TODAY's Budget (Annual Budget 2017/2018)

Again, thanks to all who contributed to the Annual Plan Budget process. The 2017/18 budget has been confirmed today and key points which may interest you are as follows;

Region wide impacts:

1.            2.5% rates rise ( lowest ward wide rise for us since amalgamation)

2.            Increase in Uniform Annual General Charge to $404 ( highest for us since amalgamation and the higher this is the lower our rates are, so it’s a positive )

3.            Another $200 million for infrastructure

4.            Targeted rate for accommodation providers to share the cost of visitor promotion with those who benefit the most

 

Orakei Ward impacts:

1.Funding to Maunga Authority for Mt Hobson $197,014This is the first budget which clearly identifiesfunding specifically for Mt Hobson ( Ohinerau) It’s for improving pedestrian access, repairs and replacement of signage, planting and vegetation control, and pest control

2.The Orakei Local Boardbudget was scheduled to be just over 2 million as per the LTP budget ( $2.189 million to be specific). I am pleased to advise this has been refreshed and confirmed to just over 7 million ( $7.074 million ) An increase of just under 5 million ( $4.885 million ).

A positive move to accelerate infrastructure investment

Auckland is desperately short of the infrastructure it needs to cope with current growth let alone investment for the future. When we look at options for delivering the substantial investment needed, we are hamstrung by our debt to revenue ratio.

In looking at our finances, I found we currently had $130 million invested in liquid stocks and bonds. Independent advice from Cameron Partners, noted it was unusual for an organization with the purposes of Auckland Council to hold such an asset. They also noted that the rationale for holding the investment was weak.

Councils Treasurer and General Manager of Financial Services agreed with the external advice and suggested to the Finance and Performance committee that the Diversified Financial Asset Portfolio ( DFAP)  be fully divested.

Doing so would allow the repayment of debt to reduce the risk of downgrading our Councils credit rating. Under the LTP the net debt to revenue ratio reaches 265% meaning little available capacity to undertake further capital investment (other than what’s already there) without breaching this ratio

A one notch downgrade is estimated to cost the Council .15%percent in higher interest costs, a bigger downgrade even more. With Councils current debt portfolio of $8 billion, this would result in an additional $12 million of expense per annum once existing debt is refinanced, more than offsetting the positive return from the fund.

The fund was also costing ratepayers $1.5 million per year to administer – and that wasn’t including staff time or costs.

With our population growing far greater than past predictions what is needed is a huge amount of further substantial infrastructure investment. Today at our Finance and Performance Meeting, we resolved to approve the full divestment of the fund, no later than 30th June 2018. This will enable us to reduce debt and accelerate infrastructure investment, particularly in the areas of transport and stormwater.

I was happy to move the recommendations as I saw them clearly as a positive step to reduce debt and create the opportunity to deliver more core council investment in the areas of transport and stormwater, we all so desperately need.

Annual Budget update

The past month has been the key month for Auckland Council’s annual budget decisions were made June 1st in a long but lively meeting.

In this process I have been sure to listen to the feedback that the people of Orakei have given me through the submission process and the two consultation events in the ward.

Some key points from the budget include;

1.       2.5% rates rise for residential ratepayers ( the lowest rates rise for our Ward rise since amalgamation).

2.       A rise in UAGC of 2.5% ( which lowers the proportion of the rate that is based on capital value)

3.       $30 million dollars of savings ( it’s worth noting that Council has found enduring annual savings of $224m per annum since amalgamation, but we still have more to find)

4.       Accommodation targeted rate to save the ratepayer having to fully fund tourist promotion

5.       Living wage was adopted in a refined form

 

There are obviously other key budget items which I’m happy to share with your Residents associations if requested and which I will put up on my website this month

Auckland Council increases support for access to sporting facilities

Earlier in May, I was part of the Environment and Community committee which voted to increase council’s support for community access to the ASB stadium via the East City Community Trust to $90,000 per annum, an increase of $10,000.

The same meeting also endorsed the continuing support for the Auckland Netball Centre in St Johns with a grant of $150,000 per year for community access and participation .

This spending ensures that the community has access to indoor sports facilities to fill the geographic gap where council does not have its own facilities available for public use.

Hyundai Marine Sports Centre ( RAYC site on the Landing)

I was honoured to participate in the sod turning for the soon to be built Hyundai Marine Sports Centre on April 12th on the site of the RAYC at the landing. This is a project that has taken a few years to get underway and I am pleased that the Orakei Local Board has been a committed supporter of this over the past six years. When it is completed it will be a great asset for the community and an example of how public funding can combine with business to create real wins for the community.

Making sure Elected members receive quality advice

It’s important that elected members receive all the information they need before they vote and/or make a decision. Quality of reports presented to me in the past have caused me to take a stance on trying to improve this. This month I have taken on the role to chair the Quality Advice Political Advisory Group. The title is a mouthful, but the work of this group is important. Auckland's elected representatives need accurate information to help form their decisions and this group is tasked with making sure that the organisation is providing top quality advice. At present external ratings rank Auckland Council as 3rd in New Zealand for quality advice and I want to see this rise to being the best in NZ.