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Auckland Council's next rates increase will be the lowest yet if the Mayoral Proposal for the council's Annual Plan - its budget for the coming year - is adopted.
The Mayor is proposing an average rates increase of 2.9 per cent for the 2013/14 financial year.
That is significantly lower than the 4.8 per cent proposed in the council's 10-year Long Term Plan (LTP) and the 5.3 per cent increase that would have been required if the Mayor had not asked for savings and efficiencies across the council.
It is also lower than the first two average rates increases set by Auckland Council - 3.6 per cent this year and 3.9 per cent last year.
The current rate of inflation faced by local government is 2.4 per cent.
Len Brown says he is particularly pleased that the proposed rates increase comes without significant impact on service levels and no effect on Local Board budgets.
"I have consistently indicated that I saw the rate increases in the Long Term Plan as a starting point and that each year I would expect us to review costs and reduce the rates requirement to a level closer to the rate of council inflation.
“This exercise was about reviewing costs and looking for savings that did not compromise the strategic intent of the Long Term Plan.
"The proposed rates increase has been achieved largely by cutting costs behind the scenes, particularly at council-controlled organisations (CCOs), and by equalising fees and services across Auckland.
“Aucklanders should pay the same fees and the same rates for the same services, no matter where they live."
Examples of proposed savings and efficiencies include:
Auckland Transport: $4.1 million – berm mowing discontinued on the Auckland isthmus in line with the rest of Auckland; reduction in the contingency fund for emergency bus service provision
Corporate support: $4.02 million – savings in human resources, IT, communications and legal services including $594,000 saved by restricting IT support for elected members to office hours
Auckland Council Investments Ltd: $3.48 million – a change in dividend policy by Auckland International Airport Ltd has resulted in an additional return to the council as a shareholder
Storm water and flood protection: $2.16 million – reducing the need for external consultants and peer reviews, and completing work in house
Additional fee revenue $1.64 million – review of animal management and environmental health licensing fees, subject to consultation
ATEED $1.18 million – rationalisation of i-sites; savings in corporate costs; additional revenue from external partnerships
Regional Facilities Auckland $1.13 million – rationalisation of staff resources; small reduction in funding to partner organisations; cost savings resulting from the sale of land next to the Telstra Clear Pacific Events Centre
Built and natural environment: $567,000 – reduced consultancy budget; reduction in area-specific consent grants; lower resourcing requirements for building inspections due to technology; changes in swimming pool inspection fee structure
Community: $461,000 – reduced external consultancy budget; free downloading of music in libraries discontinued; small reduction in libraries’ marketing and promotional budget
Waterfront Auckland: $347,000 – additional revenue and cost savings associated with the operation of the Cloud
Lifestyle and Culture: $266,000 – reduction in consultancy budget; standardisation of mowing contracts for regional parks; regional park bach hire fees increase
Governance: $230,000 – deferral of webcasting of council meetings; reduction in local board member professional development budget
ACPL: $200,000 – no appointment of additional director, reduction in insurance and consultancy costs
Solid waste: $148,000 – reduction in communications budget; increase in transfer station fees for green waste in Waitakere
Economic Development: $188,000 – reductions in consulting costs for Downtown West project and cost reductions relating to Auckland University Tamaki campus relocation
Planning and Strategy: $651,000 – deferral of local spatial plans; reduction in budget for consultants
New proposals - $2.67 million including:
Unitary Plan: $753,000
Litter in North Shore parks: $461,000
Volcanic cones restoration: $388,000
Maintenance funding for public art assets: $307,000
Regional events and community development funding: $307,000
World War I commemorations: $212,000
Parks volunteer coordination: $154,000
Trade missions: $102,000
Arataki Visitors Centre cafe; $56,000
With regard to capital expenditure, the Mayor says investment in the future of Auckland, at both the regional and local level, has already been tested through the LTP process and he does not intend to re-litigate strategic priorities or delete projects that have been agreed to with the community.
“However, I do believe we should further scrutinise the capital programme with a view to reviewing the timeframes and funding requirements of some specific projects. My intention is to put a specific review process in place to this end.”
Due to the government's requirements for a single rating system across Auckland, based on capital value, ratepayers will again be affected in a variety of ways.
Residential rate increases will be capped at 10 per cent for qualifying properties, while changes in business rates are being phased in over three years. Residential rate decreases will be capped at 2.5 per cent.
As a result, the highest number of ratepayers (236,647) can expect rates increases of less than 5 per cent, 169,061 ratepayers can expect rates increases of between 5 and 10 per cent and 96,000 ratepayers can expect rates decreases.
The 2.9 per cent rates increase will be proportionately applied to be the Uniform General Annual Charge (UAGC) meaning that will increase from $350 to $360.
The business rates differential will decrease by a factor of 0.1 for each of the next 10 years.
The Mayor stresses that Auckland must not step back from the path that the council forged with the Auckland Plan and the Long Term Plan. "We need to continue to invest in the future of Auckland as an international city and one that is forecast to grow," says Len Brown.
"The Long Term Plan balances investment in the significant regional projects that will make a difference to our long-term future, with continued investment in our local communities and overall consideration of affordability.
"This Annual Plan gives us the opportunity to fine-tune that balance and I believe this proposal achieves that. No significant areas of activity are compromised and yet this proposal reduces the level of the rates increase to 2.9 per cent. That achievement cannot be underestimated.”
This proposal will now be considered by the Strategy and Finance Committee and once approved will form the basis of the draft Annual Plan and Local Board agreements, which will be finalised over the coming weeks. Final sign-off on the full draft document, including Local Board agreements, will be in December.