Council begins process of reducing $256m off budget
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.