Council Finances Under a Cloud

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Why does Auckland Council appear insensitive to all that is happening with Covid-19?

Yes, they have discontinued contractors and consultants and brought work in-house. But why has there not been a total rethink on council (and CCO) activities – pruning out non-essential services? Why have there been no significant staff cuts? Why no salary sacrifices across the board? Why persist with 3.5% rates rise on top of the 2.5% last year (a proper re-think might even see a rates reduction).

Could it be that this lack of action, that shows no sensitivity towards the plight of ratepayers, is hiding a financial calamity? They talk of continuing to spend on the projects that matter to a growing Auckland, but falling external incomes from the Airport and Port is greater than the $66m that the 3.5% rates rise will deliver (even if every ratepayer pays). The problem could be much bigger. The Mayor says they are close to the debt ceiling, so greater pressure from bankers could arise if the council can see a big financial hit that they are not prepared to tell us about. Could they be on the receiving end of a hefty court judgement against them and/or a massive cost over run on one or more of the larger development projects? Imagine if they have now been told that the CRL is to be 20% more expensive (quite possible)? That is approximately $1 billion. Imagine if the government said they have no money for a 50% share of the cost overrun (understandable) and the council has to meet it all?

The Mayor and Council likely have a financial crisis but are not being transparent. All we hear is that they are pressing ahead with the rates increase.

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