Te Kaunihera o Tāmaki Makaurau / Auckland Council Group’s Annual Report 2023/2024 released today shows Auckland Council Group performed well over the past financial year, particularly in the face of ongoing challenges from the effects of weather events and some difficult economic conditions.
The group navigated some big cost impacts, with the high inflation and interest rates that are affecting the daily lives of many Aucklanders also driving higher the cost of delivering council services.
In the face of this, the group nevertheless invested a record $3.2 billion in assets such as the roads, pipes and buildings used to provide services to Aucklanders, building a stronger and more resilient region.
This was $487 million more than the previous year and included significant investment in transport and water infrastructure.
Mayor Wayne Brown notes we steered this pathway while also progressing economic recovery, development for growth, and advancing climate and Māori outcomes.
“A big positive has been that our costs are under control and we’re back on track getting ourselves in a good position to tackle some of the big physical and financial challenges council has been facing for too long,” Mayor Brown says.
“Our annual report shows progress in the right direction, including fixing Auckland’s infrastructure, increased transport funding and activities to deliver better, more efficient public transport, building financial and physical resilience of the region following last year’s weather events, providing fairer funding for local boards and getting our finances in better shape for the future.”
Achieving value for money outcomes for our diverse communities
The council itself achieved operating savings of $60.2 million compared to the Annual Plan target of $50 million and is actively working to embed the ‘value for money’ ethos into its renewed organisational structure.
Auckland Council Chief Executive Phil Wilson says the group’s results reflect the diverse range of activities and services supported by the council group for Aucklanders over the past year – often in partnership with iwi, community, central government and the private sector.
“I am proud of the way the council group has been able to support the region’s recovery from the devastating weather events of 2023, while maintaining services to keep the city running,” says Mr Wilson.
“I am grateful that so many Aucklanders have supported our recovery efforts - it has been a true testament of the community spirit that exists in Tāmaki Makaurau. While there is more to do, we will continue to prioritise the work that supports both recovery and adaptation to improve Auckland’s resilience.”
“We also made good progress during the year with the capital investments that will make sure we continue to provide for the services and facilities that our growing city needs.”
The council’s achievements have included:
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developing spaces like Takapuna’s Waiwharariki Anzac Square for community activities
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enlivening the Old Papatoetoe town centre to boost local business and provide new homes
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introducing new safety initiatives such as dedicated enforcement officers to help improve the feeling of safety in town centres and on our bus routes
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maintaining our investment in the local programmes, grants and activities that respond to Māori aspirations
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resurfacing over 400 kilometres of roads across the region
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working with government agencies to survey 1,360 boat hulls to prevent the spread of marine pests
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hosting or co-hosting events like the FIFA Women’s World Cup 2023, 2024 Weightlifting Festival, Moana Auckland Ocean Festival and the Rainbow Games
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conducting 11,431 food and alcohol premises inspections
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diverting more than 20,000 tonnes of food scraps to renewable energy and fertiliser use
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re-opening community assets, parks and walkways damaged by the weather events.
Key financials
Auckland Council Group Chief Financial Officer Ross Tucker says that as well as building new infrastructure, the record capital spend included repairing, upgrading and replacing community assets such as pool and leisure centres, playgrounds and sports facilities.
Our key areas of investment in assets for Auckland were:
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$1.4 billion on transport-related assets
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$1.2 billion on clean water, wastewater and stormwater assets
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$658 million other assets, such as upgrades to playground and sports facilities, environmental initiatives, renewals of cultural venues and seawall replacements.
“We use debt to spread the cost of assets over the generations that will benefit from them, and we took on new debt to fund our capital projects,” Mr Tucker says.
“Even though our total group asset base grew by $1.4 billion to $74 billion, we were able to decrease our overall net debt by $70 million to $12.3 billion.”
The most significant movement was the reduction in debt of $833 million from the proceeds of the partial sale of Auckland International Airport Limited (AIAL) shares in August 2023. This was mostly offset by new borrowings to fund the capital projects.
“Our resulting debt-to-revenue ratio of 239 per cent is below the group’s prudential limit of 290 per cent. This means we are in a strong position to keep investing wisely in the assets needed to support Auckland’s growing and diverse communities.”
Both of our credit rating agencies had our ratings on stable outlooks (S&P Global rating AA, Moody’s Investor Services rating Aa2).
Revenue for the year was $7.2 billion which was $349 million higher than budget. This was partly driven by an increase in vested assets of $242 million representing the receipt of parks and infrastructure assets from developers. Increased performance for building consents and resource consents together with strong results from inspections, licenses and permits also contributed to the revenue result.
Revenue from grants and subsidies was $1.3 billion, $86 million higher than budget. This was mainly because of capital grants received in the cost-sharing arrangement with central government for the Risk Category 3 property buy-outs ($67 million) and transport projects ($38 million).
Operating costs this year were $6.5 billion, which was $940 million above budget. The largest unbudgeted cost was $685 million, related to recognising the full impact of the council’s planned buyout of storm-affected properties and investment in property-level risk mitigation projects.
The council spent $433 million on repairs and maintenance which included weather event repairs and temporary solutions put in place while permanent solutions could be implemented. The increase in public transport use and the recruitment of bus drivers resulted in an increase to costs, but also an increase in the provision of services.
To respond to the needs of our communities and to become more adaptable and agile, we had restructures across the group resulting in unbudgeted redundancy costs. During times of change, employees reduce their leave taken, which increased employee costs.
Mr Tucker says while the annual results are pleasing in the face of the challenges we faced, looking ahead it is vital that we maintain financial flexibility to sustainably support regional growth and address any other unforeseen events.
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The link to the Auckland Council 2023/2024 Group Annual Report and Summary Annual Report is here.
A short video is here.
