Super city: 'Ratepayers will have to dig deep'

Photo / Glenn Jeffrey

Auckland ratepayers will pay at least $550 each in restructuring costs for a Super City, says the Waitakere City Council.

And Rodney Mayor Penny Webster says that, contrary to public expectations, rates will not come down under the new system.

Local body politicians opposed to Government plans to replace Auckland's seven councils with one super Auckland Council are pointing to the cost of the transition and questioning the financial benefits.

The Royal Commission on Auckland Governance said creating a super Auckland Council with six local councils under it would cost between $120 million and $240 million and produce savings of between $76 million and $113 million by 2015.

The restructuring costs have not been included in councils' budgets. Councils could choose to pay for them from rates, loans or savings elsewhere in their budgets.

Waitakere used the commission's figures to come up with the $550 cost.

Deputy mayor Penny Hulse said the figure was on the low side because the Government's proposed Super City council and 20 to 30 community boards would be more complicated and expensive to set up than the commission's Super City/six local councils proposal.

"Ratepayers are already feeling burdened by existing rates and adding the extra burden of this is not going to please them," she said.

North Shore Mayor Andrew Williams said his ratepayers would have to pay $20 million to $40 million as their share of restructuring costs under the Royal Commission plan.

The council had not budgeted for restructuring costs, and they could add 6 per cent to rates on top of this year's proposed rise of 5.9 per cent. The council could borrow the money, but debt servicing would add about 2 per cent to rates.

Penny Webster said ratepayers should not believe the Super City would save a lot of money. It would bring some efficiencies, but would not lead to lower rates.

Auckland City Mayor John Banks said it would be difficult to give details of savings at this stage, but staff relocation and the sale of surplus council property could give some.

Mr Banks did not know how much the transition would cost Auckland City ratepayers, but the council would probably borrow money to pay the bill.

"We will need to monitor the costs closely because they can run away very easily," he said.

Local Government Minister Rodney Hide said yesterday the restructuring costs would not be known until the Government appointed an establishment board in the next few weeks to do the transition.

The Government had set aside $13 million to set up the establishment board, but this sum and the rest of the transition costs would be paid by Auckland ratepayers.

"The mayors are a bit into the scaremongering mode and given how these councils have been run I would be surprised if there wasn't some ability to make savings."

THE ROYAL COMMISSION SAID
* A Super City would cost between $120 million and $240 million.
* It would save between $76 million and $113 million a year by 2015.

SOME MAYORS AND COUNCILLORS SAY
* The transition will cost each ratepayer at least $550.
* Rates will not go down once the Super City is in operation.

RODNEY HIDE SAYS
* The costs will not be known for some time.
* Auckland ratepayers will pay all the costs.
* Mayors and councillors are scaremongering.