Missing mayor, record rates rises, and Tauranga's election: What's going on with councils?

On Saturday, Tauranga City Council will have its first election since 2019. In February, 2021, a central government-appointed commission replaced a dysfunctional mayor and councillors.

The best-case scenario this weekend, local government expert Dr Andy Asquith told RNZ, is that the country's fifth most populous city ends up with a council that is "marginally functional".

RNZ spoke with others who said that's all most local authorities can hope for, these days.

Across the motu, local government representatives are making headlines for being in trouble, or causing trouble, or both. This is against a backdrop of ballooning council costs, and the fastest rates increases in decades.

An independent review of local government, commissioned by the previous government and released last year, found communities were not well-served by the relationship between central and local government.

The coalition government rejected its recommendations, saying they were a distraction from the key issues [...], such as the need to reform funding and financing, and planning for long-term economic growth, housing, and infrastructure.

What's going on?

Like central government, local government has roles and powers defined in legislation. While central government is responsible for national priorities and decisions, local authorities are responsible for community priorities and decisions, and are accountable to their communities.

Councils look after a multitude of facilities, services, and public spaces. They provide local roads, water supplies and wastewater, and public transport networks. They also provide social infrastructure like parks and libraries. They were responsible for more than $120 billion worth of assets, according to 2021 data. Their staff numbered about 30,000, with a collective spending power of $11.7b.

Despite this, local elections are plagued by low voter turnout and a lack of engagement.

Turnout for the 2022 local government elections was 40 percent. It hasn't changed much since the 1960s, though it tends to be higher for rural councils (with an average turnout of 49 percent in 2022) and lower for metro councils (41 percent in 2022).

Asquith, an industry fellow at the Institute of Public Policy and Governance at the University of Technology Sydney in Sydney, Australia, told RNZ part of the problem is a lack of quality control.

"I've long argued there should be a test for people standing for council, because so many people don't know how it all works and they're in it for the wrong reasons."

Asquith, who has stood for election to local councils twice in the United Kingdom and in 2019 in Palmerston North, said there's "every danger" Tauranga will re-elect councillors who aren't motivated by the right reasons.

"I hope I'm completely wrong," he said. But on local government, the country needs "a whole mindset change".

Local Government New Zealand (LGNZ) has also called for change, particularly for help from central government.

President Sam Broughton in a statement said councils' share of overall tax revenue has remained at 2 percent of GDP for the last 50 years, "despite our ever-increasing responsibilities".

"It's no secret that the funding system for local government is broken. Rates account for more than half council funding, and relying so heavily on rates alone is unsustainable."

LGNZ has pitched several solutions, such as central government returning the GST charged on local council rates, a total of about $1.1b.

"We've also put an accommodation levy, GST sharing on new builds, congestion charging, and tourist levies on the table."

What happened in Tauranga?

Tauranga has become a prime example of local government gone wrong.

In 2020, the previous government sacked the dysfunctional council before appointing four commissioners, led by former National MP Anne Tolley, to run the city.

It had become mired with roading and housing issues, topped off by a fiscal hole of $2b.

Ahead of the 20 July election, 85 candidates are vying for 10 seats (nine councillors and a mayor), with 15 going for the mayoralty.

"There's a lot of apprehension out there," Bay of Plenty Times senior journalist Kiri Gillespie told RNZ's The Detail.

"They're really concerned that history will repeat itself and we'll return to the same dysfunction as we had before the commissioners."

Tolley had recommended a new, hybrid model, with some commissioners staying on, and no mayor elected. Local Government Minister Simeon Brown rejected the bid, saying the people of Tauranga wanted to see a return to a fully elected and democratically accountable council.

The new council will have an extended term, until 2028.

Hamilton

Plenty of other councils have been making headlines recently for bad behaviour. Among them, first-term Hamilton City Councillor Andrew Bydder made national headlines for his expletive-laden, online submission to Waipā District Council.

Bydder, who lives in Cambridge, opened his submission on the placement of a third bridge in the town with: "What the f**k are you r******d s*****c c**ts doing?".

He went on to insult Waipā mayor Susan O'Regan by saying: "Get off your fat arse and do your job", as well as writing that outgoing chief executive Garry Dyet "better be sacked before he retires".

Despite being asked to apologise, particularly for the slurs on the disability community, Bydder was unapologetic. He said he made the submission in a private capacity, and any councillors who had complained about him could "f**k off" because he had the right to freedom of expression.

Hamilton Mayor Paula Southgate called the language "appalling" and made a Code of Conduct complaint.

On July 1, an independent investigation was launched.

O'Regan and Southgate also wrote to Local Government Minister Simeon Brown, asking for a better and more consistent way to hold elected representatives to account over bad behaviour.

Brown said in a statement he expected all elected members to meet their obligations under the Local Government Act.

"Councils are responsible for resolving conflicts around the governance table. I have no intentions to intervene in matters relating to Hamilton City Council."

Dunedin

Dunedin city councillor Lee Vandervis is also facing a code of conduct complaint, for allegedly "anti-Māori" comments.

A council spokesman confirmed an investigator's report, together with a report from the chief executive, would be considered in the public part of the council meeting on 31 July.

South Wairarapa

After a unanimous vote of no-confidence last year, South Wairarapa Mayor Martin Connelly took a two-month leave of absence to deal with "wellbeing issues" and to work with a mediator to address a raft of issues raised by councillors.

He returned in May but was "effectively sidelined", and was removed from a range of committees, groups, and forums, and his portfolio was distributed among elected members.

In June, councillor and celebrity chef Martin Bosley spoke out about the "ludicrous", below-minimum wage they receive.

South Wairarapa councillors remain some of the lowest-paid in the country; the minimum allowable remuneration was $19,553. A councillor's salary could range from $14,274 in the Chatham Islands to more than $100,000 in Christchurch and Auckland.

Bosley said he personally worked between 20 and 35 hours a week in his role as South Wairarapa councillor, which meant his pay was less than $10 an hour.

Invercargill

Another city, another absent mayor.

Invercargill Mayor Nobby Clark, who has drawn controversy for his unapologetic use of the N-word, has decided to remain in the top job despite multiple calls for his resignation.

Instead, at the end of June, Clark said he would take a month off, because he had not fully recovered from open-heart surgery earlier this year.

Most recently, Clark was under fire for his behaviour at a United Fire Brigades' Association prizegiving dinner as a guest of honour.

In a letter of complaint to the council, UFBA chief executive William Butzbach said the mayor articulated disturbing and offensive views at the event.

He said Clark mocked, disrespected, degraded and offended its members, staff, and other guests by stating volunteer firefighters were second-class citizens, making personal attacks on the MC, and wrongly implying the UFBA president and MC were having an affair.

Clark is expected to return to work on Monday, 22 July, a council spokesperson said.

Financial woes

As Broughton said, local government is mostly funded by rates. Other income comes from things like regulatory fees, the sale of goods and services, and interest earned from investments. Councils also receive grants and subsidies, and borrow from the Local Government Funding Agency.

Statistics New Zealand data from 2019 showed the biggest cost to all councils was roading. Followed by recreation and sport, then wastewater.

Different councils have different priorities. Wellington City Council spent the most on wastewater, followed by water supply, for example. Auckland Council's biggest expense was roading, followed by transport. Christchurch City Council? Wastewater, then recreation and sport.

High interest rates, growing infrastructure costs, and rising insurance prices, are stretching council budgets.

The current investment cycle, from the mid-1990s on, appears to be the first where local government has "significantly increased debt to finance investment without increasing revenues at a similar rate", according to the Infrastructure Commission Te Waihanga.

"From 2009 to 2022, inflation-adjusted local government debt grew 226 percent, but inflation-adjusted rate revenues increased only 42 percent."

Economics consultancy Infometrics in a 2024 report noted capital cost escalation had accelerated substantially in recent years.

"Bridges are 38 percent more expensive to build over the last three years, and sewerage systems are 30 percent more expensive. Roads and water supply systems are around 27 percent more expensive."

While some cost inflation was to be expected, the increases seen in the last three years "is more than would have previously been expected".

Those costs were being passed on to residents, through rates increases. Homeowners were facing average increases of 15 percent, according to data in draft long-term plans across 48 councils.

The average increase between 2002 and 2022 was only 5.7 per cent per year, according to the Infometrics report, commissioned by LGNZ. The average increase in 2023 was 9.8 percent - the fastest increase in 20 years (since 10.8 percent in 2003).

Infometrics chief economist and author of the report, Brad Olsen, told RNZ after years of promises to keep rates low, councils are having to face up to communities with "some big numbers".

"And that's just to keep the lights on. Things cost substantially more, now."

As a proportion of household spending, rates account for about 3 percent, Olsen said.

"Most people can quote their rates bill, but not their income tax paid.

"Everyone says we can't keep increasing rates. But if [we don't], then we're going to have infrastructure fail."

He agreed some money would need to come from central government, but that wasn't "a silver bullet".

"Then you get higher taxes, or less spending on other things."

Lessons from Gore

Gore Mayor Ben Bell made history as the district's youngest mayor when he was elected in late-2022, at age 23. His first year in the job was tumultuous, with internal conflicts culminating in calls for him to step down. He didn't, and things have improved.

But last month, Gore District Council approved a 21 percent rates increase. Communicating the news, and dealing with backlash, has been more challenging than anything that's come before, Bell told RNZ.

"You're going to people who can't cover their bases, and asking for an extra 21 percent."

One public meeting went until 11.30pm.

"People weren't unruly," he said. "They were just very upset.

"A lot of government policy is made but we're the ones who have to face the music."

Councils in recent years had been given more responsibility, but not more funding, he said.

"It's no secret I've long thought the rating model is broken."

Gore District Council is considering how to upgrade its wastewater treatment plants at Gore and Mataura. Upgrades could cost up to $77m, according to Stuff report.

"We're a $30-million organisation," Bell said, shaking his head. "We can't get homeowners to pay for that."

Some of the options suggested by LGNZ, such as congestion charging and accommodation levies, were not relevant to Gore, Bell pointed out: "We don't have congestion."

But the government was considering providing councils a share of GST as a reward for ensuring houses are built - "and that seems promising".

"We're in a high-inflation period at the moment [...] interest rates will come down. Things will improve."