As a council we are also required to look wider than our assets and consider our actions in terms of community, economic, cultural and environmental wellbeing. Our capital investment lever has the most impact on jobs and business activity in Auckland.
Under the 3.5 per cent general rates increase option the council proposes a $2.3 billion investment programme that we consider represents a significant lift on the investment level delivered over recent years, but does see many projects delayed or stretched out over a longer timeframe.
At this level, most existing contractual arrangements would still be able to be honoured but there would be noticeable impacts on service levels and the timeframes for achieving key council objectives. Some major projects that are not yet committed would be delayed and there would necessarily be less investment in renewal and safety programmes than previously planned.
In order to achieve a lower 2.5 per cent general rates increase around $65 million in further delays to capital projects would also be required.
Significant delays beyond this would likely not be possible without breaking contracts and accepting long-term risk to some of our critical assets and services.
Reductions in operating expenditure
- We are already planning substantial cuts to our back-office functions. Further savings will impact the services we deliver to Aucklanders.
- Under the 3.5 per cent rates increase option a package of $54 million of further operational expenditure reduction is needed, temporarily impacting some services we provide.
- Under the 2.5 per cent rates increase scenario, this will increase to $75 million with further impacts our community.
Significant savings have already been found, but we are still a long way from being able to balance next year’s budget and using debt to fund some operating costs will be unavoidable in the short-term. Additional operating cost reductions could help reduce this need to borrow.
We have already planned to make substantial cuts to our back-office functions. Further savings will impact the services we deliver to Aucklanders. However, given the expected temporary nature of the revenue pressures these service reductions may only need to be temporary.