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Te Tahua Taungahuru Te Mahere Taungahuru 2018-2028
The 10-year Budget Long-term Plan 2018-2028

Volume 1: Overview

He Mihi

Tērā tō waka te hoea ake e koe i te moana o te Waitematā kia ū mai rā ki te ākau i Ōkahu.
Ki reira, ka mihi ake ai ki ngā maunga here kōrero,
ki ngā pari whakarongo tai,
ki ngā awa tuku kiri o ōna manawhenua, ōna mana ā-iwi taketake mai, tauiwi atu.
E koro mā, e kui mā i te wāhi ngaro, ko Tāmaki Makaurau tā koutou i whakarere iho ai, ki ngā reanga whakaheke,
ki ngā uri whakatupu - ki tō iti, ki tō rahi.
Tāmaki - makau a te rau, murau a te tini, wenerau a te mano. Kāhore tō rite i te ao.
Tō ahureinga titi rawa ki ngā pūmanawa o mātou kua whakakāinga ki roto i a koe.
Kua noho mai koe hei toka herenga i ō mātou manako katoa.
Kua ūhia nei mātou e koe ki te korowai o tō atawhai, ki te āhuru o tō awhi, ki te kuku rawa o tō manawa.
He mea tūturu tonu whakairihia, hei tāhuhu mō te rangi e tū iho nei, hei whāriki mō te papa e takoto ake nei.
Kia kōpakina mātou e koe ki raro i te whakamarumaru o āu manaakitanga.
E te marae whakatutū puehu o te mano whāioio, e rokohanga nei i ngā muna, te huna tonu i ō whāruarua
i ngā hua e taea te hauhake i ō māra kai, i ngā rawa e āhei te kekerihia i ō pūkoro. Te mihia nei koe e mātou.
Tāmaki Makaurau, ko koe me tō kotahi i te ao nei, nōku te māringanui kia mōhio ki a koe, kia miria e te kakara o
te hau pūangi e kawe nei i ō rongo.
Ka whītiki nei au i taku hope ki ngā pepehā o onamata, ki ōku tūmanako mō āpōpō me ōku whakaritenga kua
tutuki mō te rā nei.
Tāmaki Makaurau, tukuna tō wairua kia rere.

Let your canoe carry you across the waters of the Waitematā until you make landfall at Ōkahu.
There, to greet the mountains, repository of all that has been said of this place,
there to greet the cliffs that have heard the ebb and flow of the tides of time, and the rivers that cleansed the forebears
of all who came,
those born of this land and the newcomers among us all.
To all who have passed into realms unseen, Auckland is the legacy you leave to those who follow,
your descendants - the least, yet, greatest part of you all.
Auckland - beloved of hundreds, famed among the multitude, envy of thousands. You are unique in the world.
Your beauty is infused in the hearts and minds of those of us who call you home.
You remain the rock upon which our dreams are built.
You have cloaked us in your care, taken us into the safety of your embrace, to the very soul of your existence.
It is only right that you are held in high esteem, the solid ground on which all can stand. You bestow your benevolence
on us all.
The hive of industry you have become motivates many to delve the undiscovered secrets of your realm,
the fruits that can still be harvested from your food stores and the resources that lie fallow in your fields.
We thank you.
Auckland you stand alone in the world, it is my privilege to know you,
to be brushed by the gentle breeze that carries the fragrance of all that is you.
And so I gird myself with the promises of yesteryear, my hopes for tomorrow and my plans for today.

How this 10-year Budget 2018-2028 is arranged

Finding your way around the three volumes

Volume 1: An overview of our 10-year Budget

Part 1: Provides an introduction to our 10-year Budget including decisions made on the key issues which were consulted on. Our plan for the next 10 years includes a brief overview of the plans, strategies and budget that has been adopted by the Governing Body.
Part 2: Contains our prospective financial statements for 2018-2028 and other key financial information.
Part 3: Report from the Auditor General.
Part 4: Provides Supplementary information on how to contact the council, its structure and people. Glossary of terms and key word index.

Volume 2: Our detailed budgets, strategies and policies

Part 1: Our key strategies - including a Summary of The Auckland Plan 2050, discussion on Māori Identity and Wellbeing and Auckland's 30-year Infrastructure strategy and Financial strategy.
Part 2: Our Activities - key information on what services Auckland Council delivers, performance measures and budget.
Part 3: Our policies - Revenue and Financing policy, Funding impact statement (including the rating mechanism), Financial reporting and prudence benchmarks, Local board funding policy, Allocation of decision making responsibility for nonregulatory activities, Summary of Significance and Engagement policy and CCO Accountability policy.
Part 4: Summary of the Tūpuna Maunga Authority Operational Plan 2018/2019.
Part 5: Our Council-controlled organisations.
Part 6: Supplementary information - Glossary of terms and Key word index.

Volume 3: Local Board information and agreements

Part 1: Provides information on local boards, the development of local board plans and agreements and a summary of planned local board expenditure for 2018-2028.
Part 2: Contains specific information for each of the 21 local boards, including a local board agreement (outlining local activity initiatives and budgets for 2018/2019), and an introductory section that provides context for the agreement.
Part 3: Supplementary information - Glossary of terms and Key word index.

Rārangi kōrero
Contents

Volume 1: Overview

Message from the Mayor
Message from the Chief Executive Officer

Pae tuatahi: Ō mātou mahere
Part 1: Our plan
1.1 Auckland's challenges
1.2 The next 10 years

Pae tuarua: Ō Mātou tahua pūtea
Part 2: Our finances
2.1 Financial overview
2.2 Prospective financial statements and notes
2.3 Prospective consolidated funding impact statement

Pae tuatoru: Tā te kaitātari kaute
Part 3: Auditor's report (not available in the HTML version, available in the PDF or by request)

Pae tuawha: Pārongo tāpiri
Part 4: Supplementary information
4.1 How the organisation is structured
4.2 How to contact the council
4.3 Glossary of terms

Message from the Mayor

Auckland Council's 2018-2028 10-year Budget delivers $26.2 billion of investment into Auckland's infrastructure. The largest ever in the history of our city.

In striking this budget, we begin a decade of transformational change for Auckland that tackles the critical issues of transport congestion, housing affordability and protecting our environment.

These issues are the result of unprecedented population growth and historic underinvestment in Auckland's infrastructure. To protect our quality of life and to make Auckland a world class city, Council is acting decisively to invest to make Auckland a more exciting, efficient and inclusive place to live, work and play.

The Government and Council are together addressing congestion with a combined package of $28 billion of investment to transform our region's transport network. It will increase the provision of public transport, improve our road network and make it safer, expand cycle and walkways and tackle Auckland's growing congestion. Aucklanders will contribute our fair share in this expenditure through a regional fuel tax (RFT) at 10 cents per litre plus GST.

Building transport infrastructure is critical to supporting the delivery of more houses, unlocking greenfields developments and allowing for intensive housing development around transport hubs.

Many of Auckland's beaches, harbours, streams and aquifers have poor water quality. We had planned to fix the issues causing this problem over the next 30 years - now we're going to do it in 10 years. Some of this work will be funded by water and wastewater charges, and the rest ($452 million) by a water quality targeted rate.

A new natural environment targeted rate will enable us to spend $311 million to tackle the spread of Kauri dieback disease and the predators that are killing our native birds and trees. This work is critical to safeguard our natural heritage for our children and grandchildren.

As a coastal region we must adapt to climate change. An additional $90 million investment in our coastal assets and a further $40 million to address infrastructure repair work will enable us to better anticipate and respond to climate-related events.

Within the constraints of our resources, we also need to promote the innovation, diversity, inclusiveness, and cultural and recreational facilities that make Auckland a great city.

Funding of $120 million is available for the development of sports and recreation facilities. We are also increasing funding to Auckland's Art Gallery and supporting Aucklanders in our poorer communities to gain skills and access job opportunities through the expansion of the Southern Initiative into West Auckland.

This 10-year Budget will help deliver a world class Auckland while keeping rates low and reasonable. It also heralds a new level of transparency and accountability with targeted rates and the Regional Fuel Tax allowing Aucklanders to know exactly where their money is being spent. Ongoing Value for Money reviews are identifying cost savings and service improvements.

Auckland is a vibrant and dynamic region, and the coming decade will be exciting for our city. We are embarking on an investment programme at a level which has not been seen before in New Zealand. It is investment that will make our city a better place to live, that will allow us to grow while protecting our way of life and environment.

Phil Goff

Message from the Chief Executive

Against a backdrop of significant population growth, this budget strikes a balance between investment in critical infrastructure, keeping rate rises low and reasonable, and funding the council services Aucklanders rely on.

The regional fuel tax will support the improvements in transport that Tāmaki Makaurau needs. This means our people will be helping to deliver more public transport, better roads, cycleways and walkways, and better options for Aucklanders to get around.

The water targeted rate will support us to get the right systems in place to stop overflows and keep our waters clean. This is a big and complex job, but our people are up for the challenge so that Aucklanders can enjoy our beaches.

We also have a strong team who care about and are working hard to protect our native birds and trees, including kauri. The targeted natural environment rate will put the work programmes in place that we need to tackle the impacts of Kauri dieback, the management of pests and look after our natural heritage.

At the same time, we'll be continuing our efforts to ensure that we deliver our council services as efficiently and effectively as possible.

Last year we began a series of Value for Money reviews, looking at cost effectiveness and efficiency across the council whānau. So far we have completed reviews for four services. Departments from the council and council-controlled organisations are busy working together to put the recommended actions in place, ensuring that we are offering good value for ratepayers and residents.

We will continue to drive efficiency by becoming a more digital council. We're now halfway to our target of making 70 per cent of our most common transactions available online by 2019. Customers can go online to pay for rates, register dogs, apply for licenses and consents, and make bookings at our many regional parks. We have more services in the pipeline to digitise and make things smarter for our customers.

Our corporate property strategy has benefits of $117 million. This money will help us fund better locations for the public to interact with the council. Better workplaces, coupled with our efforts to improve culture and engagement in the council, will drive better working conditions for staff and boost productivity. Ultimately this will help us attract and keep the talented, passionate people we need to be a great council for Tāmaki Makaurau.

We are committed to building a high performing organisation that will deliver the 10-year Budget and essential council services to all Aucklanders and visitors alike.

Stephen Town

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Part 1: Our Plan

1.1 Auckland's Challenges

The recently revised Auckland Plan identified three key challenges facing Auckland. This 10-year Budget has focused on key aspects of each of these challenges and how the council can respond to them.

Key Challenge 1: Population growth and its implications

Our growth

Underpinning the challenges facing Auckland is the pace of growth that we have been experiencing for the last few years and expect to continue facing over the foreseeable future. Our growth has consistently exceeded forecasts and we expect to be a region of around two million people by 2028. That means the number of people in Auckland will grow by an amount equivalent to the size of the population of Tauranga every three years.

Growth presents us with many opportunities but also presents challenges with demand for new housing, increasing congestion on our roads and pressure on the natural environment.

In addition, there has been past underinvestment in key infrastructure such as transport, stormwater and some community facilities. The pressures of growth just exacerbate some of these existing problems.

Chart: Recent increase in Auckland’s population

Chart: Recent increase in Auckland’s population, table of the charted information follows
Table of the charted information
Measure 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Estimated total population as at June 1,373,000 1,390,400 1,405,500 1,421,700 1,439,600 1,459,600 1,476,500 1,493,200 1,526,900 1,569,900 1,614,500 1,657,200
Estimated annual increase in population for year to June  blank 17,400 15,100 16,200 17,900 20,000 16,900 16,700 33,700 43,000 44,600 42,700

Table of the charted information ends.

Chart: Auckland’s future population growth

Chart: Auckland’s future population growth, table of the charted information follows
Table of the charted information
Measure 2013 2018 2023 2028 2033 2038 2043
Medium projection (Feb 2015) 1,493,200 1,646,500 1,767,500 1,890,900 2,010,500 2,123,000 2,229,300
Medium projection (Feb 2017) 1,493,200 1,699,900 1,859,300 1,990,100 2,112,000 2,222,700 2,326,200

Table of the charted information ends.

Transport

The combination of rapid growth and a history of underinvestment in transport infrastructure, particularly public transport, means that Auckland's transport system does not meet our needs. Congestion costs the region $1 billion to $2 billion a year and other major transport challenges include:

  • poor travel options, especially in lower income areas
  • a near doubling of deaths and serious injuries on roads since 2012
  • the need to reduce the transport system's environmental impact
  • enabling and supporting a rapid acceleration in the rate of housing construction
  • the need for streets to play a growing role in creating vibrant and inclusive places.

Addressing these transport issues has been a major focus since the councils of Auckland were amalgamated in 2010. Progress has been made in some areas, for example public transport use has grown by around 50 per cent since Auckland Council was formed. However, congestion continues to grow, with up to 800 cars arriving on our roads every week.

These issues reduce our economic productivity and lower the quality of life for those with long and unreliable commutes. Without major new investment, the transport network will struggle to provide sufficient capacity and travel choice to address current issues, let alone keep pace with the 300,000 extra people projected to live in Auckland over the next decade.

The level of investment required is beyond our ability to address on our own, and within traditional funding mechanisms. We need to work with central government to align our transport investments and to find new ways of funding transport infrastructure.

Community cohesion

The rate and speed of Auckland's population growth is putting pressure on our communities. It is not just the rate of growth but the increasing diversity of our population which requires planning and response. There is an increased demand for community infrastructure but also differing types of provision because of an ageing population and the different ethnicities that now call Auckland home. Responding to this changing picture means ensuring our community facilities are fit for purpose going forward and providing a range of community-building initiatives at a local level.

Housing

A major concern to Aucklanders is housing supply. The building of new houses has not kept pace with the growing population resulting in a shortage of housing and escalating prices. Housing availability and affordability are difficult problems to solve. The council does not build houses. Our role is to:

  • enable development through our planning functions; such as the Unitary Plan
  • provide infrastructure such as (transport, water, community facilities) to support new housing areas and intensification of existing areas
  • work with central government, iwi and the private sector to support their building programmes
  • regenerate town centres to make them more attractive for development of new housing and businesses.

Infrastructure is a key enabler of housing development, but it is also expensive. While some of the cost can be recovered from developers, often this is long after we have built the infrastructure, and in the meantime, we borrow to cover that cost. We are nearing the limits of what we can sustainably borrow, but the demand to make land available for new housing continues to grow.

Key Challenge 2: Sharing prosperity with all Aucklanders

Many Aucklanders are prosperous and have high living standards, yet there are significant levels of socioeconomic deprivation, often in distinct geographic areas. Income, employment, health and education outcomes are different in various parts of Auckland, and there are distinct patterns across broad ethnic and age groups. In part this is due to unequal access to education and employment opportunities. Along with high and often unaffordable housing costs this is resulting in fewer Aucklanders being able to fully prosper. As Auckland continues to grow, we need to play our part in ensuring that all Aucklanders can benefit from the social and economic prosperity that growth brings and can participate in and enjoy community and civic life.

Māori are over represented in the areas of socioeconomic deprivation. Current data tells us that while socio-economic indicators for Māori are improving, Māori are not benefitting from Auckland's success in comparison to most other Aucklanders. In housing, Māori have higher rates of household crowding, low home ownership rates, and less stability due to high rents.

More than 50 per cent of Māori in Auckland are under the age of 25 and Māori are estimated to continue, over the next thirty years, to have a relatively young population. This means tamariki and rangatahi remain a priority focus. Income levels of Auckland's Māori are directly related to employment in lower paying jobs.

Key Challenge 3: Reducing environmental degradation

Environment

The latest State of the Environment (2015) report shows that while Auckland's air quality has improved significantly, marine and freshwater sites have been polluted by sediments and contaminants arising from development, building and industrial activities.

Our ageing sewerage and stormwater systems overflow after heavy rainfall, depositing contaminants into our natural waterways. Many of our beaches are unsafe for swimming after these storm events, with some being permanently closed.

In addition, approximately two-thirds of Auckland's local native species are under threat of extinction. Without substantial increases in investment in this area we estimate:

  • the risk of Kauri dieback spreading is over 80 per cent
  • only 30 per cent of significant ecological sites in council parks will have adequate pest control
  • only 20 per cent of rural Auckland will have adequate possum control
  • there is a high risk of marine pests establishing with risks to ecosystems and costs to aquatic industries.

Auckland's population growth places increasing pressure on the environment. The development of 15,000 hectares of future urban land identified in the Unitary Plan could cause further problems if not managed carefully. Increasing intensification in the existing urban area could exceed the capacity of our current infrastructure unless we invest in keeping up with the growth.

Climate change

Climate change is a global problem that we are experiencing increasingly at a local level. The most recent climate change projections for Auckland indicate warming temperatures, less annual rainfall in the north but more in the south and stronger winds. More frequent, and severe, weather events are expected. Some of our infrastructure may no longer be adequate to deal with more rainfall, or a warmer climate. Sea-level rise will increase risks for assets on the coast from inundation and erosion.

We are already seeing increasing problems with coastal assets, such as sea walls, being severely damaged during storms and roads such as Tāmaki Drive are experiencing inundation on a more regular basis.

Dealing with these issues takes careful planning and a much better understanding of our existing assets - which should be renewed, which should be replaced with more appropriate solutions and which may no longer be needed. It will also require more investment than we have currently been making to maintain these assets.

The Financial Challenge for Auckland Council

All of the challenges outlined above require additional investment to address them. Not all of these costs fall on the council but many of them do. Delivering this new investment while maintaining services such as parks, libraries and waste collection presents a significant financial challenge; balancing the need for investment with:

  • acceptable costs to the community
  • prudent management of debt and sustainable financial management.

We are forecasting about $26 billion of capital investment over the next 10 years and operating costs of around $4 billion to $5.6 billion each year.

We fund our expenditure from different sources depending on the nature of the cost. Our best known source of funding is general rates, charged to homes and businesses. However, more than half of our operating revenue comes from other sources such as water charges, public transport fares, consenting fees, central government subsidies and contributions from developers. We also borrow, when appropriate, for much of our investment in infrastructure roads, footpaths, pipes, and libraries. These are long life assets and by using borrowings, we spread the cost over the generations that use them.

The sustainable management of debt presents a major challenge. Council's approach to manage this challenge is to maintain an AA credit rating from Standard and Poor's (or similar rating from an independent rating agency). To ensure that debt levels continue to remain prudent and sustainable, the council has set a prudential limit of group debt being less than 270 per cent of group revenue. Breaching this ratio is likely to increase our interest costs.

We believe there is no public appetite for major rate increases and if we want to make progress with some of these big challenges that face us we need to find other ways of raising funds.

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1.2 The next 10 years

Over the years since the formation of Auckland Council we have been having conversations with Aucklanders about what they want for their city, both in the long term and in the next few years. These conversations have informed the recent revision of the Auckland Plan and the development of our 10-year Budget (LTP).

In this 10-year Budget we are prioritising our new investment to meet the most pressing needs of Auckland and looking at new ways to fund that investment.

Transport investment and the Regional Fuel Tax

As highlighted earlier in this document, transport is one of the top concerns of Aucklanders. The increasing congestion on our roads reduces our economic productivity (estimates range between $1 billion to $2 billion) and lowers the quality of life for those with long and unreliable commutes. Road safety also continues to deteriorate with a 65 per cent increase in road deaths and serious injuries in Auckland since 2013.

Earlier this year the council and the government jointly released the revised Auckland Transport Alignment Project (ATAP) which sets out key outcomes, focus areas and a package of projects and programmes to achieve those outcomes. This means that both the government's transport investment and the council's are aligned to achieve the best outcomes for Auckland.

In order to fund our additional contribution, we have decided to use a Regional Fuel Tax of 10 cents per litre (plus GST). The government has passed legislation enabling councils to do this. The Regional Fuel Tax will come into effect from 1 July 2018. It will raise revenue of $1.5 billion over 10 years. This will enable us to deliver a transport programme of $12 billion over the 10 years which will include $4.3 billion of transport projects supported by the Regional Fuel Tax ($1.5 billion plus subsidies from the New Zealand Transport Agency and developer contributions). When added to the rest of government funded projects in ATAP Auckland will have $28 billion of investment in transport over the next 10 years.

The key projects that are supported by the Regional Fuel Tax and will be delivered by Auckland Transport over the next 10 years are:

Project $ millionAdditional capital investment: TotalAdditional capital investment: RFT contributionAdditional operating cost: Total Additional operating cost: RFT contribution
1 Bus priority improvements266100 72 35
2 City Centre bus infrastructure163 62  
3 Improving Airport Access68 26  
4 Eastern Busway (formerly AMETI)743 193 17 8
5 Park and Rides63 24  
6 Electric trains and stabling396 150 129 63
7 Downtown ferry redevelopment73 28  
8 Road Safety552 210 30 15
9 Active transport 342 112  
10 Penlink200 66  
11 Mill Road corridor508 102  
12 Road corridor improvements302 87  
13 Network Capacity and Performance improvements296 99  
14 Growth related transport infrastructure300 126  
Total 4,2721,385248 121

This programme will enable a significant step in transforming Auckland's transport system by achieving:

  • improved road safety through supporting a substantial reduction in deaths and serious injuries
  • increased availability and use of public transport, which enables more efficient use of existing infrastructure, provides travel options free from congestion and supports improved economic, environmental and social outcomes from less pollution, and from people and business traffic spending less time in congestion
  • more active transport options (walking and cycling) with resultant health benefits and a positive impact on congestion
  • improving access to employment areas which will enable improved economic and social outcomes
  • enabling growth and housing development to address the current shortfall in housing stock.

Water infrastructure

Watercare Services Limited, a Council Controlled Organisation (CCO), is responsible for providing and maintaining the drinking water (water supply) network and the sewerage system (wastewater network). Watercare is funded from user charges for water and wastewater. Stormwater, the network that deals with rainwater from urban areas, such as roads is managed from within the council and is funded by rates and borrowings.

The water and wastewater networks are mostly in good shape and are being developed to cope with the growth of Auckland. However, much of the stormwater network is ageing and does not have sufficient capacity for the growth that is happening. In some areas there are still combined stormwater and wastewater networks. It is these issues that cause major problems in heavy rainfall with sewage and other contaminants polluting our natural waterways.

We did have a programme to fix these issues over the next 30 years but this will now be accelerated and addressed over the next 10 years. This programme will deliver:

Project Outcomes
Stormwater upgrades and wastewater/stormwater separation in theWestern Isthmus
  • reduces overflows into the Waitematā and Manukau harbours
  • beaches from Meola Reef to the Viaduct will be swimmable
  • reduction in intermittent beach closures
  • rehabilitation of Western Isthmus streams
  • reduces demand on the waste water network from stormwater, allowing greater housing intensification in the Western Isthmus catchments
Infrastructure for stormwater contaminant removal across the region
  • reduction of sediment into the Kaipara Harbour
  • reduction in stormwater contaminants across the region
Rehabilitation of urban and rural streams
  • improves the ecological health of the streams and reduces flow of contaminants into harbours
  • enables urban development in areas such as Oamaru creek in East Tamaki
  • stabilises areas of high stream erosion, reducing sedimentation in the harbours and protecting property and infrastructure
Introduction of a proactive regional septic tank monitoring programme
  • develop a regional database of onsite systems, their design parameters and maintenance records
  • first step in identifying the individual properties contributing to the degradation of beaches and waterways, such as at Piha, Bethells Beach, and Little Oneroa on Waiheke

Some of this work will be funded from Watercare's water and wastewater charges. These were already projected to increase by 2.5 per cent per year for water supply and 3.3 per cent per year for wastewater. This increase will be sufficient to cover Watercare's contribution to the programme.

To pay for the balance ($452 million) we have decided to implement a targeted rate, based on property value. This will cost the average residential ratepayer $66 per year, and the average business ratepayer $308 per year.

Housing and development

The council's key role in housing is as an enabler. The Unitary Plan, which was adopted in 2016, sets out where development can occur. We also have a role in enabling development by providing infrastructure in a timely way. Much of this expenditure is eventually recovered from developers through developer contributions. However, it does require upfront financing, and the council's ability to borrow sustainably is now limited.

To address this we have a number of actions underway:

  • the Regional Fuel Tax enables $300 million over 10 years as "seed funding" for transport projects in new development areas
  • we are working with Crown Infrastructure Partners to find ways of funding some of the major infrastructure investments required to support growth
  • investigation of targeted rates, for specific developments, to fund the infrastructure for that development.

We also have a programme, through Panuku Development Auckland (a CCO), to "Transform" or "Unlock" a number of centres around Auckland. Working with the private sector in these locations will enable new housing and business opportunities. This work will be funded through the development and sale of property within each development area.

The city centre will have its development programme accelerated to create a more family, pedestrian and environmentally friendly location, with timing focused on the America's Cup and APEC, due to be held in 2021.

The Downtown programme delivers a connected and accessible waterfront, prepares for growth of cruise and ferry services and supports activation of Queens Wharf. The total forecast cost of this programme is $430 million.

Our contribution to the America's Cup is also included in the 10-year Budget. This is $57 million of capital expenditure and $41 million of operating expenditure (excluding government contributions).

Other infrastructure

Coastal assets and climate change

The effects of climate change are increasingly being felt in storm damage to coastal assets and more frequent landslips across the region. We are implementing a programme to review all of our coastal assets and develop an asset management plan which will enable us to prioritise funding for the renewal of these assets. $1 million is provided in the first two years of the budget to prepare the plan and $10 million per year for the first three years to renew these assets. $79 million is provided for years four to 10 subject to the completion of the asset management plan.

We are also providing an additional $2 million per year for capital works to non-coastal assets and a $20 million response fund for reactive storm damage works.

Parks, recreation and community assets

A key part of our role, and one that is valued at a local level, is the provision of sport, recreational and community facilities. In addition to the existing programme to renew, upgrade and build new facilities we are providing funding in this budget to partner with community groups on increasing provision of indoor and outdoor sports facilities. This contestable fund of $120 million will enable us to leverage external funding to build these facilities to meet the needs of our growing population and their changing preferences. We will also be continuing to develop our network of swimming pools, recreation and leisure centres ($152 million).

As part of this 10-year Budget, each of our 21 Local Boards has identified a project that they believe to be the most important for their local community. Some of these projects are transport related and are therefore funded through the transport budget. Others are funded through existing regional budgets, but the remainder ($170 million) are projects focused on local communities. These projects include major park developments, indoor court facilities, town centre/ precinct developments, beach erosion works and sustainability initiatives.

Protecting our environment

Many of the infrastructure projects already described will help improve our environment. A significant proportion of the transport investment is in public transport. Getting people out of their private car and onto a bus, ferry or train reduces vehicle emissions which has a positive benefit to air quality and our carbon footprint. Similarly, the more people on public transport the less congestion there is which means less travel time and less vehicle emissions.

The investment in the water quality project (described above) has direct environmental benefit for fresh water and marine ecosystems.

In addition, we are implementing an increased programme of environmental initiatives to address the spread of pests, weeds and diseases that are threatening many of our native species.

Activity Programmes Split of additional funding
Pest controlManagement of pest plants and animals, including on parks, regional programmes, spread to islands, freshwater40% ($124.4m)
Islands (Kawau, Waiheke, Aotea)Pest eradication - Waiheke and Kawau multi-species6% ($18.7m)
Kauri Research, community engagement, hygiene stations22% ($68.4m)
Kauri Capex track upgrades, installation of vehicle wash downs14% ($43.5m) 
Marine biosecurity Marine Biosecurity pathway management and response1% ($3.1m)
Grant fundingRegional Ecological and Natural Heritage fund to support community action4% ($12.4m)
Pest Free AucklandCommunity engagement programme to support trapping, data management, grants, monitoring and reporting9% ($28m)
Pest Free AucklandCAPEX - Traps, data systems, telemetry1% ($3.1m)
Marine ecologyHabitats - survey and evaluation1% ($3.1m)
Marine ecologySeabirds - implement monitoring and restoration1% ($3.1m)

These projects will make a significant difference in a number of key areas. We expect to be able to reduce the risk of Kauri dieback disease spreading, from 80 per cent to 15 to 25 per cent. The number of significant ecological sites within council parks that have adequate control of pests and weeds will more than double, rural possum control will also be significantly increased.

To pay for this programme we are introducing a targeted rate which will enable $311 million investment over the 10 years. This rate will be set based on property value but for the average residential ratepayer will cost $47 per year and for the average business ratepayer $219 per year.

Another key initiative that has been underway for some time but takes another step forward in this 10-year Budget is the Waste Management and Minimisation Plan. We already offer kerbside recycling and inorganic collections across the Auckland region, which reduce the amount of waste going to landfill.

The next step in this programme is the introduction of food scrap collections across the urban area. This service is expected to divert approximately 50,000 tonnes per year from landfill which equates to approximately 21 per cent of kerbside waste. Alongside the rollout of this programme, user pays will be implemented for the remaining parts of Auckland that do not currently operate this way (the former Auckland and Manukau areas).

Other projects and programmes

The 10-year Budget has made provision for a range of other new, or increased, projects or programmes which support the community, many of them by working with community based partners. Some examples are:

  • additional funding for co-governance entities - Tūpuna Maunga Authority ($16.8 million capital and $6.7 million operating), Ngāti Whātua Ōrākei Reserves Board ($7.7 million capital and $6.6 million operating), Te Poari o Kaipātiki ki Kaipara ($8.7 million capital and $2.8 million operating)
  • additional funding ($4.3 million) of the contestable grant funds for arts and culture programmes, community development and safety programmes, and regional events. This brings the total amount of these funds to $20 million over the 10 years
  • additional capital funding for Surf Lifesaving Northern Region for the development or renewal of facilities at Karioatahi, North Piha and Orewa ($3.7 million)
  • a capital grant to the Auckland Marine Rescue Centre Trust for urgent repair and renewal of their building ($2 million)
  • operating grants to - the Auckland City Mission ($475,000), Māngere Mountain Education Trust ($204,000), Hibiscus Youth Council Centre ($100,000).

Another partnership project follows the success of the place based programme in the south of Auckland (the Southern Initiative). This programme is being extended to the western part of Auckland with funding of $500,000 per year. This programme works with central government departments and community groups to address some of the social and economic challenges that these communities face.

Some additional funding has also gone into regional facilities such as Auckland Zoo (for renewals and animal acquisition) and the Art Gallery (for operating costs).

Māori

The council runs a programme, across the council group, which focuses on achieving improved outcomes for Māori - Te Toa Takitini. The Independent Māori Statutory Board has identified areas, for this 10-year Budget, where additional funding should be applied. These areas focus on improving visibility and support for Māori identity, relationship agreements with the 19 iwi of Tāmaki Makaurau, support for Māori economic development and infrastructure development for sites of cultural significance. This will bring the total budget for Te Toa Takitini to $150 million over the 10 years.

Financial impacts
Capital Programme

The additional investment described in the sections above, when added to the existing projects and programmes in the base budget results in a capital investment of about $26 billion (including our funding of CRL Ltd and investment made by Crown Infrastructure Partners) over the next 10 years.

The capital programme includes $12 billion of transport infrastructure investment and $7.1 billion of water infrastructure. See the chart below:

This level of spend would result in council debt growing by $4.8 billion over the next 10 years, from $8.3 billion in June 2018 to $13.1 billion by June 2028. This level of debt still enables us to remain within our prudential borrowing ratios, particularly in respect of our target to keep borrowings at a level not exceeding 265 per cent of our revenue. To maintain our credit rating with Standard and Poors the limit is 270 per cent.

Chart: Capital investment for Auckland

Chart: Capital investment for Auckland, table of the charted information follows
Table of the charted information
$million Annual Plan
2017/18
10-year Budget
2018/19
10-year Budget
2019/20
10-year Budget
2020/21
10-year Budget
2021/22
10-year Budget
2022/23
10-year Budget
2023/24
10-year Budget
2024/25
10-year Budget
2025/26
10-year Budget
2026/27
10-year Budget
2027/28
Other council assets 711 838 597 485 501 635 642 736 1,142 809 764
Transport infrastructure 844 1,025 1,217 1,290 1,300 1,219 1,197 1,147 1,017 1,284 1,270
Water infrastructure 462 641 695 739 796 734 842 870 552 598 617
 Total 2,017 2,504 2,510 2,515 2,597 2,587 2,681 2,753 2,711 2,691 2,650

Table of the charted information ends.

Chart: Debt to revenue ratio

Chart: Debt to revenue ratio, table of the charted information follows
Table of the charted information
$million Annual Plan
2017/18
10-year Budget
2018/19
10-year Budget
2019/20
10-year Budget
2020/21
10-year Budget
2021/22
10-year Budget
2022/23
10-year Budget
2023/24
10-year Budget
2024/25
10-year Budget
2025/26
10-year Budget
2026/27
10-year Budget
2027/28
Capex delivered for Auckland 2,017 2,504 2,510 2,515 2,597 2,587 2,681 2,753 2,711 2,691 2,650
Debt limit 270% 270% 270% 270% 270% 270% 270% 270% 270% 270% 270%
Internal ceiling 265% 265% 265% 265% 265% 265% 265% 265% 265% 265% 265%
Debt to revenue ratio 244% 254% 260% 264% 263% 264% 264% 259% 258% 252% 243%

Table of the charted information ends.

Operating costs

Operating costs cover provision of day to day services such as waste collection, mowing parks, maintaining our roads, footpaths, water and stormwater pipes, environmental protection, running our libraries, swimming pools and other community facilities. They also include interest and depreciation which are driven by our capital programme. In this 10-year Budget operating costs will move from $4 billion in 2018/19 to $5.6 billion in 2027/28. These costs are funded from a variety of sources including general rates, targeted rates (for specific projects and programmes), user charges and government subsidies.

Average general rate increases have been set at 2.5 per cent per year for the first two years of the 10-year Budget. The average general rate increases for the remaining years are 3.5 per cent per year.

New targeted rates have been introduced (as described earlier in this section) to fund the accelerated water quality programme and the additional investment in protecting our environment [1].

The Regional Fuel Tax is a new funding source and is specifically dedicated to new transport projects and is matched by a lift in funding from the New Zealand Transport Agency (represented by government subsidies in the chart).

Chart: Council's sources of operating funding

Chart: Council's sources of operating funding, table of the charted information follows
Table of the charted information
$million Annual Plan
2017/18
10-year Budget
2018/19
10-year Budget
2019/20
10-year Budget
2020/21
10-year Budget
2021/22
10-year Budget
2022/23
10-year Budget
2023/24
10-year Budget
2024/25
10-year Budget
2025/26
10-year Budget
2026/27
10-year Budget
2027/28
General rates 1,517 1,588 1,660 1,752 1,849 1,950 2,056 2,168 2,286 2,409 2,538
Targeted rates 198 213 224 220 227 232 237 241 245 250 255
Fees and charges 1,256 1,348 1,424 1,530 1,594 1,657 1,725 1,789 1,854 1,927 2,001
Regional Fuel Tax 0 150 150 150 150 150 150 150 150 150 150
Government subsidies 274 287 297 306 314 321 329 336 343 349 356
Other revenue 357 351 364 360 377 394 384 403 385 395 403
 Total 3,601 3,937 4,119 4,318 4,510 4,704 4,881 5,086 5,262 5,480 5,704

Table of the charted information ends.

Maximising value

To manage the pressure on our costs we focus on delivering our services in the most efficient manner, to ensure we get the best value from every dollar we collect. Ongoing efficiency initiatives include improved business processes, better use of technology and better procurement and tendering processes. Through this we will aim to control the growth in our core operating expenditure.

Additionally, in this 10-year Budget we have decided to disestablish the CCO, Auckland Council Investments Limited, absorbing their functions into the council and making a saving of approximately $800,000 per year.

We also continue to review our non-strategic assets with a view to releasing funding for re-investment through sale of those assets.

Our total budget and activities

The following chart sets out the total budget for the next 10 years by each of our key activity areas and also shows how each area is funded.

10-year Budget at a glance

Key areas of spendCapital spend
2018-28
Operating spend
2018-28
How operating costs are fundedRates value
per $100
Transport$12.0b$17.3bOther, including fees and charges: 53%
Rates: 47%
$33
Water, wastewater and stormwater$7.1b$8.5bOther, including fees and charges: 80%
Rates: 20%
$8
Parks and community$3.7b$8.0bOther, including fees and charges: 11%
Rates: 89%
$30
Centres development$1.3b$1.7bOther, including fees and charges: 42%
Rates: 58%
$5
Economic and cultural development$0.4b$2.3bOther, including fees and charges: 37%
Rates: 63%
$7
Environmental management and regulation$0.1b$4.8bOther, including fees and charges: 52%
Rates: 48%
$11
Other$1.6b$5.3bOther, including fees and charges: 73%
Rates: 27%
$6
Total $26.2b$47.9b  

 

What will be deliveredKey performance indicators
  • Building and maintaining all local and main arterial roads
  • Provision of public transport services - trains, bus and ferries
  • Building and maintaining footpaths, cyclepaths, bridges, carparks culverts etc
  • Road safety, education and enforcement
  • Major infrastructure projects, including City Rail Link and Eastern Busway
  • Implementation of the Regional Fuel Tax will enable an additional $4.3 billion of transport projects focused on increased public transport provision, improved road safety, expanded walking and cycling facilities, road corridor improvements and supporting growth areas
  • Over 10-years increase public transport boardings by 53 million trips to 149 million trips annually, maintain punctuality at 95% and customer satisfaction at 85%
  • Improve the productivity of key arterial roads in the morning peak by 14% by 2028
  • Ensure at least 80% of our urban roads meet maintenance standards in terms of ride quality
  • Grow the number of cycling trips on Auckland Transport's designated routes from 3.6 million to 5.7 million by 2028
  • Improving the quality of water in streams and harbours.
  • Building and maintaining the network of pipes, dams, treatment plants, pumps required to maintain a high standard of drinking water and the safe discharge of wastewater and stormwater
  • The delivery of major projects such as the 13-kilometre Central Interceptor wastewater project and wastewater/stormwater separation in the Western Isthmus
  • Infrastructure for stormwater contaminant removal across the region
  • Maintain 100% compliance with Drinking-water Standards for New Zealand
  • Ensure less than 10 wastewater system overflows per 1000 connections in dry weather conditions
  • Ensure no more than 1 in 1000 properties connected to our stormwater system is flooded per year
  • Increase the proportion of time beaches are suitable for contact recreation during swimming season from 77% to 87% by 2028
  • Maintaining the network of libraries, community facilities, swimming pools and recreation centres
  • Arts and cultural facilities, activities and community events
  • Local community projects including major park developments, indoor court facilities, town centre/precinct developments, beach erosion works and sustainability initiatives.
  • More investment in areas such as the development of sports and recreation facilities and coastal assets
  • Supporting Tūpuna Maunga o Tāmaki Makaurau Authority to protect and restore the maunga
  • Ensure the overall satisfaction with our local and regional parks and sportfields is above 70% and they continue to have a high level of use
  • Maintain the percentage of customers satisfied with libraries at 85%
  • Improve the number of participants at arts and community facilities to 6.1 million
  • Attendance of 62,500 per annum at council-led community events
  • New housing and business opportunities through the "Transform" and "Unlock" of a number of centres around Auckland
  • The city centre development programme, including accelerating the downtown works to align with major events in the city
  • Infrastructure to support the 36th America's Cup
  • Creating a vibrant Waterfront that attracts over 80% of Aucklanders to the Waterfront each year by 2028
  • Ensure 80% of the City Centre Targeted Rate programme is delivered on time and within budget
  • Managing major attractions, venues and sports stadiums
  • Major renewals across key facilities such as the Auckland Zoo and Aotea Centre
  • $20 million additional funding to support the Auckland Art Gallery
  • Growing the value of Auckland's visitor economy
  • Supporting the creation of more high value jobs, businesses and investment
  • Grow visitors to Regional Facilities Auckland's venues from 3.5 million to 4 million visitors by 2028
  • Increase major events and business events contribution from $49 million to $70 million towards the regional GDP by 2028
  • Protecting biodiversity with an additional $311 million to tackle the spread of Kauri dieback disease and the predators that are killing our native birds and trees
  • Waste collection, including recycling and reducing waste to landfill
  • Undertaking regulatory activities such as resource and building consents, dog control, food licensing and swimming pool inspections
  • 85% of kauri areas on council land that have active management in place for kauri dieback disease
  • Increase the percentage of threatened plants and animals under active management from 38% to 68% by 2028
  • Increase the number of resource recovery facilities to 12 by 2028
  • Decrease the domestic kerbside refuse from 150kg to 110kg per person per year by 2028
  • Process 100% of building and non-notified resource consents within 20 statutory working days
  • Mayor, councillor and local board support and meeting processes
  • Corporate functions such as finance, legal, communications and human resources
  • Auckland Emergency Management which proactively manages civil defence, hazards and crisis management
  • Ownership of Ports of Auckland
  • Grants to Auckland War Memorial Museum, MoTAT and the Auckland Regional Facilities and Amenities
  • Maintaining our annual growth in core operating expenditure under 3.5% over the 10-years
  • Value for Money reviews, looking at cost effectiveness and efficiency across the council
  • Ensuring over 65% of Aucklanders are prepared for an emergency and 75% of Aucklanders have a good understanding of the emergencies that could occur
  • At least 40% of eligible voters take part in local elections

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2.0 Our finances

2.1 Financial overview

Introduction

This section provides a high-level overview of our key financial information and explains how we fund our activities. This should be read in conjunction with the Prospective financial statements in Part 2.2 of this volume, the financial information for individual groups of activities in volume 2 (Part 2) and the Revenue and Financing policy in volume 2 (Part 3.1) of this plan.

Key financial parameters for 2018-2028

($ million)

2018/19

2019/20

2020/21

2021/22

2022/23

2023/24

2024/25

2025/26

2026/27

2027/28

Total

Total capital expenditure

2,178

2,168

2,115

2,149

2,213

2,572

2,696

2,677

2,631

2,650

24,049

Total operating expenditure

4,015

4,170

4,347

4,522

4,687

4,852

5,033

5,213

5,404

5,610

47,853

 

 

 

 

 

 

 

 

 

 

 

 

Rates revenue

1,797

1,878

1,965

2,068

2,174

2,285

2,401

2,524

2,652

2,786

 

Average general rates increase

2.5%

2.5%

3.5%

3.5%

3.5%

3.5%

3.5%

3.5%

3.5%

3.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

51,333

54,190

58,662

60,262

63,039

67,278

68,887

71,737

75,788

77,214

 

Total borrowing

9,241

9,945

10,657

11,142

11,685

12,135

12,440

12,847

13,044

13,097

 

Total equity

38,474

40,641

44,229

45,304

47,449

50,887

52,091

54,490

58,084

59,386

 

Debt to revenue ratio

254%

260%

264%

263%

264%

264%

259%

258%

252%

243%

 

Capital investment and debt levels

Capital expenditure is for purchasing, building, replacing or developing the city's assets (for example roads, libraries, parks and sports fields). The assets of the Auckland Council group are expected to grow from $51.3 billion to $77.2 billion over the period of this plan.

Over the next ten years we plan to invest $15.9 billion in new and improved assets for Auckland. Combined with $8.1 billion to restore and replace existing assets, our total capital expenditure programme for 2018-2028 is $24 billion. In addition City Rail Link Limited and Crown Infrastructure Partners are expected to incur a further $2 billion dollars of capital expenditure over this period. Therefore the total capital investment for Auckland over the next 10 years is $26 billion.  

The following table shows how we plan to fund our capital expenditure and other capital outflows over the course of the 10-year Budget 2018-2028.

Capital expenditure and other outflows
2018/2019 - 2027/2028

$ billion

Growth

7.2

Service level improvement

8.7

Renewals

8.1

Weathertightness claims

0.3

Other

1.3

Total

25.6

 

Funding sources
2018/2019 - 2024/2028
$ billion
Capital subsidies

5.1

Development contributions

2.9

Asset sales

0.8

Operating cash surplus

12.4

Borrowings

4.4

Total

25.6

Operating expenditure and revenue sources

Operating expenditure covers the council's day-to-day operations and services, from collecting rubbish to maintaining parks and issuing building consents. It includes costs related to the capital expenditure programme such as interest, maintenance and depreciation.

It is forecast that the Auckland Council group will spend $48 billion in operating expenditure to support service delivery over the next 10 years, of which $4 billion is budgeted for 2018/2019.

The $48 billion of operating revenue sources includes a surplus of $12.4 billion to fund capital expenditure.

Operating expenditure
2018/2019 - 2027/2028

$ billion

Staff

10.1

Depreciation and amortisation

12.2

Interest

6.1

Other

19.6

Total

48.0

 

Revenue sources
2018/2019 - 2027/2028
$ billion
Rates

22.6

Fees and user charges

16.8

Subsidies and grants

3.2

Other

5.4

Total

48.0

> Back to contents list

2.2 Prospective financial statements

Prospective statement of comprehensive revenue and expenditure

Auckland Council group consolidated

$000

Financial year ending 30 June

Annual Plan 2017/18

LTP 2018/19

LTP 2019/20

LTP 2020/21

LTP 2021/22

LTP 2022/23

LTP 2023/24

LTP 2024/25

LTP 2025/26

LTP 2026/27

LTP 2027/28

Revenue

 

          

Rates

1,710,004

1,796,730

1,877,746

1,965,237

2,067,667

2,174,155

2,285,295

2,401,016

2,523,783

2,652,208

2,786,186

Fees and user charges

1,255,681

1,347,987

1,424,281

1,529,558

1,593,906

1,656,939

1,725,020

1,788,540

1,854,390

1,926,710

2,001,497

Grants and subsidies

676,788

698,840

784,015

781,007

784,766

752,055

881,436

897,167

854,224

929,676

987,602

Development and financial contributions

214,359

204,492

288,657

306,698

297,514

301,301

301,301

301,301

301,301

295,771

293,223

Other revenue

277,405

417,624

426,073

430,473

443,823

446,083

450,246

453,856

457,313

459,399

472,281

Vested assets

201,594

284,486

269,609

375,122

364,322

319,355

395,611

352,962

327,878

318,834

330,923

Finance revenue

8,171

12,698

12,998

12,967

12,862

12,689

12,625

12,609

12,680

12,694

12,699

Total revenue

4,344,002

4,762,857

5,083,379

5,401,062

5,564,860

5,662,577

6,051,534

6,207,451

6,331,569

6,595,292

6,884,411

 

 

          

Expenditure

 

          

Employee benefits

864,197

905,289

927,418

950,505

971,516

994,003

1,019,292

1,041,672

1,065,150

1,088,568

1,113,120

Depreciation and amortisation

924,899

953,461

999,043

1,037,578

1,107,180

1,164,969

1,214,285

1,297,129

1,371,134

1,452,113

1,554,259

Grants, contributions and sponsorship

134,426

141,323

133,325

133,743

139,933

140,306

141,427

142,565

143,605

144,666

145,703

Other operating expenses

1,418,551

1,540,448

1,594,332

1,659,706

1,705,914

1,776,416

1,845,582

1,909,206

1,972,628

2,042,700

2,111,956

Finance costs

464,802

473,461

517,484

565,169

596,004

612,335

630,917

643,250

660,413

675,750

685,607

Total expenditure

3,806,875

4,013,982

4,171,602

4,346,701

4,520,547

4,688,029

4,851,503

5,033,822

5,212,930

5,403,797

5,610,645

 

 

          

Operating surplus

537,127

748,875

911,777

1,054,361

1,044,313

974,548

1,200,031

1,173,629

1,118,639

1,191,495

1,273,766

 

 

          

Share of surplus in associates and joint ventures

61,449

67,415

67,968

69,700

72,287

69,718

68,663

70,629

72,848

75,093

77,444

 

 

          

Surplus before income tax

598,576

816,290

979,745

1,124,061

1,116,600

1,044,266

1,268,694

1,244,258

1,191,487

1,266,588

1,351,210

 

 

          

Income tax expense

30,825

34,643

38,680

40,264

41,522

44,181

46,708

40,207

42,036

45,585

49,185

 

 

          

Surplus after income tax

567,751

781,647

941,065

1,083,797

1,075,078

1,000,085

1,221,986

1,204,051

1,149,451

1,221,003

1,302,025

 

 

 

 

 

 

 

 

 

 

 

 

Surplus after income tax is attributable to:

 

          

Ratepayers of Auckland Council

567,751

781,647

941,065

1,083,797

1,075,078

1,000,085

1,221,986

1,204,051

1,149,451

1,221,003

1,302,025

 

 

          

Other comprehensive revenue/ (expenditure)

 

          

Net gain on revaluation of property, plant and equipment

1,309,459

0

1,225,740

2,697,640

0

1,144,898

2,413,379

0

1,249,050

2,578,609

0

Tax on revaluation of property, plant and equipment

(126,398)

0

0

(193,913)

0

0

(196,960)

0

0

(205,337)

0

Total other comprehensive revenue/ (expenditure)

1,183,061

0

1,225,740

2,503,727

0

1,144,898

2,216,419

0

1,249,050

2,373,272

0

 

 

          

Total comprehensive revenue/ (expenditure)

1,750,812

781,647

2,166,805

3,587,524

1,075,078

2,144,983

3,438,405

1,204,051

2,398,501

3,594,275

1,302,025

Prospective Statement of Changes in Equity

Auckland Council group consolidated

$000

Financial year ending 30 June

Annual

Plan 2017/18

LTP

2018/19

LTP

2019/20

LTP

2020/21

LTP

2021/22

LTP

2022/23

LTP

2023/24

LTP

2024/25

LTP

2025/26

LTP

2026/27

LTP

2027/28

Contributed equity

 

          

As at 1 July

26,728,538

26,728,538

26,728,538

26,728,538

26,728,538

26,728,538

26,728,538

26,728,538

26,728,538

26,728,538

26,728,538

Surplus after income tax

0

0

0

0

0

0

0

0

0

0

0

Other comprehensive revenue

0

0

0

0

0

0

0

0

0

0

0

Total comprehensive revenue

0

0

0

0

0

0

0

0

0

0

0

Transfer from/ (to) reserves

0

0

0

0

0

0

0

0

0

0

0

Balance as at 30 June

26,728,538

26,728,538

26,728,538

26,728,538

26,728,538

26,728,538

26,728,538

26,728,538

26,728,538

26,728,538

26,728,538

 

 

          

Accumulated funds

 

          

As at 1 July

579,769

1,495,971

2,263,641

3,238,300

4,338,636

5,399,315

6,400,523

7,629,829

8,852,302

10,020,040

11,219,133

Surplus after income tax

567,751

781,647

941,065

1,083,797

1,075,078

1,000,085

1,221,986

1,204,051

1,149,451

1,221,003

1,302,025

Other comprehensive revenue

0

0

0

0

0

0

0

0

0

0

0

Total comprehensive revenue

567,751

781,647

941,065

1,083,797

1,075,078

1,000,085

1,221,986

1,204,051

1,149,451

1,221,003

1,302,025

Transfer from/ (to) reserves

9,224

(13,977)

33,594

16,539

(14,399)

1,123

7,320

18,422

18,287

(21,910)

(21,697)

Balance as at 30 June

1,156,744

2,263,641

3,238,300

4,338,636

5,399,315

6,400,523

7,629,829

8,852,302

10,020,040

11,219,133

12,499,461

 

 

          

Reserves

 

          

As at 1 July

6,861,523

9,468,270

9,482,247

10,674,393

13,161,581

13,175,980

14,319,755

16,528,854

16,510,432

17,741,195

20,136,377

Surplus after income tax

0

0

0

0

0

0

0

0

0

0

0

Other comprehensive revenue

1,183,061

0

1,225,740

2,503,727

0

1,144,898

2,216,419

0

1,249,050

2,373,272

0

Total comprehensive revenue

1,183,061

0

1,225,740

2,503,727

0

1,144,898

2,216,419

0

1,249,050

2,373,272

0

Transfer from/ (to) reserves

(9,224)

13,977

(33,594)

(16,539)

14,399

(1,123)

(7,320)

(18,422)

(18,287)

21,910

21,697

Balance as at 30 June

8,035,360

9,482,247

10,674,393

13,161,581

13,175,980

14,319,755

16,528,854

16,510,432

17,741,195

20,136,377

20,158,074

 

 

          

Total equity[2]

 

          

As at 1 July

34,169,830

37,692,779

38,474,426

40,641,231

44,228,755

45,303,833

47,448,816

50,887,221

52,091,272

54,489,773

58,084,048

Surplus after income tax

567,751

781,647

941,065

1,083,797

1,075,078

1,000,085

1,221,986

1,204,051

1,149,451

1,221,003

1,302,025

Other comprehensive revenue

1,183,061

0

1,225,740

2,503,727

0

1,144,898

2,216,419

0

1,249,050

2,373,272

0

Total comprehensive revenue

1,750,812

781,647

2,166,805

3,587,524

1,075,078

2,144,983

3,438,405

1,204,051

2,398,501

3,594,275

1,302,025

Transfer from/ (to) reserves

0

0

0

0

0

0

0

0

0

0

0

Balance as at 30 June

35,920,642

38,474,426

40,641,231

44,228,755

45,303,833

47,448,816

50,887,221

52,091,272

54,489,773

58,084,048

59,386,073

Prospective Statement of Financial Position

Auckland Council group consolidated

$000

As at 30 June

Annual Plan 2017/18

LTP 2018/19

LTP 2019/20

LTP 2020/21

LTP 2021/22

LTP 2022/23

LTP 2023/24

LTP 2024/25

LTP 2025/26

LTP 2026/27

LTP 2027/28

Assets

 

          

Current assets

 

          

Cash and cash equivalents

240,000

200,000

200,000

200,000

200,000

200,000

200,000

200,000

200,000

200,000

200,000

Receivables and prepayments

281,657

415,555

439,851

458,736

476,609

490,161

520,512

539,831

554,358

581,344

608,476

Other financial assets

101,812

50,850

50,850

50,850

50,850

50,850

50,850

50,850

50,850

50,850

50,850

Inventories

29,418

36,772

37,691

38,633

39,599

40,589

41,604

42,644

43,710

44,803

45,923

Non-current assets held-for-sale

114,504

104,000

71,000

174,000

65,000

43,000

40,000

57,000

64,000

39,000

39,000

Total current assets

767,391

807,177

799,392

922,219

832,058

824,600

852,966

890,325

912,918

915,997

944,249

 

 

          

Non-current assets

 

          

Receivables and prepayments

78,840

10,840

11,474

11,967

12,433

12,787

13,579

14,083

14,462

15,166

15,874

Derivative financial instruments

263,000

170,000

170,000

170,000

170,000

170,000

170,000

170,000

170,000

170,000

170,000

Other financial assets

151,982

165,138

174,629

178,813

182,446

186,461

190,154

193,286

197,401

201,094

204,293

Property, plant and equipment

44,763,460

47,283,468

49,881,568

53,865,450

55,220,177

57,708,203

61,857,503

63,582,157

66,437,084

70,517,806

71,957,721

Intangible assets

352,534

511,789

507,053

499,049

485,142

466,333

443,341

413,323

377,028

333,864

282,037

Investment property

681,000

735,000

735,000

735,000

735,000

735,000

735,000

735,000

735,000

735,000

735,000

Investments in associates and joint ventures

1,082,610

1,638,831

1,899,939

2,268,279

2,614,006

2,925,025

3,003,998

2,877,393

2,882,507

2,887,909

2,893,646

Other non-current assets

2,000

11,000

11,000

11,000

11,000

11,000

11,000

11,000

11,000

11,000

11,000

Total non-current assets

47,375,426

50,526,066

53,390,663

57,739,558

59,430,204

62,214,809

66,424,575

67,996,242

70,824,482

74,871,839

76,269,571

 

 

          

Total assets

48,142,817

51,333,243

54,190,055

58,661,777

60,262,262

63,039,409

67,277,541

68,886,567

71,737,400

75,787,836

77,213,820

 

$000

As at 30 June

Annual Plan 2017/18

LTP 2018/19

LTP 2019/20

LTP 2020/21

LTP 2021/22

LTP 2022/23

LTP 2023/24

LTP 2024/25

LTP 2025/26

LTP 2026/27

LTP 2027/28

Liabilities

 

          

Current liabilities

 

          

Payables and accruals

757,124

888,876

897,208

900,675

920,596

951,634

1,049,649

1,093,024

1,103,707

1,109,830

1,129,545

Employee entitlements

96,859

100,823

103,288

105,859

108,199

110,703

113,519

116,012

118,627

121,236

123,970

Borrowings

1,363,488

1,252,535

1,347,906

1,444,451

1,510,186

1,583,759

1,644,861

1,686,147

1,741,354

1,767,981

1,775,242

Derivative financial instruments

7,000

7,000

7,000

7,000

7,000

7,000

7,000

7,000

7,000

7,000

7,000

Provisions

70,483

65,806

47,705

30,411

21,983

18,375

15,633

12,942

10,700

9,314

8,662

Total current liabilities

2,294,954

2,315,040

2,403,107

2,488,396

2,567,964

2,671,471

2,830,662

2,915,125

2,981,388

3,015,361

3,044,419

 

 

          

Non-current liabilities

 

          

Payables and accruals

82,892

85,969

102,711

111,463

125,165

152,412

169,008

195,390

195,126

201,268

202,745

Employee entitlements

5,381

5,307

5,437

5,572

5,695

5,827

5,975

6,106

6,244

6,381

6,525

Borrowings

7,179,966

7,988,391

8,596,647

9,212,395

9,631,615

10,100,873

10,490,569

10,753,869

11,105,961

11,275,797

11,322,091

Derivative financial instruments

1,207,000

865,000

865,000

865,000

865,000

865,000

865,000

865,000

865,000

865,000

865,000

Provisions

198,187

288,889

227,021

167,118

138,390

126,229

116,657

107,149

99,216

94,367

92,168

Deferred tax liabilities

1,253,795

1,310,221

1,348,901

1,583,078

1,624,600

1,668,781

1,912,449

1,952,656

1,994,692

2,245,614

2,294,799

Total non-current liabilities

9,927,221

10,543,777

11,145,717

11,944,626

12,390,465

12,919,122

13,559,658

13,880,170

14,266,239

14,688,427

14,783,328

 

 

          

Total liabilities

12,222,175

12,858,817

13,548,824

14,433,022

14,958,429

15,590,593

16,390,320

16,795,295

17,247,627

17,703,788

17,827,747

 

 

          

Net assets

35,920,642

38,474,426

40,641,231

44,228,755

45,303,833

47,448,816

50,887,221

52,091,272

54,489,773

58,084,048

59,386,073

 

 

          

Equity

 

          

Contributed equity

26,728,538

26,728,538

26,728,538

26,728,538

26,728,538

26,728,538

26,728,538

26,728,538

26,728,538

26,728,538

26,728,538

Accumulated funds

1,156,744

2,263,641

3,238,300

4,338,636

5,399,315

6,400,523

7,629,829

8,852,302

10,020,040

11,219,133

12,499,461

Reserves

8,035,360

9,482,247

10,674,393

13,161,581

13,175,980

14,319,755

16,528,854

16,510,432

17,741,195

20,136,377

20,158,074

Total equity

35,920,642

38,474,426

40,641,231

44,228,755

45,303,833

47,448,816

50,887,221

52,091,272

54,489,773

58,084,048

59,386,073

Prospective Statement of Cash Flows

Auckland Council group consolidated

$000

Financial year ending 30 June

Annual Plan 2017/18

LTP 2018/19

LTP 2019/20

LTP 2020/21

LTP 2021/22

LTP 2022/23

LTP 2023/24

LTP 2024/25

LTP 2025/26

LTP 2026/27

LTP 2027/28

Cash flows from operating activities

 

          

Receipts from rates revenue

1,710,004

1,796,730

1,877,746

1,965,237

2,067,667

2,174,155

2,285,295

2,401,016

2,523,783

2,652,208

2,786,186

Receipts from customers and other services

2,391,762

2,646,257

2,913,153

3,036,196

3,112,831

3,166,348

3,335,261

3,443,048

3,449,924

3,588,087

3,724,121

Interest received

8,171

12,698

12,998

12,967

12,862

12,689

12,625

12,609

12,680

12,694

12,699

Dividends received

59,805

60,963

60,963

60,463

60,463

62,202

63,993

65,838

67,738

69,695

71,711

Payments to suppliers and employees

(2,380,242)

(2,575,718)

(2,732,737)

(2,820,329)

(2,845,049)

(2,910,682)

(2,969,565)

(3,083,268)

(3,184,852)

(3,277,702)

(3,361,991)

Income tax paid

(7,763)

0

0

0

0

0

0

0

0

0

0

Interest paid

(457,207)

(467,773)

(514,084)

(562,711)

(594,340)

(611,484)

(630,600)

(643,056)

(660,263)

(675,600)

(685,457)

Net cash inflow from operating activities

1,324,530

1,473,157

1,618,039

1,691,823

1,814,434

1,893,228

2,097,009

2,196,187

2,209,010

2,369,382

2,547,269

 

 

          

Cash flows from investing activities

 

          

Sale of property, plant and equipment, investment property and intangible assets

114,505

177,000

104,000

71,000

174,000

65,000

43,000

40,000

57,000

64,000

39,000

Purchase of property, plant and equipment, investment property and intangible assets

(2,016,720)

(2,129,427)

(2,163,164)

(2,112,858)

(2,136,977)

(2,194,698)

(2,514,027)

(2,670,324)

(2,670,563)

(2,627,632)

(2,638,240)

Acquisition of other financial assets

(6,497)

(4,011)

(3,168)

(2,960)

(2,084)

(2,362)

(1,922)

(1,070)

(1,890)

(1,117)

(716)

Proceeds from sale of other financial assets

236,401

1,021

1,088

1,027

1,121

1,154

1,212

1,283

1,370

1,481

1,615

Investment in associates and joint ventures

0

(234,700)

(254,100)

(359,100)

(333,900)

(303,500)

(74,300)

131,400

0

0

0

Advances of loans to external parties

(8,876)

(49,962)

(10,162)

(6,000)

(7,000)

(7,000)

(7,000)

(7,000)

(7,000)

(7,000)

(7,000)

Proceeds from community loan repayments

2,350

2,388

3,840

4,776

5,451

5,347

5,230

4,938

4,774

4,424

4,517

Net cash outflow from investing activities

(1,678,837)

(2,237,691)

(2,321,666)

(2,404,115)

(2,299,389)

(2,436,059)

(2,547,807)

(2,500,773)

(2,616,309)

(2,565,844)

(2,600,824)

 

 

          

Cash flows from financing activities

 

          

Proceeds from borrowings

1,965,961

1,772,682

1,956,162

2,060,198

1,929,406

2,053,017

2,034,557

1,949,447

2,093,446

1,937,816

1,821,536

Repayment of borrowings

(1,611,654)

(1,181,148)

(1,252,535)

(1,347,906)

(1,444,451)

(1,510,186)

(1,583,759)

(1,644,861)

(1,686,147)

(1,741,354)

(1,767,981)

Net cash inflow from financing activities

354,307

591,534

703,627

712,292

484,955

542,831

450,798

304,586

407,299

196,462

53,555

 

 

 

 

 

 

 

 

 

 

 

 

Net increase/(decrease) in cash and cash equivalents and bank overdrafts

0

(173,000)

0

0

0

0

0

0

0

0

0

Opening cash and cash equivalents and bank overdrafts

240,000

373,000

200,000

200,000

200,000

200,000

200,000

200,000

200,000

200,000

200,000

Closing cash and cash equivalents and bank overdrafts

240,000

200,000

200,000

200,000

200,000

200,000

200,000

200,000

200,000

200,000

200,000

Notes to the prospective financial statements

Note 1: Statement of significant accounting policies
BASIS OF REPORTING

Auckland Council (the council) is a local authority domiciled in New Zealand and governed by the Local Government Act 2002 (LGA 2002), the Local Government (Auckland Council) Act 2009 (LGACA 2009) and Local Government (Rating) Act 2002. The council is a FMC Reporting entity under the Financial Markets Conducts Act (FMCA) 2013. The council's principal address is 135 Albert Street, Auckland Central, New Zealand.

Financial information within this 10-year budget is prepared and disclosed on a full group basis (except where specifically stated otherwise). The Auckland Council Group (the Group) consists of the council, its Council Controlled Organisations (CCOs), associates and joint ventures. A summary of substantive CCOs is provided in the table below[3]. All entities are domiciled in New Zealand. The council considers that presenting group information enhances transparency of information about cost of services provided to Auckland ratepayers and enables ratepayers to make more informed decisions about the impact of delivering the Auckland Plan.

The primary objective of the Group and the council is to provide services and facilities to the Auckland community for social benefit rather than to make a financial return. Accordingly, the council has designated itself and the Group as public benefit entities (PBEs) and applies New Zealand Tier 1 Public Benefit Entity accounting standards (PBE Accounting Standards). These standards are based on International Public Sector Accounting Standards (IPSAS), with amendments for the New Zealand environment.

The Group and council have a balance date of 30 June and these prospective financial statements are for the period from 1 July 2018 to 30 June 2028. The actual results achieved for the period covered by this plan are likely to vary from the information presented in this document, and these variances may be material. The Group and council do not intend to update the prospective financial statements after publication. 

The substantive CCOs within the Group comprise the following:

Name

Principal activity and nature of relationship where there is no direct ownership

Percentage ownership %
2018

Percentage ownership %
2017

Auckland Transport

Owns the public transport network and manages the transport infrastructure and services in Auckland.

*Auckland Transport is a body corporate with perpetual succession and is treated under the LGACA 2009 as if the council is its sole shareholder.

*

*

Auckland Tourism, Events and Economic Development Limited

Manages projects for economic development, tourism and events promotion in the Auckland region.

100

100

Panuku Development Auckland Limited

Facilitates the redevelopment of urban locations. Contributes to accommodating residential and commercial growth. Optimises the council's property portfolio. Continues to lead the development of the Auckland waterfront.

100

100

Regional Facilities Auckland (RFA)

Supports and promotes the engagement of the Auckland community in arts, culture, heritage, leisure, sports and entertainment activities and develops, owns and manages the venues for these activities.

*Regional Facilities Auckland is a charitable trust of which Regional Facilities Auckland Ltd, a 100% owned subsidiary of the council, is the sole trustee.

*

*

Watercare Services Limited (Watercare)

Owns and manages the Auckland region's water and wastewater assets.

Watercare is restricted by LGACA 2009 section 57(1)(b) from paying any dividend or distributing any surplus directly or indirectly to the council.

100

100

BASIS OF PREPARATION

These consolidated prospective financial statements are prepared:

  • For the purposes of meeting the Group and council's requirements under the LGA 2002, the LGACA 2009 and the Local Government (Financial Reporting and Prudence) Regulations 2014;
  • in accordance with New Zealand Generally Accepted Accounting Practice (NZ GAAP), and comply with PBE Accounting Standards. In particular, these prospective financial statements have been prepared in accordance with PBE Financial Reporting Standard 42: Prospective Financial Statements;
  • on a going concern basis and the accounting policies have been applied consistently throughout the planned period;
  • on a historical cost basis with the exception of certain items identified in specific accounting policies below; and,
  • in New Zealand dollars (NZD) and are rounded to the nearest thousand dollars, unless otherwise stated.

This information may not be suitable for use in any other context.

These consolidated prospective financial statements were adopted by the governing body of Auckland Council on 28 June 2018.

The governing body is responsible for the prospective financial statements included in this plan, including the appropriateness of the significant financial assumptions these are based on, and the other disclosures in the document.

All items in the financial statements are stated exclusive of Goods and Services Tax (GST), except for receivables and payables, which include GST invoiced.

COMPARATIVE INFORMATION

The Annual Plan 2017/2018 adopted by the council on 30 June 2017 has been provided as a comparator for these consolidated prospective financial statements. The closing balance in this comparative differs from the opening position used to prepare these consolidated prospective financial statements which is based on the most up-to-date forecast information.

The prospective consolidated financial statements include the forecasts of the council and its subsidiaries which are added on a line-by-line basis adding together like items. Transactions and balances between the council and its CCOs are eliminated on consolidation. Investments in subsidiaries are carried at cost less any accumulated impairment. Where necessary, adjustments are made to the financial information of subsidiaries, associates and joint ventures to bring their accounting policies in line with the Group.

SIGNIFICANT JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the financial statements requires judgements, estimates and assumptions. Application is based on future expectations as well as historical experience and other factors, as appropriate to the particular circumstances.

Significant judgements, estimates and assumptions have been applied in measuring certain provisions and property, plant and equipment revaluations.

Refer to note 2 for significant forecasting assumptions.

IMPLEMENTATION OF NEW AND AMENDED STANDARDS

PBE International Financial Reporting Standard (IFRS) 9 Financial Instruments is effective from periods beginning on or after 1 January 2021.  PBE IFRS 9 addresses the classification, measurement and recognition of financial assets and financial liabilities and relaxes current requirements for hedge accounting. The Group and the council intend to early adopt the standard when it becomes effective for for-profit entities from period beginning on 1 July 2018.

The Group and the council have determined that adopting PBE IFRS 9 does not materially impact the financial instruments of the Group and the council, except for the borrower notes of the Group and the council which will be accounted for at fair value through surplus or deficit. For the purposes of this 10-year plan we have not budgeted for any fair value gains of losses on financial instruments.

The five new standards, PBE IPSAS 34 Separate Financial Statements, PBE IPSAS 35 Consolidated Financial Statements, PBE IPSAS 36 Investment in Associates and Joint Ventures, PBE IPSAS 37 Joint Arrangements and PBE IPSAS 38 Disclosure of Interests in Other Entities, are effective from periods beginning on or after 1 January 2019. The Group and the council are yet to assess the impact of these new standards, although the impact is unlikely to be material.

All other standards, interpretations and amendments approved but not yet effective in the current year are either not applicable to the Group and the council or are not expected to have a material impact on the financial statements of the Group and the council and, therefore, have not been disclosed.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Item
Policy
Prospective statement of comprehensive revenue and expenditure

Revenue

The Group and the council derive its revenue from exchange or non-exchange transactions. Exchange transaction revenue arises when the Group provides goods or services to a third party and directly receives approximately equal value in return. Non-exchange transaction revenue arises when the Group receives value from another party without giving approximately equal value directly in exchange for the value received. Non-exchange revenue comprises rates, and transfer revenue. Transfer revenue includes grants and subsidies and fees and user charges derived from activities that are partially funded by rates. Revenue is measured at fair value which is usually the cash value of a transaction.

Type

Recognition & measurement

Rates

In full at point of issuance of the ratings notice and measured at the amount assessed, which is the fair value of the cash received or receivable.

Grants and subsidies

When they become receivable unless there is an obligation in substance to return the funds. If there is such an obligation, the grants are initially recorded at fair value as grants received in advance and recognised as revenue when conditions of the grant are satisfied.

Development contributions

When the council is capable of providing the service for which the contribution was levied.

Financial contributions

When they are expended on the activity for which the contribution was levied.

Vested assets1

When control of the asset is transferred to the Group at its fair value.

Fines and infringements

When the infringement notice is issued.

Finance revenue2

Using the effective interest method.

Dividend revenue

When the Group's right to receive the dividend is established.

Regional fuel tax

When it becomes receivable.

Fees and user charges

 

Water and wastewater

When invoiced or accrued in the case of unbilled services at fair value of cash received or receivable.

Sale of goods

When the substantial risks and rewards of ownership have been passed to the buyer.

Sale of services

On a percentage of completion basis over the period of the service supplied.

Port operations

In the period the services are rendered, by reference to the percentage of completion of the specific transaction.

Consents

By reference to the percentage of completion of the transaction at balance date based on the actual service rendered

Licences and permits

On receipt of application as these are non-refundable.

1.   Arise when property developers undertake development which requires them to build infrastructure in the development area. When the development is complete these are vested to the Group.

2.   Includes interest revenue and realised gains from the early close-out of derivative positions.

Expenditure

Employee benefits

Employee entitlements for salaries and wages, annual leave, long service leave and other similar benefit are recognised as an expense and liability when they accrue to employees.

Grants, contributions and sponsorship expense

Where grants and subsidies are discretionary, the expense is recognised when the Group has advised its decision to pay and when conditions, if any, are satisfied. Non-discretionary grants are recognised on receipt of application that meets the specified criteria.

Finance Costs

Finance costs include interest expense, the unwinding of discounts on provisions and financial assets; and net realised losses on the early close-out of derivatives. Interest expense is recognised using the effective interest rate method. Interest expense includes the amortisation of borrowing costs recognised over the borrowing term.

Income tax

The Group and the council are exempt from income tax under the Income Tax Act 2007 except for certain income received from CCOs and port-related earnings.

Income tax comprises current tax and deferred tax calculated using the tax rate that has been enacted or substantively enacted by the reporting date. Income tax is charged or credited to the surplus or deficit, except when it relates to items that are recognised in other comprehensive revenue and expenditure or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive revenue and expenditure or directly in equity.

Current tax is the amount of income tax payable in the current period, plus any adjustments to income tax payable in respect of prior periods.

Deferred tax is the amount of income tax payable or recoverable in future periods in respect of temporary differences and unused tax losses.

Operating Leases

Lessee

The Group and the council lease property, plant and equipment from third parties in the normal course of business with lease terms varying from 1 month to 70 years. Payments made under operating leases (net of any incentives received from the lessor) are expensed on a straight-line basis over the lease term.

Lessor

The Group and the council lease certain property, plant and equipment to third parties including land and buildings and some commercial and residential property. The leases have non-cancellable periods ranging from 1 month to 100 years with subsequent renewals negotiated with the lessee. Rental revenue (net of any incentives given to lessees) is recognised as income on a straight-line basis over the lease term.

 

Prospective statement of financial position

Cash and cash equivalents

Cash and cash equivalents are made up of cash on hand, on-demand deposits and other short-term highly liquid investments. The carrying value of cash at bank and short-term deposits with maturities less than three months approximates their fair value.

Receivables and prepayments

Receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

Provision for impairment of receivables

The provision for impairment of receivables is calculated by a review of large specific overdue receivables and a collective assessment of smaller receivables. Assessment is done on an ongoing basis. For the collective assessment, expected losses were determined by a historical analysis of previously incurred losses. Individual debts which are known to be uncollectible are written off.

Derivative financial instruments

The Group and the council do not hold or issue derivative financial instruments for trading purposes. The Group uses derivative financial instruments, such as forward foreign currency contracts and interest rate swaps to mitigate risks associated with foreign currency and interest rate fluctuations. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured to fair value. Any gains or losses arising from changes in the fair value of derivatives are taken directly to surplus or deficit, except for the effective portion of derivatives designated in cash flow hedges.

Derivatives are carried as assets when their fair value is positive and as liabilities when their fair value is negative.

Derivative assets and derivative liabilities are classified as non-current when the remaining maturity is more than 12 months, or as current when the remaining maturity is less than 12 months.

Other financial assets

The Group's other financial assets are initially recognised at fair value plus transaction costs unless they are carried at fair value through surplus or deficit in which case the transaction costs are recognised in the surplus or deficit. 

Other financial assets of the Group include unit trusts, loans to related parties, credit support annex, bonds, borrower notes, community loans and listed and unlisted shares.

For those financial instruments recognised at fair value in the statement of financial position, fair values are determined according to the following hierarchy:

Level 1- Quoted prices (unadjusted) in active markets for identical assets or liabilities. The quoted market price used for financial assets held by the Group is the bid price at reporting date.

Level 2- Inputs other than quoted prices included within level 1 using observable market inputs for the asset or liability, either directly or indirectly.

Level 3- Inputs for the asset or liability that are not based on observable market data.

Non-current assets held for sale

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. They are measured at the lower of their carrying amount and fair value less costs to sell.

Any impairment losses for write-downs are recognised in the surplus or deficit.

Any increases in fair value (less costs to sell) are recognised up to the level of any impairment losses that have been previously recognised.

Non-current assets are not depreciated or amortised while they are classified as held for sale.

Property, plant and equipment

The property, plant and equipment of the Group are classified into three categories:

  • Infrastructure assets include land under roads and systems and networks integral to the city's infrastructure and intended to be maintained indefinitely, even if individual assets or components are replaced or upgraded;
  • Operational assets include property, plant and equipment used to provide core council services, either for administration, as a community service or as a business activity. Other operational assets include landfills, motor vehicles, office equipment, library books and furniture and fittings; and,
  • Restricted assets include property and improvement where the use or transfer of title outside of the Group is legally restricted.
Initial recognition and subsequent measurement

Property, plant and equipment is recognised initially at cost, unless acquired through a non-exchange transaction, in which case the asset is recognised at fair value at the date of acquisition. Subsequent costs that extend or expand the asset's future economic benefits and service potential are capitalised. After initial recognition, certain classes of property, plant and equipment are revalued. Capital work in progress is recognised at cost less impairment and is not depreciated.

Revaluation

Infrastructure assets (except land), restricted assets (except improvements) and operational assets (except heritage assets and other operational assets) are revalued with sufficient regularity at least three years to ensure that their carrying amounts do not differ materially from fair value. The carrying values of revalued assets are assessed annually to ensure that they do not differ materially from the assets' fair values. If there is a material difference, then the off-cycle asset classes are revalued. Revaluations are carried out on an asset class basis. Net revaluation gains are recognised in other comprehensive revenue and are accumulated to the asset revaluation reserve in equity for that class of asset. Revaluation loss that results in a debit balance in the asset revaluation reserve is recognised in surplus or deficit. Any subsequent gain on revaluation is recognised first in the surplus or deficit up to the amount previously expensed and then recognised in other comprehensive revenue and expenditure.

Depreciation

Depreciation is provided on all property, plant and equipment except for land, works of art and specified cultural heritage assets.

Depreciation is calculated to write down the cost of assets on a straight line basis over their useful economic lives.

Asset class

Estimated useful life (years)

Revaluation method

Infrastructure

 

 

Land

Indefinite

Cost less accumulated impairment losses

Roads

10-120

Depreciated replacement cost

Water and wastewater

3-200

Depreciated replacement cost

Machinery

3-200

Depreciated replacement cost

Stormwater

10-200

Depreciated replacement cost

Other infrastructure

10-120

Depreciated replacement cost

Operational

 

 

Land and buildings

Land - Indefinite

Buildings -1-101

Market value based on recent equivalent sales information.

Depreciated replacement cost is used where no market exists for operational buildings with allowance for age and condition of building, and configuration

Marina structures

40-100

Depreciated replacement cost and cash flow method

Train stations

5-99

Depreciated replacement cost

Bus stations and shelters

10-99

Depreciated replacement cost

Works of art

Indefinite

Fair value

Rolling stock

2-35

Depreciated replacement cost

Wharves

2-100

Depreciated replacement cost

Cultural and heritage assets

various

Deemed cost less accumulated impairment losses

Other operational 

1-100

Cost less accumulated depreciation and impairment losses

Restricted

 

 

Parks and reserves

Indefinite

Fair value

Improvements

3-100

Cost less accumulated depreciation and impairment losses

Buildings

5-90

Depreciated replacement cost

Disposals

Gains and losses on disposal of property, plant and equipment are recognised in surplus or deficit. Any amount included in the asset revaluation reserve in respect of the disposed item is transferred from the reserve to accumulated funds.

Service concession assets

Where the Group recognises an asset for the upgrades to the existing service concession assets, the Group also recognises a liability at the same amount as the asset. The liability recognised is reduced over the remaining period of the service concession arrangement.

Intangible assets

Initial recognition and subsequent measurement

Purchased intangible assets are initially recognised at cost. For internally generated intangible assets the cost includes direct employee costs, a reasonable portion of overhead and other direct costs that are incurred within the development phase of the asset only. Intangible assets acquired at no cost are initially recognised at fair value where that can be reliably measured. Intangible assets are reviewed at least annually to determine if there is any indication of impairment. After initial recognition intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.

Amortisation

Amortisation is provided on intangible assets, except rights to acquire, and is calculated to write down the cost of the assets on a straight-line basis over the estimated useful economic life.

Asset class

Estimated useful life (years)

Subsequent measurement

Computer software

1-15

Cost less accumulated amortisation and impairment

Intellectual property

4-35

Cost less accumulated amortisation and impairment

Other intangible assets

1-63

Cost less accumulated amortisation and impairment

Disposals

Realised gains and losses from the disposal of intangible assets are recognised in surplus or deficit.

Investment property

Investment property includes land, commercial buildings and water space licences held to generate income. Investment property is initially recognised at cost and subsequently measured at fair value, determined annually by an independent registered valuer. Gains or losses arising from fair value changes are included in surplus or deficit. Investment properties are valued individually and not depreciated.

Investment in other entities

Investment in associates and joint ventures is accounted for using the equity method in the Group and council financial statements. The investment is initially recognised at cost and the carrying amount is increased or decreased to recognise the share of the surplus or deficit of the associate or joint venture after the date of acquisition. Distributions received reduce the carrying amount of the investment. Where necessary, adjustments are made to the financial statements of associates and joint ventures to bring their accounting policies in line with the Group.

Asset impairment

Impairment of property, plant and equipment and intangible assets

Intangible assets subsequently measured at cost that have indefinite useful life are tested annually for impairment. Property, plant and equipment and intangible assets subsequently measured at cost that have finite useful life are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If any indication exists, the Group estimates the asset's recoverable amount.  The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. 

An impairment loss is recognised in surplus or deficit for the amount by which the asset's carrying amount exceeds its recoverable amount.

Assets are considered cash generating if their primary objective is to provide a commercial return. The value in use for cash-generating assets is the present value of expected future cash flows.

For non-cash generating assets, value in use is determined using an approach based on a depreciated replacement cost.

Property, plant and equipment that is measured at fair value, is not required to be separately tested for impairment.

Impairment of financial assets

Financial assets are assessed for impairment at each reporting date for impairment. Impairment is recognised in surplus or deficit.

Payables and accruals

Current payables and accruals are recognised at cost, are non-interest bearing and normally settled on 30-day terms; therefore the carrying value approximates fair value. Non-current payables and accruals are measured at the present value of the estimated future cash outflows.

Employee entitlements

Employee entitlements to be settled within 12 months are reported at the amount expected to be paid. The liability for long-term employee entitlements is reported at the present value of estimated future cash outflows.

Borrowings

Borrowings are initially recognised at face value plus transaction costs and are subsequently measured at amortised cost using the effective interest rate method.

Provisions

Provisions are recognised in the statement of financial position only where the Group has a present legal or constructive obligation as a result of past event, it is probable that an outflow of resources will be required to settle the obligation and the amount can be estimated reliably.

Provisions are measured at the present value of the expected future cash outflows required to settle the obligation. The increase in the provision due to the passage of time is recognised as finance cost in surplus or deficit.

Ratepayer equity

Ratepayer equity is the Auckland community's interest in the Group. Ratepayer equity has been classified into various components to identify those portions of equity held for specific purposes. Contributed equity is the net asset and liability position excluding restricted reserves at the time the council was formed.

Other policies

Foreign currency transactions

Foreign currency transactions are translated into NZD using the spot rate at the balance date. Foreign exchange gains and losses resulting from the settlement of such transactions and from translation, using the exchange rates at balance date, of monetary assets and liabilities denominated in foreign currencies are recognised in surplus or deficit.

 

Assumption

Assumption data for LTP 2018-2028 and source

Risks and impacts

Population and development growth (including growth in the rating base)

Population growth and the consequential demand for residential housing is a key driver for many of the council's activities and asset management plans (for example the number and type of community facilities the council provides).

For this Long-term Plan 2018-2028, the council has used the 2013 census (updated February 2017) population growth data to estimate the population growth in the future. The council has estimated that the population will increase by around 292,530 people (17.7 per cent) by 30 June 2028.

The population projections are used to forecast the level and location of development growth (the number of dwellings and floor space area). This information is key driver for some of the council's activities such managing the stormwater from developed properties.

Growth in the rating base is driven by property development, including new building and subdivision, which increases the size of the rating base over which the rates requirement is spread. The council adjusts this for prudence and timing lag and uses this projection as an indicative adjustment to the total nominal rates increase to provide an indication of the average rates increase to existing ratepayers.

 

Risk - Growth differs significantly from forecasted

Level of uncertainty - Moderate

Impacts - If actual population and/or development growth is higher, it may put pressure on the council to provide additional infrastructure and services. If actual population growth is lower it may result in surplus capacity in existing or planned infrastructure and services.

Population and development growth is affected by a range of external factors, most of which are outside the council's control or influence. The council will continue to monitor growth on an annual basis. If there is a significant change, appropriate amendments will be made as part of subsequent annual plan or long-term processes. Depending on infrastructure contracts, the council may be able to reduce or delay some of the capital expenditure to cater for growth.

Growth in the rating base has no financial impact on the total rates requirement. Lower than anticipated growth in the rating base would result in slightly higher average rates increases for existing ratepayers than forecast over the period of this plan, due to a lower than expected rating base over which to spread the rates requirement. Conversely higher growth in the rating base would result in slightly lower average rates increases than forecast.

 

 

Inflator

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

Population

1,656,646

1,694,624

1,732,601

1,770,579

1,796,395

1,822,212

1,848,028

1,873,844

1,899,660

1,924,418

1,949,176

Dwellings

554,061

568,738

583,416

598,094

608,846

619,598

630,349

641,101

651,853

662,490

673,128

Business floor space (sq meters)

31,897,471

32,475,723

33,053,975

33,632,227

34,112,132

34,592,038

35,071,944

35,551,849

36,031,755

36,502,910

36,974,065

Separately used or inhabited part (SUIP) rateable properties

601,530

612,959

624,912

637,410

649,903

662,381

674,967

687,791

700,859

713,895

726,888

Rating units (rateable properties)

538,899

549,138

559,846

571,043

582,236

593,415

604,689

616,179

627,886

639,565

651,205

Growth in the rating base (GIRB)

1.87%

2.55%

2.44%

2.38%

2.33%

2.28%

1.68%

1.66%

1.63%

1.58%

1.54%

Adjusted GIRB for revenue modelling

1.69%

1.90%

1.95%

2.00%

1.96%

1.92%

1.90%

1.90%

1.90%

1.86%

1.82%

 

Economic growth and return on investments

 

Employment numbers and gross domestic product indicate how well the region's economy is doing.

How well the economy is doing could influence the council's return on its investments:

  • 22.35 per cent shareholding in Auckland International Airport Limited
  • 100 per cent shareholding in Ports of Auckland.

Dividends are forecast based on market analyst three year forecasts extrapolated for the 10 years of this plan.

Risk - That economic growth differs significantly from that forecasted in this plan

Level of uncertainty - moderate

Impacts - New Zealand's economic outlook, while outside the council's control, will affect the council's commercial investments such as Ports of Auckland Limited and Auckland International Airport. Economic growth also impacts on affordability of the council rates and the utilisation of services with a user charge funding component as discretionary income is impacted. This in turn may drive changes to both operational and capital expenditure. The economic outlook also affects local businesses, the region's level of employment and the rate of development.

Note: Council does not use economic growth as an underlying assumption in developing the LTP financials. Economic growth is considered in the population and GIRB rates that REMU calculates.

Development contribution revenue

Auckland Council's Financial Strategy and Revenue and Financing Policy state that growth-related infrastructure investment should be funded from development contributions. Given population growth is a key focus of this 10-year Budget it includes significant growth-related capital spend.

The council is currently working to replace its Development Contribution Policy to enable the fair recovery of this investment. We expect this will be completed by September 2018.

For this plan we are assuming development contribution levels that enable the recovery of the growth-related infrastructure investment over the relevant growth units and the projected period these growth units are constructed.

Risk - that development growth occurs at a different pace than projected or the new Development Contribution Policy does not enable a fair recovery of growth costs.

Level of uncertainty - moderate for pace of growth and low for the policy.

Impacts - If development occurs more slowly than projected, the recovery period will be extended and the expenditure will need to be funded from borrowing. It may also be that the capital programme needs to be slowed.

If development occurs earlier than projected revenue levels will increase, and the capital programme may need to be accelerated to support the development.

If for any reason the new Development Contribution Policy does not enable a fair recovery of growth costs as per the Revenue and Financing Policy development contribution revenue will be lower than forecast. This may require a reduction in capital expenditure to remain within the council's prudential debt limits. The difference between the current and likely proposed new policy is estimated to have a revenue impact of approximately $4 million per month.

 

 

$million

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

Development contribution revenue

204

289

307

298

301

301

301

301

296

293

 

Inflation

 

Auckland Council uses a number of information sources (both internal and external) to inform projections of inflationary impacts on its costs and revenues. This includes projections for both the consumer price index (CPI) and other specific price movements faced by council.

Risk - Actual inflation is different from forecast inflation

Level of uncertainty - Moderate

Impacts - If inflation is higher than projected the cost of providing services would be higher than planned. If inflation is lower than projected the cost of providing services would be lower.

The council will continue to monitor price movements on an annual basis and any significant changes will be addressed in subsequent annual plans or long-term plans.

 

Inflator

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

Capital expenditure

4.0%

4.0%

3.0%

3.0%

3.0%

3.0%

3.0%

3.0%

3.0%

3.0%

Operating expenditure

 

 

 

 

 

 

 

 

 

 

Staff costs

1.7%

2.0%

2.0%

2.0%

2.0%

2.0%

2.0%

2.0%

2.0%

2.0%

Other

1.7%

2.0%

2.0%

2.0%

2.0%

2.0%

2.0%

2.0%

2.0%

2.0%

 

Interest rates

 

Auckland Council's Treasury department has provided interest rate projections for the ten-year period of the plan, based on an assessment of market yields and anticipated borrowing requirements.

The council manages its risk to interest rate increases in the short-term to provide some certainty for cost of its borrowings.

The council has assumed that it maintains its AA credit rating in preparing the interest rate projections. The following average interest rates have been assumed in this plan:

 

Risk - Prevailing interest rates differ significantly from forecasted

Level of uncertainty - moderate

Impacts - For every one notch change from the current credit rating we would expect a change in interest rates of between 0.05 per cent and 0.15 per cent per annum. Increases in interest rates flow through to higher debt servicing costs and higher rates funding requirements. The council's treasury group has mitigated these risks with a prudent hedging programme. For every 100 basis point (1.0 per cent) change in the council's average interest rate, the council's debt servicing costs would change by approximately $88 million to $127 million per annum dependent upon the amount of debt outstanding and the level of hedging in place.

 

Average interest rates

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

Borrowings

5.40%

5.36%

5.44%

5.53%

5.51%

5.42%

5.34%

5.26%

5.24%

5.21%

5.20%

Cash holdings

3.00%

3.00%

3.00%

3.00%

3.00%

3.00%

3.00%

3.00%

3.00%

3.00%

3.00%

 

Note 2: Significant forecasting assumptions

The level of uncertainty for each assumption refers to the difficulty of predicting outcomes because of limited or inexact knowledge. Council cannot control all of the variables that affect future outcomes, such as the wider economy and changes in legislation.

  • Low level of uncertainty - information available to council point to a high likelihood of the assumption being accurate and/ or most of the variables are under council's control.
  • Moderate level of uncertainty - council has most of the information available on the assumption but variables outside of council's control may still affect the accuracy of the assumption.
  • High level of uncertainty - council has some of the information on the assumption but there is a high likelihood that variables outside of council's control will impact on the accuracy of the assumption.

Assumption

Assumption data for LTP 2018-2028 and source

Risks and impacts

Crown Infrastructure Partners

On 24 July 2017 the government announced the renaming and repurposing of Crown Fibre Holdings to Crown Infrastructure Partners (CIP).  This company was tasked with working alongside the private sector to invest in infrastructure to support new housing developments.

The first areas to be assessed by CIP for investment were Wainui in Auckland's north and areas in Auckland's south including Paerata, Pukekohe, Drury West and Drury South.

The government announcement in July 2017 identified $201 million of investment required in the north that could provide capacity for 5500 houses and $387 million in the south that could provide 17800 more houses (total $588 million).

For this plan we have assumed that CIP will proceed with investing in $364 million of transport infrastructure and $224 million of water  infrastructure, primarily in Wainui and Auckland's south. Given the nature of the assets, being network infrastructure, we then assume that these assets are vested in the Auckland Council group as development projects are completed and the council is responsible for ongoing maintenance and renewals. Some of these assets may vest after 2028.

Risk

  • That the Crown remove their support for CIP
  • That CIP does not invest in the specified infrastructure

Level of uncertainty - Moderate

Impacts - If CIP does not invest in the two identified areas Auckland Council would need to incorporate the projects into its capital investment prioritisation process. Given the constrained funding environment this could result in either a delay to the enabling of housing development in these areas or other projects being delayed to provide capacity for their delivery.

Housing Infrastructure Fund

In July of 2016 the government announced the creation of a Housing Infrastructure Fund (HIF). The aim of the fund was to provide financing capacity for growth councils to deliver the infrastructure needed to support their growth.

Auckland Council submitted an application to this fund in March 2017 and was notified in July 2017 that $300 million of investment was supported in principle.  Subsequent negotiations with central government, NZTA and developers have advanced our understanding of how this will work.

For this plan we have assumed that the financing for transport projects is provided by way of an adjustment to subsidy levels ($80m) and for other projects via an interest-free loan from the crown of $120m, repaid during the period of this plan.

Risk - That the funding arrangement is not completed between Auckland Council Group and the relevant crown agencies.

Level of uncertainty - Moderate

Impacts - Given the HIF effectively provides favourable terms for financing infrastructure investment if the arrangement does not go ahead the impact would be a reduction in the council's overall capacity to invest.  This would reduce the amount of new infrastructure we could provide for Auckland, particularly in the earlier years of the plan.

Government transport funding

The Auckland Transport Alignment Project (ATAP) was established in 2015 to improve local and central government collaboration on transport planning and funding for Auckland. The revision of the ATAP work was commenced earlier this year and a final report released by the Minister of Transport and the Mayor of Auckland on 26 April 2018.

The ATAP 2018 report included a $28 billion funded programme of investment in transport activities for Auckland. The ATAP programme of work is to be carried out by multiple parties. The $28 billion in ATAP includes a $16.5 billion package for Auckland Transport, split between $10 billion capital expenditure and $6.5 billion operating expenditure.

A key source of funding for transport activities is the National Land Transport Fund. This is administered by the New Zealand Transport Agency (NZTA) and both directly funds NZTA investment in state highways and co-funds councils' investment in other activities.

The ATAP report included NLTF funding of $16.3 billion of which $8.1 billion is to support the activities of Auckland Transport (both capital and operating expenditure).

This level of support is significantly higher than has been historically provided to local government in Auckland, and than would be provided under existing funding arrangements. The report identified that delivery "would require changes to current funding arrangements, including a more flexible approach to GPS activity class limits, and funding assistance rates (FARs)." To advance this it identified areas for further work including "considering what changes may be required to transport planning and funding processes and project evaluation tools to achieve the Government and Council's direction for transport in Auckland."

Subsidy levels for different activity classes can vary and are set by the NZTA. Individual projects are assessed for subsidy through a business case process.

For this plan we are assuming the funding will be made up of $3.1 billion of operating subsidies and $5 billion of capital subsidies.

Risks

The statutory processes (such as the final GPS) do not provide for funding at a level that would allow Auckland Transport to solicit the full $8.1 billion

NZTA assessment of individual projects does not result in funding being granted

Level of uncertainty

Low

Cabinet approval of the ATAP report indicates government intentions to provide the level of funding to Auckland through the GPS and the NZTA's close involvement in the ATAP process indicates that the projects are supported for co-funding

Impacts

If the capital contribution level is lower than assumed, then transport capital expenditure would be less than projected. Conversely, if the level of capital contribution is higher than assumed this would enable an increase in transport capital expenditure.

If the level of operating subsidy available increases this would reduce the amount of rates funding required for OPEX and free up this funding to invest in additional infrastructure or services. A reduction may necessitate reduced services or investment, or additional funding from another source such as increased borrowing or rates

Regional Fuel Tax

One of the new funding sources introduced in this 10-year Budget is a regional fuel tax (RFT) to support investment in additional transport infrastructure and services.

The tax will be set at 10 cents plus GST per litre of fuel (both petrol and diesel), with appropriate rebates for non-transport and off-road uses.

Our projections of annual revenue are approximately $150 million.

Risk -that the revenue received does not match projections.

Level of uncertainty - Moderate

Impacts - If revenue is less than projected the council could choose to either reduce the investment in transport projects or look to fund the projects from other sources

If the revenue is greater than projected the additional funds will be managed through a reserve fund and may require an amendment to the RFT scheme to allow for additional projects

Revaluation of PPE and investments

 

Auckland Council's accounting policy provides for most fixed assets to be revalued with sufficient regularity (at least every three years) to ensure that the carrying value does not differ materially from fair value. Land under roads are held at cost and not revalued. Where significant the projected impact of asset revaluation on fixed assets values and depreciation expense has been reflected in this plan.

Auckland Council would normally expect to recognise income from a gain in value from its investment properties and assets of its associate entities. For the purposes of this plan, the council does not have sufficiently reliable market information on which to forecast this income. Accordingly no such income is forecast in the prospective financial statements.

Risk - That actual revaluation movements differ significantly from those forecasted in this plan.

Level of uncertainty - Moderate

Impact - If the revaluations are different from those forecasted it will affect asset values and total comprehensive income. In the case of depreciable assets this will flow through to changed levels of depreciation expense.

 

 

Assumption

Assumption data for LTP 2018-2028 and source

Risks and impacts

Timing of capital expenditure

This 10-year budget has been developed on the basis of the best available information on the likely timing of capital projects and programmes.

Over the 10 years of the plan Auckland Council is forecasting $26.2 billion of capital investment. The $26.2 billion includes $12 billion on transport, $7.1 billion on water networks and $7.1 billion across other council activities. This is a significant programme of work with complex inter-relationships with other agencies and the Crown that could impact on delivery timings. There are also constraints on the group's overall capacity for capex delivery and constraints within the construction market, particularly in the short term.

The certainty of funding for this programme (particularly through the ATAP agreement) is likely to give greater confidence to the market to invest and may encourage new players to enter the market. This is likely to result in increased capacity for programme delivery over time.

Based on this gradual increase in delivery capacity we have made a central assumption that while all projects will be delivered over the next decade not all capital expenditure will be delivered in the specific financial years set out in the Group of Activities statements. The assumed timing change is phased as follows:

Risk - That the actual timing of the capital programme is different from that forecasted.

Level of uncertainty - moderate

Impact - Delivery of capital expenditure to a different time frame than projected would have both a financial impact and could impact the timing of when the proposed level of service improvements would be achieved.

The financial implications would depend on the planned funding sources for the relevant capital expenditure and its associated expenses. The financial impact would be on funding requirements, borrowings, interest expense, depreciation expense and consequential operating expenditure.

The actual timing of capital expenditure (and the achievement of related service level improvements) will be impacted by a number of factors. One of the key areas under the control of council is the quality of project management. Other areas such as the market's response to the increased programme certainty are beyond the control of the council.

 

 

$million

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

Forecast

-100

-289

-120

-120

-60

100

0

0

400

100

89

 

Asset sales

 

Auckland Council plans disposal of certain non-strategic assets over the next 10 years. These are primarily land and buildings which are not needed for providing the council services, not providing a market rental income, are poorly utilised or simply located in the wrong place. Council also plans to dispose of property assets as part of its property and urban development activities (including Panuku's Unlock and Transform programmes).

The council has adjusted these targets for prudence and used lower forecasts when projecting debt and interest costs.

Risk - That sufficient disposals are not identified or realised to achieve the targets set.

Level of uncertainty - moderate

Impact - If the level of asset sales is higher or lower than forecast it will result in changes to the levels of debt repayments that can be made and consequentially to the council's interest cost.

 

$million

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

General disposals

24

24

24

20

20

20

20

20

20

20

Sale of specific urban development assets

15

38

28

19

3

16

15

13

25

14

Unlock and transform disposals

138

42

19

135

42

7

5

24

19

5

 

Useful lives of assets

 

The useful lives of significant assets are shown in the statement of significant accounting policies.

The useful life is used to determine the timing of renewing the asset and the level of depreciation for the asset.

Risk - Assets wear out and need to be replaced earlier than estimated.

Level of uncertainty - low

Impact - Depreciation costs would change with updated information about the remaining useful life of an asset and borrowing costs would increase if capital expenditure was required earlier than anticipated. However, these impacts could be mitigated by reprioritising the capital expenditure programme.

 

Assumption

Assumption data for LTP 2018-2028 and source

Risks and impacts

Sources of funding of replacements (including depreciation funding)

The council believes it is financially prudent and fair to fully fund depreciation so that each generation pays for the assets it uses. This funded depreciation provides funding for replacement of assets.

This needs to be balanced against other considerations such as affordability. The council has assumed that it will move to fully funding depreciation net of subsidies and contributions by 2024/2025.

However, there are some exceptions to this assumption, namely

  • Watercare Services Limited will continue to fund depreciation to meet forecast average renewal requirements
  • Waterfront Development Agency's commercial operations will fund its depreciation from debt and commercial revenue.
  • Ports of Auckland will fully fund their depreciation from commercial revenues.

For other activities the council will fund 78 per cent of depreciation, net of subsidies and contributions, for 2018/2019. The level of depreciation funding will increase by around 3.7 per cent each year, so it is fully funding depreciation in 2024/2025, net of subsidies and contributions.

The table below sets out the minimum level of depreciation funding the council will apply when calculating its rates requirement.

The council receives some subsidies for renewing assets such as the NZTA subsidy for renewing some roads. The council uses a number of other funding sources to pay for the renewal of its assets such as general rates, targeted rates and user charges.

The council's Revenue and financing policy has more details of the different types of funding used to pay for renewing assets.

Risk - That the actual level of depreciation differs significantly from that forecasted in this plan.

That funded depreciation is not sufficient to fund renewals.

Level of uncertainty - low

Impacts - If depreciation is lower than that forecast the council could choose to fund a higher proportion of depreciation expense than forecast allowing it to reduce debt or increase other expenditure.

If depreciation is higher than that forecast the council will fund less depreciation than forecast requiring it to increase debt/and or rates or reduce other expenditure.

The plan includes $12 billion depreciation, $953 million of this in 2018/2019. A 1 per cent change in depreciation in 2018/2019 equates to $9.5 million.

 

Funding percentage

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

Funded

74%

78%

82%

85%

89%

93%

96%

100%

100%

100%

100%

Not funded

26%

22%

19%

15%

11%

7%

4%

0%

0%

0%

0%

 

Weathertight-ness claims

 

The council has considered the financial impact of weathertightness claims, including those already lodged and potential claims.

On the basis of an actuarial assessment, a provision was established at 1 November 2010 for future weathertightness claims. Based on an updated assessment completed in December 2017, the council is forecasting claim payments of $296 million over the period of this plan.

The cost of funding these settlements should not fall unfairly on ratepayers in the year of settlement. Rather than penalising current ratepayers with the full impact of these settlements, it is assumed they will be funded from borrowings and the repayment of these borrowings spread over 30 years.

Risk - The council's exposure to claims is different than the potential liability forecasted in this plan.

Level of uncertainty - low

Impact - If claims are higher or lower than forecast, then the council's levels of borrowing and the associated borrowing costs will also be higher or lower than forecast. Depending on how large the variance is, it may affect future forecast rate requirements.

Climate change

Climate change is expected to have a variety of implications for Auckland's infrastructure networks. The most recent climate change projections indicate warming temperatures, less annual rainfall in the north but more in the south and stronger winds. More frequent and severe weather events are expected. The specifications of some infrastructure may no longer be adequate to deal with more rainfall, or a warmer climate. Sea-level rise will increase risks for assets on the coast from inundation and erosion.

Council is responding to the risk of climate change by increasing knowledge of risks to infrastructure networks, such as developing a Natural Hazards Risk Management Action Plan and undertaking new research on the impact of climate change on Auckland.

An Auckland Council Coastal Management Framework was developed to help the council better manage its coastal assets, and to better mitigate the risks associated with coastal erosion and the combined effects of predicted climate change. This framework will enable the council to move from the current default position of reactionary ‘like-for-like' renewals to a prioritised work programme that is based on improved asset management planning underpinned by business cases leading to improved asset investment.

Risk - If the impact of climate change is higher than anticipated there may be increased surface flooding, damage to infrastructure due to extreme weather events and greater risk to public safety and private property.

Level of uncertainty - moderate

Impact -Increased investment in new or improved infrastructure may be required and the timing of maintenance and replacement of assets may be affected.

Foreign exchange risk

Council manages foreign currency risk of the group apart from Ports of Auckland. Foreign exchange risk of all entities under the group is managed through derivative financial instruments. The risk is mitigated by entering into forward foreign currency exchange contracts where the threshold is set by the treasury management policies. The risk on offshore borrowings is offset by cross-currency interest rate swaps over the life of the borrowings. The group and council are not planning to have any material exposure to foreign exchange as all foreign currency denominated borrowings and material purchases will be hedged.

Risk - That group and council transactions that are denominated in a foreign currency other than NZD. The NZD may deteriorate against the relevant foreign currency from the period between when the transaction was entered and when foreign currency payments are made.

Level of uncertainty - low

Impact - The group and council are not planning to have any material exposure to foreign exchange as all foreign currency denominated borrowings and material purchases will be hedged.

Legislation

 

The council has assumed there will be no material changes to existing legislation and other national standards applicable to Auckland Council, other than an assumption that central government will pass legislation to enable the establishment of regional fuel tax schemes, as well as an Order in Council to implement the regional fuel tax scheme for Auckland and allow the collection of a regional fuel tax from 1 July 2018 (refer to assumption on fuel tax revenue earlier in this section).

Risk - New legislation or changes to existing legislation may alter the nature and scope of services currently being provided or the regional fuel tax legislation is not passed as expected or the Order in Council is delayed.

Level of uncertainty - low

Impact - If changes in legislation require the council's to provide further services, or significantly increase levels of compliance or operating costs then this will need to be offset by an increase in fees and charges and or an increase in rates. It is not possible to quantify the potential financial impact of such changes at this time. If the legislation and the Order in Council for Auckland are not passed to allow the collection of a regional fuel tax from 1 July 2018 then the council will receive less fuel tax revenue than forecast. While a short delay would not be material, a significant delay may require council to defer some transport projects.

 
Note 3: Reconciliation between Prospective Statement of comprehensive revenue and expenditure and Prospective funding impact statement

This statement is prepared on a group basis.  This statement should be read in conjunction with the Prospective Funding Impact Statement (group consolidated).

$000

Financial year ending 30 June

Annual Plan

2017/18

LTP 2018/19

LTP 2019/20

LTP 2020/21

LTP 2021/22

LTP 2022/23

LTP 2023/24

LTP 2024/25

LTP 2025/26

LTP 2026/27

LTP 2027/28

 

 

          

Operating surplus/ (deficit) after income tax per Prospective Statement of comprehensive revenue

567,751

781,647

941,065

1,083,797

1,075,078

1,000,085

1,221,986

1,204,051

1,149,451

1,221,003

1,302,025

 

 

          

Items recognised as income in Statement of comprehensive revenue and as capital expenditure funding sources in Funding Impact Statement:

 

          

Capital subsidies

(403,083)

(411,868)

(486,708)

(475,319)

(471,166)

(430,840)

(552,107)

(561,019)

(511,656)

(580,785)

(631,385)

Development contributions

(214,359)

(204,492)

(288,657)

(306,698)

(297,514)

(301,301)

(301,301)

(301,301)

(301,301)

(295,771)

(293,223)

 

 

          

Non-cash items recognised in Statement of comprehensive revenue and not included in Funding Impact Statement:

 

          

Depreciation

925,591

953,461

999,043

1,037,578

1,107,180

1,164,969

1,214,285

1,297,129

1,371,134

1,452,113

1,554,259

Depreciation of make good provision added back in funding impact statement

(2,211)

(559)

(425)

(323)

(104)

(12)

(8)

(5)

0

0

0

Discounting of provisions

9,806

6,247

3,825

2,781

1,768

863

325

200

151

149

149

Recognition of revenue from vested assets

(201,594)

(284,486)

(269,609)

(375,122)

(364,322)

(319,355)

(395,611)

(352,962)

(327,878)

(318,834)

(330,923)

Amortisation of prepaid leases

(1,000)

(687)

(687)

(687)

(1,027)

(1,029)

(1,025)

(1,025)

(1,025)

(1,025)

(1,025)

 

 

          

Other reconciling items:

 

          

Retro-fit your home targeted rate included in funding impact statement but not recognised as revenue in the statement of comprehensive income

4,706

4,272

6,264

7,106

7,704

7,564

7,431

7,130

6,973

6,643

6,767

Retro-fit your home targeted rate interest component recognised as revenue in the statement of comprehensive income

(2,356)

(1,884)

(2,424)

(2,330)

(2,254)

(2,217)

(2,201)

(2,192)

(2,199)

(2,219)

(2,250)

Share of equity accounted surplus  from associates not distributed by way of dividends to Auckland Council

(4,644)

(6,456)

(7,007)

(9,236)

(11,831)

(7,515)

(4,674)

(4,793)

(5,114)

(5,404)

(5,731)

Prepaid lease revenue recognised in funding impact statement

18,015

12,275

16,836

9,556

13,312

26,061

10,640

24,318

0

6,731

0

Income tax recognised in statement of comprehensive revenue not included in the funding impact statement

23,062

34,643

38,680

40,264

41,522

44,181

46,708

40,207

42,036

45,585

49,185

 

 

          

Operating funding surplus/ (deficit) per Prospective Funding Impact Statement

719,684

882,113

950,196

1,011,367

1,098,346

1,181,454

1,244,448

1,349,738

1,420,572

1,528,188

1,647,850

Auckland Council group
Note 4: Reserve Funds

The Local Government Act 2002 requires the Long-term Plan to identify each reserve set aside by the council, the purpose of each fund, the activities to which each fund relates and funding flows for the period of the plan.

Reserve

Purpose

Activities

Cash flow hedge reserve

 Gains from revaluation of the Diversified Financial Assets portfolio

 Organisational support

Available-for-sale investment revaluation reserve

 Recognition in group accounts of associated' reserves

 Organisational support

Share of associates' reserves

 Accumulated gains from asset revaluation

 Investment

Asset revaluation reserve

 Accumulated gains from asset revaluation

 Various

Cash flow hedge reserve

 Gains from revaluation of the Diversified Financial Assets portfolio

 Organisational support

 

 

 

Restricted equity reserves

 

 

Reserve

Purpose

Activities

Statutory funds (Off street parking)

Funds accumulated under legislation (primarily related to subdivisions or off-street parking).

 Parking and enforcement

Trust and bequests

These trusts are primarily related to assets held by council. The trust deeds restrict council's action in relation to these assets.

 Various

Regional fuel tax reserve

Fuel tax collected for specific transport projects.

Roads and footpaths and

Public transport and travel demand management

Other restricted equity

Reserve funds related to particular projects or assets whereby council is restricted in its decision-making ability.

 Various

 

 

 

Targeted rates reserves

 

 

Reserve

Purpose

Activities

Central City targeted rate reserve

Targeted rate collected for enhancement of central business district as a place to work, live, visit and do business.

 Regional planning

Glorit Flood Gate Restoration targeted rate reserve

Targeted rate being collected to recover the costs of the restoration of the Glorit flood gate.

 Stormwater management

Riverhaven Drive targeted rate reserve

Targeted rate being collected to recover the costs of the construction of a road.

 Roads and footpaths

Jackson Crescent wastewater targeted rate reserve

Targeted rate collected to recover the cost of the council providing financial assistance to connect to a wastewater scheme.

 Wastewater treatment and disposal

Point Wells wastewater targeted rate reserve

Targeted rate collected to recover the cost of the council providing financial assistance to connect to a wastewater scheme.

 Wastewater treatment and disposal

Harbourview Orangihina Park targeted rate reserve

Targeted rate collected for development of Harbourview Orangihina Park.

 Regional community services

Open space/ Volcanic cones

Legacy targeted rates. No longer levied.

 Regional community services

Araparera

Araparera Forest harvest proceeds set aside for roading development in the area.

 Development Auckland

Water quality targeted rate reserve

Targeted Rate collected to help fund the capital costs of investment in cleaning up Auckland's waterways. 

 Stormwater management

Natural environment targeted rate reserve

Targeted Rate collected to help fund the capital and operating costs of investment to deliver enhanced environmental outcomes. 

 Environmental Services

 

The funding flows for these reserves are:

$000

As at 30 June

Annual Plan

2017/2018

Closing balance

2018

Deposits

Withdrawals

Closing balance

2028

Cash flow hedge reserve

(3,000)

0

0

0

0

Available-for-sale investment revaluation reserve

12,000

23,000

0

0

23,000

Share of associates' reserves

451,000

453,000

0

0

453,000

Asset revaluation reserve

7,515,914

8,899,415

10,713,107

0

19,612,522

Restricted equity reserves

 

 

 

 

 

Statutory funds

9,834

9,275

1,911

(2,517)

5,787

Trust and bequests

1,576

1,541

516

(308)

1,749

Regional fuel tax

0

0

1,500,000

(1,500,000)

0

Other restricted equity

22,185

52,330

61,819

(102,333)

11,816

Total restricted equity

33,595

63,146

1,564,246

(1,605,158)

19,352

Targeted rates reserves

 

 

 

 

 

Central City targeted rate reserve

24,251

24,815

244,301

(224,634)

44,481

Glorit Flood Gate Restoration targeted rate reserve

(36)

(36)

36

0

0

Riverhaven Drive targeted rate reserve

(805)

(615)

524

0

(91)

Jackson Crescent wastewater targeted rate reserve

(3)

(3)

3

0

0

Point Wells wastewater targeted rate reserve

(79)

(79)

79

0

0

Harbourview Orangihina Park targeted rate reserve

1,462

1,357

497

0

1,854

Open space/ Volcanic cones

1,061

1,374

0

(1,374)

0

Araparera

0

2,896

1,060

0

3,956

Water quality targeted rate reserve

0

0

452,404

(452,404)

0

Natural environment targeted rate reserve

0

0

141,529

(141,529)

0

Total targeted rates reserves

25,851

29,709

840,432

(819,941)

50,200

Total reserves

8,035,360

9,468,270

13,117,785

(2,425,099)

20,158,074

Note 5: Auckland Council (Parent) financial statements
Prospective statement of comprehensive revenue and expenditure

Auckland Council parent

$000

Financial year ending 30 June

Annual Plan 2017/18

LTP 2018/19

LTP 2019/20

LTP 2020/21

LTP 2021/22

LTP 2022/23

LTP 2023/24

LTP 2024/25

LTP 2025/26

LTP 2026/27

LTP 2027/28

Revenue

 

          

Rates

1,721,646

1,806,105

1,887,287

1,975,138

2,077,906

2,184,749

2,296,257

2,412,357

2,535,513

2,664,126

2,798,454

Fees and user charges

267,315

276,634

280,863

306,332

312,189

318,011

323,817

330,813

338,184

345,086

352,126

Grants and subsidies

249,409

70,167

28,684

15,748

15,913

16,081

16,348

16,517

16,787

16,960

17,233

Development and financial contributions

214,359

204,492

288,657

306,698

297,514

301,301

301,301

301,301

301,301

295,771

293,223

Other revenue

164,436

239,228

239,494

247,865

267,821

276,332

280,836

286,388

291,493

293,640

298,182

Vested assets

502,445

84,486

68,866

92,894

74,635

75,369

77,240

77,324

96,421

97,539

98,681

Finance revenue

108,545

132,891

143,083

155,381

166,592

176,764

187,454

201,384

209,642

210,750

211,408

Total revenue

3,228,155

2,814,003

2,936,934

3,100,056

3,212,570

3,348,607

3,483,253

3,626,084

3,789,341

3,923,872

4,069,307

 

 

          

Expenditure

 

          

Employee benefits

525,978

535,778

548,349

560,979

572,375

584,335

598,331

609,956

622,695

636,004

648,889

Depreciation and amortisation

263,831

276,388

283,761

294,548

304,789

318,396

330,503

348,241

368,035

393,683

422,137

Grants, contributions and sponsorship

1,260,049

1,045,799

1,025,312

1,003,516

999,713

1,021,043

1,183,037

1,183,127

1,132,362

1,286,163

1,277,440

Other operating expenses

481,148

529,858

535,096

557,661

564,696

595,562

621,844

644,798

671,683

698,411

724,012

Finance costs

425,713

456,317

495,350

540,326

570,107

585,479

602,416

613,518

630,112

645,729

655,046

Total expenses

2,956,719

2,844,140

2,887,868

2,957,030

3,011,680

3,104,815

3,336,131

3,399,640

3,424,887

3,659,990

3,727,524

 

 

          

Operating surplus/ (deficit)

271,436

(30,137)

49,066

143,024

200,890

243,792

147,122

226,444

364,454

263,882

341,783

 

 

          

Share of surplus in associates and joint ventures

2,541

65,388

66,206

67,686

70,091

68,277

67,194

69,132

71,322

73,537

75,860

 

 

          

Operating surplus/ (deficit) before income tax

273,977

35,251

115,272

210,710

270,981

312,069

214,316

295,576

435,776

337,419

417,643

 

 

          

Income tax expense

0

0

0

0

0

0

0

0

0

0

0

 

 

          

Surplus/ (deficit) after income tax

273,977

35,251

115,272

210,710

270,981

312,069

214,316

295,576

435,776

337,419

417,643

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive revenue and expenditure

 

          

Net gain on revaluation of property, plant and equipment

491,138

0

0

1,579,812

0

0

1,347,362

0

0

1,462,031

0

Total other comprehensive revenue/ (expenditure)

491,138

0

0

1,579,812

0

0

1,347,362

0

0

1,462,031

0

 

 

          

Total comprehensive revenue/ (expenditure)

765,115

35,251

115,272

1,790,522

270,981

312,069

1,561,678

295,576

435,776

1,799,450

417,643

Prospective statement of movement in equity

Auckland Council parent

$000

Financial year ending 30 June

Annual

Plan 2017/18

LTP

2018/19

LTP

2019/20

LTP

2020/21

LTP 2021/22

LTP 2022/23

LTP 2023/24

LTP 2024/25

LTP 2025/26

LTP 2026/27

LTP 2027/28

Contributed equity

 

          

As at 1 July

26,569,092

26,569,092

26,569,092

26,569,092

26,569,092

26,569,092

26,569,092

26,569,092

26,569,092

26,569,092

26,569,092

Surplus after income tax

0

0

0

0

0

0

0

0

0

0

0

Other comprehensive revenue

0

0

0

0

0

0

0

0

0

0

0

Total comprehensive revenue

0

0

0

0

0

0

0

0

0

0

0

Transfer from/(to) reserves

0

0

0

0

0

0

0

0

0

0

0

Balance as at 30 June

26,569,092

26,569,092

26,569,092

26,569,092

26,569,092

26,569,092

26,569,092

26,569,092

26,569,092

26,569,092

26,569,092

 

 

          

Accumulated funds

 

          

As at 1 July

(878,258)

(499,506)

(478,232)

(329,366)

(102,117)

154,465

467,657

689,293

1,003,291

1,457,354

1,772,863

Surplus after income tax

273,977

35,251

115,272

210,710

270,981

312,069

214,316

295,576

435,776

337,419

417,645

Other comprehensive revenue

0

0

0

0

0

0

0

0

0

0

0

Total comprehensive revenue

273,977

35,251

115,272

210,710

270,981

312,069

214,316

295,576

435,776

337,419

417,643

Transfer from/(to) reserves

9,224

(13,977)

33,594

16,539

(14,399)

1,123

7,320

18,422

18,287

(21,910)

(21,697)

Balance as at 30 June

(595,057)

(478,232)

(329,366)

(102,117)

154,465

467,657

689,293

1,003,291

1,457,354

1,772,863

2,168,809

 

 

          

Reserves

 

          

As at 1 July

3,199,525

3,705,104

3,719,081

3,685,487

5,248,760

5,263,159

5,262,036

6,602,078

6,583,656

6,565,369

8,049,310

Surplus after income tax

0

0

0

0

0

0

0

0

0

0

0

Other comprehensive revenue

491,138

0

0

1,579,812

0

0

1,347,362

0

0

1,462,031

0

Total comprehensive revenue

491,138

0

0

1,579,812

0

0

1,347,362

0

0

1,462,031

0

Transfer from/(to) reserves

(9,224)

13,977

(33,594)

(16,539)

14,399

(1,123)

(7,320)

(18,422)

(18,287)

21,910

21,697

Balance as at 30 June

3,681,439

3,719,081

3,685,487

5,248,760

5,263,159

5,262,036

6,602,078

6,583,656

6,565,369

8,049,310

8,071,007

 

 

          

Total equity

 

          

As at 1 July

28,890,359

29,774,690

29,809,941

29,925,213

31,715,735

31,986,716

32,298,785

33,860,463

34,156,039

34,591,815

36,391,267

Surplus after income tax

273,977

35,251

115,272

210,710

270,981

312,069

214,316

295,576

435,776

337,419

417,643

Other comprehensive revenue

491,138

0

0

1,579,812

0

0

1,347,362

0

0

1,462,031

0

Total comprehensive revenue

765,115

35,251

115,272

1,790,522

270,981

312,069

1,561,678

295,576

435,776

1,799,450

417,643

Transfer to/ (from) reserves

0

0

0

0

0

0

0

0

0

0

0

Balance as at 30 June

29,655,474

29,809,941

29,925,213

31,715,735

31,986,716

32,298,785

33,860,463

34,156,039

34,591,815

36,391,265

36,808,908

Prospective statement of financial position

Auckland Council parent

$000

As at 30 June

Annual Plan 2017/18

LTP 2018/19

LTP 2019/20

LTP 2020/21

LTP 2021/22

LTP

2022/23

LTP 2023/24

LTP 2024/25

LTP 2025/26

LTP 2026/27

LTP 2027/28

Assets

 

          

Current assets

 

          

Cash and cash equivalents

215,000

180,000

180,000

180,000

180,000

180,000

180,000

180,000

180,000

180,000

180,000

Receivables and prepayments

201,160

320,098

326,012

340,565

357,793

374,030

390,367

407,604

425,789

444,233

463,794

Other financial assets

185,790

135,850

135,850

135,850

135,850

135,850

135,850

135,850

135,850

135,850

135,850

Inventories

8,000

11,444

11,673

11,906

12,144

12,387

12,635

12,888

13,146

13,409

13,677

Non-current assets held for sale

114,504

104,000

71,000

174,000

65,000

43,000

40,000

57,000

64,000

39,000

39,000

Total current assets

724,454

751,392

724,535

842,321

750,787

745,267

758,852

793,342

818,785

812,492

832,321

 

 

          

Non-current assets

 

          

Receivables and prepayments

17,782

4,589

4,674

4,883

5,130

5,363

5,597

5,844

6,105

6,369

6,649

Derivative financial instruments

255,000

173,434

173,434

173,434

173,434

173,434

173,434

173,434

173,434

173,434

173,434

Other financial assets

1,627,419

2,036,138

2,184,929

2,384,482

2,586,366

2,792,442

3,038,270

3,328,811

3,442,514

3,395,005

3,384,010

Property, plant and equipment

14,236,828

15,321,410

15,650,790

17,381,701

17,637,406

18,046,652

19,791,915

20,214,916

21,057,044

23,064,681

23,536,391

Intangible assets

226,220

277,246

257,894

235,130

225,134

215,812

209,989

210,542

213,742

208,732

187,005

Investment property

121,000

162,000

162,000

162,000

162,000

162,000

162,000

162,000

162,000

162,000

162,000

Investments in subsidiaries

21,379,000

21,264,083

21,264,083

21,264,083

21,264,083

21,264,083

21,264,083

21,264,083

21,264,083

21,264,083

21,264,083

Investments in associates and joint ventures

452,940

552,159

811,505

1,177,831

1,521,362

1,830,940

1,908,444

1,780,341

1,783,929

1,787,775

1,791,927

Other non-current assets

2,000

3,000

3,000

3,000

3,000

3,000

3,000

3,000

3,000

3,000

3,000

Total non-current assets

38,318,189

39,794,059

40,512,309

42,786,544

43,577,915

44,493,726

46,556,732

47,142,971

48,105,851

50,065,079

50,508,499

 

 

          

Total assets

39,042,643

40,545,451

41,236,844

43,628,865

44,328,702

45,238,993

47,315,584

47,936,313

48,924,636

50,877,571

51,340,820

 

$000

As at 30 June

Annual Plan 2017/18

LTP 2018/19

LTP 2019/20

LTP 2020/21

LTP 2021/22

LTP

2022/23

LTP 2023/24

LTP 2024/25

LTP 2025/26

LTP 2026/27

LTP 2027/28

Liabilities

 

          

Current liabilities

 

          

Payables and accruals

625,718

676,332

651,193

615,700

618,727

669,792

727,808

743,745

878,128

827,737

808,379

Employee entitlements

57,596

57,922

59,281

60,646

61,878

63,171

64,684

65,941

67,318

68,757

70,150

Borrowings

1,024,285

1,109,362

1,195,527

1,285,915

1,344,332

1,415,145

1,474,036

1,514,468

1,567,812

1,594,471

1,602,968

Derivative financial instruments

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

Provisions

62,762

60,806

42,705

25,411

16,983

13,375

10,633

7,942

5,700

4,314

3,662

Total current liabilities

1,772,361

1,906,422

1,950,706

1,989,672

2,043,920

2,163,483

2,279,161

2,334,096

2,520,958

2,497,279

2,487,159

 

 

          

Non-current liabilities

 

          

Payables and accruals

24,200

27,131

26,121

24,697

24,818

26,866

29,193

29,832

35,223

33,200

32,426

Employee entitlements

2,173

2,228

2,280

2,333

2,380

2,430

2,488

2,536

2,589

2,644

2,698

Borrowings

6,802,455

7,656,323

8,250,986

8,874,793

9,277,961

9,766,683

10,173,105

10,452,144

10,820,318

11,004,299

11,062,944

Derivative financial instruments

901,000

861,517

861,517

861,517

861,517

861,517

861,517

861,517

861,517

861,517

861,517

Provisions

198,908

281,889

220,021

160,118

131,390

119,229

109,657

100,149

92,216

87,367

85,168

Total non-current liabilities

7,928,736

8,829,088

9,360,925

9,923,458

10,298,066

10,776,725

11,175,960

11,446,178

11,811,863

11,989,027

12,044,753

 

 

          

Total liabilities

9,701,097

10,735,510

11,311,631

11,913,130

12,341,986

12,940,208

13,455,121

13,780,274

14,332,821

14,486,306

14,531,912

 

 

          

Net assets

29,341,546

29,809,941

29,925,213

31,715,735

31,986,716

32,298,785

33,860,463

34,156,039

34,591,815

36,391,265

36,808,908

 

 

          

Equity

 

          

Contributed equity

26,569,092

26,569,092

26,569,092

26,569,092

26,569,092

26,569,092

26,569,092

26,569,092

26,569,092

26,569,092

26,569,092

Accumulated funds

(563,317)

(478,232)

(329,366)

(102,117)

154,465

467,657

689,293

1,003,291

1,457,354

1,772,863

2,168,809

Reserves

3,335,771

3,719,081

3,685,487

5,248,760

5,263,159

5,262,036

6,602,078

6,583,656

6,565,369

8,049,310

8,071,007

Total ratepayers equity

29,341,546

29,809,941

29,925,213

31,715,735

31,986,716

32,298,785

33,860,463

34,156,039

34,591,815

36,391,265

36,808,908

Minority interests

0

0

0

0

0

0

0

0

0

0

0

Total equity

29,341,546

29,809,941

29,925,213

31,715,735

31,986,716

32,298,785

33,860,463

34,156,039

34,591,815

36,391,265

36,808,908

Prospective statement of cash flows

Auckland Council parent

$000

Financial year ending 30 June

Annual Plan 2017/18

LTP 2018/19

LTP 2019/20

LTP 2020/21

LTP 2021/22

LTP 2022/23

LTP 2023/24

LTP 2024/25

LTP 2025/26

LTP 2026/27

LTP 2027/28

Cash flows from operating activities

 

          

Receipts from rates revenue

1,721,646

1,806,105

1,887,287

1,975,138

2,077,906

2,184,749

2,296,257

2,412,357

2,535,513

2,703,494

2,839,013

Receipts from customers and other services

764,912

837,499

877,194

915,946

944,662

970,262

986,041

1,002,222

1,016,531

1,023,071

1,034,967

Interest received

108,545

132,891

143,083

155,381

166,592

176,764

187,454

201,384

209,642

210,750

211,408

Dividend received

94,229

13,713

15,465

6,396

(8,241)

(12,808)

(16,318)

(18,854)

(19,478)

(20,631)

(22,336)

Payments to suppliers and employees

(2,239,624)

(2,134,344)

(2,176,659)

(2,178,331)

(2,131,365)

(2,227,226)

(2,373,516)

(2,456,619)

(2,430,474)

(2,635,984)

(2,673,450)

Interest paid

(418,118)

(450,629)

(491,950)

(537,868)

(568,443)

(584,628)

(602,099)

(613,324)

(629,962)

(645,579)

(654,896)

Net cash from operating activities

31,590

205,235

254,420

336,662

481,111

507,113

477,819

527,166

681,772

635,121

734,706

 

 

          

Cash flows from investing activities

 

          

Proceeds from sale of other financial assets

236,401

0

0

0

0

0

0

0

0

0

0

Acquisition of other financial assets

(6,497)

(4,011)

(3,168)

(2,960)

(2,084)

(2,362)

(1,922)

(1,070)

(1,890)

(1,117)

(716)

Advances of loans to related parties

(81,583)

(149,713)

(179,735)

(254,582)

(238,300)

(138,182)

(222,799)

(263,433)

24,767

(30,328)

(25,210)

Sale of property, plant and equipment, investment property and intangible assets

114,505

177,000

104,000

71,000

174,000

65,000

43,000

40,000

57,000

64,000

39,000

Purchase of property, plant and equipment, investment property and intangible assets

(511,382)

(617,070)

(595,923)

(503,990)

(540,863)

(685,951)

(685,341)

(751,471)

(1,180,942)

(875,739)

(812,440)

Proceeds from community loan repayments

2,350

2,388

3,840

4,776

5,451

5,347

5,230

4,938

4,774

4,424

4,517

Investment in associates and joint ventures

0

(234,700)

(254,100)

(359,100)

(333,900)

(303,500)

(74,300)

131,400

0

0

0

Advances to external parties

(8,876)

(49,962)

(10,162)

(6,000)

(7,000)

(7,000)

(7,000)

(7,000)

(7,000)

(7,000)

(7,000)

Net cash from investing activities

(255,082)

(876,068)

(935,248)

(1,050,856)

(942,696)

(1,066,648)

(943,132)

(846,636)

(1,103,291)

(845,760)

(801,849)

 

 

          

Cash flows from financing activities

 

          

Proceeds from borrowings

1,298,189

1,544,192

1,790,190

1,909,721

1,747,500

1,903,867

1,880,458

1,793,506

1,935,987

1,778,451

1,661,614

Repayment of borrowings

(1,074,697)

(1,046,359)

(1,109,362)

(1,195,527)

(1,285,915)

(1,344,332)

(1,415,145)

(1,474,036)

(1,514,468)

(1,567,812)

(1,594,471)

Net cash from financing activities

223,492

497,833

680,828

714,194

461,585

559,535

465,313

319,470

421,519

210,639

67,143

 

 

 

 

 

 

 

 

 

 

 

 

Net increase/(decrease) in cash and cash equivalents and bank overdraft

0

(173,000)

0

0

0

0

0

0

0

0

0

Cash and cash equivalents and bank overdraft at beginning of the year

215,000

353,000

180,000

180,000

180,000

180,000

180,000

180,000

180,000

180,000

180,000

Cash and cash equivalents and bank overdrafts at end of the year

215,000

180,000

180,000

180,000

180,000

180,000

180,000

180,000

180,000

180,000

180,000

Note 6: Group depreciation and amortisation by group of activity

$000

Financial year ending 30 June

Annual Plan 2017/18

LTP 2018/19

LTP 2019/20

LTP 2020/21

LTP 2021/22

LTP 2022/23

LTP 2023/24

LTP 2024/25

LTP 2025/26

LTP 2026/27

LTP 2027/28

Roads and Footpaths

256,091

251,519

269,769

290,847

314,103

348,170

373,449

396,006

427,320

459,098

484,209

Public Transport and travel demand management

106,884

102,386

102,974

102,304

103,925

105,098

109,955

116,021

125,830

137,173

147,320

Wastewater

130,973

143,952

146,382

148,989

167,473

171,362

176,535

198,771

206,728

215,005

237,250

Water supply

99,011

108,393

109,493

110,743

123,820

125,050

126,271

139,798

142,567

145,802

159,723

Stormwater

58,484

60,553

63,025

64,344

67,419

70,744

74,421

77,567

80,158

84,224

88,226

Local Council Services

3,585

8,349

14,775

22,310

30,036

37,813

45,368

53,254

62,625

73,922

86,295

Regionally delivered council services

229,656

232,641

242,028

241,509

239,821

242,240

239,744

244,095

252,268

263,171

275,586

Council controlled services

40,907

45,668

50,597

56,532

60,583

64,492

68,542

71,617

73,638

73,718

75,650

 

 

          
 

925,591

953,461

999,043

1,037,578

1,107,180

1,164,969

1,214,285

1,297,129

1,371,134

1,452,113

1,554,259

> Back to contents list

2.3 Prospective consolidated funding impact statement

Auckland Council group consolidated

$000

Financial year ending 30 June

Annual  Plan

2017/18

LTP 2018/19

LTP 2019/20

LTP 2020/21

LTP 2021/22

LTP

2022/23

LTP 2023/24

LTP 2024/25

LTP 2025/26

LTP 2026/27

LTP 2027/28

Sources of operating funding:

 

          

General rates, UAGCs, rates penalties

1,517,067

1,588,388

1,660,153

1,752,213

1,848,734

1,949,845

2,055,738

2,167,522

2,285,588

2,409,220

2,538,303

Targeted rates

197,643

212,615

223,859

220,129

226,636

231,872

236,987

240,626

245,167

249,632

254,647

Subsidies and grants for operating purposes

273,705

286,973

297,307

305,689

313,599

321,216

329,329

336,149

342,569

348,891

356,218

Fees and charges

1,255,679

1,347,989

1,424,281

1,529,557

1,593,904

1,656,940

1,725,021

1,788,539

1,854,387

1,926,709

2,001,496

Interest and dividends from investments

67,976

70,661

70,961

70,930

70,825

72,391

74,118

75,946

77,918

79,889

81,909

Local authorities fuel tax, fines, infringement fees and other receipts

289,074

430,324

442,794

439,510

456,352

471,395

460,157

477,455

456,585

465,384

471,503

Total operating funding

3,601,144

3,936,950

4,119,355

4,318,028

4,510,050

4,703,659

4,881,350

5,086,237

5,262,214

5,479,725

5,704,076

 

 

          

Applications of operating funding:

 

          

Payment to staff and suppliers

2,418,699

2,587,623

2,655,498

2,744,272

2,817,466

2,910,733

3,006,309

3,093,448

3,181,378

3,275,935

3,370,765

Finance costs

454,998

467,214

513,661

562,389

594,238

611,472

630,593

643,051

660,264

675,602

685,461

Other operating funding applications

7,763

0

0

0

0

0

0

0

0

0

0

Total applications of operating funding

2,881,460

3,054,837

3,169,159

3,306,661

3,411,704

3,522,205

3,636,902

3,736,499

3,841,642

3,951,537

4,056,226

 

 

          

Surplus (deficit) of operating funding

719,684

882,113

950,196

1,011,367

1,098,346

1,181,454

1,244,448

1,349,738

1,420,572

1,528,188

1,647,850

 

 

          
 

 

          

Sources of capital funding:

 

          

Subsidies and grants for capital expenditure

403,083

411,868

486,707

475,320

471,167

430,841

552,107

561,020

511,655

580,785

631,385

Development and financial contributions

214,358

204,491

288,657

306,696

297,514

301,303

301,303

301,303

301,303

295,771

293,224

Increase (decrease) in debt

354,308

591,532

703,627

712,291

484,954

542,829

450,799

304,585

407,301

196,463

53,551

Gross proceeds from sale of assets

114,505

177,000

104,000

71,000

174,000

65,000

43,000

40,000

57,000

64,000

39,000

Lump sum contributions

0

0

0

0

0

0

0

0

0

0

0

Other dedicated capital funding

0

0

0

0

0

0

0

0

0

0

0

Total sources of capital funding

1,086,254

1,384,891

1,582,991

1,565,307

1,427,635

1,339,973

1,347,209

1,206,908

1,277,259

1,137,019

1,017,160

 

 

          

Application of capital funding:

 

          

Capital expenditure:

 

          

- to meet additional demand

797,653

980,090

827,105

774,944

806,379

678,595

648,054

690,428

543,127

616,381

634,791

- to improve the level of service

609,111

539,727

759,619

738,929

719,212

845,475

959,753

992,961

1,191,235

1,023,308

966,177

- to replace existing assets

609,952

658,203

581,334

600,823

623,084

688,867

963,799

1,012,417

942,479

991,540

1,049,458

Increase (decrease) in reserves

65,329

32,319

81,369

78,655

38,820

16,620

12,631

12,393

10,325

6,385

3,001

Increase (decrease) in investments

(276,107)

56,665

283,760

383,323

338,486

291,870

7,420

(151,553)

10,665

27,593

11,583

Total applications of capital funding

1,805,938

2,267,004

2,533,187

2,576,674

2,525,981

2,521,427

2,591,657

2,556,646

2,697,831

2,665,207

2,665,010

 

 

          

Surplus (deficit) of capital funding

(719,684)

(882,113)

(950,196)

(1,011,367)

(1,098,346)

(1,181,454)

(1,244,448)

(1,349,738)

(1,420,572)

(1,528,188)

(1,647,850)

 

 

          

Funding balance

0

0

0

0

0

0

0

0

0

0

0

> Back to contents list

4.0 Supplementary information

How the organisation is structured

Auckland Council is a unique model of local government in New Zealand, comprising the governing body (made up of the mayor and 20 ward councillors) and 21 local boards.   Together, this is a shared governance model where decisions can be made regionally and locally, and both big picture regional views and local views are an important part of the decision-making process.

Auckland Council also has council-controlled organisations (CCOs) to carry out certain functions and provide services. They are independent in their operations, but are accountable to the council.

The Independent Māori Statutory Board (IMSB) is an independent board established by the Local Government (Auckland Council) Amendment Act 2010.

There are also nine advisory panels that advise the council on its strategies, policies, plans and bylaws and mechanisms for engagement.

The Governing Body

This consists of the mayor and 20 councillors who are elected on a ward basis. The Governing Body focuses on the big picture and on Auckland-wide strategic decisions that are important to the whole region. Auckland is split into 13 wards, which are used for council elections. Councillors are elected to represent the Auckland region and they also sit on council committees. Our councillors' contact details can be found on the next page.

The Mayor

The Mayor is elected by residents directly. The mayor leads the council and has enhanced responsibilities including promoting a vision for Auckland, providing leadership to achieve the vision, leading development of council plans, policies and budget, and engaging with the people of Auckland and its many communities and stakeholders.

Mayor and councillors' contact details

Hon Phil Goff, CNZM, MAYOR

Ph: (09) 301 0101

phil.goff@aucklandcouncil.govt.nz

Chair - Governing Body
Chair - Appointments, Performance Review, & Value For Money Committee

Bill Cashmore, DEPUTY MAYOR [Franklin]

Ph: (021) 283 3355

bill.cashmore@aucklandcouncil.govt.nz

Chair - Strategic Procurement Committee
Deputy Chair - Governing Body
Deputy Chair- Audit & Risk Committee
Deputy Chair- Regulatory Committee

Wayne Walker [Albany]

Ph: (021) 882 861

wayne.walker@aucklandcouncil.govt.nz

 

John Watson [Albany]

Ph: (021) 287 5999

john.watson@aucklandcouncil.govt.nz

Deputy Chair - Civil Defence Emergency Management Group Committee

Dr Cathy Casey

[Albert-Eden-Roskill]

Ph: (027) 474 4231

cathy.casey@aucklandcouncil.govt.nz

Chair - Community Development & Safety Committee

Hon Christine Fletcher, QSO

[Albert-Eden-Roskill]

Ph: (027) 276 0013

christine.fletcher@aucklandcouncil.govt.nz

Deputy Chair - Appointments, Performance Review, & Value For Money Committee

Josephine Bartley [Maungakiekie-Tamaki]

Ph: (021) 287 5599

josephine.bartley@aucklandcouncil.govt.nz

Sharon Stewart QSM [Howick]

Ph: (021) 282 1144

sharon.stewart@aucklandcouncil.govt.nz

Chair - Civil Defence Emergency Management Group Committee

Fa'anana Efeso Collins [Manukau]

Ph: (021) 242 6585

efeso.collins@aucklandcouncil.govt.nz

Deputy Chair - Community Development and Safety Committee

Alf Filipaina [Manukau]

Ph: (021) 280 0999

alf.filipaina@aucklandcouncil.govt.nz

Deputy Chair - Environment & Community Committee

Sir John Walker, KNZM, CBE
[Manurewa-Papakura]

john.walker@aucklandcouncil.govt.nz

 

Daniel Newman, JP

[Manurewa-Papakura]

Ph (021) 518 796

daniel.newman@aucklandcouncil.govt.nz

Chris Darby [North Shore]

Ph: (021) 284 2888

chris.darby@aucklandcouncil.govt.nz

Chair - Planning Committee

Ross Clow [Whau]

Ph: (021) 808 214

ross.clow@aucklandcouncil.govt.nz

Chair - Finance & Performance Committee

Deputy Chair - Strategic Procurement Committee

 

Richard Hills [North Shore]

Ph: (021) 286 4411

richard.hills@aucklandcouncil.govt.nz

Deputy Chair - Planning Committee

Desley Simpson, JP [Orākei]

Ph: (021) 971 786

desley.simpson@aucklandcouncil.govt.nz

Deputy Chair - Finance and Performance Committee

Greg Sayers [Rodney]

Ph: (021) 285 9900

greg.sayers@aucklandcouncil.govt.nz

 

Linda Cooper, JP [Waitākere]

Ph: (021) 629 533

linda.cooper@aucklandcouncil.govt.nz

Chair - Regulatory Committee

Penny Hulse [Waitākere]

Ph: (021) 273 4663

penny.hulse@aucklandcouncil.govt.nz

Chair - Environment & Community Committee

Mike Lee [Waitematā and Gulf]

Ph: (027) 494 3198

mike.lee@aucklandcouncil.govt.nz

 

Local boards

The 21 local boards are a key part of the governance of Auckland Council with a wide-ranging role that spans most council services and activities. Local boards make decisions on local matters, provide local leadership, support strong local communities and provide important local input into region-wide strategies and plans.

Local boards:

  • Make decisions on local matters, including setting the standards of services delivered locally
  • Identify the views of local people on regional strategies, policies, plans and bylaws and communicate these to the governing body
  • Develop and implement local board plans (every three years)
  • Develop, monitor and report on local board agreements (every year)
  • Provide local leadership and develop relationships with the governing body, the community and community organisations in the local area
  • Identify and develop bylaws for the local board area and propose them to the governing body
  • Monitoring and reporting on the implementation of local board agreements
  • Any additional responsibilities delegated by the governing body, such as decisions within regional bylaws.

Each year, local boards and the governing body agree individual local board agreements, which set out the local activities, services and levels of service that will be provided over the coming year. The agreements for 2017/2018 are included in this annual budget and can be found in Volume 2 of this document.

To find out which local board area you are in, follow this path from the website home page:

About Council > Local Boards > Find your ward and local board

Council-controlled organisations

Auckland Council provides a range of services and programmes to the Auckland region through its substantive CCOs and a range of other CCOs which participate in, and contribute to, the plans made by the council, as well as managing services such as transport.

CCOs fulfil two key roles. They provide commercial or specialist expertise that may not be available within the council organisation, and allow the council to focus on its core responsibilities such as strategy, policy or regulatory functions.

For more information on the policies, objectives, activities and performance targets of CCOs, see the relevant activity statement in the Long-term Plan 2015-2025, CCO overview in Part 4 of Volume 2.

Independent Māori Statutory Board (IMSB)

The IMSB is an independent board, whose purpose is to assist the council to make decisions, perform functions and exercise powers, taking into account the cultural, economic, environmental and social issues of significance for Mana Whenua groups and mataawaka of Tāmaki Makaurau - Auckland. It also ensures the council acts in accordance with statutory provisions referring to the Treaty of Waitangi.

The board:

  • will identify and prioritise issues that are significant to Māori to help guide the council's work programme
  • advise the council about issues that affect Māori in Auckland
  • work with the council to help it meet its statutory obligations to Māori in Auckland
  • work with the council on the design and execution of documents and processes.

The board and the council will also meet at least four times each year to discuss the council's performance of its duties. The nine members are:

Independent Māori Statutory Board Members

  • Mr David Taipari, Chairperson
  • Mr Glenn Wilcox, Deputy Chairperson
  • Mr Renata Blair
  • Mr James Brown
  • Hon. Tau Henare
  • Ms Liane Ngāmane
  • Mr Terrence (Muka) Hohneck
  • Mr Tony Kake
  • Mr Denis Kirkwood.

For more details on the IMSB, please visit www.imsb.maori.nz.

Advisory panels

As one of council's engagement mechanisms with diverse communities, the advisory panels provide advice to the governing body and council staff within the remit of the Auckland Plan on the following areas:

  • Auckland Council's regional policies, plans and strategies
  • regional and strategic matters including those that Council-Controlled Organisations deal with
  • any matter of particular interest or concern to diverse communities.

Auckland Council has six demographic advisory panels and three sector panels.

Demographic advisory panels:

  • Disability Advisory Panel
  • Rainbow Communities Advisory Panel
  • Ethnic Peoples Advisory Panel
  • Seniors Advisory Panel
  • Pacific Peoples Advisory Panel
  • Youth Advisory Panel.

Sector panels:

  • Auckland City Centre Advisory Board
  • Rural Advisory Panel
  • Heritage Advisory Panel.

For more detail on Auckland Council's advisory panels, please visit our website www.aucklandcouncil.govt.nz

Information can be found under: About council > Your mayor and representatives > Advisory panels. 

Co-governance arrangements

As a result of Treaty of Waitangi Settlements, legislation has established co-governance entities which require the involvement of the council:

The Ngāti Whātua Ōrākei Reserves Board is established under the Ōrākei Act 1991 and currently operates under the Ngāti Whātua Ōrākei Claims Settlement Act 2012 and has three council appointees.

  1. Te Poari o Kaipātiki ki Kaipara (officially the Parakai Recreation Reserve Board) is established under the Ngāti Whātua o Kaipara Claims Settlement Act 2013 and has three council appointees.
  2. The Tūpuna Maunga o Tāmaki Makaurau Authority (or Maunga Authority) is established under the Ngā Mana Whenua o Tāmaki Makaurau Collective Redress Act 2014 and has six council appointees.

In addition, the council nominates two members of the Mutukaroa (Hamlins Hill) Management Trust and four members of the Te Motu a Hiaroa (Puketutu Island) Governance Trust.

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How to contact the council

Telephone: (09) 301 0101 (toll-free)
In person: At our customer service centres
Via our website: Using our online form at www.aucklandcouncil.govt.nz
Fax: (09) 301 0100
Write to us: At Auckland Council, Private Bag 92300, Auckland 1142

Customer service centres

Customer service centres allow Aucklanders to interact with us in person. We have over 25 customer service centres operating around Auckland. Currently, there are a variety of different services delivered to different levels across the centres, but overall they deliver:

  • general information on all council services, products and events
  • property information
  • payments for dog registration rates and other services
  • lodgement of building and resource consents
  • dog renewal registration
  • lodgement of licences and LIM applications
  • copies of publications and reports
  • specialist advice
  • payment of parking infringements.

To find out what services are offered from your local service centre, please visit our website www.aucklandcouncil.govt.nz. Information can be found under: Contact us > Customer service centres

Service centre

Physical address

Albany

30 Kell Drive, Albany

Birkenhead

Nell Fisher Reserve - Hinemoa Street, Birkenhead

Bledisloe House

24 Wellesley Street, Auckland Central

Browns Bay

Corner of Bute and Glen Roads, Browns Bay

Devonport

3 Victoria Road, Devonport

Glen Eden

39 Glenmall Place, Glen Eden

Glenfield

90 Bentley Avenue, Glenfield

Graham Street

35 Graham Street, Auckland

Great Barrier Island

Hector Sanderson Road, Claris

Helensville

49 Commercial Road, Helensville

Henderson

6 Henderson Valley Road, Henderson Waitākere

Huapai

296 Main Road (SH16) Huapai

Manukau

Ground Floor, Kotuku House, 4 Osterley Way, Manukau City Centre

New Lynn

31 Totara Avenue, New Lynn

Ōrewa

50 Centreway Road, Ōrewa

Papakura

35 Coles Crescent, Papakura

Pukekohe

82 Manukau Road, Pukekohe

Takapuna

1 The Strand, Takapuna

Waiheke Island

10 Belgium Street, Ostend

Waiuku

Corner of King Street and Constable Road, Waiuku

Warkworth

1 Baxter Street, Warkworth

Whangapāraoa

9 Main Street, Whangapāraoa

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4.3 Glossary of terms

Term

Definition

Activity

The goods or services the council provides

Annual Plan (Also known as Annual Budget)

The plan that sets out what the council will be working to achieve in a financial year, how it will spend its money, the level of service to be provided, and the level of rates and other revenue required to fund that spending

Asset

An item of value, usually of a physical nature, that has a useful life of more than 12 months and has future economic benefits over a period of time. Infrastructural assets provide the basic facilities, services and installations needed for a community or society to function, such as stormwater drainage pipes. Non-infrastructural assets are the organisation's other assets that provide either administrative or operational functions, such as computer software

AT

Auckland Transport

ATAP

The Auckland Transport Alignment Project, a collaborative project between Auckland Council and Central Government to align strategic transport priorities for the Auckland region.

ATEED

Auckland Tourism, Events and Economic Development

Auckland Council or the council

The local government of Auckland established on 1 November 2010. The council is made up of the governing body, 21 local boards, and the council organisation (operational staff)

BID

Business improvement district

Centres

Localities identified as urban centres which include the city centre and fringe, metropolitan centres, town centres and local centres. Centres are typically higher density, compact mixed-use environments with high quality public transport links and provide a wide range of community, recreational, social and other activities

CRL

The City Rail Link project

CRL Limited

The separate legal entity that will deliver the CRL

COMET

COMET Auckland (Community and Education Trust)

Commercial activities

Retail, information and communication, finance and insurance, and other service sectors. These sectors typically can afford relatively higher land prices/rents, and locate well in town centres

Council-controlled organisation (CCO)

A company or other entity under the control of local authorities through their shareholding of 50 per cent or more, voting rights of 50 per cent or more, or right to appoint 50 per cent or more of the directors. Some organisations may meet this definition but are exempted as council-controlled organisations

Depreciation

The charge representing consumption or use of an asset, assessed by spreading the asset's value over its estimated economic life. Depreciation includes amortisation of intangible assets unless otherwise stated

FULSS

The Future Urban Land Supply Strategy

Development contributions

Contributions from developers, collected to help fund new infrastructure required by growth, as set out in the Local Government Act 2002. This can be a financial contribution or provision of services or an asset of the same value

Governing Body

The governing body is made up of the mayor and 20 councillors. It shares its responsibility for decision-making with the local boards. The governing body focuses on the big picture and on Auckland-wide strategic decisions. Because each ward may vary in population, some wards have more than one councillor

Grants and subsidies

Revenue received from an external agency to help fund an activity or service that the council provides

Gross operating expenditure

Total without deductions of depreciation and finance costs

Hapū

Kinship group, clan, tribe, sub tribe - section of a large kinship group

Household

One or more people usually resident in the same dwelling, who share living facilities.  A household can contain one or more families or no families at all. A household that does not contain a family nucleus could contain unrelated people, related people, or could simply be a person living alone

Infrastructure

The fixed, long-lived structures that facilitate the production of goods and services and underpin many aspects of quality of life. Infrastructure refers to physical networks, principally transport, water, energy, and communications

Iwi

Groups of whānau or hapū related through a common ancestor

Kaitiaki

Guardians of the environment

Kaitiakitanga

Guardianship including stewardship; processes and practices for looking after the environment, guardianship that is rooted in tradition

Local boards

There are 21 local boards which share responsibility for decision-making with the governing body. They represent their local communities and make decisions on local issues, activities and facilities

Local Board Agreement

An annual agreement between the governing body and each local board, setting out how the council will, in that year, reflect the priorities and preferences in its local board plan for the year in respect of various things, including the local activities to be provided in the local board area

Local Board Plan

A plan that reflects the priorities and preferences of the communities within the local board area in respect of the level and nature of local activities to be provided by the council over the next three years

Local Government Act 2002 (LGA 2002)

Legislation that defines the powers and responsibilities of territorial local authorities such as Auckland Council

Local Government (Rating) Act 2002 (LGRA)

Defines how territorial local authorities such as Auckland Council can set, assess and collect rates

Long-term Plan or the LTP (Also known as the 10-year budget)

This document sets out the council's vision, activities, projects, policies, and budgets for a 10-year period. Also commonly referred to as the LTP, the 10-year budget

Mana whenua

Iwi, the people of the land who have mana or customary authority. Their historical, cultural and genealogical heritage are attached to the land and sea

Mataawaka

Māori who live in Auckland but do not whakapapa to mana whenua

Mātauranga Māori

Māori wisdom. In a traditional context, this means the knowledge, comprehension or understanding of everything visible or invisible that exists across the universe

Maunga

Mountain, mount, peak; Auckland's volcanic cones

Mauri

Mauri is the pure state of an object or substance. Sometimes referred to as the 'life force', mauri is contingent upon all things being in balance or in harmony

New Zealand Transport Agency (NZTA)

Plans and delivers sustainable transport networks across New Zealand, In Auckland and has responsibility for maintaining the state highway network roads

One Local Initiative

As part of the 10-year Budget, each of our 21 Local Boards has identified a project that they believe to be the most important for their local community

Fortified Māori settlements, villages and towns

Papakāinga

A location including meeting facilities, homes, vegetable gardens, a cemetery and other things required to sustain a whānau, hapū or iwi. Known previously as unfortified Māori settlements, villages and towns

Papakāinga housing

Housing development within a papakāinga framework

Penlink

Penlink is a proposed alternative route between the Whangaparaoa Peninsula and State Highway 1 (SH1) at Redvale

Rangatahi

Younger generation, youth

Rangatira

Chief

Rangatiratanga

Chiefly authority. A state of being. It is expressed in who we are, and how we do things; ability to make decisions for the benefit of their people and the community in general; confers not only status but also responsibility to ensure that the natural world and its resources are maintained into the future; recognises iwi and hapū right to manage resources or kaitiakitanga over the ancestral lands and waters. The Māori version of article 2 of the Treaty uses the word 'rangātiratanga' in promising to uphold the authority that tribes had always had over their lands and taonga

Rates

A charge against the property to help fund services and assets that the council provides

Rūnanga

Assembly or council in an iwi context

RLTP

The Regional Land Transport Plan provides the blue print for Transport in Auckland over the next decade.

RFT

Regional Fuel Tax

RPMP

Regional Pest Management Plan

Taonga

A treasured item, which may be tangible or intangible

Tāmaki Makaurau

The Māori name for Auckland

Tangata Whenua

Indigenous peoples of the land

Targeted rates

A targeted rate is a rate set to fund activities where greater transparency in funding is desired or where the council considers the cost should be met by particular groups of ratepayers, as they will be the prime beneficiaries of the activity

Te Tiriti o Waitangi / The Treaty of Waitangi

The written principles on which the British and Māori agreed to found a nation state and build a government

Te Toa Takitini

A top-down council group approach to better enable the council group to identify, invest, and track progress on activities that deliver on the Auckland Plan, transform the organisation and deliver Aucklanders great value for money. It derives from the whakatauki (proverb): Ehara taku toa i te toa takitahi, engari he toa takitini, Success is not determined by me alone, it is the sum of the contribution of many

The Auckland Plan 2050

Our long-term spatial plan for Auckland looks ahead to 2050.
It considers how we will address our key challenges of high population growth, shared prosperity, and environmental degradation

Tikanga

Customary lore and practice

UAGC

Uniform Annual General Charge - a fixed rate set uniformly across all properties regardless of property value or category, applied to every separately used or inhabited part of a rating unit (e.g. a dwelling on a section, a shop in a mall, or a granny flat)

Unitary Plan

The Auckland Unitary Plan is the planning rule book that sets out what can be built and where. It is essential for protecting what makes our city special, while unlocking housing and economic growth and strengthening our community.

Waka

Canoe, vehicle, conveyance

Waste

Any matter, whether liquid, gas or solid, which is discharged, unwanted or discarded by the current generator or owner as having little or no economic value, and which may include materials that can be reused, recycled or recovered

Watercare

Watercare Services Limited

WMMP

Waste Management and Minimisation Plan, the first Auckland-wide plan, aiming at an aspirational goal of Zero Waste, helping people to minimise their waste and create economic opportunities in doing so

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Footnotes

[1] The average overall impact of general rate changes, these targeted rates and the expiration of the Interim Transport Levy for residential ratepayers in 2018/2019 is also 2.5 per cent. Further information on average rates increases is included in Part 1.4 Financial Strategy in Volume 2 of this document.

[2] There is no minority interest in the group. Total equity represents ratepayer equity.

[3] On 31 May 2018 the council resolved to disestablish council-controlled organisation Auckland Council Investments Limited (ACIL) and to transfer all of its assets, liabilities and obligations to Auckland Council on 1 July 2018.