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The bill to Auckland City ratepayers for the leaky building crisis is between $200 million and $360 million - and will need more ratepayers' money to meet the swelling number of claims.
After more than a year hiding the potential cost to ratepayers, councillors voted behind closed doors at a finance committee meeting yesterday to release some general figures around the potential cost to ratepayers.
Last week, Mayor Dick Hubbard let slip that the bill to ratepayers was $320 million over 12 years, when his arch-rival John Banks told a mayoral debate the bill was between $350 million and $500 million.
Yesterday, the finance committee said the figure was $200 million to $360 million with a central estimate of $251 million. This was based on what the council had already spent on settling claims, legal advice on the cost of settling outstanding claims and actuarial advice on the likely cost of claims still to be made.
The Herald understands the number of claims is set to swell from 200 a year to 420.
Finance committee chairman Vern Walsh said the council had made considerable provision to settle leaky building claims but in light of the revised estimates would have to reconsider this for next year's budget.
One councillor said there was a budgeted shortfall of between $30 million and $190 million, which could trigger further rate rises.
The council will continue to push the Government for a fairer system of settling claims. Mr Hubbard has requested an urgent meeting with Prime Minister Helen Clark to push for a joint, central-local government approach.
The Government has refused to accept any liability for the crisis. This has left councils picking up much of the bill when builders, developers and other parties find ways, such as going into liquidation, of avoiding liability.
The centre-right Citizens & Ratepayers ticket and mayoral candidate John Banks have been working up the issue for the local body elections.
C&R finance spokesman Doug Armstrong said the council needed to be totally open with ratepayers on the issue. A C&R-controlled council would release all the details on the financial and social impacts of the crisis.
In an Official Information Act letter to Mr Banks last month, council chief executive David Rankin said up until this June the council had been cited as a party in 375 claims and settled 191 at an average cost of $92,000, or $17.6 million. When legal and expert costs of $4.45 million were added, the bill to date was $22 million.
