The Government says it’s taking advice on a potential intervention at Wellington City Council. 1News explains how it got to this point.
Money’s too tight to mention for local councils and their ratepayers of late.
Rates have been rising steeply around the country, with some regions proposing rate hikes of more than 20%.
Wellington City Council’s budget for the coming year included an average rate increase of 16.9% – but recent events have left a dark cloud hanging over the organisation’s long-term finances and questions about how that might further affect rates.
Tory Whanau today called councillors in for an urgent meeting hoping to stave off possible Government intervention. (Source: 1News)
A squabble over a sale
The council adopted its Long-Term Plan at the end of June – but not without controversy.
At the centre of that conflict was the council’s plan to sell its 34% share in Wellington Airport. The money from that sale was to go into a new investment fund to help cover costs should the earthquake-prone city fall victim to a natural disaster.
But last week, the decision to sell the council’s share in the airport was overturned.
A Notice of Motion was brought by one of the councillors to amend the Long-Term-Plan by not proceeding with the sale. The council then voted nine to seven in favour of not selling its stake in the airport.
Wellington Mayor Tory Whanau said she was disappointed with the move.
“I firmly believe this proposal was in the best interests of our city,” she said last week.
“As a progressive mayor, I have always sought to deal with the difficulty our city faces in a way that allows us to invest in a thriving, affordable city, while building long-term resilience to climate shocks and natural disaster.”
Without the sale of its airport share, Wellington City Council now needs to cut $400 million to $600 million from its budget.
Whanau said she would fight to keep funding for Wellington’s ailing water infrastructure and the Golden Mile transport project. She also said she was not yet prepared to sell the city’s social housing.
Future spending on Wellington’s ageing pipes and plans for a disaster recovery fund are now at risk. (Source: 1News)
Under Government scrutiny
The current predicament facing Wellington City Council has not gone unnoticed at the Beehive.
Finance Minister Nicola Willis told Newstalk ZB on Monday: “We have what appears to be not a very functional council in Wellington right now.”
“The fact that the Long-Term Plan is now having to go back to the drawing board, that it’s already one of the biggest increases in rates in the country, that Wellingtonians are sort of despairing about the council’s focus on itself rather than the people it’s meant to serve – those are all factors that I’m certainly concerned about,” she said.
Prime Minister Christopher Luxon also chimed in this week, saying the Government would intervene at the council if it needed to.
What could the Government do?
It comes after the sale of airport shares was voted down, meaning the city’s Long-term Plan will need to be changed. (Source: 1News)
Local Government Minister Simeon Brown confirmed yesterday that he was seeking advice from the Department of Internal Affairs on what options were available to him and what the thresholds were for action against the council.
Brown said a “high threshold” was needed to intervene in a local council that had been democratically elected, but he was looking at the options available under Part 10 of the Local Government Act.
The Act says a minster may choose to appoint a Crown Observer, Crown Manager or Crown Review Team to help a council with a problem.
Doing so is less extreme than appointing a Commission to a local council, a move the previous Labour government took when Tauranga City Council was deemed dysfunctional in 2020 and replaced with four commissioners.
The Local Government Act states a Minister may appoint a Commission to replace a council if they believe a “significant” problem is impairing good local government of a region or endangering the public, and the council is unable or unwilling to effectively address that problem.
Brown could also call an early election for Wellington under the Act.
Local body elections are due to be held around the country in October next year.
Brown has not yet set a timeframe for making any decisions about potential government intervention into Wellington City Council.
The council was holding an urgent meeting behind closed doors this afternoon to discuss the issues around its Long-Term Plan.
