Napier goes for second opinion on infrastructure spending

Basil Morrison, chair of the Local Government Commission.

Napier City Council will hire consultants to review a disputed Local Government Commission report which concluded that it and Wairoa District Council have underspent on infrastructure.

The commission said yesterday it stood by its report which concluded the two councils would need to spend tens of millions of dollars to bring their roading and water networks up to a comparable standard with Hastings and Central Hawke's Bay District councils.

The commission has used the report, which it released last week, as the basis for recommending council debts and financial assets be "ring-fenced" until 2021 under its proposal to amalgamate Hawke's Bay's five councils into a single local authority for the region.

The Napier and Wairoa councils say a consultants' study the commission's report is based on contains significant errors, including over-valuing the replacement cost of the region's local roads by almost $1 billion, which skews the conclusions it reaches about the state of their assets.

After asking consultants MWH to review their study this week, the commission said yesterday it was satisfied it had "based its decisions on the best available information".

"MWH and Napier City Council have used different methodologies and asset valuations to derive their figures," commission chairman Basil Morrison said.

"Local government infrastructure renewal and asset valuation is a highly complex area.

"Even if the commission was to use the Napier methodology and resulting figures, the decision to propose ring-fencing of assets and debt would remain valid. It is based on the fact that each council, and their ratepayers, is starting from a different position."

Napier Mayor Bill Dalton said his council would engage independent consultants to review the figures used by MWH and the commission, and to review the process and methodology behind the study and the commission's report.

"It's going to take a few days for us to get that done," he said.

"The LGC seem to have set out to try to undermine our reputation to push their own cause.

"They are determined to try to show our position as being a negative one when, in fact, we are in a very positive position."

Wairoa Mayor Craig Little said he was looking forward to the material being reviewed.

Wairoa District Council chief executive Fergus Power said the council maintained its view that the figures used by the commission were wrong.

"We're quite happy to have our views validated and if the LGC continues to stand behind what was done then that certainly raises issues when it comes to any judicial review that may occur in the future," Mr Power said.

The chairwoman of pro-amalgamation group A Better Hawke's Bay, Rebecca Turner, welcomed the commission's announcement.

"The fact that we've now got clarity on all the councils' financial states is seriously welcomed, as is the Local Government Commission's decision on ring-fencing," she said.

The commission will do a survey of 2000 Hawke's Bay residents to gauge support for its proposal.

"The ring-fencing proposal is just one aspect of that reorganisation. The results of the survey will be weighed up with all other relevant information before the commission makes any decisions on its next steps," Mr Morrison said.