Time to Jump the Hoops

I saw this morning as the leading headline that the Mayor is “offering” $250 million to “kick-start” the construction of the City Rail Link “early.”

You can read the article here: Mayor’s $250m offer to PM

That is all very well from the Mayor and I can hear the excitement already in some quarters. However, I am sorry folks I am going to have to be the party-pooper and outline the hoops the Mayor has to jump through to get the $250 million for the City Rail Link approved.

The $250 million for the City Rail Link is a capital expensive otherwise known in Government and Corporate Worlds as CAPEX. Most if not all CAPEX is debt funded with repayments made later on down the line (including interest). For CAPEX over a certain amount (need to check the limit) to be appropriated it needs to be approved by ultimately the main Governing Body.

Off the top of my head the $250 million CAPEX budget line is not in the Draft Annual Plan 2014/2015 (the budget document) so a new budget line will need to be set. To start the ball rolling for the new budget line especially CAPEX lines an appropriation needs to be requested – usually starting at the Finance and Performance Committee – a Committee of a Whole. After deliberations and Finance and Performance and if the vote is successful the appropriation request I believed would be then kicked to the Budget Committee – another Committee of the Whole. At the Budget Committee the budget line and how it will be funded (so how it will sit ultimately in a Long Term Plan – the master budget document) (plus any subsequent amendments) will be deliberated and again set for the vote. Now if the vote at the Budget Committee is successful then the appropriation request will be sent up to the main Governing Body for final approval.

Note: As the Budget Committee is a new committee I am not sure whether the appropriation request would bypass either it or the Finance and Performance Committee. I’ll kick an email to find out tomorrow.

And this is where it gets prickly – at the main Governing Body, especially as the Living Wage was defeated at the GB last year on an 11-10 vote. The Governing Body must give final approval for the appropriation to be authorised and instructions to Auckland Transport given. Even if Auckland Transport rearranged its entire budget to get the $250 million CAPEX line sorted, the Governing Body would still need to give approval.

This is where I do legitimately fear the vote could be lost – at the Governing Body. If I crunch the numbers right now and take an estimate I would 11-`10 if not a 12-9 vote for the CRL if no one gets spooked. That said it needs to be watched because it can easily flip over to 11-10 in defeat if one Councillor swings.

All eyes are now on the Council and how they proceed.