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In a statement released after the meeting, the Invercargill City Council said it would appoint Bruce Robertson as an independent governance expert, in response to a request from the Department of Internal Affairs.
The public-excluded meeting was held to discuss a letter from the department to Mayor Sir Tim Shadbolt and council chief executive Clare Hadley.
Anita Balakrishnan had written on behalf of the department raising concerns about "significant conflict [identified] among elected representatives and the chief executive at Invercargill City Council."
Sir Tim said media reports on the scale of "conflict" were overstated.
"Invercargill conflicts would pale in comparison to those I experienced in council in Auckland.
"Tonight’s meeting reflects that, in that we’ve found a way forward with everybody on board.
"I believe public confidence will be restored."
Other councillors mirrored Sir Tim’s analysis.
Cr Graham Lewis described the outcome as "a win for everyone".
"It was an amenable meeting, with a good outcome. We’re moving totally in the right direction, and I came home satisfied," he said.
Cr Peter Kett said the council continued to work well together as a team.
"I’m sure we’ll resolve the current issues successfully."
Ms Hadley declined to comment.
Last night’s statement said the council would "determine to proactively address the issues by coming up with a plan as requested by the DIA."
The council will request the chief executive and council leadership group, with guidance from Mr Robertson, outline a draft plan for consideration at an extraordinary meeting tomorrow afternoon.
A final plan will then be considered in a public meeting on September 3.
A local government specialist said mediation could be the first step for Invercargill City Council’s elected members and management to resolve internal conflicts.
University of Otago business administration specialist Kyle Whitfield said the department’s request for assurances the council could govern effectively was "not very common".
However, a Government intervention would be "even more rare".
"These things only happen in extreme cases."
Dr Whitfield said rather than "get rid" of elected members, dialogue between the parties was best.
"Having somebody external can help bridge that gap between council managers and elected members.
"[The investigation] is necessary if they have concerns and I think obviously people had some concerns.
"It is not an easy fix.
"If the mediation of relationship works, that is absolutely fantastic and they can get on and do their job."
Minister for Local Government Nanaia Mahuta told the Otago Daily Times yesterday councils must be responsible for resolving their own problems.
"This is the expectation for all councils in New Zealand.
"We are seeking assurance from the council that they are resolving the issues.
"Intervention has never been mentioned."
She referenced a similar situation in Westland District Council last year.
"These issues were resolved without intervention being required.
"The next steps will depend on our level of assurance that they are taking active steps to resolve these concerns," Ms Mahuta said.