Federated Farmers has lodged a complaint with the Ombudsman over the way Environment Southland approved its Long-Term Plan 2022-2032 (LTP), citing unfairness as well as missing and misleading information.
Feds has around 1200 members in the region – that’s a majority of Southland’s farmers – and many of them are appalled the Council has approved an LTP that will result in a general rates rise of 16-20 percent, Federated Farmers President Chris Dillon says.
The farming organisation has called on the Ombudsman to investigate alleged breaches of the Local Government Act 2002 by Environment Southland in that the Council:
- Failed to follow a fair process. Without explanation, Environment Southland changed the accounting categories between the current LTP and the new one, which did not allow submitters to fairly analyse the direction and performance of the Council.
- Failed to follow an appropriate process in determining appropriate levels of debt and/or the possibility of debt-funding in comparison to the proposed rates rises.
- Failed to provide sufficient time and detail to enable fair consultation.
The operative LTP provides for seven financial categories of expenditure, including: addressing adverse effects of non-point source discharges to water from intensive farming practice; flood protection and control works and protection from the adverse environmental effects of resource use.
The new LTP has a totally different set of spending categories: Air; Biosecurity and Biodiversity; Coast & Marine; Community resilience; Land and Water; Regional Leadership.
“These [changed] categories barely relate to the categories in the operative LTP, and it also appears that some activities fall between functional groups, for instance, much of what happens in Biosecurity and Biodiversity could equally sit in Land and Water, or Community resilience, and vice versa,” Chris said in the complaint to the Ombudsman.
“Environment Southland has effectively undertaken a reset of operations, and has hidden that in changing the financial categories. Our members and the wider community have not been able to compare current and future expenditure plans.”
The Council’s LTP said the rates increase was to help fund additional costs from new regulations “and to invest in change and transformative technologies that will build our resilience for the future”. It would run an operating deficit for the next three years, which it would cover by borrowing.
But Federated Farmers said there was no clear explanation in the LTP on why the rates hike was needed, nor sufficient information on the debt policy.
“A high-level explanation was only provided after the decision on rates rises was made by Councillors (30 July),” the Feds complaint says.
In an undated document, the Council states: “Council decided to proceed with a 20% rates increase in 2022, followed by 5% each year for the next three years and 4% thereafter. This was the preferred option in the consultation document and will allow the organisation’s debt to be repaid by 2028.”
The primary consideration for the rates rise appears to be to pay off all the Councils debt by 2028.
“This seems an absurdly short timeframe, given the temporary economic shock of Covid, the almost complete collapse of tourism in the region, and the existence of $81 million in Council reserves. What is more, the new LTP still commits the Council to increasing its reserves over the 10 year period, from $81M million to $108M by 2031, at the same time as paying off debt. So, the rates rise of 20% is locked in as a new baseline, along with the subsequent rises,” Federated Farmers said.
“Many of the projects that ES is committing to have a multi-generational component, which lends themselves towards a debt-funding component. There are some short-term shortfalls in the budget, which ES claims to be debt-funding, yet the existing reserves provide some flexibility to cover short term peaks and troughs. This was not considered as an option, and Federated Farmers considers that it breaches fairness.”
Despite the significant 20% initial rates rise, followed by subsequent rises, the level of detail supplied by Environment Southland was no more than was supplied for more modest increases in previous years.
Some councillors justified pushing ahead with the LTP on the basis there had only been 52 submissions. However, Feds has pointed out only 10 submitters supported the rise and also that inadequate time had been allowed for consultation and deliberations.
With a government-set 31 July deadline to approve the new plan, Environment Southland only opened consultation on May 3, and let it run for only four weeks. Hearings were held on 23 June, with final deliberations by the full Council on 29 June.
“For a document which rases baseline rates by 20% and locks these in, followed by subsequent and ongoing rates rises, this timeframe appears excessively short,” Chris Dillon said.
“The consultation that was released received an overwhelmingly poor response from the community, but that this was seemingly ignored by Environment Southland.”