Running costs turn into the killer
Grassroots community projects could be hit by tough new council funding models, warn local body politicians.
Kaipatiki Local Board chairwoman Kay McIntyre says Auckland Council’s allocation of capital project funding will tighten the noose around local board’s operational budgets within a few years.
That’s because the running costs for board-created Small Local Improvement Projects (SLIPS) like playgrounds will snowball, eating into board’s operational budgets, rendering them ‘ ‘ unworkable’’, McIntyre says.
Local board driven initiatives like Christmas parades could be cut as suc- cessive boards reap the consequences of inherited ‘‘asset based service spending’’ under council’s proposed Long Term Plan, McIntyre says.
North Shore councillor Chris Darby has defended the change saying the council has made a ‘‘huge effort to satisfy local boards’’.
‘ ‘ Effectively, [ Auckland Council’s] governing body has devolved more decisionmaking to local boards.’’
Upper Harbour Local Board chairman Brian Neeson says communities that choose targeted rates to get expensive projects like swimming pools built instead of waiting for the council will hurt.
Targeted rates for facilities would stay on rates ‘‘forever’’ and ‘‘never-ending’’ operating costs would eat further into local board budgets, Neeson says.
Meanwhile, service charges paid to the council which local boards have ‘‘no control over’’ further erode board budgets, Neeson says.
Maungakiekie- Tamaki Local Board chairman Simon Randall says about 10 per cent of a project’s cost needs to be spent each year on maintenance and depreciation.
‘‘That’s every consequential year, our local board has about a million dollars a year, after fees paid to the council we’re left with $700,000 to $800,000.
‘‘It might sound a lot to fund consequential opex out of, but that will be increasingly difficult,’’ Randall says.
‘‘If you say spend $100,000 on a project, there’s no immediate impact, but the moment you start using it, charges begin,’’ McIntyre says.
Changing the model would restore some fairness to the changes the council’s governing body approved earlier this year, she says.
An accountant, McIntyre wants the council to bundle the first three to four years of consequential opex costs with new SLIPS.
In return, the council should also drop the amount boards are permitted to spend on SLIPS from about $1 million annually to about $500,000, McIntyre suggests.
The draft Auckland Council Long Term Plan 2015-25 goes out for public consultation in January.