What follows explains what wasn’t debated at the 1 June Council Meeting – but should have been. It also challenges the view that Councillors should be kept at arms-length from commercial agreements – agreements that are becoming increasingly complex, strategic, and enduring. The Lakeview Development Agreement is one of those.
On Monday 29 May, Mayor Lewers directed the Chief Executive of the Queenstown Lakes District Council to refuse a Notice of Motion (the Notice) signed by a third of his Council.
The purpose of the Notice was to give the new group of councillors – remembering that 7 out of the 12 members of the Council are new – the opportunity to decide whether certain decisions, affecting the implementation of the Lakeview Masterplan, should be signed off by the elected Council, rather than the Chief Executive.
It’s an important debate to have because any departure from the Masterplan will impact the value the community gets from the Lakeview deal.
The Mayor’s direction to refuse the Notice was supported by a memo and 2 sets of legal advice from 2 law firms – paid for by ratepayers. The legal advice can’t be disclosed but the Mayor decided the Notice didn’t meet the decision-making requirements of the Local Government Act. He also decided that it concerns a matter for which decision-making authority has been delegated to the Audit Finance and Risk Committee. I disagree on both counts.
It’s the second time council officers have produced advice that, I believe, has undermined an informed debate about the Lakeview Delegation. Last year, after specifically directing staff to provide options for the division of decision-making power between the Chief Executive and the elected Council, councillors received a report (at a cost of $12k-$18k) that failed to provide the options required. The terms of reference for Mr Bruce Robertson’s Report, prepared by QLDC staff, didn’t require his report to provide those options. However, he was asked to “confirm” that the existing delegations to the Chief Executive are appropriate, and that outcome was met.
In my opinion, the July 2022 resolution was not met. And now some cost and effort has gone into preventing councillors debating an adequate Notice in the correct forum. To me, it feels like a pattern of obstruction. Which is concerning because if the Councillors delegate power, they must be able to get it back in a timely way – if that’s the will of the majority. And we have all just been denied the chance to know what the will of the majority is.
THE NOTICE OF MOTION
The Lakeview Development Agreement essentially sets out the terms of a land sale that will take place in stages over 20 years. This approach (rather than an immediate sale) comes with financial risk and delayed financial return, but it also allows the Council to retain some control over the outcomes of the development.
At the heart of the DA is an agreed Masterplan that should be consistent with agreed Development Objectives, and deliver value for the community. Any decision to depart from the Masterplan has the potential to reduce or increase that financial and non-financial value. The Lakeview Development Agreement recognises this, and approval is required if the developer wants to deviate from the Masterplan. Currently, those approvals are made by the Chief Executive under delegated authority, and it’s the power to make those approvals that was the subject of the Notice.
The Notice was prepared for this particular meeting because of imminent ‘Modification’ decisions. Because of the refusal, these will, without a doubt, be made by the Chief Executive.
The Notice was refused on two grounds under clause 26.2 of QLDC’s Standing Orders:
1. Insufficient information to satisfy the decision-making requirements of the LGA; and
2. Because it concerns a matter where decision-making power has been delegated to another committee – in this case the Mayor says it is the Audit Finance and Risk Committee (AFRC) that has been delegated power to make the decision.
These grounds don’t stack up:
The AFRC has no power to make decisions or recommendations on Council delegations – QLDC’s Delegations Register is clear on that point. In line with that assertion, both previous decisions on the Lakeview delegation were made by the full Council, without the AFRC’s involvement.
Surely if the council can delegate authority at a full Council meeting, it must be able to reclaim it in the same forum. And surely councillors shouldn’t have to rely on council officials in order to remove the decision-making power that has been delegated to them.
This is the most concerning part of the Mayor’s decision because there is now no clear route by which a majority of councillors can amend the Lakeview delegation – or any delegation – without a staff recommendation.
As to whether there was ‘insufficient information’ included in the Notice, it included: 4 pages of context; references and links to Mr Robertson’s Report on Lakeview Governance and last year’s (8 July2022 ) Council debate; and consideration of the matters of democratic accountability, risk of liability to councillors, and ‘efficiency’ given the decision-making given timeframes in the Development Agreement.
Compared to the 26 October 2017 Report, which recommended full delegation to the Chief Executive, the Notice was positively encyclopedic. That Report contained no information to help councillors decide whether to authorise the delegation – no options, no risks, no significance level, and no limits other than “subject to the financial parameters”.
The fact that power can be delegated by the elected Council with no information at all is concerning. But what’s more concerning is that so much information is required to get that power back that councillors can’t bring a Notice of Motion to enable that decision.
WHY IT MATTERS
Notices of Motion are fundamental to local democracy – they allow all elected members to be proactive and to bring matters to the table when they need to be debated. That process needs to be protected rather than undermined. The question is why was it undermined? Why were time and money spent on refusing the notice rather than improving it, if that’s what the Chief Executive thought was needed?
The elephant-sized problem in the room is the strongly-held belief that councillors should be kept at arms-length from the execution of commercial agreements, regardless of the complexity and the level of strategic decision-making required under those agreements – sometimes over long periods of time.
It’s a position that seems to be deeply entrenched in QLDC’s leadership culture, and regularly supported by the legal advice and expert opinions that council officers provide to support their recommendations. That advice is usually hung on the intangible concept of business ‘best practice’. But under the Local Government Act 2002, the principle of undertaking commercial transactions in accordance with sound business practices and the principle of conducting business in an open, transparent, and democratically accountable manner (both set out in s14 LGA) , are not mutually exclusive. In fact, the latter principle trumps the former.
It follows that Councillors are able to make decisions in accordance with business ‘best practice’ – taking into account the terms of a development agreement, and any economic and legal advice, in the same way that a Chief Executive would. Council officers should be comfortable with that if they want to work in local government, and certainly if they want Council to enter complex development agreements. And if companies want to work with councils in this way, they need to understand what democratic accountablity might mean for their business.
But mostly it’s important that the Councillors understand that they needn’t and shouldn’t lose control of decision-making under commercial agreements. With every commercial deal the Council agrees to enter into, there needs to be an open, transparent, and informed debate about which decisions should be delegated (and what limitations should be applied), and about which decisions will require a report and options, and debate and a vote – for the record. And the route to reclaiming delegated power needs to be clearly understood.
If Councillors don’t require that, if they continue to delegate decision-making power too easily, if they prefer the corporate narrative to the Purpose and Principles of the LGA, and if they don’t challenge the push back when they try to make ‘commercial’ decisions in the best interests of our communities, then in my opinion elected members will find themselves increasingly rubber-stamping budget overruns, and increasingly powerless to make a difference.
Niki Gladding QLDC Councillor 