Council slashes budget

Elected officials are meeting next week to decide where to slash budgets to keep rate rises in check.

Auckland City Councillors will also look at cutting cash payments from Metrowater at the annual plan direction-setting meeting on Wednesday.

Deputy mayor David Hay says major capital spending will have to be deferred or cut. "Everybody wants everything, but you can’t have all the toys and no increase," he says.

"We’re into a more for less mentality."

Council has promised to keep rates rises within 4.8 percent for the next financial year, instead of a predicted 10.2 percent.

A report by chief executive David Rankin says that would require cutting capital spending by $400 million.

Councillor Doug Armstrong, chairman of Wednesday’s meeting, says the council will still be making major investment in infrastructure.

Even a cut-back works programme will see about $380m spent on roads, footpaths, stormwater upgrades, and the Auckland Art Gallery.

"We will also consider reports that review options for revenue other than rates, such as increased fees and charges, uniform charges and funding from central government," he says.

Planned dividends of more than $260 million from council-owned Metrowater over the next eight years are expected to be cut.

The payments were criticised by a parliamentary select committee earlier this year.

The committee said the council’s demands for dividends from Metrowater were "unwise and harmful to the public’s trust in this local authority."

Officers have recommended continuing the payments, both to encourage water saving and give ratepayers "a more appropriate return on their investment in Metrowater".

But Mr Hay says Citizens and Ratepayers policy is to keep water rates at a minimum.

Metrowater can make profits to pay for infrastructure investment, but not to pay dividends to the council, he says.

Options for how to offset the funding shortfall will be considered at the meeting.

"We’ve just got to work through a fair way of correcting that problem," Mr Hay says.

The public can comment when the draft annual plan is published in April.

- © Fairfax NZ News