Coun­cil be­gins process of re­duc­ing $256m off bud­get

Auckland City Harbour News - - News - By Heather McCracken

Talks be­gan last week on slash­ing $256 mil­lion from Auck­land City Coun­cil’s bud­gets over the next three years.

Coun­cil­lors met last Tues­day for the first di­rec­tion set­ting meet­ing on the coun­cil’s new 10-year plan.

Ma­jor cuts will be needed in or­der to hold rates at the level of the coun­cil’s inflation, an elec­tion prom­ise from the ma­jor­ity Cit­i­zens & Ratepay­ers ticket.

A re­port pre­pared for the meet­ing showed un­der the cur­rent plan rates will rise by 12.8 per­cent next year, 16 per­cent the fol­low­ing year, and 12.6 per­cent in 2011-2012.

The coun­cil’s rate of inflation over the same years is es­ti­mated at 5 per­cent, 4.7 per­cent and 4.4 per­cent re­spec­tively.

Hold­ing rates at that level will mean cut­ting $256 mil­lion over three years from gross op­er­at­ing ex­pen­di­ture.

Ma­jor cap­i­tal projects in par­tic­u­lar are likely to come un­der scru­tiny.

A re­port by chief ex­ec­u­tive David Rankin says high spending on in­fra­struc­ture is push­ing rates up through debt ser­vic­ing, de­pre­ci­a­tion and the re­sult­ing op­er­at­ing ex­pen­di­ture.

He says in­ter­est costs alone are ex­pected to in­crease from $43m a year to more than $117m over the next three years.

The coun­cil will look at four ways of re­duc­ing rates: In­creas­ing non-rates rev­enue, be­ing more ef­fi­cient, cut­ting ser­vice lev­els and stop­ping some ac­tiv­i­ties and projects.

Coun­cil­lors were asked to es­tab­lish a set of goals and pri­or­i­ties at the meet­ing.

Spe­cific cut­backs won’t be dis­cussed un­til the next meet­ing on Novem­ber 18.

The draft plan will be de­vel­oped at a se­ries of meet­ings early next year, with pub­lic sub­mis­sions called for in April.

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