The preliminary mayoral proposal, which goes to a Budget Committee workshop this week, reflects Auckland Mayor Wayne Brown’s commitment to tackling Auckland Council’s big financial challenges, and strengthening the long-term financial and physical resilience of the region.

The mayoral proposal is the first formal step in the lengthy process of developing Auckland Council’s 10-year Budget, otherwise known as the Long-Term Plan (LTP).

In December, the Budget Committee will determine what items from the mayoral proposal will be included the four-week public consultation on Auckland Council’s 10-year Budget beginning in February.

At the Mayor’s direction, the process for developing this proposal has been more politically led than in the past. To date, 34 budget workshops have been held over the last 11 weeks, with the Mayor, councillors, local board chairs, Independent Māori Statutory Board (IMSB) board, staff across the Auckland Council Group, and external experts.

For the first time, councillor-led working groups provided an opportunity for elected members to work on and put forward specific recommendations to inform the proposal.

The overarching theme of the mayoral proposal will be ‘strengthening Auckland’s long-term financial and physical resilience’ which delivers on the Mayor’s key election promises:

• Fix Auckland’s infrastructure
• Stop wasting money
• Get Auckland moving
• Make the most of our harbours and environment
• Take back control of Council-Controlled Organisations (CCOs) and Auckland’s future, including a fundamentally different relationship with Government

Auckland’s financial and physical resilience

Auckland Council faces big financial challenges. In previous years, decisions have been made to paper over funding gaps with debt and commit to new mega-projects, while underfunding the renewal of core assets, like roads, pipes and community buildings.

The chickens are coming home to roost. The running costs of the City Rail Link alone are expected to account for about 10 percent of rates paid by Aucklanders in the third year of the long-term plan. Unless replaced, the potential loss of Regional Fuel Tax and repeal of the Three Waters reform worsen the financial picture for Auckland Council in the year ahead.

The Auckland floods and Cyclone Gabrielle demonstrated that the region must also confront the long-term risks posed by climate change, which come with increased risk of damage to Auckland Council’s physical assets and less access capital and insurance. The cost of insurance for the council’s assets increased 40 percent this year.

The Mayor will propose a plan to put Auckland Council on a sustainable path.

Making provision to manage long-term risks associated with climate change, fully funding depreciation, and reducing debt-to-revenue levels are among the financial strategies being floated next week.

“The decisions of the past have determined our current budgetary woes. And the decisions that we make now, in the process of developing Auckland Council’s long-term plan, will shape the decades ahead. Nobody here is lacking vision, but we are lacking resources and we need to put Auckland on stable footing. We must get better value from our strategic assets and make provision for our biggest risks,” says Mayor Brown.

“I suggest that we commit to strengthening our resilience, financially and physically, over the next three years – providing a solid foundation that will enable our region to make some real progress for the remainder of the long-term plan.”

Fix Auckland’s infrastructure

The Mayor has set a clear focus on infrastructure: “Finish what we’ve started, fix what is broken, and get the best out of what we have.”

“We need to slow down the growth of our capital programme and play catch-up with the associated costs. Now is not the time for new mega projects. I want to be confident that we have value out of our current assets and what we are already building, before we acquire more,” says Mayor Brown.

The Mayor wants to see Auckland Council Group embark on a sustainable path of asset renewals and maintenance, prioritising transport and water networks, that strengthen critical infrastructure across the region.

Auckland Council Group holds assets valued at $67 billion, including thousands of kilometres of roads, footpaths, and water pipes. The region’s transport and water networks, parts of which have been in place at least 100 years, account for three-quarters of the portfolio.

“Every asset has a life-cycle cost. And, the ongoing costs of owning, operating and maintaining assets have been piling-up on our books. Now, they’re overdue.” says Mayor Brown.

“We need to fix our pipes and roads. Auckland’s infrastructure is spread thin and falling into disrepair. We have struggled to keep up with population growth. Too often, Auckland Council has deferred maintenance works to accommodate new infrastructure works, made worse by unfunded mandates handed down by central government, such as those enabling greenfield developments to intensify at the city’s outskirts.

“The floods this year showed us we need to look after Auckland’s physical assets and those natural resources vital to stormwater. A city is a shared system, and these are the structures tasked with protecting lives and livelihoods, so we need to get on with delivering the Making Space for Water programme.”

The Mayor will also propose that local boards have better options to manage their assets.

“The existing asset-based funding structure for local boards was designed to maintain ageing community facilities, many of which are no longer fit for purpose, rather than enabling communities to plan for the future,” says Mayor Brown.

“We all have a shared interest in the strength of Auckland’s critical infrastructure. I have spoken a lot about empowering and funding local boards to be fully in charge of local matters, and I am heartened to see that local boards are eager and willing to embrace my proposal.”

Stop wasting money

The mayoral proposal builds on Mayor Brown’s commitment to securing Auckland Council’s long-term financial position and avoiding unnecessary rates hikes.

The Mayor will propose cuts to operating costs in real terms for Auckland Council Group, excluding Auckland Transport and Watercare which are funded differently.

“This will involve significant financial restraint and require efficiencies. Auckland Council has to stop wasting money, and start getting things done faster, better, and cheaper. As we continue to weed-out wasteful spending, the focus will be on prioritisation, performance, and delivering better benefits for every ratepayer dollar spent,” says Mayor Brown.

Sensible initiatives to get better value for money will include moving to a fit-for-purpose IT system, and having Auckland Council and CCOs share back-office services, such as IT, property management, and HR.

Despite a reduction in operating costs, rates will need to increase as Auckland Council plays ‘catch-up’ on previous decisions to plug operating gaps using short-term measures. Increased costs of delivering public transport, including the City Rail Link, also need to be met for Auckland Transport.

Over the long-term, with continued restraint, rates increases are planned to reduce to inflation or near-inflation.

The Mayor is also determined to reduce waste in the Council’s capital programme, defunding some low value works, and looking for ways to do things better, cheaper and faster. This includes looking closely at the costs of things like earthquake strengthening.

The Mayor is adamant that is not solely a cost-cutting measure.

“This is about Aucklanders getting more for their rates. The mayoral proposal seeks to improve Auckland Council’s core services, by prioritising issues that really matter to Aucklanders and pausing those that don’t make a real difference or should be funded externally,” says Mayor Brown.

Get Auckland moving

The Mayor will propose a transport programme that makes progress towards his vision of a faster, less congested, more resilient, low carbon transport system for people and goods.

This includes initiatives to achieve significant gains in network performance through smaller-scale improvements, as well as initiatives to make public transport faster, more reliable, and easier to use.

“My plan is to speed up the traffic and cut congestion, which means we need to make better use of what we have. I will propose that we continue with time-of-use charging. I also want us to maintain progress on speeding-up buses through the city with dynamic lanes and affordable rapid transit projects,” says Mayor Brown.

The Mayor will propose halting funding for some low-priority initiatives, including removing funding for new raised speed-tables and some cycleways until Auckland Transport can do these things cheaper and better. He will continue his plans to radically reduce the cost of temporary traffic management.

Take back control of Council Controlled Organisations and Auckland’s future

The mayoral proposal will continue progress on providing clearer direction and oversight of CCOs. The Mayor is also seeking a fundamentally different relationship between Auckland Council and the new government, based on mutual respect and aligned goals.

Ahead of the election, the Mayor was in talks with political parties about ‘The Auckland Deal’ outlined in his Manifesto for Auckland.

“Our region needs a joined-up vision and strategy agreed by central government and local government. The new government should also consider greater devolution to Auckland Council. This isn’t about going to central government for handouts. What we’re asking for is a fair share of what Auckland generates, including tax revenue equivalent to the GST charged on Auckland rates,” says Mayor Brown.

“At the Governing Body, we are discussing the National Party’s election policies to repeal and replace the Three Waters legislation and remove the Auckland Regional Fuel Tax. We need to work through the implications for those policies with the new Government, because they could have a significant impact for our region.”

Options to be consulted on

The Mayor will propose consulting Aucklanders on genuine options, including doing more or less than the core proposal.

“After the mayoral proposal has gone to public consultation, it will be clear what matters most to Aucklanders and whether there is an appetite to spend more or less, or the same,” says Mayor Brown.

“We must take an open-minded and pragmatic approach – solving problems in a sensible way that suits the current conditions. I think the organisation and Aucklanders are ready now.”

Following public consultation and comprehensive deliberations, the 10-year Budget will be finalised and adopted in June 2024.

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