Wellington City Council woes: Simeon Brown appoints Crown observer, Tory Whanau refuses to quit
Embattled Wellington Mayor Tory Whanau admits her council “must do better” after the Government moved to appoint a Crown observer at Wellington City Council.
Local Government Minister Simeon Brown made the announcement today following the council’s decision to reopen its Long-Term Plan (LTP).
Brown said the Government had written to Wellington City Council with a draft terms of reference and has given the council 10 working days to respond, as required under the law.
Whanau faced the media on Tuesday afternoon and said she was focused on delivering the best outcome for Wellington.
“I welcome his intention to bring in an observer,” she said.
Whanau said the minister has fairly pointed out examples where councillors had walked out of meetings and acknowledged the council has some tough decisions ahead in the next few months.
“We must do better,” she told reporters.
But she doesn’t accept there has been financial mismanagement at the council surrounding water infrastructure investment, and doesn’t intend to cancel crucial plans for the city.
STORY CONTINUES AFTER LIVE BLOG
James Wheeler
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Scott Palmer
Tory Whanau's standup is now over
Whanau won't resign
Scott Palmer
Whanau said she won't resign.
She confirmed the council would have to pay for the observer.
Whanau said, that while others have said this may be politically motivated, she was focused on delivering the best outcome for Wellington city.
Wellington airport decision
Scott Palmer
The airport decision brought out the worst behaviour of council members.
"Us as a collective, we could have done a lot better. It got pretty tense a few weeks ago."
Mayor wants more support
Scott Palmer
The mayor said she looked forward to the minister's recommendations on water infrastructure spending.
She said they are not dissimilar to other councils around the country and would like to see more support.
Whanau said other councils have shared a lot of support for her.
"I hope it doesn't set a precedent for other councils," she said.
"What I have seen in the past hour is punching down. We need assistance not punching down."
Whanau told her councillors that they should accept the intention and should work with Minister Brown.
She doesn't know who the observer may be.
When asked what "punching down" meant, she said other coalition partners have used colourful language.
Whanau not surprised by intervention
Scott Palmer
Whanau said she wasn't overly surprised when the intervention was announced.
"I welcome his intention to bring in an observer."
She said she doesn't accept there has been financial mismanagement at the council surrounding water infrastructure investment.
She said the council has increased water infrastructure spending during the past few years.
Tory Whanau stand up starts
Scott Palmer
The Wellington mayor said she has met with councillors to discuss the city's long term plan.
She said the minister has fairly pointed out examples where councillors have walked out of meetings.
She said the council has some tough decisions coming ahead in the next few months.
Whanau said she doesn't intend to cancel crucial plans for the city.
James Wheeler
Wellington City Councillor Geordie Rogers is looking forward to working “constructively” with an observer. Rogers is the most recent councillor to be appointed, winning his seat after a by-election.
Chair of Long-Term Plan Committee weighs in
Sophie Ryan
Listen: The Front Page on the state of Wellington City Council
Sophie Ryan
Last week, The Front Page podcast discussed the 'shambles' of Wellington City Council and if the issues are as bad as the Government has made them out to be with Georgina Campbell.
'Lowest point' of Andrew Bayly's career
Sophie Ryan
Bayly said the issue was that he had caused offence, he "got it wrong", and he apologised.
"It was given in a light-hearted manner, but unfortunately he took offence."
He had not made contact with the complainant but he did not have his contact. If he had contact, he said he would say he was "very sorry" for the distress he had caused.
Bayly said he was very passionate about his portfolio, and loved getting out and meeting businesses.
He didn't believe there were any other similar instances of similar behaviour that might emerge.
He didn't realise he had offended the complainant until he received the complaint.
He said he was not the type of person who walked around saying "horrible things" about people.
He said it was the lowest point of his political career by "a long way".
Bayly said he didn't consider resigning, and he was keen to continue in his current role and still had a lot to offer.
Detracting from what the Government was doing was the last position he wanted to be in, he said.
Mayoral statement on Crown Observer
Sophie Ryan
“The Government has informed me of its intention to install a Crown Observer to oversee the development of an amended Long-term Plan,” said Mayor Tory Whanau.
“I will shortly consider the draft Terms of Reference and discuss this decision with Councillors.
“It is my view that we accept this and work constructively with whoever is appointed.
“Ultimately, we all want a Long-term Plan amendment that delivers the best outcomes for Wellingtonians.
“We must use this as an opportunity to put past disagreements behind us and build a coherent plan that delivers for the people of Wellington.
“The decision not to sell our minority shares in the airport to resolve our growing insurance risk has meant we have some tough decisions to make in the coming weeks and months.
“I am focused on addressing our insurance risk without increasing rates. Additionally, I do not intend to cut projects that are critical for our city’s growth and sustainability. For me, that means protecting our social housing, and continuing funding for water and key climate initiatives.
“I will continue to work with Councillors in the coming weeks and months to put forward an amended Long-term Plan proposal that offers surety to Wellingtonians.”
Hipkins has questions around the appointment
Sophie Ryan
Chris Hipkins says the advice needs to be released. He says this is a “significant” step. If squabbling around the council table is justification, then perhaps they need an observer at the Cabinet table, he says
If they are going to appoint an observer in WCC there will be a lot of other councils the Government may be looking at, says Hipkins.
Observer won't intervene
Sophie Ryan
"It's about assisting the council and providing information to the Crown."
The observer was "another source of advice".
"I'm interested in the long-term plan being finalised over the next nine months in the best interests of Wellington ratepayers."
The observer will report back to Brown, but ultimately the council and the mayor are still responsible for all of the decisions.
Issues around resolution to long-term plan
Sophie Ryan
The council wasn't using its debt financing appropriately, Brown said, and while it was taking on debt for some things, 94% of its capital expenditure was coming from rates.
He said he had a "pleasant conversation" with Whanau and the council and the mayor had 10 days to respond.
She did not give him an indication of what action she and the council might take, Brown said.
"The problems that exist do warrant an observer," Brown said.
A key question is what the council's plan is to resolve the issues in its long-term plan.
Mayor has no intention to resign
Sophie Ryan
Mayor Tory Whanau told the Herald she had no plans to resign.
"I was elected to deliver for the people of Wellington, and I plan to work with councillors to deliver a solid Long-Term Plan. We will continue to do that work at pace”.
Concern for impact on ratepayers
Sophie Ryan
Simeon Brown said the government was concerned about the impact on ratepayers in the city.
The observer would assist the council as it works through its long-term plan, Brown said.
Simeon Brown appoints Crown Observer
Sophie Ryan
Local Government Minister Simeon Brown has decided to place an observer on Wellington City Council following its decision to reopen its Long Term Plan.
Seymour reveals the new meals featured in school lunches
Sophie Ryan
David Seymour’s new school lunches programme will include chicken katsu, butter chicken, lasagne, chicken pasta salad and wraps.
The details of the Government’s cheaper school lunches are being revealed today. The lunches will be served in schools from Term 1 next year.
Benjamin Doyle to become List MP
Sophie Ryan
She expected there to be some consideration of how the process could have been improved for the future.
"This is growing pains, this is part and parcel of growing as a party."
She believed the Green Party was "a stronger force" as a result of the issue.
Ricardo Mendendez-March said he had spoken to Benjamin Doyle, who would replace Tana as the list MP. Swarbrick expected a small re-shuffle of portfolios as a consequence of the change.
She said the party was deliberately not the same as those of Labour and National with a more hierarchical approach and instead opted for "grass-roots" decisions. "That sometimes can be messy, it requires a lot more discussion."
Swarbrick on use of waka-jumping bill
Sophie Ryan
On the party's use of the waka-jumping bill, she said the party's opposition to that was historically based on concern about the power it gave to a party leader and that MPs could be kicked out purely because of a principled stance. She said the Greens had gone "above and beyond" to ensure the decision was made by members rather than just the leaders and to ensure it was "not a trigger-happy, go and spray it everywhere" decision.
She believed it was the most principled stance the party could have come to. She said if the same specific circumstances were repeated, it would use the law again but it had not had a broader conversation about its overall stand on the waka-jumping bill.
'Really sad situation'
Sophie Ryan
She said she hoped the party could now go back to focussing on issues, such as the planet and child poverty.
She said democracy was not always a tidy process and the Greens took democratic processes seriously.
"This is a really sad situation. It's not a situation any of us wanted to be confronted with," Swarbrick said. She said the party believed it was "crystal clear" that Tana had not been up-front or forthcoming about the situation and that had put the party in a position it had not faced before.
'Draw a line' under Tana saga
Sophie Ryan
Green Party co-leader Chloe Swarbrick said the Speaker's decision on Tana "draws a line" under the issue. She said throughout the process, the party's founding values had been the guide and she was proud of the process followed.
"I can't begin to tell you what her actions might be from this point on, what I can tell you is everything we have done has been in line with our values."
She said the party was confident with its process and the Speaker had also been careful in deciding on it.
The main events happening in Parliament
Sophie Ryan
Darleen Tana is no longer an MP, with Speaker Gerry Brownlee this morning completing the final step in the process of removing to remove her from Parliament.
Christopher Luxon says Labour ‘conspiratorial’ with questions about disappearing email relating to Andrew Bayly complaint.
Labour decries Govt ‘subverting’ proper process on Three Strikes changes
Live coverage from Parliament today
Sophie Ryan
We're bringing Herald readers live coverage from all the stories in Parliament today.
STORY CONTINUES
In a statement earlier today, Whanau said she would “shortly consider” the draft terms of reference and discuss Brown’s decision with councillors.
“It is my view that we accept this and work constructively with whoever is appointed,” Whanau said.
“Ultimately, we all want a long-term plan amendment that delivers the best outcomes for Wellingtonians.”
Whanau said she would not resign as mayor.
“I was elected to deliver for the people of Wellington, and I plan to work with councillors to deliver a solid Long-Term Plan. We will continue to do that work at pace,” she said.
The council was described as a “shambles” by Brown’s colleague, Finance Minister Nicola Willis, who today backed Brown’s decision.
Brown’s decision to get advice on intervening in the council was sparked by the council’s vote to U-turn on a plan to sell its stake in Wellington Airport, a decision which required reopening the council’s plan. The airport shares would have created an investment fund and freed up debt headroom to manage the council’s earthquake insurance risk.
Without the airport sale, the council will need to find up to $600 million in savings to free up debt headroom.
Brown said that the Department of Internal Affairs (DIA) advised him that while it was “not uncommon for councils to amend their long-term plans, it is uncommon for a council to reverse such a critical financial decision that requires such an amendment only four months into the cycle”.
DIA identifies further financial issues
Brown said there were several other problems with the council’s finances, including its decision to pay for most of its water investment with rates rather than debt, a decision which Brown said would “overcharge” Wellington City ratepayers by $700m over the next 10 years.
“I have been concerned about the council’s ability to manage their long-term plan amendment and adoption process, following their recent decision to rewrite its 2024-34 Long-Term Plan,” Brown said.
“Under part 10 of the Local Government Act 2002 [the act], I have powers of assistance and intervention in relation to a local authority that has a problem. Following advice from officials, I have identified there is a significant problem at Wellington City Council that warrants the Government appointing a Crown observer,” he said.
“Advice provided to me by the Department of Internal Affairs highlights that the council is not utilising its balance sheet appropriately in order to maintain critical infrastructure like water, and that is failing to manage its insurance risk appropriately. These risks have been increased due to its recent decision to amend the long-term plan.”
Brown said the DIA’s advice found “found that the council has demonstrated an inability to understand the mechanisms it has available to manage financial pressures it is facing”.
“This includes the council choosing in its long-term plan to use rates revenue to pay for its water infrastructure upfront, rather than appropriately using debt financing. Local Water Done Well financing mechanisms enables further debt headroom for Wellington City Council to meet its under-insurance issues.
“The advice from the department highlights that the 2024-34 Long-Term Plan shows the council’s net borrowings for water services increase by just $66 million to fund this investment [6% of the total], with the remaining $1.10 billion of capital investment proposed to be funded by rates [94% of the total],” he said.
The effect of this, Brown said, was to overcharge Wellington residents by $700m over 10 years.
It is not immediately clear whether the council could have made better use of Local Water Done Well financing mechanisms in its plan, given these were only developed and announced relatively recently.
Politicians react
Whanau said the situation should be seen as an opportunity for the council to put past disagreements behind it and build a coherent plan for Wellington.
“The decision not to sell our minority shares in the airport to resolve our growing insurance risk has meant we have some tough decisions to make in the coming weeks and months,” Whanau said.
”I am focused on addressing our insurance risk without increasing rates. Additionally, I do not intend to cut projects that are critical for our city’s growth and sustainability.
“For me, that means protecting our social housing, and continuing funding for water and key climate initiatives.”
Whanau said she would continue to work with councillors to amend the plan and give Wellingtonians certainty.
Labour leader Chris Hipkins called on the Government to “release the advice on which they have made that decision”.
“It does seem to be quite a significant step to take,” Hipkins said.
Brown promised to release the advice once the council had responded to the draft terms of reference.
Reports of ratepayers being overcharged hundreds of millions of dollars for water assets over a decade did sound “very concerning”, Hipkins said.
“The responsibility of that would not necessarily sit with the current council either. If that is an allegation that has been made, again they [the Government] should release the information they have on that,” he said.
“I think if they are going to appoint an observer to Wellington City Council, there is probably a number of other councils around the country that they will also be looking very closely at. There is a lot of disagreement amongst councils around the country.
“If this is the start of an ongoing process, then we won’t find many councils that don’t end up with some kind of intervention.”
Deputy Prime Minister Winston Peters directed questions to Brown.
“I support Simeon Brown. I am concerned that a city that was once alive is being destroyed; it is the worst I have ever seen it in a long career coming to Wellington,” Peters said.
“I attribute that to meddling politics and meddling bureaucracies without any regard to how a city properly functions, with thriving businesses and a thing called customers.”
Thomas Coughlan is deputy political editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the Press Gallery since 2018.