Consultants eat into Super City budget

The cost of designing the Auckland Super City is $34.4 million - but putting all the building blocks in place will cost more.

Yesterday, a spokesman for Local Government Minister Rodney Hide was unable to put a total figure on the Super City reforms, saying details of the final make-up were still being worked on.

Mr Hide and Prime Minister John Key have been careful not to promise cost-savings to ratepayers from the biggest shake-up of local government since 1989.

Finance Minister Bill English has given approval for the agency designing the Super City to spend $34.4 million from July last year to the end of October this year, when it ceases to exist and the Auckland Council comes into being. Nearly half the budget of $16.4 million will be spent on consultants and professional costs, such as auditing and legal work.

The cost of running the Auckland Transition Agency is $7.8 million.

Other set-up costs, such as staff recruitment, for the Auckland Council and a mega-transport agency is $3.2 million.

The Department of Internal Affairs is billing $1 million for support costs and nearly $6 million is set aside for the October 9 elections.

The $34 million is being funded by a Crown loan, which will transfer to the Auckland Council to be paid for by ratepayers.

The agency has neither the time nor the money to complete the reform process. For example, it will take years and cost millions of dollars to build co-ordinated information technology systems across the region.

A preliminary financial analysis of the reform process for the Royal Commission on Auckland Governance estimated it would cost between $120 million and $240 million over four years.

The analysis said this would lead to annual savings of between $76 million and $113 million by 2015. Many of these savings would come from shared services.

Auckland's eight councils have banded together before the Super City merger in the hope of driving down their combined electricity bill of $20 million for offices, recreation centres and street lighting.

Meanwhile, merging eight councils into a single structure is expected to result in about 240 jobs losses among managerial staff.

It is unclear how many other staff will lose their jobs.

The agency plans to write to lower-level staff this month advising them which of three categories they fall into - no change, redundancy or potential redundancy, or a change to role or location.

When applications closed last week for senior management jobs, there were 28 for the chief executive job, 110 for the chief planning, finance and operating roles, and 390 for 25 "tier 3" roles.

The mega-transport agency has attracted 42 applications for the chief executive job, 91 for three tier 2 jobs and 398 for 20 tier 3 jobs.

The Auckland Council head office and mayoral office is expected to be located in central Auckland. Auckland Transport could be located at Waitakere City Council's new head office in Henderson.

The other main council-controlled organisation, Watercare Services, is expected to remain at its location in Newmarket and have a customer call centre at East Tamaki.

THE COSTS

Consultant and related costs: $16,359,396.
Auckland Transition Agency: $7,783,206.
Election costs: $5,966,667.
Auckland Council and Auckland Transport costs: $3,208,115.
Department of Internal Affairs: $1,046,875.
Total: $34,364,259.