Council to consider report on contracts

9 September 2008

Council will consider a report at this Thursday’s meeting whether to limit its initial negotiations on three maintenance contracts to its current contractor City Care.

City Care is a Council Controlled Trading Organisation (CCTO) and one of the Council’s strategic assets, owned by Christchurch City Holdings Ltd (CCHL). It has held these contracts which total $32 million since 1999. The contracts for parks and gardens maintenance, water and waste and facilities maintenance, expire between now and 2011.

Council Chief Executive Tony Marryatt is recommending in his report to Council that Council negotiate the new contracts with City Care. The proposal is that the contracts will only go to the market for competitive tender if Council can not negotiate suitable terms and conditions with City Care.

The proposal is in the best interests of Council, Mr Marryatt says. "Council and the city’s ratepayers benefit when its strategic assets such as City Care are strong, financially-sound organisations."

City Care has an annual turnover of $110 million and employs more than 900 full-time staff. Its dividend for the 2008 financial year was $1.48 million and the forecast for the year ahead is $1.646 million.

CCHL’s dividend to the Council for the 2008 financial year was $34 million. This dividend contributes to the annual operating and capital programme costs to Council and reduces the annual rates required from its residents.

The recommendation is for the Chief Executive to appoint a panel of external and internal members, chaired by an external consultant, to negotiate with City Care.

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