Kaikōura District Council at 'risk of implosion' after 2016 earthquake

Thursday, 3 October 2019

Kaikōura residents reflect two years after the 7.8-magnitude earthquake in 2016. (Video first published in November 2018)

The Kaikōura District Council may not be around in another 10 years because the November 2016 earthquake has left it in financial peril, a report says.

The Kaikōura Recovery Steering Group, created by the council last year, says the district needs up to $10 million just to stay afloat for the next five years.

The incoming council will have to keep operating costs to a minimum, likely by sharing resources with neighbouring authorities, if it has any chance of surviving.

Council infrastructure and assets were extensively damaged, requiring funding to fix. Pictured is the damaged effluent treatment pond.

Already the smallest district council in mainland New Zealand, the financial strain on its ratepayer base of just 3500 residents is at breaking point following the November 2016 earthquake.

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Kaikōura District Council chief executive Angela Oosthuizen.

The steering group's report says Kaikōura is in a unique situation because of the natural disaster.

New Zealand's community spirit is helping Kaikōura post-earthquake. (Video first published November 21, 2016)

Past 'under-investment' and 'ongoing challenges' in meeting costs have been 'exacerbated' by the earthquake, which is estimated to have cost the district between $3 billion and $8b. Major infrastructure repairs had to be carried out, while local businesses were affected by long-term road closures north and south of the seaside tourist town.

The report says the council's existing model is not sustainable. Its three‐year plan had indicated rates bills for residents could rise by 50 per cent in the three years to June 30, 2021.

The council was also struggling to attract and keep staff with the right skills, and had 'ineffective and inefficient internal support systems'.

The report proposes the council adopt a new operating model, which would cost between $7.3 million and $10m, including $4.8m just to bring the internal systems into the modern day by digitising records and introducing new technology.

About $650,000 would be needed for staff to manage the transition, while $1.85m would be used to review basic council services like rubbish and recycling, parks and recreation, and water.

The report says the council is at 'risk of implosion' if it does not make changes.

It recommends the council shares resources with other authorities where possible, such asIT services and says it should find a new company to carry out the waste and water services currently delivered by council-controlled Innovative Waste Kaikōura.

Local Government Minister Nanaia Mahuta was not available for comment, but a Department of Internal Affairs spokesperson said further work was being done to develop the case for a new operating model for the Kaikōura district. 'The minister is awaiting further advice on this.'

Council chief executive Angela Oosthuizen said the incoming council would make decisions on the district's future, given how close it was to the local body elections.

It is not the first time the small council's future has looked uncertain.

In 2008, the Local Government Commission received an elector-initiated petition in support of abolishing the Kaikōura district and instead merging it with the Hurunui district. The commission eventually ruled in favour of the status quo, but many residents in the district's north have maintained they should be part of the Marlborough District Council's remit.

The council was again criticised in 2015, one year before the earthquake, for overspending on its own civic centre building, a project many ratepayers were not happy to finance in the first place.