Wellington City Council’s Crown observer, Lindsay McKenzie, has released his first report, offering a critical assessment of the council’s challenges and decision-making processes. Appointed in late 2024 by then-Local Government Minister Simeon Brown, McKenzie was tasked with monitoring the council’s performance and governance. His report highlights a series of pressures facing the city’s leadership, from political infighting to financial uncertainty, and suggests that some of the turmoil could have been avoided.
‘A Perfect Storm’ of Challenges
McKenzie’s report, dated December 13 and recently shared with councillors, describes the council’s current state as a “perfect storm” of disruptions. The most significant issue was the October decision to halt the sale of Wellington City Council’s 34% stake in Wellington Airport, which forced a rewrite of the city’s Long-Term Plan (LTP) and required hundreds of millions in spending cuts. McKenzie argues that councillors could have waited until December to make the decision, giving the council more time to consider financial strategies.
“It is surprising that the organisation hasn’t totally wilted under the pressure,” McKenzie wrote, adding, “It didn’t need to be this way.”
His report outlines several major challenges confronting the council, many of which are unique to Wellington. These include the influence of political ideologies, the city’s proximity to central government, heightened media scrutiny, seismic and climate risks, and the legacy of past financial strategies. While he acknowledges that councils nationwide face difficulties—such as economic uncertainty, COVID-19 disruptions, and policy shifts—he emphasises that Wellington’s situation is exacerbated by additional pressures.
The Airport Stake Debate
McKenzie was particularly critical of how the council handled the airport stake decision. He noted that the initial LTP adoption in June did not mandate the sale of the shares but rather allowed for the possibility. Councillors could have opted to delay their final decision until December, decoupling it from other financial and infrastructure concerns.
“The alternative path doesn’t appear to have been considered by the proponents, nor does it appear that the impact on the organisation was a factor in the majority decision,” he stated.
Without the expected revenue from the sale, the council now faces the challenge of addressing a significant funding shortfall. Debt and balance sheet concerns remain at the forefront, with KPMG providing additional financial advice regarding asset management, borrowing capacity, and potential liabilities from natural disasters.
Public Perception vs. Reality
A key theme of McKenzie’s report is the gap between how the council is perceived and its actual performance. He suggests that while the council may be functioning better than it appears, public perception is shaped largely by councillors’ conduct in meetings and the media’s portrayal of their decisions.
“perceptions, shaped mostly by elected members’ performance in committee room/council chamber, become reality,” he wrote.
Some councillors have raised concerns about the quality and timeliness of information provided by council officers, with a few alleging bias in official reports. However, McKenzie sided with officials, stating that while mistakes happen, there is no evidence of deliberate attempts to mislead councillors. He praised the thoroughness of the information provided and described the existing processes as “best practice.”
Leadership Changes and Future Stability
The upcoming departure of Chief Executive Barbara McKerrow in March 2025 adds another layer of uncertainty. McKenzie noted that the recruitment process for her replacement had been well-managed, but he was disappointed that the name of the new chief executive had been leaked before the official announcement.
“That is extremely disappointing and unless well-handled from here on will add to concerns about leaks,” he wrote.
Mayor Tory Whanau has previously stated that McKenzie’s presence has helped improve collaboration among councillors. However, with financial difficulties looming and ongoing concerns about governance, McKenzie’s report suggests that stability remains fragile.
What Comes Next?
McKenzie’s appointment as Crown observer lasts until July 31, 2025. His next update will be delivered in February to new Local Government Minister Simon Watts. Depending on how the council navigates its financial and governance challenges, further intervention from central government remains a possibility.