$14 million blowout and central library woes challenge Auckland Council budget

Monday, 20 May 2019

Many projects around Auckland are forcing the council to shell out.

The cost of refurbishing Auckland's Aotea Centre has blown out by $14 million, and there is uncertainty about the future of a second major public building, the central library.

The council's chief executive is to investigate the 33 per cent blowout in the refurbishment of the 28-year-old theatre, which is run by the council agency Regional Facilities Auckland.

At the same time the council is to examine the future of the almost 50-year-old Central Library on Lorne St, with re-location and re-development a possibility.

The mayor Phil Goff says the grounds for the Aotea Centre overrun warrant investigation

Unmentioned in a media release from the Mayor Phil Goff, these are in a list of budget surprises which the council will consider on Wednesday.

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The refurbishment blowout at the council-owned 2100-seat Aotea Centre is the biggest surprise in budget papers made public ahead of Wednesday's first budget debate.

The project will overrun by up to a year, to mid 2020, partly due to new cladding regulations brought in following a disastrous fire in London's Grenfell Tower.

'The circumstances surrounding the cost of the refurbishment warrants a review,' said Goff in his budget proposal.

Another surprise are the questions over the future of the Central Library building, which 'has challenges due to its age'.

'I support investigating a wide range of future options for the central library with an open mind,' said Goff.

The work is not urgent, and council officials will spend $420,000 investigating options ranging from refurbishment, to redevelopment in conjunction with the private sector or re-location.

More immediate is a $12m top-up to the council agency Auckland Transport, which has been hit by unexpected running costs for public transport, mostly the cost of scheduled bus services, after a law change awarded more frequent rest breaks for drivers.

As the council's cost pressures rise, there's also a slowdown in some key revenue.

The rates take is expected to be lower this year than forecast, and development contributions will be $30m lower than expected.

The cash surplus at the council-owned Ports of Auckland will be $34m lower, and its costs higher, meaning a smaller annual dividend into council coffers.

The $1 billion increase announced last month in the cost of the City Rail Link project also looms in the budget, even though the council's half-share has been covered by savings through better financial management.

'The funding of the CRL has however removed capacity for funding major new initiatives for the next four years,' wrote Goff in his proposal,

Previously-signalled sweeteners remain locked into the budget proposal, including keeping the average general rate rise at 2.5 per cent.

A late addition unveiled in mid-May, is to allow under-16s to travel free at weekends on public transport, from September this year.

The city's ferry fares will also be integrated will connecting bus and train trips earlier than first planned, meaning from next February, connecting legs either side of the ferry trip will be free.

The budget with the looming cost pressures is the third and last in Goff's first term as mayor, and is likely to be hotly debated by an increasingly fractious council facing re-election in October.

The first round of debate is on Wednesday, with the final budget sign-off next month.