Struggles not over yet as an awful year ends

LOIS CAIRNS
Last updated 05:00 28/12/2013

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It has been a tumultuous year for the council, marked by frequent attacks on its performance by the Government, the embarrassing loss of accreditation to issue building consents, the sudden departure of controversial chief executive Tony Marryatt, and a game-changing local body election.

Some of the key issues that caused headaches for the council in 2013 are likely to continue to pose challenges for the organisation and its leadership for the next 12 months and beyond.

Consenting - can the council get its house in order? For the council's building control operations, 2013 will go down as its annus horribilis.

After years of warnings from Accreditation New Zealand (Ianz) about problems with aspects of its consenting processes, the council was unceremoniously stripped of accreditation to issue consents in July.

That left the council with little option but to ask the Government to step in and appoint a Crown manager to take charge of its consenting department.

The Government appointed experienced fix-it man Doug Martin, who quickly pinpointed areas where the council needed to make changes.

Under his leadership the building control operation is being restructured, extra staff are being recruited and more work is being outsourced, but the council is still struggling to meet the statutory 20-day timeframe for the processing of consents.

It will need to hit those targets if it wants to regain accreditation by the middle of 2014, as hoped, and if it wants to effectively deal with the tsunami of applications expected to hit over the next couple of years.

Projections done by Martin's team suggest the council can expect to receive between 300 and 400 building consent applications each week for the next two years, with most related to residential projects as the home repair and rebuild programme moves into full swing.

The search for a new chief executive It was the council's consenting crisis that proved the downfall of its controversial chief executive Tony Marryatt.

The mayor and councillors felt Marryatt had let them down by not keeping them fully briefed on the seriousness of the problems within the consenting arm and placed him on paid leave, pending a full, independent investigation.

That investigation found Marryatt was not aware of the extent of the consenting crisis until shortly before he informed the council, but he accepted he was ultimately responsible and resigned, walking away with a payout and salary earnings of close to $500,000.

His departure has left the council on the hunt for a new chief executive. The job is being advertised internationally and the council plans to interview prospective candidates early in the new year in the hope of having a new chief executive in place by the start of May.

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It will be a critical appointment for Mayor Lianne Dalziel and the new council and they will be anxious to get it right.

The new chief executive will play a crucial role in the rebuild of Christchurch and will need to inspire confidence, show leadership, and have both business and community acumen if they are to avoid the mistakes of their predecessor.

Walking a financial tightrope The unprecedented costs facing the council in the wake of the earthquakes have left it walking a financial tightrope.

In June the council signed off on a cost-share agreement with the Government which saw it committing $1.9 billion towards the cost of the anchor projects in the Christchurch Central Recovery Plan and the repair and replacement of the city's essential horizontal infrastructure. At the same time it signed off on its own Three Year Plan which maps out its work programme and spending plans through until 2016.

To fund its share of the rebuild costs the council is planning on borrowing heavily. Its debt levels are set to soar from 60 per cent of revenue to 247 per cent by 2017, just a few per cent shy of its 250 per cent limit on total borrowings. They will start to taper down after that, but will still remain high for decades.

There is little wriggle room to cope with any unexpected or unbudgeted expenses, as is evidenced by the recent news the council's forecast operating deficit for the financial year ending June 30 is set to balloon out to more than $30 million due in part to the extra costs the council has had to wear as a consequence of the consenting crisis.

For newly appointed chief financial officer Peter Gudsell, a big job lies ahead identifying and driving savings to provide the council with the fiscal headroom it desperately needs.

Inevitably the next 12 months will see the council under renewed pressure from business and government quarters to sell off assets to raise cash, particularly if, as many now fear, the money it is banking on getting from insurance claims on damaged facilities falls short of expectations.

Will the council's insurer pay up? Just as many homeowners have spent the past year struggling to get their insurers to settle their earthquake claims, so too has the council struggled to reach settlements with its insurers.

The council's assets were mainly insured by local government insurer Civic Assurance and it has been battling with its reinsurers over who should pay what.

That has left many of the council's claims in limbo and led to slow progress on the repair and rebuild of quake-damaged community facilities.

Getting those claims settled as soon as possible is vital to the council because its budget is predicated on the assumption it will receive its full entitlement. Any reduction in insurance proceeds could have major implications on the council's bottom line, dramatically increase the amount of money it needs to find to fund its share of the anchor projects, and cause further hold-ups in the rebuild.

Council finance committee chairman Cr Raf Manji wants all the major claims settled within the next 12 months but whether he can make that happen remains to be seen.

Planning rule book under review In the middle of the year the council announced it was going to conduct a major rolling review of the District Plan - the four-volume legal document that maps out how land within its territorial boundaries can be used and developed.

The last time the council reviewed its District Plan it took about 20 years but this time the council hopes to get it all done within three. It is approaching the task with urgency because the District Plan, as it stands, is so cumbersome and complex that it is no longer regarded as an effective and efficient planning instrument.

The review is one of the most critical tasks on the council's agenda and could have far-reaching consequences.

It could result in a complete re-think of the planning rules that govern how the city is shaped and what developers can and cannot do.

It could also lead to the council making some tough calls about where people can live because one of the key things the District Plan review will consider is how to address natural hazard risks in the post-quake environment.

If area-wide solutions to the increased risk of flooding on the flat and landslips on the hills cannot be found, the council might need to start having some tough conversations about whether it is wise to have people living in hazard-prone areas.

- © Fairfax NZ News

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