Confusion as footpaths bill rockets 38pc

Auckland City transport officers are at a loss to explain how footpath renewal costs soared 38 per cent in the same year they negotiated a 6 per cent price discount.

Council figures show footpath renewal costs jumped from $100.98sq m in 2006-2007 to $139.47sq m in the 2007-2008 - the same year John Fillmore Contractors dropped all its rates, except administration costs, by 6 per cent.

The figures show that a 20.7 per cent increase on footpath spending resulted in a 12.6 per cent drop in renewal work.

Transport general manager Don Munro sidestepped the issue yesterday by passing on questions to a colleague, Tim Lott.

Mr Lott said he was not sure of the dollar figures and asked the Herald for a copy of the calculations. The Herald pointed Mr Lott to the council's figures, but did not get a response.

The figures surfaced after transport officers said ratepayers had benefited from the 6 per cent discount.

The report of an independent inquiry into double payments on some footpath renewal work alluded to the discount as one reason transport officers did not stop double payments.

Mr Munro earlier claimed that John Fillmore Contractors offered the 6 per cent discount as a "gesture of goodwill and appreciation" when the council increased the footpath renewal contracts to $65 million in the 2007-2009 years. The contracts totalled $35 million in the previous two years.

Mr Munro said when the increased expenditure was cut by $14 million in the second year, John Fillmore Contractors did not seek compensation for the discount.

Documents, obtained by the Herald, show John Fillmore was pressed by the council in 2007 to drop his prices if he wanted the extra work and his contracts extended for two years. If not, the council would tender some work.

When the budget was being cut by $14 million in the second year, Mr Fillmore wrote to the council on June 18 last year saying he would honour the discount for the first year, "but this leaves us in the difficult position of not being able to offer any reduction for the 2008-2009 year".

Management of the council's footpath contracts is being scrutinised by the Auditor-General. It is also a sensitive issue for Mayor John Banks in his bid to be the first Super City mayor and for council chief executive David Rankin, who, it is understood, wants to lead the Super City bureaucracy.