Category: Financial Planning

An Investigation

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Rates Due to Hike Again – So Time for An Investigation

 

Okay, some idiot in Council mentioned rates and rates rises again giving the hapless ratepayer a sour stomach as we approach Summer and the Silly Season (although for Council, it is always the Silly Season with the Ratepayer Credit Card). Here is a piece from Councillor Cameron Brewer via Facebook with all the comments below (I am pasting this to draw context on where I am going with this):

  • Despite inflation running at just 0.8%, rates keep going up and on the isthmus service levels fall. In the Mayor’s draft 2013/14 budget released today road-side berm mowing will be axed in the old Auckland City area. Wards like Orakei will soon be paying more for even less.

    Another service reduction for old Auckland City area | Voxy.co.nz

    http://www.voxy.co.nz

    Auckland Mayor Len Brown’s draft budget for 2013/14 released today will cut out a long-held lawn mowing service for residents living in the old Auckland City area who are the same ratepayers stung the hardest with ongoing rates increases, says Auckland Councillor for Orakei Cameron Brewer.
    • Andy Cawston and 3 others like this.
    • Lea Worth Really….. why are we not surprised!!
    • Desley Simpson Pay more get less ! So again Orakei gives and doesn’t receive
    • Ben Ross Give the money to Local Boards away from the Governing Body seeming the Mayor and side kicks can’t budget. Bulk funding Local Boards with 33% of the total rates intake any one?
    • Stephen Maire Yes Ben.
    • Lea Worth At least that way Ben we would be protected from being seen as the cash cow to fund Len’s crazy ideas
    • Stephen Maire Yes, its OUR City not his.
    • Desley Simpson Cash cow and like all cows now need to eat ( mow) its own grass!
    • Ben Ross Just a refresher (just in case) Bulk Funding the Local Boards goes like this. Orakei currently pays $106m in rates to the “Council” yet “Council” only gives $10m (about 10%) back to Orakei to run its Local Board and services. The proposal I am running with is Orakei pays $106m to “Council” and Council gives back (and that is a must, no if’s buts or maybes) 25-33% (up to Local Board’s decision on level) back to Orakei so Orakei can run and maintain its Local Community Services, Events plus any CAPEX spending as it sees fit (of course with dialogue with its residents and businesses).

      The Governing Body can not touch the 33% as it is ring fenced to Local Boards. This also includes the Governing Body unable to hike the rates beyond 1.6x the rate of inflation at max with all spending spelled out per the current Better Local Government MK II Bill/Act/Paper
    • Mark Donnelly Desley – isn’t berm mowing in only a few local board areas a LB decision per the Act? ie not “regional” – and you could go to local govt commission for a ruling? This isn’t about a “cost” but about making a cut in just one or two board areas?
    • Cameron Brewer Good work George Wood. The Mayor botched that one – he didn’t even have the numbers to refer his budget to Strategy and Finance committee. He is very poorly supported by his political inner circle who don’t know how to whip or secure the numbers. Beautiful to watch.
    • Andy Cawston (shakes head in disbelief…)

      It would have been reasonable to expect significant cost efficiencies to arise from the Auckland SuperCity merger — reduced duplication of effort and infrastructure being the efficiencies that spring immediately to mind.And it would have been reasonable to expect the rate take to stay stable and/or for services to be improved for the same cost, or more likely to decrease in cost as these efficiencies filtered their way down…

      …but no. Exactly the opposite has happened.

      (Makes marks of the Balanced Scorecard)
    • Tracy Kirkley out west , we have mowed our own berms…forever…its not that hard.
    • Nigel James Turnbull 2.9% is actually pretty good as a rates rise. I wonder how much more could actually be found? And berms are generally mowed by most of us arent they? i mean i do my own berms because council did such a poor job normally…i would be incensed if the whole region got it and only we were getting this cut. I do understand how bearing the brunt of rates increases coupled with the highest rates rises is a bitter pill to swallow.
    • Andy Cawston Service cuts + rates increases + increases in debt burden is not on.
    • Penny Webster A good thing this is ony the beginning Cameron. We look forward to your considerable input and suggestion of further cuts.
    • Cameron Brewer Bernard Orsman covers yesterday meeting in today’s Herald. The good thing about the Mayor’s budget now staying at the Governing Body level is that he has to own it and front the meetings over the next 8 months, and not just kick it to Strat & Finance. This is primarily why a majority of us voted for it not to go to S & F. It was not really about excluding the Maori Statutory Board.http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10842948

      www.nzherald.co.nz

      Auckland Mayor Len Brown is proposing a rates rise of between 1.9 per cent and 2.9 per cent in next year’s election-year budget.
    • Andy Cawston I’d quite like to see Brown strive for a 5% rates DECREASE. It’s time we saw some Efficiencies of Scale arising from the merger of the Auckland-based councils. Any competent business would have found such efficiencies within weeks of a merger, yet the exercise appears not to have happened yet with Council.

      A 2% increase, within that context, is utterly unnecessary and obscene.
    • Ben Ross I have a debt and spending policy I might go pitch to voters when I run for Papakura Local Board next year. Fiscal Conservatism (hey Andy I am a conservative after all 😛:P ) is the name of the game and something those serious about fiscal prudence need to adhere too. The idea was in my submission to the (now failed) Long Term Plan. Busy writing post now on this

Okay so that is the discussion as of when I was writing this post. But the situation that I think is worth investigating is bulk funding Local Boards as I have suggested above:

Just a refresher (just in case) Bulk Funding the Local Boards goes like this. Orakei currently pays $106m in rates to the “Council” yet “Council” only gives $10m (about 10%) back to Orakei to run its Local Board and services. The proposal I am running with is Orakei pays $106m to “Council” and Council gives back (and that is a must, no if’s buts or maybes) 25-33% (up to Local Board’s decision on level) back to Orakei so Orakei can run and maintain its Local Community Services, Events plus any CAPEX spending as it sees fit (of course with dialogue with its residents and businesses).

The Governing Body can not touch the 33% as it is ring fenced to Local Boards. This also includes the Governing Body unable to hike the rates beyond 1.6x the rate of inflation at max with all spending spelled out per the current Better Local Government MK II Bill/Act/Paper

 

That policy piece stems from at least half of my What I Believe In for a Better Auckland fundamentals which I am going to pitch to voters at next year’s Local Government Elections (running for Papakura Local Board). The fundamentals being applied here are:

  1. Strong but no interfering Governance: Meaning Council  shows active and real leadership but does not interfere with the daily lives of residents and businesses
  2. Finances: If my family has to live within its means then so does the civic institutions that impact on us greatly (that being Council and Government). You work out your income, then what you can spend on – NOT THE OTHER WAY AROUND as with Auckland Council
  3. Keeping It Local: Large centralised civic institutions seem impersonal (if not frightening) to most us. So how about keeping it Local and allow our Local Boards to be resourced properly so they can execute their true functions of local advocacy and providing our local community parks and services for us.
  4. Basics first: One thing I learnt when I moved out from the parents’ home and struck it out in the real world (including getting married and owning our first house) is that with the limited resources you have got, you did the basics first then with anything left over you just might be able to afford a luxury. Same applies to our civic institutions; they have limited resources so get the basics right first then “treat yourself or others” to a luxury if you are able to do so once the basics are taken care of.
  5. Listen and Engage: God gave us two ears and one mouth. In my line of work you actively listen with both ears THEN engage in dialogue with your one mouth. Not the other way around as that is usually monologue and the fastest way to get your ears clipped. Same applies to civic institutions:  you actively listen with both ears THEN engage in dialogue with your one mouth unless you like getting your ears clipped… Oh and remember some days all the person wants you to do is JUST LISTEN to their little piece – as all we want some days is just to get it off our chests.
  6. Stay out of my way: I believe in the following strongly “Individual Freedom -> Individual Choice -> Individual Responsibility (oh and do not forget the consequences)”   I am an adult who can make choices for myself (whether it was right or wrong), treat me as such rather than a child.

Actually that is 3/4 of my fundamentals being applied from the bulk funding of Local Boards proposal.

But the point I am going to pitch strongly to Papakura (in fact most likely to be the strongest as all other fundamentals technically stem from it) is Point Three (in bold):

Keeping It Local: Large centralised civic institutions seem impersonal (if not frightening) to most us. So how about keeping it Local and allow our Local Boards to be resourced properly so they can execute their true functions of local advocacy and providing our local community parks and services for us.

It is of my strongest belief that the Local Boards are in a better position than the main council and bureaucracy to deliver your local community services as well as being the main calling point from local residents (so you) in advocacy issues. And none more so with being the main calling point for advocacy that urban development within their jurisdictions.

 

In my submission to the Auckland Plan, and in my pitching to the Civic Forum of the Unitary Plan; I pushed for Local Boards working with planners in delivering the urban development outcomes in Auckland. An excerpt from my submission:

The main crux of the SLPD would come from the: decentralised, semi-regulated, collaborative, efficient, simplistic and affordable approach to LADU. This is how the crux or ideal would be achieved:

  • Under SLPD’s the decisions and/or oversight would be with the Local Community Board rather than the centralised Council
  • Council provides  a statement of intent (The Auckland Plan) and action plan for Auckland (Auckland Long Term Plan) over the next period of time
  • Council provides a mediation service when there is a dispute with an SLPD
  • Council assists Local Community Boards with resources required when an SLPD is being carried out
  • SLPD follows the Philosophies of Land Allocation/Development/Utilisation (mentioned page 14)
  • Simplified Zoning
  • Collaboration between the Local Board, Community and Developer (allowing greater flexibility and response to community concerns and needs/desires)

As well as

So in the end the SLPD-LADU model follows a hybrid of Houston’s method of urban planning and (to a limited extent) the (although simplistic and maybe crude compared to reality) techniques used in Sim City Four!

In short this is how the SLPD-LADU would work:

  • Council provides its goal/vision for the wider city over a period of time
  • Council provides a framework on how it would like to reach that goal
  • Council and the Local Community Boards begin the SLPD-LADU Process by:
    • Created a SLPD which “maps out” the local area’s intentions
    • Zoning or rezoning begins
    • Memorandum of Understanding between Council (if required), the Local Community Board and developers in developing the land (but complies with the Region LADU Philosophies previously mentioned)
    • Development begins
  • Development is then underway with the developer having to provide these basic provisions inside the zoning area – effectively zone or zoned district or districts:
    • Water infrastructure for the district
    • Electricity infrastructure (in coordination with the local lines company)
    • Telecommunications infrastructure (in coordination with whoever is contracted to provide phone/broadband cabling
    • Basic park/recreation facilities (set a minimum percentage of total developed area within the zoned district (except for “pure” industrial land)(percentage to be determined at a later date))
    • Basic street network (that can be readily connectable to the main transit system)
    • Allow for provision of a mass transit system if one is required (often in medium and higher density zoning districts)
  • After completion, the corresponding infrastructure of the zoned district would be allowed and capable of connecting to the existing city infrastructure

You can see the rest of the Submission that covers Land Use (urban development) in the embed below.

 

But as you can see I am pushing for democracy to return to the Local Boards and costs to be brought back under control. I will run further commentary in my Civic Forum update but in regards to Council finances and debt, check my submission to the LTP via the link below as both submissions are interlinked.

2013 you will need to decide how you want your Local Board(s) to work for you (and how it should be resourced). We all have a long road ahead but I advocate for local (community) democracy and basics first in regards to finances for you the Papakura ratepayer. Yes we all need to work together for a better Auckland, but also we need to work and focus closer to home – a better Papakura. Because a Better Papakura that you love and enjoy to live in contributes to a better healthier Auckland!

Check my commentary on the Unitary Plan and the pitch for local democracy and moving away from big stick regulation in building outcomes for housing, transport and the (physical and human) environment!

 

Submission to LTP where I mention a Debt and Finance Policy for Council

 

Submission to Auckland Plan

Causalities of – The LTP?

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And Here Come the Causalities

 

 

The Long Term Plan 2012-2022 was adopted into existence earlier this year, setting the Council’s course on all things revenue and expenditure (yeah lets ignore the V8s and White Water-rafting for a few seconds). On the rates side; some of us got stung with large rates rises while others got nice rates decreases. All of us though got service and capital expenditure cuts when our respective Local Boards had to follow through on a 3% cut in their budgets per the Mayor’s “orders.”

Manurewa Local Board have been very vocal on what the funding cuts have meant capital expenditure wise (so money for community projects like playgrounds and upgrades to community facilities). Well it seems I have stumbled (via the NZH) across our first OPEX (so facilities funding in the operational costs side) casualties in the form of POSSIBLE library closures.

 

From the NZ Herald:

 

Cost cuts threaten two libraries

By Bernard Orsman

5:30 AM Monday Oct 1, 2012

 

Pressure goes on after mayor’s directive for all areas of city council to trim budgets by 3 per cent in election year.

 

Libraries in Snells Beach and Grey Lynn have been marked for closure as the result of a directive from Mayor Len Brown to reduce costs in what will be election year.

Snells Beach residents, many of whom are retirees, are bewildered and angry at murmurings the refurbished Mahurangi East Library in the community centre is closing.

More than 300 locals have signed a petition deploring the proposal and there is fighting talk by local politicians of chaining themselves to the building.

“We love our bright, welcoming, well-used library, the heart and soul of this mixed and growing community,” said local Sandra Garman.

The other locality in the cost-cutting sights of council library manager Allison Dobbie is the Grey Lynn library, housed in its original 1924 building on Great North Rd.

Waitemata Local Board chairman Shale Chambers said closing Grey Lynn library would be unwarranted, completely wrong and would cause pointless grief.

Mr Brown, through chief executive Doug McKay, has directed all council departments, local boards and council-owned bodies to cut their operating budgets by 3 per cent next year.

This is so Mr Brown can reduce the projected rates increase for his election-year budget to “well below 4 per cent”.

Mr Brown and Mr McKay have boasted about making $1.7 billion in savings and efficiencies over 10 years.

And for the first time they are calling for cuts to service levels. This has led Ms Dobbie to look at closing two of the council’s 55 libraries.

She did not return calls to comment about the pressure she was under to reduce library services.

In a written statement, Mr Brown said he doubted any libraries would be closed to reduce next year’s rates.

But he would not give a firm guarantee to Snells Beach and Grey Lynn library users

 

Article continues at NZH site

 

Okay so which way is it, we looking at library closures or not? And why is a guarantee not able to be given here – that to me sounds like that the libraries will close but not one has the balls to say so from the outset. Gee I feel the communities affected through being left in limbo over the state of their libraries.

 

But we all knew this kind of thing was coming under this Council with this failed Long Term Plan.

I suggest that we divert money from the CAPEX budget and sink it into the OPEX budget. The money for the Cruise Ship Terminal and the money for phase one for the Quay Street Boulevard would cover the libraries and other Local Board budgets for the next wee while to come (oh say 10 years).

And what about Quay Street Boulevard? Defer all work on it until 2020 but leave enough money behind for our engineers to get the traffic light phasing RIGHT and maybe some extra signage and pot plants.

 

Hey we all got to make sacrifices here and I am making a few suggestions that are win-wins all round here.

But then again win-wins and the simple things often escape Council and the bureaucrats – otherwise we would not have these problems would we?