Brown now considering advice on any council intervention

Monday, 21 October 2024

Local Government Minister Simeon Brown said this afternoon he had received advice on any government intervention into the Wellington City Council and was now considering it.

“I’m taking it with seriousness and urgency but won’t be going into those details today,” he said at Monday afternoon’s post-cabinet press conference.

He said he had no plans to meet with Mayor Tory Whanau.

“When I met with the mayor last week, she gave me an outline in terms of some of the work that she's got underway,” he said. “Ultimately, as I said last week, we've got concerns in regards to the fact they’ve decided to effectively relitigate their entire long term plan, and we're obviously concerned about the impact that may have on on ratepayers here in Wellington.”

On Monday Whanau laid down her 11 “principles” for where cuts could and could not be made as the fallout from the airport share no-sale continued into a new week.

Whanau called councillors in for a meeting at midday on Monday as the council tries to find up to $600 million – which some argue may not be needed – in the wake of the vote to stop the sale of the council’s 34% stake in Wellington Airport.

Whanau handed out her principles, leaked to The Post, “for identifying potential projects or area for spending reduction”. These included no cuts for water infrastructure, projects under contract or construction, maintenance or renewal budgets, social housing, or projects such as pool de-gasification where cancellation would increase rates.

She called for the council to avoid cuts for projects aimed at growing the city’s economy, as well as continuing projects with a high level of government funding. It is understood the $139 million Golden Mile revamp, co-funded by the Government, is included in this.

She wanted the council to continue to work with the Greater Wellington Regional Council to support public transport and to try to “maximise savings” where earthquake-prone building standard changes may eventually reduce council obligations.

Where reductions to community facilities were considered, the council should “share the pain” across wards, her list said.

Councillor Nureddin Abdurahman’s notice of motion effectively cancelled the planned sale of the council’s 34% Wellington Airport stake, meaning the council’s long-term plan now needs to be amended.

He last week outlined his proposed steps to get through the council stand off. It amounted to doing more work looking at options and to get a full picture of the scale of the problem, before taking any action.

Council staff originally said a no sale would have no impact on services but, by the time it came to the sale-ending vote, the advice was that it would lead to a $400m to $600m financial hole.

After Monday’s meeting Abdurahman said the council remained a long way off getting consensus on what to do.

Councillor Ray Chung came out of Monday’s meeting saying there was “general consensus” on many of the principles but questions over some.

But the big issue was getting clear advice from council staff about how much of a financial hole was left by the no-sale, he said.

“We are still waiting for a finite number from staff,” he said.

“If we know the number, we know what we are heading towards.”

The alleged financial hole means Whanau is looking at cuts to council spending but she has already listed her “non-negotiable” items she will not cut: The revamp of the Golden Mile, social housing and water infrastructure.

In a statement on Monday afternoon, Whanau set out a time line for an amended long-term plan with a draft budget by December 11, consultation from March 20 to April 20, and final approval of the plan by June 26.

“Making savings is a difficult process and we also discussed the principles that we should take to inform that,” she said.

“As a top priority I think every councillor agrees that the [long-term plan] amendment decisions should not further increase rates and should not reduce funding for water.

“The focus is on reducing new infrastructure and community building projects as these are debt-funded.” She planned to avoid cuts to social housing and climate action.

“I know that reductions to community projects are difficult. Where these are considered, it is my view that we should seek to share the pain as much as possible across different wards and between the central city and suburbs.”

At Monday afternoon’s post-cabinet press conference Local Government Minister Simeon Brown said he had received advice on any government intervention with the the city council and was now considering it.

“I’m taking it with seriousness and urgency but won’t be going into those details today,” he said.