Consents rights bid cost council $9m

LOIS CAIRNS
Last updated 05:00 02/07/2014

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The Government-appointed Crown Manager and consultants hired to help the Christchurch City Council win back its accreditation have pocketed $1.2 million over the past 12 months.

Their costs make up almost 15 per cent of the $9m in unexpected costs the council has had to wear since being stripped of its accreditation to issue building consents in July last year.

"It's a hefty cost we have had to pay for losing our accreditation and it is a lesson for other councils to make sure it doesn't happen to them," council finance committee chairman Cr Raf Manji said.

A breakdown of the additional costs the council has incurred as a result of losing its accreditation shows the organisation has paid Crown Manager Doug Martin $550,000 in costs while payments to consultants have totalled $650,000.

The restructuring of the consenting area has pushed personnel costs out by $3.2m.

Nearly two-thirds of that has gone on wages and salaries, including for the new management team, but the council has also made $300,000 in overtime payments and spent $450,000 on recruiting in New Zealand and overseas for additional staff.

"The reality is that we've had to upscale our consents department just to cope with the volumes [of building consents] we are seeing at the moment and the volumes we'll be seeing in the future. If you look at the international recruitment costs, that probably would have happened anyway," Manji said.

Technology changes designed to increase the efficiency of the building consents department have added another $1.3m to the council's operating costs, while the council has also had to shoulder a $1.3 million increase in its premiums for professional indemnity and public liability insurance.

Martin acknowledged the costs incurred had been substantial but said the expenditure was necessary if the council was to comply with the standards set by accreditation agency International Accreditation New Zealand (Ianz).

For example, $550,000 had needed to be spent on assessing staff's technical competency in order to meet Ianz's requirements.

Many of the costs were one-off in nature.

"I'm afraid it is one of those things where you take a bit of a hit up-front but then you start bringing it back into a more normal mode of operating," Martin said.

The reason why so much money had been spent on consultants was because the council initially did not have the capacity to do much of the work required to revamp its systems itself.

"There was no capacity to do a lot of the work but there is now. We have built up capacity in-house."

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Martin said he was confident the ongoing costs could be reduced and had already identified some areas where savings could be made.

Ianz is due to begin its audit of the council next week. The audit is scheduled to take two weeks.

- The Press

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