The merger of five Hawkes Bay councils would save $10 million a year but incur a set-up cost of $18.4 million, which would take two years to pay off.
The major cost to transition to one council would come from establishing a business system, picked from present councils, and adapted for a single authority. The largest ongoing expense for the new council would be managing its regional road network.
Local government specialist Peter Winder presented his report on the potential costs and savings of local government reform in Hawkes Bay, to the Hawke's Bay Regional Council yesterday. It was based on the Auckland super city model and three scenarios, including the one by A Better Hawke's Bay, which supported a merger of Wairoa, Napier, CHB, Hawke's Bay regional and Hastings councils.
Mr Winder's earlier report suggested a merger would save up to $25 million but that figure had been revised down to $10 million. He estimated it would cost between $13.6 million-$18.4 million to set up a new, single authority.
The regional road network represented the biggest expense, 23.8 per cent of overall costs. But it was also the area where the biggest savings could be made, if it was run under a single contract.