On Guy Fawkes Day last year there was a crescendo of departures at Christchurch’s city council – 20 staff left that day.
That unfortunate milestone follows years of upheavel under chief executive Dawn Baxendale, who took up the job in 2019 after a $30,000 move from England.
Staff satisfaction is low, and ratepayer dissatisfaction high, with concerns about its provision of services, including consent processing. Yet it’s sitting on a forecast $30 million surplus.
Adding to the pressure, the council has vacancies for 116 full-time equivalent workers, out of a total workforce of 2460.
These are unusual times. This council, like all others, has been grappling with the effects of the global pandemic. Christchurch also suffers from an infrastructure hangover from the earthquakes more than a decade ago.
One council insider, speaking anonymously, fears the organisation is slipping into serious decline, similar to the post-quake period under then CEO Tony Marryatt, when the council was stripped of its accreditation to issue building consents.
A former senior manager, who left recently, sheets the situation home to Baxendale, who they’re adamant they’d never work for again. “Dawn’s good at managing the politicians but she’s lost the three groups that she actually serves – which are the public, business, and customers of council.”
Difficulties in a leader’s first year can be blamed on their predecessor, or the lack of time to make changes, the ex-manager says. “But years two and three, you’re expecting to see an upward trajectory in these things.”
However, another staffer, who left recently, puts the large turnover down to “swings and roundabouts”, noting some have been frustrated by “constipating” processes, like dealing with official information requests and procurement.
“I don’t have any trouble with Dawn,” they say. “She’s pretty straight up.”
Arguably the highest-profile issue now is a stink across the city emanating from the fire-damaged Bromley wastewater treatment plant – a problem for which Mayor Lianne Dalziel has apologised.
The latest blow landed on Wednesday: a bombshell $150 million cost escalation in the city’s planned new stadium, an issue that worries business owners.
“The delays in the stadium is a big concern for all the businesses, and we’re really worried about any holdup is going to mean it’s going to cost more,” Central City Business Association chair Annabel Turley told Newsroom on Tuesday, before the cost-blowout was revealed.
However, she feels sorry for the council, given the “raw deal” on the stadium because of a “hospital pass” from the Government. (A blueprint released by the John Key-led Government a decade ago said a stadium would be built by 2017.) “I wouldn’t want their job,” Turley says.
Baxendale, the council chief executive, confirms the council’s approval rating in its latest residents’ survey – to be released publicly today, the Friday before a long weekend – is 42 percent, a drop from 49 percent.
(Last year, on the Friday before Queen’s Birthday, the council publicly released the chief executive’s response to an external advisory group report.)
Elected members have been briefed on a plan to turn around that concerning survey number, she says.
“We’ve actually said … this is the issue, these are the actions, we’ve defined those actions from a head of service perspective about how we can try and improve that position. And that’s what the public will see in the report.”
(Without naming names, Baxendale says other big councils also suffer from low public confidence. She’s right: Auckland Council has a stable 23 percent satisfaction level, while only 17 percent agree Wellington City Council “makes decisions that are in the best interests of the city”.)
A proposal will go to councillors later this month for higher pay rates to retain good staff and attract new ones.
“It’s not just about pay rates but, yes, I am proposing an increase,” she says. “We’ve got to get the balance right about being able to pay our staff as well as we can, at the same time, recognising that the residents have to pay their [salaries].”
Asked why confidence of staff and ratepayers in the council is so low, Baxendale says it’s experiencing exceptional circumstances, and after two years of Covid, people – including council staff – have had enough and are feeling the strain.
Beyond Covid, there are major reforms from central government to deal with, and the job market is such that private sector firms and government agencies are prepared to pay staff “tens of thousands of dollars” more.
(In January, acting chief executive Lynn McClelland put a positive spin on staff turnover, saying it enabled the council to refresh skillsets and employ people with diverse experiences.)
“Every single local authority’s facing the same problem because there aren’t enough people in New Zealand to actually do the work.” – Dawn Baxendale
Yet, Baxendale’s council made choices. In the midst of a pandemic, with low unemployment, it chose to pursue restructures in consecutive years.
Those were the right decisions, she says, because her letter of expectation from elected members “said they wanted to see the organisation moved and transformed”.
Baxendale is unapologetic about “difficult decisions” taken to “right-size” the council, with several restructures, and a cost-cutting transformation project. Meanwhile, last year Baxendale got an $18,000 payrise, taking her annual package to a touch over $550,000. (She did take a $50,000 pay cut in 2020.)
“I have reduced at a senior level because I genuinely believe that that is the right approach for this authority. But I did not make significant numbers of people redundant all the way through that [Covid] period – I kept our staff on.”
She appreciates, and recognises, changes have been difficult for staff and some will be unhappy. “But that doesn’t mean we shouldn’t do those changes, because, actually, by doing that we have become far more financially sustainable.”
Levels of service are steady in some significant areas, Baxendale maintains, despite Covid-related problems, such as having to close, or reduce hours, of some libraries. But, yes, she says, it has been battling with consents.
“Where we can get people we’ve been getting them, where we’ve been able to contract the private sector, we’ve been doing that. Every single local authority’s facing the same problem because there aren’t enough people in New Zealand to actually do the work.”
Baxendale describes her management style as open and direct. When she’s in the office, her door’s propped open and she’s regularly “out on the floors” and at external work sites.
“Staff both approach me personally and together, and they actually are very positive because they’re prepared to bring me problems. And then the stakeholders have been extremely positive about the approach.”
By that measure, it should only be a matter of time before confidence in the council is restored.
Numbers behind the changes
Council figures released to Newsroom show 426 permanent employees left the council last year, 17.5 percent of all staff, up from 224 the previous year, or 9 percent. The resources group was hit particularly hard, with 101 people leaving last year, triple the amount the previous year (33).
There has been a clearout at the top. In the last two calendar years, 24 “senior leaders” have left, double the amount over the previous two years.
A shake-up of “tier 3” senior managers, in which 20 roles were scrapped and 13 created, was implemented five days before Christmas last year. Elsewhere, 87 roles were re-confirmed or had minor changes.
Nine personal grievances were lodged in 2020 and 2021, and 12 severance payouts totalling $250,000 made, including one of $141,000.
Internal morale is low. In the latest available staff survey from November 2020 showed only 19 percent of employees would recommend the council as a place to work, compared to 45 percent of “detractors”. They raised concerns about their workloads and called for “good leaders”.
(In response, Baxendale says public sector work is fairly challenging right now – local authorities aren’t particularly well-regarded. “So we’re battling that challenge.”)
The most common reasons for leaving, the council says, are: job opportunities elsewhere, pursuit/offers of higher salaries, retirement, returning home, spending more time with family, and “working in a bureaucracy being challenging”.
A former staffer recounts how a university graduate at the council was approached via LinkedIn. The private firm “just came and made an offer – no job advertising or recruitment process”.
The PSA union, which didn’t want to comment for this story, told The Press last year council staff stress and high workloads were exacerbated by vacancies not being filled.
In a written response, council’s general manager of resources, Leah Scales, says the council’s new structure will “enable us to anticipate and respond to significant challenges and remain agile for the future”.
“We are confident that we are now well-aligned across the council to anticipate and respond intelligently to changing requirements in the future so we are better able to contribute to a better long-term future for our communities.”
The last available public satisfaction survey, from March last year, put overall satisfaction with the council’s performance at 49 percent, on par with 2020’s 50 percent figure, but down from 62 percent in 2019. (In 2014, the year after Marryatt’s departure, the council’s overall satisfaction was 64 percent.)
The council’s official information response, attributed to Scales, proudly stated the total remuneration of the executive leadership team was $1.73 million, down from $2.67 million the previous year.
Newsroom first asked for information related to staff turnover in January, and got a full response on April 1. We asked several clarifying questions on April 27 but have yet to receive a response.
Last week’s report to the council’s finance and performance committee said the council was forecasting a full-year surplus of $30 million. Key drivers included $2.8 million in higher rates revenue, and personnel savings of $2.6 million.
Operating revenue is forecast to reach $822 million, from a budgeted $793 million, while costs were expected to be down $5 million, to $616 million. (The balance, $176 million, is “funds not available for opex”.)
By the year’s end, regulatory and compliance revenues are expected to be $11 million more than forecast “driven by higher building/resource consent volumes”.
Capital expenditure, meanwhile, is only expected to reach $424 million, only 70 percent of its budget. “Carry forwards” total $182.5 million.
The former council senior manager says: “The council’s the big spender in Christchurch, if it can’t spend its money then that’s a problem for every subbie [sub-contractor] and large contracting company across the city.”
Another report in the same committee meeting said the council met just two organisational performance metrics: having its 2023 funding budget allocated by March, and managing its operational spending within budget.
However it failed to meet: deliver community levels of service to target, deliver watchlist capital projects, deliver non-watchlist capital projects, having 2024/25 funding budgets drawn by May, and delivering the overall capital programme within budget.
Beleaguered Birmingham
Baxendale came to Christchurch from England, where she headed the beleaguered Birmingham City Council.
An April 2019 report of the Birmingham Independent Improvement Panel, penned while she was still there, said the council recognised, “at last”, how poor many aspects of its performance had been.
That followed years of “public denial, defensiveness and push-back about the extent of the problems, risk and challenges, and its focus on ridding itself of Government intervention as quickly as possible, almost at any cost”.
It would be unfair to blame these problems at Baxendale, who was only appointed to the Birmingham job in April 2018, and stayed a year-and-a-half before coming to Christchurch.
But the report said the panel would leave in March 2019 as staying longer would mean “out-staying our welcome”. “The chief executive has made clear her wish that the council’s collaboration with the panel should last up to 12 months.”
Its advice was, at times, more challenging than, perhaps, the council wanted.
“Have we been able to assist as much as we were prepared to? The answer to this question is sadly ‘No’,” the panel’s report said. “Intervention is rarely warmly welcomed. Yet, when it is, the benefits that can flow from it will be greater.”
What were Birmingham council’s problems?
Poorly performing services, badly handled industrial disputes, low staff morale, overspending, and secrecy. Its external communications needed improvement, the report said – “it needs to be the first to publicly acknowledge its mistakes, failures, limitations, learning, constraints and risks”.
Back to the Bromley stench
In Christchurch, Bromley residents have long complained of the sickening smell and how it is affecting their mental and physical health, and leaving dark marks on their homes. But the council only announced on May 12 work was starting to remove rotting material in the fire-damaged filters.
It prompted questions, including from councillors, about whether work could have started sooner. The following day, council workers were booed at a packed-out meeting at the Bromley Community Hall. Dalziel, the mayor, apologised.
Last week, councillors endorsed a $1 million support package to 3380 households, plus help to pay for medical treatment.
Newsroom asked Baxendale if she spoke at the Bromley Community Hall meeting. “Yes, I was present at the meeting,” she said, adding that she didn’t speak from the podium but answered questions from the floor.
“The challenge in something as complicated and difficult as Bromley is getting the communication right,” she says.
What should the council have done better? The initial communication was good, she says. “But what we needed to then move into was more face-to-face earlier.”
The insurer “acted as quickly as we could have hoped”. (A council briefing in April was told the council’s insurer accepted its claim three weeks after the fire but the claim had not been settled. Dalziel said by law the council wasn’t allowed to spend outside its budget.)
So decisions have been made, and payments received? “They’ve accepted the situation, as we regard it,” she says. “And we’re able to undertake the bypass work with support from our insurance company.”
Material can now be removed, and now the council is searching for a long-term solution to what was “a really, really complex and difficult situation”. “It’s not just a ‘fix this’ issue.”
Then, an apology: “We’ve been working hard but we did not do the face-to-face with our community and we absolutely understand and apologise for that.”
Dalziel, who says she’ll never forgive herself for the “failed” communication, is stepping down at October’s local body elections. That might be a good thing, considering the support package rollout has been an “absolute shambles”.
One of the outgoing mayor’s comments earlier this week suggests where accountability might lie: “I assumed that things were happening when they weren’t.”
The former senior manager puts it simply: What do the public of Christchurch want, on top of an end to the Bromley stench?
“They want services for the rates that they pay. No one in Christchurch goes, ‘I don’t want to pay anything’. But they go, well, we pay about the same as everyone else but where’s our stadium, where’s the Metro sports facility? Why are those things taking time?”
It sounds like the city council under Baxendale has an external communications problem. If it’s not careful, the stench of failure might follow incumbent councillors all the way to October’s local body elections.
