Wellington’s council organisations are queueing up for ratepayer bailouts as Covid-19 and failing infrastructure hits their bottom line, including at Sky Stadium which had 30-fold decrease in patrons.
The stadium, hit hard by Covid, and Wellington Water, hamstrung by vintage pipes, are the first cabs off the rank with the Wellington City Council this week being asked to approve a debt-funded $1.5 million grant to the stadium trust, and increase funding for the water provider by $5m this year.
The Basin Reserve Trust, Experience Wellington, Zealandia, and Cable Car are all posting Covid-related deficits and Wellington City Council papers show more funding requests from council controlled organisations (CCOs) are expected in May. The economic development agency, WellingtonNZ, is also expected to take a big hit due to a lack of use of its venues.
Wellington City councillor Nicola Young – a regular critic of council overspending – is now asking whether if was time to review the CCO structure. “Is it working for Wellington?,” she asked.
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It comes as the council considers an 8.8 per cent rates increase, following a 13.5 per cent increase a year before following a flood of big-dollar costs including pipes, Let’s Get Wellington Moving and a new convention centre.
CCOs are independently managed council facilities, services, and activities for Wellington residents and visitors and take at least some of their revenue from ratepayers.
Wellington Water – quarter owned by the Wellington City Council– has reported it is expecting to spend $4.86m more than its $35m budget. The city council is being asked to increase its funding by $4.9m.
Wellington Water’s pipe troubles have been well-documented via multiple pipe failures – some pipes are more than 100 years old – in recent years and issues have been blamed on a lack of investment dating back decades.
This is shown in the “reactive maintenance” budget of $11.5m for the current financial year being $5.3m more than budgeted. Planned maintenance came in $900,000 below its $4.4m budget while monitoring and investigations were also less than budgeted.
Meanwhile, the Wellington Regional Stadium Trust, which runs Sky Stadium, is asking the city council and Greater Wellington Regional Council – its two shareholders – for $1.5m apiece.
“The current expectation is that the stadium may end up hosting only three unrestricted event days for the entire financial year to June 2022, being one [rugby National Provincial Championship] game and two days of Beervana, all held last August, with 16,500 attendees across these events,” the council papers say.
A normal year would see that stadium have 50 to 60 event days representing 500,000 attendees. Even the last financial year – also during the pandemic – managed a “reasonable” number of events including an All Blacks test, nine Super Rugby matches, a Six60 concert, and Phoenix game.
Stadium chief executive Shane Harmon said that without the extra council money the stadium would have to cut back on planned projects in coming years including preventative maintenance.
Councillor Fleur Fitzsimons said the council needed to back the city through hard times and should be willing to borrow to fund the shortfalls.
“We should invest now to fix leaks and broken pipes as every day they remain broken, precious water is lost,” she said.
Wellington mayor Andy Foster indicated that he would likely vote for the increased CCO spend, “otherwise they will fall over”.
“There is light at the end of the tunnel but we need these businesses, these attractions, still operating.”