Auckland Council’s Annual Report shows the Council Group continuing to deliver on its record capital investment programme, with infrastructure spending of $2.5 billion, despite COVID-19 lockdowns and supply chain challenges. This included significant investment in transport and water infrastructure as well as environmental and community initiatives.
Mayor Phil Goff says that the council’s strong financial position prior to the latest COVID-19 outbreak will be a crucial factor in helping it absorb the revenue losses incurred due to the current Level 4 and 3 lockdowns.
“In the Recovery Budget we passed this year, we budgeted prudently in the knowledge that a further community outbreak of COVID-19 was a real risk. We left room in the budget to cope with further revenue loss, so that even if this occurred we could sustain record infrastructure investment and maintain council services.
“Unless the current lockdown is prolonged we will be able to manage operating revenue losses of a forecast $80 to $160 million, without breaching borrowing limits, further cuts to council spending or rate increases beyond what is set out in our 10-year Budget.
“However, in the current uncertain environment, we will need to continue a prudent and agile response to get through the challenges that confront us, “ the Mayor said.
- Delivery on the $120 million savings target set out in the Emergency budget, with further annual savings of $90 million
- The Council has one of the highest credit ratings in New Zealand with S&P Global Ratings and Moody’s Investor Services ratings of AA and Aa2 respectively
- A moderate increase in net borrowings of $474 million to $10.4 billion, resulting in a debt-to-revenue ratio of 258 per cent, within the group’s 290 per cent policy limit (and only 17 per cent of the value of our assets).
Auckland Council’s Group Chief Financial Officer Peter Gudsell says this year’s report reflects that the council was able to respond when uncertainty hit, “Lockdowns and supply chain issues set us back financially but despite this, our total capital investment for the year was $2.5 billion, just $110 million short of our highest spend ever.
“The challenges presented over the past 12 months required a true team response. The council’s ability to work through its recovery phase is due to careful fiscal management, but also through the heart shown by council whanau, some of whom took a voluntary salary reduction to help us mitigate the financial impact of the pandemic.”
The overall result included net other gains of $998 million. This includes a net gain of $780 million on derivatives compared with a net loss of $665 million last year. Derivatives are commonly used by large corporates and councils to fix interest rates paid on borrowings to even out interest costs over time and allow more certainty for council planning. Gains and losses are on paper only and balance out when held until maturity.
Finance and Performance Committee Chair Desley Simpson says, “This was a challenging year for Auckland, and a challenging year for Auckland Council, but our focus on cost containment and improving operating efficiencies put us in a strong position to navigate our recovery phase.”
In summary, Gudsell is satisfied with the result, “We continue to pave the way for recovery and invest in the critical infrastructure that our growing city needs. Continued partnerships with central government and other agencies are crucial in ensuring Tāmaki Makaurau is a strong and resilient city that we can all remain proud of.”
- $1.1 billion spent on developing and upgrading our roading and public transport assets
- Significant progress with the $4.4 billion City Rail Link project
- Progress with the new Puhinui Station Interchange
- The opening of major upgrades to city centre waterfront public spaces and continued progress with upgrading local centres such as Takapuna and Flatbush
- $881 million investment in our water networks with $195 million spent on new water sources delivering 90 million litres per day to support recovery from the drought
Mayor Phil Goff states this report demonstrates sound planning in the Emergency Budget for our growing region.
“Auckland continues to grow at pace. We are currently home to around 1.7 million people and our population is expected to reach 2 million by early next decade.
“Infrastructure to support this growth is our biggest asset and our biggest cost, meaning it is our greatest opportunity to deliver outcomes for Aucklanders and our largest risk if we don’t manage it.
“I am proud that once complete, the City Rail Link will transform Tāmaki Makaurau’s transport system, carrying up to 54,000 people an hour, moving the equivalent capacity of three Auckland Harbour Bridges or 16 extra traffic lanes into and through the city at peak times. Work on the Puhinui Interchange made strong progress throughout the financial year.
“The completed interchange is already making it easier, faster and more convenient for people to travel to and from the airport and its growing employment precinct.”
- In Te Tāruke-ā-Tāwhiri – Auckland’s Climate Plan, our core goal is to reduce our greenhouse gas emissions by 50 per cent by 2030 and achieve net zero emissions by 2050
- In pursuit of this goal, in the past financial year, the council planted 735,000 new trees and bus operators added another 28 electric buses to the fleet - there are now 33 low emission buses in the Auckland bus fleet
- The upgrade and solar panel installation at the Rosedale Wastewater Treatment Plant was completed in November 2020 with the panels expected to generate approximately 1480 megawatts of electricity each year, with zero emissions.
Mayor Goff is proud of the council’s climate delivery in this report, whilst acknowledging there is still work to be done, “Emergency Budget funding to replace boilers and decarbonise our car fleet has helped council stay on track to cut our operational emissions by 50 per cent by 2030. We also continue to work with central government, iwi, the community and businesses to reduce regional emissions and adapt to and manage the impacts of global heating.”
- $17.5 million spent through the Māori Outcomes Fund, the highest spend achieved to date.
The council is proud that services were targeted where they are needed most. This report included grants of $2.9m as part of the Manaaki fund. This supports Māori led response and initiatives for whānau Māori and tamariki wellbeing, Māori employment and business, and sustainable solutions for Māori communities, with a special focus on essential needs.
See all of the Annual Report 2020/2021 documents on the Auckland Council website.