Tag: Budget Committee

Day Two at the Budget Committee

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Governing Body Ratifies Decisions Made over last two days

 

Full podcast will be up tomorrow.

From Auckland Council – in summary

Decisions continue on draft 10-year budget

 

Auckland Council’s Budget Committee today made decisions regarding its rating policy for the draft Long-term Plan (LTP) 2015-2025, council’s next 10-year budget.

The following decisions on rating policy make no difference to the overall amount of money council receives from rates; instead they are decisions about the distribution of rates among business, residential and farm/lifestyle ratepayers.

The Budget Committee voted to keep the fixed portion of rates (known as the Uniform Annual General Charge – UAGC) to its current proportion of 13.4 per cent of rates. Adjusted for the 3.5 per cent rate increase (as decided yesterday) the UAGC is proposed to be at $385. This is the amount every ratepayer pays to council regardless of the value of their property.

 

The level at which the UAGC is set affects the amount of rates raised from high value properties and low value properties. For example, if the UAGC is increased to $500 per year, then rates will rise for lower value properties and drop for higher value properties. If the UAGC is lowered to $250, rates will rise for higher value properties, and drop for lower value properties.

Mayor Len Brown says: “Differences to the UAGC have an impact on how rates are distributed across our communities and are always hotly debated. Today we agreed to keep the UAGC at its current level which reduces the rates impact of high revaluations on middle and low income households.”

The Budget Committee also agreed to set the business sector contribution at 32.8 per cent of total rates revenue for 2015/16, down from 33.3 per cent in 2014/15. This delivers an average benefit to business ratepayers of $260. The business sector differential is now set to reach a proportion of 25.8 per cent by 2025/26.

 

The Committee also decided to move from a ratio approach to setting business differentials to a percentage proportional approach. This change removes an unintended windfall benefit to businesses that would have resulted from the recent revaluations. The new approach also avoids an additional rates cost of 5 per cent for households.

 

Summary of other decisions:

 

  • Proposals for Maori: Confirmed funding for priorities for the Maori transformational shift, which include a signature Maori event, Marae development and Papakainga development.
  • City Centre Targeted Rate: Agreed to continue the City Centre Targeted Rate for the duration of the LTP. Secondly, while the targeted rate will largely fund capital projects, the operating costs and depreciation of those projects will now be funded from the general rate.
  • Business Improvement Districts: Agreed a resolution for staff to carry out work with the Business Improvement District (BIDs) and relevant local boards on the nature and costs of council support services provided for BIDs to ensure value for money.
  • Standardising and increasing social housing rent: Agreed to standardise the rent on council’s social housing units to be based on 30 per cent of tenants’ gross income. Secondly, agreed changes to annual rents (including increases or decreases) be capped at $780 per unit (equivalent to $15 cap on weekly rents).
  • Standardising fees and charges: Agreed to standardise from the diverse policies of the legacy councils the fees and charges for street trading, cemeteries and other services, with the exception Hauraki Gulf islands, which will be discussed further at the next Budget Committee meeting.

The decisions made today are a starting point to include in the draft budget. The plan can, and will change following consultation with Aucklanders early next year.

 

Next steps:

  • Decisions made November 5 and 6 form the draft of the LTP 2015-2025
  • Draft LTP is developed for adoption on December 18
  • Aucklanders have their say from late January – mid-March
  • Amendments made to the draft LTP
  • Final LTP is due for adoption in June 2015

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Council Summary of Today’s Budget Committee

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Full Podcast tomorrow

 

From Auckland Council

Decisions on draft 10-year budget

 

Auckland Council’s Budget Committee today made decisions for its draft Long-term Plan (LTP) 2015-2025, the council’s next 10-year budget.

The Budget Committee has agreed to consult with Aucklanders on a 3.5 per cent average rates increase for each year of the Long-term Plan 2015-2025. This compares to the 2.5 per cent average rise in 2015/16 and 2016/17 and 3.5 per cent for each year thereafter that the Mayor had proposed.

The Budget Committee agreed 16 votes to 7 that keeping average rates at 2.5 per cent in the first two years was too constrained for the council’s overall budget, particularly for the area of Parks, Community and Lifestyle which was facing significant capital expenditure reductions compared to what was previously planned.

 

A 3.5 percent average rates rise, along with inflationary increases in development charges and more sales of non-strategic surplus assets, means Parks, Community and Lifestyle will now be able to invest $800 million more in projects over the ten-year plan than was outlined in the  Mayoral proposal.

Mayor Len Brown says: “I supported the increase to 3.5 per cent today because I was getting the message I was being too tough with the 2.5 per cent target.

“Unfortunately, we haven’t yet been able to find a way to match people’s expectations for investments in their communities with an average increase of just 2.5 per cent. As I have always said, if Aucklanders thought I was being too tough with that target, I would listen.

 

“This process still has eight months to run, and I am convinced that we can get the 3.5 per cent figure lower. I, for one, will be working as hard as I can to drive further efficiencies in budgets to get keep rates as low as possible for Aucklanders.”

 

A 3.5 per cent average rise remains less than forecast in the previous Long-term Plan 2012-2022, which would have seen average annual rates increases of 4.9 per cent.

The proposed 3.5 per cent increase would equal about $2-3 extra per household each week.

 

The budget committee has also agreed to a $6.8 billion basic transport programme to be included in the draft budget. This is a 33 per cent reduction in capital expenditure on transport compared to the council’s previous Long-term Plan.

This basic transport package includes funding for major projects such as the City Rail Link, the East-West connections and SH1 intersection improvements at Warkworth. It does not however stretch to the majority of projects included in the fully-integrated Auckland Plan transport network including new park-and-ride facilities, planned cycleways, the north-western busway, road improvements, Penlink and rail electrification to Pukekohe.

 

The committee also decided to consult with Aucklanders on whether they are comfortable with the basic transport programme or whether they want to invest more to get the fully-integrated Auckland Plan network. It was also agreed consultation will include both alternative funding options announced by the Independent Advisory Body last week. The funding options include a motorway user charge or rates and fuel increases.

The decisions made today and tomorrow are a starting point to include in the draft budget. The plan can, and will change following consultation with Aucklanders early next year.

 

Further Information

Summary of key decisions:

  • Average rates increase by 3.5 percent for each year of the Long-term Plan 2015-2025
  • The overall level of development contributions charges increase annually in line with inflation from FY 2015/16
  • A $20 million per annum increase in the targets for the sale of non-strategic surplus assets
  • Forecast net group debt of $11 billion by 2025, resulting in a $2.7 billion reduction in growth of council debt
  • A $6.8 billion basic transport programme to be included in the draft budget
  • Consult with Aucklanders on two transport budgets – the basic and the full Auckland Plan – and if they choose the Auckland Plan network, what alternative funding option they would prefer to pay for it

 

Next steps:

  • Decisions made November 5 and 6 form the draft of the LTP 2015-2025
  • Draft LTP is developed for adoption on December 18
  • Aucklanders have their say from late January – mid-March
  • Amendments made to the draft LTP
  • Final LTP is due for adoption in June 2015

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The Transport Proposed Budget (remembering Basic Transport Package is currently defaulted)

 

Full analysis via podcast tomorrow