June 25, 2008

Waitakere Delivers A ‘Balanced’ Budget

Waitakere City Council has unanimously approved its Annual Plan (budget) for the 2008-2009 financial year.

The budget shows a rates increase of 6.95%, on average. That is almost half a percent below the draft budget which went out for public consultation (showing a proposed 7.4% increase).

Regional levies from Watercare Services Limited, the Auckland War Memorial Museum and Museum of Transport and Technology (MOTAT), which the Council is required by law to collect, resulted in an additional rates increase of 1.36%.

The 2008/2009 budget includes a significant new capital works and renewal programme of $157 million. Among the key new capital projects are parks ($4.8 million), work in and around New Lynn ($45 million), roading and transport ($29.9 million), wastewater ($4.5 million), stormwater ($10.5 million), Project Twin Streams ($9.8 million) and an upgrade of the Te Atatu Peninsula Community Centre and Library ($4.7 million).

The new budget, which comes into effect on July 1, adds about $3 a week for the average residential property (with a land value of around $270,000).

Councillor Janet Clews, chairman of the Long Term Council Community Plan and Annual Plan Committee which oversaw the budget process, says that more than in any other year the City finances have been heavily impacted by external factors outside of the Council's control.

Councillor Clews cites major cost increases in depreciation ($1 million) and interest on loans ($6.7million). “And things like graffiti and repairing other vandalism in public places including town centres and parks costs close to $1.5 million a year.”

Councillor Clews adds that the Council’s rate of inflation, which includes a rising construction index, runs at about 5%.

The price of oil hitting more than (US) $135 a barrel has also hit many areas of expenditure hard.

“When we started looking at the budgets in March oil was at (US) $110 and it has been going up virtually every day since then,” Councillor Clews says. “Almost half of the cost of re-sealing roads is affected by rising oil prices, so that gives some idea of how hard we have had to work to trim and cut costs in other areas.”

A special budget review group comprising Mrs Clews and fellow councillors Derek Battersby, Ross Clow and Penny Hulse worked with senior staff to present a final draft budget for consideration by the full Council.

“We spent hours going over hundreds of line items and either cutting or deferring projects and looking where income could be increased,” says Councillor Clews.

“The Council’s own internal costs in areas like administration have also been kept at a minimum.”

She describes the end result as a “balanced” budget.

“With any more cuts we would seriously have compromised service standards in basic areas like parks and libraries,” she says.

As it is, over 80% of the budget will be spent in those “basic” areas which also include such as water and wastewater, roads and rubbish disposal.

One key issue highlighted in the draft Annual Plan for public consultation was the future of the City's annual inorganic refuse collection. The roadside collection will cease and be replaced by a new system where residents have the option of contacting the Council and having inorganic refuse picked up from within their properties once a year. There will be an $11.25 (including GST) charge for the service; until now that was included in rates.

Councillor Clews says the service is still partially funded through rates, but having a user pays component makes it fairer for everyone as in previous years around a third of residents did not use the service, but paid for it through their rates.

The new system comes into effect in January 2009 and shaves around $339,000 a year off the overall rate requirement. The new system also helps address illegal dumping in streets, as well as health and safety concerns.

Residents can still take reusable and recyclable material, such old furniture and appliances, to the Henderson Refuse Station free of charge.

As signalled in the draft Annual Plan, increased charges from the region’s bulk water supplier (Watercare Services Limited) and the cost to the Council of complying with the new Drinking Water Act see the price of water rise to $1.53 a cubic metre (from $1.48).This is the first water price rise in eight years.

ENDS

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