emergency budget 2020/2021 consultation document...2020/06/19 · severe revenue challenge over the...

1 | TE PUKA KŌWHITIWHITI KŌRERO

EMERGENCY BUDGET CONSULTATION DOCUMENT PART ONE: ANNUAL BUDGET

Te Tahua Pūtea Mate Ohotata 2020/2021

Emergency Budget 2020/2021Further consultation on the Annual Budget due to COVID-19.

Together we can recover stronger.

CONSULTATION DOCUMENT

akhaveyoursay.nz/emergency-budget

http://www.aucklandcouncil.govt.nz/have-your-say/topics-you-can-have-your-say-on/emergency-budget/Pages/default.aspx



This is your chance to have a say on the Emergency Budget about what

Auckland Council is planning over 2020/2021 in response to the impacts of

COVID-19 pandemic.

In Part One we’ll give you an overview of our challenges due to the COVID-19

pandemic, and how we plan to respond to this next year.

In Part Two we’ll let you know what we are proposing and what we want

specific feedback on.

In Part Three, we’ll let you know how you can give us your ideas and feedback.

Message from the Mayor

5

Rates postponement for ratepayers impacted by

COVID-19 26

Other Changes

27

Minor changes to rates and

fees following your feedback in February/March

28

Part Three Give us your views

29

Glossary of terms

31

Feedback Form

32

Next steps 30

Parts of this document

Water, Wastewater and Stormwater 14

City Centre and Local

Development 18

Rates increase 24

Suspending the Accommodation

Provider Targeted Rate

27

Transport 12

Parks and Community

16 Economic and Cultural

Development 19

Impacts of rates increases on

Emergency Budget 23

Council Support

21

Environmental Management and

Regulation 20

COVID-19’s impact on our Budget

7

Key considerations 6

How to have your say 4

Introducing the Emergency Budget

3

Part Two What we want your

feedback on 24

Part One 2020/2021 Budget at a glance 11


EMERGENCY BUDGET CONSULTATION DOCUMENT

Introducing the Emergency BudgetThe COVID-19 pandemic has significantly impacted

Auckland. Our people, communities and businesses have

all been affected by the health-related restrictions,

border closure and knock-on economic impacts.

Auckland Council is no different. Because over half of the

money we collect to pay for the services Auckland needs

come from sources other than rates, we are facing a

severe revenue challenge over the coming year.

We consulted on the Annual Budget 2020/2021 in

February/March 2020, but with COVID-19 we are facing a

very different financial picture. There is no business as

usual scenario for next year’s budget and Auckland

Council has had to respond quickly, therefore we are

calling this our Emergency Budget. We need your input

on some bold decisions to address the revenue gap and

help support Auckland’s recovery.




We want your input to help us develop our Emergency Budget for 2020/2021.You can give us your feedback until 19 June 2020. Please refer to

page 29 for ways to get in touch or complete the Feedback Form

included in this Consultation Document.

For more information, including the Supporting Information for

this Consultation Document, you can visit akhaveyoursay.nz/emergency-budget, phone 09 301 0101 or visit your service

centre or library.

Final decisions will be made in July 2020 and will be available on

aucklandcouncil.govt.nz in August.


https://www.aucklandcouncil.govt.nz/have-your-say/topics-you-can-have-your-say-on/emergency-budget/Pages/default.aspx



EMERGENCY BUDGET CONSULTATION DOCUMENT PART ONE: ANNUAL BUDGETEMERGENCY BUDGET CONSULTATION DOCUMENT

Message from the MayorCOVID-19 has had a dramatic impact on the world, including our

nation and city. While strong management of the infection has

saved lives in our country, the lockdown and the international

recession caused by coronavirus is severely impacting our job

market and the revenue Auckland Council needs to provide

services for Aucklanders and invest in our city.

We estimate that the fall in revenue will be more than half a billion dollars in the coming

financial year. The dividends from council-owned shares in assets like Auckland Airport have

been slashed; revenue from our venues, pools and facilities such as the zoo was reduced

during lockdown, and considerable reductions have been projected from the loss of public

transport fares and parking.

With the slowdown in the economy, council revenue will also suffer from reduced

development contributions and council regulatory fees. On top of this, we have budgeted $65

million to help people who need rates postponements because they are suffering financial

hardship due to COVID-19.

The loss of revenue, the largest in our city’s history, puts at risk the services that the

council provides to Aucklanders, and our ability to invest in much-needed infrastructure for

transport, housing and the environment.

With loss of revenue, we also need to reduce our spending. The Local Government Act 2002

requires that we balance our budget, unless it is prudent not to do so having considered

the current and future interest of the community. We are conscious of our responsibility

to manage our finances prudently and not just increase debt that could jeopardise our

credit rating, raise the cost of borrowing and burdening future generations with larger debt

repayments. Debt should mainly be constrained to finance infrastructure and not to cover

operational expenses.

This means we will have to make tough decisions. Services that are less important will need

to be reduced and some investment in infrastructure will need to be deferred. Staff salaries

will be affected, and the council will have to reduce staff numbers.

Over the last three years, council has already made efficiency and value for money savings.

However, in the post-COVID environment, further—and larger—cuts in spending are necessary

and will inevitably reduce what Auckland Council and its organisations are able to do.

In all of this, we are working hard to ensure that important services needed and valued by

Aucklanders continue to be delivered.

We are also striving to retain as high a level of investment in infrastructure as possible.

Aucklanders need this investment to tackle long-standing problems such as housing

shortages, traffic congestion and to improve the quality of our environment. The investment

is also important to create jobs at a time of growing unemployment and to stimulate

economic recovery.

We are proposing an average general rate increase of either 2.5 per cent or 3.5 per cent for

2020/2021. The scale of the financial challenge that we face for next year with a revenue loss

of over half a billion dollars due to COVID-19 means that spending on some council services

will need to be reduced and many capital projects will be delayed even with the 3.5 per cent

increase we had previously planned.

With a lower rate increase of 2.5 per cent, we would need to further reduce spending on

council services and further delay investment in transport, parks and community and town

centre projects. We looked at but did not propose rates increases below 2.5 per cent because

of the severe impacts that would have on council services, new infrastructure, our debt levels

and employment and business activity in Auckland.

The challenge we face is great. However, we are determined to continue our progress

towards a better and more inclusive community and to deal with long-term challenges such

as climate change.

During the health crisis caused by COVID-19, we showed what this city and our country could

achieve by working together. Just as we were successful in breaking the chain of COVID-19

transmission during the lockdown, by working together we can recover

from the recession and achieve a stronger and better Auckland.

Kind regards, Phil Goff Mayor of Auckland

Key considerationsIn developing the draft Emergency Budget, we have identified

some key considerations to guide us when we make decisions.

The changes we make will impact these to varying degrees.

Ensuring long-term financial prudence and sustainability

Impacts on our

community facilities Climate

change impacts

Minimising impacts on

jobs and employment

Honouring our

commitment to Māori

Impacts on the most

vulnerable

“He waka eke noa”We’re all in this together.

Impacts on community

programmes and grants

Impacts on

transport





Our challenge: less money in the doorWe face a significant financial challenge next year:

• revenue is projected to be over $500

million less than previously budgeted

• high fixed costs mean our budget will not balance,

even after making considerable savings

• we will have hundreds of millions of dollars of less cash to

pay for services and investments for Auckland

• we will have to rely on borrowings to help make up the

difference, but unlike central government we were already

very close to the limit of what we can sensibly borrow

• not increasing rates would have severe impacts on council

services, new infrastructure, our debt levels and employment

and business activity in Auckland

• we are proposing rates increases of either the currently

planned 3.5 per cent or a lower 2.5 per cent ($1.82 or

$1.35 per week for the average value residential property),

each with different impacts for Auckland, and a new rates

postponement scheme to help the hardest hit households

and businesses.

COVID-19’s impact on our Budget – Overview

Our response: four leversWe have four key levers to respond to this challenge:

1. Increased council borrowing• under either rates increase option we will temporarily exceed our debt limits

• further borrowing would lead to increased borrowing costs, reduced access to debt markets

and greater exposure to further shocks

• additional debt would also need to be serviced and repaid by future ratepayers.

2. Reduced capital investment• we have already decided to slow down some of our building and construction projects

• to avoid over-reliance on the use of debt, we need to look at delaying more projects, with

more delays needed under the 2.5 per cent rates increase option.

3. Reductions in operating expenditure• we are already planning substantial cuts to our back-office functions. Further savings will

impact the services we deliver to Aucklanders

• under the 3.5 per cent rates increase option a package of $54 million of further operational

expenditure reductions is needed, temporarily impacting some services we provide

• under the 2.5 per cent rates increase scenario, this will increase to $75 million with further

impacts on our community.

4. Asset recycling• the council owns over $50 billion of assets

• we are proposing to let go of some more of our less well used assets to help pay

for new ones that will help us deliver better services to the community.



COVID-19’s impact on our BudgetThe impacts of the COVID-19 pandemic on Auckland will be

substantial over the 2020/2021 year.

We expect borders to be closed for a significant period. This will halt international tourism

and severely impact migration. Many businesses will struggle and unemployment will be at

levels we have not experienced in recent memory. Many people

will be facing financial hardship.

As a community we have banded together and fought the health

impacts of COVID-19. Now it’s also time to come together to manage

the financial impacts. We need to do this in ways that are sustainable,

help us recover quickly, and which uphold key principles which are

important for Auckland.

These financial impacts and our options to respond through this Emergency Budget are

outlined in this section. These are key things to keep in mind when considering the key

choice between the options of the currently planned 3.5 per cent or a lower 2.5 per cent

average general rates increase for next year. For more information please refer to Section

Two of the Supporting Information.

Less money in the doorWe are expecting a sizable drop in revenue next year. Operating cash income across the

council group is now projected to be $525 million less than previously budgeted. This is

caused by:

• border closures and restrictions on gatherings resulting in around $40 million less revenue

from conventions, concerts and visitors to Auckland Zoo.

• a public hesitancy to gather in busy places will reduce the use of our pools, leisure centres,

holiday parks and community facilities resulting in about $30 million less revenue.

• this hesitancy along with the need to space people out on public transport services will see

around $40 million less transport fares collected.

• changes to overall travel patterns are projected to reduce revenue

from parking and enforcement by $40 million and Regional Fuel

Tax receipts by $20 million.

• the lack of international travel means we can’t rely on the $60

million annual dividend from our investment in Auckland Airport,

while lower economic activity will see Ports of Auckland’s revenue

also drop by around $65 million.

• greater economic uncertainty leading to a slowdown of

development projects is expected to result in around $50 million

less in building and resource consent fee revenue.

• this slowdown in development projects along with reduced water usage from lower

business activity and the current drought situation will reduce Watercare’s revenue by

about $75 million.

• finally, our rates postponement initiative to support ratepayers facing hardship is expected

to also reduce the amount of rates collected in the year by $65 million.

Our current assumption is that the country will be at alert levels 2 and then 1 for all of the

next financial year. At these alert levels there is a general expectation that most council

services will be back up and running, even though the associated revenue may have

dropped significantly.

The combination of lower revenue and high fixed costs for many council services will

result in an operating budget that is a long way from being balanced. This will be the case

even after making significant additional savings across the council group from staff costs,

consultants and other discretionary costs.

An unbalanced operating budget means hundreds of millions of dollars of less cash to

spend on delivering services and activities to Aucklanders and to invest in infrastructure for

the region. Without further spending reductions all of this would have to be borrowed. Doing

so puts pressure on our borrowing capacity. It also means paying for services delivered in

Auckland Council group expects a sizeable

drop in revenue

Revenue

Debt

Managing our debt to revenue ratio



2020/2021 for years to come. This might be necessary to some extent, given the emergency

situation, but it should be kept to a minimum.

Addressing the challengeAuckland Council is committed to ensuring it can maintain essential and critical services

and deliver infrastructure investment while maintaining a strong commitment to financial

prudence. We have four key levers available to achieve this but are constrained in the

amount we can use of each.

1. Increased council borrowingCentral government is planning substantial increased spending to support economic

recovery with this spending funded by large increases in government debt. This is possible

because in recent years central government has been maintaining low debt levels with

substantial unused borrowing capacity. However, we have been steadily increasing our

level of borrowing over recent years to invest in critical infrastructure to support our rapidly

growing city. We have now reached our debt limits.

Our long-term financial strategy sets a limit on the ratio of our debt to our revenue of 270

per cent. This means that our debt should not exceed $2.70 for each $1.00 of revenue.

The severe revenue reduction means that we will undoubtedly exceed this limit next year.

Financial modelling indicates that without any further mitigating actions, the actual ratio

is likely to be well over 300 per cent next year and stay above the 270

per cent limit for at least four years. Additionally, analysis that looked

at better or worse case scenarios indicates that different underlying

assumptions could see the ratio 20 per cent higher or 10 per cent lower

than our base estimate for next year.

Increases above our policy limits of this size and duration would erode

confidence in the council’s commitment to long-term financial prudence. This would likely

change how our investors and credit rating agencies view our creditworthiness, potentially

leading to increased borrowing costs and reduced access to debt markets. When we take

on additional debt we also need to remember that it will need to be

serviced and eventually paid back. We need to make sure we don’t

burden future generations with an unwieldy level of debt.

The more debt we carry, the less flexibility we have to respond to any

further shocks. A current example is the drought situation, for which

Watercare may need to soon invest $50 million to $180 million in

critical water supply infrastructure to make sure Auckland doesn’t run

out of safe, reliable drinking water.

We think that the highest we can responsibly go with using additional borrowings is to allow

our debt to revenue ratio to temporarily increase to 290 per cent for 2020/2021 before

reducing back to our 270 per cent policy limit the following year.

2. Reduced capital investmentThe second lever we have is to delay the start of new capital projects and slow down or

“stretch out” some programmes of work. We have already made decisions to slow down

some investments, but to avoid over-reliance on the use of debt, we need to look at delaying

more of the capital programme.

There are some important constraints that the council considers when looking at this. A

large portion of the capital programme is already contracted and to make changes could

be costly in terms of breaking or amending contracts. We also need to ensure any works

necessary to meet statutory requirements or critical renewals are prioritised.

Additionally, we need to consider overall value for ratepayers and excessive delays to

renewals work could result in higher costs over the long-term.

As a council we are also required to look wider than our assets and consider our

actions in terms of community, economic, cultural and environmental wellbeing. Our capital

investment lever has the most impact on jobs and business activity in Auckland.

Under the 3.5 per cent general rates increase option the council proposes a $2.3 billion

investment programme that we consider represents a significant lift on the investment level

delivered over recent years, but does see many projects delayed or stretched out over a

longer timeframe. At this level, most existing contractual arrangements would still be able

to be honoured but there would be noticeable impacts on service levels and the timeframes

Increased borrowing

Less investment

Savings and service reductions

Asset recycling

Our levers enable us to balance service delivery and financial prudence

Leaving capacity to deal with

unexpected events



for achieving key council objectives. Some major projects that are not yet committed

would be delayed and there would necessarily be less investment in renewal and safety

programmes than previously planned.

In order to achieve a lower 2.5 per cent general rates increase around $65 million in further

delays to capital projects would also be required. Significant delays beyond this would

likely not be possible without breaking contracts and accepting long-term risk to

some of our critical assets and services

3. Reductions in operating expenditureAs discussed above, significant savings have already been found, but we

are still a long way from being able to balance next year’s budget and using

debt to fund some operating costs will be unavoidable in the short-term.

Additional operating cost reductions could help reduce this need to borrow.

We have already planned to make substantial cuts to our back-office

functions. Further savings will impact the services we deliver to

Aucklanders. However, given the expected temporary nature of the revenue pressures these

service reductions may only need to be temporary.

Under the 3.5 per cent general rates increase option we are proposing a package of

additional operating expenditure reductions for 2020/2021 totalling $54 million. To enable

a reduction in the level of general rates increase to 2.5 per cent we propose a further $21

million of savings and temporary cuts to services.

Both packages will result in noticeable changes to what we are providing to the community

and to the level of staff we employ.

As we move through the year and learn more about our post-COVID recovery challenges

we may need to make further operational adjustments and temporary changes to service

levels. As we deal with service interruptions and make

operational decisions and changes, we will keep our

communities and local boards as informed as possible.

Any significant and permanent reductions in council

services will only be made via the upcoming 10-year

Budget process following further public consultation.

4. Asset recyclingAuckland Council has over $50 billion worth of assets.

Primarily these are things like roads, libraries, pipe networks and parks that deliver core

services highly valued by Aucklanders.

We also, however, have assets that are not delivering council services. These include

property assets that may be left over from previous projects (such as a roading upgrade),

commercial property we may have used for staff in the past, or investments we have in

commercial enterprises.

One lever available to us is to sell these assets and use the money to invest in new

assets that the region needs. We refer to this as asset recycling as it means replacing

one underutilised asset with a new one that will help us deliver better services to the

community.

The extent to which our capital is invested in the most strategically important activities

is something that parties like credit rating agencies and central government look at when

assessing our financial position. Changing asset ownership also has minimal impact on jobs

and employment compared to spending reductions.

Given the ability of this lever to directly reduce our debt burden without any impact on core

service delivery, we propose setting an additional target of $200

million for asset recycling in 2020/2021.

Government supportCentral government announced its Rebuilding Together Budget

in May 2020 which includes significant additional provision for

government spending and infrastructure investment.

We are talking with central government about how this might

benefit Auckland. If the government decides to invest in some of the projects we have

identified or support us some other way, then this might enable us to provide more services

and investments next year than set out in this document. This means we could play a bigger

role in helping central government to support jobs and business activity in Auckland as part

of the recovery and rebuilding effort.

However, there is not yet enough certainty or clarity about this and so we can’t plan for

it yet. Hopefully this will become clearer before we adopt our final Emergency Budget in

July 2020.

To read more about the financial impacts of COVID-19, please read Section 2 of the Supporting Information document.

Government may help us reduce the pull on some

of our levers

Asset recycling as a lever to pay down debt

Service reductions may be temporary



CAPEX (CAPITAL PROJECTS) OPEX (OPERATING COSTS)

ACTIVITY ORIGINAL BUDGET

3.5% RATES INCREASE

2.5% RATES INCREASE

3.5% RATES INCREASE

2.5% RATES INCREASE

Transport $1,300m $1,095m $1,055m $1,616m $1,615m Refer page 12

Water, wastewater and stormwater

$670m $603m $603m $754m $754m Refer page 14

Parks and community

$342m $168m $158m $768m $752m Refer page 16

City centre and local development

$252m $191m $186m $101m $101m Refer page 18

Economic and cultural development

$42m $50m $40m $213m $213m Refer page 19

Environmental management and regulation

$26m $14m $14m $436m $436m Refer page 20

Council support $178m $163m $163m $558m $558m Refer page 21

CAPITAL UNDERDELIVERY ASSUMPTION ($160)

TOTAL $2.65b $2.28b $2.22b $4.44b $4.42b

Wāhanga Tuatahi: 2020/2021 He aronga poto i Te Tahua PūtePart One: 2020/2021 budget at a glance

** *



TransportWe keep Auckland moving with well-planned transport networks, good quality local roads and convenient, frequent public transport that more people use. We deliver a comprehensive programme of safety improvements to reduce harm across the transport network.Public transport services will be impacted by COVID-19 social distancing rules. More people working from home and

concerns about COVID-19 will see fewer people using public transport, but it is important that this essential service

be maintained. Under all options there will be a noticeable drop in capital investment next year compared to current

plans, with work focusing on projects that are already in progress.

RevenueThe impact of COVID-19 restrictions, more people working from home and the resulting economic slow-down will

have significant impacts on transport revenue. In 2020/2021, we expect that public transport revenue will be $40

million lower than planned (assuming that NZTA top up 51 per cent of the gross revenue shortfall and there is a 4 per

cent fare increase in February). Parking and enforcement revenue is expected to be down by $33 million, even with

greater levels of enforcement to keep bus and transit lanes clear so that the network flows as efficiently as possible.

We expect a reduction in fuel usage meaning that the Regional Fuel Tax revenue will drop by $20 million. This is

additional to a $20 million drop in other Auckland Transport revenue lines.

SavingsUnder the currently planned 3.5 per cent rates increase, a number of operational and capital investment savings will need to be made in the transport activities in 2020/2021.

Planned operational savings include:

• reduced staff costs, professional costs and contract staff, resulting in $20 million saving

• setting an additional savings target for Auckland Transport, resulting in $7 million saving

• some reductions in the number and frequency of public transport services, resulting in $10 million saving.

CAPEX

OPEX

3.5% RATES

INCREASE

3.5% RATES

INCREASE

2.5% RATES

INCREASE

2.5% RATES

INCREASE

$1,095m

$1,616m

$1,055m

$1,615m

2.5%3.5%

* Construction of the City Rail Link will continue, capital investment

in transport includes Auckland Council’s share of $395 million of

funding for 2020/2021.

* *



Capital investment $700 million of capital investment will be delivered in 2020/2021 compared with $905 million previously

planned. This level of investment will not allow us to support capital programmes undertaken by other

agencies or developments in Auckland. If more money was available we would prioritise the originally planned

safety and public transport projects. In addition, around $100 million of capital investment that did not

proceed in 2019/2020 will now fall into 2020/2021 further reducing the level of investment in new projects.

The reductions in capital investment in 2020/2021 include:

• pausing or cancelling of safety improvements include any further rollout of red-light cameras in urban areas, the rural road delineation programme, and improvements to high risk intersection and pedestrian crossing improvements

• pausing or deferring work on all walking and cycling projects not in construction including Glen Innes to Tamaki Stage 4, Point Chevalier to Herne Bay, Waitematā Safe Routes programme, Links to Glen Innes, and the Great North Road project.

• no further investment in electric buses and charging infrastructure is likely to be made in 2020/2021 other than three electric buses already on order

• deferrals to multi-modal projects such as Glenvar Road, East Coast Road, Lake Road, Esmonde Road and Lincoln Road

• delays in the ferry strategy development and implementation

• increased roading maintenance costs in medium term as a result of deferred renewals.

Under a 2.5 per cent rates increase, a further $40 million of capital expenditure would need to be deferred as follows:

• Additional $28 million deferral of transport growth and improvement programmes with delayed planning work for future walking and cycling projects and deferring delivery of any remaining local road sealing and local board programmes. This would also include deferring investment in the Airport to Botany Mass Rapid Transport investigation works and slowing down work on the Mangere cycle route.

• $12 million of further reductions in Auckland Transport’s planned renewals leading to further implications for asset conditions, future maintenance requirements and deaths and serious injury reduction targets.

To achieve a 2.5 per cent average general rates increase we propose reviewing public transport fare structures and concession fares for next year. This could mean temporarily removing some fare concessions and charging more for peak services compared to off-peak services. Some users may pay more on some services (in addition to currently planned fare changes) and total fare revenue will increase.

We also propose to increase revenue by introducing charges for some park and ride facilities. This will be done in conjunction with work on Auckland Transport’s parking strategy. It might result in some reduction in the use of public transport.

If an average general rates increase less than 2.5 per cent is decided, then we would need to make a temporary reduction in road and footpath maintenance, adversely affecting road and pedestrian safety.



Water, wastewater and stormwaterAbout our water expenditure Our water functions include:

• supplying safe drinking water and treating wastewater every day

• managing stormwater to minimise flooding and protecting waterways

• providing infrastructure that keeps pace with the growth of Auckland.

These are core services that we will always provide, but over the next year we will be deferring some

capital investment.

Important projects, such as the Central Interceptor and the Huia 1 and Hunua 4 watermains, will continue to provide

important infrastructure for Auckland’s future.

Auckland’s droughtAlongside COVID-19, Auckland is facing one of the worst droughts in its history. If it continues, new sources of water,

such as extracting and treating more water from the Waikato River and a new treatment plant, might need to be

brought forward, at a potential cost of $50 million to $180 million.

RevenueWatercare (who supply Auckland’s water and manage the wastewater network) expect that water charges revenue

will be $50 million lower than previously planned. This is because of COVID-19 and water restrictions to manage

through the drought.

They are also expecting Infrastructure Growth Charges will be $20 million lower than previously planned as the rate

of development falls.

SavingsUnder the currently planned 3.5 per cent rates increase, we plan to make a number of operational and capital

investment savings in the water, wastewater and stormwater activities in 2020/2021.


• less preventative maintenance including reductions in small projects, and less outsourcing of services in the

Healthy Waters department. This would mean a $2.25 million saving

• Water Protection Fund grants, which help rural landowners with riparian planting and fencing, will stop for one year.

This would mean a $170,000 saving.

$603m

$754m

$603m

$754m

If a 2.5 per cent or lower general rates increase is decided, no further reductions in service or capital investment in addition those shown above would be made.

2.5%3.5%

Learn more about the impact of the drought and our planned response online at www.watercare.co.nz/Water-and-wastewater/ Drought-response

CAPEX

OPEX

3.5% RATES

INCREASE

3.5% RATES

INCREASE

2.5% RATES

INCREASE

2.5% RATES

INCREASE

https://www.watercare.co.nz/Water-and-wastewater/Drought-response

https://www.watercare.co.nz/Water-and-wastewater/Drought-response



Capital investment $162 million of capital investment will be deferred. This includes:

• deferrals across Watercare’s planned capital programme with a number of projects to support growth being

rephased, this would mean a $23 million timing change.

• deferrals across Healthy Water’s capital programme. This includes:

- almost all externally contracted design work

- all network growth projects

- almost all renewal work and capacity upgrades (except for emergency works)

- deferring and/or re-staging of the Hurstmere Road water quality upgrade – to be carried out in conjunction with

further streetscape works

- almost all small drinking water upgrades

- some Water Quality Targeted Rate projects, this would mean a $39 million timing change.



Parks and CommunityWe provide parks, libraries, pools, recreation centres, community halls and events that support strong and diverse Auckland communities. We will continue to provide these services, but there will need to be savings that will affect some service levels,

facility opening hours, maintenance levels and programmes delivered. These savings will have a low overall impact

on the community but there will be some noticeable impacts on the parks, recreation, community, arts and culture

activities available to Aucklanders. Changes to services will be determined through consultation with local boards

and any significant and permanent reductions in council services will only be made via the upcoming 10-year Budget

process following further public consultation.

RevenueThe impact of COVID-19 restrictions is expected to reduce the public usage of:

• libraries

• venues for hire

• recreation centres

• pools.

Revenue for Parks and Community is expected to be $30 million lower than originally planned.

SavingsUnder the currently planned 3.5 per cent rates increase, a number of operational and capital investment savings will

need to be made in the Parks and Community activities in 2020/2021.


• efficiencies, including staff and organisational changes, reduced outsourcing, reduced catering –

$6.49 million saving

• fewer and smaller events, including regional parks events (such as cancellation of Ambury Farm Day and Sculpture

at the Botanic Gardens) and other regional events such as Matariki, Waitangi Ki Manukau, Movies in Parks, Music in

Parks, Heritage Festival, citizen ceremonies, this would mean $610,000 saving

• reduced parks and recreation programmes, including using in-house fitness programmes, reducing park activations

and the Arataki Visitors Centre programme, this would mean $420,000 saving

• direct facility costs savings achievable by reducing opening hours, based on utilisation information and with local

board consultation - $800,000 saving

• reduced park track maintenance, this would mean a $260,000 saving

$168m

$768m

$158m

$752m

If a 2.5 per cent general rates increase is decided, then some community facilities with low utilisation will need to be permanently closed. Regional grants provided to the community would be reduced by $5 million. Local Board funding would be further reduced by the equivalent of 20 per cent of discretionary local funding rather than 10 per cent. There would be a further $10 million reduction in capital investment. This would include reduced regional park renewals, such as deferring track upgrades, renewal of toilet facilities and accommodation. It would also include reduced community asset renewals, such as community halls and playgrounds, meaning more possible closures of some facilities.

If no general rates increase is decided, then more community facilities would need to be closed to save operational expenditure and because of health and safety concerns from reduced renewals and maintenance of facilities. There would be a significant reduction in events. Funding to sports and community groups would drop significantly.

2.5%3.5%

CAPEX

OPEX

3.5% RATES

INCREASE

3.5% RATES

INCREASE

2.5% RATES

INCREASE

2.5% RATES

INCREASE



• deferral of unallocated grant funding from the Sport and Recreation Facilities Investment Fund, this would

mean a $3 million saving

• scaled back programmes in community centres, arts facilities and libraries, this would mean a $1.07 million saving

• fewer arts, culture and events grants due to a reduction in activity, including reduced Q Theatre grant and reduced

contestable grants overall, this would mean a $670,000 saving

• operational expenditure not required due to delayed community centre build - $300,000 saving

• reduction of local board funding by the equivalent of 10 per cent of local discretionary funding- $3 million saving.

Capital investment $162 million of planned capital investment as well as the value of incomplete projects from the current year will be

deferred. In addition, capital investment deferred from the current year will not be caught up next year. These timing

changes include:

• fewer land acquisitions, with only land purchases that have already been signed being acquired, as well as land at

Manukau Cemetery

• delays in the One Local Initiative and growth programmes unless works are already contractually committed,

this means no design, planning or new construction being started for projects like new sports fields, toilets,

playgrounds, walkways, pools and community centres or parks that do not already exist

• deferral of all unallocated and uncommitted Locally Delivered Initiatives projects

• most planned renewals for buildings, playgrounds and open space being deferred (80-90 per cent of renewals

deferred) with potential closures of community assets if they become a health and safety risk – this means very few

replacement of old playgrounds, old library or community halls, cracked walkways and old pools where that was

planned for next year

• no seismic remediation of community facilities, meaning possible closure of some facilities if deemed a risk to

continue operating

• reduction of investment in library collections by one third and no new on-line library services or technology

• reduction in public art spending (70 per cent reduction).



City centre and local development We help deliver vibrant town centres and a thriving economy that supports strong communities and accommodates growth. The city centre development programme prepares us to host major events such as the 36th Americas Cup and APEC 2021. Development of town centres is an important way to stimulate local economies and jobs. Preparations also

need to continue for major events in the city. These activities will continue but will be scaled back wherever

possible to achieve savings.

RevenueThere will be some reduction in rental revenue from properties owned and managed by the council group.

SavingsUnder the currently planned 3.5 per cent rates increase, then a number of operational and capital investment

savings will need to be made in the Centres Development activities in 2020/2021.


• a $20 million budget provision of new funding across the group for supporting large events in 2021. This

would be instead of $30 million and would mean $10 million saving.

• reduced staff costs and operating efficiencies at Panuku Development Auckland - $3 million

• reduced project planning and placemaking and activation, this would mean a $2.4 million saving

• reduction in professional services for Council planning - $380,000 saving

• suspension of the Regional Historic Heritage grant for one year - $100,000

Capital investment $73 million of capital investment by Panuku Development Auckland will be deferred. Panuku’s work will focus

on the completion of projects under construction and property acquisitions for the Northcote Town Centre.

Deferrals include:

- fewer asset renewals

- delaying waterfront projects

- removing the contingency for cost overruns or delays.

The Wynyard Edge Alliance needs to complete capital works for the 36th Americas Cup event in 2021, with capital investment proceeding as previously planned.

Capital investment by the Development Programme office in town centres will be $19 million higher than previously planned as projects underway in 2020 are carried forward to 2021.

Projects that will be deferred include Hobson Street, Myers Park, Nelson Street slip lane and stage 4 of the Ōtāhuhu Town Centre upgrade. Hurstmere Road upgrade will be restaged.

$191m

$101m

$186m

$101m

There would need to be a further $10 million of investment in town centre upgrades deferred if we decide on a 2.5 per cent general rates increase. There would also be a temporary reduction in cleaning and maintenance standards in Wynyard Quarter. At a general rates increase below 2.5 per cent, the continuation of any centre development work would be put at risk.

2.5%3.5%

CAPEX

OPEX

3.5% RATES

INCREASE

3.5% RATES

INCREASE

2.5% RATES

INCREASE

2.5% RATES

INCREASE



Economic and cultural developmentWe provide arts, natural environment, sport and live performance events that enrich the lives of Aucklanders and visitors. We promote Auckland as a place to work, invest, study and visit. We support the creation of quality jobs for all Aucklanders.The COVID-19 pandemic restrictions mean that international visitors and migration to Auckland will be much lower, and

restrictions on groups will make events much harder to run. Economic growth will be slower over the next few years.

RevenueThe size and number of events will be much lower as a result of COVID-19 and this will reduce the revenue of Regional

Facility Auckland (RFA) by $40 million. With border restrictions very few international visitors will come to Auckland.

This means that we will not be spending money on promoting Auckland as a destination (which is partially funded by

the Accommodation Provider Targeted Rate). If we decide to suspend the Accommodation Provider Targeted Rate

until March 2021 there will be a $10 million drop in revenue. To read more about this proposal please read page 27 of

this Consultation Document.

SavingsUnder the currently planned 3.5 per cent rates increase, we will need to make a number of operational and capital

investment savings in the economic and cultural development activities in 2020/2021.


• reduction in RFA’s cost of sales as a result of reduced performances and events, and reduced shop and café sales -

$16 million saving

• RFA identified further operational savings through reduced operating expenditure and holding vacant positions and

deferring salary increases - $6 million saving

• lower staff costs (including factoring in $4 million received for the WINZ Wage Subsidy) and discretionary spending

reductions in RFA - $5.8 million saving

• further cuts to Auckland Live’s public programme and to Auckland Art Gallery exhibitions - $1.1 million

• reduction in major events funding and promoting Auckland as an international destination, funded by the

Accommodation Provider Targeted Rate - $10 million saving.

Capital investment Uncompleted capital work at Auckland Zoo and on the Aotea Centre mean that capital expenditure by RFA will be $9

million higher than previously planned in 2020/2021 when these projects are completed. The increase in budget is the

unspent portion of the current year budget reflecting the timing change for completion due to COVID-19.

$50m

$213m

$40m

$213m

Under a 2.5 per cent general rates increase $5 million of critical renewals for our regional facilities would be delayed, with a risk that one or more may temporarily close. If the rates increase is lower than 2.5 per cent, then further cuts would be made to Auckland Tourism, Events and Economic Development’s (ATEED) economic development activities, and this would put economic recovery of the region at risk.

2.5%3.5%

CAPEX

OPEX

3.5% RATES

INCREASE

3.5% RATES

INCREASE

2.5% RATES

INCREASE

2.5% RATES

INCREASE



Environmental Management and RegulationWe nurture, look after and monitor Auckland’s natural environment, and protect it from a variety of natural and human generated threats. We collect and dispose of Auckland’s rubbish and waste. We keep Aucklanders safe and well through building compliance, animal control, alcohol licensing, resource consenting and environmental health activities. We expect to see less economic activity as a result of COVID-19. This will slow the pace of development over the city

and will see the number of resource and building consents drop.

RevenueWe are expecting a 25 per cent - 35 per cent reduction in the number of building and resource consents we issue,

resulting in a $50 million drop in revenue.


investment savings in the environmental management and regulation activities in 2020/2021.


• reductions in pest eradication, including delaying the rat eradication component of Te Koro o Waiheke project and

pest eradication on Kawau Island, and reduction in Kauri Dieback research - $1.17 million saving

• reduction in the Natural Environment Heritage Grant for community-led conservation and low carbon living

projects, and the programme to support rural landowners restore high ecological value sites – $530,000 saving

• reduction in the number of animal shelters from three to two, as well as the closure of the Waiheke animal shelter -

$300,000 saving

• optimisation and automation of consenting processes - $5 million saving

• reduction in staff and staff costs and internal efficiencies in the Environmental Services, Waste Services and

Regulatory Services departments - $3.43 million.

$14m

$436m

$14m

$436m

No additional savings are proposed under a 2.5 per cent average general rates increase.

2.5%3.5%

CAPEX

OPEX

3.5% RATES

INCREASE

3.5% RATES

INCREASE

2.5% RATES

INCREASE

2.5% RATES

INCREASE



Council SupportWe support Auckland Council to deliver services and elected representatives to make decisions. We provide emergency management for the city. We provide grants for large regional amenities. Council Support includes the operations of the Ports of Auckland.Our focus is on striving to keep as many front-line council services operating as possible. Therefore, a wide range of operational savings have been identified across the council support activity.

RevenueThe impact of COVID-19 and the expected economic slow-down will have a significant adverse impact on revenue.

We are expecting no dividend from Auckland International Airport Ltd, which will see revenue drop by $60 million. Revenue from the Ports of Auckland is also expected to be $65 million less than previously planned.


investment savings in the council support activities in 2020/2021.


• voluntary salary reductions for six months for staff earning over $100,000 (assuming a 75 per cent take-up) -

$3.71 million saving

• discussion with the Public Service Association (union) on options relating to this year’s annual remuneration review

for staff, and whether it should be limited or cancelled - $8.6 million saving

• reduction of the Independent Māori Statutory Board budget - $200,000 saving

• reduction in spending against the Mayoral Office budget - $2 million saving

• reductions in governance staff - $650,000 saving

• interest cost savings due to lower interest rates - $15 million saving

• deferral of triennial property valuation process - $4.5 million saving

• reduction of discretionary spend, including travel, training, professional services, marketing, and people function

efficiencies - $12.05 million saving

• reduction in insurance claim costs - $1 million saving

• reduction in corporate property maintenance and utilities costs – $1.5 million saving

• reduction in printing costs from digitisation of documents - $450,000 saving

• optimising business support functions - $1.3 million saving

• vehicle fleet savings, including fewer vehicles and reduced usage - $200,000 saving

$163m

$558m

$163m

$558m

If we decide on an even lower rates increase, the implementation of a living wage for contracted cleaners, climate change initiatives and Māori outcomes initiatives (such as marae development) would be delayed. We estimate that, if the rates increase was 0 per cent, the council workforce may reduce by around 900 staff members.

2.5%3.5%

CAPEX

OPEX

3.5% RATES

INCREASE

3.5% RATES

INCREASE

2.5% RATES

INCREASE

2.5% RATES

INCREASE



• setting a formal target for savings from removing duplication across council-controlled organisations – $5 million

• additional savings targets across Finance, Planning and Governance Divisions - $16.65 million.

Capital investment $32 million of capital investment deferrals will include:

• delay of non-critical information and communication technology initiatives

• slow down of the WorkSmart programme, pausing the Manukau Hub project, and deferring some local board

office refits

• reduction of the response fund for major storm events from $20 million to $5 million.



Impact at 3.5% average rates increase Further impacts at 2.5% Further impacts at 1.5 - 0%

Impacts on our community facilities

Service level reductions including facility opening hours and maintenance levels. Most

capital works, including renewals will be delayed.

Some facilities with low utilisation will be permanently closed. Further deferral of investment

meaning more possible closures of facilities.More facilities closed.

Impacts on community programmes and grants

Less programmes delivered in our facilities. Reductions to community grants and events.

Further reductions to grants and local programmes.

Funding to sports groups, volunteers and other community groups would drop significantly.

Impacts on our transport network

Reductions to public transport services. Deferrals of investment in safety programmes,

walking and cycling and key corridors.

Further deferral of capital investment. Review of fares and concessions could result in higher user costs.

Temporary reductions in road and footpath maintenance adversely affecting road and

pedestrian safety.

Impacts on the most vulnerable

Reduced support to vulnerable groups in our community.

Further reductions in grants and programmes may further impact

vulnerable communities.

Significant reductions in services will further impact the most vulnerable, including the homeless and cleaners contracted to the council paid less than a living wage.

Honouring our commitment to Māori

Māori outcomes will be progressed as a key priority area.

Māori outcomes will be progressed as a key priority area.

Some key initiatives such as marae development will be delayed. Reduced staff capacity and capability will mean

slower progress with achieving key outcomes.

Impacts on jobs and employment

Lower capital and operational spending compared to previous plans will result in

lower levels of employment within the council group and across the wider Auckland economy.

Further spending reductions will lead to further reductions in jobs and

employment for Auckland.

Further reduction in economic development spending will slow down regional economic recovery.

Climate change impacts

Reduced local activity budgets will temporarily reduce our ability to progress climate change response actions. Temporary reductions in some public transport services and delayed investment in public transport and active transport modes will delay progress with addressing

Auckland’s carbon emissions.

Higher transport fares and further delays to transport investment will adversely affect Auckland’s carbon

emissions in the near-term.

Further reductions in the council’s ability to adequately respond to the climate emergency.

Further delays to transport investment will further adversely affect Auckland’s carbon

emissions in the near-term.

Financial prudence measures

Debt limits are exceeded temporarily but drop within prudent limits by 2021/2022.

Debt limits are exceeded temporarily but drop within prudent limits by 2021/2022.

Debt limits may be exceeded over the medium term leading to higher borrowing cost, less

access to funding, reduced ability to handle shocks and a higher debt burden for future ratepayers.

Impacts of rates increases on Emergency Budget


EMERGENCY BUDGET CONSULTATION DOCUMENT PART TWO: ANNUAL BUDGET

Rates increaseRates normally make up about 40 per cent of our revenue. Fees and charges for our services, dividends, government funding, and revenue from commercial activities are examples of other ways council earns revenue. The huge reduction in our other sources of revenue mean that in 2020/2021 we will rely even

more on income from rates to fund essential services. General rates are currently planned to

increase by an average of 3.5 per cent next year.

We understand that many households are struggling financially. We need to balance the

need to keep rates affordable with protecting the core services that provide community

infrastructure, keep us safe, help stimulate the economy and employment, and support those

who are the most vulnerable in the community. As discussed in the next feedback topic, we

are also proposing to provide some targeted support

to those households and businesses that are most

affected by the current situation.

What we are proposing Unfortunately, we do need to increase rates.

If we don’t, we risk our debt levels becoming

unsustainable and we will need to make service

cuts that compromise some of our core principles.

Community support, community facilities, climate change,

roading maintenance, and economic development are all areas where significant

cuts and permanent closures would be made. Without an increase to rates, we

also would not be able to extend our living wage policy to contracted cleaners or

continue to provide additional funding to support the homeless. This means we

would not be sufficiently supporting Auckland at the time of its greatest need.

Even at the rates increases we are proposing we still need to make large savings,

sell some assets and borrow more money. But we

will be able to work together with Aucklanders to

secure our core services, support the community

to recover and stay on the path to achieving the

long-term outcomes for future generations.

We are proposing to increase average general rates by either the currently planned 3.5 per cent, or by a lower increase of 2.5 per cent.

Both options require reduced spending, increased debt and asset sales. Both options would see a reduction in permanent council staff numbers, disruption to some council services, lower employment across the wider Auckland economy and delays with achieving the council’s key strategic outcomes.

Wāhanga Tuarua: Ngā kaupapa e hiahia whakahoki kōrero ana mātouPart Two: What we want your feedback on

General rates increase for 2020/2021

We are proposing an average general rates increase of either 2.5 per cent or 3.5

per cent for 2020/2021. We looked at, but could not responsibly propose rates

increases below 2.5 per cent because of the severe impacts that would have

on council services, new infrastructure, our debt levels and employment and

business activity in Auckland. The scale of the financial challenge that we face for

next year with a revenue loss of over half a billion dollars due to COVID-19 means

that spending on some council services will need to be reduced and many capital

projects will be delayed even with the 3.5 per cent increase we had previously

planned. With a lower rate increase of 2.5 per cent, we would need to further

reduce spending on council services and further delay investment in transport,

parks and community and town centre projects.

Question 1

3.5% 2.5%An increase

of $1.82 per weekor $94.85

per year on average

An increase of $1.35 per week

or $70.23 per year on

average



Both of the proposed options will increase our debt to revenue ratio to around 290 per cent

in 2020/2021, before dropping back to around 270 per cent in 2021/2022. Neither option

would see us running a balanced budget next year and there will need to be some borrowing

to funding operational costs. We need to carefully manage our debt so we can borrow at this

challenging time but also keep it at a level that is sustainable and fair for future generations.

Both of the proposed options include the sale of non-strategic, non-service assets to raise

$200 million that can be reinvested back into the region.

The two options differ in the size of spending reductions required, the impact on the

community and their impact on the average rates bill. The key differences are shown in the

following table:

The additional delays to capital investment in Option B would see the following changes to

the budget for 2020/2021:

• $10 million less investment in community assets such as track upgrades and

playground renewals

• Additional $28 million deferral of transport growth and improvement programmes with

delayed planning work for future walking and cycling projects and deferring delivery of

any remaining local road sealing and local board programmes. This would also include

deferring investment in the Airport to Botany Mass Rapid Transport investigation works

and slowing down work on the Mangere cycle route

• $12 million of further reductions in Auckland Transport’s planned renewals leading to

further implications for asset conditions, future maintenance requirements and deaths and

serious injury reduction targets

• $5 million less investment in critical renewals for our regional facilities, with a risk that one

or more may temporarily close

• $10 million of further deferrals for Panuku’s town centre development programme.

The additional savings and temporary service reductions in Option B would see further

and more significant reductions in staffing levels and the following specific changes to the

budget for 2020/2021:

• a reduction in local board funding equivalent to 20 per cent of discretionary funding rather

than 10 per cent

• reduced open space maintenance standards through reduced footpath cleaning, closing

some public toilets and removing litter bins to reduce emptying costs

• reduced maintenance and cleaning of public spaces at the city centre waterfront

• a review of public transport fares (which could see the temporary removal of some fare

concessions) and introducing car parking charges at park and rides.

• a reduction in regional grants funding.

SEE FEEDBACK FORM, QUESTION 1

OPTION A:3.5% RATES INCREASE

OPTION B:2.5% RATES INCREASE

Increase in general rates impact for average value residential property

Capital investment$2.3b for 2020/21

$280m of deferrals in 2020/21

$2.2b for 2020/21

$345m of deferrals in 2020/21 ($65m further

deferrals)

Additional savings and temporary service reductions

In addition to substantial planned savings:

$54m of further reductions in 2020/21

$75m further reductions in 2020/21 ($21m further

reductions)

$1.82 per

week

$1.35 per

week

$94.85 per

year

$70.23 per

year



Rates postponement for ratepayers impacted by COVID-19Many Aucklanders are facing immediate financial stress and an uncertain future.

We are providing short-term assistance by allowing ratepayers to delay their fourth

quarter rates instalment until 31 August 2020. However, this only provides a

temporary solution.

In addition to this short-term assistance, we recognise that some ratepayers will continue

to need support when the first rates payment for the 2020/2021 financial year is due.

What we are proposing We are proposing to allow ratepayers financially impacted by COVID-19 to put off paying

up to $20,000 of their 2020/2021 rates per property until 30 June 2021 and give a further

12 months to pay off the balance. You will also be able to carry forward up to $5,000 of any

rates deferred from your fourth quarter instalment.

The postponement will be available to all ratepayers (except government organisations

and utilities) who are in financial hardship as a result of COVID-19 and who meet the

criteria and conditions set out in the proposed scheme. For most ratepayers, rates are not

a major expense (as compared with mortgages for example). A rates postponement, whilst

small compared to the Government’s support, does provide some additional financial

relief to those facing financial hardship.

Some larger businesses, with rates over $20,000, are severely affected by COVID-19 but

are often better able to manage through financial hardship. We could allow businesses to

apply to postpone their rates in excess of $20,000 but this would add to the overall cost

of the scheme.

Under the proposal, we would accept applications up until 31 December 2020. Eligibility

will be limited to ratepayers who owned their property before 26 March 2020 when we

went into Alert Level 4.

We will add a postponement fee to rates postponed under this scheme to cover interest

and administration costs.

Effects of the new rates postponement scheme The scheme:

• enables us to help ratepayers who are facing financial hardship as a result of COVID-19

• focuses support on residential ratepayers and small to medium businesses

• provides for ratepayers enrolled to cover the cost of borrowing and administration through a fee added to the postponed rates

• reduces the amount of rates we expect to collect next year by $65 million (but could be as high as $85 million) meaning we will have less to spend on activities and projects until we receive the postponed rates.

What happens if we don’t introduce a rates postponement scheme This would mean that:

• we wouldn’t be able to provide rates postponement to ratepayers affected by COVID-19

• this option does not reduce council’s ability to invest in activities and projects that can help economic recovery.

You can read the proposed postponement scheme and details of the options considered by the council in Section Three of the Supporting Information.

You can find out about other financial assistance for ratepayers on our website, please visit aucklandcouncil.govt.nz/rates-help.


%

Rates postponement for ratepayers impacted by COVID-19

We are proposing to introduce a COVID-19 Rates Postponement Scheme. This will allow ratepayers who are struggling financially as a result of COVID-19 to defer up to $20,000 of their rates for the 2020/2021 year. At the end of the postponement period ratepayers would have to 30 June 2022 to pay off the balance (including interest and administration fees).

Question 2

http://aucklandcouncil.govt.nz/rates-help



Suspending the Accommodation Provider Targeted RateThe Accommodation Provider Targeted Rate (APTR) is a rate paid only by owners of

properties such as motels, hotels and Airbnb properties. It seeks to recover from

accommodation providers a fair proportion of visitor attraction and major events

spending by Auckland Tourism, Events and Economic Development (ATEED).

Restrictions on travel and mass gatherings due to the COVID-19 pandemic are likely to

remain in place for some time. As a result we are reducing our spending on visitor

attraction and major events until restrictions on travel and mass gatherings are lifted.

We expect to increase expenditure when restrictions are removed as this investment

will be key to revitalising the Visitor Economy.

What we are proposingWe are proposing to reduce our spending on visitor attraction and major events to one

quarter of our planned investment targeting our spending to support a restart from 31

March 2021.

The APTR will be suspended until 31 March 2021 and invoiced in May for payment with

that rates instalment.

This will mean that there will be no additional costs to ratepayers for this expenditure.

Learn more about this proposal in Section Four of the Supporting Information document.


Suspending the targeted rate paid by accommodation providers Restrictions on travel and mass gatherings due to COVID-19 have resulted in us reducing our spending on visitor attraction and major events. We are proposing to suspend the Accommodation Provider Targeted Rate (APTR) which helps fund these activities until 31 March 2021. The APTR will only be charged for the last three months of the next financial year (2020/2021) as we increase our spending in this area. This proposal will assist the accommodation sector who are struggling financially.



Question 3

Other rates changes Removing interest charges for loan repayment ratesWe are removing the interest from our loan repayment targeted rates for the

2020/2021 financial year. We will resume charging interest in 2021/2022. This will give

us time to work through the implications of the new and existing requirements under

the Credit Contracts and Consumer Finance Act 2003 on our various voluntary

financial assistance schemes.

This will apply to the following six financial assistance repayment targeted rates:

• Riverhaven Drive targeted rate

• Retro-fit your home targeted rate

• Kumeū Huapai Riverhead wastewater targeted rate

• On-site wastewater systems (septic tank) upgrades targeted rate

• Point Wells wastewater targeted rate

• Jackson Crescent wastewater targeted rate.


Minor changes to rates and fees following your feedback in February/MarchThe earlier consultation included a number of proposed minor changes to rates and fees for 2020/2021.

While the financial landscape has changed almost beyond comprehension since then,

the key choices facing the community and decision makers in relation to these proposals

remain the same. Therefore, after considering your feedback, we have made decisions

on these issues and will include them in the Emergency Budget 2020/2021. For more

information on the decisions made, see Section One of the Supporting Information.

A few of the proposals that we previously consulted on have been agreed in principle

only subject to consideration of any further feedback received in the Emergency Budget

consultation (including discontinuation of rural sewerage service in the Upper Harbour

Local Board area, Central Park Henderson Business Improvement District establishment

and changes to waste management targeted rates). You can find out more information

about these matters in Section One of the Supporting Information.

More informationTo read a summarised feedback report and to see all submissions, go to

akhaveyoursay.nz/annual-budget-submissions

You can also see the minutes of the Emergency Committee meeting, 21 May 2020.

We consulted on the Annual Budget 2020/2021 in February and March 2020. To see the topics we consulted on and the decisions that have been made please visit aucklandcouncil.govt.nz/annual-budget-2020-2021

PART TWO: ANNUAL BUDGETEMERGENCY BUDGET CONSULTATION DOCUMENT

http://akhaveyoursay.nz/annual-budget-submissions

http://www.aucklandcouncil.govt.nz/annual-budget-2020-2021


EMERGENCY BUDGET CONSULTATION DOCUMENT PART THREE: ANNUAL BUDGET

There are a number of ways you can share your views with us on the Emergency Budget 2020/2021. Please take the time to get involved.

Wāhanga Tuatoru: Tukuna mai ō whakaaro Part Three: Give us your views

Written and online feedback

You can provide feedback online at akhaveyoursay.nz/emergency-budget

Or you can complete the feedback form included in this Consultation

Document, Or you can request documents at libraries and service

centres and then send it back to the freepost address provided.

or download a copy online and send it to the freepost address provided,

Or email it to: akhaveyoursay@aucklandcouncil.

govt.nz.

Face-to-faceFace to face events have been

replaced with online information webinars due to COVID-19 social

distancing requirements. For more information and to register for these webinars go online to

akhaveyoursay.nz/emergency-budget

PhoneIf you would prefer to give your

feedback over the phone you can register for this by phoning

09 301 0101.

TranslationsWe want as many people from Auckland’s communities as possible to have their say

win this process.

To help with this, translated summaries of the consultation material as well as the feedback form

are available in te reo Māori, Korean, simplified Chinese, Samoan, Tongan, New Zealand Sign

Language video and accessible versions.

The translated documents are available:

online at akhaveyoursay.nz/emergency-budget

for downloadable translations and feedback forms

on request in libraries and service centres

by emailing [email protected]

by calling 09 301 0101

Social mediaComments made through the following

channels will be considered written informal feedback:

Comments on ‘Emergency Annual Budget’ Facebook posts on Auckland Council and Local Board Pages AND/OR using

#AKHaveYourSay

Comments on ‘Emergency Annual Budget’ Instagram posts on the Auckland Council Page AND/OR using #AKHaveYourSay

Comments on ‘Emergency Annual Budget’ Twitter posts on the Auckland

Council Page AND/OR comments using #AKHaveYourSay across other

Twitter pages

If none of the above methods are suitable for you, please call us on 09 301 0101 to discuss alternative options

http://akhaveyoursay.nz/emergency-budget






Next steps

MAY JUNE JULY AUGUST

Public consultation

opens 12 noon, 29 May

Public consultation

closes 19 June

West Regional information webinar

event –Elected Members present

31 MAY

North Regional information webinar

event – Elected Members present

2 JUNEEast Regional information

webinar event - Elected Members present7 JUNE

Rates Postponement

information webinar event –

Elected members present8 JUNE

Central Regional information

webinar event - Elected Members

present9 JUNE

Feedback is reported back to decision makers

8 JULY

Emergency Budget (Annual Budget

2020/2021) is formally adopted (which

includes all 21 Local Board Agreements)

30 JULY

Emergency Budget

decisions are made

16 JULY

Final documents are made publicly available and

decisions published

EARLY AUGUST

Decision makingThe council has two decision-making parts – a governing body which is made up of the mayor and 20 councillors, and 21 local boards made up of 149 members. The governing body focuses on issues, decisions and strategies affecting the whole region while local boards represent their communities and make decisions on local issues.

Where to find more informationYou can find everything you need to know at akhaveyoursay.co.nz/emergency-budget including the Supporting Information, an online Feedback Form and information on how you can Have Your Say.

A reference copy of the full Supporting Information that supports this Consultation Document will also be available at libraries and service centres.

South Regional information webinar

event - Elected Members present

14 JUNE

Accommodation Provider Targeted Rate information webinar event –

Elected members present16 JUNE




Glossary of termsAccommodation Provider Targeted Rate (APTR) A rate paid only by owners of properties such as motels, hotels and Airbnb properties. The money received from this rate is used to fund major events and undertake other activities to attract visitors to Auckland.

Activity or serviceThe services the council provides to the community. This includes things like running buses, collecting rubbish and maintaining parks.

Annual Plan, Annual Budget or Emergency BudgetThe plan that sets out what the council seeks to achieve in a financial year, the services we will provide, how much money will be spent and where that money will come from. Next year’s budget is referred to our Emergency Budget because of the need to respond to a significant financial challenge for 2020/2021.

AssetAn item of value, usually something of a physical nature that you can reach out and touch, that will last for more than one year. Infrastructure assets are physical items such as roads, pipes and council buildings that are needed to provide basic services.

Asset recyclingThis means letting go of some of our less well used assets to help pay for new ones that will help us deliver better services to the community. Usually this means selling assets to somebody else, but sometimes it is possible to instead agree that someone else will use the asset for a period of time before handing it back to us in the future.

ATEEDAuckland Tourism, Events and Economic Development, the organisation that delivers major events for council and provides tourism promotion and economic development services on council’s behalf.

Auckland Council or the council The local government of Auckland established on 1 November 2010. The council is made up of the governing body, 21 local boards, and the council organisation (operational staff).

Auckland TransportThe organisation that delivers transport service on behalf on the council.

Capital investment, capital expenditure or capital programmeBuilding (or buying) assets such roads, pipes and buildings that are we use to provide services to Aucklanders.

Council-controlled organisation (CCO)A company (or other type of organisation) that is at least 50 per cent owned by the council or for which the council has at least

50 per cent control through voting rights or the right to appoint directors. These organisations each have their own board of directors (or equivalent) and their own staff who manage day-to-day operations.

Council groupAuckland Council and the Council-controlled organisations, along with the council’s investments in Ports of Auckland and Auckland Airport.

DeferralDelaying the building or buying of assets until a later time.

Development contributionsA charge paid by developers to the council when they build or subdivide property. The council uses this money to help pay for the new assets such as roads, pipes and parks that are needed to support the new households or businesses that will occupy the new properties that have been developed.

General ratesRatepayers across Auckland pay to fund general services.

Governing BodyThe Governing Body is made up of the mayor and 20 councillors. It shares its responsibility for decision-making with the local boards. The governing body focuses on the big picture and on Auckland-wide strategic decisions.

Grants and subsidiesMoney that someone pays to the council to cover (or help cover) the cost of providing a service to Aucklanders. Sometimes grants also refers to money the council pays to a community organisation to provide services to Aucklanders, rather than council providing those services directly.

FacilitiesBuildings or other structures used to provide services to Aucklanders.

Financial yearThe year from 1 July to 30 June the following year. The council budgets and sets rates based on these dates rather than calendar years which end on 31 December.

Local boardsThere are 21 local boards which share responsibility for decision-making with the governing body. They represent their local communities and make decisions on local issues and services.

Operating budget or operating expenditureMoney that the council spends on providing services in the current financial year, as opposed to building things that will provide services for years to come. This includes spending money on staff and contractors to do things like process building consents, open libraries, run buses and maintain parks. It also includes things liking paying grants to community organisations

and paying interest on money the council has borrowed.

PanukuPanuku Development Auckland, the organisation that provides property management and development services to the council and Aucklanders.

RatesA tax against the property to help fund services and assets that the council provides

Rates postponementAllowing ratepayers to delay paying the rates they owe until a later date.

Revenue or incomeMoney that the council receives (or is due to receive) to pay for the cost of providing services to Auckland. Cash revenue specifically refers to the money received during the year, and excludes things like postponed rates which will be received later.

RFARegional Facilities Auckland, the organisation that manages Auckland Zoo and the Auckland Art Gallery along with venues used for conventions, shows, concerts and major sporting events.

SavingsReducing the amount of money that the council pays out in a particular financial year. This could refer to being more efficient (paying less money to get the same service) or to saving money by delivering less services to the community. It also sometime refers to spending money later than we previously planned.

Targeted ratesA rate that is paid by only a particular group of ratepayers or is used to fund only a particular set of activities. This is used when the council wants to make sure that those ratepayers who benefit from an activity pay for it (as opposed to spreading the cost across all ratepayers) or where the council wants to make sure that money collected for a particular purpose is only spent for that purpose.

TransportLocal roading, parking and public transport services provided for Aucklanders. These services are usually provided by Auckland Transport, except for the City Rail Link project which is delivered separately in partnership with central government.

WasteGenerally refers to household and business rubbish, along with recycling and things like food scraps which can be reused for other purposes.

WatercareWatercare Services Limited, the organisation that provides water supply and waste water services to Aucklanders.

Your feedback will be included in public documents. All other personal details will remain private.

First name:

Last name:

Email address or postal address:

Your local board:

Is your feedback on behalf of an organisation or

business? (If yes, this confirms you have authority to

submit on the organisation’s behalf)

Yes No

Name of organisation or business:

The following information is optional but will help us know whether we are hearing from all Aucklanders.

Are you: Female Male Gender diverse

What age group do you belong to?

Under 15 15-24 25-34 35-44

45-54 55-64 65-74 75+

Which of the following describes your ethnicity? (Please select as many as apply)

Pākehā/NZ European Māori

Chinese South East Asian

Samoan Tongan

Indian Korean

Cook Islands Māori

Other (please specify)

To see how your rates may change go to our rates guide at akhaveyoursay.nz/emergency-budget.Please provide your opinion below, all questions are optional.

General rates increase for 2020/2021

To answer the following question please read pages 24 and 25 of the consultation documentWe are proposing an average general rates increase of either 2.5 per cent or 3.5 per cent for 2020/2021. We looked at, but could not responsibly propose rates increases below 2.5 per cent because of the severe impacts that would have on council services, new infrastructure, our debt levels and employment and business activity in Auckland.

The scale of the financial challenge that we face for next year with a revenue loss of over half a billion dollars due to COVID-19 means that spending on some council services will need to be reduced and many capital projects will be delayed even with the 3.5 per cent increase we had previously planned.

With a lower rate increase of 2.5 per cent, we would need to further reduce spending on council services and further delay investment in transport, parks and community and town centre projects.

Which increase do you support?

2.5 per cent average general rates increase

3.5 per cent average general rates increase

Don’t know

Add comments below:

1.We want your feedback Feedback must be received by Friday 19 June 2020. Please read the consultation document available at akhaveyoursay.nz/emergency-budget or at any library, service centre, or by phoning 09 301 0101 before you give feedback. It has more information about the issues and choices that we want your feedback on.

All of the questions below are optional. We encourage you to give feedback online at akhaveyoursay.nz/emergency-budget, or you can complete this form and return it to us using one of these options:

Email Scan your completed form and email it to [email protected] person Drop your completed form off at your local library or service centre.By post Place your completed form in an envelope and send it to freepost address: AK Have Your Say, Auckland Council, Freepost Authority 182382, Private Bag 92 300, Auckland 1142.

All personal information that you provide in this submission will be held and protected by Auckland Council in accordance with our privacy policy (available at aucklandcouncil.govt.nz/privacy and at our libraries and service centres) and with the Privacy Act 1993. Our privacy policy explains how we may use and share your personal information in relation to any interaction you have with the council, and how you can access and correct that information. We recommend you familiarise yourself with this policy.

Emergency Budget – Annual Budget 2020/2021 Feedback form


Suspending the targeted rate paid by accommodation providers

To answer the following question please read page 27 of the consultation documentRestrictions on travel and mass gatherings due to

COVID-19 have resulted in us reducing our spending

on visitor attraction and major events. We are

proposing to suspend the Accommodation Provider

Targeted Rate (APTR) which helps fund these

activities until 31 March 2021. The APTR will only be

charged for the last three months of the next financial

year (2020/2021) as we increase our spending in this

area. This proposal will assist the accommodation

sector who are struggling financially.

What do you think of our proposal?

I support the proposal

I don’t support the proposal

Don’t know

Add comments below:

Rates postponement for ratepayers impacted by COVID-19

To answer the following question please read page 26 of the consultation documentWe are proposing to introduce a COVID-19 Rates

Postponement Scheme. This will allow ratepayers

who are struggling financially as a result of COVID-19

to defer up to $20,000 of their rates for the 2020/2021

year. At the end of the postponement period

ratepayers would have to 30 June 2022 to pay off the

balance (including interest and administration fees).

What do you think of our proposal?

I support the proposal

I don’t support the proposal

Don’t know

Add comments below:

Other feedback – what is important to you?

Do you have any feedback on any other issues including the in-principle decisions made from the first round of consultation?

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© 2020 Auckland Council

May 2020

Auckland Council (2020). Auckland Council Annual Budget 2020/21. Consultation document.

ISBN 978-1-98-858950-3 (Print) ISBN 978-1-98-858951-0 (PDF)

Auckland Council disclaims any liability whatsoever in connection with any action taken in reliance of this document for any error, deficiency, flaw or omission contained in it.

emergency budget 2020/2021 consultation document...2020/06/19 · severe revenue challenge over the...

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