Wellington mayor says $500m disaster debt headroom agreed on

Wednesday, 16 October 2024

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Wellington Mayor Tory Whanau is preparing to sit down with Local Government Minister Simeon Brown on Thursday morning as threat of Government intervention in Wellington City Council looms.

Following an urgent meeting called on Wednesday afternoon with councillors in the lead up to tomorrow, Whanau said she and the council agreed to $500 million of debt headroom in the case of a disaster, but where those cuts would come from was a discussion that still needed to be had.

Whanau’s bottom line was that rates would not be increased further as the long-term plan was amended.

“I also want to assure the public that, as we go through this process, I do not intend to cut projects that are critical for our city’s growth and sustainability,” she said in a statement.

“For me, that means protecting our social housing, and continuing funding for water and key climate initiatives.”

There was a shared commitment for the council to investigate the sale of ground leases and carbon credit holdings to form the basis of a fund – or other insurance mechanisms – that could offer both returns and form of self-insurance to the council and would grow over time.

“It would be a vital step towards a long-term solution to our insurance risk,” Whanau said.

After today’s meeting, councillor Ben McNulty said there was “laughter” in the council room. “I would probably classify it as the most productive meeting we have had as city councillors in this triennial.

“There was a lack of ego for once, a lack of politics, the airport’s done and dusted, no one’s re-litigating that and we’re moving on.”

Any government intervention after today’s “positive” meeting was politics, he said, rather than any issue being addressed.

McNulty regarded the council’s approach as “solid” and said the council’s decision to still put aside money for a disaster resilience fund was a “clear win”.

There was an agreement from councillors on what they should look at. For him, he did not want to see another cent spent on Te Ngākau Civic Square.

But councillor Ray Chung said the meeting was a “talkfest” with little achieved. He hoped to continue the talks with Whanau at a Chamber of Commerce dinner on Wednesday night.

Chung, who has confirmed he will run for the mayoralty, said the Government should force a Wellington City Council election with three months. “If I had confidence in her, I wouldn’t be running for mayor.”

Tim Brown said there was “a remarkably high level of unity” among the council members at today’s meeting. “There’s enthusiasm in how we are going to address this responsibly.”

Brown said they had agreed on a process to address the insurance problem and they had started off at $500m, which would be put aside as an insurance fund.

“We still have some assets we can sell such as the ground leases, other council assets and capital spending reductions.”

Councillor Nureddin Abdurahman said there was no need for government intervention, and while the mayor “might make some mistakes,” she is democratically elected.

Councillor Diane Calvert said social housing and transport projects like the Golden Mile could take the cut. “They’ve got to come from somewhere.”

Whanau told The Post on Wednesday morning she was “focused on finding a solution to the council’s insurance risk through the [long-term plan] amendment”.

The Wednesday afternoon meeting was an attempt to save the council’s long-term plan, which was thrown into jeopardy last week when a majority voted against the sale of its shares in Wellington Airport.

The planned sale was central to the long-term plan – a once-a-triennium decade-ahead document for how the council plans to charge rates and spend – meaning it now needs to be amended.

This led to strong suggestions from central government on Tuesday of intervention, which – at the most extreme end – would be the council and mayor being ousted and a commissioner being appointed to take over the running of the city.

The long-term plan amendment will reopen old wounds around where spending cuts are needed, how much debt the council is willing to take on, and how much risk it is willing to carry in the event of a major disaster for the city.

But Whanau has already said she has “non-negotiables” including the Golden Mile, retaining social housing and spending $1.8 billion over the coming decade on water infrastructure.

The $139.4m Golden Mile revamp, $111m budgeted for cycleways, and a waste minimisation plan were cited by councillors on Wednesday morning as possibly being in line for cuts, with one councillor saying the city needed to focus on keeping projects that “keep the city running” and ditching those aimed at improving the city.

Wednesday’s urgent meeting comes after Finance Minister and Wellingtonian Nicola Willis said she was concerned about the long-tem plan going back to the drawing board, calling the situation a “shambles”.

Housing Minister Chris Bishop, also MP for Hutt South and a long time Wellingtonian, said the council’s state of affairs was a “schemozzle”, then Prime Minister Christopher Luxon chimed in on Newstalk ZB.

'We’re pretty concerned about it … it doesn’t look great,“ he said.

But it was Brown who confirmed the Government was considering some sort of intervention in the council by confirming he was getting advice on the issue.

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