I wrote in the NBR weeks before the ratepayers in Auckland even received their rate hikes. The finances in Council just do not stack up: Auckland mayoral candidate John Palino has attacked Auckland Council’s $702 million wage bill and warns of future rate hikes if staff costs are not kept in check. The council’s spending on staff in the 2013-14 annual plan is up $42 million (6.4%) compared to last year and Mr Palino says rates have not risen enough to cover this and other increases in operating expenditure. “At $700 million per annum, the amalgamated Auckland Council now spends 9% more on staff than the previous eight councils combined. Between 2011 and 2012, staff numbers also increased by a whopping 800 full-time equivalents, or more than 10%." Rates were set at an average increase of 2.9% for this year but he says they needed to rise by 7% to cover the council’s operating deficit of $60 million. The council is projecting this to reverse into an operating surplus of $77 million next year, rising to $410 million in 2015-16. It is projecting a decrease in staff spending next year to $700 million, with salary costs forecast to rise only $31 million to $733 million by 2016-17. But Mr Palino says there has been negative labour productivity over the past three years in Auckland Council. “The annual plan’s operating deficit of $60 million could have been almost wiped out if the council had simply kept to the long term plan projections for employee spending.” Mr Palino says a “sinking lid” policy needs to be applied to council employment policy to keep costs under control. Big borrowing He has also taken aim at the council’s borrowing. Non-current borrowing jumped $1 billion in the last year – up a “staggering” 17%. “The largely prudent management of local government finances in Auckland for generations has been all but squandered in just the first term of Auckland Council alone," he says. “We are all going to have to pay for this in coming years. Already our region’s debt repayments exceed $1 million each and every day, having increased $40 million from last year. That’s equivalent to this year’s rates rise – we increased rates just to service debt.” Mr Palino made the comments today as he launched his policies on transport and the unitary plan. He plans to create satellite centres, the first one most likely in the Manukau area, to ease pressure on Auckland’s transport network by allowing people to live closer to where they work. He is also promising to create more park and ride facilities around train stations, saying Auckland is not dense enough for most train users to walk to a station. On the topic of the unitary plan, Mr Palino says he would take a “bottom up” approach, with local boards creating the plans for their own areas. nbr.co.nz/stayconnected?return=143389 #palinoformayor
Posted on: Thu, 15 Aug 2013 00:27:57 +0000