This is not an argument against reform. It is an argument against surrendering leverage before the “price”, protections and exit rights are known.
In a 7-4 split vote led by Mayor Revell and Deputy Mayor Grant, four Thames-based Councillors, and Cr Freer (Whangamata), TCDC decided to enter the Government’s Head Start amalgamation process. We did not have to do that. The Government’s own policy calls Head Start voluntary and says councils that do not opt-in will face no mandatory change until after the 2028 local elections.
Remaining a territorial authority is lawful, not defiant. It preserves TCDC’s ability to compare stand-alone, Eastern Waikato and Northern Bay of Plenty options.
Instead, TCDC gave everything away before it got anything.
1. Memorandum of Understanding (MoU)
The Hauraki, Matamata-Piako and Coromandel District Councils’ MoU is unusually blunt. Non-binding until all three councils’ adoption; once adopted, it became binding. Once operative, cl. 6.1 bars each council from entering formal amalgamation negotiations with another council. Clause 7.3 provides that the MoU can only be replaced or terminated by written agreement of all parties or councils. Clauses 5.4 and 5.5 preserve statutory duties and deny predetermination, but neither supplies a unilateral termination right.
That is not harmless collaboration. It is exclusivity plus a unanimous-release mechanism.
You may ask, what binding protection did TCDC receive in exchange? Very little is the answer.
The executed MoU is five pages. Its seven principles are broad. Clause 4.2 expressly says they are not final arrangements for representation, rating, debt allocation or service delivery.
It contains no attached Foundational or Guiding Principles; it limits itself to 4-6 local boards (TCDC alone has 5 today). The MoU has no operative terms fixing powers, rates transition, legacy-debt allocation, asset-condition treatment, service levels, capital priorities or Wai Water (LWDW) accession.
A promise to preserve the sentence “strong local voice” does not specify how many representatives TCDC will have on the Governing Body, decisions they control, how budgets are calculated, or what remedy follows if the eventual legislation delivers less. The MoU fixes the negotiating relationship while leaving the economic and democratic bargain unfixed!
Clause 9.1 calls the MoU the entire understanding and supersedes prior discussions and understandings.
Whatever more detailed Schedule 1 negotiating paper existed, it was not incorporated into the executed instrument filed with the proposal.
The legal point must be stated accurately. In strict contract law, mutual promises may supply consideration. The failure is not solved by chanting “no consideration”. It is commercial: TCDC accepted a concrete restraint while obtaining no equivalent, enforceable quid pro quo on the matters that determine whether TCDC ratepayers win or lose.
Aspirations are not conditions precedent.
“Best endeavours” are not an audited opening balance sheet.
Good faith is not a rating cap.
Nor does unanimity rescue the drafting. Clause 4.3 says the principles may be changed only by written agreement of all parties and councils. That protects the words, not the outcomes.
2. What’s Next?
The mayors’ covering letter to Ministers Watts and Bishop states that, if due diligence disclosed red flags, councils “…may seek to exit”. Seek is the operative word. A right to ask the other parties for release is not a contractual right to leave.
The political sales pitch describes an off-ramp; the legal instrument supplied is a gate controlled by all three councils. This before TCDC has decided any “red flags” (if our political leaders indeed have any)!
Akin to a true Tui advertisement, the three councils intend to progress genuine community engagement and due diligence. Yeah Right!
The published proposal confirms how much remained open. It says its financial analysis does not constitute an opening balance sheet or establish a quantified net saving. Governance, representation, rating, debt, asset arrangements, service levels, transition costs and regional functions are deferred to detailed design.
3. Political Accountability
Political responsibility cannot be outsourced to consultants or compressed timetables. Mayor Revell and Deputy Mayor Grant led TCDC’s reform working group. I was a member of the working group; I am a commercial contract lawyer. I know a good agreement when I see one. I voted against the adaptation. Mayor Revell signed the MoU. In my opinion, accepting binding exclusivity before reciprocal agreement terms are settled is politically and commercially naive. That criticism is directed at the decision and its text, not at motive.
The Local Government Act requires open, transparent and democratically accountable conduct, prudent stewardship, and a decision process that identifies reasonably practicable options and considers their advantages and disadvantages. They demand decision-grade evidence before material leverage is surrendered.
4. A Stand-Alone TCDC Comparator is Essential, not Optional
Without a ten-year stand-alone model by property type, service level and downside scenario, no one can objectively say amalgamation creates value. Scale may cut overhead; it may also centralise priorities and import transition costs. Both sides need pricing before commitment.
The responsible position is “not yet”: remain a territorial authority; keep negotiations non-exclusive; require an audited asset, debt and liability baseline; obtain property-level rating and service modelling; settle water and local-board terms; and insist on a unilateral withdrawal right before any irreversible step. Anything less is not due diligence; it is governance on a wing and a prayer.
TCDC’s political leadership calls the proposal “starting from strength”. A party that must obtain its counterparties’ consent merely to reopen competing negotiations is not negotiating from strength. It is negotiating from inside the bargain it should have completed first!
What do you think?
◾️This is my private opinion. It is NOT written in my capacity as an elected Mercury Bay Ward District Councilor. Flemming is a laywer and businessman living in Mercury Bay.
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