Council budget blowouts
Invercargill city councillors have been forced to deal with another embarrassing budget blowout involving a council project.
The news this week that the council’s investment property on Don St is facing a possible $4.5 million cost over-run has been followed by revelations that the estimated cost of completing the Chinese Garden in Queens Park has risen from $600,000 to $882,000.
Red-faced councillors discussed the budget blowouts at length at yesterday’s council meeting and vowed to put processes in place to ensure there is no repeat.
The Chinese Garden budget blowout was due to ‘‘unbudgeted costs associated with completion of buildings’’, a report to the council says.
Cr Lindsay Thomas successfully got the issue transferred from the public-excluded part of yesterday’s council meeting so the public could hear the debate. After 21⁄2 years the council had ‘‘half a duck pond and a footpath around it’’, and he was no longer able to support it.
Cr Thomas said there would be a lot of political fallout but he would not support any more funding for the garden.
Cr Ian Pottinger agreed, saying a homeowner would not accept it if they were building a kitchen and he indicated the council shouldn’t either.
However, Cr Lesley Soper warned of major ramifications if the council pulled out of the Chinese garden project.
An agreement was in place for Invercargill to build a Chinese garden and for Chinese city Suqian to build an Invercargill garden – with Suqian’s garden nearly complete.
She believed it was essential to Invercargill’s international relationship and to its commitment to the ‘‘friendship city’’ that Invercargill completed its garden.
‘‘I think there’s no way we could credibly claim to maintain the sister city relationship if we cancel this project at this stage.’’
People needed to understand certain behaviour was expected in relationships with Asian countries, Soper said.
‘‘To back out at this stage is going to send a very poor signal for our future relationship.’’
The council had to bear in mind there was significant Chinese investment in the region already, she added.
However, in a split vote, councillors decided that work
would stop on the Chinese garden, given the cost blowout.
The garden discussion followed an animated discussion on the Don St building budget blowout.
Cr Soper said there were learnings to be taken in both cases.
‘‘For future projects it’s essential we have more guidelines in place and perhaps some awareness of exactly what the building requirements [are].’’
Cr Lindsay Abbott questioned why the council needed to get an external review done on what happened with the Don St building project when chief executive Clare Hadley had provided a comprehensive report.
‘‘I think we just need to accept responsibility and move on.’’
But Cr Ian Pottinger said an independent report was needed so the council could learn. The external review was not a witch hunt, but it was important an independent set of eyes looked at what went wrong, he said.
‘‘Council has a number of major projects coming up and we want to rely on good project management frameworks we can adhere to rather than good luck. We seem to be wing and a prayer at the moment, and sorry, it’s unacceptable.’’
Cr Darren Ludlow said the council was embarrassed and not happy with what had happened. ‘‘We didn’t know everything at the time and we didn’t contest it as thoroughly as we should.’’
He saw value in framework being established going forward, but he did not see how an external review on the Don St building would add anything to what was already known.
Cr Karen Arnold said the council had new people, particularly chief executive Clare Hadley, who had real drive to make sure things would be done properly in future.
Cr Allan Arnold said in his two years on the council he had noticed a lack of business planning in developments being done.
Hadley told councillors there had been project management on the Don St development but it ‘‘may not have been the right project management’’.
Resolutions passed by the council, in regards to the Don St building, included retrospectively approving $487,000 in costs for the August 2018 progress claim from the building contractor; approving the completion costs of $2.2m and ordering an independent review on the project.