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March 28, 2012

NZ’s environmental watchdog, the Parliamentary Commissioner for the Environment, Dr Jan Wright, announced today that her office will conduct an official investigation into fracking. Here’s her full statement:

Initial scoping work being done on hydraulic fracturing (fracking) has been stepped up to an official investigation.

Parliamentary Commissioner for the Environment, Dr Jan Wright, says the preliminary work indicated there is a need to examine the issue more closely.

“The work that has been done by my office thus far shows a substantive case for an official investigation under the Environment Act.

“Over the next few months my staff and I will conduct this investigation and produce a report to Parliament.

“I realise this is a hugely contentious issue and I would hope to have a report tabled in the House before the end of this year.”

The Green Party proposes a moratorium on any further fracking in NZ until the review is completed.

National Business Review reports as follows:

The Petroleum Exploration and Production Association of New Zealand, an oil industry lobby group, welcomed the decision as “an opportunity to dispel mistruths”.

“As an industry we have nothing to hide and everything to gain from participating in an open and honest dialogue with all interested parties,” said PEPANZ chief executive David Robinson.

“The practice of hydraulic fracturing has occurred in oil and natural gas reservoirs in Taranaki since 1993 in 28 wells. In that time there have been no incidents of drinking water contamination, land contamination or earthquakes linked to hydraulic fracturing.

“We are confident that this inquiry will dispel misinformation about the environmental impacts of hydraulic fracturing and will show what great lengths the industry goes to ensure the practice is done safely with proper precaution taken,” he said.

The Regional Council issued this media release, noting that they had endorsed and now welcome the PCE study, but that they also had a legal obligation to process any consent applications that appeared on their doorstep.

Given that the industry views the inquiry as a positive opportunity, the appropriate step for TAG Oil/Apache to take in Hawke’s Bay would be to accept this delay, and either not file its expected consent applications with the HBRC at this time, or, make its applications public, but allow them to lie on the table by mutual agreement with the HBRC until the review is completed.

With the latter option, members of the public would have the opportunity to study the applications, inform themselves about the details of the applicant’s plans, and prepare eventual responses. Making their plans public in the detail required by the consenting process would be a public-spirited gesture, giving needed credence to the industry’s apparent embracing of transparency.

It would seem rather foolish that the PCE would regard the public interest concerns as so large as to warrant a full investigation, yet TAG/Apache/HBRC would proceed as though nothing is happening that might fundamentally alter the playing drilling field.

The PCE might well find that fracking poses such hazards as to not be worth the risks here in New Zealand. Or it could conclude that ‘best practices’ — appropriately mandated and rigorously monitored and enforced — mitigate the dangers sufficiently to allow the process.

In fact, major environmental groups in the States have reluctantly accepted, for now at least, the strong mitigation approach, only on the grounds that fracking is used there mainly to produce natural gas, which is deemed a ‘better’ (i.e., cleaner) energy source than the coal that would otherwise be burned and foul the air (and atmosphere) much worse. A lesser of two evils trade-off not necessarily relevant here in NZ.

Of course the PCE’s findings and recommendations will be just that — recommendations that the Government may take aboard in whole or in part … or not. NBR quotes Energy Minister Heatley saying that the review would “enable us to consider all our options around fracking, from the consenting process through to work in the field.”

In either event, a course has now been initiated — one championed by environmentalists — whose result those opposed to fracking will need to accommodate.

For its part, the HBRC can sigh with relief. More likely than not, the rules governing fracking, if it is to be continued, will be set by central government once the PCE review is completed. HBRC’s role will be limited to administration — applying and monitoring compliance with those rules if consenting does proceed in Hawke’s Bay. As it should be, given that conceiving a comprehensive regulatory regime from scratch is out of their technical depth.

Tom Belford

P.S. Ann Michelle and Angela Hair, representing Don’t Frack the Bay, presented well to the DHB today on the health concerns associated with fracking. DHB Chairman ask that they provide supporting info to the DHB, with the expectation that the public health staff would prepare advice for the Board.

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March 27, 2012

We have not been shy about criticizing our local bodies on this blog or in Baybuzz magazine.

However, if I might make an important distinction, those criticisms have been about priorities, the soundness of individual projects and policies, suitability of governance structure to plan and spend efficiently, and the frequent avoidance of public accountability — all in specific instances.

This as distinct from an ideologically-driven crusade to confine local government to some reduced set of responsibilities or to apply some rigid formulaic strictures to squeeze down local spending and debt.

Surely, local funds must be used prudently, according to priorities that enjoy broad public backing, and require a sustainable share of ratepayers’ wallets. We can and should have healthy, vigorous debate over these choices.

But not all local government debt is evil. It should all be totally transparent, easily identifiable and consistently presented (which it is not under present council bookkeeping practices in our region … hence the Napier versus Hastings debt debate) … but it is not evil.

Unless, of course, we don’t want roads, swimming pools, reserves etc. — infrastructure with long shelf-life and inter-generational benefits that should be debt-funded. There’s the rub, of course, one ratepayer’s absolutely essential infrastructure is viewed by another ratepayer as sheer folly.

But politics should be about debating these priorities, including the sufficiency of spending on assets like wastewater, drinking water and stormwater systems, the lines of demarcation between the public and private sectors, and the total amount of debt to be shouldered at any given time; not about whipping up hysteria about runaway local government debt (a problem of just a few councils in NZ) as the National Government is now doing.

[The cynical amongst BayBuzz readers could be forgiven for regarding this local government debt-mongering as a National plot to distract us from central government debt that has blown out in no small part because Government declines to fairly (i.e., adequately) tax the wealthy. Others point to responsibilities that fall on the shoulders of local government when central government decides to pull back the reins on needed services (like low income housing) or simply add/shift duties to local government's plate.]

I have the same issue with fanning hysteria over current rates. Could our rates be spent smarter? Absolutely. But that said, rates paid in Hawke’s Bay are near the bottom of national tables. Here, I submit, the issue is more one of how we spend than how much.

This week, for example, the Hastings Council will consider a report on the “community contracts” through which it financially supports (about $1.3 million) a variety of community groups working toward the District’s social and cultural well-being. In this “difficult economic climate” (as the report terms it), Hawke’s Bay Racing Spring Carnival receives a $25k subsidy and Horse of the Year gets $35k; the Hastings Food Bank gets $10k — but hey, some of the needy got a whopping three parcels in the past year. If you’re hungry in Hawke’s Bay, you best be a horse.

If we want more bang for our buck, then we need to look seriously about how our local governance is structured. And we also need to look at the insulation of council staffs — which now enjoy uninterrupted growth — from economic reality and political control. These parts of the Government’s local government reform proposals I can fully subscribe to.

So I would ask of John Key and his next Local Government Minister …

Sure, give us the mandate and processes that will permit us to re-structure our local governance to deliver better performance. But then let us set our own priorities about what we want our local government to do. And focus on getting your own fiscal house in order.

Tom Belford

P.S. For an excellent column on this theme, read Gordon Campbell here.

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March 20, 2012

The Government announced policy changes on Monday that will make it easier for proponents of local government reorganisation to initiate reform.

Most important are these changes …

1. The Local Government Commission (LGC), which reviews and recommends reorganisation initiatives, will be required to “consider the benefits of a reform proposal for simplifying planning processes”.

As the announcement continues: “This change may mean there is more interest in unitary authority models because of their potential to simplify planning processes.” You can expect that to be true in Hawke’s Bay!

2. The process to instigate LGC consideration of a reorganisation initiative is made easier … and it includes public participation at the very outset.

Any council or “community” can bring forward a proposal, which if it meets statutory criteria, will then be developed  by the LGC and published as a draft proposal for public consultation, with the LGC hearing submissions. Thus, the new process is easily triggered, doesn’t require months of fruitless negotiation by disinterested or obstructionist councils (as we are seeing right now in Hawke’s Bay), is independent, and the public is invited to participate.

In short, the Government-mandated process now includes every feature the Napier City Council has resisted.

3. If the LGC determines that a proposal meets criteria, it can move directly to prepare a reorganisation scheme. A poll on the proposal can be triggered, if 10% of voters in the affected area petition for one. But a poll is not otherwise required.

4. And if a poll is conducted, to be successful it requires majority support over the area of the new council, and not of every existing district or city. In other words, individual districts do not have a veto (although the Government says that “to proceed, there must be significant community support in each of the affected territorial authorities”.

Taken together, these changes clearly strengthen the hand of those who wish to see some form of local government consolidation.

That’s precisely what Government intends. Indeed, Local Government Minister Nick Smith says in the Foreward to the programme, passage of the enabling legislation by next September … “will enable the Local Government Commission to consider council reorganisation proposals in time for the October 2013 local government elections.”

And you might expect reform advocates like A Better Hawke’s Bay to jump at this opportunity.

The Government has wrapped its procedural reforms in a heap of rhetoric about local government debt. A lot of politics at play on that one … which boil down to the pot calling the kettle black.

More on that in a future post.

In the case of Hawke’s Bay, even though the wisdom of this or that project might be challenged (and BayBuzz has done its share of challenging), the problem isn’t runaway local debt … it’s the lack of region-wide planning and priority-setting to guide prudent investment across a range of bona fide community needs.

The supporting document for the announcement, Better Local Government, is attached here. I’ve pasted the pertinent procedural discussion below for reader convenience.

Tom Belford

Streamline council reorganisation procedures

There is the potential to achieve efficiencies and better decision making through structural reforms of councils in some parts of New Zealand. The experience of the reforms in Auckland has been a reduction of 2000 staff with no drop in service standards or levels of infrastructure investment, and savings of $140 million in its first year.

The current reorganisation process in the Local Government Act 2002 is lengthy, complex and the chances of success are low. Of the 11 proposals considered under the existing provisions only one boundary change and one abolition proposal have been successful.

The new process will be:
1. Community or council prepares an initiative and submits it to the Local Government Commission;
2. The Commission assesses the initiative against statutory criteria and either:
a. rejects it; or
b. refers it back for further work; or
c. proceeds to develop the initiative into a draft proposal;
3. The Commission approves and publishes a draft proposal for consultation;
4. The Commission hears submissions on the draft proposal from affected communities and other interested parties;
5. The Commission determines whether the proposal has sufficient public support and if so, proceeds to a final proposal;
6. If a petition of at least 10% of the affected electors of the proposed new council request a poll, this will be undertaken and determined by a simple majority over the area of the proposed council area;
7. The Commission prepares a final reorganisation scheme that is implemented by Order in Council.

A significant change in the process is that the existing process requires a petition of 10% of electors to initiate a proposal. In the new process this mechanism is used to trigger a poll on a draft proposal for reform. A further change is that, to be successful, a poll requires majority support over the area of the new council, and not of every existing district or city.

The statutory criteria to be used by the Local Government Commission will also be amended. It will specifically require the Commission to consider the benefits of a reform proposal for simplifying planning processes. This change may mean there is more interest in unitary authority models because of their potential to simplify planning processes. Where such a model is proposed, the Commission would need to be satisfied that catchment based flooding and water allocation management issues can be dealt with effectively. The changes will also mean any new unitary authorities, like Auckland, will be simply named the <name of District> Council.

The statutory criteria will also be amended to put greater weight on the benefits of efficiency improvements. It will also require that, to proceed, there must be significant community support in each of the affected territorial authorities. This will ensure that a larger council cannot simply take over a smaller council by weight of numbers, as the Commission will have to be satisfied that there is significant support for reform in the smaller district or city.

The Local Government Commission can reject initiatives where it is clear they would not meet the criteria, offer no improvement, are poorly conceived or frivolous, or where the proposal might have a negative consequence for neighbouring councils.

The new process needs to be flexible enough to accommodate all kinds of proposals and solutions, which requires the Local Government Commission to have sufficient powers to consider a wide range of ideas and options and to develop proposals for achieving good local government across the area concerned. The establishment of Màori committees may be considered by the Commission as part of the development of any proposal.

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March 19, 2012

The CHB Council is (inch)worming its way toward progress in cleaning up its sewage discharge into the Tukituki.

On Tuesday the Council will hold a special session to consider replacing its proposed ‘effluent to land’ sewage treatment scheme with a less expensive scheme that would discharge substantially cleaner effluent into the Tukituki … using worm farms to clean the effluent.

The alternative scheme is less expensive and is based on a proposal made to CHB several years (and consultants) ago. At the time, the worm clean-up was less tested in New Zealand and so was rejected. However, recent data from such schemes in New Zealand seem to indicate that the process could in fact put CHB in full compliance with the more stringent water quality standards the Environment Court has said the two sewage treatment facilities must meet by 2014.

Faced with 20 submissions opposing the consent application CHB has just filed for the ‘effluent to land’ scheme, it appears CHB officials are worried that conditions imposed during an appeal of that application might lead to even more expense, over and above the higher costs now anticipated for the ‘effluent to land’ plan after new consultants updated the construction estimates.

So, from an environmental standpoint, the ‘effluent to land’ approach involves putting 50% less (but essentially untreated) effluent into the river, while the worm clean-up would arguably reduce contaminants substantially (readily meeting tougher standards if the performance results reported hold up), but still discharge the treated effluent into the river.

The worm clean-up option deserves consideration (if the Council indeed decides to entertain it at its extraordinary Tuesday session). Here’s the staff report.

My sense is that key environmental objectors to the land-based scheme might well prefer the worms to the forest discharge (at least as the latter now stands). That said, the worm scheme will need to be vetted thoroughly, with plenty of evidence produced as to its viability.

Effectively, the matter must be decided during CHB’s long term plan review process … which must end with LTP adoption by June 30.

Tom Belford

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March 15, 2012

The Central Hawke’s Bay District Council announced on Thursday that they were “putting on hold” their plans for a land-based “sewerage” (their spelling) treatment programme for Waipawa and Waipukurau! Here is the full announcement.

CHB just filed its consent application for this scheme at the end of 2011. The public submission window closed on 29 February, with 20 of 23 submissions filed opposing the scheme. Most questioned the viability of the land-based scheme as proposed (although not necessarily in principle).

Now CHB says it’s having second thoughts about the costs. Huh? Don’t these folks read their consent applications before filing them? Or is it that the submissions make such a compelling case that more land and pond storage is required for the system to function in an environmentally sound manner … extra capacity CHB (and/or the Regional Council) don’t want to pay for?

Along with unidentified new costs, CHB says it also will look at “an alternative sewage treatment option”.

So … understand the full scenario here.

Back in 2007 the Environment Court said CHB would need to meet tougher water quality standards by 2014. Now, five years later, CHB — apparently not well enough advised by its consultants and the Regional Council (who invented the land-based scheme) is still befuddled … with the new standards only two years out.

Maybe it’s all just a game of chicken. CHB telling the rest of the Bay (and the Government), we can’t or won’t pay for sewage treatment … what are you going to do about it?!

So, we can either admire their balls or bemoan their incompetence.

In any event, many of us submitted that the scheme, as proposed, was not sufficiently protective of the environment. Maybe there’s hope that CHB will propose something more effective. But if cost is their issue, how likely can that be?

However CHB decides to proceed, this delay surely cannot be welcome to those making other plans for the Tukituki catchment. Until there’s a reliable projection of how much effluent CHB will continue to dump into the river, there can be no agreement on how aggressively other discharges into the river must be limited … for example, the discharges of those farming the 22,000 or so additional hectares potentially made available by a dam.

And there’s a bigger picture still.

If CHB District Council can’t figure out how to meet an Environment Court clean-up standard after five years, maybe it’s simply not fit to govern. Not in the sense of wrong team (of course, that could be a problem). But in the sense of basic scale and capacity.

This is exactly what Local Government Minister Nick Smith has been talking about … are some of New Zealand’s small local bodies simply not up to the task of governing in the 21st century? That’s why Hawke’s Bay needs to be looking at its governance structure.

If CHBDC can’t afford to take the required steps to clean up its act, maybe Hawke’s Bay can’t afford CHBDC.

Tom Belford

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March 12, 2012

Local councils — not just in Hawke’s Bay, but throughout NZ it appears — can’t calculate.

Or more precisely, they’re hopelessly inept at doing the cost-benefit analysis on their major infrastructure projects. And as a result, ratepayers are always left holding the bag.

The latest evidence comes from Hamilton, where, as the Herald reported today, a new $72 million events centre is facing an operating deficit of $1.42 million in the current year. When interest, depreciation and maintenance is added, the facility is costing ratepayers $10 million per year … and will for many years to come. For Hamilton, this follows Waikato Stadium, which costs $3 million to keep open, and the V8 racing debacle.

Here in Hawke’s Bay, we seem to have no end to the infrastructure wish list, even as current facilities lose money regularly.

Splash Planet. Marineland. The Opera House. HB Museum & Art Gallery. Pettigrew-Green Arena. The Sports Park. All with operating deficits requiring ratepayer funding.

This is not to say that one or another of these facilities isn’t meeting a genuine community need and isn’t worthy of ratepayer support. However, experience has shown that the extent of required ratepayer funding has always been under-stated, while the ‘economic benefits’ have always been over-stated.

The net result: ratepayers holding a bigger bag than they were told to expect.

Not long ago, HB Opera House chairman John Buck informed the Hastings Council that ratepayers would need to be asked to put an extra $1.5 million into the facility over the next seven years. As reported by the DomPost, Mr Buck stated that: “…when the board took over its operation in January 2009, it did so ‘without fully realising the paucity of financial and operating information available to it’ … Forecasts had been based on a ‘best-guess basis’ and ‘to put this in simplistic terms, we did not know what it cost us to open the doors’.”

That’s a remarkably candid comment — one you’ll never hear an elected councillor make — from a savvy businessman. But even John Buck drank the Kool-Aid … what can we expect from financially-impaired councillors?

They just keep adding to the infrastructure wish list — television-ready hockey field, aquatics centre, Marine Parade and Civic Square redevelopments, Te Mata Peak Visitor Centre, a business park or two … to say nothing of a dam that would cost hundreds of millions, all in.

Recently I heard a presentation to the Regional Council on behalf of a television-ready hockey facility for the Sports Park by Mayor Yule, Park chief executive Jock Macintosh and entrepreneur Bruce Mactaggert. Super-booster Mactaggert was especially enthusiastic about the economic benefits he foresaw from the proposed facility.

Deja vu … I couldn’t help being reminded of the original predictions made by then-consultant-on-high Murray McCaw (or was it Sam Kelt) about the vast money-making potential of the sports park if it only had a gym sport facility (or was it a velodrome)?

Again, no doubt one or another of these projects might prove entirely worthy.

But as we enter the season of adopting councils’ Long Terms Plans, a healthy dose of skepticism is warranted when listening to the sales pitches of the various applicants … especially when councils are touting their own projects and promising a pot of gold at the end of the rainbow.

Be assured:

Costs will be under-estimated. Financial benefits will be over-projected.

It’s the council way. Why? Because they never need to absorb losses … they just pass them along to you.

Tom Belford

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March 11, 2012

Our latest BayBuzz mag is available this week at your favourite pick-up point. Subscribers will have received yours already. You can view a digital version of the mag, exactly as published, via our online reader.

The major theme of this edition is Hawke’s Bay’s local governance, and the politics and issues surrounding possible change.

Kathy Webb discusses the politics of reorganisation in Political Battle Lines Drawn.

I analyze reorg issues in Is Hawke’s Bay Organised to Face the Future?

Various viewpoints on the issue are expressed by …

Rebecca Turner — For A Better Hawke’s Bay

Tim Gilbertson — Local Government … A Non-Stop Gravy Train

Claire Hague — writing from the perspective of the education sector, Long Bows and Red Herrings

Moving to other issues …

I take a look at the Bay’s demographic trends — unfortunately the news isn’t good — in Forget About ‘Growing’ Hawke’s Bay

Keith Newman identifies the ‘big ticket’ items coming up in councils’ about-to-be-announced Long Term Plans (LTPs), in Cohesive Vision Missing in a Billion Dollar Spend Up

Mark Sweet looks at a few of the developers whose visions are shaping our living environment here in Hawke’s Bay, in Personal Visions Develop Hawke’s Bay

More from Guest Advocates, with Stuart Nash challenging the leadership of Napier (as well as Hawke’s Bay Tourism), in Marine Parade … A Pale Shadow; and George Hickton projecting the future of tourism in the Bay, in Re-Writing Hawke’s Bay’s Tourism ‘Software’

Then our regular columnists take over …

David Trubridge takes on the Food Bill, which he views as National Government “going after the small fry”, in The Brat Kids Fight Back

Kay Bazzard looks at some key happenings in Havelock North — Keirunga workshops, Sirtrack’s success, and fibre rollout — in Inside Havelock North

Janet Luke wants urbanites to raise chickens, as she proposes in Six In The City

And Roy Dunningham gives us a tour of some of Hawke’s Bay’s best public art, in Public Art: Who Needs It?

Enjoy!

Tom Belford

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