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• A report detailing initial observations by Wellington City Council’s Crown observer has been made public. 
• Lindsay McKenzie said factors increasing challenges at the council include political positioning and ideologies and the media spotlight. 
• McKenzie will now report to Simon Watts who is the new Local Government Minister after Simeon Brown was made Health Minister. 

Wellington City Council’s Crown observer says it’s surprising the organisation hasn’t “totally wilted under the pressure” it’s facing. 

A report detailing initial observations by observer Lindsay McKenzie dated December 13 has been posted on social media and verified by the Herald. 

It’s understood the five-page document was sent to all city councillors on Monday. 

McKenzie wrote that some of the issues they faced were similar to other councils around the country, including prevailing economic conditions, Covid-19 disruption and significant shifts in central government policy. 

Other factors that have exacerbated challenges at Wellington City Council included personalities, political positioning and ideologies, earthquake risk, the media spotlight, the proximity to central government and “wicked” problems. 

Former Local Government Minister Simeon Brown intervened at the council after it stopped the controversial sale of its 34% share in the airport – upending the Long Term Plan (LTP). 

The council now has to amend the LTP and cut hundreds of millions of dollars in capital spending to create additional debt headroom to respond to the insurance risks the airport sale was designed to solve. 

Wellington Mayor Tory Whanau has said the presence of a Crown observer has helped her colleagues work more collaboratively. Photo / Mark Mitchell 

McKenzie described this, as well as the current chief executive stepping down, as “massively disruptive”. 

“In many respects, this was the perfect storm, even more so when the challenges and expectations of local water done well reforms, on Wellington especially, are overlain. 

“My initial observation is that it is surprising that the organisation hasn’t totally wilted under the pressure. It didn’t need to be this way.” 

After the council signed off the initial LTP, which included selling the airport shares, councillors still had the opportunity to stop the sale in December if they wanted to. 

Chief financial officer Andrea Reeves has previously said council officials would report back to the council in December with recommendations outlining the process to sell the shares. She confirmed councillors would have an opportunity at this time to say they didn’t want to progress. 

However, a majority of councillors forced the decision in October by lodging a notice of motion. 

If the decision had been made in December, it would have given the council more time and decoupled the issue from three waters reform changes triggered by the change in government, McKenzie said. 

“I observe that the alternative path doesn’t appear to have been considered by the proponents, nor does it appear that the impact on the organisation was a factor in the majority decision.” 

McKenzie observed the perceived performance and the underlying performance of the council were likely different. 

“But perceptions, shaped mostly by elected members' performance in committee room/council chamber, become reality.” 

Crown observer Lindsay McKenzie says the perceived performance and the underlying performance of the council were likely to be different. Photo / Mark Mitchell 

McKenzie said the recruitment process for a new chief executive was well managed, after Barbara McKerrow said she would step down from the role in March 2025, at the end of her term. 

However, McKenzie also said he had been briefed that the name of the new chief executive had been disclosed before the agreed timeline. 

He did not say by whom. 

“I understand that the disclosure occurred while a non-disclosure agreement was in place and before the appointee had advised his employer and before Wellington City staff and residents could be properly advised of the appointment. 

“That is extremely disappointing and unless well-handled from here on will add to concerns about leaks.” 

Many of McKenzie’s observations related to the procedural mechanics of council meetings. 

In a separate report to Brown, sent on the same day, McKenzie outlined similar preliminary observations to what he had told councillors. 

He said some elected members were concerned about the quality and timeliness of information they received ahead of making decisions. 

He said a few were concerned about biases in officers' reports and advice. 

McKenzie noted the way the council provided information to elected members was “as thorough as one could expect”. 

“While mistakes will occur from time to time there is nothing to suggest that these are in any way deliberate or designed to constrain elected members' roles and responsibilities. 

“That said, some councillors cite examples of selective advice and a lack of timeliness as well as examples from the past that eroded trust and confidence.” 

McKenzie said there was nothing to suggest that the governance-management relationship was constraining the council’s performance. 

He said his own appointment as a Crown observer had “moderated” much of the conduct that has called the council into question. 

Mayor Tory Whanau has also said McKenzie’s presence has helped her colleagues work more collaboratively. 

McKenzie told Brown he expected there would be very little to report in January given the holiday break. 

He will now be reporting to Simon Watts who is the new Local Government Minister after Brown became the Minister of Health. 

Georgina Campbell is a Wellington-based reporter who has a particular interest in local government, transport, and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.