Mai Chen: Only new legislation can fix rescue chopper money row

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The saga of the Auckland Rescue Helicopter Trust and the Auckland Regional Amenities Funding Board is an example of when a litigation problem, on proper diagnosis, is really a legislative problem. It also evidences a need to check what other laws need further change now that we are in the second term of the Auckland Council. Some legislative changes were made to the Auckland Regional Amenities Funding Act when Auckland Council transitioned from eight councils. But this latest incident shows the need for a deeper and more sophisticated review.

The trust issued judicial review proceedings last year over the board's decision to cut its funding that year, and threatened to issue fresh proceedings this year (and every year thereafter). Mayor Len Brown pledged to ensure the trust would get further funding and called, critically, for a review of the regional amenities funding legislation. The first pledge may be in doubt after he voted yesterday to support the funding board's levy of $14.3 million this year, which includes cutting funding for the helicopter trust from $900,000 to $450,000.

The litigation brought the issue to a head, but its genesis lies in the creation of the new Auckland Council, which is the game-changer.

The allocation of funds and the annual associated litigation is only a symptom; the legacy funding model designed when there were eight councils and established by the Auckland Regional Amenities Funding Act is the real problem.

The act was enacted in 2008 to - as the preamble says - resolve the issue that arts, educational, rescue and community organisations received their funding from a range of sources by way of grants made in response to annual or periodic applications, and in particular, separate applications had to be made to each of the territorial authorities and various trusts for funding. The grants resulting from applications were often ad hoc and short-term. Thus, the act was passed to solve a classic pre-Auckland Council problem.

The act sought to resolve this issue by establishing a funding board which would collect a levy calculated through a statutory formula from every Auckland territorial authority and then make centralised annual grants to 10 specified amenities - the Auckland Arts Festival, the Philharmonic Orchestra, the Auckland Rescue Helicopter Trust, the Auckland Theatre Company, the Coastguard Northern Region, the New Zealand Opera, the Auckland Observatory, the New Zealand Maritime Museum, Surf Life Saving Northern Region and Watersafe Auckland.

But with the creation of the Auckland Council, what is the funding board now for, and could these decisions be better made in-house by the council - since the board is, after all, handing out ratepayers' money? The council can refuse to approve the proposed levy - in which case it is determined by an arbitrator - but it cannot dictate to the board how it spends the money it gets. Questions about the appropriateness of the amenities funding model also raise questions about other legacy models still in place and whether they are still fit for purpose.

The decision to conduct a review has also broadened the issue beyond just the helicopter trust. All amenities bodies in Auckland should lobby their local council representatives and their local Auckland MPs on what better funding policies and models would look like and why they matter.

This engagement is vital because there are problems with the status quo. The trust has complained that the act creates perverse incentives since the board is more likely to provide funding to organisations that cannot obtain support from public fundraising. But what can be done about the funding cuts for the trust right now? The mayor suggested the shortfall could be made up through the annual plan process, but there is a prohibition on specified amenities receiving funding from the Auckland Council for expenses that have been or are being funded under the act. There has been speculation in the media that this prohibition could stop the trust receiving additional funding, but section 21(b) of the act puts capital expenditure outside the scope of the funding board, meaning that while the trust can't receive additional operational funding this year, it could receive a top-up for a new helicopter.

The only permanent fix to this annual funding dispute over a much loved helicopter service appears to be new legislation. This reminds us again in election year why you need to vote, because often when Aucklanders want a public problem solved, it is Wellington they need to convince.

• Mai Chen is a partner in Chen Palmer lawyers.