Wellington Scoop

The Transport Agency and its part in the sackings at the city council

by Lindsay Shelton
The Transport Agency’s influence on Wellington is not only shown by its insistence on building a flyover at the Basin Reserve. Other demands from the Agency were revealed on Thursday when city councillors asked why 27 CitiOps staff were being sacked and their jobs were being outsourced.

Eight councillors (including the mayor) called a meeting on Thursday in an effort to stop the CitiOps workers losing their jobs. But the councillors weren’t successful. Staff told them that tenders for out-sourcing the work had been called and “the financial risk of not continuing with the tenders could exceed $1.6 million every year.”

There was much more to be discovered.

Street cleaning is budgetted at $2.4m a year, and vegetation clearance at $1.4m. A subsidy from the Transport Agency covers $900,000 of this cost. But the Agency has a condition for its subsidy:

“To be eligible for the subsidy, works must either be undertaken by external contractors or internal business units structured according to Transport Agency requirements.”

The 27 council employees (from CitiOps and the Parks unit) have been cleaning suburban streets and carrying out vegetation clearance as a result of a successful tender which expires in June. The council failed to put in a new tender for its staff to continue this work. Why was this not done? There was reference to an “optimal bundling package to reduce costs,” and the need to buy new machinery if council staff continued to do the work. But the Transport Agency’s requirements seem to have been the influencing factor. The council’s chief asset officer Anthony Wilson told councillors at Thursday’s meeting:

“In previous audits over the last decade, the Agency has raised concerns about whether or not CitiOps and the Parks unit meet their ‘business unit’ transparency and accounting requirements, including matters such as the return of capital.”

Councillors had voted in 2001 to continue CitiOps, with a business plan to be developed and implemented by chief executive Gary Poole. So there’d been more than ten years to overcome the Agency’s concerns. But no explanations were offered for this failure. Instead, using words which sounded like an echo of the Transport Agency, Mr Wilson warned our elected representatives that if they insisted on keeping the work in-house the likely result would be “adverse industry reaction and reputational risk.” And potential loss of the subsidy.

Councillors learnt that the Transport Agency has had a detailed involvement with the council’s street cleaning planning. Mr Wilson said staff have spent “nine months in extensive consultation with the Transport Agency and industry service providers” and “the procurement strategy has been approved by the Transport Agency, a requirement for subsidy.” The mayor provided further details.

“The council has agreed that instead of three separate crews going along the same stretches of road, we plan to manage the corridor as a whole. This should be more effective and efficient. This is also the approach that now underpins subsidies from the Transport Agency.”

Follow the instructions of the Agency. Sack the staff. Get the subsidies.

The council’s new chief executive Kevin Lavery (it was his first week at work) repeated some of Mr Wilson’s words when he warned councillors not to stop the tender process: “It’s too late. It will damage your reputation.”

But it wasn’t too late. Mr Wilson said it would be necessary “to get a dispensation from the Transport Agency for a further extension of the existing contracts. This is likely to be problematic but achievable.”

Though a majority of eight councillors had called for the special meeting, only seven of them voted against the sackings and the out-sourcing. Mayor Wade-Brown had been concerned enough to sign the paper calling the meeting, but she voted for out-sourcing, and then her casting vote ensured that the process dictated by the Transport Agency – and the job losses – will continue.

The Agency’s tactics for forcing the privatisation of street-cleaning are remarkably similar to its threats to stop the council opposing the Basin Reserve flyover.

The threats were first advanced by Transport Agency board member Alick Shaw, a former city councillor and former deputy mayor. He was quoted in the DomPost in 2011 as saying that councillors who were challenging the Agency’s roading plans were “playing silly buggers.” He said the Agency could ditch Wellington roading projects and use the money somewhere else, if the council didn’t support what it wanted. His anonymous threat gave the newspaper its headline: “$2billion at risk.” Here’s what he told the newspaper:

“To think you can pick and choose what parts to go ahead with simply because you don’t like roads … would mean we would be making worthless or questionable investments … It’s not that these things won’t happen but they will be put on the backburner and of course that whole question of confidence of delivery becomes a question mark again.”

It was the same tactic during the flyover debate last December, but this time from a staff member. The Transport Agency’s chief executive Geoff Dangerfield sent a letter to councillors warning them:

“We are particularly concerned about the council taking a position to oppose the construction of a bridge at the Basin Reserve. This would have serious implications for future transport investments in Wellington City that rely on fixing the traffic woes at the Basin … If the council changes its stance … we will also need to reconsider our support for a range of other transport network projects with Wellington city that rely on the efficiency gains to be delivered by the bridge… Withdrawal of support for the bridge proposal at this late stage may have significant implications for investment in Wellington’s wider transport network and ultimately on the growth and prosperity of the city.”

And the scare tactics worked. Councillor Andy Foster (“We said we didn’t like the flyover, the public said the same”) voted against the flyover last December. But when the subject was again put to the vote last month, he said he’d been talking with the Transport Agency and he would no longer oppose what it wanted.

The council has, however, been brave enough to vote against any further out-sourcing of CitiOps work, at least till there’s been a peer-reviewed report detailing “the advantages and disadvantages of an in-house unit versus an external contractor.” Let’s wait to see if this decision is any more effective than the resolution in 2001 – which was ignored.


  1. Michael Gibson, 8. April 2013, 9:40

    A wonderfully educated analysis – the sort of thing which has been completely missing from reporting on Council affairs (even by the Audit Office).
    And, naturally, our elected representatives never bother with looking at what is actually going on – I think that the Deputy Mayor & Andy Foster are most blameworthy in this respect.
    Thank you, Lindsay!

  2. Maximus, 8. April 2013, 15:43

    Interesting. Not that different from the ideology that has driven NZ / UK politics for the last 30-odd years. And certainly not one that mandates that in-house Ops must be dismantled. As noted, what is meant to happen is that the in-house unit should bid against the external bidders – but in this case, it sounds like someone in Council screwed up, either by mistake or on purpose, and forgot to let the internal City-Ops team bid on the project.

    The bit that gets me is the need for the internal unit to “return capital” ie to make a profit. I’d quite like the city road building / cleaning team to just be doing their job, not aiming to profit from that.

  3. Elaine Hampton, 8. April 2013, 17:23

    And a peer review report! I hope this is ‘outsourced’ and not conducted by the same Council Officers who produced the recent, skewed, pro flyover report.
    The N Z T A appear to have more influence than our elected representatives.

  4. Sridhar, 8. April 2013, 22:08

    Since when did a govt agency adopt extra-constitutional powers – I suppose ever since John Key and his friends got elected . eh!

  5. Ferdinand Hendriks, 10. April 2013, 9:19

    The street cleaning budget and the vegetation clearance budget total $3.8 million. The subsidy for this from the Transport Agency amounts to $900.000, which is about 23.68%.
    But the Transport Agency’s conditions for the WCC to be eligible for this subsidy are somewhat out of proportion taking into account the subsidy only represents 23.68% of the overall budget – and it also interferes in a rather undemocratic way with the internal management of the Wellington Council’s management of CitiOps.
    The structure and running of the WCC’s internal business units are the responsibility of the Wellington Council and should not be subject to outside interference from any party.
    It is the WCC that has been democratically elected by Wellingtonians to make the best decision for the Wellington community. If we want to remain a democratic society then there is no room for the NZTA to slip in though the back door with their demands and push through their agenda in a manner we now have become familiar with.

  6. Sridhar, 11. April 2013, 20:57

    So should the Wellington City Council be renamed the NZTA council? The NZTA seems to dictate what / how the WCC should be.

  7. Lindsey, 29. May 2013, 14:11

    My heart bleeds for the unfortunate and innocent parties to this – the workers. Nobody has given a damn. The managers are after their bonuses and all that the Mayor was wanting was to save face. It was not too late – no tenders had been accepted at that stage. The treatment of Council workers has been dreadful. OK Celia et al – you have a job. Hopefully not for much longer. I will never forgive you.