Wellington City Council: Angry taxpayers vindicated as Government appoints Crown monitor – capital letter

Local Government Minister Simeon Brown moved quickly to appoint a Crown observer to Wellington City Council. He accused the council of financial mismanagement and risking Wellingtonians being overcharged for water services by more than $700 million over the next decade.

The government’s intervention came after the council voted to halt the sale of its 34% stake in the airport, which was contrary to the long-term plan (LTP) it had signed just three months earlier and could potentially force hundreds of millions of dollars in capital spending cuts. .

Mr Brown said the Department of Interior (DIA) recommendations showed the council had misused its balance sheet – for example, using rates revenue to pay upfront for water infrastructure rather than debt financing to spread costs, Mr Brown said.

Net borrowing for water supplies was to increase by only $66 million, with the remaining $1.10 billion of capital expenditures expected to be financed through rates. Brown said it’s an inefficient and expensive way to finance infrastructure and overcharges taxpayers.

By 2028, a typical Wellington house bill will be $3000 more expensive, with Wellington City Council rates accounting for the lion’s share of that. This year’s rate increase averaged $1,000 per household, an increase of 21%.

Whānau has consistently cited the council’s record investment in water infrastructure as something it is proud of.

But even investment in repairing Wellington’s bursting pipes, one of the few things the city council actually agrees on, is failing.

The mayor has previously supported the council’s LTP and admitted the latest rate increase was difficult to stomach because people had yet to see progress.

“I can understand why people are really upset about this,” she previously told the magazine. Herald.

“They don’t see where this is going, but my God, in 10 years we’ll have a city we can be proud of.”

It was difficult for ratepayers to stay the course as buildings closed due to earthquake risks, government workers lost their jobs, precious drinking water wasted due to leaks, and longtime businesses closed.

The issue is now virtually impossible as DIA officials have found that “the board has demonstrated an inability to understand the mechanisms it has in place to manage the financial pressures it faces.”

The revelations behind Brown’s decision to intervene in the council further damaged whanau’s credibility among taxpayers after her deal to open the Reading Cinema building also soured and personal problems dogged her first year in the leadership role.

They are also a vindication for many Wellingtonians who have raised wider concerns about council spending, although the DIA rightfully does not pass judgment on broad issues such as cycle lanes and the plan to remove cars from the Golden Mile.

Earlier this year, Karori resident Judy Rohloff started a Facebook group called Wellington Rates Rebellion, where disgruntled ratepayers voice their concerns about council decision-making. She refused to pay the rate increase, saying she would not do so until “frivolous spending” stopped.

Both Pandoro and Bordeaux Bakery have blamed the council at least in part for their recent closures, with a group of businesses banding together to try to fight the council’s upcoming Golden Mile redevelopment.

Whānau said it did not accept the council had made financial mistakes in relation to water infrastructure investments and that the allegation came as a surprise.

She said Wellington City Council funds its water supply in the same way as other councils across the country.

Except other councils don’t have government ministers breathing down their necks.

Why Now is the Right Time to Be a Corona Observer

There have been several calls for government intervention at Wellington City Council in recent years, all of which have been a disproportionate response to existing problems – until now.

Previous calls for the government to intervene in the council’s work, mostly while New Zealand’s current First Member of Parliament Andy Foster was mayor, were fueled by fiery council politics.

Foster’s council was portrayed as divided, with council members and the mayor regularly bickering with each other, and arguments between them were broadcast publicly on more than one occasion.

But Foster’s council did not vote to cancel a key policy document involving billions of dollars in spending just months after it was signed.

That’s the difference.

The Local Government Act says the government can intervene with people such as the Crown monitor or commissioners if it believes there is a “serious problem”.

A “problem” is defined as, at a minimum, something that impairs or is likely to impair the ability of a local government to meet its obligations under the law.

Brown is right to have concerns about the ability of councillors, who walked out of meetings, refused to vote and criticized each other and staff, to amend the LTP they had just voted to repeal.

He said this environment was not conducive to effectively managing the LTP process and leaving these issues unresolved would likely have adverse consequences for Wellingtonians.

Brown’s decision to intervene now risks causing further controversy to which Wellington City Council has signed up.

If a left-wing council with a Green-backed mayor wants to sell assets and make significant budget cuts, why not leave it to them?

Brown said the government made it clear it did not take responsibility for any decisions made by the council by appointing the monitor.

That responsibility remains with the mayor and councilors, who also remain accountable to their constituents, he said.

That kind of accountability is best done at the ballot box, and with local government elections less than a year away, several big names are already being put forward as possible candidates to challenge Whānau for mayor.

Georgina Campbell is a Wellington-based reporter with a special interest in local government, transport and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.