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10-year plan with 4.9% average rate increase

ARC adopts 10-year plan with 4.9% average rate increase

27 June 2005

The ARC’s Long Term Council Community Plan Plan 2006-16, which was adopted at yesterday’s Council meeting, outlines the Council’s plans and projects for 2006/07.

ARC Chairman Michael Lee says that the ARC Group (which includes Auckland Regional Holdings and Auckland Regional Transport Authority) has recognised that it is heading into one of the most challenging periods that regional government has ever faced.

“This year, the ARC once again faces the challenge of delivering excellent service at a reasonable cost.

“A world-class public transport system is clearly our number one priority, and this becomes more urgent with the approach of the Rugby World Cup in 2011. In addition, the development of Auckland’s waterfront is a priceless opportunity to achieve an attraction of lasting planning and architectural excellence.

“The Council has set this year’s rate based on an overall 4.9 per cent increase, and has projected budgets over the next 10 years based on the same level of moderate increase.

“Based on submissions from the public, we believe that this level of rate increase is the highest that ratepayers will find acceptable. The increase is needed to fund the increasing demands of vital operational and capital expenditure over the next 10 years, especially for transport.

“We have significantly increased spending on public transport, up from $35.7 million in 2001/02 to a proposed $145 million for 2006/07.

“The ARC Group continues to make good progress developing the passenger transport network. We are proposing to invest $1.6 billion in public transport and related activities over the next 10 years, made up of $1.076 billion of operating funding and $545.6 million of capital funding. This will deliver enhanced bus, train and ferry services across the region and will also allow the Auckland Regional Transport Authority (ARTA) to invest in more trains, better stations, ferry terminals and other bus facilities, along with integrated ticketing and real-time passenger information systems.”

Submitters raised a wide range of environmental, planning, parks and financial issues, which will be addressed by Council over the coming months, and be reported back through the relevant Council committees.

Several submitters sought ARC funding for regionally significant organisations. In response, this 10-year plan has been amended to provide a total of $350,000 per year to fund the Auckland Philharmonia Orchestra and Regional Surf Lifesaving from 2007/08, subject to local councils maintaining their financial support for these institutions.

“I would like to thank the 240 Auckland individuals and organisations that submitted on this year’s draft 10-year plan, and to the 3,223 people who sent us their feedback via the Region Wide questionnaire. It is clear that Aucklanders overwhelmingly support significant improvements to public transport and an increase in government contributions to public transport funding, while opposing significant increases in ARC rates,” Michael Lee says.

Also in response to submissions, the ARC has indicated its support for the return of Watercare Services Ltd to regional ownership and governance under the ARC. This position is subject to full analysis of options through the water services legislative review to be undertaken by central government during 2006/07.

Transport Funding Notes

The ARC has included in its 10-year plan a potential funding arrangement to support the introduction of currently unfunded public transport services, and to fund up to half of the cost of staged electrification of the Auckland rail network. Implementation of this funding arrangement is conditional upon the ARC being provided with additional funding sources and the ARC being satisfied with the merits of investing in electrification.

Support for the introduction of currently unfunded public transport services will require the ARC to receive an additional $20 million in funding for each of the 10 years of the plan. This funding would also need to be matched by equivalent funding from Land Transport New Zealand.

Providing support for half of the capital cost of the staged electrification of the Auckland rail network would require the ARC to raise debt of approximately $250 million over the period 2009 to 2016. The ARC would need $16 million per annum to repay that debt and would therefore need additional funding sources able to generate up to $36 million per annum to allow it to put the funding arrangement in place.

The majority of transport issues raised by submitters have been formally referred by Council to ARTA, to be addressed in its draft Passenger Transport Network Plan. Council has noted that its committed funding will not address the potential additional shortfall in operating funding for ARTA relating to the increased costs of operating existing services which may arise in 2007/08 and subsequent years.

Further information on the LTCCP can be found at www.arc.govt.nz or by calling 366 2000. Rates bills will be delivered from mid-July.

ENDS

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