Stratford Mayor Neil Volzke says TET's money is vital to the Stratford community. Photo / Unsplash
Opinion:
Why is the Taranaki Electricity Trust (TET), formed in 1993, so vitally important to the people of the Stratford District?
There are several reasons, but near the top of the list is the fact that the trustees collectively are responsible for the governance of an organisation that oversees an investment fund of circa $100 million of public money. Or more directly said, your money.
My observation is that as a community, we seldom hear about or discuss this investment fund. We seem to focus entirely on the discretionary grants the TET dishes out which are funded from the dividends of their investment fund. As a consequence, the public knows little of the TET other than as a potential source of money when you need it.
The trustees’ roles are paid positions with the current chairman receiving $53,276 per annum, the deputy chairman receiving $36,551 per annum and other trustees receiving $32,222 per annum. As a matter of interest and by comparison to the Stratford council’s elected members, these pay rates are pretty good. The deputy mayor is currently paid $34,215 per annum, while councillors are paid $23,154 per annum.
Currently the TET is holding its triennial trustee election. Historically, this election has had very poor voter turnout, even worse than the council’s, but it is not something that should be ignored. I encourage eligible voters to have their say and support the candidates they think are best suited to the role.
This is especially important given that the TET has no employees and its functionality is totally dependent on the six trustees that govern the organisation, along with some contracted administrative support. They are bound by a trust deed that dates back to the early 1990s and in my view (and others) is clearly in need of a major overhaul to allow the trust to function in a way that is more suited to today’s world.
At the heart of the problem is the fundamental issue that has confronted trustees since its inception and that is the issue of boundaries. To understand the problem you need to know something of the history of the formation of the trust. When the massive reforms of the electricity sector occurred back in the 1990s the then electricity companies were restructured and sold off.
Depending on the decisions made at that time, in Taranaki, the large sums of cash generated from the sales were either allocated to councils or to an external independent trust. In the case of South Taranaki and New Plymouth, the funds were given to the two district councils to administer; those large investment funds have now grown to circa $150m and $350m respectively. Those councils use the dividends from their investment funds to subsidise rates in their districts, meaning all residents and businesses benefit as a result.
At the time of the electricity sell-off, the Stratford District Council never received any equivalent funding. Instead the Taranaki Electricity Trust was formed and the funds were allocated to the trust, as are the dividends the fund returns.
A key role of each of the trustees is to allocate the dividends and decide who receives grants. Because the available funding is contestable and discretionary, the very nature of this distribution process there will inevitably be conflict when making decisions. The northern (Ward A) and southern ward (Ward B) voting system compounds this.
Another fundamental issue is around fairness of distribution of the grants. Because the trust boundaries don’t align with the boundaries of the district councils, there are some overlap areas created.
This means in effect, that people in these overlap areas receive not only the benefit of rates subsidy from their own council’s investment fund but also the benefit from the TET funds, described by some as a double dip. Stratford District residents don’t enjoy the same opportunities and only have access to the TET funds. Furthermore, because the funds are only distributed by way of application from varying local organisations, some residents can rightfully argue they receive little or no direct benefit. Stratford residents are worse off because of this.
So my phone doesn’t ring off the hook with disgruntled neighbours in the north and south, can I say that I am not blaming anyone here, I am just stating the reality of the situation.
It’s also interesting that as I write this article, the New Plymouth District Council is promoting legislation that will ring-fence their investment fund ensuring the benefits for it are for the people living within the present district boundary. A wise and clever protection move on their part, ensuring the funds are secure, should a future amalgamation of councils ever occur. South Taranaki already has its fund ring-fenced through legislation.
By comparison, under present arrangements and should an amalgamation ever occur, there is no guarantee that any TET money will come to the Stratford District. There is a real risk here that somewhere in the future, we might pay for that anomaly.
Current chairman Mike Davey commented publicly earlier this year that a review of the leadership provisions of the trust deed was needed, I agree. But I also think a much broader review would give an opportunity to provide a structure that is fairer for all.