Wellington Scoop

City Council facing revenue shortfall of $60m-$70m; it may borrow to avoid a rates increase

by Andy Foster
Today is going to be a huge day for the Wellington City Council, so I want to give you all an update on where we’re at. I’m going into a workshop this afternoon with councillors and senior management to discuss our Pandemic Response and Recovery Plan.

Our management team and staff have been working very hard to put this package together, working closely with myself and Deputy Mayor Sarah Free. This is about how we do our bit to try to soften the impacts on our business and residential community now, and how we support economic, social and cultural recovery post-lockdown.

We’re also looking at the impact of the pandemic on the Council itself. I won’t beat about the bush – the numbers that the workshop will be looking at this afternoon are, to put it mildly, very challenging, and they will force us into some tough decision-making.

We are proposing allowing deferral of payment of the next rates bill for the commercial sector and for residents who can show they have been financially impacted by the Covid-19 pandemic.

We are proposing parking remain free until at least June, and that weekend parking be free for a period post the end of the lockdown to attract people back into town.

There are a range of proposed fee refunds and fee freezes, which are all detailed in papers which we are making public today. They include consents, liquor fees, pool and gym fees.

We will ensure we speed up payment to suppliers to improve their cash flow at this critical time.

We will continue to support a range of arts and social sector organisations which rely for their existence on Council support. Collectively they are essential to our community’s wellbeing. We will obviously work through what they can save – for example many organisations will not be running events over the next few months until mass gatherings can resume.

We will continue to enhance our support for those in greatest need, particularly the homeless. I had a good conversation with the Housing Minister and her officials in that respect this morning. I want again to thank our Community Services team and the community agencies that are doing such great work for these vulnerable people.

Working with WellingtonNZ and the Dominion Post we are supporting Love Local Buy Local campaign and we are undertaking initiatives to build pride, confidence and community spirit.

Looking to the recovery we are teaming up with WellingtonNZ and the Chamber of Commerce to establish a City Recovery Panel. We’re also responding with our regional partners to Government’s request for ‘shovel ready’ projects to boost employment.

As a landlord we will be looking at rent relief where organisations and businesses can show financial hardship caused by Covid-19.

Back to the Council’s own financial position as a result of the lockdown. We’re looking at a fiscal shortfall for the Council in the 2020/21 year of between $60 and 70 million from lost revenue from a range of user charges and investment income.

We were already looking to find $12 million in savings to keep rates at a reasonable level – even before Covid-19 appeared.

The Council has to keep spending to keep the city running – but our non-rates revenue streams have instantly dried up – as they have for so many businesses around the city, region and nationwide.

As of a week or so ago we have no income coming in from our swimming pools, from parking meters and parking enforcement, and other revenue streams we use to keep rates down.

It also doesn’t take a rocket scientist to figure that the revenue the Council receives from its share in Wellington Airport is likely to be impacted – given that hardly any planes are now flying.

If we are to avoid a significant rates increase next year then we will have to borrow significantly and possibly have to look at service cuts – and we know that such cuts don’t go down well with the community.

These are the big issues we’ll be looking at this afternoon. So – a big day for your elected representatives – I’ll report back to you on how we have got on either later today or tomorrow.

Earlier from Andy Foster: Pandemic package workshop


  1. Conor, 2. April 2020, 15:51

    Please clarify. In your proposal, would both businesses and residents have to prove financial impact from covid-19 to get rates deferral? Or just residents?

  2. Concerned Wellingtonian, 2. April 2020, 18:28

    Conor, all the big expenditure – the airport, convention centre etc – is being pushed for by the business people for their benefit only. They should pay for all this new expenditure, not residents. We should have lower rates.

  3. michael, 2. April 2020, 20:24

    Well the convention centre had better be canned if the council wants ratepayers to accept a huge rates increase.

  4. Mike Mellor, 3. April 2020, 12:32

    “We are proposing parking remain free until at least June, and that weekend parking be free for a period post the end of the lockdown to attract people back into town” – understood, but we need to make sure that it’s people being attracted rather than vehicles. That means also facilitating walking, biking and public transport.
    The June timeframe ties in with GWRC’s continuation of its no-fares policy until then, and WCC and GWRC need to be in lockstep after the lockdown to ensure that the city continues on the path to being a much more people-centred place, rather than one where cars come first (as has been the case for far too long).

  5. Ian Apperley, 3. April 2020, 12:39

    We definitely don’t need the Convention Centre, it was dubious in the first place, now, no one will come to visit it. Can we turn it into a library or something? Yes?

  6. Marko Garlick, 3. April 2020, 22:56

    Andy, will more groups than WellingtonNZ and the Chamber of Commerce be invited to be part of the City Recovery Panel? That appears to be a very narrow range of stakeholders.

    We don’t want analysis/consultation paralysis either, so could their be a brief period of consultation to other community stakeholders on recovery panel issues?

  7. Jason, 3. April 2020, 23:58

    Twenty five percent pay cut for all council staff earning over 100K. Public servants need to share this pain

  8. michael, 4. April 2020, 0:22

    All the WCC seems to do is have workshops, panels, meetings, employing endless consultants and then “assessing opinions”, reassessing options, employing more consultants to review the last recommendations – anything not to have to make a decision. We need strong, proactive leaders who recognise we will be faced with a different world after this is over.

  9. Andy Foster, 4. April 2020, 8:41

    Marko – absolutely. Given the circumstances the plan is for a small number of key leaders.
    I absolutely want more input into our economic future. Pre Covid we were working on an Economic Forum, originally timed for last week – but we’d already moved it to late April – May because of key presenters we were looking at. So we were very well advanced with planning that. That would have led to an Economic Strategy and Action Plan.(our current one is completely out of date – dated 2011) With Covid this work becomes even more important as we plan – together – for recovery. I would welcome knowledgeable people getting in touch during the lockdown too.

  10. TrevorH, 4. April 2020, 9:54

    @Andy Foster: Economic Forum? How about focusing on basic infrastructure (eg water and sewerage) without which we won’t have an economy to speak of? Remember, “if you build it (infrastructure), they (businesses and consumers) will come”.

  11. Andy Foster, 4. April 2020, 12:33

    Trevor H – Having a functioning economy is critical to being able to do anything else. However we can do more than one thing at once!

    My Mayoral taskforce on water/sewage/stormwater will continue during the lockdown – via virtual meetings of course. We have already signalled an increase in resources for inspections, leak repairs etc – when the lockdown finishes. Wellington Water provides a weekly update for its Councils. Of course the Willis Street sewer pipe is now fixed and Willis St is open. Contractors from there are now going to work on the Moa Point interceptor. We are also working towards the very tricky repair for the Mt Albert tunnel sewage lines.

    Stay safe everyone, and please keep following all the separation rules. Seeing what is happening around the world we really have to beat this virus – quickly – in NZ if we want to prevent loss of life, damage to our society and to our economy.

    Kind regards, Andy

  12. Spongebob, 5. April 2020, 14:50

    “As of a week or so ago we have no income coming in from our swimming pools, from parking meters and parking enforcement, and other revenue streams we use to keep rates down.” – sure, but you have all been drawing an income for yourselves. As someone else said, all those earning over 100k at the council should take a pay cut. <100k is plenty to live on, without hardship.