include public transport, often regional facilities like venues and parks, and a lot of high-level strategic planning.

Regional councils are first and foremost about the environment, so their boundaries tend to be based on water catchments. This is important, as any boundary changes (and potential splitoffs like Waiheke/ North Rodney) will require some environmental rationale.

Territorial councils look after more local stuff: local roads, services and infrastructure; resource and building consents, etc. This is actually most of the work councils do, so typically the rates bills from territorial councils are 3-5 times higher than the ones from regional councils.

Looking at Whangarei, for example, properties have to pay rates to the Whangarei District Council and the Northland Regional Council, and it’s a similar story for most of New Zealand, “Unitary” councils are ones which are responsible for both levels, regional and territorial.

The Auckland Council Merger

Across New Zealand, there have been many proposals for changes to councils since 1989. People have argued for both amalgamations and split-offs, but very few have gone ahead. At the region level, Nelson-Marlborough split into three in the early 90s, and at the territorial level, the tiny Banks Peninsula merged with Christchurch in 2006. The merger of the seven Auckland councils has been the only major change out of the 70-odd councils across New Zealand.

Take it away, Te Ara:

Between 1989 and 2010 Auckland was organised into four cities – North Shore, Waitākere, Auckland (which included islands in the Hauraki Gulf) and Manukau – and three districts – Rodney, Papakura and Franklin. An Auckland regional council had responsibilities across the entire area bar the southern part of Franklin District (which was affiliated with the Waikato region). Business leaders claimed that a single council would put an end to squabbles between councils and make more progress on issues common to the whole city, especially infrastructure and economic development. In 2010 the government mandated a single Auckland council, which came into existence after elections in October 2010. The southern part of Franklin became part of Waikato district.

So, that’s a good summary of the 1989-2010 period. As a bonus, it used the word “squabbles” which I hadn’t heard for a while. Good word, that. Merging all the councils into one certainly did get rid of squabbles between councils, by default. But people have still squabbled since 2010. When will the squabbling end? Squabble.

The map above shows that the northern boundary of the Rodney District was also the northern boundary of the Auckland Region. It’s a natural place for a boundary: one of the narrowest points of the country, with only around 15 km separating the east coast from the Topuni River (which leads to the Kaipara Harbour and the west coast).

In fact, this boundary goes back to the 19th century, when it was the Rodney County on the south side and the Otamatea County on the north side. It has been the northern boundary of the Auckland Region since regional governance started to emerge in the 1960s.

The Waiheke and North Rodney “splitter” proposals

The “Our Waiheke” and “Northern Action Group” have each submitted proposals for splitting off their areas from Auckland. Those proposals are with the Local Government Commission, and they’ll now work through a process where the LGC reviews the proposals, maybe gets some external feedback, listens to various other stakeholders apart from the two ‘splitter’ groups, and ultimately comes up with proposals that people can vote on.

Both the Waiheke and North Rodney groups are proposing that their areas become unitary councils. This leads to at least two issues – more on that below.

Waiheke has actually had its own governance in the past. There was a “Waiheke county” from 1970 until 1989, which grew over that time to take in some of the surrounding islands. Then Waiheke was part of Auckland City from 1989-2010, and now the unitary Auckland area.

The group’s proposal suggests that a Waiheke unitary council could also include some of the unpopulated/ sparsely populated islands nearby, as in the map below:

North Rodney is more vague about where its boundaries should be, but they seem to have ended up with the below, which includes Warkworth and a little bit more to the south:

Issue 1: unitary council size

So, both the splitter groups are wanting to become unitary councils. They say they’ve looked at options where they’d become “districts” but stay within the Auckland region, and instead they’ve decided to cut the cord completely.

There are a few unitary councils in NZ. Auckland has been one since 2010, and Nelson, Tasman and Gisborne have all been around for longer. The Chatham Islands are kind of a unitary council, but they’re an extreme case. With a remote population of just 600 people, they don’t have the scale or resources to be self-sufficient. They contract out their regional functions to the Canterbury regional council, and are heavily reliant on government grants to survive (these “recognise the unique position of the Chatham Islands and the desirability of maintaining a viable functioning community with its own elected representatives“).

So, if the Chathams aren’t big enough to be self-sufficient, how large do areas have to be before it’s practical for them to have a unitary council? Nelson, Tasman and Gisborne all have around 45,000 people. North Rodney would have around 25,000 people, and Waiheke a little under 10,000.

The advocates for change in Waiheke and North Rodney reckon they can make cost savings by splitting off and becoming unitary councils. I’m extremely sceptical of this. Could splitting off give better local representation? Sure. Could it save money? I really doubt it, at least without a reduction in services. There’s no free lunch here.

Interestingly, there could be another option for Northern Rodney, but as far as I can see the group that wants to split hasn’t considered it at all.

If they’re wanting to split off from Auckland, why not amalgamate with the Kaipara District to the north, and become part of the Northland Region? This is another area with a pretty sparse population, only a few smallish towns, and not a great deal of growth. A similar profile to Northern Rodney, in other words. Surely there must be some economies of scale, ways in which the two areas can benefit from joining together?

Of course, this would go down like a cup of cold sick with the Northern Action Group, because Kaipara District has made a pretty bad name for itself over the last few years – a wastewater scheme at Mangawhai ended up saddling ratepayers with huge debt, resulting in the councillors getting turfed out and replaced with appointed commissioners in 2012. If they’d suggested this, their proposal would never have gotten any traction. But surely this option makes as much sense as going it alone?

Issue 2: unitary council costs

I’m a layman on these matters, but even I can pick up a glaring hole in both the proposals, so it’s a fair bet the Local Government Commission will too. Both groups have misunderstood (or wilfully ignored, so that they can try to attract more support from locals) the difference between a district council and a unitary one. They compare themselves to small district councils (of which there are plenty), but completely ignore the regional functions which unitary councils have to perform.

Those have big cost implications, and mean that they’re significantly underestimating the cost of going it alone. Typically, regional rates might add another 25% on to district rates bills. Numbers may vary, but those regional functions are going to extinguish pretty much all the cost savings that the splitter groups think they’ll get.

It’s not at all clear what proportion of people in either Waiheke or North Rodney actually support the proposals, but given that the splitters have campaigned on two main platforms – better representation and cost savings – it’s a fair bet that people would be a lot less supportive if they realise that one of those platforms is a myth.

Issue 3: the Northern Action Group can’t see the forest for the trees

There are quite a few regional parks in North Rodney. The NAG proposal suggests that these parks are “accessed in high proportion by people from outside [North Rodney]” and “an appropriate arrangement would be for… the net costs of Regional Park operations… be apportioned on the basis of population between [Auckland Council] and [North Rodney Unitary Council]”. That is, North Rodney should only pay around 2% of the costs of its regional parks, with Auckland paying the other 98%.

However, the NAG seems completely oblivious to the fact that North Rodney residents would also use Auckland Council resources. The glaring example being roads and transport, which are of course the largest item in the Auckland Council budget (at least a third of all rates money is spent on transport). North Rodney’s proposal seems to assume that they will be able to use these roads free of charge.

Which, of course, they will. Transport is a cross-boundary issue for many councils. This post is getting pretty long already, so I’ll save the transport discussion for part 2 where I look at whether Pokeno and nearby areas should become part of Auckland.

But there are other cross-boundary issues too. Northern Rodney residents would lose access to most other Auckland Council services outside their newly defined area, including libraries, pools, public transport connections to Auckland, etc. The new council could negotiate with Auckland to retain access to some of those services, but they’d probably pay more than they currently do.

The real issues: representation and satisfaction

The Our Waiheke group and Northern Action Group might think they’re paying too much in rates (who doesn’t?) and they’re not getting enough in return. Their proposals both suggest that they can cut rates, which they could, but that they’d continue to have exactly the same levels of service, which they wouldn’t. This might be intellectually dishonest, but no doubt it helps them get support among local residents. But this isn’t the real issue.

The splitter groups talk about having more local representation. Their proposals would certainly deliver that. But it’s not the only way to help local views be heard. Auckland Council’s local boards could have more say, for example. The balance between Auckland Council and its local boards will no doubt evolve over time, in terms of how much decision making and funding goes to each level.

The other issue is general satisfaction with the Auckland Council. There are dissatisfied people in all parts of Auckland, but presumably people outside the main city area feel more disconnected from the council’s actions and spending. That’s fair enough. But there are several ways to address it. One, Auckland Council improves what it’s doing. I’d hope that’s an eternally ongoing process. Two, Auckland Council improves its communication so that people actually understand what it does, the value it provides, and the journey that our city is going on.

Satisfaction will probably improve even if the council didn’t do any of those things, simply because we’ve already been through the hardest years. These were the transitional years when there were shocks to some rates bills, the shift to a Unitary Plan, the council taking on debt to help it provide for growth.

Summing up

Stuff.co.nz had a good article on the proposals to split off Waiheke and North Rodney, and I’ll just quote part of it here:

Massey University local government expert Andy Asquith disagreed [with the proposals].

“It’s completely ridiculous,” he said.

“If you think about the resource required, the expertise required to run an autonomous local body then it ain’t going to happen on Waiheke.”

Rodney had never wanted to be part of the super city and had at one time considered merging with the nearby Kaipara District Council, he said.

Kaipara later ran into major problems over the cost of a wastewater project which blew out from $17m to $58m.

Similar problems were seen in other small local authorities, he said.

“Smaller councils can’t afford to employ people of the right calibre and competence to deal with these big infrastructure projects,” he said.

The government had spent the last six years trying to get Auckland working because it understood how crucial its success was to the rest of New Zealand

“All of a sudden to break it up again is a recipe for disaster,” Asquith said.

Personally, I think the requests to split off Waiheke and North Rodney are daft. I’ll be very surprised if either of them goes ahead. This doesn’t mean things are perfect the way they are – it just means that it’ll be much easier to improve outcomes in Waiheke, North Rodney and everywhere else in Auckland by working to improve the Auckland Council we already have.

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  1. Transport related how? This blog is getting more and more political, why don’t you put all of these type of posts under a separate blog, it’s getting boring and uninteresting. Keep the Transport and roading stuff, get rid of the political advocacy.

    1. Reel it in, team! Helen — officer of politics — has denied you the alienable right to be political! /s

      Come off it, Helen. You can stop reading if you find it that boring and uninteresting.

    2. Greater Auckland isn’t a blog we are an advocacy group for better Urban Planning, Housing & Transport in Auckland.

      This topics are linked urban planning & transport planning are two sides of the same coin.

    3. Transport is political, just as waste water, fresh water, and all other utilities are political.
      Politics is Transport.
      Who you vote for has a massive impact on what is provided. You may choose to vote the MOR Roads lobby or the PRO PT – thats politics.

  2. but for so long the blog has said it was always non-political. Has that changed? Are the greenies starting to sneak in? You may want to highlight the political nature of the blog now that you are actively seeking donations regularly

    1. The distinction between political which is having opinions around policy & partisan which is pushing a party/parties line I think is important here.

      While we have opinions around policy & what policy should be. We are, well at least I am not partisan. I talk to people from all sides whether is Simon Bridges, Phil Twyford, Julie Anne Genter & etc. as I personally don’t believe these issues have to fall into traditional left/right divide.

      This is why often I have been called a Govt apologist & Green Spy in same comments thread.

      1. ok, it was a long number of topics ago but I regret the govt apologist accusation, it was the repetitive emphasis of blocking any idea with ‘it costs too much’ which seemed just echoing the standard govt excuse while they frittered billions away elsewhere on tarmacking the country.
        I see now that damm good ideas and bloody outrageous ones don’t align with any particular political party, it just seems that way sometimes..

  3. The balance between financial self interest and freedom is interesting.Here are three examples.
    1. Brexit – as far as I can tell the remainers argued the case for finance and the leavers still chose to leave; if the remainers had argued the case for ‘no more European wars’ they might have won. OK the whole issue of Brexit is complex and debateable but this freedom -v- cost is a significant strand.
    2. When younger and living in Scotland the SNP had a main slogan of ‘Its Scotland’s Oil’ and they remained powerless but when oil production in the North Sea peaked and they began to emphasise freedom from London rather than self interested wealth they swept almost all the Scottish seats.
    3. Last month our 19 year old son chose to leave home; we fed him and charged him no rent but he wanted to share renting a house with friends. Sometimes he gets homesick and returns. Yet again freedom won over self interested wealth.

    I have only had a couple of day trips to Waiheke so have no expertise at all but my gut reaction is I would initially find independence attractive and I’d be willing to pay a premium for it. It would take more of this type of carefully considered post to convince me otherwise.
    It would be interesting to know how the author would feel about NZ being a state of Australia similar to Tasmania. Would his answer be emotional related to his sense of identity or would it be a cool contemplation of financial spreadsheets?

    Helen: You are probably right but this site and this post contains intelligent ideas; where do you recommend the author publishes this kind of article? At one level this is political but surely so is almost every transport decision; so long as it is not blatantly party political it shouldn’t matter.

    1. “The balance between financial self interest and freedom” – very good point.

      I also wonder if people in the splitter areas could see they bring diversity to the Auckland Council, to the benefit of all. (In the way that having your 19-year-old stay at home would bring diversity to the home – not that I”m saying he would want to.) The Waiheke splitters have a green grassroots history which they’ve seen picked apart by the AC – but at this stage could they see their alternative views as something that could influence the AC – in a small way, perhaps, but over a large area?

      (Not my area at all, but I’ve enjoyed the post, thanks.)

      1. Interesting post. Great comment Bob.

        Heidi, good question: Would Waiheke have a greater chance of influencing the Auckland Council by demonstrating a different approach, or by continually arguing with the council? I guess you could ask: Did the Waitakere region have more effect on the policy of the wider Auckland region when it was an autonomous Eco-City, or now? I’m not sure what happens behind the scenes, but you don’t hear much about it these days. Does that mean that it’s been quietly adopted as policy, or quietly dropped? No doubt there will be many people here who can provide some perspective on that?

        I also note that you mentioned Auckland Council, but not the ‘Council controlled’ organisations. A lot of the issue that Waihekians seem to have (myself included) is with Auckland Transport and the way they handle stormwater on the island (or don’t), plus the way they support the Fullers monopoly on the Waiheke ferry route by not making adequate facilities available to competitors and by bending over backwards to support the double-decker tourist buses at the expense of useful access to the ferry terminal for other forms of transport and at the expense of roadside vegetation and gecko habitat. If you live here you don’t want out-of-place tourist buses whizzing people to commercial-tie-in venues, whilst the local bus service still fails to offer a usable alternative to private transport. You want better buses for all. The issues have been raised with AT constantly over many years, via the local board and Councillors, but they won’t budge. ATs unresponsiveness to the wishes of elected representatives does seem to be a region-wide issue, but it’s felt strongly here.

        Some other issues to add to this discussion:

        Waiheke has a lot of tourists – as with the Auckland Region, there are ways to tax tourists to help pay for the infrastructure they use and to protect the environment they are visiting and enjoying. This could help balance the books.

        Waiheke’s ferry is very expensive. Unlike other public transport in Auckland it is not subsidised. I’ve always been astonished that Auckland Transport has not instituted its own Auckland to Waiheke service and sought tenders to operate it and provided funding in the same way as other public transport. Why should it not, if Waiheke is part of the Auckland Region?

        And perhaps the biggie: The original article didn’t mention that (surely related to the break-away proposals; also related to the election of Phil Goff) Auckland Council is now proposing to offer local boards – with Waiheke as the test case from October – much greater power. See the front page article on yesterday’s Gulf News: http://gulfnews.realviewdigital.com/#folio=1
        As the original post made clear, the council should be devolving more power to local boards. They’ve shown the opposite tendency over the years, but now I think they are reacting to the splitters’ proposals by making concessions, that perhaps would never have been gained any other way. Heidi, perhaps having forced this concession will be Waiheke’s greatest gift to the Auckland Region?

        1. Thanks Fraggle, My experience with (my) local boards is that they are progressive, responsive, and limited n their powers, so this is indeed an interesting change.

          Other issues that I’d love to read some local Waiheke input on are grassroots recycling and composting schemes vs Council schemes, and how Council has dealt with mooring and marina issues. Any experience with those?

        2. Yes think this is a good idea, will be interesting to see how it goes. Perhaps give bigger budgets to the local boards too, but in the Waiheke case cashing in on tourists is the way to go.

        3. Thanks Heidi. That almost sounds like a set-up question of the sort a junior MP will ask so that their minister can knock it for six… Waiheke had one of the best recycling rates anywhere in the country, through a facility which employed local unemployables and got them back on their feet. Despite a massive sustained campaign (who remembers seeing the Visy mountain on TV?) to keep the contract with the Waste Resources Trust, by what really felt like every person on Waiheke, the contract was awarded to TPI. I’ve been on a tour of their Visy automated recycling plant that takes all the co-mingled recyclables and separates them on a conveyor belt with lots of clever systems. But the bales of plastic and bales of paper that were coming out of the end of it appeared almost identical to me (so much paper in the plastic, and plastic in the paper). There’s also a great deal sent to landfill due to contamination from plastic bags, broken glass, dead cats, lumps of concrete and the like. Unlike under the old system where the collectors would teach you how to separate if you were doing it wrong, the only feedback I’ve ever received from the new operator was a note telling me not to put out too much recycling. I strongly suspect that the only reason that the current system can work financially is that the empty shipping containers going back to China can be loaded with the bales of recycled materials on the cheap and then opened up and sorted by hand with cheap labour. Which is what Waihekians used to do at home before putting the recycling out. To be fair, that was Auckland City which awarded that contract, not the amalgamated council. It was done on the basis of cost – but only financial cost.
          I think I best not go on to the composting schemes and marina issues, but you’re pushing the right buttons. Greater ability to make decisions locally (basically, what’s worth spending money on) on these sorts of issues is to be welcomed. It would also have saved quite a few very expensive trips to the Environment Court over the years to oppose decisions made or developments approved (wrongly, according to the court) by Auckland Council.

        4. Just call me Patsy. 🙂 I didn’t mean it that way – I’d heard things from various sources but thought it would be worth asking to add to my knowledge. There are so many things that Council does that needs to be centrally funded, and then there are things that are better if the locals organise the way they want. From what I did hear, the story of how a perfectly functioning recycling scheme got shut down is a perfect example of how I DON’T want my council to run.

        5. Thanks Patsy 😉 You were just so on the money that it felt like a case of you set them up and I’ll knock ’em down! There’s no question that if the local board had made the decisions in each of those cases (or a future local council) they would have made different (better) decisions. Yes, there may have been slightly higher costs, but worthwhile ones. The splitters appear to believe that they can save a lot of money to make up for these sorts of decisions, either by not funding other things or by spending more efficiently. Actually, I think they would need control of the road corridor spending for this, since that’s where I see a lot of money being spent to little effect, and that means taking control away from Auckland Transport. And they might find that AT has left them with a lot of spending to do on the stormwater system (although there’s no sign that AT intend to do this work themselves at present).

      2. What happened to my long comment I posted here half an hour ago – can an administrator please retrieve it from the junk bin or wherever it ended up? Thanks.

    2. Thanks Bob, good question with “how the author would feel about NZ being a state of Australia similar to Tasmania. Would his answer be emotional related to his sense of identity or would it be a cool contemplation of financial spreadsheets?”.

      I agree that both identity/ democratic and financial/ economic dimensions are important. There can be tradeoffs between them and sometimes we might see them as worthwhile, and sometimes we might think it’s a bridge too far.

      First up, I don’t think many of us stake our identity on local government boundaries, whereas we probably do that more for national boundaries… e.g. I’m in the Auckland Central electorate/ Waitemata local board area, but my personal identity isn’t really tied to those things. I do think of myself as an Aucklander and New Zealander.

      I’d also hope that local government can recognise and celebrate diversity within a particular area. Someone living on Waiheke might define themselves through that, likewise someone in Manurewa might think of themselves as a proud south Aucklander. We should have room for all those local expressions, without having to split the local government areas.

      As for NZ becoming part of Australia, it’s obviously a different magnitude of decision. Larger identity/ democratic costs for sure. Maybe there are large benefits, but I’d want to see research on it, and look at other options besides a complete shift to becoming an Australian state. Like the East-West Link… a $2 billion motorway is not the only option…

      Until we’ve done more to quantify the costs and benefits, I’d be inclined to stick with the status quo rather than rushing into a decision we might regret. And I’d look for interim solutions. Maybe, like the East-West Link again, we can get most of the economic benefits at a lower cost, and then it might not be worth doing the extra bit.

      So we might make incremental changes to make the countries more closely linked. We’ve already made a lot of them – e.g. with border control, collaboration on various matters, some access to each other’s welfare and other government systems, preferred access to jobs etc. Shifting to a common currency would be a big change, but still easier than a full amalgamation… and we’d probably have most of the benefits unlocked by then.

      1. We usually have identities that are in concentric circles: usually self/family/country/the world. With quibbles about self/family since most parents would make any sacrifice for a child. However I’m writing this to say I certainly have a far stronger NZ identity than I have for Auckland or my suburb despite the fact I’ve spent about 99% of my NZ life in Auckland and have only ever lived in Birkdale.

        It is relevant because many of the Auckland decisions are also NZ decisions. The bridge was needed by the country but is mainly used by Aucklanders. It also means I support development of rail transport in Auckland which at present is designed to serve CBD and is of little advantage to North Shore.

        Answering my question if you can prove I would be say $1000 better off if we became a state of Australia (or territory of China come to that) I would tell you to keep your money. It is not as strong a feeling as I would have if someone said they would give me a million if they could swap my 6 month old granddaughter of another baby just as fine. But it is a strong feeling.

        Someone did something similar with Scotland’s Independence – they presented one group of Scots with a careful explanation proving they would be about $1000 better off with independence and another group with much the same but proving they would be $1000 worse off and then they asked how would they vote. For the sake of this blog I can’t remember what the result was. Maybe they could try it in Waiheke.

        Your last paragraph has a lot of sense in it – it makes sense to share sovereignty on specific issues for our mutual convenience. Your idea of a common currency is the beginning of a long discussion. Just as a good post ought to be you have left me thinking.

  4. Personally I was at the time anti super city and I’m still not a big fan but it had to happen, being from the smallest district (Papakura) had the super city not happened we would have been amalgamated into Manukau by now. From memory Rodney didn’t want to be split like Franklin and opted for the all in or all out, being they were inside the old ARC boundary they were always going to be all in.

    I know you want to cover Franklin in part 2 but I think it should have been all in too. Franklin district, Pokeno, Tuakau, even Mercer etc are attached more to Auckland than Waikato/Hamilton but with the current sprawl where do you draw the line?

  5. Well I for one found this post very interesting, thanks John for writing it.
    Excellent summary and description of how local government works here in NZ, something most people simply don’t understanding but a lot of people have opinions on .

  6. Personally I am happy for them to go if they really feel as if they will be better off.

    I think Auckland would be better off as I think these areas disproportionately whinge all the time & them going there own way means we can move the way we want to faster.

    1. Agree, I’d love to see Waiheke especially go independent as it has zero land use and transport impacts on Auckland. It would be an excellent case study on small independent councils and would probably put anyone else off doing the same thing once the costs became apparent.

  7. Good post John.

    One thing that strikes me is that Waiheke or North Rodney splitting off would have a large impact (positive or negative) on those areas, and pretty much no impact on the rest of the city. So I’m somewhat inclined to say: Fill your boots!

    On the other hand, there’s the issue of moral hazard. I suspect that Waiheke / North Rodney would run into serious financial trouble pretty rapidly if they split off, a la the Kaipara screwup. And at that point they would probably petition to get back into Auckland’s big balance sheet so we could cover their losses.

    The behaviour of the withdrawal organisers doesn’t give me confidence that this will be avoided. They’re pursuing the same “have your cake and eat it” line that the Brexit promoters did – and look how that turned out. But if they’re willing to present a properly detailed financial plan and outline how they would avoid the moral hazard issue, then I’d be willing to listen.

    1. From the very little I saw of Waiheke it does look like a very wealthy suburb/island so they could afford to make mistakes and then just up their rates. And if they do make a major mistake they could be certain that they will change their representatives. Compare that to my Birkdale home: the council can do something really dumb that wrecks our life and the votes of everyone in Birkdale will make no difference.

      Surely the idea that a small council body can make expensive mistakes applies to all the existing small councils – how do they handle it? Isn’t it something the central government audits?

      So far Brexit hasn’t turned out. Like you I’m rather pessimistic for various reasons but look at the UK today: unemployment lower than its European neighbours, has overtaken France economically, crime is falling and the forecast immediate financial misery never materialised. So about Brexit best if in NZ we wait and see.

      I suspect that if I read what the proposers are actually saying and got to know the individuals saying it I might well agree with Polkinghorne and Nunns. I’m merely pushing the idea of democracy over paternalism.

      1. There are only a couple of district councils in NZ with populations as small as Waiheke – Mackenzie and Kawerau and neither of them have to undertake regional council activities. There is no existing example of an unitary council this small.

        1. Thanks for the info. Does my point make sense for district councils with say double the population. Or measured by personal wealth – those houses and boats on Waiheke sure looked expensive.

        2. Just to say that Waiheke’s population are very varied in their wealth – don’t look at the coastal holiday homes of the rich and famous and assume that everyone is loaded! The costs of essentials and transport have always been higher, due to being an island with a small population. Wages have also been low (not much work locally and a lot of it servicing tourism operations). Census data has always shown Waiheke to have the lowest incomes in the Auckland Region, after Great Barrier. Of course one can commute or start a business…or move here as the CEO of an existing business, or wealthy retiree, as many have. But one would be wrong to assume that the majority of the population are wealthy.

          The cheap properties and rents of the past have meant that the non-weathly have been able to live here and there has been a complete community of all-sorts. Now that accommodation is expensive, there is a de-facto gentrification and the ‘essential workers’ can’t afford to stay. Nor indeed can most professional families afford to move here now and many have moved away when caught out by the property market. Nor can the lovely loopies – not so many fairy wings sported at the market these days as there were once were.

          It’s probably similar to many parts of Auckland (and communities like Queenstown) but somehow more poignant for an island community…or perhaps just because it’s my community.

          I don’t have a specific point, except to respond to a common mis-conception that Waiheke is uber-wealthy. Some very obviously are (and many of those contribute greatly to the community in many ways and I don’t resent them at all), but most residents are not at all wealthy and the level of rates will affect them significantly.

        3. Having wealth (ie your examples on Waiheke) does not relate to willingness to pay more.
          You’ll often hear the most wealthy are the most vocal about how high rates are. (no source on that though).

        4. Anthony01 – “You’ll often hear the most wealthy are the most vocal about how high rates are. (no source on that though).”

          Your only source needed is the minutes of the meetings and general pronouncements of the Orakei Local Board members, and their former leader, now councillor: Desley Simpson.

          Orakei is the richest of all the wards in the Supercity by any means you care to name.
          But they and their residents moan long and hard at every instance how large a portion of “their” rates goes to “subsidise” all the other wards [other than Orakei] and how little they receive in return for it.

          So theres the only evidence you need that is having wealth is in no way correlated with willing to pay more. In many ways while there probably is one, but it is a distinctly negative correlation.

    2. Agree, “Waiheke or North Rodney splitting off would have a large impact (positive or negative) on those areas, and pretty much no impact on the rest of the city”. Waiheke has 0.6% of Auckland’s population and North Rodney has about 1.5%. Plus, Waiheke actually has its own Local Board for that population of 10,000, whereas there are 100,000 people in mine… so they’re doing pretty well for representation. How that translates into funding I haven’t checked, but certainly good for representation!

  8. There must be a model where we can have most decisions made at the local level but where decisions that affect the entire region are made by a group that represent regional interests. Oh wait that is what we had until Rodney Hide gave us this current monster.

    1. I’d hardly say North Shore or Manukau were particularly local, the old borough councils maybe.
      Personally I think the current model with beefed up local boards is the way to go.

  9. I’d be interested to see what people in Warkworth think of this. I imagine North Rodney are looking at them like a cash cow. However, I’m not sure how they would appreciate going from being average ratepayers in Auckland to probably being some of the biggest ratepayers in North Rodney as they would likely have higher property values than those further north.

    We saw this a couple of years ago with people who had moved south to Pokeno complaining about their rates. That’s what happens when your property values are high compared with other parts of the district such as Huntly and Ngaruawahia.

  10. I will not be around in 2073 but that’s when the Entrust (AECT) trust will terminate and assets transferred to the relevant council which will be a fortune (currently over 2 billion in Vector shareholding)
    We might be back to smaller city councils and only the ones in the Entrust area will benefit.
    Some on the blog have previously posted that they want the Entrust to wind up to forward the payout to the Auckland Council now.My question is how do you now where the boundaries that will be in place when the private trust terminates in 2073 ?

    1. Vector? The electric utility company? A 2mil shareholding which if I read your post properly there is an expectation this will be significantly more at cash up in 2073.
      These utility end user supply companies need the price of electricity to be maintained in order to make a profit. Despite the impending massive surfeit of electricity when RioTinto close their NZ aluminum smelter its unlikely this will see any price reduction for consumers.
      As prices increase to maintain profit margins then consumers will look at alternatives. And there is just that with distributed power generation using PVs. The ever decreasing price of these coupled with new technology high density (hence capacity) battery systems means a growing number of consumers installing their own electric generating/supply system at their homes and businesses.
      Power Utilities world wide have already said the biggest threat to their future is consumers generating their own power. Of concern is that some (In USA and some EEC countries) are seriously looking to Govt to legislate to protect their industry by taxing in one form or another those that generate their power (Spain already has sunshine tax for PV users)
      So I’d be concerned that Vector is a sunset industry and that few mil wont be worth peanuts by 2073. Just imagine, there is the AWHC almost paid for

      1. Agree. Also the power from Manapouri wont have the effect people expect, as the line losses to get it to this end of the country will be massive. It’s more likely some other facility will be developed in Otago or Southland to use the surplus power.

      2. Vector has a future, but it won’t be in the form it is now.

        While in the near future people will be able to generate and store their own power.

        What they won’t be easily able to do is manage all this and have it connected to a grid for times when the sun don’t shine or they need to use more electricity than they have stored in their batteries.

        Vector on the other hand is ideally placed to not only manage the grid and all the stuff “behind the meter” like the batteries and solar system, and manage everything as whole.

        Just like we expect our councils (like Auckland Council) to do for us now.

        Not only because its cheaper to do it that way, its also better for everyone if they are managed under the one system than millions of individual processes.

        Imagine what Auckland roads would look like if each property had to maintain their bit of road to the centre line, their bit of 3 waters and such.
        That would be what everyone doing their own thing with their own power but still connecting to the wide world or each other via the [Vector] grid would look like.

        Vector could just as easily become a huge network of Electric Vehicle charging stations. As we will no doubt need such a network of such stations in the next 20 or so years.

        If that type of future for Vector doesn’t pan out, Enact can easily sell off all or some of its 75% Vector shareholding and bank the money or do something else with the proceeds until 2070 or whenever rolls around.

        BTW: The trust can wind itself up at any time if a majority of the trustees vote to do so.
        Currently the trustees are all Cits and Rats proxies so that won’t happen unless they are assured they and their crony mates can profit off the back of doing so.

        But I don’t for a minute believe that all future trustees will be of the same stripe and so it won’t always be this way.

        I doubt Enact will exist by 2070 to hand anything to hand over the Auckland Council.
        ‘Cos it already will have wound itself up. Or have been made to do by a future government.

      3. David
        The success of Tesla cars is in part due to their supercharger network especially in the US. On the drawing board are more powerful charging stations that require massive amounts of power to quickly recharge which is the key to mass adoption of electric vehicles.
        Yes you can store your own solar power then send it back to your car at night however how much capacity are you going to install to try and cover all usage.
        The electric vehicle revolution is going to see a massive increase in power demand so no I see Vector as a company that has a very good future.
        Just look at their website to see they are planning for the future

        1. Mike, I hope Vector can survive even though their business model will need restructuring to deal with the loss of much of their income from households. Not sure that vehicle recharging will save them as the oil companies will probably want some of that action.
          In any case i’d be seriously looking at that few billion cashout and getting it invested in infra

        2. David, Vector is a lines company not a “utility company” as you’d define it.

          Very. Big. Difference.

          Line companies don’t make money directly by making or selling power.

          They make their money via their line charges due to their intrinsic monopoly connection they provide your house/business for delivering or sending away electricity made and sold by others.

          As such electricity power prices have little relevance to their income stream.

          Electricity usage levels do have an impact as the lines charges are a combination of fixed (daily connection charges) and per-kWhr usage figures, so the less power you use via their lines, the less money they will make.
          This is the argument used by overseas utility companies to justify their keeping solar off their grids.

          But while electricity usage in NZ per capita is on a slow/slight downward trend, its not one of a freefall type nature.

          Vector simply, ain’t that dumb. Because they know that until true wireless electricity transmission is invented (some would say re-invented, first having been invented originally by Nikola Tesla), electricity will flow over electricity wires they control.

          And while folks can make their own power at home, should they want to top up or send that surplus power anywhere outside their property, Vector will be able to charge them for using its lines to do that. So unless we end up with 1 million completely isolated mini grids, 1 per house, in Auckland, Vector will make money.

          And no, you can’t [legally] sling a power cord over the fence to your neighbours house and give them your free power that way. You’d have to become a lines company first.

          And Vector already has dibs on your neighbourhood power distribution whether you like it or not.

          Instead, it has to go out the front door, through the meter and down the (Vector) lines to the neighbours house and in through their meter.

          And while the Oil companies may want “a piece of the EV charging action” unless they install 100% completely onsite solar and battery combinations at their EV charging stations they too will have to pay Vector too to move those electrons they want to sell EV owners around the place.

          In that respect, Enact, by deciding to keep the Vector Line company when forced to split the old Mercury Electricity company into 2 – the lines and retailing companies, was a good decision.

          We will still have a grid in 50 years time, it won’t look like the grid of today thats for sure, but someone will be making money out of providing and running it.
          I’d put a big bet on today that Vector will likely be there doing that.
          In fact I’d prefer the line company of tomorrow is mostly owned by a community owned trust, because if private enterprise takes over Vector, the lines charges will simply skyrocket.

          So the 75% shareholding in Vector Ltd that Enact has is a predictable situation.
          Now, future government law changes could undermine that position.
          But for now no one is suggesting getting rid of all or any of the lines companies in NZ.

          Having said that, Enact can use that situation [and predictabe cashflow/dividend streams Vector provides] as a way to kickstart the funding of the many big infra. projects Auckland faces.

          So it is possible for us to have our cake and eat it too, if we do it wisely.

        3. Greg , I think you have a very limited view on what an electricity grid does, or even that there are two types of power. The effect of synchronicity etc.
          As the electricity is for practical purposes consumed immediately after production. Batteries may smooth that out, but lines companies need them too.
          We are very lucky in NZ that the wind generation has the hydro generation to provide network stability with those large generators spinning at 50 cycles- synchronous- to provide network stability. If you lose that vital part of a grid, the computers will shut that part down in milliseconds. You would call that a blackout, not just homes but local shops, traffic lights, factories, offices .

        4. Greg, Its the very fact that Vector are just a delivery company for energy products, electricity and gas, that means they will ultimately fail. With the supply of electricity changed from a centralised generation and distributed by lines to end users, to a local generation source located right at the end consumer location then a distributer such as Vector become almost functionless.
          They can talk diversification, appear to embrace new technology, be a successful company for the next few years (or 10 or 20)
          but they will eventually fail if they continue to depend on being an energy distributor as the core of their business

        5. “local generation source located right at the end consumer location”

          How is this even plausible?

        6. ..plausible because on average a Kw of solar energy falls on every square metre of ground.
          This can be collected using photovoltaic (PV) panels (aka solar panels that convert sunlight to electricity), with current technology 15-20% efficient means its quite easy to collect enough energy for a family home.
          Other types of solar panel can use this energy directly to heat water, heat homes etc.

        7. Seems if there is an issue with too much home electricity generation, the price of mains line will just drop to make the alternative less attractive. All I know is that the price I have paid has dropped recent years rather than increasing making the risk and upfront investment in a solar system less attractive. I think we will have a broad combination of all sorts of power sources as time goes on, but Hydro will be the massive back bone still of this country.

        8. 1 kW/m² insolation is about the maximum at midday, in the summer, under clear skies at sea level. To take this figure as an average is irresponsibly optimistic. The annual average for Dunedin, for example, is 0.141 kW/m².

          source: http://solarelectricityhandbook.com/solar-irradiance.html

          …and if long-term electrical storage is not financially viable then the worst month will have to be considered which, for Dunedin, is 0.115 kW/m².

          Yes, relatively easy to collect enough energy for a family home, provided it isn’t an apartment, or shaded by another building. Not so easy to store it however, and family homes are, of course, a fraction of electrical demand. The industry I currently work in, for example, consumes 1100 GWh of electricity pa. and operates around the clock. Not really a candidate for PV.

        9. A PV array is normally either fixed at a angle and aligned north to maximize solar insolation over several hours either side of midday. More sopisticated systems use active tracking to keep PVs face on to the sun.
          So published solar insolation tables are useful but sizing PV arrays/batteries and designing for energy requirements is fairly normal practice.
          As for industrial applications then I agree with you that their Mw or Gw energy needs is probably better met with grid connection. But in the context of this blog I don’t see a long term future for lines companies supplying grid power to consumer households. Maybe special cases such as towers of apartments/flats etc but not the sprawled suburbs.

        10. @duker
          ” I think you have a very limited view on what an electricity grid does, or even that there are two types of power. The effect of synchronicity etc”

          I know a reasonable amount about the NZ Electricity Grid, despite your assertions that I do not.

          For instance, despite your comments saying otherwise – I know the grid provides a stable 50 Hertz reference that all generators on that grid have to synchronise to, so that the AC cycle, and thus, voltage direction and electric current is the same everywhere at once. That is a necessary requisite to have any electricity grid in the first place.

          Failure to provide it within strict tolerances will cause blackouts and brownouts.
          And you have to balance the generation and consumption on that grid at all times to avoid that issue occurring.

          When we send power over the Cook strait cables, it goes over [HV]DC links, not as AC and is then converted to/from AC as needed at each, on the fly.
          Because of that fact, of the Cook strait link being HVDC only, in NZ we actually have two separate grid references, one for the entire NI and one for the entire SI.
          So we have to balance the generation and consumption at all times in both islands simultaneously. Batteries “before the meter” i.e. in the lines company network, or elsewhere on the national grid can be used to soak up or release electricity to help with that balancing act.

          Batteries allow time-shifting of both generation and consumption.
          Hence their immense value in any electricity grid whether it be domestic or otherwise.

          Which is why Tesla are shortly installing one of their massive PowerPacks in South Australia to provide exactly that level of grid support. Vector already has a similar, albeit, smaller version of that in the GI substation providing the same sort of time shifting of load. Vector having worked out that its cheaper to do that than run a new high voltage AC feeder line to the area to cope with the expected growth in residents in the area.

          All those who self-generate electricity [with or without batteries] still need the grid reference points for their own 50 Hertz AC they generate. Some PV systems can generate their own 50 Hertz reference in the inverter(s) when the reference from the grid AC is missing. In NZ when your grid connection goes offline, your PV system has to as well or you can’t connect it to the grid.

          PV [solar] panels generate DC which needs to be converted to AC via an inverter before domestic appliances can use it. Present battery tech stores/releases energy as DC voltages. So rectification and inverters are needed to convert AC to from DC.
          Even the so-called Enphase “AC battery” is really a DC battery with AC/DC conversion over the top. And its just really a “plug and play” way to connect a small [1.2 or so Kilowatt Hr] battery storage device to the 240 volt local grid in your house.

          All up – you can’t import or export AC power to/from the grid without being in sync with it. And you can’t do that without using the electricity lines, provided by your local lines company – for legal and operational requirements.

          So yeah, I think I might know a teensy little bit about these things.

          Moving on:


          David’s essential argument is that everyone will self-generate their own power, forever, for an infinitely cheaper cost than buying it in, and all within a decade or two, And therefore Vector and all other lines companies in NZ will all implode into a cloud of dust or similar as their services will no longer be required by most if not all of us.

          We heard all these arguments/predictions before about electricity from Nuclear power a few decades back, and Fusion since, seemingly forever, too as I recall.

          It didn’t happen back then, it won’t happen now.

          [And they said the same predictions about Telecom in the early 90s when they flogged it [and KiwiRail] off for a song – dead business models and technologies they said, better off to sell ’em off now before they’re worth nothing at all. Big. Mistake.]

          I don’t argue against the idea [and never have] that self-generation will become a bigger piece of the energy picture than it is now. Its obvious and a necessary step for a lower carbon future of the planet, not just Auckland or NZ.

          But I draw a line at his suggestion that, ultimately this change means ipso facto Vector has no future [and thus Auckland Council via Enact has a dead duck investment in it, that it needs to quit for our collective good].

          Because as I pointed out previously, if you ever want to be able to share your energy with/or supplement your self-generation from anyone or anywhere else – i.e. outside your property – you will have to do it [legally and practically] via a grid synchronised electricity line, supplied and manged by your local [and grid connected] lines company.

          In Auckland that means Vector or its successor(s).

          For which you will pay an access fee of some kind. [whether that will be a single fixed connection fee or a mixture of fixed and variable charges like now remains to be seen, but doesn’t invalidate the need or the business model].

          As to how and why everyone will generate all their own power in all cases and seasons is a little too much wishful thinking. Not everyone or business has the space on their roof/property or external walls to capture all the [solar/wind] energy they’ll ever need, and/or the space or desire to give up room for the energy storage they need to be fully energy self-sufficient. And even if the above holds, they may not necessarily have the money or desire to spend the capital [or the leases] required to pay for all the above to get their free energy.

          Agreed many homes and business will generate some power, but not all, and the many who do simply won’t be able to be 100% self-sufficient, all the time.

          That is: will it be true that no one shares their power with anyone else, ever, under any circumstances?

          Which are major pre-requisites for not needing a [Vector type] lines company or a grid at all are they not?

          Seems like a pretty big assumption to me – never sharing with or wanting anything from anyone else?

          And for comparison, just like now, not everyone grows all their own food, for all sorts of reasons. Space, time and production efficiency, practicality being some of the main reasons why not.

          Similarly we don’t “make our own” freshwater or all self-dispose our own stormwater or self-treat all our own wastewater/sewage do we? Some do.

          No generally we pay someone else to manage these things and all the details for us. And pay fixed and variable charges to them for them to be able to do so on our behalf.

          But if David’s argument about self-generation and Vector s taken to its logical conclusion wouldn’t/shouldn’t we also all be growing all our own food as well? And if so, then won’t that mean that freight firms like Mainfreight have a business model that is fatally flawed too?

          And that they will go out of business ‘cos everyone will be “self-generating” their own food? [and fresh water, storm water and sewerage processing], with no need for deliveries of said food they previously made their money from doing?
          Either growing all our own or us sending our robot car/truck to the local food farm to get “our” food supplies without needing Mainfreight in the loop?

          And you extend that thought to 3D printing, meaning the need to buy stuff will cease too as you’ll be able to make it at home for the same or lower price using 3D printers?

          [Except of course for the stuff you feed into your 3D printer, which you need to buy from someone else and have delivered to your by a Mainfreight or subsidiary company]

          Its all gonna happen like this.
          Yeah, Right.

          I don’t think the freight industry is on a big downhill slide, nor lines companies, nor Watercare any time soon.

          All up I think David’s argument that lines companies are living dinosaurs is simply too simplistic to ever likely be true here within his or my [remaining] lifetimes i.e. the next 50 or so years – which is the life left in the Enact trust.

          And there is one very simple reason why that is never going to be the case:

          It the same big reason now why we all don’t have petrol refineries/distilleries/Hydrogen fuel making plants in our basements now making us cheap petrol/booze/H2. And its also why we all don’t stock up on petrol when its dirt cheap and store it at home in 44 gallon drums for use when its expensive.

          Its way too much of a communal fire hazard/danger to be allowed to happen en-masse. So its generally outlawed. For everyones safety/benefit.

          And so it will be that sooner or later in the next 2 decades even if Davids predictions fully come to pass, we will have one or major fires [with a big loss of life] either directly or indirectly caused by, or made significantly worse/harder to put out by, everyone’s energy self-generation equipment [be that wind turbines, batteries, solar panels or a combination of these things], such that the Government of the day and/or the insurance companies will stand up [and no doubt be egged on by the Vectors of this world] and simply say “enough already”.

          Net result: you no longer can have more than this amount of energy generation or energy storage capacity per property. and only then under strict fire and other safety controls.

          And from then on, you will be very intentionally limited as to how self-sufficient you can be energywise.

          So when that happens, you’ll need that lines company to provide, or take away your energy to be compliant with the law and your insurance companies requirements.

          At that point I can see Vector Ltds owners rubbing their hands all the way to the bank.

          And if we’re smart, we’ll make sure that when it does happen, that the owner of Vector is still us.

  11. This Entrust situation is a shambles – half of Auckland benefits every year, half of Auckland gets nothing every year. I say wind it up today.

    1. It is and it isn’t- at the time many of the lines companies just gave shareholdings to consumers at the time who mainly just sold them. In Auckland instead of doing that they went into trust. So in one sense it’s just a different model of distribution of the benefits of those shares.

      On the other hand the only thing you need to do to be a beneficiary of the trust is to hold a power account in the area. I didn’t even live in Auckland when the trust was formed but am a beneficiary now which isn’t on balance fair.

      Certainly if the trust was wound up and the proceeds used for developing long term assets for the wider city I’d be supportive of that.

      1. “On the other hand the only thing you need to do to be a beneficiary of the trust is to hold a power account in the area”

        Which was pretty much the requirement all the other former Auckland area power boards had for their “owners” to get shares in *their* selloffs. So nothing new or manifestly unfair there.

        Difference is The Vector Consumer Trust held 100% of Mercury Energy and then had to split into a lines and retailing company, so they sold Mercury off and kept Vector the Lines company, then narrowly elected to list Vector as Vector Ltd, and sell of ~25% of it in a public share float, keeping the other 75% ownership for the trust to use the dividend income to benefit the former AEPB area power account holders.

        The ultimate beneficiaries are still those who live [well actually, have power accounts for properties located] in the former AEPB [power board] district.

        The Deeds of the Vector Trust [Now Enact] say that their assets will devolve to the councils who control the former power board districts when wound up or in 2070 whichever happens first. So if AC was ever hived off into [god forbid] say 7 councils again, not all those would benefit when Enact wound up. only those who control all or some of the area of old power board district would. And I would expect it would devolve out in proportion to the percentage of the original power board district they each now control.

        Lastly, the Enact situation is not ideal, but it is not simply the shambles that David B insists.

        After all the rest of Auckland already had their lolly scrambles. They got 10 or more years worth of equivalent Enact annual dividend upfront if they got, then sold their power company shares. As many folks did.

        If they’d have then put that money into Vector Shares when it listed they’d probably have done quite well out of doing so. From the annual Vector dividends alone, let alone the captial value of the Vector shareholding.

        Those who simply used their money and had a family holiday in Raro or whereever, or bought a newer car, great – but in effect “they’ve already had their lot, so should piss off.”

        Former AEPB district power account holders never got such a share scramble, all they got was the chance to have a smaller annual lolly scramble – one scramble for each and every year they have a power account in the area. And just as they have done for the last 24 or so years and will continue to do so for the next 53 or so years if nothing changes.

        So in some ways, because the former AEPB area folks were [collectively] more prudent than their easily swayed fellows out west and north as to how they dealt with their “sudden wealth”, isn’t it just as unfair to expect the present Enact dividend recipients to rollover and simply “subsidise” expensive infra that everyone else benefits from too, if Enact was wound up and the money given to Auckland Council?

        I’m sure thats a subject that a future council may have to grapple with.
        But its not a problem yet, for now. But it will be.

        Personally I think Enact sees it has a strict duty to only those who have power accounts in the former AEPB area. While that may be so, they should certainly be doing a hell of of a lot more for those folks [like undergrounding more of their overhead wiring each year] and investing in delivering a better community outcomes each year than simply handing out cash to everyone as they simply do.

        They could for instance, direct their Vector Ltd dividend stream to provide a [large] infrastructure loan to council for infrastructure projects in their area [CRL being one obvious such example], with the dividend stream income being used to pay the interest/principal bills on the borrowings for the interim, and council paying it back/down over a long time [say 30-50 years] by “access” fees for using the CRL tunnels. A sort of Public-Public Partnership if you will.

        That still keeps the money firmly in the trust but actually benefits a lot more of the trust beneficiaries in direct and also indirect ways than they do now.
        Only Enact has the ability to do this as they are one of the few to have those sort of 50 year timeframes in its purview by virtue of its trust deed.

    2. “half of Auckland benefits every year, half of Auckland gets nothing every year”

      Well back when the ‘other power companies covered the rest of Auckland’, they were given shares worth may 000’s her house
      The Vector are were given nothing then, as a new trust held all the shares for long term benefit. The irony being vector then bought the companies who had given away their shares.

      You will get the money ( if you are out of area) out of my cold dead hand.

  12. Think it’s ridiculous for Rodney to break away & think they can save money. These areas often perceive big expensive CBD projects sucking all their money up, but it’s not really the case as they certainly do get a bigger proportion of service compared to their population size. As the write of the post says, it could be more an issue of local representation & yes, I suspect the communication & teething problems maybe more the issue. Don’t want to get into the Pokeno debate yet until the next post, but seems to me they should really be Auckland, I grew up there & we pretty much used Pukekohe and north for services apart from the local town itself. It is tricky culturally I guess at the borders as you do have a merge, in this example, of Waikato & Auckland cultures really. Getting back to Rodney, they can’t have their cake & eat it too, think of all the recent roading /Hill St intersection fixes they are trying to address with big Auckland $$.

    1. Now after quickly skim reading the NAG proposal (http://www.lgc.govt.nz/assets/Uploads/NAG-Alternative-proposal-as-submitted-24-06-16.pdf), it is interesting the problems they have had, hopefully can be addressed. Look at the last few pages, for example:
      “Contractors sent to Warkworth from South Auckland to repair minor equipment and
      change light bulbs.”
      “Removal of rubbish bins from key places without consultation.”
      “Urban planners dealing with farmers from a position of complete ignorance of
      farming requirements.”

      Also interesting they think it can work with another one that did:
      “..has been our discovery of the highly successful Thames Coromandel District Council (TCDC) Devolved-Empowered model of local governance.”

      1. The other things they say of interest are that they don’t think they are liable for any of the supercity debt despite coming into the supercity with the highest per capita debt. And they somehow think that the parks in the NAG region should be the responsibility of Auckland Council.

        The basic issue with North Rodney is the huge road network that services a very sparse population. I think they will rediscover very quickly that this network is expensive to maintain.

        1. Yes, seems more the problem of local representation & urban/rural understanding: “The idea that “one-size can fit all” conflicts in areas of service standards and cost of capital works. For example, Auckland Transport’s footpath construction standard is not different between rural and urban settings and yet the operational environments are vastly different.”
          I think these things can get worked through.

  13. I commented in reply to a comment by Fraggle, but that has disappeared… come back, Fraggle, your comment was really interesting… so I’ve deleted mine as well. :/

  14. The special interest groups that are opening willing to secede from the unitary council should get their say and see how long they last, my opinion is they will be regretting their decision – just like those who thought Brexit was a good idea

    1. Maybe, maybe not, but I do think that people should have the opportunity to vote on it. All parts of Auckland, not just Rodney and Waiheke.

      Would I vote for a separate Devonport or Devonport/Takapuna borough council? I’d consider it if it meant better public transport than we get from AT (not hard to achieve) and I reckon Richard Hills might make a fine mayor!

      That’s idle speculation and good fun, but the democratic process has been subverted with the super-city creation and this should be set right wit a vote. Yes I know Brexit is a poor outcome for the UK, but the alternative was a dictated solution not a elected one.

  15. Can you explain the reasons why urban Aucklanders want to keep these areas within Auckland? Wouldn’t it be better to let them go, then we wouldn’t need to subsidise the Waiheke Ferry, wont have to pay for the old SH1 when the new toll road goes in?

    1. The Waiheke Ferry is fully commercial. But good point on the retired SH1, will add to the substantial roading network the new council would need to maintain.

    2. It’s a common concept around the world – the bigger core areas like to take in smaller areas (population wise) as it helps grow their empire, even though these areas are more expensive to run.

      It goes the other way too – smaller areas will often want to become independent even if their costs go up.

      It’s worth remembering NZ would probably be better off economically being part of Australia, and would likely be a drain on Aus taxpayers, but a merger is far more likely to find support in Aus than here.

      1. Yes exactly there is world scale version of this very thing. NZ itself is like a Waiheke Island compared to Europe say. The question is how far do you go with merging?

  16. I live on Waiheke.

    A ‘Wexit’ is a terrible idea. As with Brexit in the UK, the notion that we can have our cake and eat it (“lets have control back”, free from the ‘tyranny’ of Auckland Council, and that our rates may even fall (!!!!!)) is complete and utter fantasy. Its perpetuated by some locals, fuelled by nostalgia, who want to return to the 80s when the island was a completely different place (maybe it was better, maybe it wasnt, I didnt live here then and I’m not going to take a view either way on that). The fact remains that what Waiheke, as a place, has moved on, for better or worse -like it or not its basically a suburb of Auckland and this will only be reinforced further as the years go by.

    For every dollar we pay in rates we get almost two back.
    Our local board area is the second poorest after Great Barrier
    We get millions spent on marketing and promotion each year spent by ATEED which fuels tourism, which is the main industry supporting the island
    Over 2000 locals commute daily to Auckland for work, further reinforcing that we’re absolutely connected to the mainland.
    Our ferries are run by Fullers who outside of the main tourist season actually run a half decent service (i’m sure some would crucify me for having this view), but without further oversight from Auckland Transport will do whatever the hell they want
    Our Local Board is a bit of a shambles – aspirational in its intentions, but without any sort of hold on reality about where the money will come from to do what it wants to get done, and chaired by a someone who, for example, would quite happily refuse reduced ferry fares (benefitting all locals) in case more people actually wanted to come here.

    Look, its a great place to live, and we made our choice knowing that it comes with certain logistical challenges, trade offs, and increased costs to do some things that others in the city take for granted. I’m not complaining at all. There are some fantastic local initiatives and a real unique character about the place as well which would be a shame to lose as the island evolves, but..

    I just find it completely crazy that there’s even a plausible argument to be had for going it alone, and those who are in favour of it and who perpetuate the myths about the possible benefits of it are doing us all a massive disservice just so we can have ‘control’ back.

    I remember a quote from someone who was interviewed on the news about this a few months back who said “well at least if its ours again then any mistakes will be our mistakes”. Jesus wept, i’m sure that comfort will help you sleep at night when your rates bills have doubled, your ferry costs have increased, and the tourist dollars which you rely on to pay your bills have dropped significantly.

    /rant over!

    1. I’m a regular weekend visitor to Waiheke and I know a lot of locals. They virtually uniformly think the splitters are barking mad and not to be taken seriously.
      But then maybe I know the ‘wrong’ people.

      1. Yes I think so – I know lots who support it. I couldn’t honestly say if more support it, or oppose it, or haven’t made up their minds. But the splitters are a significant group.

        I think most Waihekians would prefer a solution where the local board genuinely gets more power within Auckland Council, if that was provided as an option (as it appears it may now be). I would. Most people don’t like taking a big jump into the unknown.

        But if one choice is an Auckland Council and its CCOs who don’t recognise Waiheke as being an island in a Marine Park with its own history and thus a bit different; and won’t listen to the local board; and won’t consult locally (or perhaps just can’t given their size and format?)…Then the other choice is by default attractive, even if it is a gamble. Again, I’d take that gamble, but I’d rather not have to. (Hence the welcome proposal, if it eventuates, of more power for the local board).

        By the way, no-one has made a joke about the Waihetian People’s Front being splitters from the Waihekian People’s Front…or is that a bit too local?

        Splitters! https://www.youtube.com/watch?v=iS-0Az7dgRY

        1. “But if one choice is an Auckland Council and its CCOs … and won’t listen to the local board; and won’t consult locally (or perhaps just can’t given their size and format?)”

          Your point being?

          Isn’t this the exact same complaint made by every local board in Auckland Council?

          So maybe the answer to the problem is not Waiheke or Rodney splitting from Auckland Council, but getting a proper reform of the local board and CCO system so that everyone gets a better outcome together?

        2. Hi Greg.

          I think Waiheke is a bit different to other local boards, having been independent in the past, having a very clear boundary, and having a particular political heritage (see: Tea, Scones and Nuclear Disarmament, The Rainbow Warriors of Waiheke Island, etc.). You don’t tend to notice the difference crossing over the other local board boundaries quite as much. And other boards have more shared resources (roads, pipes, transport, leisure) which are cross-boundary.

          But I personally like a lot about Auckland and don’t have an overriding ideological reason to split, if Waiheke’s needs can be met by a proper reform of the local board and CCO system. I’d like to see other areas get a better outcome too. I mentioned in another post that I think that the start of this process may well have been prompted by the splitters, and may well have not happened without this impetus.

        3. Hi fra99le, you raise some good points in your comments on the post, and for sure the current relationship between AC and Waiheke isnt perfect, but whose is? I’d still argue that the best method to advance local causes is from within Auckland Council not from outside of it – so a complete split off, to me, would be absolutely disastrous for Waiheke and a gamble not worth taking. The negative effects would completely outweigh the positives in my mind.

          Recognising some of the local issues which don’t seem to be heard at AC, then of course if there is a proposal to devolve more power to local boards whilst still maintaining membership of the wider council area and getting the benefits from that is something that many people would support I’m sure.

        4. Yes I agree James. If Auckland Council can make the changes to devolve more power to the local board, then I’d prefer to go that route than to take the risk of devolution. That would still leave the CuCO (Council unControlled Organisations) issue to address and that is surely a thorn in everyone’s side. But with a more powerful local board, you have someone to take up that fight with AT. If I have an issue with what AT are doing, then I can contact my local board transport representative and have them take it up with AT and that’s a lot more direct and meaningful than it currently is. The question is: How do we get to decide on the various options, if they eventuate?

  17. There seems to be four talking points between the post and the comments itself.

    Firstly, even if this were still called Transportblog, I really don’t see why this sort of post falls outside that remit. After all, how can you claim to be about transport policy if you ignore entirely the decision making framework that would actually implement your policies? Yet, the name Transportblog also gave a narrow understanding of what the site has been about (at least since I have been reading it, i.e. 2014)… urban policy has always been something of interest here. Again, the previous reasoning applies but surely an aspect of urban policy is the consideration of the relationship of urban spaces, forms, governance and representation?

    Secondly, there was the relationship between freedom and financial self-interest that was highlighted by Bob Atkinson. I’m not entirely convinced that Brexit is a good example of this… what would happen with the money involved was a selling point of Leave so I am inclined to say that Polkinghorne is quite right to use a “have your cake and eat it” framework here. It’s certainly true that identity and the like matters in terms of a person’s political decisions but I think the confounding effects of misinterpretation of (financial) realities must be removed. That’s what I think this post is trying to do.

    Thirdly, it seems to me that some of the impetus for change stems from a perception of a rural/urban gulf. To the extent that I believe this, surely a response is to have a “rural member” seat, elected on top of current representation to the council by all “rural voters” (however we decide who they are). This person’s job would be to add further importance to the rural-wide but not local specific needs: without creating undue influence. Of course, if things really are going to become more localised, then what’s the real issue?

    Finally, I think another option for Waiheke is if it remained part of Auckland in a district sense, but became a semi-independent regional council. What I have seen in the comments is that a lot of the concerns relate to regional issues, such as transport. If those on Waiheke paid reduced district rates to the Super City with the shortfall (relative to whatever they pay now) and current implicit “regional contribution” going to this, let’s call it, Gulf Islands Authority then I think it could work. The Authority would have to be considered by AT as an additional stakeholder and would co-ordinate with Auckland Council in setting and managing regional policy, with the agency to pursue conflicting policy within its own means… but with the understanding (reflected in the statutes creating it) that doing so didn’t mean going alone in all areas (thus creating tradeoffs… maybe the Authority would spend its own resources on essentially operating as a competing ferry provider and consequently just acts as a management arm of Council in other regional concerns… and for Council the less they respect the desires of the Authority, a proxy for Waiheke’s inhabitants, the more of the regional costs it has to cover itself). I think it is an interesting idea but it’s been an idea for all of ten minutes. Probably stick a generic Council member or something in the Authority’s Board too.

    1. Thinking about your third point, the “rural/urban gulf”, seems to me a rural member wouldn’t necessarily work if we still aren’t really discussing the big issues.

      A week ago I heard someone from Matakana say “We’re living out here which lowers the pressure on housing in Auckland, but what does the Council do? It raises parking costs at Albany so much that we’ll just have to start driving all the way into town instead of taking the bus from Albany”.

      Seems to me some good evidence-based analysis on how much someone living outside Auckland and commuting in puts on our roads would help the discussion. Whereas a badly chosen “rural member” could just peddle the same misconceptions.

      1. Three remarks.

        Firstly, this is exactly why I am not necessarily convinced that there really is a “rural/urban” gulf. For instance, if you look at maps of the US with micropolitan and metropolitan areas over-laid, it is apparent that most of what we think of as rural is actually deeply integrated with “urbanised” or urban areas. That is, concerns are shared.

        Secondly, this is also the issue with undue influence… you can’t make the rural member too powerful, and I don’t think adding one more voice among equals (with a generalised rural constituency) does this. Of course, other options also exist… e.g. putting the rural member in a capacity similar to the Maori Statutory Board… and possibly similarly non-elected, but as a technocrat. This quite probably broadly already exists.

        Thirdly, if there are pressing rural concerns, surely the Rodney and Franklin and wherever councillors simply gang up? And surely the councillors aren’t so single minded that all of them are always incapable of comprehending different perspectives? That is, the rural member’s functions are performed by existing members acting in concert.

  18. Hi if do that do the people that get cut will they still get the Dividend that they get once a year our will they get still get it not far if they get cut off and lose on it John manurewa Auckland

    1. Your dividend is assured until 2070 as long as Enact stays in existence and decides to keep handing out annual cash bribes.

      If Enact is wound up or what happens to it after 2070?

      That part is unknown.

  19. The problem is elected local officials does not have the financial power to address local issues.

    Local officials have to fight for the limited pool of money with each others. Sometimes the distribution is not fair and those one who consistently get low share would want to split.

    The easiest way to fix is half of the local residence rate received goes to local board, and half of them goes to regional.

    The local board have full power to decide how they can spend their local budget.

    1. “The problem is elected local officials does not have the financial power to address local issues.”

      yes they do. Thats what community board funding is for. These are substantial amounts each year. Auckland Council have $439 mill for next years budget , most of that goes to local controlled boards

      eg Rodney Local Bd had $23 mill of operating expenditure 2017 and 43.5 mill of capital spending ( it was $10.5 mill in 2015)

  20. Watercare took over the Rodney council run water supply/sewerage schemes as well. They have put in big dollars that were too much for the Council but small in relation to Watercares spending.
    have they accounted for that side of things to be put back in their lap along with a share to the upgrade debt

      1. Near the end of this doc: http://www.shapeauckland.co.nz/media/1854/draft-waiheke-local-board-plan-2017-consultation-document-pdf.pdf for spaending/budget summaries.

        As for WaterCare – there’s a small treatment plant near Oneroa which I believe deals with sewerage and waste water from a small network in the village there, otherwise the rest of the island uses rain water and septic tanks. Presumably this will remain the situation as reticulation is unlikely to happen any time soon.

  21. There is little or no “rural/urban gulf” between Auckland and Rodney or even Waiheke. The majority are ex- or peri- urban dwellers, lifestyle blockers and the like. It’s purely a tribal mentality.

    In both cases they’ll be exposed as country bumpkins within 5 minutes of attempting to administer themselves.

  22. I’m reminded of the Simpson’s episode where the town splits in two through argument over an area code change. They start charging each other an ‘out of towner’ tax. I can see this proposal ending in similar tears and a state of confusion in the split off areas with ‘why won’t you pay for our infrastructure/services needs?’

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