Priorities in the Council Spend
As we approach consultation for the 2015 Long Term Plan (the master council budget document) (which will be early next year so we can breath for the moment) the question always get asked what are priorities Council should spend on. The answer usually is split two ways with one group advocating for “core services” (often the “far” right) and the other pushing for more social spending – that is arts, events, some sorts of welfare and so on. The Local Government Act 2002 outlines that Councils are given the “power of general competence” and does allow social spending if it benefits the community environment/well being. So those who go on about core services (rates, roads, rubbish) I wonder if they understand the legislation or the complexity of local government governance and its responsibilities. Because if you take out the community/social aspect of spending decisions you are effectively doing half your job needed for a well functioning city. A city is made up of both the physical and the social – not one and forget the other. Then again I wonder of attitudes of people especially towards others who go on about “core services.”
In saying that the legislation is not a free pass to tax and spend willy nilly either. Commissioners have been installed by Central Government before with an example being after a particular waste water project up north blew the that respective Council’s finances to bits. So if a Council is reckless with finances the Government can sack the Council and install Commissioners.
This naturally brings the question of what do I personally consider priority spending by the Council and what do I call “nice to haves.”
For me Core Services (so priority spending) are:
- Water (waste, storm and fresh)
- Transport (road, mass (public) and active (walking and cycling)
- Sanitation (your trash and recycling of residential, commercial and industrial waste)
- Parks
- Community Facilities (community halls, senior citizen clubs, recreation centres, pools)
- Libraries and funding towards our Museums
- Public Toilets
- Urban Planning and Design Departments
- Comm’s – that is notifications and consultations (but does not include marketing)
Now I have left small community events and large council sponsored events off the list as core services. This is because the above in my eyes are carried by Council solely (although at the moment we contract out public transport services) and private sector involvement is often cumbersome and expensive. Your community events and large sponsored events I have no issues with as you often get partnerships between the council, community and private sectors. That said the events need to have value for the investment given. The V8s in Pukekohe is an example of bad value for the level investment given. Local and the big Santa Parade(s) are examples of good value for the investment often committed.
I have left stadia out of the mix as well. Stadiums I consider last priority on the list and they are often a drain on City finances (as they are at the moment). If all other expenses have been met and there is some left over cash then maybe stadiums could get some. However, personally more leaning on the private sector should be happening to keep the stadiums going – with no more built for at least twenty years if it involves public money.
Budget Blow Outs and That Priority Spend
Orsman in his “Budget warning for Brown” article this morning outlines what the Governing Body faces when it sets the 2015-2025 Long Term Budget. Long story short we have problems with the CAPEX rather than the OPEX. CAPEX means capital expenditure (or rather investment) on things like infrastructure and facilities while OPEX is your operational expenditure on things like staff and maintenance. Looking at Auckland Council finance figures the OPEX is in the black with surpluses often reported – so no particular issue. That said the bureaucracy is too inefficient and needs to go on a diet across the board in my opinion.
It is our CAPEX spending (which is done through raising debt and later paying off that debt (with interest)) that is causing blow outs and teeth gnashing.
Our Auckland Plan (which is operative) has a very large wish list of CAPEX styled spending. Spending which much come through and be translated via the Long Term Plans which are written every three years. As Transport Blog has said more than once our Mayor (and possibly the Governing Body) just simply do not know how to say NO. Because of this we have a $15 billion short fall in transport funding ($60 billion is the total and we only have enough for $45 billion) for a transport solution that does not fix congestion but congestion gets actually worse than now. If you tried that kind of a stunt with a business especially a publicly listed business the shareholders would revolt and kick you and the entire board out without a second thought.
So why should this be any different with a Council that has billions of dollars of assets and a population of 1.5 million people? The simple answer it should not be. While as pointed out by Orsman that the Council and Mayor are just starting to say NO now it is considered too little too late – AND the elephant in the room causing the issue has not been removed. That elephant still being our grandiose transport program that needs the biggest diet of all diets within the Council. As I noted on Facebook yesterday:
“Drop half the large roading projects off the CAPEX, no more stunts like White Water Rafting facilities that commercial enterprise should be funding and hello I think we might be just that little bit closer to a balanced budget and less debt.”
That should have been done in 2011 when the Auckland Plan was written and it should be done NOW as a full review of the Auckland Plan.
Again neither National nor Labour are going to consider alternative funding methods for Councils and why should they. With a bit of a trim to the CAPEX and a reorganisation of the bureaucracy I say we can get the CAPEX back in line and start do lower debt from 160% to 100% even with the City Rail Link passing through the books over the next ten years.
So come on Council, get the red pen out and start some line by line reviews starting with the transport program – we know you can do it (one way or the other) 😉
As Transport Blog just tweeted as I was writing this:
Simple – really ;-D
Talking Southern Auckland 