The mayors of Napier and Hastings disagree on how the contentious issue of existing council debt could be handled under amalgamation.
Hastings Mayor Lawrence Yule and Napier Mayor Bill Dalton took to the stage in Waipawa last night to argue the case for and against the amalgamation proposal put forward by the Local Government Commission (LCG).
Under the proposal, Hawke's Bay's five local authorities would be merged into a single super council for the entire region.
Last night's meeting, organised by the Central Hawke's Bay District Council, was the first major public debate on the issue and attracted about 200 people to the town's Municipal Theatre.
The issue of how existing council debt would be handled by an amalgamated council is a key concern raised by opponents of amalgamation, including Mr Dalton. They are concerned ratepayers in Napier, which has low public debt, will end up sharing Hastings' much higher debt load under a merged council.
Existing council debt can technically be "ring-fenced" (confined to the area where it was raised) for up to six years, Mr Dalton said last night. But the LGC's amalgamation proposal: "says very clearly that debt does not have to be ring-fenced, and in any case, you tell me how you effectively ring-fence debt. It simply doesn't work".
"I completely disagree with that," Mr Yule told the meeting.
There were provisions in the relevant legislation which allowed for consideration to be made for ring-fencing for longer periods, he said.
When Hastings City, the surrounding county and Havelock North were amalgamated in 1989, the areas had different levels of debt and it had ring-fenced, with each area continuing to pay off its own debts "from that day until now", he said.
"So whether in fact the Local Government Commission can do it, or whether you choose to do it, it is entirely within your control.
Mr Dalton said when ratepayers got the chance to have their say at a referendum on amalgamation they needed to reject the proposal, which he said would "tear the guts out of" Hawke's Bay's rural communities.
"We are either for this blunt, crude proposal for this amalgamation or we are for the status quo. There are no other options available to us."
Mr Yule said he was focused on putting forward amendments to the draft proposal that would make it acceptable to all affected communities and in the best interests of the region's development.
"I support a change and I am proposing to find solutions along the way to some of your well-found fears," he said.
"In my view there is everything to gain by such a proposal and actually very little to lose."
The other speaker at the meeting, Michael Barnett, chief executive of the Auckland Chamber of Commerce, said Hawke's Bay needed to find a solution to local government that met the region's unique circumstances.
That would be different from the Auckland experience, which involved seven councils being merged to create a super city.
"For you, Auckland is a bad comparator," he said.
"What we got was a political solution.
"It was imposed on us and then we back-filled it, with justification."