February 13, 2012

Reorganisation options for Christchurch City Council

Calls for an overhaul of the beleguared Christchurch City Council raise far reaching constitutional issues. What are the options available to the Government and how might these work? Local Government legal expert Michael Garbett, of Anderson Lloyd, examines the alternatives.

Existing local body legislation arms Local Government Minister Nick Smith with a range of legal options to intervene in Local Government if necessary. Most of these options have checks and balances to ensure elected councillors are fairly dealt with before any move to intervene.

Under the Local Government Act, Smith could appoint a review authority to look at the performance of any council. There are limits on this power and to do so the Minister must decide:

• If there has been a significant or persistent failure by the local authority to meet its statutory obligations or
• If there has been significant and identifiable mismanagement of the local authority's resources or
• If there is a significant and identifiable deficiency in the local authority's management or decision-making processes.

Following any such review, the Minister could require the council to implement any recommendations.

But if the local authority fails to adopt those recommendations, he could appoint a person, or people, to take over the functions of the council and act in its place.

Nick Smith could also call an early election for the council. This process has previously been used to review the Rodney District Council in 2000. This review led to then Local Government Minister Sandra Lee appointing a Commissioner to take the place of councillors and to call for an early election.

Such a process is likely to take many months for a review and requires ministerial action. This process also gives the council a chance to comply with recommendations of the Minister before ministerial intervention.

Commissioner

Under present law, the Minister of Local Government can alternatively appoint a commissioner to run a council or to hold a new election if the local authority:

• Is unable to operate because it cannot hold meetings for lack of a quorum or
• Requests the appointment of a Commissioner to perform its duties or
• Is refusing to perform its duties and that impairs good government of the local authority or endangers public health or safety.

If the local authority does not request a Commissioner, then the Minister can only act if the local authority is unable or refuses to carry out its duties. This is an extreme situation and one that is rarely used.

Local Government Commission

There are also powers under the Local Government Act for the public to request "reorganisation" of councils. A reorganisation can be commenced by a council request, the Minister of Local Government or a petition from 10% of electors.

Generally, a reorganisation focuses on the boundaries of councils or merger of councils. Currently this power is being considered by the Local Government Commission for a proposed merger of Nelson City Council and Tasman District. Such a reorganisation is not normally designed to consider alleged dysfunction of Councils.

Special Legislation

Recently two councils have been the subject of significant reorganisation by special legislation.

The Auckland "Super City" had its own special legislation which abolished the existing councils. This reorganisation followed a Royal Commission of Inquiry which considered numerous public submissions.

In the local setting, ECan councillors were recently replaced by Government appointed commissioners for a specified term following the passing of special legislation. Special legislation is a tool that enables the Government to tailor a structure and timeframes for a council that it wishes to achieve. Potentially this can happen very quickly (as was the case for ECan)

Chief Executive

Neither the Minister of Local Government, nor the Government, have any specific powers under existing legislation to affect the employment of chief executive Tony Marryatt, or for that matter, the chief executive of any council. A chief executive is employed by the council and their relationship is governed by normal Employment Law. It is only the council that has any power to manage the employment of a chief executive. New legislation would be required to effect any changes of this nature.

Conclusion

The structure and election of local councils is seen as a fundamental part of our democracy. Where there are existing statutory procedures enabling those structures to change, normally there is public consultation and opportunities for councils to remedy problems that arise. Outside the existing structures, Parliament has the power to create any special arrangements or changes it sees as appropriate by new legislation.

Critical decisions need to be made on who leads Christchurch through the rebuild and beyond. The city will benefit from cohesive leadership at this time. Regardless of how the current debate plays out, it is also important that the people of Canterbury have the opportunity to have their say on the makeup of the city council, either through normal elections, existing statutory procedures or any special intervention that the Government may make.

Michael Garbett is a specialist local government partner in law firm Anderson Lloyd.

ENDS

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