Wellington City Council’s new Chief Executive, Englishman Dr Ken Lavery, has a clear agenda for what he wants the council to do to fix Wellington. And he’s pretty determined to lead the mayor and councillors, whoever the voters elect, down the right path as he sees it. This is a man on a mission to make Wellington a better place. He spoke to Capital writer John Bishop.
Dr Lavery has a step by step programme for councillors: first, put your own house in order, secondly involve the business community and other stakeholders in setting a direction, and thirdly work out how Wellington city andits city council relates to the region. And invest in things that increase the rates base, and cut council costs or improve services.
He comes to Wellington armed with a PhD in urban and regional studies from the University of Kent, and after 16 years in and around local government in the United Kingdom – nearly nine of them as a CEO of a local authority – the city of Newcastle upon Tyne and more recently the Cornwall Council.
He replaces the unobtrusive Garry Poole whose contract was not renewed after 15 years on the job, but who was quickly snatched up by Tauranga City Council.
Under the current model for local government, a council employs only one person – the chief executive. The CEO employs the rest of the staff. Who the CEO is matters, even more so when the CEO has strong opinions about what needs to be done, in what order, and by what means.
Talking to Ken Lavery and talking to people who have heard the vision and the programme, it’s almost as if who the voters elect doesn’t matter very much. The council will have to approve a good deal of what is proposed, but new councillors, like new MPs, are easy for experienced, persuasive and well prepared officials and council officers to handle. It’s the officers not the councillors who do the investigations, crunch the numbers, define the options and make the recommendations. Officers always have better information than councillors, which gives them, and their leader, the council CEO, enormous power, particularly where councillors are new, inexperienced in making big decisions, weak, or divided.
In the six months Dr Lavery has been on the job, he has seduced the business community with his clear-eyed articulation of what has to be done, and how it should be done, always but always, with the council at the forefront driving reform and improvement.
Things the council doesn’t or can’t control
City Councils provide important services as well as leadership for their citizens. Councils’ powers are also limited by what they can’t or don’t control. Capital writer John Bishop lists some factors relevant to Wellington’s case.
- The port company controls land which stretches from the port side of the railway station north past the ferry terminal, an important part of the City and waterfront.
- The regional council funds the buses and trains, and decides on their routes, fares, frequency, and rolling stock.
- The government funds the state highway. Its money is available only for what the government wants to build. Light rail is not favoured. The flyover is.
- The airport. The majority owner, Infratil, says there is no commercial case for extending the runway. As the minority shareholder, the council can’t meet all of the price tag – roughly $300m – itself. The government isn’t keen either.
- The exchange rate. A sharp drop in value against the US dollar could ruin the economics of film production in Miramar – whatever the charm of our cafes and lifestyle.
- Major companies can shift their head offices north. Government departments and agencies may downsize even further, or put some functions in regional centres.
- Other councils in the region. They have long been wary about Wellington City being top dog, and have been sceptical about past councils’ ambitious plans.
From the morning of 11 June when he addressed members of the regional chamber of commerce in the St James Theatre, business groups have enthused about him. ‘Fresh air,’ ‘clear-sighted,’ ‘strong,’ ‘positive,’ ‘what we have wanted for years,’ are just some of the terms used.
Inside the council he has been equally busy, articulating what needs to be done, explaining how staff will be involved, affected, empowered and uplifted. It’s all straight out of the handbook on how to lead and take people with you.
What makes his presentation so powerful is that it all sounds so utterly reasonable and obvious. Why have the council and we as a city, not done all of these things before, is the listeners’ unspoken question. Holding the election almost seems an interruption to his progress. Who the mayor and councillors are after the election won’t alter his views or his recommendations.
The Lavery seven-point programme
Do the basics well. Keep the city clean, green and safe. Make it an attractive place for accompany to do business. Make it an attractive place for people to live.
Be well led. Have an ambitious vision, and deliver on your promises to be a well run place. Be the conductor of the team Wellington orchestra.
Spend all the budget. We underspend our budget every year. It is fairly common in local government. Last year we under spent our capital budget by $35m and the year before by $30m and the year before that it was a similar figure. There are plenty of opportunities for operational efficiencies across this organisation. Then we can divert more money to things that are more valuable.
Involve business in economic development. We are not the experts on the economy. The business sector is, so we need to create the right arrangement for them, so that we do that together and agree on the priorities. Auckland has a Committee for Auckland, and on that committee are the major businesses along with the Mayor and the chief executive. [Economic development] is the big thing that we need to get right.
More money for economic development. Let’s see what we can do post election with the council and the mayor, to see how ambitious they are. We have a team preparing some ideas for them for a very significant increase in our economic programme. If we spend it wisely it will enlarge our business and residential rate base, which then allows us to fund better community services.
Amalgamate the Council Controlled Organisations (CCOs). We have got a whole series of fragmented CCOs. We are pulling all the economic development teams in the city council into one area and we are looking at consolidating all the CCOs into one economic CCO. Now that is subject to a decision by the new council, but it will show a saving which we will be able to invest in more economic activity.”
Borrow a bit more. We have a very strong balance sheet. Our debt is manageable. It’s a relatively small amount compared to the revenue we get.
So how much more, asks Capital- another $100m? “No – our first task is to spend closer to budget.”
The game changers
- “What can we do to make Wellington a great competitive economic city going forward?” Dr Lavery asks, and answers, “It’s got to be things like:
- a big expansion in the film industry in Miramar, and a Lord of the Rings museum
- finding a formula to fund the airport runway extension
- setting up a technology quarter in the CBD
- helping Victoria break into the global elite of research -led universities
- a purpose-built conference centre in the CBD – commercially funded.”
Council investment, underwriting or guarantees may be needed. That’s ok, says Dr Lavery, if the projects enlarge the rates base or fund themselves over time. So do all the projects being considered pass that test?
“Not all of them, but some of them.”
Rates and debt
Under the Lavery plan there will be more of both – but no big borrowing programme or rates rises are proposed.
Council debt currently stands at $344 million, about 5.4% of assets of over $6 billion. Annual interest costs are $23m, 5.7% of annual income of $443m. So some more borrowing is possible without affecting the council’s credit rating.
He favours increases of around 2.5% a year, only slightly above inflation and lower than the council’s track record in recent years.
“Where I’d like to be is to have modest increases in rates, and to fund the projects from within existing budgets. That’s the challenge and if we can do that, we are showing what a good management team we are,” Dr Lavery says.