LGNZ forms establishment board to investigate local government risk agency

Local Government New Zealand (LGNZ) announced it has formed a relationship with the Crown to investigate options for a local government risk management agency.

The parties today confirmed the appointment of the establishment board chaired by experienced director and businessman, Craig Stobo. Mr Stobo was Chair of the establishment board which launched the NZ Local Government Funding Agency which now provides cheaper and better access to global capital markets for its council borrower members’ needs.

The establishment board will work closely with LGNZ, local authorities, and officials from the Department of Internal Affairs, the Ministry of Civil Defence & Emergency Management and The Treasuryover the next 12 months. Its primary task is to identify risk management services that would assist councils and locally owned infrastructure.

Local Government Minister Paula Bennett and Civil Defence Minister Nikki Kaye also announced today a concurrent review of the existing funding arrangement between central and local government to restore certain infrastructure after emergencies, such as for water, wastewater, stormwater and river flood control. Under this arrangement, the government reimburses councils up to 60 per cent of certain restoration costs.

Establishing a risk management agency for local government is the culmination of the Craig Stobo review of the local government insurance market. This, along with other LGNZ reports on managing the impacts of natural hazards and its 3 Waters review of drinking, wastewater and stormwater assets show that risks from natural hazards particularly on underground infrastructure would benefit from stronger sector-wide collaboration.

LGNZ says the establishment board will consider self-reliant and sustainable solutions for key infrastructure, as well as protection from the volatile global insurance market and solutions for councils’ needs both from a pre-funding and post-funding perspective.

“Local government has significant expertise on managing the impacts of natural hazards and other risks but we need to work together as a sector and draw on external expertise. The ability to work together to better manage future risks is important for communities,” Mr Yule says.

“This is a major initiative that will be important for communities, central and local government alike.”

The list of appointees to the establishment board are:
• Craig Stobo (Chair)
• Hugh Cowan – General Manager of Reinsurance, Research and Education, EQC
• Lawrence Yule – President, LGNZ
• Basil Chamberlain – Chief Executive, Taranaki Regional Council
• Jim Palmer – Chief Executive, Waimakariri District Council
• Garry Poole – Chief Executive, Tauranga City Council

Two further members will be appointed to the Board in coming weeks. Treasury will have an observer on the Board.

ENDS

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