It won’t be all smooth sailing

A109 Light Utility Helicopter flight with mayor Gisborne City from the air in November 2023.

Opinion

Tension built into the relationship between Eastland Community Trust and its capital beneficiary Gisborne District Council through the ECT Trust Deed is in the process of being smoothed over.

A Memorandum of Understanding between the two, adopted at the end of June, was said to provide “agreement around which the parties will collaborate with each other to deliver projects for the benefit of the Gisborne region”.

At ECT’s annual meeting last week, chairman Paul Reynolds confirmed that the trustees were willing partners of the council. They did not want to invest in core council infrastructure, but could put money into other areas and allow the council better capacity to fund its core activities.

ECT has already done this in recent years as it has stepped up distributions, for example its $3m grant for the War Memorial Theatre redevelopment and a $5m commitment for the Navigations Project. The indication now is that much more is on the way.

This is a big deal for the council, which has major infrastructure investment planned over coming years that will take its external debt level from $43m now to over $100m by 2023. It has had to move from a pledge of maximum 2 percent average rate rises to a 10-year plan that signals rate rises of up to 5 percent a year. And it adopted that 10-year plan a month ago with some major funding holes in it — principally a long-delayed Olympic Pools redevelopment that requires $23m of extra funding, and a Waipaoa Flood Control Scheme upgrade that is short on funding by $15m-$20m or more.

As ECT assesses these and other projects it could partner with the council on, it will need to weigh up the benefits for its income beneficiaries — who are basically the people of the Gisborne district — and the council, which gets the capital of the trust (now worth $327m) when it winds up by its termination date of 2073.

Some tension between the parties will remain, and needs to. As John Clarke noted last week, the trustees are in a privileged position thanks to their forebears who built the value of the trust, and they would not want future trustees to look back at their decisions with regret.