Ring-fence on debt planned

Hasting Mayor Lawrence Yule

Pro-amalgamation Hastings District Council is pushing for legislation to ring-fence its own debt if the region's local authorities are amalgamated.

At a council meeting tomorrow, councillors will discuss a proposal to submit a "Local Bill" to Parliament which would keep Hastings debt repayments as the responsibility of the district's citizens if plans to amalgamate Hawke's Bay's five local authorities are eventually approved.

An amalgamation proposal is before the Local Government Commission, which will hold public hearings on the issue in the region next month.

The plan is opposed by four of Hawke's Bay's five local authorities, but is supported by the fifth, Hastings District, although the council wants to see amendments to the commission's proposal.

Those changes include amending the commission's draft proposal suggestion that existing council debt would be ring-fenced for six years, instead making ring-fencing effective for the life of the debt.

The debt issue has been raised as a concern by amalgamation opponents, particularly those in Napier, who argue that residents in areas where councils have low debt should not have to share the repayment obligations of high-debt councils.

According to figures in the commission's draft proposal document, Hastings District Council had debt of $55.7 million last year, while Napier City Council's debt was $2 million.

A staff report prepared for tomorrow's Hastings District Council meeting says a Local Bill - a piece of legislation designed to deal with an issue specific to particular locality - was one option for ensuring the amalgamation debt issue was "appropriately dealt with".

Hastings Mayor Lawrence Yule said the idea was a solution to dealing with "people's fears and concerns" around amalgamation and followed on from the council's submission to the commission.

"We've simply said we're more than happy to deal with our debt and this will allow that to be enshrined in legislation," Mr Yule said.

"Hastings District has ring-fenced debt since 1990 [when a previous round of council amalgamations took place] until this point.

"We're well used to doing it, there are no major concerns about it and it's very fair and reasonable. We're just trying to transfer that thinking into the new structure should it eventuate."

Given the council's pro-amalgamation stance, the idea is expected to be approved by councillors tomorrow. Assuming it wins approval, the Local Bill would be introduced into Parliament by Tukituki MP Craig Foss.

Mr Foss said he supported the move and was happy to sponsor the Bill because it would allow "everyone to concentrate on the core issues around amalgamation as opposed to some of these issues which have distracted some people".

"It's what a local authority wants to do. I'm more than happy to put it through Parliament as the local MP."