Bay of Plenty Regional Council’s Quayside Holdings dividend could provide a massive boost to Eastern Bay ratepayers if it was divvied up per hectare, Ōpōtiki district councillors heard recently.

How dividends from Bay of Plenty Regional Council’s investment assets of over $40 million a year from Quayside Holdings will be divided across the region when there is no more regional council is a hot topic among local councils.

The subject reared its head at an Ōpōtiki District Council meeting recently as the council agreed to engage with central government’s Simplifying Local Government Head Start Pathway to investigate how various aggregations of districts could form unitary authorities.

Councillor Dean Petersen sought clarity from council staff about how regional council functions would be funded in an Eastern Bay unitary authority composed of Ōpōtiki, Whakatāne and Kawerau districts, including how the Quayside dividend would be distributed.

“If we could negotiate a per-hectare [share] it would be a fair bit of money for our ratepayers.”

Chief executive Stace Lewer said Peterson had a good point.

“The regional council have a primary role to play in protecting the environment, which includes biosecurity, biodiversity and my understanding of how Quayside is set up is to help provide income to achieve those outcomes.

“The Eastern Bay has a huge geographic area, with a significant amount of biodiversity potential, not only in the whenua but also in the moana.

“Depending on how that dividend is divvied out, either by population or by land area, is going to have a huge impact on funding flowing into those regions.

“If it was based on land area it would be very favourable for us. And rightfully so, because the intent is to protect biodiversity.

“We have a huge opportunity in the east to protect and develop environmental outcomes as a result of that.”

Both Ōpōtiki District Council and the regional council are consulting with the public on options for Simplifying Local Government.

The regional council has provided tables to show the effects of different methods of dividing dividends across three sub-regions – a Western Bay sub-region that included Tauranga city; Rotorua; and Eastern Bay.

Under the status quo the regional council allocates 30 percent of its investment revenue as a fixed benefit based on rating units and 70 percent based on land value. This sees the bulk of the dividend allocated to Western Bay.

In the past year, about $36.9 million in investment funding was allocated to the Western Bay sub region.

Rotorua received about $7.4 million and the Eastern Bay about $7.1 million.

If the dividend was distributed by land area $32.3 million would go to the Eastern Bay, $10.2 to Rotorua and $8.9 million to the Western Bay subregion.

However, further figures show that due to the Western Bay sub-region’s high population and property values, rates from the area subsidise much of the regional council’s functions across the entire Bay of Plenty.

Under the current allocation of the dividend, the Eastern Bay ratepayers could face a 58 percent rise in costs for regional services due to loss of rates income from Western Bay.

The regional council also raises concerns about how flood protection assets would be managed when the region is divided into separate unitary councils, stating that the cost of failure would be “severe”.

With five of the region’s six river and drainage schemes located in the Eastern Bay, this could be a significant consideration for an Eastern Bay unitary authority.