This article was first published by RNZ.
Wellington City Council has paused signing contracts for any major projects as it considers plans to adapt its 10-year budget.
Earlier this month councillors voted to stop the sale of their 34 percent stake in Wellington Airport.
The sale was a key part of the council’s long-term plan with the money from it set to create an investment fund which would grow and provide cover for the council’s insurance risk which is estimated to have blown out to $2.6 billion.
Following the vote, Local Government Minister Simeon Brown announced his intention to install a Crown observer on the council.
Brown said he was concerned about the council’s ability to manage the long-term plan amendment.
Nonetheless, the council had been working on the amendment process with new agenda documents outlining that work.
It stated that due to the amendment requiring changes to their capital programme the council would not enter any major capital works contracts until “a clearer picture emerges of the final capital works programme for the next nine years”.
Council staff noted this could have a minor impact on the delivery of planned work.
In a statement to RNZ, a council spokesperson said it was sensible to be cautious about entering into any new capital contracts whilst advice was being formed.
At the time of writing they could not say what contracts for council projects would not be signed as a result.
“It does not mean that contracts will be held over until after 30 June next year.”
The documents said at the Long-Term Plan, Finance, and Performance Committee on Tuesday next week councillors could direct staff to restart work on a fund similar to fund that would have been crafted out of the airport shares money but sourced through different sources.
These could be selling the council’s $234 million ground leases portfolio, its 450,000 carbon credits or other asset sales.
If the council voted in favour of restarting work on a similar fund it would bring back advice on it in December.
That meeting would also look at how the fund could be looked at alongside other insurance options.
Prior to the airport vote, council documents warned the council might have to triple its debt ceiling and slash hundreds of millions of dollars' worth of capital projects if it did not vote in favour of selling the airport shares.
Council staff set projects that could be considered for funding cuts included the cycleways programme, Golden Mile Upgrades, the Kiwi Point Quarry upgrade and the Khandallah Pool strengthening, which campaigners fought to save.
By Nick James of RNZ
