Waitomo and Ōtorohanga amalgamation floated, again

Friday, 22 March 2024

If Waitomo and Ōtorohanga merge, would it save ratepayers a million dollars every year, or would it create unnecessary trouble?

The two district council mayors thinks it’s important for voters to have a think now before it’s too late.

“If we don’t have these discussions ourselves, the future will be made for us,” said Ōtorohanga mayor Max Baxter.

Waitomo mayor John Robertson, having been the commissioner chair during amalgamation talks among Northland districts, said “this would be a very simple amalgamation.”

“Just two councils, very similar in size of population, very similar in what they do and the sort of communities they serve as.”

But Baxter thought “it’s not a simple conversation”.

Both mayors share the view that there’s a need for councils to collaborate in face of higher infrastructure and compliance costs, but Baxter wasn’t sure whether amalgamation is the best solution.

He said when he stood for mayor ten years ago, voters were against amalgamating with Waitomo.

Robertson’s calculation shows a million dollars could be saved across the two councils every year - if they only need to pay for one audit fee, one long term plan, one district plan, one council office, and one procurement procedure.

While Robertson doesn’t “really see any” downsides of amalgamation, Baxter has reservations.

“It may be saving a million dollars, but there could be costs that we haven't actually taken into consideration either.”

Costs include the difference in ward system, community boards, water pricing, rates, and importantly, Waitomo’s debt.

The proposal comes 20 years after 87% of Ōtorohanga voters voted against amalgamating with Waitomo, citing Waitomo’s high debt, despite 60% of Waitomo voters in favour.

However, the Local Government Commission, the decision making body who looks after amalgamation, said a change in law means amalgamation can now go ahead if majority voters across the districts are in favour.

Robertson thinks debt shouldn’t be a concern, although the district’s $30m debt by June 2023 is almost five times higher than Ōtorohanga’s.

“I don't think there'll be too much difference between liabilities of these two councils. One'll have higher debt but newer plant, and one will have lower debt and older plant.”

Robertson said each district’s ratepayer could ring fence their own liabilities - Waitomo pay for their debt, Ōtorohanga take care of their water asset upgrades.

While Robertson hopes the two smaller councils - 10,000 population each - could form a large enough entity for better bargaining power, Baxter is doubtful if that’s enough to form the critical mass and said Waipā may be needed.

However, the 2014 amalgamation involving Waitomo, Ōtorohanga and Waipā ended with Mayoral Forum ruling out the Property Council’s proposal.

Other than cost-saving, mayors also see community similarity as an important factor to consider.

“We’re both rural communities, we’re largely covered by one iwi, Maniapoto,” and there are a lot of shared sporting and cultural events, said Robertson.

Baxter said identity is important, but money is the most critical.

“People don't want to lose their identity. But identity is only one part of the equation, the other part is affordability, which people are really struggling with at the moment.”

– Correction: An earlier version of this story attributed comment to Local Government NZ, rather than the Local Government Commission. Amended 12.30pm March 25, 2024.