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Birch Review Points To Way Ahead

Auckland City councillors face a number of tough decisions in coming months as they work through recommendations from the Birch Review aimed at containing rate increases.

The review found that the council has already taken significant steps to strengthen its financial management, for example, the growth in operating expenditure, excluding depreciation, has been low over the last four years.

It says improved financial systems and greater scrutiny of operational spending have contributed to this outcome, but future fiscal pressure means that every effort must be made now to promote the effective use of ratepayer funded resources.

In his review of council activities Sir William Birch and his team recommend a range of spending measures and efficiency savings which would allow the total rates bill to be $18 million (6 percent lower than forecast for 2004/05).

These include:

 Savings in the areas of business improvement, project management, and public communications.
 Discontinuing inorganic waste collection and the organic waste coupon scheme.
 Reducing the sponsorship and the Edge community arts budgets by 33%, and the free events budget by 20%.
 Reducing funding for the community advice bureau, community halls, community boards and the Mainstreet programmes.

 Reviewing the use of chemical free vegetation control and removing the rate rebate for wastewater charges.
 Reviewing expenditure on community advice, community development planning, and discretionary rates remission.
 Stopping mowing berms
 Reducing operating expenses by one percent a year.


The savings come from the following areas:

Total Expenditure Savings ( $ )
Total Net Expenditure 2002/03 2003/04 2004/05
Arts, Culture & Recreation 883,000 883,000 883,000
City Development 450,000
City Governance 1,593,000 1,758,000 1,758,000
Environmental Infrastructure 1,630,000 2,700,000 2,700,000
Community Infrastructure 4,430,500 5,163,000 5,758,000
Total 8,536,500 10,504,000 11,549,000


To allow rates to be further contained the review is also recommending the sale of a number of city assets including shares in Auckland International Airport, parking lots and buildings, City Design and the council’s stock of residential and pensioner housing while protecting the security and tenure of pensioners.

If the council chooses not to proceed with the recommended asset sales the review recommends there be increases in off-street parking fees and City Design’s dividend.

Throughout the recommendations there is a strong emphasis that council should involve the private sector in its operations. As well as the recommended asset sales the review suggests external advice be sought to quality control delivery of services, to provide sponsorship, to take over the inorganic refuse collection, and to manage the Civic car park.

“We think that private participation in infrastructural projects in Auckland City would benefit ratepayers. Projects in such areas as roading, passenger transport, and water and storm-water could be suitable candidates.”

The review includes recommendations that council.

 deter indefinitely proposals to invest in light rail.
 support measures that would improve the efficiency of state highways, and if economic, support the development of the eastern corridor as a partnership between the public and private sectors.

The recommendations will go to the council’s Finance and Corporate Business Committee on Wednesday 19th November, and then be considered as part of council’s annual planning process.

If implemented they would mean a small reduction in staff numbers, and staff in the areas where these may occur are being are being consulted.

ENDS

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