An adjusted estimate of future flood recovery spend has saved Auckland Council $10m
As Auckland Mayor Wayne Brown prepares to take the stage this morning and reveal his proposed cost-saving budget, there are big numbers at stake.
The $295m budget shortfall metastasised earlier this month into $325m, with insurance costs, higher utility bills and deprecation blamed for the extra $30m. There was also the impact of a further $50m allocated in next year's budget to help pay for this year’s extreme weather events.
It was a one-off extra hit that much of the media reported as part and parcel of the shortfall Brown and his team would have to overcome; council documents even included it in a graphic as part of the “updated operating shortfall”.
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That was not the case, however, council chief financial officer Peter Gudsell told RNZ.
"These costs do not add to the ongoing operating shortfall, but they will add to council's debt levels and therefore reduce the debt capacity that can be utilised to manage other costs.”
Still, the idea of a “$375m shortfall” has since been bandied about from a number of quarters, including the mayor’s own office, which issued a press release headlined: “Council’s budget hole grows to staggering $375 million”.
Now the numbers have morphed again – though for the better this time.
An email yesterday morning to Auckland Council staff from CEO Jim Stabback put the extreme weather figure at $40m, not $50m. Apparently council staff had managed to “claw back” $10m worth of costs.
Stabback said the organisation will have to be “agile and responsive” to meet the needs of Aucklanders.
A council spokesperson said the change reflected updated estimates of the storm-related operational costs and how much central government would be contributing.
It's not the first time the council has moved the numbers. Soon after the devastating January and February storms Wayne Brown proposed a response fund of $20m. But around the same time as the budget shortfall expanded at the beginning of May, council staff also advised the mayor and councillors an extra $30m would likely need to be borrowed to meet post-storm needs.
It’s that latter figure that has now shrunk.
Any reduction in the amount Auckland Council needs to borrow is good news, and $10m is not insignificant. Still, detractors say communication has been patchy and a bit confusing.
Although some council staff apparently knew about the $10m they won’t have to borrow about a week ago, the news first came out more publicly from Brown's office on Tuesday, in the middle of a press release where the mayor outlined his priorities for any money earmarked for storm recovery.
Then Stabback’s email on Wednesday morning alerted a council staffer, who was concerned the most visible talk in the lead up to the budget hadn’t taken the savings into account.
Council communications staff said an announcement would be forthcoming, likely as part of the proceedings around Brown revealing his budget proposal today.
Opponents aren't convinced. India Logan-Riley, spokesperson for alternative budget advocate group A Better Budget for Auckland, said the storm costs had been used to make selling the airport shares and cutting services more palatable for the public.
“This again shows the surge of spin behind Wayne Brown’s budget," they said. "It’s shocking to see the storm costs used as a political football to try to whip up fear to justify asset sales and community service cuts. A different budget is possible, without cuts and the airport sale, which would lift debt and rates to reasonable levels to build a thriving city we can be proud of.”
