Auckland City Council

25 February 2008

Affordability key to council's budget discussion

Auckland City Council will meet on 5 and 6 March to discuss the priorities for the city over the next year and budget options for how to fund them.

Chairperson of the council's Combined Committees, Councillor Doug Armstrong, says that keeping rates and water prices affordable will be a key focus.

"We made a commitment to keep any rates increases to the level of council's inflation which for next year is 4.8 per cent," says Mr Armstrong.

This is a change from the 10.2 per cent rates increase forecasted for next year in the council's 10-year plan.

"Careful spending means that some projects in the 10-year plan will need to be changed, deferred or cancelled," says Mr Armstrong.

"There is still significant investment in infrastructure occurring. We plan to invest around $200 million in projects that will move the city forward."

The council will also consider different funding options such as rates, borrowing and contributions from developers.

One area the council is looking at is keeping water price increases to a low level, which will reduce the return it receives on its public investment in Metrowater.

"People have told us that they are concerned about the rising price of water. We are looking at how we can ensure water prices are fair," says Mr Armstrong.

"We will look carefully at the impact the annual payment the council receives from Metrowater has on people's water bills.

"One option would be to keep water prices to the level of council's inflation by reducing these payments over time. However that would require either an increase in borrowing or a reduction in expenditure.

"At the moment those payments go directly into funding a large part of our $30 million per year stormwater improvement programme.

"We recognise that some people do not believe that the payments are the right way to fund projects in the city. However, these payments supplement rates and enable us to make the rates dollar go further.

"We have some tough decisions to make," says Mr Armstrong.

The council will consider three options for changes to the annual payments it receives from Metrowater including:

* continuing the payments

* reducing them over time

* cancelling the payments altogether.

The decisions made at the Combined Committees meeting will be included in the council's draft annual plan that will be available for public feedback from 21 April to 22 May 2008.

The Combined Committees will meet again in June before the budget and rates levels are set for the 2008/2009 financial year.

ENDS

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