AUCKLAND CITY COUNCIL

MEDIA RELEASE

27 September 2007

Council’s financial position is strong

Auckland City Council’s annual report shows the city is in a strong financial position.

The 2006/2007 annual report, which was adopted by the council last week, details the progress made on projects, plans and everyday services in the first year of the council’s 10-year plan for the city set in 2006.

The report shows the city’s assets are valued at $8.7 billion, which is a 6.8 per cent increase on last year due to revaluation of the council’s assets and an increase in value of $173 million in the council’s Auckland International Airport Limited shareholding.

Capital expenditure of $343 million reported for the year equates to almost $1 million a day spent on the things people said they wanted in the city.

Of this, $151 million of this was spent on renewing transport assets like footpaths and roads in the city to provide more travel choices for people.

Highlights from the financial year 1 July 2006 to 30 June 2007 include:

- improvements made to the CBD including the upgrade of a section of Queen Street Queen Street

- securing 13ha of land and wharves along the CBD waterfront that will be opened up as public spaces to enable people to get to the water’s edge

- the opening of the 12,000-seat Vector Arena, which has already drawn world-class acts to the city such as Red Hot Chilli Peppers, Pink, Gwen Stefani, Bob Dylan, The Cure and Burt Bacharach

- investment in and improvements to the transport network including the upgrade another 105km of footpaths, improving of another 90km of roads, creating 3km of new bus lanes and making progress on the Auckland-Manukau Eastern transport Initiative

- $19.7 million in efficiency and productivity gains.

Several large unexpected expenditure items are outlined in the year’s financial results including:

- increased project management, regulatory and specialist consultancy costs relating to the transport and Arts Community and Recreation divisions

- additional provision for cleaning up contaminated sites and landfills.

As part of the council’s proactive management of weathertightness liability, provisions for legal and weathertightness settlements are also included in this year’s annual report.

Estimates released last week show the council could face costs of between $200 million and $360 million to settle all leaky building claims.

The annual report outlines that as at 30 June 2007, the council’s provision was $107 million to settle all leaky building claims. On top of this, it has already spent about $22 million and signalled in its 10-year plan a further $5 million each year.

In total this means the council has made provision to spend about $170 million to settle all leaky building claims. The level of provision in the long-term plan will be reconsidered given the revised financial estimates and advice taken from the council’s auditors as part of the annual reporting process.

The Auckland City Council Annual Report 2006/2007 will be published on 4 October. A summary of the report will be distributed with City Scene on 30 September.

ENDS

© Scoop Media