The Good and The Well Some Stretching of the Facts by Brewer

 

Even though the Auckland Council elections are in September next year already we are seeing players making their move especially around the Mayoral Chains. Those on the Right Wing have taken to speeches, and op-ed pieces in the media. The Left Wing are most likely doing their due diligence while still doing what they are meant to be doing; their job!

Yesterday Orakei Ward and resident Council cynic Councillor Cameron Brewer gave a speech to the Otahuhu Rotary Club on what he would look for in a mayor post 2016. The speech itself can be seen HERE. What I am going to do is some simple critiquing of the good stuff and some of the stuff that is a bit wide of reality in Auckland. I will be playing the ball not the man as it is said.

 

The Critique

I will go section by section of Councillor Brewer’s speech relevant to the critique point I am making.

 

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

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Fair enough opening and relevant to what a new mayor and Council will face post 2016. I have said for a while we need fresh blood in that Governing Body and like the bureaucracy of the Council a clean sweep is needed. I do not want to see legacy era people hang on to their seats nor even contest seats if they have been involved in Auckland Politics prior to 2010, or involved in Central Politics at any time. This would have me ruling our Labour MP Phil Goff running for Mayor.

I see him as a retread like John Banks for another era. We need fresh thinking not has been tied to another era entirely. Granted I will not mind a small mix of legacy era politicians in the Governing Body as a kind of transition from old to new I do not want more that 33% of that Governing Body consisting of people from the legacy era. This is a new Auckland and has been since 2010 and we do not need an over whelming majority of politicians on that body with ties to that other era. Pure and simple.

 

The next part of Brewer’s speech goes on about Government reforms to the Local Government Act in trying to focus Councils back on this core business mantra. That doesn’t bother me except when you do not allow development contributions to be used for civic infrastructure like parks and libraries. Do people want more libraries and green spaces in a growing city?

 

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.

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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.

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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.

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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.

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Again fair point by Brewer on getting expenditure under control especially in the OPEX (operations) department. I do believe CAPEX (capital expenditure) gets put through the wringer and setting CAPEX budgets is getting better all the time. This includes Auckland Transport getting better in setting down budget lines for transport investment – that is in the right modes with the proportion of the investment pie. Yes there are shortages in funding but I will look at that further down.

Now the Uniform Annual General Charge is going to be the first place where I will ping Brewer. Brewer should be reading the Long Term Plan feedback breakdowns which are publicly available and I have a copy of (see: LTP Feedback). Brewer and co are going to have to accept that the UAGC will be kept at the low-level ($385 or below). This is because despite over-representation in White over 45’s from affluent areas of Auckland contributing to the Long Term Plan a super-majority (70%) want the UAGC at $385 or below with another 17% wanting it at $500 which to me is tolerable. Thus a very small minority want the UAGC at much higher levels including the $900 maximum mark. So Brewer I would leave the UAGC one alone as it is clearly not a winner based on 15,000 Long Term Plan submissions.

 

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.

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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.

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I can tell you right now Brewer any attempt by Council to sell down any share in Auckland International Airport, and Port of Auckland will meet strong resistance. Any candidate touting it will not survive the voters of the South and West who one needs if they are to ever take the Mayoral Chains or form a governing bloc on the Governing Body. So to be blunt forget it just forget it until the majority of voters are ready for such a move.

Now I have heard about this landlord model where Port of Auckland remains in Auckland Council hands but a private operator runs the port. The idea being a private enterprise like Transdev running our passenger trains would give good service for good returns (monetary, social or otherwise). I am keen to explore this landlord idea if it means a more efficient port and better returns back to Council thus the ratepayer.

As for OPEX lines and staff numbers? My thoughts are known in my submission to the Long Term Plan which you can see HERE. Alternative funding options using Development Auckland can also be seen in my LTP submission.

 

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.

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If Brewer or the Right Wing want to get anywhere near the Mayoral Chains or forming a governing bloc on Council then following his advice above would be near electoral suicide. Again look at the Long Term Plan feedback around transport and transport funding. People want more investment in Public and Active Transport while still some investment in roading which is understandable for a growing City.

The Generation Zero Essentials Budget was the best alternative in achieving a better balance of transport investment across ALL MODES needing less funding that the gold-plated Auckland Plan Transport Network. Granted people were not sure on fuel taxes and tolls and that other alternative funding options (see: THE REACTION TO MY PRESENTATION TO THE AUCKLAND DEVELOPMENT COMMITTEE [UPDATED WITH FIGURES AND LINKS]).

From what I did hear in the Long Term Plan Have Your Say Sessions in terms of extra funding even for the Essentials Transport Budget in the South was that a fuel tax would be acceptable to get the public transport projects built with tolling good for a demand management toll once the system is fully working. So there is that to consider.

As for the City Rail Link yes the cost once it is operating is $105m in the first year (minus first year revenue). However, $33m of that is the OPEX of the CRL itself with the rest in financing costs (which go down over time through debt servicing and capital depreciation). Where Brewer is being disingenuous on the City Rail Link (as well as buses) is the benefits the CRL does give although the capital cost does seem eye watering. Consider that price a penalty for dithering since the famous Dove Myer Robinson wanted a similar scheme nearly 50 years ago. This is the price of National and her supporters dithering then and even today. But as I have told even road users the CRL gives both capacity on the rail and bus network AND allows the construction of new lines to places rail does not go in Auckland. The obvious two being the Airport and North Shore Lines. The North Line and Airport Line allowing someone from Albany to reach the Airport via Aotea Station in 45 minutes compared to well over an hour both on and off-peak.

As for more investment into buses and less on rail? Again Brewer misses the Long Term Plan feedback where essentially people were wanting investments in all modes to which Auckland Transport is doing.

I need not remind Auckland that it was Brewer and the Orakei Local Board that forced Auckland Transport to convert the effective bus lanes on Remuera Road to ineffective T3 lanes despite increasing bus traffic down that road. Brewer if he read blogs or even communications from Auckland Transport would know the full construction of Otahuhu Bus Interchange (that allows Bus-Rail Transfers) starts in winter while Manukau Interchange is meant to be sod turning this month (I will follow-up on that soon).

Yes we need more bus infrastructure but Auckland Transport has changed her course under Dr Levy (its Chair) and increases in bus, heavy rail, light rail investment is happening or going to be happening. So sorry Cameron you are wrong on this one.

 

As with Local Board empowerment it is something I know needs fixing and can only be down under a new mayor or who is both not top down prone and somewhat autocratic. The empowerment of the Local Board Brewer does have right and it is something I will draw out more on at a later date. This is owing to this particular angle of the debate being able to have a mini-series on its own.

 

So that is my critique of Councillor Cameron Brewer’s speech to the Otahuhu Rotary Club. Some parts of the speech were fine but essentially the crucial parts were well wide of the mark especially when looking at Long Term Plan feedback. And speaking of that feedback here is the latest break down of it:

 

I might write my own speech of what I expect from a Mayor, and a Southern Auckland Ward Councillor either later today or tomorrow.