Govt to Appoint Crown Observer for Wellington City Council Amid Long Term Plan Rewrite

Local Government Minister Simeon Brown expresses concerns over council’s financial management and governance, leading to intervention.

The Government will appoint a Crown Observer to Wellington City Council following the Council’s decision to rewrite its 2024-34 Long Term Plan. Local Government Minister Simeon Brown announced the decision, citing concerns over the Council’s ability to manage its financial responsibilities and maintain critical infrastructure, particularly its water services.

Financial Mismanagement and Long Term Plan Concerns

Minister Brown highlighted that the Department of Internal Affairs (DIA) had raised alarms over the Council’s financial approach, which is front-loading costs on current ratepayers rather than utilizing debt financing for long-term infrastructure investments. "The Council’s decision to fund water infrastructure almost entirely through rates instead of using debt financing is both inefficient and expensive, overcharging Wellington residents by more than $700 million over ten years," said Brown.

The Council’s decision to rewrite its Long Term Plan just four months into the cycle is highly unusual and raises questions about its financial strategy. According to the DIA, Wellington City Council has failed to utilize its balance sheet appropriately, impacting its ability to maintain critical infrastructure such as water services.

Dysfunctional Council Environment

The issues within the Council go beyond financial mismanagement. Recent meetings have been marked by walkouts, confusion over votes, and public disputes among councillors and staff. This chaotic environment has hampered the Council’s ability to effectively manage its governance and financial planning processes.

Minister Brown noted that the situation had become untenable: “This environment is not conducive to the Council effectively managing the Long Term Plan amendment and adoption process. The dysfunction could lead to adverse consequences for Wellington residents and ratepayers if left unaddressed."

Crown Observer Appointment and Next Steps

To address these issues, the Government will appoint a Crown Observer, who will assist the Council in ensuring the Long Term Plan is financially sustainable and aligned with the city’s capital investment needs. The observer will not take over decision-making but will monitor and provide guidance on governance, financial strategy, and planning.

“The appointment of a Crown Observer will help the Council stay on track, but it’s important to note that the responsibility for decisions remains with the democratically elected Mayor and Council,” Minister Brown stated.

A draft Terms of Reference has been provided to the Wellington City Council, and the Council has 10 working days to respond. The goal is to ensure that Wellington’s Long Term Plan secures the city's future needs without placing undue financial burden on current ratepayers.

The intervention aims to restore public confidence in the Council’s ability to manage its resources effectively while navigating the complex challenges of urban planning and infrastructure development.