Who needs rescuing

By Geoff Cumming

Auckland's rescue helicopter service claims it has been starved of money - but it turns out to be much better off than its fellow charities.

Photo / File
Photo / File

Uninvited guests at the banquet, they were ostracised and whispered about and, boy, did they ruin the party.

The Westpac-sponsored rescue helicopter service, officially known as the Auckland Rescue Helicopter Trust, is one of our most popular charities, garnering a high media profile over 40 years for life-saving acts and the courage of its pilots, crew and medics. Last year it flew more than 900 missions, including medical emergencies, accidents, searches and hospital transfers. Though much of its work is more routine than the media image suggests, we all like to think it will be there for us in an emergency in some remote location, where speed is of the essence.

So when the Auckland Regional Amenities Funding Board last week halved the trust's ratepayer funding for the coming financial year to $450,000 - after a $300,000 cut for the current (2013/14) year - even Mayor Len Brown bought into the PR-driven outrage.

"It is difficult for Aucklanders to make sense of a decision to cut the rescue helicopter's funding by 70 per cent in the last five years, while increasing funding for the nine other regional organisations [the board] funds by between 30 and 150 per cent," Brown said in a press release.

The arm's-length funding model was not working, he said. Responsibility for funding the 10 organisations should come back under the council umbrella, their requests considered alongside others when the council sets its budget. Meanwhile, Brown promised to remedy the "immediate $900,000 funding gap" for the helicopter trust in the annual plan for the coming year.

He later told the Herald that the amalgamation of eight local bodies into the single Auckland council meant the funding board was no longer needed. The model "has well and truly outlived its purpose".

Helicopter trust chairman Murray Bolton thought this news was "fantastic" and the trust immediately withdrew threatened legal action over its 2014/15 allocation - though it's too late to do anything about its court challenge to the current year's funding, heard earlier this month. The High Court case, a judicial review, hovers on whether the board's decision-making is fair enough under its legislation. But Brown saw no need to await the judge's decision before signalling the demise of the funding board - a fate that only Parliament can seal because the board was created by Act of Parliament only six years ago.

Brown's stance makes most of the agencies - guaranteed a slice of a levy of up to 2 per cent of total rates under the act - gravely worried. The Auckland Regional Amenities Funding Act, passed by the outgoing Labour Government in 2008, ended an annual desperate dance around the region's eight local bodies for this elite group of regional arts, education, rescue and community agencies.

While the Super City put an end to the cap-in-hand circuit, most of these not-for-profits mount strong arguments for retaining the levy. The increased certainty and stability make it easier to attract funding elsewhere and to expand their community influence - something the legislation encourages.

The Northern Coastguard has been able to employ two full-time staff in its operations centre, 24/7, and extend its preventive education work, says chief executive David Tommas. It faces big capital costs for vessel replacement and communications upgrades in the next three years. These capital items are not funded by the board and require a major fundraising drive. The council meets about 12 per cent of operating costs "and in my view we will need Auckland ratepayers' help for a long time to come".

Watersafe Auckland points to the region's lower drowning statistics; Surf Lifesaving to extended patrol coverage.

Agencies are wary of returning to a system where decisions may be subject to political whims and lobbying. It's also hard to imagine politicians applying the same level of scrutiny to the agencies' wish lists as the full-time funding board.

APO chief executive Barbara Glaser says decision-making is extremely robust and dismantling the mechanism raises concerns. She says the APO was regularly in financial crisis before the legislation but has since been able to serve the community "far better and in more depth".

They may seem a disparate bunch - ranging from high-brow arts, a museum and an observatory to life-saving organisations. But they were selected for their true regional stature and their contribution to a "vibrant" and safe Auckland. What they had most in common was precarious financing.

Yet the helicopter trust's inclusion was largely political. To get the bill through in the dying days of the Clark Government, Minister for Auckland Judith Tizard needed National's blessing. That support came after former National Party president Michelle Boag, a helicopter board trustee, lobbied wavering National MPs. There was a price to pay.

"We were reluctantly included in the act," Bolton says.

Before the act was passed, the trust got no money from any of the councils, Bolton says, despite surveys ranking it as the most popular regional amenity. In the past five years it has received $6 million.

Having pushed so hard to get inside the tent, the trust seems intent on bringing it down. It's a high-risk strategy but Bolton is happy to defend it.

"I would much rather take my chances with elected officials than have 10 faceless people making decisions on how ratepayers' money is spent" he says. "At least if we don't like their decisions we can vote them out."

For good measure, he's asked the Auditor-General's Office to investigate the board's acceptance of free tickets from arts organisations.

Bolton says from day one the board has shown bias towards the arts. "They treated us like we were lepers and we were crooks. It was just unbelievable. They were openly antagonistic towards us."

Any misgivings about the trust's books appear to stem from the establishment in 2011 of a second helicopter trust - mainly, Bolton says, to fundraise for a state-of-the-art new helicopter.

The $15 million purchase is due next year and the trust has an option to buy a second in 2018. Such purchases, as capital items, must be funded from sources other than the council but can put pressure on operational funds.

In 2010, the first year the board was free to make adjustments, funding to the helicopter trust fell from $1.5 million to $1.2 million. This went to arbitration but the board's decision was upheld.

"Then they cut us again last year and in December told us they were cutting us to $450,000 next year."

At last week's meeting, Bolton produced graphs showing funding for the Auckland Philharmonia and others heading skywards as the helicopter trusts' nosedived. He says the board gives scant reasons for its decisions.

"All they have told us is we are extremely good at what we do [funding-wise] and you don't need our money. They've argued that because we've ordered a new helicopter any money we raise should be first applied to our operating costs. But they don't require that of other amenities."

He points to the Auckland Theatre Company, which has a foundation raising funds for a new theatre.

Bolton claims the board is unaccountable and makes "seat of the pants" decisions. Yet its draft plan goes out for public submissions and final decisions are subject to full council approval.

The thing is that, under the legislation, it's easy to understand why ratepayer funding might fall for the helicopter trust - simply, it is in comparatively rude health. Under the principles of the act, the funding board gives chiefly on the basis of need (and after rigorous scrutiny of each agency's case). The legislation was not designed to ensure an even slice of the pie: its purpose, clause 3, is to "provide adequate, sustainable and secure funding".

"The board works towards ensuring that each of the 10 gets to the point of being sustainable without the need for additional public funding," says board chairman Vern Walsh. "Sometimes, success can be seen to be detrimental to them but at the end of the day it's public money ...

"The funding is to enable the organisations to operate and deliver its current services."

The board must follow key principles in assessing applications. Clause 21 rules out funding for capital items, for activities outside the region and for services funded by the Government. Agencies must first show they've maximised funding from all other sources. They must show they are extending their reach across Auckland.

The fund's primary purpose is "to contribute to the expenses that the ... amenity must incur" in order to provide its services.

Translation: if you've plenty of income from outside sources, don't expect ratepayers to stump up so much. And, in the life of the funding board, the helicopter trusts' income from council and other sources has soared.

At the end of the last financial year (2012/13), the combined helicopter trusts' balance sheet showed a $3.4 million surplus. A distant second was the APO, in surplus by $677,000. Three agencies were in the red - worst off was the Auckland Festival Trust, with an $845,000 deficit. Bolton says the trust is being penalised for its success: "Why should our supporters be penalised because other amenities are not as effective as us at fundraising?" But even he admits the Westpac-sponsored helicopter trust is better positioned than most to raise money from sources other than ratepayers. By its very purpose - saving lives in areas beyond the quick reach of ambulances - it seems more essential than, say, a night at the opera. And, he admits, a shiny new helicopter provides an alluring fundraising focus.

The trust employs 16 fundraising staff. It does particularly well with fundraising events on Waiheke Island, where it flies a third of its missions and where Boag lives. Paul Holmes, until his death, was another trustee whose celebrity status garnered support.

It also collects millions each year from district health boards and ACC - agencies it flies for under contract.

In 2012/13, its income (excluding council funding) of $13.5 million far exceeded what the other agencies raised through sponsorships, donations and the box office. Its helicopter replacement fund was well on track and there was plenty more in the bank.

Before the funding board released its draft plan in December, it looked at how the agencies were tracking in the first six months of this year. The helicopter trust was even more flush with cash: working capital had improved by $2.1 million to $7.36 million. The trust was heading for another healthy surplus; five agencies were in deficit.

The trust's need for capital is not confined to replacing its two ageing BK117 helicopters, between 25 and 30 years old. It has long provided services beyond the Auckland region and recently lent the Coromandel Rescue Helicopter Trust $167,000 to build a Whitianga base with hangar and crew accommodation, so a helicopter can be stationed there over the busy holiday period instead of at Mechanics Bay.

No one would dispute that this is an essential service which should be financially well-supported and, if necessary, kept "sustainable" by ratepayers. All the agencies agree that the trust provides an invaluable service and has evolved into an efficient operator and fundraiser.

But its current balance sheet suggests its claim to be the poor relation is at best unsustainable, at worst a piece of PR spin built on public (and even political) ignorance.

One week on, Mayor Brown has softened his stance. He told the Weekend Herald that given the acrimony and the expense of litigation, it's timely to review the legislation and whether the funding board's role should be brought back within the council. The Government will be involved; the associate Minister of Local Government supports a review. It should look at areas which can't be addressed under the legislation, he says. But that's curious because the act already provides for the council to broaden its funding principles without recourse to Parliament.

Brown wants the review completed by June next year, in time for the 2015/16 annual plan. In the meantime, he says the helicopter trust is welcome to seek additional funds from the council's budget "if it believes it has a case".

The council is hugely in debt and looking to fund massive capital projects such as the city rail loop. But Brown says he is "not looking to diminish the amount of funding that ratepayers bring to the 10 trusts".

- NZ Herald

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