Wellington's central library closed in 2019 due to earthquake-related structural vulnerabilities. The building is now undergoing a $188 million upgrade and set to reopen in 2026. Photo: RNZ / Samuel Rillstone
A Wellington City councillor warns over-commitment from the council means it needs to cut capital expenditure from major projects.
Diane Calvert said the council needed to slash spending by tens, if not hundreds, of millions of dollars in the coming years.
She made the comments last Thursday at the council's Environment and Infrastructure Committee meeting while discussing its Zero Waste Programme.
The day before she received briefings on the state of the council's finances and sought legal advice to make these statements public.
On Friday she requested to release the details but this was refused because it was set to be released in around six weeks.
Its finances could have an impact on strengthening plans such as the Town Hall and Central Library.
Councillor Diane Calvert told Midday Report the council needed to realistically think about whether it had the capacity and finances to be able to go ahead with its strengthening projects, as well as fixing the city's water pipes infrastructure.
She said the council had taken on too many new projects without understanding the financial consequences.
"You don't have to be a chartered accountant or an economist to know over the past couple of years, interest rates were changing, there was a recession looming, costs of materials are sky-rocketing yet our council continues to increase its capital expenditure over this time," Calvert said.
When pressed about why she waited so long before revealing the state of the council's finances she said it had all been held confidential and she had had to seek legal advice before going public.
The council was not trying to sweep it under the rug but needed to get a move on with telling the public, she said.
"They were waiting for another couple of more months until they had a plan on how to deal with it and my view is we know the situation, we may not know all the details but we've certainly got a sense of the scale of the issue, so we should be open with Wellingtonians, I mean it's their money and it's their debt," Calvert said.
She agreed it was getting to a point where the council needed to weigh up the cost of doing infrastructure projects against the cost of delaying them because of both the environmental and inflationary costs.
She said the way out of the council's financial crisis was to stop spending so much.
"Just like any household has to do, every household is facing a cost of living crisis, they're having to make choices. We've seen Auckland Council having to make some hard choices, it's now time or it's overdue that this council now makes those hard choices," Calvert said.
Calvert said if costs were not cut and council could not stick to its borrowing limits then the government would have to intervene.
Another Wellington councillor and long-term planning committee chairperson Rebecca Matthews has rejected claims the council needs to cut spending by hundreds of millions of dollars in the coming years.
But she said it was too early to tell if spending needed to be reined in by tens of millions of dollars and admitted there would have to be cutbacks.
"It's nothing like the magnitude that the councillor is describing. The tens of millions we need to do more work on. We're at the beginning of a plan where we will look at what capital expenditure needs to be, rephased or in some cases needs to be cut in order to make an affordable plan for Wellington," Matthews said.
She said the council was currently in the process of working though the financial outlook for the next 10 years would look like for the capital.
"We do have some affordability challenges as a city, that is not new, it's not a Wellington problem it's a local government across the country problem. But this idea that there is a crisis, that we're not able to deal with and make decisions to do the work that we need to do is just politicking. And [much] ... of the work this council wants to cut is stuff she never voted for or supported in the first place," Matthews said.
* This story has been updated at 4.20pm 19/9/2023 to add further detail regarding Calvert making comments at the council's Environment and Infrastructure Committee, and to add comments from Rebecca Matthews.
