Inquiry into Christchurch City Council's five property purchases

12 January 2009

Tony Marryatt
Chief Executive
Christchurch City Council
P O Box 237
CHRISTCHURCH

Dear Mr Marryatt

As a result of the high public interest shown in the Christchurch City Council's decision in July 2008 to purchase five central city properties, I decided to inquire into the decision-making process followed by the Council. A wide range of concerns were raised directly with my Office, and indirectly through the media. Not all are matters for the Auditor-General, and not all are dealt with in my findings.

The results of our inquiry are set out in this letter. Our more detailed findings are attached as an Appendix. Overall, we conclude that the decision-making process followed by the Council was sound.

We consider that the Council's process for deciding to purchase the five properties complied with the principles of decision-making set out in the Local Government Act 2002, and was consistent with the Council's wide discretionary powers under the Act.

We acknowledge that the Council's decision was made under time pressure and that the Council considered relevant factors, including its policy on determining significance. The Council considered the consistency of the decision with existing Council strategies and plans; in particular its aspirations for city revitalisation and urban regeneration.

The Council's decision was made on the basis that budget allowances did not fully cover the costs and funding involved. The Council's existing Long-term Council Community Plan did include budget allowances for purchases of this nature, although the allowances had been partially spent on other purchases by the time the Council was considering the decision to buy the five properties.

The merits of the decision to purchase the properties are a matter for the Council's elected members. In this instance, a majority of elected members decided that the Council should buy the five properties.

Our inquiry did not consider whether we agreed with the Council's decision, nor the reasons behind it (such as the Council's views on the merits of city revitalisation and urban regeneration). Rather, our inquiry considered the process that the Council followed to make its decision.

It is not the role of this Office to provide definitive views on the legality of decisions made by local authorities and we have not attempted to do so here. Our primary concern is whether we can see sound administrative and decision-making processes operating, and whether we have any reason to doubt compliance with the requirements of legislation.

In conducting our inquiry and arriving at our overall conclusion, we have made a number of observations that the Council may wish to consider. These observations do not detract from our overall findings noted above, and are set out towards the end of the Appendix to this letter.

As we have discussed with you, we intend to publish a copy of this letter on our website in due course.

Finally, we would like to thank you for the assistance provided by you, your staff, and your elected members.

Yours sincerely

Kevin Brady