Auckland Council last week adopted its Emergency Budget for 2020/21 – named ‘emergency’ in response to the estimated loss of revenue of $475 million this financial year due to the Covid-19 response.
The budget also allowed for more water infrastructure to the tune of $239 million to mitigate any future severe water restrictions.
Cr John Watson voted against the budget, and Cr Wayne Walker in favour.
The majority of Coast residents were clearly in favour of a smaller rate increase, or even no increase at all, with hard times ahead. Consultation showed that 70 percent of local ratepayers (Albany Ward) supported a 2.5 percent rise or less. Council also paid $100,000 for a Colmar Brunton poll, in which 53 percent opted for 2.5 percent.
However, Mayor Phil Goff says keeping the increase to 3.5 percent required hard decisions.
“To meet the full cost of the loss of $475 million would have required a 28 percent rate increase but given the impact of Covid-19 on incomes across the community, an increase beyond 3.5 percent was never contemplated,” Mayor Goff says. “We examined whether a lower increase was viable, but it would have involved more savage cuts to services and investment in infrastructure badly needed by the city. Instead, we looked at other ways to balance our budget. Hard decisions had to be made, cutting over $200 million from expenditure. Staff losses will total over 1000, elected representatives and senior staff took pay cuts of up to 20 percent, and nearly 60 percent of other staff agreed to voluntary pay reductions. Non-essential spending has been slashed and surplus properties up to the value of $224 million will be sold. Council must become a leaner and more adaptable organisation, able to do more with less.”
Suggested impacts on local services, before the budget was signed off, were a concern but many of those cuts never eventuated. There will be no charges at Silverdale or Albany park and rides, Silverdale dog pound remains open (for now) and the road safety programme for local roads was not cut. Funding for HBC Youth Centre is in the budget but yet to be signed off by Council and proposed cuts to library and leisure centre hours did not eventuate.
The local board’s Discretionary Funding, which could have been reduced by 10 percent, was left intact – this is used for things such as park maintenance and community grants.
The biggest roading projects locally – Penlink and Northern motorway improvements are with Waka Kotahi/NZ Transport Agency (Government), so they are unaffected by Council’s budget cuts.
Things to watch
Council now begins preparing its 10-year budget. This may be even more constrained with effects in many areas, Cr John Watson warns.
• Asset sales: The asset sales target escalated from $24 million in the pre-Covid budget to $224 million for 2020/21 across Auckland. Among the first properties on the block are two small sites in Albatross Rd, Red Beach, followed by 21 properties on Whangaparaoa Rd and two on Brightside Rd, which form a critical part of the road network and have been the subject of several stories in this paper.
• There is also a proposal in the budget for Council to exit ownership of gyms and holiday parks and this is expected to be considered in the future.
Local budget impacts
Transport projects and services
Many local transport projects are funded at the request of the Hibiscus & Bays Local Board, which receives an annual allocation from the transport capital fund. Auckland Transport (AT) advises that this fund has been cut to $5 million for 2020/21, which must be divided among 21 local boards. Any projects where contracts have not been signed will not go ahead this year. The big one locally to be put on hold is the extension of Orewa Boulevard from Riverside Road to Empire Road, costed at $1.4 million. Other projects that AT recently costed for the local board that are now on the back burner are changes to the McDonalds drive through and parking in Hillary Square ($60,000), footpaths on Laurie Southwick Parade in Gulf Harbour ($462,000) and the footpath from Hatfields Beach to Orewa ($1.5 million).
Big infrastructure projects
Orewa Seawall: This is the local board’s single biggest project. The Environment Court released an interim decision granting resource consent for the seawall, with final conditions still being worked out. To move the project forward, Council funding is needed for the next stage – detailed design and building consent. This has been requested by the local board for 2020/21 but is not guaranteed.
Cutting grass, cleaning toilets and emptying bins. No change is anticipated to service levels like these, although the local board is considering reducing the number of rubbish bins and increasing the size of those that remain, where appropriate.
• Stanmore Bay Pool & Leisure Centre: Auckland Council head of active recreation Dave Stewart says under the Emergency Budget, savings targets have been identified which may result in operational and service changes in the next 12 months. The number of group fitness classes provided at the local leisure centre are now at 75 percent of pre-Covid levels and this is likely to be ongoing, he says.
Several environmental groups receive local board support in undertaking voluntary work such as trapping, planting and cleanups. There were fears that funding could be cut, but it remains in place.
• The next stage of kauri dieback protection in Eaves’ Bush in Orewa has been delayed by a year, due to the need to defer capital expenditure.