Auckland Councillor for Orakei, Cameron Brewer
Speech to the Rotary Club of Otahuhu Inc.

Five priorities for the next Mayor of Auckland

Ladies and Gentlemen,

In just 18 months’ time, the postal voting papers will be sent out to all registered electors throughout Auckland for them to decide their next mayor, council, and local board.

And believe me the political jockeying has already begun and will intensify as we near E-Day on Saturday, 8 October 2016. But the region’s next leader has still to be publicly identified.

The next Mayor of Auckland faces a huge task in winning back the confidence of his or her colleagues, and that of the wider public.

From day one this term-two administration has faced credibility issues, which has stripped away any goodwill gained in the first term when by and large Aucklanders gave the inaugural council every opportunity to prove itself and get on and deliver the benefits of a Super City.

This has very much been a mayoralty of two halves. In the first half there was a lot of political capital, but then it instantly disappeared and has yet to reappear.

The next leadership team can waste no time and will need to act with speed and decisiveness to enable the Auckland Council to gain back a credible mandate with Auckland ratepayers and residents.

To help positively re-position Auckland Council, I want to put to you five top line priorities that the next Mayor of Auckland should focus on: Getting back to core business; respecting ratepayers’ money; exploring all the funding options; achieving a betting better balance in transport; and empowering local boards and communities

Getting back to core business

The Government’s 2012 Better Local Government reforms sought to repurpose local government.

Ladies and gentlemen, the statutory purpose of local government is now “to meet the current and future needs of communities for good quality local infrastructure, local public services and performance of regulatory functions in a way that is most cost-effective for households and businesses.”

A decade earlier the previous Labour Government gave councils broad responsibility covering the social, economic, cultural and environmental wellbeing of communities. Subsequently household rates across New Zealand went up by 6.85% each and every year on average from 2003 – to 2010 as many councils lapped up their new and broader role in life.

With no public opposition, the National Government refocused local government, but since those statutory changes, Auckland Council has refused to take any such direction and has continued on its quest to act like some kind of state government involved in all things and everything.

The next Mayor must move with pace to reposition this council as primarily a servant to the community, focused on delivering core projects and local services cost effectively and efficiently. That is what the amended Local Government Act now demands, that is what the 2010 amalgamation of eight councils was meant to achieve, that is what the Auckland public rightly expects, and that is what must now be delivered.

Wards like mine in Orakei should not be still paying an average of 6.5% in residential rates increases every year.

Respecting ratepayers’ money

Last week councillors were literally listening to Grey Power deeply concerned about affordability issues senior Aucklanders face, when we were informed via email that the media would be running a story about the accounts department employing image consultants.

I could spend all afternoon giving you examples of low quality, non-priority spend, and likewise you could give me plenty of examples. It makes for great dinner table banter. But ladies and gentlemen, it has got to stop. It is not the council that is bearing the brunt of these jokes, it is the average suburban ratepayer that is copping all of this.

The next Mayor of Auckland needs to make every ratepayer’s dollar count. It’s far too loose as it stands, and the public is getting let down badly at a time when most household budgets are stretched from pay cheque to pay cheque.

Why such poor decisions keep hitting the headlines is not helped by the fact that seven council-controlled organisations or CCOs are not reporting how they’re spending their operating expenditure. For example we know that ATEED has a gross Opex budget of $61.6m this current financial year growing to $87.2m by 2024/25, but we don’t know where or how they’re spending it at any detail. It’s not good enough.

It’s time for the CCOs to actually be controlled. Sure we issue them with statements of intent, which include a no surprises policy. But given we are surprised on a weekly basis via the media, this is clearly not enough. The Super City structure is fine, but the governance is not. The next Mayor needs to sort it out. It’s not about becoming the staff’s friend. It’s about becoming their governors.

We generally get good visibility on Capex projects and budgets but we’re effectively bulk-funding much of council’s operational expenditure because supposedly any finer Opex allocation is solely management’s role. I disagree

The next Mayor of Auckland needs to demand greater visibility on all operational budgets. The public has been badly let down again and again and the council is repeatedly embarrassed.

As well as respecting every dollar of ratepayers’ money, let’s start showing some respect to those householders who have borne the brunt of the Mayor’s rates rises.

Many ratepayers in certain wards have been very patient, enduring significant rates rises every year since amalgamation. However that patience is running out. A higher Uniform Annual General Charge is well overdue. Every Aucklander has equal access to the council’s amenities, infrastructure and services regardless of the value of their property. A higher fixed component of rates would reflect this. Socking Auckland’s higher valued properties has got to stop. It’s driving the likes of our elderly out.

Exploring all the funding options

Yesterday submissions closed on the council’s draft Long Term Plan or 10-year budget.

Sadly the Mayor has blankly refused to consult the public over the future of council’s larger assets – such as the Ports operating business, our shareholding in the Auckland Airport and whether the council should own film studios or even car parking buildings. I am pleased this council is planning to sell $66m of surplus property assets each year over the next 10 years but the exploration needs to go further.

We need to commission some independent market analysis for public consumption and feedback. Let’s see what money could be raised by sell downs or partial sell down to then invest in future game-changing infrastructure. And let’s line up those expected sales proceeds against forecast annual dividends. This public debate is well overdue.

The unexplored funding option that remains the elephant in the room to many of us is not around necessarily around finding more and more money trees, but putting the brakes on the organisation’s huge operational expenditure increases that are forecast.

In business terms we’ve got to get our overheads down. After all it’s our operational expenditure that determines rates.

If Auckland Council wants to save everyone on average one percent in rates, it could defer about $200m in capital expenditure or cut $15m of its operational budget. Cutting $15m would mean finding just 0.43% within the council’s existing total group operational budget of $3.4b. We should’ve and easily could’ve done that and kept the average rates increase this year at 2.5% not 3.5% but my 2014 motion to do just that failed.

This council just keeps putting its hand out for more rates, fees and charges, and now tolls, new taxes and possibly more targeted rates.

The next administration needs to freeze big chunks of its operational budget including its wage and salary bill which has grown by over $100m in the last four years to $730m, with the total headcount up from 9,300 to over 11,134. Staffing costs are a big part of the organisation’s operational expenditure which need to be reined in.

Amalgamation was all about doing more stuff with less staff, achieving better economies of scale, and delivering benefits for the ratepayers’ back pockets. The forecast 56% increase of average residential rates rises over the next 10 years is alarmingly all about keeping pace with escalating operating expenses. A rise of 56% certainly doesn’t reflect inflation which in the last quarter was less than 1%.

And the local government costs will keep coming. I’m not necessarily against the concept of road tolls or fuel taxes to plug a $12b transport infrastructure funding gap. However the Automobile Association has recently made a very good point that “the council needs to get its own house in order” first. AA’s latest survey of its huge membership base has shown that “there is a strong perception among Auckland AA members of wastefulness and excess on the part of council.”

Ladies and gentlemen, this crippling perception that is now the daily media and public narrative of Auckland Council needs to be slayed. Exploring all the funding options must also be about holding our overheads and in many discretionary areas, cutting them.

Achieving a better balance in transport

I put it to you that in the last financial year 84% of Auckland Transport’s capital expenditure for public transport went solely into rail, when still only about 1.6% of Auckland commuters catch the train, according to Census 2013.

Have we got the modal balance right? I don’t think we have. I want to see the next mayor of Auckland focus more on bus infrastructure. Buses are more flexible, carry 80% of our public transport patrons already, and cost a fraction to run compared to trains. We need to advance many bus projects that have been put on the backburner including $17.6m for a new and much needed Otahuhu Bus Interchange.

Otahuhu is not scheduled to happen this decade unless the council can convince the Government to allow for tolls or fuel taxes, nor are a number of bus lanes, bus priority improvements or interchanges as well as many new park and rides.

The North-Western Busway is not scheduled to happen until sometime between 2025 and 2045. At the same time Penlink – the motorway to link the SH1 to the increasingly populated Whangaparaoa Peninsula - has also been delayed until then.

If the next administration is serious about delivering a fair and balanced transport investment programme, then it must advance these strategic projects. It must also start lobbying the Government to deliver a second harbour crossing in the next 10 to 15 years, albeit NZTA’s latest move to protect the route is good news this week.

Another case where the council needs to achieve better transport balance is in funding of the City Rail Link.

This is not a 50/50 project with the council and the government. According to Auckland Transport’s own percentages this project is instead a 58% one for council and a 42% one for government. This is because the council has decided to spend the first $400m all on its own for land purchases and getting the tunnels halfway up Albert Street over the next three years before any formal agreement has been reached and without any contribution from the Government until at least 2020.

The Government successfully campaigned in Auckland last year on holding the line with the CRL, but the Mayor is soldiering on regardless. In the meantime the poor old ratepayer carries the whole load.

The next Mayor of Auckland should not stop the project. Rather he or she should work to secure a greater contribution from the Government and ensure the project costs over the coming years are tightly contained. Because one thing’s for sure, the Government won’t be paying for any cost blow outs beyond $2.4b. Instead that will fall to you the ratepayer.

But it’s not just the construction of the City Rail Link that’s squeezing this council. Once it’s up and running, it will require a huge and ongoing council operational subsidy of $105m each year, when you also factor the interest costs to service the project’s debt.

Ladies and gentleman, be prepared not only for cuts to core council services, more revenue grabs and council debt increases to $10.8b this coming decade, but for the following decade as well. The cost to run train tunnels well under the city and Spaghetti Junction will need to be met on a daily basis, with forecast fare box revenue falling well short of meeting its total ongoing costs.

The challenge is not just about focusing on 2015’s 10-year budget, but 2025’s when the pressure will be even more immense.

Empowering local boards and communities

Finally I want to address the other big task and that is for this council to win back Auckland’s many and varied communities. They arrived at amalgamation with a lot of good will and a lot of experience among the 21 local boards to effectively co-govern the region.

Local boards have been hammered by this Long Term Plan. The CCOs have escaped much misery with many of their wish lists remaining intact, while most local board plans have either been largely or completely ignored.

If you wanted to save $1.1m you don’t go and cut community library hours but that is what is being proposed. In fact despite residential rates set to skyrocket in the next 10 years, council service levels are expected to fall – your local park, and your local town centre will not be as well maintained and sadly that’s a written promise in this 10-year budget.

Again, the next council needs to cut organisational costs not local services.

Elected local boards represent every Aucklander yet they get less than 10% of the council’s operational funding and even less for capital expenditure.

A lot is expected of our local boards but they are starved of resources to really make a difference in their communities. They have to turn up cap in hand to the Governing Body which many believe seems more interested in the central city.

I support taking $10m off Auckland Transport’s huge capital budget, and increasing the current Local Board Transport Capital Fund to $20m each year. That would give each local board around $1m per annum on average to spend on local place-making projects. That would at least be a good start.

The local boards have more than proven themselves. We now need to empower them and ensure a bigger piece of the pie goes back directly back into the communities, reflecting local boards’ priorities and plans that have been consulted and agreed on locally.

As the saying goes, all elections are won locally so I encourage the next Mayor of Auckland to get out on the ground. At the same time enough Aucklanders need to convince and support that person to put their hand up which 18 months out is proving no easy task.

At 175 years old, Auckland has given so much to so many. Given all the growth projected this century and the related opportunities and challenges for Auckland, a serious municipal competition of ideas, public policy and even personality needs to take place sooner rather than later.

Thank you and happy St Patrick’s Day.

www.cameronbrewer.co.nz

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