QAC governance crisis at Council

Crux, 9 April 2020

We Love Wakatipu are deeply troubled by the suggestion that councillors abandon their leadership and governance responsibilities for Queenstown Airport Corporation at this time of crisis. Councillor Niki Gladding’s article in Crux calls councillors out on a plan to legally “agree to” QAC’s draft Statement of Intent” at the upcoming 23 April council meeting.

The idea that council, the principal owner of QAC, could accept a pre-covid SOI, amended with only a rubber-stamped intro indicating that the plan is already redundant, would be an incomprehensible and unacceptable abrogation of its governance responsibilities.

The airport’s business has changed massively, from surging profits just a month ago to virtually zero revenue, nearly $200 million debt liabilities, and facing the same desperate future of our many local tourism operators. It is a business in crisis.

The Statement of Intent and Annual Report are the only legally required and publicly visible reporting and control tools that council has to influence this business, of which it is the controlling 75.01% owner and which last year had an enterprise value exceeding half a billion dollars.

This year’s final Statement of Intent isn’t even due for another two-and-a-half months. You might remember that councillors only agreed to the last SOI on the third attempt, with the caveat that it did not properly reflect council or community objectives, and on the condition that a joint Council – QAC workgroup be set up specifically to ensure a timely and better process and product this time.

Instead, despite a month’s extension, councillors are being presented with a totally irrelevant draft SOI and being asked to rubber-stamp it as final, months before it’s even due. And do so with, for the first time, no opportunity for public input to be considered. And, once again, little opportunity for councillor input.

With last year’s Annual Report showing 22 QAC staff on salaries exceeding $100 thousand, topping out at $550,000 for the CEO, and with no flights and scant operations to distract them, surely QAC executives could scaffold a three-year recovery plan SOI by June 30, the legal deadline for its delivery?  By then, they’ll have had more than three months since lockdown to better grasp the new business reality.

That must be the least the controlling owner – our council and community – should expect from a large, highly paid and competent executive team, who are guided by a well qualified and remunerated board of directors.

Instead, at this time of crisis, Mayor Boult seeks to neuter council’s ability to control QAC’s objectives and scrutinize the business – as is their legally mandated role under the Local Government Act – leaving councillors and the community blind and powerless. 

We understand from another councillor that QAC’s executive team intend to produce a new business plan by sometime in October.

No. QAC’s executive team should already be working hard on this new business plan and SOI. It may well include the need for regular updates to adapt assumptions as conditions unfold. But kicking it to touch is not acceptable.

We call on all councillors to reject the mayor’s move to cut out their governance role.

We ask that instead they direct QAC to present its three-year crisis recovery plan to Council by 30 June, knowing that, like all other businesses in the region, it will include heightened risks, uncertainties and refinements over the months to come. Such updates fit easily within the provisions of clause 5 of Schedule 8 in the LGA.

Our current lockdown shows New Zealanders can live with hardship and uncertainty where we have confidence in leadership. Now is the time for our local leaders – in both council and QAC – to step up and earn our confidence.

Read Councillor Niki Gladding’s article here.

One Comment on “QAC governance crisis at Council

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