Yesterday, Local Government Minister, Hon Simeon Brown, announced his intention to appoint a Crown Observer to Wellington City Council. This begs the question, what is a Crown Observer and how are they appointed?
Lead up to appointing a Crown Observer
The role of Crown Observer was established under the Local Government Act 2002. The Minister may appoint a Crown Observer to a council where he believes, on reasonable grounds, it is necessary to:[1]
- enable a council to effectively address a significant problem; or
- enable the Minister to monitor the council's progress in addressing a significant problem.
Before appointing a Crown Observer, the Minister must notify the council in writing that he intends to appoint a Crown Observer.[2] The notice is required to state the reasons for the proposed appointment, and the proposed terms of reference.[3] The Minister must then allow the council an opportunity to respond (a minimum of 10 working days must be provided) and satisfy the Minister that:[4]
- the reasons for making the appointment do not exist;
- the council is acting effectively to address the problem;
- any other reason the appointment should not be made; or
- a different review body should be appointed (the options being a Crown Review Team, a Crown Manager, or a Commission).
Hon Simeon Brown has confirmed that he has written to Wellington City Council with draft terms of reference and has given the Council 10 working days to respond.[5] Given Mayor Tory Whanau's indication that she welcomes the Minister's intention to bring in a Crown Observer, and similar responses from other councillors,[6] it seems unlikely Wellington City Council will provide a response suggesting a Crown Observer should not be appointed. The focus of any feedback from the Council will likely be on the scope of the role.
Once the Minister has received a response, he must either notify the council in writing that he has decided not to appoint a Crown Observer or appoint a Crown Observer in accordance with the process set out in the Local Government Act.[7]
Appointing a Crown Observer
To appoint a Crown Observer, the Minister must notify the council of the appointment in writing, place a notice in the New Zealand Gazette, and give public notice.[8] The notice must specify the terms of reference of the Crown Observer, including an outline of the problem and the extent of the Crown Observer's authority, as well as the start and end dates of the appointment and the observation period.[9]
The role of Crown Observer
The Crown Observer is required to (in accordance with the terms of reference):[10]
- assist the council to address the problem;
- monitor the council's progress in relation to the problem;
- make recommendations to the Minister on whether he should take further action, including whether he should appoint another review body (such as a Crown Review Team, a Crown Manager, or a Commission); and
- ensure the council's existing organisational capability is not diminished as far as practicable.
The council is required to co-operate with the Crown Observer so that they may fulfil the terms of reference.[11] In particular, the council must comply with any reasonable request by the Crown Observer to provide relevant information that the council holds.[12]
Outcome of appointing a Crown Observer
As part of their role, a Crown Observer produces a final report.[13] The report must set out:[14]
- a description of the actions taken by the Crown Observer in relation to the terms of reference;
- an assessment of progress in addressing the problem;
- the Crown Observer's final recommendations to the Minister and/or the council, including whether the Minister should take further action, such as appointing another review body; and
- any other matters set out in the terms of reference.
The report must be produced as soon as practicable after the observation period ends.[15] Once the Minister has received the report, he must, also as soon as practicable, give a copy to the council and make the report publicly available (though information may be excluded where it could be withheld under the Local Government Official Information and Meetings Act 1987).[16]
A Crown Observer is entitled to remuneration.[17] That remuneration, and any other expenses incurred by the Crown Observer's appointment, may be recovered from the council if the Minister decides it is reasonable in the circumstances and the terms of reference authorise it.[18] This outcome seems likely given the Mayor's confirmation that Wellington City Council would pay for the Crown Observer.[19]
Next steps
If a Crown Observer is appointed, a public notice will be issued. As noted above, this will confirm the terms of reference, the Crown Observer's authority, and the length of the appointment and observation periods. It will likely also confirm just who the Crown Observer will be. In any event, a challenging period lies ahead for Wellington City Council, with the "Eye of Sauron" focused firmly on them, and obvious escalation options available to the Minister and the Government if required.