Speaker by Various Artists


Christchurch: how did it come to this?

by Greg Jackson

You can't help asking “how did it come to this?” as Christchurch  faces possible asset sales along with brutal rate rises for years, if not decades, ahead as the price of  earthquake repairs and rebuild.

A $1.2 billion gap in funding is estimated for the Christchurch City Council, leading to proposed rate rises averaging just over 8% per year for four years, plus a proposal to raise up to $750 million though either partial or full sell-downs in Council-controlled companies.

Consultation on these grim options is happening now, with submissions closing on Tuesday, April 28.

How did what was lauded internationally as the best-run city in the world in 1993 come to this a little over 20 years later? 

To put the natural disasters in context, since the Greendale fault popped on September 4, 2010, more than 16,000 aftershocks have hit. The February 22, 2011, Port Hills fault earthquake devastated the Christchurch CBD and vast areas of the suburbs. The main shock period went on for over two years.

There is no risk comparison for a Western city like Christchurch, which at times was three main water and sewer junctions away from infrastructure collapse; where the ground forces exceeded twice the force of gravity. The risk is still elevated, with a 5 to 5.9 magnitude shake very possible in the next year.   

So far, the comeback story for the Council since Mayor Lianne Dalziel took over in late 2013 has been remarkably positive, given the fractured state of affairs Dalziel inherited. The previous Council, beset by the horrific and prolonged Christchurch quakes and an effective gelding by the Government with the establishment of CERA, had struggled to cope.

That Council had even managed to lose the power to issue building consents, a failure of  a key competency that left even critics like myself open-mouthed in amazement. The consents debacle also provided an impetus for a clean-out of top management and the hiring of some fresh talent.  A fractious set of councillors under the old administration has given way to an outbreak of peace that testifies to great management skills from Dalziel.

The council is evenly split between the independents, who tend to back Dalziel, and People's Choice, the Labour-led grouping who also generally back her, and the balance of power is held by Deputy Mayor Vicki Buck. A three-term Christchurch Mayor, Buck came out of happy obscurity to help recover Christchurch.

Another of this Council's unlovely inheritances was the agreement signed by the previous Council with the Government about who would pay for what is in the rather pharaonic CERA-decreed rebuild plans for the central city. This deal basically contracted the Christchurch City Council to pay set shares of the builds before knowing what monies it might claw back from insurance claims. Or even having a full assessment of the massive infrastructure damage that is still being revealed.

The road ahead for the Council as it puts up its proposed 10-year plan is rocky and full of “unknown unknowns”. Publicity material on behalf of Dalziel aptly sums some of these up as: “We still don't know the true cost of fixing city pipes, roads, services and community facilities. Nor do we know how much we will receive from insurance proceeds or what external funding we may be eligible for.”

The word around Christchurch is that the insurance payments from the under-insured Council facilities are not going to be a pleasant surprise. 

It was publicly revealed at the weekend that the Council's insurer, Civic Insurance, has decided that $50 milllion would fix what was Lancaster Park, which was sum insured with Civic for $143 million. Unsuprisingly, this impasse is heading for mediation. 

With the central Government surplus shimmering off into the future again, the prospects of salvation from Wellington also look dim.

I've been able to have a deluxe sniff around this issue because of my past incarnations as a political reporter and as a three-term adviser for former Christchurch Mayor  Garry Moore. It means doors open and people tell me things, knowing that I will understand the complexity and scope of the issues. And after weeks with a range of people, listening and asking questions and analysing,  I have come to the highly qualified and maturely insightful conclusion of “buggered if I know”.

My head says it may just be time to bite the bitter bullet of partial asset sales. 

My heart says  there has to be some other option.

It looks like when the consultation is done, the options are reviewed, due diligence undertaken, and hopefully a gang of axe murderers is unleashed on the Council accounts in search of savings, we may have to let go of some of the family silver. The silver being the assets Christchurch kept when other councils around New Zealand sold theirs for short-term gain: Orion the power lines company, Lyttelton Port,  Christchurch International Airport; Enable Services, City Care Ltd, Red Bus Ltd, Ecocentral and the Selwyn Plantation Board Ltd.

That family silver was retained by the then People's Republic of Christchurch, under Mayors Buck and Moore, who defended it against government attempts to persuade the city into privatising public assets. Those asset yields helped keep rates down by about an average of 13% each year while Christchurch was praised internationally for its robust management. 

It is worth a trip to the trophy cabinet to see how world-class my home city was not that long ago. 

About  10 years ago the American local government Governing magazine made Christchurch its third-ever foreign cover story with “Is this the world's best run city?” 

Given that it was a local-body election year, the recognition got short shrift from the media, who had learned just enough about spin to detect it in everything that came across the newsdesks.

In 1993, Christchurch and Arizona jointly won the prestigious Bertelsmann Prize for democracy and efficiency in local government.

In 1994 we won the New Zealand Business Local Authority of the Year Award.

In 1996 Christchurch was judged the world's outstanding Garden City, outdoing this the next year with the award of Best Garden City In The World for a city with more than 300,000 people.

When I compiled all the awards of the 1990s onward for a book, it took several pages to list them all. I'll spare you the full march-past.

The rescue squad that took control as councillors after the last  election is an interesting mix of high-achievers, the highly motivated and a few less impressive careerist politicians.

Among this number and deeply embroiled in all the financials is first-time Councillor  Raf Manji who, as a former London money market operator like Prime Minister John Key, has no need to work if he doesn't want to. A gift to the conspiracy fans, Manji has worked with Key and knows him quite well.

He also backs a universal wage for everyone to replace the present benefit system, puts in lots of hours mentoring including prisoners' families, and he is gobsmackingly open if you ask him a question.

Manji understands money like few other councillors I can recall, taking the negotiations between the Christchurch City Council and the Government on to another level. The concern in some Christchurch circles is whether Manji has lived here long enough to truly understand the kaupapa and history of the People's Republic.

As I said earlier, I've come to a “buggered if I know” point on the asset sales as a means of preserving the city.

Some positions are predictably clear: the Green Party is agin it, the Labour/People's Choice ran on a no-asset-sales plank and will have to take lots of anti-nausea pills to change their minds, while the Independents incline toward a reluctant fire sale if forced. People's Choice has produced its own 10-year Common Sense Plan, which basically proposes putting off all non-urgent works to avert sales.

The general public views may clarify as consultation lumbers to a close next week.

Perhaps the only happy players will be the other end of the never-ending story, the National Party members, who will sing whatever happy song it is they sing when a long-term goal is hit if assets like part of the port or airport shares do go on the block. To this I should add the Greens who, having had the wit to propose an earthquake tax earlier on, can now indulge in told-you-so about our finances.

I get the impression there is a genuine wish among the brighter councillors for the consultation and submission process to come up with new ways of negotiating this fraught time in Christchurch rebuild history.

In what has turned out to be a fairly contextual piece, I need to point out that democracy in Canterbury is fragile after both the quakes and the Government's overt willingness to shut down councils they don't think are doing it right. With Environment Canterbury still under commissioners, and the Christchurch City Council having to work with the more powerful CERA, which is now run out of the Prime Minister's Office, there is a chill to democracy and politics in Christchurch.

There is also the reality that the “eternal council”, the full-time Council staff, will be pursuing their own agendas and ends, with the power struggle to resolve who really runs things yet still to fully play out.

Then there is the public of Christchurch and their wants and needs from their Council. The wish lists are ever-increasing. I have detected no discernible recognition from the public that the Council, and the Councils that went before, took more than 150 years to build the wider assets the city enjoyed before the earthquakes.  

Before this city was built on rock and roll, it was built by working bees and cake stalls. Community involvement rather than central planning. Small acorns rather than billion-dollar babies.

In normal times I would predict that this would be a huge scrap. Now, in battered Christchurch, I sense many are like my usually stroppy partner, who will not get involved and just wants things fixed. My last brainstorming attempt on this subject was rebuffed with “My brain hurts, shut up.” 

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