Aucklanders may face a wait to learn Covid-19 impact on council's financial position
Wednesday, 15 April 2020
The financial hit on Auckland Council's finances from Covid-19 will be laid out for councillors behind closed doors on Thursday.
It could be Friday before the fiscal forecast is made public, along with any pointers to the impact on rates rises.
The secrecy is to meet stock exchange rules, as Auckland Council bonds are traded on the NZX and are subject to disclosure rules.
If councillors debate the forecasts until late in the day, public statements might have to wait until the NZX is informed on Friday.
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Rates make up less than half of the council's almost-$5 billion income, and it is the non-rate portion which is already taking a bit hit.
Auckland International Airport, in which the council held a 22.4 per cent stake, has cancelled its dividend, and the council had forecast revenue of $58 million.
A 10 or 20 per cent fall in regional fuel tax revenue could amount to as much as $30m.
The only significant step made public so far is the axing of up to 1100 jobs held by temps, external contractors or consultants.
The council had proposed and consulted on a general average rate rise of 3.5 per cent, one of the lowest in the country.
Major questions on the rating side could be to what extent the council offers deferrals or other help to ratepayers in financial strife.
Lobby group the Taxpayers Union has been calling for rates freezes, and its executive director Jordan Williams said while some Auckland councillors had supported the call, others had strongly disagreed.
One targeted rate due for attention is the $14m Accommodation Providers' Targeted Rate (APTR), introduced under Mayor Phil Goff's leadership in 2017.
The rate is to fund half of the city's major event and tourism promotion - both of which have ceased to exist - and is paid by those owning hotel and motel properties, many of which are struggling to stay open.
The Hotel Owners Association has called for the rate to be scrapped.
The council also has to consider its level of debt, which is limited to 270 per cent of its revenue.
Until now, the debate has always been about how much additional debt the council can carry without upsetting ratings agencies whose views affect borrowing costs.
However if revenue falls significantly, that could put the ratio in jeopardy from the opposite perspective.
The possible financial scenarios will be spelled out at Thursday's scheduled meeting of the full council's Emergency Committee, but in a confidential session.
It was considered by the Audit and Risk committee on Tuesday, again behind closed doors.