LOCAL GOVERNMENT COMMISSION

MANA KĀWANATANGA Ā ROHE

Final Decision on the Union of Nelson City and Tasman District

30 January 2012

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CONTENTS

Introduction …………………………………………………………………………………. 3 Background …………………………………………………………………………………. 3 Criteria for consideration of scheme ……………………………………………………... 3 Will the scheme result in a more appropriate district/region for the efficient and effective performance of the local authority role? ……………………….. 5 Will the scheme result in a district/region reflecting a more distinct community or communities of interest? ………………………………………………….12 Will the scheme result in a local authority with enhanced resources for carrying out its responsibilities, duties and powers? ……………………………… 15 Will the scheme result in a local authority better able to achieve the statutory purpose of local government including meeting decision- making requirements? …………………………………………………………………… 18 Commission decision …………………………………………………………………….. 23 Summary of additional recommendations ……………………………………………... 24

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Introduction 1. This document sets out in detail the decision and reasons of the Local

Government Commission (the Commission) for issuing a reorganisation scheme for the union of Nelson City and Tasman District.

Background 2. On 16 June 2011 the Commission released a draft reorganisation scheme for

the union of Nelson City and Tasman District. This followed the receipt of an elector-initiated petition for the union of the two areas and the calling of public submissions on that proposal. Details relating to the petition and the hearing of submissions on the proposal are set out in the Commission document ‘Decision on Proposal for the Union of Nelson City and Tasman District’ dated 13 June 2011.1

3. Following consideration of the submissions and the undertaking of further

enquiries, the Commission decided, under clause 39 of Schedule 3 of the Local Government Act 2002 (LGA), to issue a draft reorganisation scheme on the basis that the proposal would promote good local government of the Nelson Tasman area. The detailed reasons for that decision are also set out in the Commission’s ‘Decision on Proposal for the Union of Nelson City and Tasman District’.

4. The Commission then called for submissions on the draft reorganisation

scheme by 19 August 2011. Written submissions were received from 402 persons and organisations. A total of 107 submitters appeared before the Commission at hearings held in Nelson and Motueka on 28 to 30 September, and in Murchison and Takaka on 11 and 12 October 2011. A list of submitters and a summary of the main points made in submissions and at the hearings is separately available.

5. Following the consideration of submissions on the draft reorganisation scheme

and the undertaking of further enquiries considered necessary or desirable, the Commission was then required, under clause 46 of Schedule 3 of the LGA, to decide whether to approve the draft scheme, with or without modifications, or to decline to proceed with the scheme. This document sets out that decision and the reasons for it.

Criteria for consideration of scheme 6. In order to proceed with the scheme, the Commission must be satisfied, in

terms of clause 3 of Schedule 3 of the LGA, that it will:

1 This document is available on the Commission’s website www.lgc.govt.nz along with a background report prepared to assist the Commission’s consideration of the proposal providing a general description of the two areas, existing communities of interest and planning issues.

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(a) promote good local government of the districts or regions concerned; and

(b) ensure that each local authority provided for under the proposal will:

(i) have the resources necessary to enable it to carry out its responsibilities, duties and powers; and

(ii) have a district or region that is appropriate for the efficient and effective performance of its role as specified in section 11 of the Act; and

(iii) contain within its district or region a sufficiently distinct community of interest or sufficiently distinct communities of interests; and

(iv) be able to meet the requirements of section 76 of the Act (which relate to decision-making).

7. When considering the above criteria, the Commission is required to take into

account:

(a) the area of impact of the responsibilities, duties, and powers of the local authorities concerned; and

(b) the area of benefit of services provided; and

(c) the likely effects on a local authority of the exclusion of any area from its district or region; and

(d) any other matters that it considers appropriate. 8. The Commission has previously recorded that it believes that the main statutory

criterion – ensuring that the proposal will promote good local government – requires it to consider whether the proposal will result in improved local government arrangements in the area. These arrangements will need to result in local authorities that can give better effect to the purpose of local government and the roles and principles relating to local authorities. These elements of good local government are set out in sections 10, 11 and 14 of the LGA.

9. We note that in relation to improved local government, the LGA requires

assessment of not only current arrangements but also consideration of the most effective long-term arrangements. In particular, we note the principle identified in section 14(h) of the LGA for local authorities to take a sustainable development approach in relation to: the social, economic, environmental and cultural well-being of the community; the need to maintain and enhance the quality of the environment; and the reasonably foreseeable needs of future generations. An important part of our consideration, therefore, is assessment of the capacity of the current two-council structure to achieve this principle compared to the proposed united council for the Nelson Tasman area.

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10. In this report, we address the statutory requirements and criteria in relation to the scheme in terms of the following four questions2:

a. Will the scheme result in a more appropriate district/region for the efficient and effective performance of the local authority role?

b. Will the scheme result in a district/region reflecting a more distinct community or communities of interest?

c. Will the scheme result in a local authority with enhanced resources for carrying out its responsibilities, duties and powers?

d. Will the scheme result in a local authority better able to achieve the statutory purpose of local government including meeting decision-making requirements?

11. We address each of these four questions below. Will the scheme result in a more appropriate district/region for the efficient and effective performance of the local authority role? 12. The role of a local authority (section 11 of the LGA) is to:

a. give effect to the purpose of local government which is as follows:

i. to enable democratic local decision-making and action by, and on behalf of, communities

ii. to promote the social, economic, environmental, and cultural well-being of communities, in the present and for the future

b. perform the duties, and exercise the rights, conferred on it by the LGA and other enactments (such as the Resource Management Act 1991 and the Land Transport Act 1998).

13. We focus first on the promotion of community well-being and giving effect to

legislative requirements, and whether these would be assisted by an alternative local government structure for the Nelson Tasman area. We address the democratic local decision-making and action aspect of the local authority role under question 4.

14. A report prepared for Local Government New Zealand identified a number of

key factors that make a significant contribution to local economic growth.3 We believe these factors are also important in contributing to all the dimensions of community well-being i.e. social, environmental and cultural as well as economic well-being. The key factors include: spatial planning and infrastructure, implementation and delivery of regulation, provision of services and local authority leadership. We used these factors to assess the potential for

2 These questions incorporate the seven questions the Commission posed when it called for submissions on the proposal and the questions set out in ‘Decision on Proposal for the Union of Nelson City and Tasman District’.

3 ‘BERL – Local Government Economic Indicators Framework’ prepared by BERL Economics dated December 2010.

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a united Nelson Tasman council to promote sustainable community well-being in the area.

Spatial planning and infrastructure 15. Significant population growth has occurred in recent years in the Nelson-

Richmond urban conurbation as shown in the following table. The growth has been largely accommodated in Richmond and the neighbouring Waimea-Moutere Ward given the geographical constraints on Nelson City.

Area

(Wards based

on pre-2007

boundaries4)

1996 Census,

Usually

Resident

Population

Count

2001 Census,

Usually

Resident

Population

Count

Change

96-01

%

Change

96-01

2006 Census,

Usually

Resident

Population

Count

Change

01-06

%

Change

01-06

Golden Bay

Ward 4,698 4,791 93 2.0 4,830 39 0.8

Lakes-

Murchison Ward 2,313 2,445 132 5.7 2,421 -24 -1.0

Motueka Ward 9,909 10,440 531 5.4 10,602 162 1.6

Moutere-

Waimea Ward 9,870 10,695 825 8.4 12,366 1,671 15.6

Richmond Ward 11,178 12,981 1,803 16.1 14,406 1,425 11

Tasman District 37,974 41,352 3,378 8.9 44,625 3,273 7.9

Nelson City 40,242 41,568 1,326 3.3 42,891 1,323 3.2

16. Between 2001 and 2006, approximately 95% of total Tasman District population

growth occurred within the Richmond and Waimea-Moutere Wards. Significant population growth is projected to continue in Richmond and also in Wakefield, Brightwater, Wai-iti and Mapua in the Waimea-Moutere Ward. The Tasman District Council’s (TDC) growth modelling work projects that the population of Richmond Ward alone will increase from a Statistics New Zealand estimated 15,350 in 2010, to an estimated 27,100 by 2031. By 2031, the Richmond Ward will contain approximately 42% of the total population of Tasman District.

17. In addition to projected population growth and the resulting requirement for

adequate residential land, there is a need, as identified in the second Nelson Regional Economic Development Strategy, to ensure future requirements are also met for industrial and commercial land, particularly given geographical constraints on Nelson City.5 This needs to be achieved while, at the same time, protecting the area’s most productive rural land.

4 In 2007, the Belgrove/Wai-iti settlements area was transferred from Moutere-Waimea Ward to Lakes-Murchison Ward. For consistency, population has been determined on a meshblock basis based on post-2007 boundaries.

5 The second Nelson Regional Economic Development Strategy was produced by the Nelson Regional Economic Development Agency in 2007 and it identified the need for appropriately zoned retail, commercial and industrial land as a key requirement in achieving the economic potential of Nelson Tasman.

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18. Currently the Nelson City Council (NCC) and TDC are separately responsible for resource management planning under the Resource Management Act 1991 (RMA). Both councils are unitary authorities meaning there is no regional council responsible for developing a regional policy statement under the RMA. The purpose of this statement is to provide an overview of resource management issues for the area as a whole, and policies and methods for integrated management of the area’s resources. Given their unitary authority status, there is also an absence of formal mechanisms, such as a triennial agreement under section 15 of the LGA, to plan common approaches and joint communications for the area as a whole. As a result, co-ordination between the two councils on planning issues is dependent on the political will of the councils on a case-by-case basis, and on the commitment of staff.

19. The two councils were established as unitary authorities in 1992 following

abolition of the Nelson-Marlborough Regional Council. At that time they were in the unusual position, compared to other unitary authorities, of being responsible for a primarily urban area, in the case of NCC, and a primarily rural area in the case of TDC. As noted, this situation is changing rapidly for TDC and the combined Nelson-Richmond conurbation needs to be planned and managed as one entity including its relationship with the surrounding rural land, with a view to achieving sustainable development and future community well-being.

20. The desirability of unified planning for the combined area was stressed in a

number of submissions on the draft reorganisation scheme. Nelson Forests Ltd, which manages forests in both areas, stated that “operating our business across two districts highlights the inconsistencies in resource management application” and “a unified council will streamline and simplify the council procedures that impact on our business”. The NZ Institute of Surveyors Nelson Marlborough Branch commented that its members believed that “with a single district plan and engineering standard they could provide improved delivery of professional survey services in such matters as subdivision design, infrastructure development and building construction”.

21. Another example of current differences between the two councils which can

undermine attempts to promote the area as a whole and attract desired investment is that of their different development contribution policies. Unified planning and decision-making processes will also be more administratively efficient, removing the need for each council to submit on the other’s proposed resource management plan changes and saving staff resources as a result.

22. As noted in the ‘Decision on Proposal for the Union of Nelson City and Tasman

District’, there is a broad consensus, including among many opposed to the union, that Nelson Tasman comprises one regional economy. The close economic relationship of the two areas is reflected in the description of Tasman District as ‘the engine room’ of the economy and Nelson City the essential servicing centre including key services such as the port and airport. The relationship between the two areas highlights the importance of infrastructure planning such as for roading, as a component of effective spatial planning.

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23. In relation to transport planning, the New Zealand Transport Agency, while not expressing a formal position on the union, submitted on the draft reorganisation scheme saying “it makes inherent sense to view Nelson and Tasman as an integrated network reflecting in particular:

North/south traffic and freight flows from Tasman to Nelson, accessing key transport infrastructure in Nelson City (e.g. Port and Airport), and

Economic, land use and transport interdependencies between Richmond (in Tasman District) and Nelson City.”

24. The Agency went on “to this end, having a single strategic land use and

transport planning framework that extends over the Nelson and Tasman regions, capturing the urban area in Nelson/Richmond, and interactions with the wider regional economic area (including connections with key regional infrastructure), would seem to offer a more streamlined and efficient approach in terms of identifying and delivering transport outcomes”.

25. A measure of the coalescing of the two areas and resulting artificiality of

separate planning processes, is the increasing cross boundary work patterns and associated pressure on the transport network. Information from the 2006 census shows that:

of the 22,023 employed residents of Nelson City, 2,136 (approximately 9.7%) worked in Tasman District (an increase of 396 over 2001)6

of the 23,313 employed residents of Tasman District, 4,962 (approximately 21.3%) worked in Nelson City (an increase of 1,227 over 2001).

26. The alternative to integrated spatial planning is the current reliance on the

agreement of the two councils on approaches to particular cross-boundary issues (e.g. urban sprawl, roading to the Port, stock effluent disposal) taken in the absence of any overall planning framework for the area as a whole. This approach is dependent on the effective collaboration of staff of the two councils and the political will of elected members. A number of submitters suggested more certainty was required for the community, developers and business.

27. Similarly in relation to improvements to council-provided infrastructure, these

are identified from separate city and district focuses and are subject to the separate long-term planning processes of two councils with their own priorities and political accountabilities. We note in this respect that we were advised that it was rare for either council to submit on the other’s long-term plan. We address infrastructural services further under provision of services below.

6 Based on 2006 census usually resident population aged 15 years and over and employed (part time and full time)

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Implementation and delivery of regulation 28. While planning for growth to promote community well-being is important, local

authorities must also work to maintain and enhance the quality of the environment in accordance with the sustainable development principle in section 14 of the LGA. The importance of this principle is likely to increase in light of rising public expectations and the need to grapple with issues such as those arising from climate change, rising sea levels, water and air quality.

29. We believe that the current land boundary between Nelson City and Tasman

District, down the middle of Champion Road, and its extension into the Waimea Inlet and Tasman Bay, and also the two areas’ respective airsheds, will become increasingly artificial when dealing with environmental issues. Consequently the two councils will increasingly have to work together to address environmental issues. Again the success of this will depend on effective collaboration of the staff of the two councils and on the political will of elected members.

30. One council for the combined area will ensure the development of common

standards for regulatory control in the future, without the need for joint exercises by the two councils to reconcile different standards.

31. There is a wide range of regulatory activities performed by local authorities from

planning and building controls, to environmental and public health standards, to animal and pest control, to a raft of more socially orientated controls such as in relation to alcohol, gaming and prostitution. The trend has been in recent times for more requirements to be placed on local authorities to develop regulatory policies. On the assumption that this will not change at least in the short term, it will become increasingly more efficient and effective for one set of policies to be developed recognising the area of impact is becoming more and more one identifiable area with the population moving freely across the area.

Provision of services 32. The provision of services to the community is a core responsibility for local

authorities and they have an obligation to provide these as efficiently and effectively as possible.

33. An example of an opportunity for more efficient and sustainable provision of

services is in the supply of water. The NCC 2009-19 community plan states the city has sufficient water supply available to meet the needs of Nelson for at least the next 30 years. The TDC 2009-19 plan on the other hand identifies the need for a new supplementary water source for rapidly growing Richmond. There are agreements for sharing of existing water supplies between the two councils for the Nelson-Richmond conurbation but these have not been fully exercised. There is also the proposal for the development of the Lee Dam to help address pressing water supply issues. Integrated management of water supply for the combined area will provide more capacity to enable a joint project to proceed, provide a more secure future supply, be more efficient for current users and at the same time allow for the diversion of more water for irrigation purposes.

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34. It is both more equitable and more economically efficient for the area of benefit

for services to match the area of the people who pay for those services. Some shared service (governance) arrangements have been agreed to date between the two councils aligning with this principle and recognising the coalescing of the two areas. Successful examples of shared service arrangements are the Saxton Fields recreation facilities, the Bell Island sewage treatment plant, joint civil defence and emergency management, the jointly owned port company and jointly owned council (controlled) organisations for the airport, tourism and Nelson Provincial Museum.

35. The potential for further shared service arrangements is dependent on the

agreement of the two separate governing bodies with different priorities and accountabilities. It will also involve significant costs (time and money) in necessary joint meeting and reporting processes and subsequent separate council agreement.

36. We are aware that the two councils, along with the Marlborough District Council,

commissioned a report on shared service options for the three councils. The report identified a number of services and functions as possible shared service candidates but recommended only a limited number be chosen for initial consideration based on resource availability issues. It also recommended a working party of officials be established to determine which of the possible options should proceed to detailed analysis in stage two of the process, with the third stage being implementation of agreed shared services. While the stage one report has been received by the councils, we understand that there has been no commitment to progress the issue or adopt the recommended process. On this basis we do not believe that agreement between NCC and TDC, with or without Marlborough District Council, on the implementation of further shared service arrangements in a comprehensive programme is likely in the short term.

Local authority leadership 37. In addition to planning, regulation and the provision of services, local authorities

have an important function in providing leadership for their communities. The BERL report notes that for leadership to be effective there must also be partnerships and it identifies partnerships with central government and local community organisations and interests as important. It also notes facilitation of interventions by a range of public sector partners as a key role for local government.

38. We believe that one council for the Nelson Tasman area with an agreed vision

will be important to provide the necessary leadership, advocacy and promotion for the area at a national and international level. One council with an agreed vision for Nelson Tasman will also be in a better position to develop the necessary partnerships and carry out the required facilitation.

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39. Beyond the direct responsibilities of the council, community well-being for the combined area will depend in the future on, among other things, the efficient operation of the regional economy. This will be in relation to both existing industries and also new opportunities such as those identified in the 2010 review of the Nelson Regional Economic Development Strategy.7 These new opportunities included aquaculture, the impact of the emissions trading scheme on the forestry sector, tourism and research and development capability in the area. One council will be better placed to provide necessary partnership and facilitation support in respect of future opportunities in these areas as opposed to two councils attempting to coordinate their efforts.

40. In addition, the ability to effectively promote the local economy and to attract

and retain events, such as past events like the ‘World of Wearable Art’ and Rugby World Cup games, will in the future become increasingly important. This is because of reforms in Auckland and possibly elsewhere in the future, which will result in enhanced ability in those areas for promotion. Clearly the Nelson Tasman area will need to be in the best possible position to compete with those areas including one council providing partnership and facilitation opportunities.

41. An exciting opportunity will arise in Nelson Tasman, as elsewhere in the

country, with future Treaty of Waitangi settlements resulting in possible significant new local investment. The opportunity will arise to work closely with local iwi, whose rohe currently cross local authority boundaries, with a view to ensuring the maximum potential economic, social and cultural benefit is realised. This will be enhanced by the ability of iwi to work with a united council responsible for the whole area. We note all submissions from iwi groups on the draft reorganisation scheme supported the union proposal.

42. Another submitter who highlighted the desirability of one council for the area

was the Nelson Historical Society. The Society pointed out that the Nelson Tasman area has one of the longest and most diverse histories in New Zealand including bicultural history. It noted, however, that “a division between city and district councils has prevented the development of a united regional voice regarding heritage and the Society is concerned that aspects of our valuable history will be lost or continue to be severely diminished as a result”.

Conclusion 43. Projected population growth in the Nelson-Richmond urban conurbation with

resulting demand for residential land along with demand for more industrial and commercial land, will put increasing pressure on the two councils to provide effective spatial planning for both the urban and rural areas of Nelson Tasman. One council for the combined area will provide integration of the current separate long-term, resource management and transport planning processes.

7 ‘Nelson Tasman Regional Economic Development Strategy Review’ produced by the Nelson Regional Economic Development Agency dated June 2010.

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44. Integrated planning, regulation and service provision will be more effective in addressing significant issues such as: sustainable planning for the urban conurbation, effective environmental management (e.g. in relation to Tasman Bay into which rivers in both Nelson City and Tasman District flow8), adequate bulk water supply for the combined area (e.g. unified decision-making on the Lee Dam proposal), an efficient and effective roading and transport network for the combined area, sustainable joint solid waste management and recycling, cost effective provision of council buildings and facilities including emergency resilient civil defence headquarters.

45. In addition to the need for more coordinated planning, regulation and service

provision for the combined Nelson Tasman area, there will be an increasing need for strong unified leadership to promote and advocate for the combined area.

46. The NCC and TDC function efficiently and effectively in their respective areas.

We also acknowledge successful collaborations have occurred in the past but note the time and effort required for making these happen. In the future we believe an increasing amount of coordination of activities will be required in respect of the issues and opportunities identified above.

47. We do not believe the present two-council structure is appropriate for the

continued efficient and effective performance of the local authority role of promoting community well-being and giving effect to legislative requirements. Efficient and effective performance of this role relates to both present and future community well-being with the latter needing to be guided by the principle of sustainable development. Our conclusion relates particularly to the future well-being of Nelson Tasman rather than being a criticism of the current or past performance of either the NCC or the TDC.

Will the scheme result in a district/region reflecting a more distinct community or communities of interest? A distinct geographical area 48. One dimension of community of interest is the perception of a sense of

belonging to and identity with an area. This is enhanced by geographical features. The Nelson Tasman area can be seen as a discrete geographical area separated from its neighbours by mountain ranges. The area stretches from the Whangamoa Ranges in the east, generally following the Bryant, Richmond and Saint Arnaud Ranges (at the boundary with Marlborough District) to the Spencer Mountain Ranges south of Murchison and Saint Arnaud (at the boundary with Hurunui District). The boundary then follows the Mariri and

8 The Nelson Tasman area is characterised by significant river catchments including the Maitai (Nelson City), Waimea (predominantly Tasman District but partly in Nelson City), and the Moutere and Motueka (Tasman District) Rivers, which all flow into Tasman Bay. The Wakapuaka and Whangamoa Rivers (Nelson City) also flow into Tasman Bay.

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Arthur Ranges and the Tasman Mountains (at the boundary with Buller District) to include Golden Bay in the north-west.

49. The geographical distinctiveness of the combined Nelson Tasman area

compared to its neighbours, is in contrast to the increasingly artificial boundary between Nelson City and Tasman District down the middle of Champion Road.

50. We note that Tasman District encompasses part of the Buller River catchment

and as a result the West Coast Regional Council boundary does not fully conform with river catchments as required, as far as is practicable, by clause 4 of Schedule 3 of the LGA. This variation was agreed with the constitution of the Tasman District Council as a unitary authority in 1992 based on community of interest considerations in the Murchison area. This variation, in relation to river catchments, will continue with a Nelson Tasman union.

A distinct social and economic area 51. Other dimensions of community of interest are the functional relations that tie a

community together and the political structures to represent communities. The structure of local government in the Nelson Tasman area has reflected an evolution of these relations as a result of social and economic change. This has seen the successive combining of small boroughs, counties and town districts, progressively established following the abolition of the Nelson Province in 1876, recognising both economies of scale and an evolving wider community of interest. The history of both the current NCC and TDC involves amalgamations of local authorities all within the geographical area previously described.

52. The Nelson Tasman economy is one regional economy and distinct from the

Marlborough and West Coast economies as reflected in the establishment of the Nelson Regional Economic Development Agency.

53. We note there is a relatively involved picture of iwi structures in the area and the

fact, as is common across the country, these cross local authority boundaries and often encompass significantly larger areas. We have addressed the need for councils to engage effectively with local iwi elsewhere in this report but note here a Nelson Tasman union will facilitate this engagement by removing what is seen by iwi as an arbitrary boundary at Champion Road.

54. A wide range of community and governmental organisations cover the

combined Nelson Tasman area, or indeed a wider area. Local organisations that cover the Nelson Tasman area include: the Nelson Provincial Museum, the Suter Art Gallery, Sports Tasman (a satellite office of the wider Tasman Regional Sports Trust) and a wide range of other sporting and recreational competitions and activities.

55. In relation to governmental services, we note there are two base hospitals under

the Nelson Marlborough District Health Board with one in Nelson City serving the combined Nelson Tasman area. The Department of Conservation has a Nelson Marlborough Conservancy with a regional visitor centre in Nelson City and area offices in Golden Bay, Motueka (including the Nelson City area) and

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Nelson Lakes. The Ministry of Social Development has a regional office and service centres across the Nelson, Marlborough and West Coast areas.

Hierarchy of communities of interest 56. While we have emphasised the importance of recognising a distinct Nelson

Tasman regional community of interest, this is not to say that smaller local communities of interest do not exist. The Commission has acknowledged elsewhere that the TDC has identified 17 main settlements for planning purposes within Tasman District.9 Many submitters stressed the importance of these settlements as a focus for community identity. Acknowledgement of a regional Nelson Tasman community of interest in no way detracts from these local communities of interest, rather they should be seen as complementary. Communities of interest can be seen to exist as a hierarchy from local to regional to national and, in certain respects, even international.

57. We note that a number of submitters emphasising the importance of local

communities of interest were concerned at what they saw as a risk of domination of urban interests over rural interests and identity. We address the issue of representation, including in relation to rural and urban interests, in question 4 below. While acknowledging the importance of recognising all community interests, we note here and endorse the objective identified by the Commission when carrying out the nationwide restructuring of local government in the late 1980s:

“Most authorities in the new structure of territorial government will be district councils serving a combination of rural and urban communities. The objective is to bring town and country together. This will enable both rural and urban people to gain greater understanding of the challenges each faces and to have the opportunity to assist in the development and administration of the wider community.” 10

Conclusion 58. A combined Nelson Tasman district/region will reflect a more distinct regional

community of interest than present arrangements while still recognising distinct local communities of interest. One council for the combined area will be well placed to develop the necessary partnerships for promoting the distinct interests and well-being of the Nelson Tasman area.

9 See Local Government Commission report ‘Background Report on Communities of Interest and Planning in Relation to Proposal for Union of Nelson City and Tasman District’ available at www.lgc.govt.nz

10 Local Government Commission ‘Draft Reorganisation Schemes – Nelson-Marlborough Region’, December 1988, Section B p. 6.

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Will the scheme result in a local authority with enhanced resources for carrying out its responsibilities, duties and powers? 59. The Commission noted in its ‘Decision on Proposal for the Union of Nelson City

and Tasman District’ that the NCC and TDC, as unitary authorities, carry out a full range of territorial authority responsibilities, duties and powers as well as those of regional councils, and both were generally performing these well. As a result of our further investigations and enquiries, we have no reason to disagree with this conclusion and emphasise our decision to proceed with a reorganisation scheme relates to ongoing ability to address future issues and opportunities not to present or past performance. The ability to address future issues and opportunities relates to both financial and organisational capacity.

Enhanced financial capacity 60. To assist it to decide whether to issue a draft reorganisation scheme, the

Commission contracted the preparation of a report on financial and service delivery matters relating to the proposed union. That report concluded that both NCC and TDC were in a sound financial position and they had the ability to cover additional investments in assets and increased operating expenditure associated with the rates of population growth projected for their areas. 11

61. A second Addendum providing updated and additional information including a

review of the NCC and TDC annual reports to 30 June 2011 was produced. This confirmed that both councils continued to manage their financial affairs on a prudent basis and within their established policy limits.12

62. Some enhanced financial capacity will arise from savings that will result from the

union. The initial contracted report identified significant savings could be achieved in staff costs and this was confirmed in the second Addendum to the original report.13 These savings will include elimination of one chief executive position and the equivalent of one executive management team, and also reductions in the number of middle managers. An estimate of the savings from these reductions alone is $2.28 million. While other staff reductions are likely, we have become aware that TDC is currently reviewing its professional services contracts and this may result in a number of positions being brought back in- house. Given this and it being the responsibility of the Transition Manager to design the organisation chart, we have not made any further estimates on staff savings.

11 ‘Report for Local Government Commission on financial and service delivery matters relating to the proposal for

a union of Nelson City and Tasman District’ prepared by Strateg.Ease Ltd in May 2011. An Addendum to that report clarifying certain issues was also prepared dated 28 July 2011.

12 This Addendum, dated January 2012, was peer reviewed by Ernst and Young. Both documents are available on the Local Government Commission website.

13 The May 2011 report estimated savings of between $3.7 and $4.7 million depending on decisions by the new Council on activities levels in specific areas.

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63. A range of other savings will occur though some of these will be offset by some cost increases in certain areas. There is likely to be, for example, a modest increase in democratic costs, despite a reduction in the total number of elected members, as a result of increased levels of elected member remuneration. This will be determined by the Remuneration Authority, but increases can be expected to reflect the increased size of the district and council responsibilities, increased responsibilities for community boards, and payment of remuneration to non-council members of the Maori Board and Rural Advisory Committee. There will also be offsets against expected savings as a result of one-off transitional costs such as staff redundancies and Council branding, decisions on which will made either by the Transition Committee or by the new Council.

64. A number of submitters raised issues such as the cost of expected new

information technology systems. We note firstly that the reorganisation scheme provides for the current rating arrangements of NCC and TDC to continue until the new Council adopts a new long-term plan for the period commencing 1 July 2015. This means the current support and computer systems for the two councils’ rating systems will continue in the meantime. A phased transition timetable will allow the Transition Committee and Transition Manager initially, and then the new Council, to review all existing systems, current capacity and priorities for merging of systems over a period of time. It is important to note that upgrading of computer systems is an ongoing cost for organisations and would be required in any event by NCC and TDC. It should also be noted that costs that will be incurred, in areas such as the progressive upgrading of computer systems, will return benefits over time at least equal to cost outlays.

65. The reorganisation scheme provides that a range of existing plans of the NCC

and the TDC, such as their resource management plans under the Resource Management Act 1991, will be deemed to be plans of the new Council. Therefore there will be no requirement for the immediate combining of such plans. The cost of future reviews of these plans in Nelson Tasman will not be additional to current statutory requirements for the periodic review of these plans. We note that clause 67 of Schedule 3 of the LGA applies in respect of other transition matters not specifically identified in a reorganisation scheme. This means that matters like current council bylaws and contracts also carry over to the new Council.

66. In relation to savings generally, we note the findings of a recent joint Australian

and New Zealand report on options for consolidation in local government. This report concluded that efficiency gains can be achieved through various forms of consolidation, such as amalgamations, but these are unlikely to produce reductions in local rates and charges due to other expenditure needs.14 Case studies undertaken for the report “revealed cost reductions in specific functions or areas of service delivery (e.g. savings in administrative overheads or waste management), but the evidence strongly indicates that such savings need to be ploughed back into other areas, notably asset management”.

14 ‘Consolidation in Local Government: A Fresh Look’ Volume 1 prepared for Australian Centre of Excellence for

Local Government, Local Government Association of South Australia and Local Government New Zealand dated May 2011.

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67. In summary, while net savings will occur these are unlikely to translate into rates

reductions in the short term. An undue focus on financial savings may, therefore, be misleading for the public. We reiterate the statement in the ‘Decision on Proposal for the Union of Nelson City and Tasman District’ that the argument for a union does not rest primarily on financial savings but rather on the addressing of regional issues and opportunities.

68. We note the two councils are currently analysing the financial impact of recent

flooding events in Nelson City and Tasman District. The scale of the impact will become clear when they release their draft 2012 – 2022 long-term plans. In respect of the financial impact on Nelson and Tasman ratepayers from the union, we have provided in the reorganisation scheme that the NCC and TDC 2012 long-term plans will continue in effect until the new Council adopts a new plan in 2015. These plans include the councils’ rating arrangements and therefore there will be minimal impact on ratepayers from the union for an initial three-year period.

Enhanced organisational capacity 69. A key finding of the joint Australian and New Zealand report was that

consolidation provides important opportunities to capture what it calls ‘economies of scope’ and enhance the strategic capacity of local government. The report notes that “economies of scope increase the capacity of councils to undertake new functions and deliver new or improved services that previously were not possible … this enhanced strategic capacity is in part a function of increased size and resource level, but it is also related to the potentialities that are created by the pooling of knowledge and expertise”.

70. We believe a united Nelson Tasman council will have enhanced organisational

strategic capacity to address the issues and opportunities identified in this report. This will be a result of having the resources to attract qualified specialists in more areas, having a sufficiently large organisation to allow more functional specialisation by officers, and removal of the need for council officers to be engaged in liaison and coordination work with the other council. We note some specialisation does occur now which is shared with the other council, such as in the area of hydrological services provided by TDC. The union will allow specialisation to occur more widely with one dedicated specialist team for the range of council functions instead of the current two.

71. Clearly the combined Nelson Tasman district/region will be larger than the areas

for which the current councils are individually responsible. We do not believe, however, it will be sufficiently large to result in significantly greater costs to outweigh the benefits to be gained. We note, for example, the combined district is smaller in area than the neighbouring Marlborough unitary authority but it will have a significantly larger population over which it can spread its costs.15

15 The union will result in a district with a land area of 10,075 square kilometres which will be the fourth largest territorial authority by land area though still smaller than neighbouring Marlborough District and smaller than

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Conclusion 72. Given the financial position of the current councils, the new Council will have

adequate financial resources to carry out its responsibilities, duties and powers. The new Council will have enhanced strategic organisational capacity to address future issues and opportunities.

Will the scheme result in a local authority better able to achieve the statutory purpose of local government including meeting decision-making requirements? 73. The statutory purpose of local government (section 10 LGA) is:

a. to enable democratic local decision-making and action by, and on behalf of, communities

b. to promote the social, economic, environmental, and cultural wellbeing of communities, in the present and for the future.

74. We have addressed the promotion of community well-being above under the

question relating to an appropriate district/region, and we focus here on the enabling of democratic local decision-making and action.

Enhanced recognition of communities of interest 75. To achieve democratic local decision-making requires firstly the recognition of

communities of interest and then provision of adequate representation for those communities of interest.

76. A union of Nelson City and Tasman District explicitly recognises the Nelson

Tasman regional community of interest as described in detail above. It does not, however, ignore the fact that there are a number of strong local communities of interest within the combined area. This is recognised in provision for a ward system of representation across the new district/region.

77. The ward system closely reflects current ward arrangements for Tasman

District, which are seen as appropriate groupings of the 17 settlements recognised by the TDC for planning purposes. One minor adjustment to current TDC ward arrangements is the aligning of the Lakes-Murchison Ward with the southern boundary of the Wai-iti area unit so as to better reflect this community of interest. In light of submissions received on the draft reorganisation scheme, we have decided to retain Tasman Village and surrounds in the Moutere-Waimea Ward, as is currently the case, to reflect the community of interest centred around Mapua and Ruby Bay.

Westland and Southland Districts. The district will have a population of 92,850 making it the eighth largest territorial authority.

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78. We received several submissions suggesting that an area of the Motueka Valley, currently in the Moutere-Waimea Ward, should be transferred to the Motueka Ward. We are providing significant community planning powers for community boards to support their overview role in respect of council services provided in their communities. The transfer of the Motueka Valley to the Motueka Ward will facilitate the carrying out of this function by the Motueka Community Board, particularly in relation to water supply and stormwater and river management services, and it also reflects roading patterns in the area. Accordingly we agreed with the transfer of Motueka Valley to the Motueka Ward/Community Board area. The transfer has the benefit of achieving closer compliance with the fair representation requirement of the Local Electoral Act 2001 by compensating for the transfer of the Tasman Village and surrounds to the Moutere-Waimea Ward.

79. We received a number of submissions opposing the proposal in the draft

reorganisation scheme for the Nelson City area, given its current ‘at large’ election arrangements, to be one relatively large seven-member ward. This opposition reflected concerns at the apparent imbalance of representation between this ward and the other one, two or three-member wards. We acknowledge these concerns and after considering options for dividing the Nelson City area into either two or three wards, we have decided a division into separate Stoke, Nelson and Atawhai Wards is appropriate to provide more balanced representation across the district/region.

80. As a result of our decisions outlined above, a summary of ward arrangements is

as follows.

Wards Population Members

Population:

Member

ratio

Difference

from

quota %difference

from quota

Golden Bay 4,890 1 4,890.00 -915.00 -15.76

Lakes-Murchison 2,410 1 2,410.00 -3,395.00 -58.48

Moutere-Waimea 12,900 2 6,450.00 645.00 11.11

Motueka 11,800 2 5,900.00 95.00 1.64

Richmond 15,500 3 5,166.67 -638.33 -11.00

Stoke 21,200 3 7,066.67 1,261.67 21.73

Nelson 19,300 3 6,433.33 628.33 10.82

Atawhai 4,880 1 4,880.00 -925.00 -15.93

92,880 16 5,805.00

81. We note that a number of the wards fall outside the +/-10% range prescribed in

the fair representation requirements of the Local Electoral Act 2001. This variation is permitted by clause 59(1)(f) of Schedule 3 of the LGA for a period of not more than 3 years. We also note that projected population growth indicates closer compliance will be achieved in future.

82. A number of Tasman District submitters expressed concern at a loss of

representation by the reduction in the number of councillors for their particular ward. In compensation for the reduced number of councillors, the draft

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reorganisation scheme provided for enhanced powers for community boards to undertake local decision-making. We acknowledge the concerns raised but support the view that the community boards will provide a good measure of compensation particularly in light of our decision to provide further enhanced powers to the boards. We also believe that the new Council has an important task in supporting the community boards to achieve their full potential for responsibility for local decision-making and in educating the public about the benefits and ready access to local decision-making.

83. We did acknowledge some concerns will remain, at least in the short term, and

particularly in the rural areas, and therefore considered other mechanisms to enhance representation. As a result, we have decided to provide for a rural advisory committee to be established as a standing committee of the new Council. This committee is to comprise members nominated by the two Federated Farmers Provinces, and the two Rural Women New Zealand provinces and also local fruit growers, wine and grape, and forestry organisations. The role and responsibilities of the committee are set out in Schedule 2 of the reorganisation scheme.

84. We have also decided to provide for a Māori board to be established as a

standing committee of the new Council. This is in response to submissions suggesting a range of mechanisms for enhancing representation for Māori and assisting the new Council to meet its statutory obligation to provide opportunities for Māori to contribute to local decision-making processes. Suggestions from submitters included the establishment of Māori wards and/or community boards and constitution of a Māori statutory board as has been established in Auckland.

85. We were advised it is not possible for the Commission to establish Māori wards

as the process for doing so in the Local Electoral Act 2001 specifically provides for community input, by way of an elector poll, before any decision is made to establish a Māori ward. It is also not possible for the Commission to establish a Māori community board as there is no statutory provision for such a body. In light of these restrictions, we decided establishment of a Māori board as a standing committee would be the most appropriate mechanism to help the new Council to meet its statutory obligations. The membership of the board is to be representative of iwi interests and matawaka in the Nelson Tasman area and will be determined by the new Council. The role and responsibilities of the board are set out in Schedule 1 of the reorganisation scheme.

Enhanced regional decision-making 86. As discussed above under ‘a more appropriate district/region’, there are a range

of issues and opportunities facing the Nelson Tasman area. One united council addressing these issues and opportunities will, we believe, result in significantly enhanced regional decision-making and action and thereby be better able to promote community well-being. This will be as a result of clear responsibility for and accountability to the regional community of Nelson Tasman while allowing at the same time for local decision-making and action to be carried out at the local level. A united council will have the resources to meet the statutory decision-making requirements set out in section 76 of the LGA.

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87. A united council will obviate the need for the separate councils to commit

resources to agreeing to provide shared services to the wider community and deciding the priorities for such shared services. As noted previously, while a number of shared services have been agreed between the two councils, there is scope for considerably more but there is an apparent lack of will to vigorously pursue this matter.

88. The scheme provides for representative structures to be established relating to

Māori and rural interests across the combined district and this will enhance the quality of council decision-making on these important responsibilities.

89. A union will allow more streamlined council decision-making in respect of the

interests of the many community organisations who currently have to do business with two councils in order to lobby or seek assistance for their work covering the areas of both councils. This results in significant duplication for these groups, uncertainty and potential confusion arising from differing accountability requirements. Groups who pointed out the benefits of only having to deal with one council included the Bishop Suter Trust Board, NZ Automobile Association Nelson District, Nelson Historical Society and Nelson Heritage Advisory Group.

90. The union will also provide more equity for local groups and organisations and

the community at large. We were advised, for example, that the TDC provides one fifth of the amount provided by NCC as operational funding for the Suter Art Gallery and its associated services which the Board stated are provided equally to both areas. In addition, a union will provide more certainty for a range of other interests, such as developers for example, by requiring them to deal with one council rather than two.

91. Other advantages of the union include the scope for staff to be relieved of work

involving liaison and coordination with the other council, and instead be free to focus on delivery of services directly to the community.

92. We believe a council of 16 members plus a mayor will be sufficient for the

council to efficiently and effectively perform enhanced district-wide/regional decision-making, as required for a unitary authority, given the subsidiary decision-making structures provided in the scheme and the potential to establish more such bodies when the role is fully understood.

Enhanced local decision-making 93. We received many submissions relating to community boards and their powers.

A number of these sought the allocation of maximum powers to boards to enable them to carry out the subsidiary decision-making role envisaged in the draft reorganisation scheme.

94. On the other hand, some submitters opposed the establishment of community

boards where they do not currently exist. We believe this opposition showed a lack of understanding of the full potential of community boards in local decision-

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making. The opposition was also based on a belief by some that community boards would replace community or residents associations where these currently exist. This is not the case and we are aware of a number of examples around the country where community boards and community/residents associations work well in partnership. We noted that community boards have the advantage of being able to be delegated a much wider range of functions from the territorial authority, as evidenced by the powers provided in this scheme, than community/residents associations.

95. However, in light of the level of understanding about the role and potential

powers of community boards, we decided to establish community boards only where they currently exist at this time. In making this decision, we were aware that 10 percent of electors of an area may, under Schedule 6 of the LGA, petition the territorial authority at any time for the establishment of a community board and our decision still allows for this to happen. Alternatively the Council may decide to establish further community boards as part of a representation review. We also note a territorial authority may decide to establish ward committees which may be delegated similar powers as those provided to community boards. Such committees may comprise the ward member(s) and appointed members from organisations or groups within the ward.

96. We believe district-wide coverage by subsidiary decision-making structures, as

envisaged in the draft reorganisation scheme, is still appropriate for Nelson Tasman. However we also believe it is important for communities to fully understand the issues and options relating to such structures and that the new Council should facilitate the necessary enhanced understanding. Accordingly, at this time we have decided to provide only for the establishment of community boards for Golden Bay and Motueka and we recommend the new Council considers the establishment of ward committees for the other wards, and for the more rural Lakes-Murchison and Moutere-Waimea Wards in particular, with similar delegations to those provided for community boards. We also recommend the Council provides information to those communities who may be interested in the establishment of community boards on the process for their establishment.

97. The Golden Bay and Motueka Community Boards will both have four elected

members, as at present, and one and two appointed members respectively, being the ward councillor(s).

98. As noted, we received a number of submissions seeking maximum allocation of

powers to community boards. In light of this we reviewed the powers proposed in the draft reorganisation scheme and have enhanced these in a number of areas. We were guided in this exercise by the fact that there are different sized catchments for different council services and that it is more efficient as a result for some services to be agreed and provided at the local level rather than at the district level. The new powers can be seen to be additional to those recently delegated by the TDC to the Golden Bay and Motueka Community Boards following the release of the Commission’s draft reorganisation scheme.

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99. To facilitate the establishment of an effective working relationship between the Council and the community boards, we recommend the parties enter into an agreement covering how they will work together. We suggest matters to be covered in such an agreement include: the ongoing appointment of ward councillors to community boards to provide liaison between the Council and boards; community board membership of council committees and speaking rights at full council meetings; an agreed level of servicing of boards by the Council and agreed funding levels; communication and consultation protocols between the Council and boards including the use of boards for Council consultation exercises wherever possible; criteria for establishing and agreeing what constitutes a district-wide issue; agreement to accept community board recommendations where these do not relate to district-wide issues or they do not have implications wider than that community.

100. In relation to funding of community boards, given their significant contribution to

council decision-making processes, we believe it is appropriate for boards to be funded by rates levied across the district. We recommend that the new Council funds the boards accordingly.

Conclusion 101. The union will provide a local authority better able to achieve the democratic

decision-making and action component of the statutory purpose of local government. This will be as a result of effective representation of both regional and local communities of interest, and enhanced democratic decision-making as a result of a clear distinction between regional and local decision-making responsibilities with accompanying clear accountabilities. By the union of two established local authorities, the new Council will have the resources to meet the statutory decision-making requirements set out in section 76 of the LGA.

Commission Decision 102. After considering the submissions and the comments made at the hearings and

completing its inquiries and consultations, the Commission decided, pursuant to clause 46(1)(a)(ii) of Schedule 3 of the LGA, to approve the draft reorganisation scheme with certain modifications and issue it as a reorganisation scheme. These modifications included some relating to the transition provisions as a result of submissions received and further consideration by the Commission.

103. The modifications to the draft reorganisation scheme are as follows:

a. the inclusion of Tasman Village and surrounds in Moutere-Waimea Ward and the Motueka Valley area in Motueka Ward

b. the division of Nelson City into Stoke, Nelson and Atawhai Wards

c. constitution of community boards in Golden Bay and Motueka only

d. amended powers for the community boards

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e. constitution of a Māori board and a rural advisory committee as standing committees of the new Council

f. provision for the Māori Board, Rural Advisory Committee and the community boards to nominate members to council committees

g. provision for an independent chairperson for the Transition Committee, appointed by the Nelson City Council and Tasman District Council, in addition to the three members appointed by each of the Councils

h. provision for the Nelson City and Tasman District Mayors and Deputy Mayors to be two of the three members appointed by each Council to the Transition Committee

i. amended functions for the Transition Committee, including recommendation of the appointment of a transition manager

j. amendments to a range of transitional matters including provision for the Nelson City Council and Tasman District Council 2012 – 2022 long-term plans, including rating arrangements, to remain in place until the new Council adopts a new long-term plan in 2015

k. the new district and new council to be called Nelson Tasman (not hyphenated) District and Nelson Tasman District Council respectively

l. the new Council to come into existence on 1 November 2012. 104. In deciding to proceed with a reorganisation scheme, the Commission was

satisfied that the Scheme will promote good local government of the Nelson Tasman area, as required by clause 3 of Schedule 3 of the LGA, and that it meets, as far as practicable, the further requirements of clause 4 to 7 of Schedule 3. In particular, the Commission considers the proposal set out in the reorganisation scheme will promote good local government of the Nelson Tasman area by:

a. ensuring a more appropriate district/region for the efficient and effective performance of the local authority role

b. reflecting the distinct Nelson Tasman community of interest

c. providing for a local authority with enhanced resources for carrying out its responsibilities, duties and powers

d. providing for a local authority better able to achieve the statutory purpose of local government including meeting decision-making requirements.

Summary of additional recommendations 105. In addition to the decisions reflected in the reorganisation scheme, the

Commission wishes to make a number of recommendations, as identified in this document, to the new Council for its consideration. These recommendations are that the new Council considers:

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a. establishment of ward committees in those areas where community boards have not been established and particularly in respect of the Lakes-Murchison and Moutere-Waimea Wards

b. providing information to those communities that may be interested in establishing new community boards on the requirements and process for establishment

c. entering into agreements with the community boards on how the Council and boards will work together for the benefit of those communities and the wider Nelson Tasman area

d. funding the operation of community boards by way of a district-wide rate and not targeted rates solely on the communities concerned.

LOCAL GOVERNMENT COMMISSION

Basil Morrison, Chair

Anne Carter, Commissioner

Grant Kirby, Commissioner 30 January 2012