Auckland Council

Len Brown has bigger problems to worry about than a sugar ban

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Len Brown seems to be so desperate to talk about anything else aside from the Council’s black budget that he’s now thinking about banning sugary drinks.

I’ve posted about Auckland Council’s perilous state of its finances, as has Len Brown’s former favourite journalist Bernard Orsman who talked about ‘how city budget hit crunch point’.

With Len not keen on talking to Bernard, his PR team have instead raced out to find diversions to take Aucklanders’ attention off his inability to deliver his promised pet projects.  If it wasn’t Waterfront Auckland’s clumsy attempt at spending millions on Queens Wharf, it was wheeling out Rod Oram to encourage Len to keep on spending up big.  Read more »

Face of the day

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Now he’s after Mum’s chickens……….. Read more »

Oram justifies borrow and spend from Brown

One of the left’s biggest apologists, Rod Oram, has penned an article which basically forgives and encourages Len to borrow and spend and particularly for his train set and then at the end of the articles we find Oram is on the payroll.

So he gets hired by the ratepayers and the coincidently uses his weekly column to write nice things about his paymaster.

Ratepayers should be asking what this guy is paid and Fairfax should never have accepted the column and asked him to write about something else, in fact Fairfax should get a proper business columnist who actually knows something about business.

The fight is on for the future of Auckland. The choice is: a healthy one driven by ambition, or a dysfunctional one dragged down by a penny-pinching mentality.

The issue has come starkly to a head with the deliberations over the council’s 10-year budget. The decisions the council will make over coming months, guided by public opinion, will set Auckland’s course for years to come.

So far the pessimists have dominated the debate with their wildly inaccurate and irresponsible claims that the council’s finances are shambolic. Only savage budget cuts can save it, they say.

To set the record straight:

The council runs a budget surplus on operating expenses. In 2012/13 it was $246m.

Rates provide only half the revenues for the council’s $3 billion annual budget. The rest come from a variety of sources.  Read more »

Len Brown’s failures will cause Auckland headaches for decades

Recently we started glibly taking pot shots at Auckland Council about the perilous state of it’s finances. It may be lost on some people, but the issues are significant and if allowed to continue, will result in massive headaches in decades to come.

The Mayor has strong desires to spend up large on principally public transport. He is also proposing substantial increases in borrowing to fund these works and other trinkets.

At the same time, Auckland Council is bogged down by the constraints of its current borrowing relative to the debt limits imposed on it by legislation. In order to increase spending (and assuming he won’t reduce the right costs) the Mayor has to increase rates, but he also has to opt to to defer maintenance on existing infrastructure to fund things now that he would prefer.

Infrastructure is often misunderstood and hard for the general public to value any expenditure on it because most of it is below ground.

As residents we notice the general condition of roads and footpaths and parks but not really the essential services pipes for potable water, sewer and storm water.

We’ve identified concerns primarily about debt but also the culture of excessive expenditure that has beset Auckland Council. In our view, the city is living beyond it’s means. Much of Auckland’s expenditure to date has come at the cost of maintenance of infrastructure (which in Auckland is widely know to be poked).

Council has many factors that it must budget for in it’s operating expenses. These must generally be offset by income derived principally from rates but also from other sources like airport shares and Ports of Auckland returns.

The Local Government Act clearly sets down the expectations but often Local Government falls short. Auckland Council is no different.

Auckland has significant capital expenditure to outlay, yet is focussed heavily on the persuasion that investment in rail and improved street scapes and other high profile projects should take priority.

Focus – for the purpose of this general discussion – should therefore start with understanding the responsibilities of a Local Government.

Reactionary

Local Government all around New Zealand has for years managed maintenance on a reactionary basis.

Councils fix things only when it breaks because of deficiencies in the planning of future maintenance.

A general lack of prudent planning of adequate future costs into Long Term Plans means Annual Operating budgets typically provision very little for the future with a general preference to spend on more immediate and public works ‘today’. By taking this approach Auckland Council – by example – is creating significant liabilities in the future for other generations to resolve.

Where surplus income avails of itself the normal response is to provision that to expenditure ‘now’ like a kid hungry to blow his pocket money on lollies.

A Local Authority like Auckland Council plans capital expenditure for urban projects – like the pretty CBD road and footpath improvements.

The problem with infrastructure maintenance is that it is very expensive, and it occurs in the future. Competing against the pretty high profile projects it suffers because it takes second place.

On the Audit NZ website is a document that records an audit of the performance of Local Government that is pertinent to this topic.

It is a helpful analysis of the general state of Local Government financial planning. Specific attention should be paid to the sections of the report regarding how Local Government is performing where it concerns maintenance of assets. Overall the report is one of serious under performance by Local Government including widespread failure to appropriately plan for future maintenance of infrastructure assets.

The Local Government Act states in section 10, subsection (1) (b) the purpose of Local Government relative to the provision of services and infrastructure and then in section 10, subsection (2) it goes on to say ‘In this Act , good-quality, in relation to local infrastructure, local public services, and performance of regulatory functions, mains infrastructure, services and performance that are (a) efficient; and (b) effective; and (c) appropriate to present and anticipated future circumstances. [Emphasis added].  Read more »

ATEED staff lairing it up on your rates dollars

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The photo below is of ATEED staff having a session at the ratepayers expense (CEO Brett O’Riley is in the background).

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ATEED Muppets give the finger to Auckland ratepayers who are milked $60 million a year to support their party

Like the mayor, these muppets have learned to have fun on the tab of the ratepayer.

Not sure it is a flash look drinking straight out of wine bottles. No wonder their budget is $60 million per annum, it is run by a bunch of tossers and the CEO just sits back and watches.

Auckland Council is out of control and needs to be reined in…hard.

Not much hope for ratepayers in Auckland when the CEO’s PA needs a PA

There sure isn’t much hope for the ratepayers of Auckland for savings led from the top when the Executive Assistant for the CEO feels the need to hire a personal assistant.

Take your career to the next level!

Are you looking for a role with variety, responsibility and a great corporate working environment?

This role supports a number of key areas within the Chief Executive’s Office at Auckland Council. This really is an exciting opportunity to provide efficient and high quality PA support to the Executive Assistant to Chief Executive and administrative support to Executive Officer. This position is responsible for providing appropriate support and, as required cover for the Executive Assistant to ensure that deliverables are met and that a high standard of customer service, quality and stakeholder relationships are maintained.

Your day will involve providing administrative support as and where required, this includes anything from managing correspondence, records management to diary management. This role is vital to ensuring that items are actioned, recorded and accurate.

I mean seriously…this is a p.a. role to another p.a. Astonishing.  Read more »

Does Len Brown have the stones to rein in Waterfront Auckland?

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This morning Len Brown’s former favourite journalist Bernard Orsman is running a story about how Auckland Council’s CCO Waterfront Auckland is suddenly running their Queens Wharf idea up the flag-pole.

Now considering Bernard’s Monday story about how the city budget has hit a crunch point, the times are tough message obviously hasn’t filtered down to the bloated office of the Waterfront Auckland CCO.

What better way for Len Brown’s team of spin doctors to draw attention away from the city’s financial mess under their Mayor, than to get people talking about Queens Wharf instead.

But there’s a slight problem with this.

Waterfront Auckland’s John Dalzell isn’t too forthcoming about how much will all of this will cost Auckland ratepayers?  Read more »

Auckland Council unable to fund all capital expenditure

The PR machine of Auckland Council is working overtime to deflect attention to its finances which are drawn criticism and scrutiny in the last week.

Here at WOBH have been watching with interest and are amused by some of the obvious lies that are being spun.

What we have also noticed is a lack of clear information about what the total forecast capital expenditure for Council is going to be, and whether Council has added up all the costs it faces in the next 3-5 years.

Auckland Council has three groups of capital expenditure that it needs to keep on top of and budget for over the coming years:

(1) Existing maintenance and upgrades of existing infrastructure (most of which is poked or under capacity or deferred maintenance);
(2) The ‘wish list’ of nice things promised by Mayor Brown and his Council like the rail tunnel, urban improvements and the like;
(3) Required expenditure for infrastructure to enable Special Housing Areas.>

Normally maintenance and upgrades of group (1) has been deferred with the money robbed to pay for capital expenditure that would fall into group (2).   Read more »

More bulldust from Auckland Council and its friends

​David Shand has gone out on a limb to defend Auckland Council’s debt woes with some classic PR spin in the Herald.

Quoting Shand he says:

‘The Auckland Council’s latest audited financial statements (for the 2012/2013) year show an operating surplus of $246m and total assets of $37 billion against a debt of $8 billion’.

We felt some clear facts should be made.

1. Auckland Council does not own ‘$37 billion’ of assets. Wikipedia states:

‘In financial accounting, an asset is an economic resource. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset. Simply stated, assets represent value of ownership that can be converted into cash’.

Wikipedia goes on to say that an asset is a resource from which economic benefits are to flow to the entity that owns it. Economic value is described as a benefit measured in units of currency because value is linked to price through the mechanism of exchange creating an observation of value.

In short what this really means is that for something to be defined as an asset – it must be a thing that can generate money – either through an ongoing benefit, or by its sale to another person who is willing to pay a ‘value’ to acquire it for that same ongoing benefit.  Read more »

Auckland Council debt at the limit, time to sack the Treasurer

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The rot at Auckland Council continues unabated with more news about just how perilously close to trouble the Council is in financially.

Council is already tapping the lit of it’s borrowing capacity. Currently net debt sits at or close to 14.9% of revenue. The limit is 15%.

Which means Len Brown (as treasurer) has spent so loosely in the last two years that Council cannot borrow any more money.

The only way that Council can borrow more – is to increase it’s rates. Raising the rates by 2.5% as noted on this table will increase borrowing capacity by 3%.

Mayor Brown is talking up closure of services – libraries, inorganic rubbish and so on to trick ratepayers into believing things are tough and, to justify breaking his election promises with a significant rates increase. He is already signalling that he is likely to break that promise.   Read more »