Invercargill City councillors have been criticised for failing to settle their differences in a letter that may spark government intervention.
The Department of Internal Affairs sent a letter on 18 August to request information from the council following reports of rising tensions.
The department confirmed the information will be used to advise the Local Government Minister on the action she may take which could include assisting or intervening in local authority matters under Part 10 of the Local Government Act.
In the letter, ministerial advice monitoring and operations director Anita Balakrishnan said several high profile projects seemed to be testing the council's ability to govern including the City Block development, investing in the Museum storage facility, and Rugby Park.
"It appears that these projects are testing the capacity of the Council to provide strong, unified governance and leadership particularly when it comes to the prudent allocation of council funding for capital projects," she said.
"It is also disappointing to note the behaviour of elected representatives that has resulted in a series of Code of Conduct complaints, some of which have been leaked to the public through social media and news channels. It is not apparent that there is any willingness to settle these conflicts.
"This does not give confidence that the Council can resolve its differences and represent its community with unified leadership."
The department has requested an independent review of its current performance compared with the expectation set out by the council's Code of Conduct, a summary of the main issues both councillors and the chief executive agree are impacting the council's performance, a plan for how they will address them, and a list of the key decisions the council needs to make to deliver its 2021-2031 Long Term Plan.
Balakrishnan gave the council 10 days to respond to the letter to describe how the council would meet this request.
In response, the council met today in a public excluded meeting to discuss the next steps.
Councillors voted to proactively tackle rising tensions raised by the department and have appointed at independent governance expert, Bruce Robertson, the independent chair of the council's Risk and Assurance Committee.
The council asked for the chief executive and council's leadership group - guided by Robertson - to outline a draft plan to address areas of concerns raised by the department for an extraordinary meeting on Thursday.
Councillors also voted to keep the department informed, and for a joint statement from the Mayor and chief executive to be released advising the timeline and process agreed upon.
An extraordinary meeting will also be held next Thursday to discuss the final plan in front of the public.