APOLOGIES

CARRIED

EXTRAORDINARY BUSINESS

There was no extraordinary business.

CARRIED

BASELINE 2006/2007 BUDGETS

The General manager finance gave a presentation regarding baseline 2006/2007 budgets.

[ATTACHMENT 3A]

The Chairman moved:

1. That the report of the Financial planning manager dated 6 December 2005 be received.
2. That the following alternative revenue sources be reported on to Combined Committees in March 2006:
   1. GST component of rates
   2. Conservation levies such as to assist demand side management for utilities
   3. Congestion charging
   4. And other alternatives

Councillor Milne moved the following amendment:

That government owned properties and other rates exempt properties eg Ports of Auckland Ltd be assessed for rates and that pro-forma rates demands be prepared for forwarding to the government at the discretion of the Finance & Corporate Business Committee.

A division was called for, voting on which was as follows:

Cr Dr Cathy Casey and Cr Christine Caughey were absent.

Voting in the division was TIED with 9 votes for and against. The Chairman exercised his casting vote against the amendment. The amendment was declared LOST by 10 votes to 9.

The Chairman put the following substantive motion:

CARRIED

The meeting adjourned at 11:00am and reconvened at 11:20am.

CARRIED

FIRST-CUT OF COSTED SCENARIOS FOR THE 2006 – 2016 LTCCP

The General manager finance gave a presentation outlining the methodology used in accessing the first cut of costed scenarios for the 2006-2016 LTCCP.

[ATTACHMENT 4A]

The General manager finance also tabled an updated "Rates impact of new scenarios".

[ATTACHMENT 4B]

The Chairman moved:

1. A. That council adopt for consultation purposes in relation to the Draft 2006-2016 Long-term Council Community Plan (LTCCP) five costed scenarios, namely:
   1. Option (i) - Status quo - no additional capital or operational expenditure, ie: none of the projects in the following scenarios will be funded.
   2. Option (ii)

      Capex	Net ($000's)	Gross ($000's)
      AMETI: Auckland-Manukau Eastern Transport Initiative	100,000	800,000
      Stormwater: Water quality improvements (air, land and water plan)	20,000	20,000
      Stormwater: Flood risk reduction	0	60,000
      Soil Contamination and Closed Landfills	5,000	5,000
      Footpath Condition Upgrade (enhanced)	83,000	87,000
      Swimming Pools (Otahuhu and Avondale)	12,000	18,000
      Gulf Island Projects (wharves, eco-tourism infrastructure)	10,000	11,500

      'Pure' Opex	Net ($000's)	Gross ($000's)
      Refuse Collection: World class recycling services (food & green waste)	30,000	30,000
      Transport Safety (school transport, implementing works from crash studies)	10,000	10,000
      Diversity (migrant settlement, celebrating diversity)	8,000	8,000

   3. Option (iii)

      Capex	Net ($000's)	Gross ($000's)
      Stormwater: Water quality improvements (Air, land and water plan)	20,000	20,000
      Stormwater: Flood risk reduction	0	60,000
      Development with Vision and Wynyard Point	200,000	408,000
      Outside the Square (future proofing)	127,000	127,000
      AMETI: Auckland-Manukau Eastern Transport Initiative	100,000	800,000
      Swimming Pools (Otahuhu and Avondale)	12,000	18,000
      Footpath Condition Upgrade (enhanced)	20,000	21,000
      Pah Homestead restoration	5,000	5,000

   4. Option (iv)

      Capex	Net ($000's)	Gross ($000's)
      Miscellaneous Transport Initiatives (priority projects not funded by targeted rate)	39,500	158,000
      Stormwater: Water quality improvements (air, land and water plan)	20,000	20,000
      Stormwater: Flood risk reduction	0	60,000
      Development with Vision and Wynyard Point	200,000	408,000
      AMETI: Auckland-Manukau Eastern Transport Initiative	100,000	800,000
      Waterfront Projects (land, parks, recreational wharf)	50,000	62,500
      Gulf Island Projects (wharves, eco-tourism infrastructure)	10,000	11,500
      Capex	Net ($000's)	Gross ($000's)
      Safety Projects (public spaces, lighting strategy and CCTV network)	10,000	10,000
      Westhaven Marina: Open Spaces	15,000	20,000
      Tamaki Edge Development (Lunn Avenue, Glen Innes and Sylvia Park)	29,000	29,000
      Footpath Condition Upgrade (enhanced)	50,000	53,000
      Diversity Projects (making community facilities more relevant)	7,500	10,000
      Contribution to International Facilities (eg Convention Centre)	50,000	50,000
      Swimming Pools (Otahuhu and Avondale)	12,000	18,000

      'Pure' Opex	Net ($000's)	Gross ($000's)
      Waterfront (planning, water quality regulation & ecotourism)	5,000	5,000
      Diversity (migrant settlement, celebrating diversity)	8,000	8,000
      Transport Safety (school transport, implementing works from crash studies)	10,000	10,000
      Tourism Promotion Fund	0	30,000
      Local Centres: Protecting character and heritage of local centres	1,000	1,000
      Economy (research, sister cities, planning, regulation, niche industries)	4,000	4,000
      Learning Quarter: Town and Gown (Building City-University relationships)	1,000	1,000
      Arts agenda	2,000	2,000
      Harbour Festival (increasing frequency from biannual to annual)	1,000	1,000

   5. Option (v)

      Capex	Net ($000's)	Gross ($000's)
      Outside The Square (New Carparking)	40,000	60,000
      Outside The Square (Underground Street)	35,000	35,000
      Outside The Square (Collonade/Canopy)	13,000	13,000
      Capex	Net ($000's)	Gross ($000's)
      AMETI: Auckland-Manukau Eastern Transport Initiative	100,000	800,000
      Development with Vision / Wynyard Point Development	200,000	408,000
      Gulf Island Project	20,000	21,500
      Footpath Condition Upgrade	20,000	21,000
      Stormwater – Water quality improvements	20,000	20,000
      Swimming Pools (Otahuhu and Avondale)	12,000	18,000
      Pah Homestead restoration	5,000	5,000

      'Pure' Opex	Net ($000's)	Gross ($000's)
      Refuse	30,000	30,000

2. That it be noted that even before inclusion of any new scenario, Auckland City's funding sources for capital expenditure are fully committed under current policy settings for the next ten years. Funding a new scenario adopted via the 2006-2016 Long-term Council Community Plan will either require additional funding or a reprioritisation and reduction of currently planned projects and costs.
3. That it be noted that the rates increases required to fund a new scenario adopted via the 2006-2016 Long-term Council Community Plan will have to stay in place for the next 30 years and any new unbudgeted projects approved in future years would again require additional funding and/or cost savings.
4. That council agree that the following new funding sources be utilised in the following order of priority to fund the projects comprising the scenario ultimately adopted in the final 2006-2016 Long-term Council Community Plan:
   1. the $18.7 million Auckland International Airport Limited (AIAL) special dividend received by council on 5 August 2005;
   2. liquidation of the approximately $30 million Strategic Asset Fund (SAF) (and utilisation of the $4.3 million per annum operating surplus currently tagged for capital contributions to the SAF); and
   3. increase budgeted charitable payments from Metrowater so that there is a 1.7% decrease in any proposed level of general rates increases required for the 2006/2007 and 2007/2008 financial years, and 0.5% in the following eight years, provided analysis of Metrowater's revised funding plan shows that this is fiscally sustainable, and subject to any constitutional or legal constraints. These sums be deployed on "three waters" (stormwater, water, wastewater) expenditure.

Councillor Northey moved the following amendment:

That D. (iii) be deleted.

A division was called for, voting on which was as follows:

Cr Faye Storer abstained from voting.

Cr Dr Cathy Casey and Cr Christine Caughey were absent.

The amendment was declared LOST by 13 votes to 4, with 1 abstention.

The meeting adjourned at 1:00pm and reconvened at 1:35pm.

Councillor Armstrong moved the following amendments

That A (i) be amended to read

1. Status quo – the rates increase to be limited to no greater than the rate of inflation.

   LOST

   2. That the consultation methodology be at a high level and
      1. focus on ranking the expenditure (dollar and percentage) and importance of the various council involvements
      2. specifically focus on the level of rates increase that ratepayers are prepared to sustain to increase these involvements.

   LOST

   3. That resolutions B and C be deleted.

   LOST

Councillor Milne moved the following amendment (new resolution E and F):

5. That the strategic asset fund be retained and deployed to fund the purchase of strategic land assets only (eg: waterfront land) and that it be supplemented with the following:
   1. the $18.7 million Auckland International Airport Limited special dividend received by council on 5 August 2005
   2. the $4.3 million per annum operating surplus
   3. the Council's airport share holding.
6. That resolution E be included in the draft 2006-2016 Long Term Council Community Plan (LTCCP) for public consultation.

LOST

The Chairman put the following substantive motion:

1. That council adopt for consultation purposes in relation to the Draft 2006-2016 Long-term Council Community Plan (LTCCP) five costed scenarios, namely:
   1. Option (i) - Status quo - no additional capital or operational expenditure, ie: none of the projects in the following scenarios will be funded.
   2. Option (ii)

      Capex	Net ($000's)	Gross ($000's)
      AMETI: Auckland-Manukau Eastern Transport Initiative	100,000	800,000
      Stormwater: Water quality improvements (air, land and water plan)	20,000	20,000
      Stormwater: Flood risk reduction	0	60,000
      Soil Contamination and Closed Landfills	5,000	5,000
      Footpath Condition Upgrade (enhanced)	83,000	87,000
      Swimming Pools (Otahuhu and Avondale)	12,000	18,000
      Gulf Island Projects (wharves, eco-tourism infrastructure)	10,000	11,500

      'Pure' Opex	Net ($000's)	Gross ($000's)
      Refuse Collection: World class recycling services (food & green waste)	30,000	30,000
      Transport Safety (school transport, implementing works from crash studies)	10,000	10,000
      Diversity (migrant settlement, celebrating diversity)	8,000	8,000

   3. Option (iii)

      Capex	Net ($000's)	Gross ($000's)
      Stormwater: Water quality improvements (Air, land and water plan)	20,000	20,000
      Stormwater: Flood risk reduction	0	60,000
      Development with Vision and Wynyard Point	200,000	408,000
      Outside the Square (future proofing)	127,000	127,000
      AMETI: Auckland-Manukau Eastern Transport Initiative	100,000	800,000
      Swimming Pools (Otahuhu and Avondale)	12,000	18,000
      Footpath Condition Upgrade (enhanced)	20,000	21,000
      Pah Homestead restoration	5,000	5,000

   4. Option (iv)

      Capex	Net ($000's)	Gross ($000's)
      Miscellaneous Transport Initiatives (priority projects not funded by targeted rate)	39,500	158,000
      Stormwater: Water quality improvements (air, land and water plan)	20,000	20,000
      Stormwater: Flood risk reduction	0	60,000
      Development with Vision and Wynyard Point	200,000	408,000
      AMETI: Auckland-Manukau Eastern Transport Initiative	100,000	800,000
      Waterfront Projects (land, parks, recreational wharf)	50,000	62,500
      Gulf Island Projects (wharves, eco-tourism infrastructure)	10,000	11,500

      Capex	Net ($000's)	Gross ($000's)
      Safety Projects (public spaces, lighting strategy and CCTV network)	10,000	10,000
      Westhaven Marina: Open Spaces	15,000	20,000
      Tamaki Edge Development (Lunn Avenue, Glen Innes and Sylvia Park)	29,000	29,000
      Footpath Condition Upgrade (enhanced)	50,000	53,000
      Diversity Projects (making community facilities more relevant)	7,500	10,000
      Contribution to International Facilities (eg Convention Centre)	50,000	50,000
      Swimming Pools (Otahuhu and Avondale)	12,000	18,000

      'Pure' Opex	Net ($000's)	Gross ($000's)
      Waterfront (planning, water quality regulation & ecotourism)	5,000	5,000
      Diversity (migrant settlement, celebrating diversity)	8,000	8,000
      Transport Safety (school transport, implementing works from crash studies)	10,000	10,000
      Tourism Promotion Fund	0	30,000
      Local Centres: Protecting character and heritage of local centres	1,000	1,000
      Economy (research, sister cities, planning, regulation, niche industries)	4,000	4,000
      Learning Quarter: Town and Gown (Building City-University relationships)	1,000	1,000
      Arts agenda	2,000	2,000
      Harbour Festival (increasing frequency from biannual to annual)	1,000	1,000

   5. Option (v)

      Capex	Net ($000's)	Gross ($000's)
      Outside The Square (New Carparking)	40,000	60,000
      Outside The Square (Underground Street)	35,000	35,000
      Outside The Square (Collonade/Canopy)	13,000	13,000
      AMETI: Auckland-Manukau Eastern Transport Initiative	100,000	800,000
      Development with Vision / Wynyard Point Development	200,000	408,000
      Gulf Island Project	20,000	21,500
      Footpath Condition Upgrade	20,000	21,000
      Stormwater – Water quality improvements	20,000	20,000
      Swimming Pools (Otahuhu and Avondale)	12,000	18,000
      Pah Homestead restoration	5,000	5,000

      'Pure' Opex	Net ($000's)	Gross ($000's)
      Refuse	30,000	30,000

2. That it be noted that even before inclusion of any new scenario, Auckland City's funding sources for capital expenditure are fully committed under current policy settings for the next ten years. Funding a new scenario adopted via the 2006-2016 Long-term Council Community Plan will either require additional funding or a reprioritisation and reduction of currently planned projects and costs.
3. That it be noted that the rates increases required to fund a new scenario adopted via the 2006-2016 Long-term Council Community Plan will have to stay in place for the next 30 years and any new unbudgeted projects approved in future years would again require additional funding and/or cost savings.
4. That council agree that the following new funding sources be utilised in the following order of priority to fund the projects comprising the scenario ultimately adopted in the final 2006-2016 Long-term Council Community Plan:
   1. the $18.7 million Auckland International Airport Limited special dividend received by council on 5 August 2005;
   2. liquidation of the approximately $30 million Strategic Asset Fund (SAF) (and utilisation of the $4.3 million per annum operating surplus currently tagged for capital contributions to the SAF); and
   3. increase budgeted charitable payments from Metrowater so that there is a 1.7% decrease in any proposed level of general rates increases required for the 2006/2007 and 2007/2008 financial years, and 0.5% in the following eight years, provided analysis of Metrowater's revised funding plan shows that this is fiscally sustainable, and subject to any constitutional or legal constraints. These sums be deployed on "three waters" (stormwater, water, wastewater) expenditure.

CARRIED

5. UPDATE ON KEY RATING AND REVENUE ISSUES

The Chairman moved:

That it be noted that:

1. the higher property values provided by the 2005 citywide revaluation will not increase rate revenue but will redistribute rates between the city's ratepayers
2. the expected rate of inflation for 2006/2007 is now predicted to be 3.2% not 3.1%, but at current budget levels the additional 0.1% increase will not be required at this time
3. officers are completing some work on the specific circumstances and triggers for establishing new targeted rates; this will be reported to the Finance and Corporate Business Committee in February 2006; and
4. the possible changes to Auckland City's identified costs of growth and development contributions policy.

Councillor Armstrong moved the following amendments:

5. That any rates increase be levied by way of an increase in the uniform annual general charge.
6. That it be noted that each one percent rates increase represents $3.5m of income and that the Chief executive be asked to find savings equivalent to the rate of inflation without affecting service levels.

   LOST

The Chairman put the following substantive motion:

1. the higher property values provided by the 2005 citywide revaluation will not increase rate revenue but will redistribute rates between the city's ratepayers
2. the expected rate of inflation for 2006/2007 is now predicted to be 3.2% not 3.1%, but at current budget levels the additional 0.1% increase will not be required at this time
3. officers are completing some work on the specific circumstances and triggers for establishing new targeted rates; this will be reported to the Finance and Corporate Business Committee in February 2006; and
4. the possible changes to Auckland City's identified costs of growth and development contributions policy.

CARRIED

UPDATE: PROGRESS TOWARDS A STRATEGIC DIRECTION FOR AUCKLAND CITY

1. That the statement of the strategic direction for Auckland city be endorsed as set out below:

   WORLD LEADERS

   Amazing natural landscape

   • Auckland has a unique landscape with twin harbours, the Gulf Islands and volcanic cones. We are renowned for the sustainable way we keep our environment clean and green. This gives us a great lifestyle, attracts businesses and provides a visitor experience that is second to none.

   Global City

   • Auckland is a youthful, cosmopolitan, and equitable global city; a great place to live, welcoming of new migrants and businesses. Our diverse communities, and our pioneer and distinct Pacific heritage, gives us a special identity in the world. Auckland's vitality and our special identity stimulates social, cultural, and business opportunities.

   WORLD CLASS

   Lifestyle

   • Every Aucklander can enjoy the benefits and lifestyle opportunities provided by our location.

   Waterfront & CBD

   • The waterfront, and its link to the CBD, is a hub that attracts people and business

   Creativity & Innovation

   • Auckland is a magnet for creativity and innovation. We blend the best from the world and New Zealand to create a fresh Auckland style.

   Pride

   • Auckland has a distinct identity. We identify with, and celebrate our city.

   Ambitious

   • Auckland has a smart and sustainable economy. We are well equipped and strive to compete globally.

   Vibrant Local Centres

   • We have vibrant, distinctive and connected local centres that reflect all our communities. These attract people because of their distinct characteristics.

   BIG CITY BASELINE

   Auckland also provides:

   • a sustainably managed natural and built environment and protected heritage throughout the city.
   • the infrastructure and networks that makes the city work for people, visitors and businesses.
   • access for everyone to the community and social facilities, networks and services that we need throughout our lives.
   • a transport system that works for Auckland and allows us to access what the city and gulf has to offer.
2. That this statement be used by officers in the preparation of the draft LTCCP 2006-2016.
3. That a programme of initial consultation be planned and carried out to gain feedback on this strategic direction statement in early 2006.
4. That a review of the outstanding strategic plan milestones to ensure alignment with the council's new strategic direction be undertaken.

CARRIED

LEADING IN URBAN SUSTAINABILITY

CARRIED

REVIEW OF AUCKLAND CITY'S POLICY ON SIGNIFICANCE

1. That officers consider that the current threshold in Auckland City's significance policy ensures that unnecessary and costly consultation does not have to be carried out on insignificant issues, whilst still ensuring a robust and transparent decision-making process for important decisions.
2. That officers consider that in order to enable the council to exercise judgement in the extent of consultation it carries out on various issues, and to retain flexibility, no additions be made to the list of strategic assets (this does not preclude the addition of assets that may be purchased and considered strategic).
3. That lowering the threshold and adding to the list of strategic assets may provide more comfort to councillors and stakeholders that consultation will be carried out on important issues, but that this benefit must be carefully weighed up against the resulting increase in consultation requirements and costs.

CARRIED

4. That consultation would be required if the proposed change in a reporting component would result in a 40% increase or a 25% decrease.
5. That the following be added to the list of strategic assets:
   • The Central Library
   • The Community and mobile library network
   • The Auckland Art Gallery
   • The Community Centres and halls network
   • Premier parks, parks, sports fields, and public open spaces
   • The Edge
   • Auckland Zoo
   • The public swimming pools
   • The network of heritage buildings
   • The network of carparks

CARRIED

EVENTS & TOURISM PROMOTION FUNDING

1. That further analysis and consultation will be undertaken on the tourism and events funding options for Auckland City with the aim of their implementation for 2006/2007 and beyond, or should advocate for the ability to implement in future years, with the aim of making a recommendation to the Combined Committees in March 2006.
2. That officers will continue to discuss regional tourism and events initiatives with Auckland Regional Council.

CARRIED

LESSON ON AUCKLAND

The above motion was put by a show of hands and declared CARRIED by 9 votes to 8.

There being no further business the Chairman declared the meeting closed at 1:55 pm.