5 September 2006

The Prime Minister
Parliament Building
Wellington

Dear Prime Minister

Rationalisation of Auckland’s governance structure

Nearly two years ago the four Mayors of Auckland came together to sing a Christmas carol on stage at the “Christmas in the Park” concert. We sang the same song together with the same tune, albeit we were not necessarily in perfect tune or harmony! We now come together again with a common voice or song on an issue that, in our opinion, is very serious and now, for reasons that we can demonstrate, urgent.

The issue is the reform of Auckland’s governance structure. We, the four Mayors of Auckland, are unanimous in our view that the governance structure in Auckland is not working properly, and, more importantly, will not and cannot deliver Auckland to be the world-class city that both you, and we, desire.

We have been heartened by the clear message received from you that if Auckland wants reform then the Government will stand ready to help. We are unanimous in our belief that this proposed reform has to be both bold and fast. The flaws in the existing system are, in our belief, both fundamental and systemic and a “band aid” solution or a slow solution will not work.

We are united in our belief that speed and urgency is important as a means of overcoming pullback and resistance to change. It is essential to give impetus for the implementation of recommendations coming through from both the METRO and START projects. We also believe that one very strong argument for urgency is the need to have Auckland ready to both receive and derive the maximum benefits from the Rugby World Cup 2011.

We also believe that the public of Auckland want change. As you and we are aware, the business community generally, and business groups specifically, have argued for a rationalisation of Auckland structure for some years now. The strength of this voice has significantly increased recently. There is now a public awareness of the debate and the media are increasingly picking it up as an issue. The current rates debate and discomfort over rates increases have elevated governance reform in the public minds as an issue and a possible solution. Grant Kirby, ex chair of the Local Government Commission, is specifically forming a “One Auckland” research and lobby group. We believe it is important to be on the “front foot”, on this issue and to show leadership by being ahead of the call for governance reform.

We are aware, of course, that there will be obstacles to overcome and that successful implementation of a bold reform will encounter resistance from some quarters. We agree with you that the impetus for reform has to be seen as coming from Auckland. We also believe there must be as much unity as possible between the four Mayors and Government.

We, the four city Mayors, pledge to work as closely as possible with you in partnership on this proposed change and to play our role in both fronting up and taking the concept to the people of Auckland.

Each of us is fortunate to have highly competent Chief Executives, all of whom struggle with the complexity and slowness of the existing structure. We would offer their services to Government to assist in the reform process and the implementation of an appropriate structure. Their enthusiasm for reform is key to successful implementation.

For some of us, a change in governance may mean termination or modification of our political careers. We accept this possibility and while none of us want premature termination of our careers, we accept that the interests of greater Auckland come before our individual interests.

Dr Michael Cullen summed up the situation in our opinion extremely well when he stated in Auckland recently “instead of Auckland being one world-class city that it was a combination of four sub world-class cities”. We do not see this as an indictment on our stewardship but rather that it meant four fragmented entities rather than one united Auckland.

We would also add to his comments that Auckland lacks and suffers from not having an overall elected leader or voice. The four cities of Auckland also have a regional council that, in our opinion, is not able to deliver regional leadership.

In our opinion the structure, responsibilities and “modus operandi” of the Auckland Regional Council is a problem and has an inhibitory effect. It is our opinion that the Regional Council model which works arguably well in other parts of the country, is not appropriate for a city with the size and complexity of Auckland. The focus must be on a structure that removes the conflicting, confusing and overlapping responsibilities between the ARC and the TLA’s of Auckland.

In short, it is our opinion that structures which have worked tolerably well in the past in Auckland will not and cannot deliver Auckland’s needed transformation. The phrase, “Globally, cities compete with cities” is true and businesses are of the view that we are running a real risk of becoming a branch city of Australia.

Attached to this letter is our summary of the perceived benefits of an overhaul of the governance structure. We will vary a little in our ranking of the relative importance of these benefits and some of the benefits are overlapping. However, we are in agreement that this list represents the main benefits that will be obtained.

More importantly, we present to you our alternative model, which centres around the concept of a “Greater Auckland Council”. This in our opinion is the only structure that can provide overall leadership, an overall voice, an overall strategic overlay and a distinctive “chain of command” to the delivery agents of cities or councils that sit underneath this structure.

The Greater Auckland Council (GAC) must be more than a revamp, renamed or reconstituted ARC. It will obviously pick up on a number of the current ARC responsibilities, programmes and expertise, and will also take some current functions from the TLA’s. However, the transition to the new structure must be tight and well defined. It must factually, and in the public perception, herald “a fresh new start” to the governance of Auckland.

We agree the process of reform should be a two-step process. We would urge that both the announcement of and the setting up of stage one be as soon as possible. We also believe that the transitional period should be as tight as possible to avoid, if nothing else, any loss of impetus towards Rugby World Cup 2011 preparations.

The essential elements of our recommendations on which we are unanimous are as follows:

a) A Greater Auckland Council (GAC)

b) A directly elected head of the GAC.

c) Representation on the GAC by the Mayors of the Auckland Region cities or councils in conjunction with directly elected and/or appointed representatives.

d) A redefining of the responsibility of the current cities and councils into the “delivery arms” of the GAC, albeit allowing these entities to have distinctive local identities that reflect individual social, environmental, economic and cultural characteristics.

e) Reconsideration of the number of cities or councils, their boundaries and urban limits, though we appreciate that this may need to come after the transitional arrangements have been put in place.

f) The use of well structured CCO’s ( Council Controlled Organisations) reporting directly to the GAC to run regional structures such as Ports of Auckland, Watercare, ARTA, Emergency management, Parks etc. maximising business expertise and minimising political interference.

g) A common rating system and shared services between councils.

We do not believe that a referendum by the people of Auckland is the appropriate way of progressing a “Greater Auckland Council” structure. Such a referendum would slow the process down too much, to the detriment of Rugby World Cup planning and more. It would, in our opinion create uncertainty and could potentially de-rail the process, or allow for a sub-optimal outcome.

The overall aim must be a simplification and streamlining of the existing structure. It must not be “yet another layer”. It must reduce current complexity, current duplications and current overlaps and confusion of responsibilities.

We are unanimous in our belief that this proposed structure is the key to moving Auckland forward and unlocking its potential, which we believe, is yet to be realised and which cannot be realised with the existing structure.

Sincerely yours

Dick Hubbard
Mayor of Auckland City

Sir Barry Curtis
Mayor of Manukau City

George Wood
Mayor of North Shore City

Bob Harvey
Mayor of Waitakere City

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Appendix one

THE PERCEIVED BENEFITS OF
AUCKLAND GOVERANCE REFORM

We, the four city Mayors of Auckland, believe that the following are the advantages of and the core of the arguments for Auckland Governance reform. We will vary on our weighting and our ranking of the relevant importance of these benefits. Furthermore, we note that many of the benefits as listed below are inter - related and are not mutually exclusive.

We recognise that the actual benefits and the selling of the benefits of reform are two separate issues. Clearly, the current debate on rating allows the efficiency argument to come to the fore as a selling argument for reform. However the efficiency and cost saving arguments are, in our opinion, not the core arguments. As with business rationalisation, some projected cost benefits are not always achieved in practice and transitional arrangements can sometimes cost more rather than less. It would therefore be our belief that the core arguments are –

1. One Auckland coordinated plan and one Auckland leadership.
2. One Auckland overall identity
3. Delivery of the Metro report and other major regional outcomes including Rugby World Cup and any other major international events.

The details of the benefits as we see them are listed below.
I. One Auckland Plan
The development and implementation of a coordinated overall plan bringing together –
a) The long term plan ( START)
b) A community development plan (New)
c) The Economic development plans (METRO)
d) The Regional Growth Strategy (RGS)
e) The Regional Transport Strategy Plan ( RLTS)
f) The Rugby World Cup plan

II. Delivery of Plan
The GAC will allow a prioritised delivery of funding and infrastructure for Auckland with the “one city” emphasis overriding parochial interest.

III. Leadership
The GAC will provide a voice for Auckland from both an Auckland elected leader and the GAC itself to the Auckland public, to the business community and to the Government

IV. Efficiency – Costs
The new structure should allow efficiencies to be gained through –
a) Slimming down of political structures (current costs of $52 million dollars per year or 3 per cent of all TLA / ARC operating costs).
b) Cost savings of shared services e.g. rating costs, common supply contract for services etc.

V. Efficiency – Decision Making
The GAC will allow
a) A speeding up of decision-making processes and reduction of the costs of decision-making processes.
b) Minimisation of “political churn” i.e. re-litigation of decision making by different agencies, multiple legal costs.

VI. Image
A GAC will allow a stronger Auckland “identity” and “image”. This will have a symbolic value as a premier city and will allow a metro city identity.

VII. Funding of Regional Structures
The GAC will allow
a) Appropriate and equitable funding of all regional physical infrastructures (e.g. Zoo, Art Gallery, etc.) organisations (e.g. Philharmonia) and events e.g. city - wide ethnic festivals
b) One structure for the redevelopment of the waterfront ( Wynyard Wharf and rest of waterfront)

VIII. Minimisation of use of courts
A clear top down structure will allow the avoidance of current costly and time-consuming LTA/ ARC disputes currently going through the Environment Court and the general court system.

IX. Resource Consents
One set of co-ordinated resource consents instead of separate and un- coordinated LTA/ ARC resource consents, to help develop projects.

X. Rating
The new structure will allow a coordinated approach to rating formulas amounts and collection - it will hopefully allow more buy-in from the public. It will allow for more equity of the rating contribution across greater Auckland.

XI. Ownership and Control of Regional Entities
The GAC will allow for a consistent CCO (Council Controlled organisations) structure for the bodies such as Ports of Auckland, ARTA, Watercare, Parks Trust, Regional Property Development (including the waterfront / Wynyard Wharf area) etc.

There are of course, other benefits. We recognise that a major reform such as this will create some unsettlement and that some of the benefits will take a number of years to fully materialise.
However, we believe the cost of “disruption” is greatly exceeded by the benefits to be obtained.

Sincerely Yours

Dick Hubbard
Mayor of Auckland City

George Wood
Mayor of North Shore City Sir Barry Curtis
Mayor of Manukau City

Bob Harvey
Mayor of Waitakere City

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Appendix two

THE PROPOSED STRUCTURE

We, the four city Mayors of Auckland, recommend to you the immediate formation of a Greater Auckland Council (GAC) the components of which should be as follows:

1. A directly elected head of Greater Auckland.
2. A Council comprising:
I. The Mayors of Auckland.
II. Directly Elected Representatives
III. Direct Government appointments
IV. Minister for Auckland (non voting?)
3. The GAC to have overall responsibility for metropolitan Auckland. Such responsibilities would include the stewardship of all strategic plans (economic, growth, transport, long term (START) and Rugby World Cup.
4. The GAC to own and operate all assets which are regional in nature through the use of strong CCO’s (Council Controlled Organisations) e.g. -
- Auckland Regional Holdings (ARH) and ARTA
- Trading e.g. Ports of Auckland
- Service delivery entities e.g. Watercare
- Facilities e.g. Sporting venues, Zoo, Library network, The Edge, the Bruce Mason Centre and The Art Gallery.
- Regional Parks, premier parks including the Volcanic cones.
- Property Assets – as appropriate.
5. The GAC to have responsibility for funding regional organisations (e.g. Philharmonia) and events, (e.g. City Wide Ethnic Events).
6. The GAC to have responsibility for a single rating system and revenue collection with each local council having a variable component set by each council to reflect individual cost structures.

7. The GAC to set up a “shared services” structure for the Councils under it.
8. The GAC will have responsibility for service, which it determines are metropolitan in nature.
9. The GAC to have a legally constituted CEO’s Board made up of Chief Executives of the councils. The GAC Chief Executive would be the Chairman.
10. The GAC to use strong “CCO” structures as previously outlined for the running of subsidiary entities. e.g. Watercare, ARTA, Ports of Auckland etc.

Under the GAC will be the “Local Councils”, acting as “delivery arms” of the GAC. These will deliver the “territory services” within the strategic parameters set by the GAC. The powers and responsibilities of the councils will be determined by GAC and by legislation.

We recognise that there is room for debate on the number of these redefined council entities. (cities?). Three possible scenarios are as follows:
1) Three city model
- Counties / Manukau (includes Papakura, parts of Franklin)
- Auckland Central
- North Harbour (including Waitakere and Rodney)

2) Four city model
- Counties/Manukau (includes Papakura, parts of Franklin)
- Auckland Central
- Waitakere
- North Shore ( including Rodney)
Other combinations do of course exist, including the status quo.

A debate will also be necessary on the possible adjustment of the Franklin District Council into Auckland Regional (GAC) components and true rural components, with the rural components possibly going into adjacent rural district councils. ie. Franklin south of the Waikato River.

Furthermore, with the GAC being confined to regional Auckland, consideration will need to be given to the re-definition of Waikato Regional Council Boundaries.

It is believed that the redefined councils should have elected representatives (ER’s) significantly reduced in number to reflect redefined responsibilities, and the redefined method of operating. This in turn will have ramifications for ward boundaries and community board structures.

We have not addressed specifically the role and value of community boards and at this stage there is divided opinion amongst us on their role and value. This is a level of detail that is not necessary to be addressed at this stage. However, we make the point that community boards are close to the public can galvanise public opinion, and any changes to their structures would have to be thought through carefully and handled carefully. For these reasons, the status quo (with redefined boundaries) may be the answer.

Sincerely Yours

Dick Hubbard
Mayor of Auckland City

Sir Barry Curtis
Mayor of Manukau City

George Wood
Mayor of North Shore City

Bob Harvey
Mayor of Waitakere City

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Appendix three

IMPLEMENTATION ARRANGEMENTS

We are of the unanimous view that a two-stage process is necessary to implement the required proposed changes. The reasons for this are as follows:-

(a) It is in our opinion hugely important that we avoid a “hiatus” of a slow implementation that freezes decision-making, diverts attention and slows Rugby World Cup preparations.

(b) The current METRO report recommendations in our opinion cannot start to be delivered under the existing governance structure.

(c) The “boldness” inherent in the plan will be diluted and partly lost by a slow implementation process and some “pull back” to existing structures may occur by those resistant to change.

It is our combined belief that the implementation period (with an appropriately robust implementation structure) should be as brief as possible. However, we do understand and appreciate the need for consultation, buy-in and due democratic process to occur. We understand the particular importance of this if boundaries are to change.

The present Regional Council will stay in place until the October 2007 election when we are hopeful that a new structure will be put in place.

We have discussed whether the transitional GAC requires specifically legislation or should be “voluntary”. We have formed the view that is must be set up also by legislation so that it can deliver with appropriate authority and take the necessary leadership role for the Rugby World Cup preparations.

We recognise that transitions come with their own set of problems and that they can be difficult if they are not managed correctly. We give you our commitment to give all possible assistance to expedite appropriate smooth transition arrangements and we are prepared to consider redefining our own roles and responsibilities to help expedite this.

Sincerely Yours

Dick Hubbard
Mayor of Auckland City

Sir Barry Curtis
Mayor of Manukau City

George Wood
Mayor of North Shore City

Bob Harvey
Mayor of Waitakere City

ENDS

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