City's debt situation looking brighter but mayor still left with shortfall to plug if rates rise to be kept at 2.4%.
Auckland Mayor Len Brown has six weeks to plug a $16 million hole in this year's budget and achieve the goal of holding household rate increases at 3.6 per cent.
A budget update contains both good and bad news for Mr Brown, who has been under pressure to control debt, spending and rates in his second term.
Debt is now tracking down, thanks largely to a $101 million special dividend from Auckland Airport and a healthy $21 million dividend from Ports of Auckland.
Council officers are now projecting debt to reach $7.28 billion next year, $150 million less than the earlier figure of $7.43 billion. But while the council's debt and capital programme is being contained, the day-to-day costs of running the city are getting away on Mr Brown, who doubles as the City Treasurer.
The worst offender is Auckland Transport, which has a $10.1 million budget shortfall, partly driven by lower than expected patronage and revenue from public transport.
Then there is an unbudgeted $3.1 million annual bill of running the Unitary Plan hearing committee, including daily payments of $1500 for the chairman, Environment Court judge David Kirkpatrick, and $1200 for each of the other seven on the panel.
When interest savings from lower debt are taken into account, the operating budget is $16 million in the red.
A paper going to today's budget committee says Mr Brown has six weeks to plug the funding hole to achieve an average rates rise of 2.4 per cent (3.6 per cent for households).
The 3.6 per cent average rise for about 450,000 households has come about as a result of shifting $11.1 million of rates from business to household ratepayers. Businesses get no increase as a result.
Finance officers have recommended a range of options to fix the $16 million problem, including holding talks with Auckland Transport to consider options such as increasing parking prices and penalties.
The council also has the option of a higher rates increase, reducing some service levels, reducing or deferring capital works and/or requesting further efficiency savings, but officers do not recommend these options at this stage.
The $16 million funding hole does not include $900,000 Mr Brown has promised to find in the budget for the Auckland Rescue Helicopter Trust, the sum it has been refused by an independent council body.
The mayor said he was determined to keep rates low while continuing to invest in the future of the city.
• $101 million airport dividend to offset debt
• $4.75 million of interest savings from dividend
• Debt down by $150 million in this year's budget
• $16 million extra in council running costs
• $10.1 million transport shortfall, partly from reduced public transport revenue
• Rates increase of more than the planned 2.4% possible if $16 million hole not plugged within six weeks.