From Queenstown Airport Corporation website, May 2020

If you want to check out the statement of intent agreed to by Queenstown Lakes District councillors three months ahead of schedule, despite being acknowledged as containing redundant and irrelevant pre-Covid 19 forecasts and there being no legal requirement to do so, here’s the link.

You will note that despite an amendment to the statement of expectations from councillors that stated QAC must operate within its air noise boundaries, this SOI quite specifically includes planning that could include expansion. The only commitment (page 10) is to not seek ANB expansion at Queenstown or development of Wanaka Airport “at this time”.

Councillors expect a revised statement of intent back from QAC in time for the October 27 meeting.

Crux, 21 May 2020

Crux has answered the question we posed two days ago – and yes, the MartinJenkins social and economic impact assessments meant to guide councillors’ decision on agreeing to QAC’s statement of intent has also been delayed.

Originally due early March, it’s now not going to be delivered until mid-June.  Which would still have been in time for that SOI decision if councillors hadn’t been persuaded to precipitously, and unnecessarily, agree to a redundant SOI two months ahead of schedule. 

We Love Wakatipu Inc has earlier highlighted our serious concerns about the flawed process used by MartinJenkins.  And that was pre-Covid, when we at least had some idea how they were doing it. 

To earn any trust in the report, there will need to be greater transparency in how, what and from whom the consultants are gleaning the further information. And at what cost to ratepayers?

LINK to the article

We Love Wakatipu Commentary, 19 May 2020

Queenstown Lakes District Council’s spatial plan community engagement, initial feedback report, May 2020

The picture painted by QLDC’s spatial plan “early insight summary” suggests our people feel there’s no problem having an expanding airport in the midst of the community they want to make more cohesive, connected and peaceful.

That seems odd.

This spatial plan will shape the district’s communities and growth over the next 30-plus years. It is directed by QLDC as a joint venture with the government (as part of its visitor levy agreement) and Ngai Tahu. It is meant to be central to airport planning.

Participants in community workshops for the spatial plan earlier this year were told the airport was not up for discussion, because it was going to be the subject of the MartinJenkins impact assessments.  And that its presence or absence wouldn’t affect the spatial plan anyway.  Really?

Interestingly, however,  the authors chose to include a strongly pro-airport comment (see below) as the report’s only airport narrative. Do they have an agenda? Asked one participant, was she on a different planet? Here is the link to the 12 page glossy document.

And the “snapshot” comments given as the most important feedback from Frankton’s workshop (which included Kelvin Peninsula) highlighted generic Wakatipu history and environment – nothing specific about Frankton at all. Nothing about the need for community cohesion, facilities, connection, peace – all those critical issues that workshop participants say they primarily spoke about.

In the more detailed notes provided on this link, we find that three of the four discussion tables at the Wakatipu Focus Group session identified as their first point that Frankton is the central hub of Wakatipu.  Yet, it seems either participants didn’t raise or officials didn’t take note of the issue of how the airport might interfere with this.

That also seems odd.

We understand that a detailed report was to have been the subject of a council workshop on May 19, but Covid-19 interrupted that schedule.  We are assured that this report will be publicly released, at the same time as the draft spatial plan. We have also, in response to our concerns, been assured that this report will be “making it very clear what the purpose of the workshops were,” and that the airports were not the focus of the sessions.

We hope that this version will give a more balanced, rounded and fairer depiction of community feedback than this early insights document.  Because our community’s future – and the environment we live in – relies on it.

However, we remain concerned that a 30-plus year spatial plan is being formulated without any consideration of the airport and its future – non-expansion, expansion or removal.

Page 5 – Frankton’s “snapshot of comments”. No mention of Frankton at all.
Page 7 – the largest comment featured
Page 8 – Workshop participants were strictly told not to discuss the airport. Perhaps that’s why it did not dominate the discussion!

Otago daily Times, 15 May 2020

Mayor Jim Boult has confirmed there had been no discussion between Council and Queenstown Airport Corporation over the latter’s finances before a majority of councillors voted to agree to QAC’s pre-Covid statement of intent.

This despite legal obligations for council to exercise financial governance over the council-controlled trading organisation, under both the Local Government and Trustee Acts.  And a requirement for specified financial forecasts to be contained in the SOI under Local Government Act’s schedule eight – information acknowledged in the SOI’s front-page caveat to be redundant.

Councillors could have instead required QAC to come back with a stripped back SOI with more accurate information for agreement within two months, in a public process mandated by the LGA. This barebones SOI would be the minimum our councillors should expect from the high-powered, highly remunerated professional board responsible for our biggest community/council asset and only control mechanism of tourism growth. Councillor Niamh Shaw put forward a resolution along these lines – all councillors but Crs Shaw and Niki Gladding said “no thanks”.

Instead, they okayed QAC’s survival strategy being developed in a black hole with no community visibility, little council input and potentially only two days for the community to read, digest and feedback on the revisited SOI when it comes back for agreement (or not) in late October.

Only two councillors raised concerns over the total dearth of financial governance At the meeting, again Crs Gladding and Shaw.

LINK to the article

We Love Wakatipu Report, 30 April 2020

We Love Wakatipu was asked to find out from each councillor why they voted 9-2 to accept a pre-Covid statement of intent that both QAC and QLDC acknowledged contained redundant financial forecasts a week ago today, despite almost 80 public forum submissions calling on them not to.

So, we offered all councillors the opportunity to say their piece on the same basis as council’s own public forum – two-day deadline, 400 words maximum. Three councillors chose not to participate: Heath Copland and Glyn Lewers, who both voted to agree to the SOI, and Val Miller, who abstained because she could not remember what the resolution was. The responses of all others are copied verbatim below, in the order received. Our original email is at the end.

The mayor copied his response, less than three hours after our initial invitation, to all councillors. To ensure this did not discourage councillors from responding, we reminded them this was an opportunity to explain their voting rationale in their own words, without time constraints of the meeting. And, that most people would not have time to go through two hours of video.

Councillor responses

In order of receipt:

Jim Boult

Hello Cath

Thanks for the contact. It is up to individual councillors whether they wish to respond or not. However, personally I do not consider that there is any need to have councillors record in writing their reasons for voting. The meeting, while held in a digital space was streamed so any person who chose to attend (digitally) was able to follow the questions, answers and debate. In that sense it was not unlike a normal meeting. The minutes will record the key points of the meeting and the vote.

As I say, if councillors individually want to share their thoughts with you than that is their choice but Council will not be producing a written rationale for votes on this item, or any other item on that agenda

Regards

 Jim Boult ONZM Mayor            

Penny Clark

Morning Cath…hope all still well in your bubble…….
I think I was pretty clear in my comments that I wanted us to concentrate on Triaging the business, looking after the staff, parking the SOI for the immediate moment

And once we have a better idea of border controls or Covid in general they produce a fit for Purpose document for Oct which will get us into the third quarter.

Hope this helps thanks Penny

Craig Ferguson (Ferg)

Hi Cath
Hope all is good with you and John.

I see you will have on the recording what I said at the meeting. As I mentioned, I wanted a complete accurate document that we could take to the community later in the year and get done. The future has come crashing into the present and who knows the outcome of it all…

Best Regards
Ferg

John MacDonald

Thanks Cath

All I wish to say is that, in the election campaign last year, I said I would not support the expansion of Queenstown Air Noise Boundary. I followed on from that at the council meeting on the 25th February, successfully moving to get into the letter of expectation that The QAC would “Continue to operate within the existing established noise Boundry.” Then at this last council meeting I moved to tighten up the Draft SOIs so the QAC would not commit to undertaking any spending on capital projects, I also stated, my belief that the QACs and our current position is so fluid and drastic that the QAC will need the extra time to come up with any kind of meaningful SOIso that is why I supported the recommendation which will now see a new and fit for purpose SOI due at our October meeting.

Regards
John

Quentin Smith

Thanks Cath, 

My decision was based on an acknowledgement of the incredibly dramatic circumstances we find ourselves in, an acknowledgment that the risks associated with undue airport expansion in Queenstown and Wanaka are effectively negated for the time being and that it was reasonable to understand, inform and respond to the new circumstances in a comprehensive way before October.  I reiterate the point i made in the Council meeting that the requirement in this SOI for the masterplans for both airports to be fully consulted and subject to endorsement by Council is a significant and major step in regaining control of our future for both airports and communities.  I will continue to be fighting for a better strategic vision for the future of our airports and one that doesn’t come at the expense of the community and the environment.

Niamh Shaw

Hi Cath,

A full account of the motion I moved at the 23 Apr council meeting is posted on my Niamh Shaw – QLDC Councillor Facebook Page, which details the many reasons I voted as I did. Since it is slightly more than 400 words, following is a condensed version:

One of the justifications for approving the draft SOI is that we’ve all got bigger things to worry about. I concur with that assessment; and therefore it made no sense to unnecessarily propose approving a meaningless document and cause additional stress to our residents. 

The previous SOI fulfilled statutory obligations until potentially (and legally) the end of Jul, so Council had no legal requirement or obligation to agree this document on 23 Apr.

Although Covid-19 was put forward as the reason we couldn’t (in this instance) direct our CCTO, every time we are presented with an opportunity to demonstrate leadership and governance over our CCTO we have dropped the ball. That’s not a symptom of Covid-19. Until we, the Council, start actually governing our CCTO, we are doing great disservice to our council staff, the QAC board and staff, and our community.

 With its Covid-19 ‘disclaimer’, the SOI is a self-declared ‘invalid’ document that achieves precisely nothing in the way of governance or oversight, and is furthermore contradictory. Therefore it presents an untenable risk on a number of levels. One potential risk to our majority shareholding has been highlighted by Auckland and Wellington Airports’ recent requirement for shareholder support.

Requesting that our CCTO produce a condensed SOI outlining its recovery plan, and intent for servicing debt, is not a wall-mounted moonbeam; it is a basic requirement. All we achieve by delaying the process is further undermining trust in this Council and kicking the SOI down the road.

At the time, I considered approving the draft SOI to be a dereliction of duty.

I still do.

I would like to extend my sincere gratitude to all who submitted for public forum. The feedback was invaluable in enabling me to represent what I consider the wishes and best interests of our community

Cheers
Niamh

Calum MacLeod

Put simply under the LGA QAC must;

Achieve the objectives of its shareholders, both commercial and non-commercial by exhibiting a sense of social and environmental responsibility by having regard to the interests of the community in which it operates.”

QAC as our CCTO must be held accountable. This is why I voted NOT to accept QAC’s SOI twice last year. Due to the current exceptional circumstances I voted to recieve the SOI. Paragraph 16 of the report sums it up;

“Public interest in this process will be better and more meaningfully served through a modified SOI that reflects the true impact of COVID 19, and can incorporate the findings from both the Council’s Spatial Plan and Economic and Social Assessment currently being completed.”

I specifically ask QAC to note;

  • In addressing the immediate needs of the Airport community QAC cannot compromise the longer-term, higher-level goals and aspiriations.
  • This is the single best opportunity we will ever get to re-imagine our economic pillars and way we ‘do’ tourism in NZ with better outcomes.
  • Return to BAU is not an option!
  • The ‘High value tourist’ mantra will not cut it. The data proves pre Covid-19 we were getting less per tourist than 10 years prior.
  • This next SOI process must be community inclusive.
  • QAC needs to address destination management with the aim of understanding the prospect of a National outcome potentially limiting numbers coming into NZ.
  • QAC must rise to the Climate Change challenge – Board members have legal risk obligations.
  • Specifically how “QAC will identify and take opportunities to influence the aviation industry and airlines to reduce the carbon footprint associated with air travel.
  • I applaud QAC’s commitments to sustainability however QAC must move from Sustainable to Regenaritive.

At the last Council meeting Councillors adopted the Climate Action Plan. A challenge I laid to Council was;

Investigation & analysis of our tourism footprint including the direct impact of flights into the district & flight tax. Confronting this head on and early will truly show bold leadership.

As Bill McKibben says – “Rescuing high-polluting industries without imposing any climate conditions … would be an abrogation of our leaders’ responsibility for our future welfare.”

This District – as a key driver of NZ Inc. – has the capability to lead internationally.

I will be looking to QAC to provide the ‘Bold Leadership’ this District – its shareholders – are crying out for!

Niki Gladding

At Thursday’s council meeting (23 April 2020) I voted NOT to agree QAC’s Statement of Intent. That decision was based primarily on the risk the document might pose to Council’s majority shareholding – and ultimately our communities’ ability to control aviation and tourism growth. On the day, my decision came down to the document not managing the risk associated with QAC paying compensation to Remarkables Park Limited for ‘Lot 6’. What’s below explains my thinking in more detail…

Over 70 submitters to Public Forum made it clear that airport expansion is still something the community wants to be able to control, so that was front of mind. If I wasn’t sure our majority shareholding was as safe as it could be I wasn’t going to agree the document – and ultimately I wasn’t sure.

Currently, all business owners are scrutinising balance sheets and working to protect their investments. QLDC must do the same. QAC’s last financial statement was produced in December. At that time debt was close to $70 million and the company had 4 credit lines totalling $140 million; $50 million set to expire mid-2021 and $90 million in mid-2023 i.e. relatively soon. Financial costs were around $3 million per year. When I raised concerns about servicing debt, QAC didn’t contradict the figures or explain how it would achieve that. When I asked whether funding for Lot 6 was included in the capital programme (set out in the SOI) the CE couldn’t provide clarity.

The caveat added to the final motion is good and addresses some of my concerns. It means the SOI is not agreed unless QAC’s Board adds a paragraph to the SOI preventing further capital spending on projects set out in the document. However, the caveat doesn’t resolve the risks associated with Lot 6 and councillors don’t understand any options that QAC might have with respect to the acquisition. If the company pays compensation (potentially a huge sum) and then can’t service the resulting debt, it will be up to QLDC to either bail out the company or issue more shares – and QLDC may not be in a position to fund a bailout.

Finally, in the back of my mind was an understanding that there will be those who believe that the best thing for QAC – and possibly the tourism industry – is to rid the company of the legal requirements associated with being a CCTO.

NB – clarification from We Love Wakatipu

John MacDonald did get the letter of expectations changed, but the QAC statement of intent councillors agreed to does not reflect any long-term commitment to this. Instead it says:

“QAC has committed not to seek any expansion of the air noise boundaries at ……… at this time.”

That does not mean it isn’t planning to.

Because of Covid, the SOI says, QAC will not complete its master plans for either airport this financial year. Once it has, QAC will then seek council endorsement and consult fully with the community “before any decisions on future airport developments are made.” There is no suggestion this will not include air noise boundary expansion. (See page 10 of SOI.)

EMAIL SENT TO ALL COUNCILLORS 28 April, 2020.

Dear Councillors,

I hope you are all well and looking forward to extending life a little on level 3.

We Love Wakatipu Inc has been asked to approach councillors to ask you for your reasoning as to why you voted yes or no (or abstained) on agreeing to Queenstown Airport Corporation’s statement of intent last Thursday.

So we would like to offer you the opportunity to respond.

Like public forum, we ask for 400 words maximum, in your own words, by 1pm on Thursday.

  • The collation of responses will then be printed verbatim, in the order received, on our protectqueenstown.nz website with a link to our Facebook page.
  • For your information, we have already uploaded the video of the meeting and the collation of public forum submissions.
  • We have also uploaded a story from the Wellington City Council website about their vote to provide shareholder support to the capital’s airport the same day you voted on the SOI.

We very much look forward to hearing from you all.

Kind regards,
Cath Gilmour
We Love Wakatipu Inc chair

Otago Daily Times, 30 April 2020, and Jarden financial report, April 2020

Dunedin airport executive leadership says there will not be a return to normal “in the foreseeable future” in the wake of revenue crash landing with the Covid-19 pandemic. The number of passengers could be halved in a post-Covid-19 environment, executives say. Read further in the ODT HERE.

And data sourced from Auckland International Airport has led Jarden wealth management advisors to estimate it will take five years, until financial year 2024, for passenger numbers to climb back to FY 2019 levels. See here for their full report on bear, base and bull forecast scenarios for the next five years.

Meanwhile, Queenstown Lakes residents and council will need to wait until late October to understand the financial and passenger forecasts for Queenstown Airport, after a majority of councillors voted to agree to QAC’s pre-Covid financial forecasts and its draft statement of intent a week ago.

WCC website, 23 April 2020

The same day Queenstown Lakes District councillors voted 9-2 to agree to a caveated pre-Covid 19 statement of intent for Queenstown Airport Corporation, complete with financial forecasts acknowledged to be irrelevant, their cohorts in Wellington voted to provide shareholder support to the capital’s airport.

Relevance to Queenstown? First, it shows Wellington Council is going on the hook for a capital injection into Wellington airport. This could well happen for us. If QLDC can’t provide an injection and it has to come from another party, this would effectively dilute QLDC’s shareholding.

WCC’s capital injection will be in the form of convertible notes, a hybrid form of capital that starts off as debt but can be converted to equity which, if it were coming from another party, would dilute WCC’s shareholding.

To get this funding, Wellington Airport would have had to provide an initial damage assessment and business survival plan to its shareholders. QAC should have done the same already. Survival scenarios would be the basis of any SOI written now, July or October, particularly as it relates to the next 12 months.

LINK to article here

And here is a short piece on Covid’s global impact on airports, creating zombies from previous behemoths: LINK to article

We Love Wakatipu Inc commentary, 23 April 2020

Despite all but one of the more than 70 Public Forum submissions strongly opposing it, eight of 11 QLDC councillors today voted to agree to QAC’s draft statement of intent, written in pre-Covid times. Two – Niamh Shaw and Niki Gladding – argued strongly and voted against it, also raising pertinent issues of financial risk and democratic process. Val Miller abstained because she couldn’t remember what the resolution was.

Quentin Smith pushed back against QAC board member Adrienne Young-Cooper’s suggestion that the joint steering group need not be brought back into discussions on the October SOI revision until late August. John MacDonald put forward the amendment to confirm QAC wouldn’t fund any pro-growth development before that is in place. But all councillors, again but for Crs Gladding and Shaw, rejected Cr Gladding’s suggestion they also stop QAC from committing to such funding. One could ask why?

Disappointed? Yes. Surprised? Not really. Communications with councillors prior to the meeting showed most were singing from the same song sheet with little chance of minds being changed.

We all did our democratic part, trying to get councillors to hear the community voice. Our community, through a couple of councillors, did make some gains. And even if they didn’t listen, the other councillors can’t have helped but hear the clamour for stronger governance, better democracy, proper legal process and real community input. Surely?

So, a big thank you to everyone who did input to Public Forum or contact your councillors. We will keep posting as relevant issues/items pop up. We look forward to a better process – and certainly a more fact-based, unbiased agenda item – next time around. October will no doubt roll along quickly.

Here’s the YouTube link for the meeting if you’d like to see how our councillors operate and what our community said during public forum.

Or for the shorter version, here is the Crux story.

Crux, 22 April 2020

Community News Media Crux has published in full two of the public forum submissions that have been made to QLDC’s videoconference meeting tomorrow, at which Councillors have been asked to agree to QAC’s draft SOI based on pre-Covid forecasts and objectives.  Both call on councillors to reject the staff recommendation.

Council has given mixed messages on how they are going to treat public forum – initially they were just going to circulate to councillors and summarise them for the public. After we and others advocated, they said they would read them out during the now live streamed meeting. But on their Facebook and web page, they still say they will just be circulated and “acknowledged” at the start of the meeting.

That would not be democratic. Nor open and transparent. At the very least, a full transcript of every public forum submission should be made available on the website with a link from Facebook.

LINK to the article

We Love Wakatipu Inc commentary, 21 April 2020

Council’s proposed agreement to Queenstown Airport Corporation’s pre-Covid statement of intent on Thursday would totally abrogate its legal governance role and disrespect QAC’s capacity to actually do its job.

The council executives’ agenda item that recommends this course of action gives false grounds for the need to agree, conflicting reasons as to why it must, and its one alternative option is so nonsensical it seems designed for councillors to immediately dismiss.

Thursday’s agenda item says councillors must agree to the draft SOI “to enable QAC to be compliant…”  Staff and the mayor used the same argument last year. It wasn’t true then. It still isn’t. QAC just had to deliver it by deadline for the draft to be compliant, allowing their work to continue.

Council’s executive team should know this as we provided legal advice from a senior QC pointing out this and other aspects of proper process under the LGA last year. Council’s own legal advice later confirmed this.

So, to the second reason why council executives claim agreement is necessary now – enabling QAC to focus on its job.

Confusingly, there are three distinct versions given of this rationale. In the recommendation; “to enable QAC to commence re-forecasting immediately”. Under significance; “to enable it to commence immediately on a modified statement of intent”.

And thirdly, in both the recommendation and the narrative, we are told that QAC can’t produce a modified SOI until October 29 because they have to wait until “the immediate market challenges are stabilised, the impact is better understood and the company is in a better position to develop a relevant three-year statement of intent”.

Contrast this with QAC’s minority shareholder, Auckland International Airport.  Within two weeks of lockdown, it came out publicly with a detailed strategy (including raising $1.2 billion capital) to ensure its survival over the next two years. Sydney Airport is continuing with its May AGM to report its survival strategy to shareholders.

Why does QAC need over seven months to write the survival and recovery SOI it needs now?

For clarity, QAC does not need council’s agreement to start this strategy work. Surely it has already begun? And their final SOI is not due until June 30 – or July 30 if councillors extend the deadline, as they legally can and already did for the draft. 

There is no legal need and no practical pressure on councillors to agree to this draft SOI, which both QAC and the staff report acknowledge as irrelevant and redundant. The LGA sets out content requirements in schedule eight, reflecting the QAC board’s outlook, expectations and goals of the business in the world as they see it. To agree to statutorily required information known to be false would be a legally dubious move by our councillors and Mayor.

Instead, they should show their confidence “in the capability and capacity” of QAC board and management the staff agenda item claims, by getting them to do their job in a timely way.

The council executives’ report suggests councillors agree to the pre-Covid 19 SOI with only an “expectation” that, by October 29, QAC modify it under a section of the LGA (Clause 5 of schedule eight)  that gives QAC full control, with councillors allowed only to “consider” changes made.  Such “expectation” is not legally enforceable, council’s views hold no legal weight, and QAC’s strategic response to this crisis would continue under a council-sanctioned cone of silence until the end of October.

There are two other clear paths for councillors to take under the LGA to ensure this year’s SOI, the document that outlines the strategic and financial parameters within which QAC must operate, is not a mockery.

  • They can revert to treating this as the draft SOI that it is and, under clause 2 of LGA’s schedule eight, ask QAC to bring back a final SOI that reflects the uncertainties of the next three years as accurately as they can by July 30. This is the “good cop” option, in which they show trust in their relationship with QAC. Or…
  • They can carry on with the staff’s suggestion that it be treated as a final SOI, and by resolution direct QAC to do the same as above. So far, QLDC has appeared to be allergic to exercising its legal right to govern the company it is controlling shareholder of in this way – but it would give greater surety of results.

Within this legal framework, updates could be scheduled to allow for the inevitable tweaks required as the full impacts of this global crisis emerge. Where forecasts cannot be provided, alternative scenarios could be outlined.

By following proper legal process in either of these ways, councillors would ensure they, our community and business sector have visibility of QAC’s strategic approach as a basis for trust, peace of mind and their own business planning.

These are not even listed as options in the staff report. The second option it does list is legally dubious, meaningless and impractical.

Surely with four months since lockdown and almost no planes to divert them, QAC’s well-qualified and well-paid executive team and board should be able to formulate its Covid survival and recovery SOI?

Now is not the time to argue about airport growth, but nor is it the time for lax governance. QAC’s Covid caveat acknowledges its forecasts are inaccurate – but makes no mention of its objectives no longer fitting reality.

So by agreeing to the draft SOI, councillors would implicitly agree to QAC’s objectives of continuing down the dual airport growth track, developing landholdings to support growth and, among other things, total debt of $170 million by the end of 2023.

In one of six specific Covid comments in the draft SOI, QAC says it will not complete long-term development planning for either airport this financial year and it won’t seek expansion of Queenstown’s air noise boundaries “at this time”.

QAC also says “as and when” it completes its draft master plans, it will seek council’s endorsement and consult with the community “before any decisions on future airport developments are made”. The implication is very clear that they are QAC’s decisions to make.

If councillors agree to this draft SOI, they leave the window open for QAC to argue the current council implicitly agreed to these objectives.