Wellington mayor Tory Whanau during her appearance on Newstalk ZB’s Wellington Mornings with Nick Mills. Video / Newstalk ZB
Wellington City Council has voted to consult with the public on selling its 34 per cent share in the airport, worth $278 million.
It will also consult on whether to sell its ground leases, worth $245m.
Both are considered important revenue streams but there is concern they are effectively the only two investments in the council’s portfolio.
“It is not well diversified and is highly exposed to situations like the Covid-19 pandemic. The investment portfolio could not be easily utilised in a disaster, such as a significant seismic event,” council documents said.
The council is proposing to reinvest the money in a new perpetual investment fund.
Mayor Tory Whanau said the council had all its eggs in one basket.
“Let me be clear - I will never lead a city that sells airport shares to pay down debt. I have never supported selling the silverware to pay the mortgage.
“Instead - to spread our risk and secure our financial resilience - officers have come up with a solution that sells our minority share in Wellington Airport and recycles the funds.”
Whanau successfully proposed that any investment fund would have strong environmental and social criteria and be protected against future councils withdrawing the capital to pay down debt.
These amendments persuaded several councillors around the table, who were initially reluctant, to support putting the sale proposal out for consultation.
Councillors discussed the airport shares and proposed cuts in a Long-term Plan, Finance, and Performance Committee today.
The council is undergoing a cost crunch amid inflation, historical underinvestment in infrastructure, and a challenging insurance market.
The council is still waiting on advice and options for the city’s water pipes, although Wellington Water chief executive Tonia Haskell revealed this week the company needs $1 billion a year every year for 10 years to get on top of the region’s water woes.
The committee meeting was designed to give council officials a steer as to which proposals to cut or which projects to delay in a way that was somewhat palatable to councillors.
The draft budget is yet to be put together and will need to be put out for public consultation next year before a final call is made.
Many of the cuts on the table were in the suburbs and included ditching skatepark upgrades at Ian Galloway Park and Waitangi Park, which will save $1.1m, and removing upgrade funding for Khandallah Pool after the budget increased to $11.7m.
The council agreed today to additional cost-cutting - a more affordable option for the redevelopment of Te Ngākau Civic Square, with the option to demolish the likes of the City to Sea Bridge instead of repairing it.
Wellington's Town Hall has suffered delays and several budget blowouts, adding to the city council's financial woes. Photo / Mark Mitchell
Whanau said councillors couldn’t do everything they wanted and she is keeping a laser focus on making the city centre a green and vibrant place where people can come together and businesses are supported.
Councillor Tony Randle said he suspected there was too much focus on the central city, considering more than half of the $468m the council took in rates last year came from suburban businesses and residents.
“We are seeing some compromises being made that potentially have the balance wrong.”
Randle successfully reinstated $3.1m for upgrades at Ōtari-Wilton’s Bush and retained funding for Khandallah Pool until more information is available, but failed to claw back the deferral of Begonia House improvements.
It was clearly disappointing to one community group that the council had agreed to pour up to $329m into earthquake-strengthening and refurbishing the Town Hall while proposing cuts and delays to projects in the suburbs.
Tawa Community Board member Rachel Allan said the facilities that local kids used were sports fields: “They don’t go to the Town Hall.”
Allan said the Grenada North sports fields upgrade could not be delayed, especially because often only half of the fields could be used due to poor drainage.
Several kids have broken their ankles this year alone due to slipping on the soggy ground.
Allan urged the council to keep its promises.
“This facility upgrade has long been promised and patience is running thin.”
Councillor Iona Pannett successfully introduced a proposal to fund one town or suburban centre upgrade every two years - $10m in capital expenditure and $2.5m in operational expenditure over 10 years.
Georgina Campbell is a Wellington-based reporter who has a particular interest in local government, transport, and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.
