Cost of buying-out cyclone affected properties could 'bankrupt' Hawke's Bay councils

Wednesday, 21 June 2023

Flooding in Hawke's Bay as a result of Cyclone Gabrielle in February. (This video was first published in March, 2023)

The mammoth cost of funding voluntary buy-outs of Cyclone-affected properties in Hawke’s Bay has the potential to bankrupt local councils, a councillor has said.

The cost of funding voluntary buy-outs of the worst affected properties would be shared between the government and councils, but how it would be split was yet to be negotiated.

Hawke’s Bay Regional councillor Martin Williams, speaking at the council’s Cyclone Recovery committee meeting on Wednesday, said there was no way the local councils could afford to pay half the cost, which he said would be “enough here to bankrupt local government in Hawke’s Bay”.

“We can’t handle 50% of these buy-outs and the rebuild cost… I’m very concerned about, and I do hope that we can collectively as local authorities for our communities go incredibly hard on government,” he said.

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The Esk Valley was one of the worst hit areas and contains many properties in the Category 3 zone. (File photo)

Chris Finlayson KC had been appointed to lead the councils’ negotiating team for discussions with the Government on the recovery package. (File photo)

The regional council along with the four Hawke’s Bay territorial authorities (Hastings District Council, Napier City Council, Central Hawke’s Bay District Council and Wairoa District Council) is about to begin negotiations with central government over the buy-out scheme.

There are 216 properties in Hastings and 20 in Napier that fall into Level 3, where the risk may be so great that they can not be rebuilt on.

The cost of buy-outs would come on top of the nearly $2 billion in recovery costs faced by councils over the next four years.

It was announced this week that former Cabinet Minister Chris Finlayson KC had been appointed to lead the councils’ negotiating team for discussions with the Government on the recovery package.

Negotiations were to start this week.

“Thank goodness we’ve got Chris Finlayson on the job, because in addition to the wisdom of Solomon, if I could borrow a Greek God, he’s going to need the strength of Hercules because there’s enough here to bankrupt local government in Hawke’s Bay,” Williams said.

“This is a very poor precedent for managed retreat. If too much of it falls on our balance sheet, it’s simply not going to work. The future of local government review has already highlighted the need for local government on business as usual to get a $1bn a year back just to keep pressure off our ratepayers. So God’s strength to Chris and the negotiating team because our communities need that support from government, and fast,” he said.

Earlier in the meeting interim chief executive of the regional council Bill Bayfield said there may be times when the councils had to ignore rules.

He said he was aware of four areas (Esk, Tangoio, Rissington and Pōrangahau) in which landowners had offered land for subdivision.

“That’s really clever but how do we as the district council and the regional council facilitate that so it happens in one week and not a year like normal subdivision applications?” he said.

“The whole business of us, dare I say it, making things fit in an emergency like this is going to continue to challenge us and I really hope that the district council staff and our own staff can rise to that and recognise that there are times when you ignore rules,” Bayfield said.