Big city expenses creating super bill

The cost of building the Auckland Super City is $81 million - and rising.

The biggest cost is a $34.4 million bill for the agency designing the Super City, followed by a $26.5 million for establishing a mega-water company.

The region's existing councils have spent or budgeted a further $20.1 million, mostly staff time, working on the Super City, which comes into being on November 1.

The councils' costs and setting up Watercare Services have been funded out of current budgets. The $34.4 million cost of the Auckland Transition Agency is being funded by a Crown loan, which will transfer to the new Auckland Council and be paid for by ratepayers.

A spokesman for Local Government Minister Rodney Hide did not return messages yesterday.

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.

Labour's spokesman on local issues, Phil Twyford, said the $81 million cost was the tip of the iceberg and would lead to higher rates.

"Aucklanders didn't ask for this but they will be forced to pay for it."

Mr Twyford believed the final cost would be at the top end of the Royal Commission on Auckland Governance's estimate of $120 million to $240 million over four years.

A financial analysis for the commission said these costs would lead to annual savings of between $76 million and $113 million by 2015.

The agency is budgeting to spend $34.4 million between July last year and the end of October this year, when it will ceases to exist.

Nearly half of that money - about $16.4 million - will be spent on outside consultants, such as for auditing and legal work. Another $4.5 million will be spent on internal contractors.

Watercare Services - the region's wholesale water and wastewater provider - has budgeted $26.5 million over two years to merge with the retail arms of the seven territorial councils, including Metrowater and Manukau Water.

Information technology costs account for $17.5 million of the bill. It is not know how much it will cost to build co-ordinated information technology systems across the region for the Auckland Council.

The other big bill is the cost of council time spent on the Super City reforms. Auckland City chief executive David Rankin said more than $8 million worth of staff time had been spent on agency projects or other transition-related work up until the end of February.

SUPER CITY COSTS

* Auckland Transition Agency - $34.4m.
* Watercare Services - $26.5m.
* Councils - $20.1m.
* Total - $81m.

Where some money is going:

* Salary and bonus for Auckland Transition Agency executive chairman Mark Ford - $594,000 per year.
* Total Transition Agency board fees - $192,000.
* Transition Agency travel and accommodation within New Zealand - $108,054.
* Consultants and contractors for Transition Agency - $21m.
* Election costs - $5.9m.
* Information technology costs for Watercare - $17.5m.