Bob Dey has an¬†interesting¬†article about Auckland Council and stormwater.
Cameron Brewer also raises some interesting points.
Today‚Äôs heavy downfalls and surface flooding around Auckland is a reminder of¬†just how much investment Auckland needs to make to improve its stormwater network. Yet Mayor Len Brown has not committed the necessary money despite pleas from experts, says Auckland Councillor for Orakei Cameron Brewer.
Auckland‚Äôs stormwater network needs a financial investment of $9.9 billion over the next 50 years according to an official report presented to Auckland Council in 2011. However in the council‚Äôs 10-year budget, or Long Term Plan signed off last June, the council only ‚Äėplans to spend up to $768 million on capital (stormwater) projects‚Äô over the coming decade.
‚ÄúDespite all the issues that heavy rain causes this council is only spending less than 10% over the next 10 years of what‚Äôs actually required. It‚Äôs not good enough. We need to address Auckland‚Äôs inadequate underground infrastructure.
Both articles are interesting. But here is a question for you:
Council collects depreciation of its infrastructure assets in rates as depreciation. This is a cash collected revenue stream. Currently Council and Watercare depreciate assets at 17% per annum based on an annual replacement valuation of its assets with each asset in each catchment having a line in the ledger and depreciation carried for each asset. Some assets have been carrying depreciation for the life of the asset.
Some infrastructure is 80 years old.
So where has all cash gone?
If the ratepayers have already paid for replacement assets through depreciation in cash – where is the money?
Answer: Council has spent it.
Well that means they have mis-managed income and funds. And they are now asking for ratepayers and developers to pay them again so that they can replace assets that are over capacity.
Given the length of time and the direct income source associated with infrastructure assets there should be billions available in accrued CAPEX income to spend on upgrades.
So where is the cash?