These are the numbers mayor Len Brown (pictured) wants Auckland Council to set today for the year starting 1 July:
- an average increase in rates revenue of 2.4%
- a uniform annual general charge of $394
- year 2 of the 3-year interim transport levy (targeted rate) be unchanged at a fixed charge of $113.85 (including gst) for non-business ratepayers and $183.85 (including gst) for business ratepayers
- draw down from the council’s diversified financial asset portfolio up to $100 million/year over the next 2 years to manage debt ratios within prudent limits
- $1.945 billion of capex, $3.67 billion of opex, $8.774 billion of closing debt, interest:revenue ratio 11.5%, debt:revenue ratio of 265%
- the general rate differential for farm & lifestyle properties to stay at 80% of the urban residential rate.
The 2016-17 budget would be based on year 2 of the 2015-25 long-term plan, adjusted for the updates set out in the staff reports, and to incorporate the following changes & specific decisions:
- Auckland Council to continue its public transport concessions
- additional funding of $1.5 million to Auckland Transport, noting that the remaining $1.5 million estimated cost of the discontinued Government subsidy to come from internal savings in Auckland Transport
- additional capital funding to Auckland Transport of $30 million in 2016-17 & $20 million in 2017-18 to support the early acquisition of land for capital projects excluding light rail
- request Auckland Transport work with the NZ Transport Agency & Kiwirail to retain the land at the Waterview Tunnel construction site until the decision on the light rail project has been progressed
- additional operating expenditure of $150,000 to deliver town & local centre clean-ups.
For Maori property
The mayor has proposed that the Maori freehold land rates remission & postponement policy be amended to include remissions:
- to adjust rates to the equivalent of those that would have been charged, had the property been valued excluding any potential use that is unlikely to be achieved within Maori ownership
- to adjust rates to the equivalent of those that would have been charged, had the rateable value of the property been adjusted by 10%, where properties have significant barriers to development such as owners being deceased or not succeeded to
- for marae & urupa land in excess of the 2ha limit for non-rateability
- for land returned under treaty settlement for commercial redress, where the land is set aside and protected for cultural, historic or natural conservation purposes or because it is wahi tapu, or used for a marae or urupa
- that the rates remission & postponement policy be amended to remit fixed charges on Maori land on multiple titles used as single property.
Other specific targeted rate proposals:
- a 2-year pilot programme be established providing financial assistance of up to $35,000/property to eligible homeowners in Piha, Te Henga, Karekare & Little Oneroa catchments to replace or upgrade their failing systems, funded by a targeted rate set from 1 July 2017
- a targeted rate be set (at two-thirds of the level set regionally for a full year recycling service) to fund a fortnightly kerbside fully commingled recycling collection in rural Franklin
- the Brown’s Bay, Glen Eden & North Harbour business improvement districts are extended.
The mayor’s annual budget proposal is debated this morning by the council’s finance & performance committee. Its recommendations go to the council’s governing body this afternoon for approval, without relitigation.
Mr Brown said in his summary:
The consultation document the governing body adopted in February identified the key changes to the rating policy on which it was seeking feedback – the level of uniform annual general charge, the interim transport levy, a reduced differential for farms over 50ha and the rates remission & postponement policy for Maori freehold land.
Mr Brown said review of the underlying budgets by council-controlled organisations & council staff had identified some cost changes, mostly positive, and a few issues where specific decisions would be required. These specific issues include some aspects of concessionary fares to SuperGold cardholders & senior citizens, additional capital funding for strategic transport land acquisition and release of diversified financial assets. He’s also proposing the inclusion of a small budget for town and local centre clean-ups.
“With regard to rating policy, this proposal is based on minimal change. I am firmly of the view that, after 5 years of massive change as a consequence of the amalgamation of the rating system, it is time to have some stability. I acknowledge the work that Cllr Ross Clow has done to look for alternatives in the way the transport levy is charged and I think that was a debate worth having. However, on balance, I feel that this should be a year of minimal change and therefore my proposal is to remain with status quo for the uniform charge, transport levy & the differential for farms over 50ha.
“I am supporting the recommended changes to the Maori freehold land rates remission & postponement policy and also to the more local targeted rate issues – where supported by the local board. These are all minor and do not undermine the stability principle.
“I am proposing for 2016-17 that we continue to support the SuperGold cardholders & senior citizens in free use of public transport in the current arrangements. The introduction of the HOP card for these users will enable data gathering to support any future consideration of this ongoing subsidy. I am disappointed that the Government has withdrawn its support in the absence of such information and I intend to write to the minister to express our views. I am proposing that the additional cost of continuing this level of service is 50% funded from within Auckland Transport’s existing budgets and 50% by additional funding from rates.
“I have also proposed partial funding of the additional strategic land acquisition and supported the drawdown of funds from the diversified financial assets portfolio to manage our debt within prudent limits. These assets are not, in my view, core to the functions of council and it is appropriate to utilise them to prudently manage our debt & debt ratios, and by so doing maintain our AA credit rating.
“The net result of these proposals is an interest:revenue ratio of 11.5% and a debt:revenue ratio of 265%.”
Auckland Transport land acquisition:
Auckland Transport asked for $80 million more for strategic land purchase: “The long-term plan includes a number of transport projects which will require land acquisition, and largely these are budgeted close to the time when the project would commence. However, as development is progressing at such speed, it has become apparent that on some sites it would make more sense to designate & potentially acquire the land now before any development takes place and make the acquisition significantly more expensive.”
“3 categories of acquisition are identified – projects that are planned and in the budget but at a later date (effectively this is bringing budgeted expenditure forward); projects that are identified but beyond the current long-term plan and there is an opportunity to designate/secure land now; acquisition associated with a light rail depot that, should that project be approved, would be the most suitable location and will only be available for a relatively short period of time.”
With regard to light rail, the mayor said: “There is still a significant amount of work to do before either ourselves or the Government is ready to give the green light on that project. I recognise the limited opportunities to identify & designate land in critical spots in the central area. I am proposing that we enter into discussion with the NZ Transport Agency, which currently owns the land in question, and seek the ability to keep this land available until there is a decision on the future of light rail. Should this become an urgent matter of consideration before the next budget, then it can be brought back to the council of the day.”
Town & local centre clean-up initiatives:
“During the discussions with local boards, we heard a lot about dissatisfaction with levels of service around basics such as mowing & street cleaning. I am aware that there is a process underway to review the way we deliver some of these services. The outcome of that is expected to be an improved level of service and this will roll out over the next 12-18 months. While this is the underlying issue that needs to be resolved, there are other activities we can leverage for relatively small amounts of budget.
“I am proposing a small budget of $150,000 to deliver a number of town & local centre clean-ups across the region. Resources will be targeted towards those areas that are in high demand for graffiti & other clean-ups. The council’s service providers will support & work with business owners, business improvement districts, business associations & others to remove any graffiti vandalism that is outside the scope of the council’s normal service delivery. Typically this means graffiti that is on private premises such as storefronts, rubbish skips, private signs & fences. The clean-ups will also include litter removal, weeding, and painting of fascias where possible & permitted. This new initiative will help to improve the overall look of local business environments across the region. The service will help to strengthen & enhance the council’s relationships with business owners, business improvement districts & business associations across the region.
“The proposed budget of $150,000/year allows for up to 50 clean-ups throughout the year. At a minimum, and over the first year of operation, 32 clean-up initiatives will be delivered. Town & local centres will be prioritized, based on the council’s extensive data on graffiti ‘hot-spot’ areas as well as call centre information on demand for council services.”
Image above: Mayor Len Brown alighting from a new double-decker bus last November.
- I’ll update during the day if there’s any major change from the course set out above, and on the final figures adopted.
10 February 2016: Council annual plan consultation starts next Monday
11 December 2015: Council back next week to debate rates rise
13 November 2015: Reports released on Auckland’s alternatives to rates
Attribution: Council committee agenda.