Government intervenes in local authority's financial woes.
Local Government Minister Simeon Brown has announced plans to appoint a Crown Observer to oversee Wellington City Council, following concerns over the council's ability to manage its Long Term Plan amendment and adoption process.
According to Mr Brown, the decision follows advice from officials that the council is not utilizing its balance sheet effectively in maintaining critical infrastructure like water and failing to manage its insurance risk appropriately. The Department of Internal Affairs highlighted that the council has demonstrated an inability to understand the mechanisms it has available to manage financial pressures.
The proposed Crown Observer would assist the Council in securing a financially sustainable Long Term Plan, prioritizing the capital programme. Minister Brown emphasized that this move is not taking responsibility for the Council's decisions but rather working to ensure Wellington City Council ratepayers have confidence in their council and its decision-making process.
The Government has given the Council 10 working days to respond to a draft Terms of Reference for the Crown Observer. The appointment aims to address the significant problems identified at Wellington City Council, including inefficient financing approaches that would overcharge residents by more than $700 million over ten years.