We need to better manage our insurance and our investment risks. Insurance is getting harder and more expensive to get, and the Council’s assets – like buildings, roads and pipes – are underinsured by $2.6 billion. We’re exposed if there’s a natural disaster, and our biggest investment assets, including our shares in Wellington Airport and ground leases, are poorly diversified and exposed to the same risks. We’re proposing to sell our shares in the airport and some ground leases to set up a new investment fund as a form of self-insurance, so we can diversify our investments and have money to help with recovery if there’s an earthquake or other disaster.

There are three options:

1. Sell all airport shares and reinvest into a newly established perpetual investment fund. Proceeds from future ground lease sales could also be transferred into the fund (if/when these leases were considered for sale). (Preferred option.)
2. Sell some airport shares and reinvest into a newly established perpetual investment fund. Proceeds from future ground lease sales could also be transferred into the fund (if/when these leases were considered for sale).
3. Retain current airport shares, and do not establish a perpetual investment fund. Proceeds from any future ground lease sales will be utilised for other purposes.