Council forced to pay share of costs
The fine print is clear - the Christchurch City Council must pay its portion of the cost-sharing deal with the Government even if its earthquake insurance payouts fall short of expectations.
Despite noises from the council this week it may have to revisit that deal, the legally binding agreement, released by the Government yesterday, contains a subclause stipulating all council contributions to the anchor projects need to be met by the council "even if its assumed insurance payouts are less than budgeted for."
That deal, inked in June, agreed the council would contribute $1.9 billion towards rebuilding damaged horizontal infrastructure and anchor projects but the council has yet to finalise the insurance payouts on several key facilities, leaving it fearing the payouts could be much less than budgeted.
On Wednesday, council finance committee chairman Raf Manji admitted it may need to re-think aspects of the agreement or find money from elsewhere if the payouts are less than predicted while the council's acting finance boss, Diane Brandish, described negotiations with insurer Civic Assurance as "mind-bogglingly slow."
But the June agreement, signed by prominent leaders including Earthquake Recovery Minister Gerry Brownlee, Finance Minister Bill English, former Christchurch mayor Bob Parker and former city council chief executive Tony Marryatt, makes it clear the council's share must be met, regardless of any insurance-related issues.
Frustration around the deal flared up yesterday when Mayor Lianne Dalziel, whose new-look council inherited the agreement, said plans for a $20m community playground on the site of the Centennial Pool were "financial lunacy" considering it would cost only about $2m to repair the damaged facility.
Centennial Pool supporters yesterday pleaded with the council not to sell that land to the Crown but were told that deal was already done.
Jonathon Gillard and Simone Pearson said that it made no sense to spend $20 million developing the site into a community playground when $2m was enough to repair the pool. Pearson said a report suggesting the pool was uneconomic to repair was unsubstantiated and there had never been any probe into a temporary or quick way to bring the pool back.
Dalziel agreed elements of the cost-sharing agreement, especially around Centennial Pool, were not satisfactory but there was not much the council could do because the previous council had signed the deal.
"[The council is] not in a position to take legal action against itself."
Dalziel said the agreement allowed the council to decide the future of the Town Hall but that was not the case for any decisions over Centennial Pool.
There is also understood to be quiet frustration among councillors who feel the entire agreement should have waited until the new council took office.