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Trimming the fat out of Auckland Council’s Balance Sheet

Recently I listened to Julie-Anne Genter, transport spokesperson of the Green Party, encouraging the National Government to bring forward the start date of the Central Rail Link project.  Ms Genter was asking that the project start at 2015 and not the later date of 2020. This got me thinking as to how the Auckland Council half share would be funded.
Now it isn’t a secret that I am a sceptic of the rail link tunnel beneath the Auckland CBD, especially from an economic perspective.  Rail has not been performing and recently Auckland Transport pleaded with Auckland Council to relax the target for passenger trips on rail this year.  The target was set at 11.7 million trips but Auckland Transport wanted this reduced to 10.5 million.
I have not heard a lot of North Shore people clamouring to pay more of their money in rates, long term, to support this tunnel project.  Many North Shore people instead would prefer to see more savings found from the huge comprehensive statements of accounts of the Auckland Council Group as a better way to fund the tunnel.
This year through to 30 June 2014 the Auckland Council Group has an expenditure of $2.775 billion.  Aucklanders and especially people living on the North Shore believed there would be savings under this new combined council. Now some savings well over the one hundred million dollars figure have occurred since 2010 but more should be found.  Working to reduce expenditure especially internal costs across the Auckland Council Group would be a good start. An area to bring the blowtorch on would be the cost of staffing the Auckland Council Group (Auckland Council and seven CCOs).  This year personnel costs across the Group have climbed $47.1 million from the figure of $654.4 million to $701.5 million.  This does not sound too promising when everyone out there is hoping that the combined council would be making savings. Help, however, could be on the way.   Auckland Council is in the midst of a new $71 million technologies upgrade, known as the NewCore Programme, which includes major improvements to the council’s front-of-house computer systems.  This system which comes on stream in 2014 is promising to deliver a $10.6 million annual savings when it is fully implemented.   I believe that North Shore residents would be hoping that this will just be the start of real meaningful savings being found.
The rapid increase in the number of salaries over the $100,000 level across the council group also needs to be addressed.  The numbers being paid more than one hundred thousand dollars per annum across the Auckland Council Group has leaped from 1250 to 1510 employees, in just 12 months.  As one councillor recently pointed out this means that more people are being paid over the hundred thousand mark by Council than could be fitted into the Auckland Town Hall.
A recent report by AUT University on the State of the Auckland Super City highlighted the increase in staff costs since the new Auckland Council came into being.  This report notes that the Auckland Council Group had personnel costs of $497.5 million in 2011 and these costs across the group are substantially above even this figure. I will be calling for a huge effort to control and trim costs in the new term of council.  We cannot continue to allow costs to drift up in this manner.  North Shore residents are extremely concerned about the rising costs of running Auckland Council and council needs to control internal costs before we lurch off into borrowing around $1.5 billion for the Central Rail Link. It will be extremely important that the savings that accrue from efficiencies gained including improved computer systems are not lost.  These systems are designed to make our Auckland Council Group much more efficient and streamlined.  That must equate out to lower our funding needs and therefore lower pressure on ratepayers. Too often in a council environment there is a tendency to add in the next projects that have not been funded whenever savings are found.  Auckland Council must take a far more hardnosed approach to ensuring that cost savings actually equate out to less pressure for rate increases.
Let’s hope there is a major dialogue with ratepayers from right across the region in relation to the funding of the City Rail Link project.  People deserve to know the full facts and in particular what impact this huge project will have on our pockets now and in the future years.


by George Wood