It comes after the council voted to stop the sale of its 34 percent stake in Wellington Airport.
The sale was part of the council’s long-term plan, with money raised from it set to be used to establish an investment fund.
The council was now needing to amend its long-term plan.
In a statement, Local Government Minister Simeon Brown said he was concerned about the council’s ability to manage the amendment.
“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.
“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 government had wrote to the council and outlined the Terms of Reference for having a Crown observer.
The council now had 10 days to respond.
- The Terms of Reference included:
- The law allows the Crown to require the council to pay the observer’s wages, and for any costs incurred from appointing them if the minister decides that is reasonable in the circumstances;
- The Terms of Reference state remuneration will come from the council pursuant to the above sub section of the law;
- It says they will be paid out at an unspecified rate according to Cabinet rules;
- The Crown observer will file monthly updates to Brown, and an interim report by 28 February 2025;
- The Crown observer’s term will end 31 July 2025 – unless the Minister of Local Government decides otherwise;
- A final report will be filed as soon as practicable after the their term ends;
- The minister may decide to end it earlier if he is satisfied the appointment is no longer necessary.
Mayor Tory Whanau said she was now considering the Terms of Reference.
“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.”
Whanau said Brown had fairly pointed out to her instances where councillors had walked out of meetings, refused to vote, and publicly criticised each other and council staff.
“I hope this intervention serves as a reminder to councillors that actually, we all hold incredibly important roles on behalf of our city and we must do better.
“We must use this as an opportunity to put the past disagreements behind us and build a coherent plan that delivers the best for the people of Wellington.”
MPs react to decision
Whanau said she wanted to see the Prime Minister and his coalition partners commit to localism like they did prior to the election, and work with local councils to help them come up with solutions to address increased insurance risk and water infrastructure issues.
“What I’ve seen in the last hour is a lot of punching down. We need assistance, not punching down.”
Whanau’s comments came after ACT leader David Seymour and New Zealand First leader Winston Peters shared their opinions on the decision to appoint a Crown observer.
Seymour said it was about time the government intervened, but “in a light touch” way at first.
“If they’re not doing a good job then Parliament and the government also have a legal ability to take steps to get a fair deal for the ratepayer.”
Peters said he supported the move.
“I’m concerned that a city that was once alive is being destroyed. It’s the worst I’ve ever seen it in a long career coming to Wellington.”
Peters attributed it to “meddling politics and meddling bureaucracy” that had no regard for businesses or customers.
Te Pāti Māori co-leader Debbie Ngarewa-Packer said the writing was on the wall for the council.
“You should always be about what the voters want for their local government. They’re the ones who put the councillors and the mayor in place. So I think the mana of that has to be respected, first and foremost.”
The Greens and Labour saw the decision differently.
Green Party co-leader Chlöe Swarbrick said it was “a really welcome distraction” from the broader issue of local government funding.
She said the real issue was that local governments around the country lacked the resources to achieve their mandate.
“If the government wanted to fix that fundamental issue, it could, but here it [would] prefer to play with this distraction.”
Labour leader Chris Hipkins said there would probably be other councils that needed observers, if this was the threshold the government was using.
He said many councils were struggling to put together their long-term plans because of the changes to water legislation.
“There are a lot of councils under a lot of financial pressure as well, so if this is the start of an ongoing process, you won’t find many councils left that don’t end up with some kind of intervention.”
Hipkins said he disagreed with some of the decisions the council had taken, but it was up to voters to do something about it.
“There’s clearly a lot of disquiet amongst Wellingtonians about how their local government is currently performing. My argument is there’s an election coming up next year and they can do something about that then.”
Councillors react to decision
Wellington councillor Diane Calvert said she was pleased with the decision as it was something she had been calling for.
Councillor Nicola Young said it was not an unexpected move.
“I think it is a positive thing, I’m relieved,” she said.
“I feel as though the cavalry are galloping over the hill to come and help the city council.”
Councillor Teri O’Neill said: “I remain grounded in the kaupapa of driving positive change for Wellington.
“The mayor’s driving LTP reform, councillors are engaged, and we’re making progress on the minister’s concerns every day.
“Transparency is always a good thing – those who act in good faith with solid governance have nothing to fear
“If the observer helps sharpen our focus, great. At the end of the day, it’s about serving our people.”