Pressure is coming on Auckland Council's controversial tourism and economic development arm to pay its own way.

Writing in today's Herald, senior councillor Desley Simpson is challenging Auckland Tourism, Events and Economic Development(Ateed) to work towards becoming the first self-funded council-controlled organisation (CCO).

Her views are shared by Mayor Phil Goff, who yesterday said the council could formally require Ateed to become increasingly self-funding over time.

The current vibrant economic conditions make self-funding a viable goal for Ateed to pursue

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Goff - speaking during a discussion about setting council expectations for CCOs - wants to introduce a targeted rate on hotels and other accommodation providers to raise $28 million to fund Ateed's tourism and events promotion.

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Shortly after coming to office in October, Goff was critical of Ateed for planning to contribute hundreds of thousands of dollars to a Joseph Parker boxing fight and halted any more public spending on a $500,000 branding project.

Ateed has also attracted headlines for creating a contract in London for one of its senior executives and sending staff to the Monaco Yacht Show.

Auckland needs Ateed to drive and shape economic development and deliver events and tourism, but it should not be funded by ratepayers, says Simpson, who is deputy chair of the finance committee.

"The current vibrant economic conditions make self-funding a viable goal for Ateed to pursue. Starting now, my challenge to Ateed is for it the use ratepayer funds as a last resort, not a first resort and work towards becoming Auckland's first essentially self-funded CCO," she said.

In the past financial year, Ateed received $56.2 million from council for running costs and raised $19.6 million through fees, user charges, subsidies and grants.

Ateed chief executive Brett O'Riley said the CCO was already projecting to raise more than 20 per cent of its income for the coming financial years from alternative sources, up from 16 per cent this year.

This was part of an ongoing commitment to reduce dependency of rates, he said.

Pointer: Desley Simpson on Ateed. P.30