Councillor Fairey talks you through the decision on the rates rise for 2026/27

Councillor Julie Fairey was part of a mammoth debate on setting the rates for next year. The Spinoff have a good rundown of the meeting here: https://thespinoff.co.nz/politics/27-05-2026/rates-rise-opponents-shot-down-in-brutal-qa-at-auckland-council, and below Julie gives an excellent explanation of the process.

1. 7.9% rates rise this year was signalled and consulted on twice - in the 2024-2034 Long Term Plan process in 2024 (info here: https://www.aucklandcouncil.govt.nz/.../mayoral-proposal...) and again this year (info here: https://akhaveyoursay.aucklandcouncil.govt.nz/annual-plan-2026-2027

2. Council has long been clear that the first year of operation for the CRL would require a significant rates increase to cover increased operational costs plus what's called the "cost of ownership" (interest and depreciation payments because this is a huge asset to add to the books). No one likes that but it has to be paid for and was always going to be a big hit whichever year it fell in.

It depends a little on how you slice up the budget but most/all of the rates increase is these CRL costs; without the CRL costs it would have likely been close to a 0% rates rise. In turn though this meant little flex to go even lower than 7.9% without serious cuts because reducing the costs of running and owning the CRL isn't possible.

More info on that specifically (from the consultation info put out earlier this year) here: https://akhaveyoursay.aucklandcouncil.govt.nz/.../city... And on the benefits & costs of CRL here: https://www.cityraillink.co.nz/city-rail-link-benefits...

2. The budget I voted for included $106m worth of savings - council has had a savings target every year for some time now and I sit on the committee that oversees this work, the Value for Money Committee, chaired by the Deputy Mayor. There was a similar committee l sat on last term, called Revenue, Expenditure & Value. There is constant scrutiny of contracts, delivery models, and work on efficiencies always underway.

The $106m savings target is ambitious and the council CEO has been clear it is right at the limit of what can be achieved while also not cutting the services that Aucklanders receive and value (which often deliver significant savings to households eg free library services and community centre programmes, free swimming pools for kids, subsidies for public transport, our many free and usually well maintained parks, public spaces and playgrounds, environmental programmes run with volunteers that in turn reduce cost to council etc).

Some of these savings have already been identified, such as the asset decommissioning being worked through under "Delivering Differently" which contributes both to the asset sales target and reducing opex costs (because we don't need to maintain land/buildings that we don't own anymore).

Other savings will need to be identified through the coming months, as usually happens, as per this article from February about the Value for Money Committee's work: This February article gives an idea of the work that it does identifying and delivering savings and efficiencies https://ourauckland.aucklandcouncil.govt.nz/.../all-eyes.../

3. The 5.9% scenario (which I did not vote for) was not actually a full budget; it did not balance without unidentified savings of a further $60m (possibly actually another $6m of cuts too but that wasn't clear). Staff advice was given to all councillors that this level of additional savings, making it $166m+ in one year, was impossible without service cuts; even $106m will be a stretch to do through efficiencies alone (as mentioned above).

Those who moved the 5.9% scenario, and voted for it, were aware of this and were effectively putting up a budget that wasn't actually a balanced budget - Council's budgets must balance; we can't use debt to plug opex gaps. I could not vote for an unbalanced budget.

4. I could not support the areas of savings/cuts identified by the 5.9% scenario for further investigation to find the $60m.

Some of the areas proposed were actually contradictory or counter productive eg the "Delivering Differently" programme put up to be stopped is actually driving significant savings to council (as above), delaying depreciation would also increase Council's costs in interest repayments by likely leading to a credit downgrade, not building new council facilities to Green Star standards would increase the cost of running those facilities by as much as 25% as those standards decrease electricity costs in particular.

Other areas put up would have cut things that Aucklanders have repeatedly said they value and want to continue eg cutting all regional grants and the $7m major events fund which would have meant no council funding for the Santa Parade, Auckland Writers Festival or the Auckland Marathon, the 2027 ASB Classic would need to be cancelled, an end to many volunteer programmes doing pest control that has led to (among other things) being able to reintroduce kokako to the Hunuas (which would cost council a heap more to deliver directly without those grants).

The difference between a 5.9% and 7.9% rates rises is around $1.70 per week for average rates bills. My view is that the cuts required to get to 5.9% would cost more than that to most Aucklanders.

The 5.9% scenario also included double counting in the $60m savings work already underway and counted through the $106m, such as "non-essential staff", travel etc - council generally runs at a staff vacancy rate of about 4% and is currently iirc at 5%, and that is included in the budget already. There is no such thing as "non-essential travel" funded by council. It also proposed setting up an "independent taskforce" to recreate the work that the Value for Money Committee is already doing.

When the mover was asked questions about how these proposed cuts could work, had concerns raised about double counting etc, he responded that there would need to be further work done on them. When we needed to vote for a balanced budget on the day that doesn't make sense.

5. I also had a major process concern about the 5.9% scenario. We have had workshops to prepare this budget for months. These exist to allow committee members to ask for staff advice and further information, and for collective discussion amongst us to see if there is a consensus forming, test political support for different scenarios etc.

In particular we had four workshops in April and May on the budget at which any councillors could have raised the idea of a 5.9% scenario, sought advice and info on what that meant etc. No one did that.

At the 20th May workshop (I was online due to illness but did attend) Cr Baker actually asked everyone if anyone was working on a 5.9% scenario because he had heard a rumour. No one said they were. And then a 5.9% scenario was emailed to us by Cr Gillon all at 4.45pm on Monday, when the meeting started on Tuesday at 10am. That's what you do when you want to ambush people and make a media splash, and not how you do responsible governance for our city.

6. I did give a five minute plus speech before the vote yesterday on why I didn't support the amendment for unidentified cuts and why I did support the Mayor's proposal for 7.9% - most councillors did speak to their views and what they weighed up before the vote and you can watch that all back online here, and see the agenda and information on the budget: https://aucklandcouncil.resolve.red/portal/meeting/13814 Be aware the meeting was about six hours long total!