The issue of how we fund transport projects has been in the news a lot recently with discussions of the council’s Long Term Plan (LTP). The Herald have been running a campaign basically suggesting the council finances are perilous and almost saying are bankrupt and trying to shift a lot of the blame on to the City Rail Link. The part about the council’s finances being in trouble was well debunked the other day by David Shand who was a member of the Royal Commission on Auckland Governance and chaired the 2007 Independent Commission of Inquiry into Local Government Rates.
Aucklanders should have an informed debate about the state of the city finances, given the $1.4 billion of rates collected annually and the total assets of some $40 billion managed by the council. However, the debate has not been well served by Herald articles which blithely use terms such as “spending spree”, “spending beyond its means” and “crisis point”.
This has led to the usual spate of letters from aggrieved ratepayers who are only too willing to believe that the council’s finances are in a “mess” and that we may be facing “bankruptcy”. There is no “crisis” in the city’s finances at the moment but there are major issues to be addressed.
He goes on to discuss 6 key points about the council’s finances and the heralds coverage and afterwards he notes:
While there has been no spending spree, the city’s finances are not in a mess and we are not presently at risk of bankruptcy, there are some big financial issues to be addressed.
The Herald has referred in the past to the “infrastructure deficit” Auckland faces over the next 30 years based both on coping with future expansion and addressing the past neglect of infrastructure expenditure.
The real problem is the sheer amount of projects the council has on the books from legacy councils. Many of the projects are good and critically needed – like the City Rail Link – while others like Penlink are at the other end of the spectrum. As a result there are two separate but combined issues at play when it comes to the next LTP. We need to:
- Make sure we’re building the right stuff – that means we need to review every project to see if it’s actually worthwhile building as what we don’t build can be just as important as what we do.
- If there is an funding deficit we need to work out how we address that which will likely mean new funding sources need to be found.
Ultimately the solution is likely to be a bit of a combination of the two however unfortunately in ways similar to the density debate with the Unitary Plan talk only seems to coalesce around one option. Len Brown falls in to the second camp of wanting to find new funding sources but not wanting to make some hard decisions about what should be funded and he reiterated that again yesterday when speaking at the annual conference of the Road Transport Forum.
Auckland needs to work “shoulder-to-shoulder” with the Government if it’s to find a way out of a massive budget deficit and fund its much needed transport plans, Mayor Len Brown says.
The city was gearing up for “one of the most important funding debates Auckland has ever seen, and maybe even the nation”, he said today.
It needed to find $300 million-$400 million a year to fill a $12 billion funding gap, which would mean the difference “between steady-as-you-go typical Auckland or whether or not we’re going to seriously invest in infrastructure to deal with the shortfall and to deal with the growth coming at us to build this city as a real economic powerhouse”.
And
“Bluntly, we need to decide do we want a transport package based on current funding sources, which is not at all appealing and won’t deliver the city that we’re aspiring to and we know we need. Or do we find new sources of funding and deliver the transport programme Aucklanders asked for through the Auckland plan and in successive elections.
“Current funding sources would deliver us a transport system that’s half-way there. We need to be bold, innovative.”
A similar story was told by the Head of the New Zealand Council for Infrastructure Development (NZCID) which is a lobby group for the construction and infrastructure financing industry’s.
Note: we’ve also pointed out in the past the odd situation where the Council are a paid up member of a group who exists to lobby the council to spend more. Also the councils outgoing CFO happens to be on the board.
Head of the New Zealand Council for Infrastructure Development, Stephen Selwood, said the investment plans for Auckland’s public transport and roads are not great and the city must move quickly to avoid massive congestion within 30 years.
He believes a motorway charging regime is the best option for raising money to cover the $300-400 million annual cost of developing Auckland’s roads and public transport. He said users should pay about $3 a trip.
Mr Selwood told the Road Transport Forum’s annual conference on Thursday that he favours motorway tolls rather than the ring road option used in London.
He said a toll would also help clear congested roads by encouraging some commuters onto public transport while others would car pool.
But Mr Sellwood warned that authorities need to move in the next two to three years or Auckland will face much bigger congestion problems by 2040.
Stephen Selwood has been pushing this idea for some time now. Personally I’m not opposed to using road pricing, in fact quite the opposite in that if done right it could be quite useful for managing demand however there are a number of problems with what Selwood keeps pushing.
- Tolling only the motorways is likely to push a lot of trips that currently use the motorway on to local roads which aren’t tolled likely putting a lot more pressure on them. It’s also those local roads that carry the bulk of our bus services so there could be quite a substantial impact to PT reliability.
- Would our PT system be able to cope with such an increase in demand. Even with the new network and new electric trains there isn’t likely to be enough spare capacity to be able to cope if significant numbers of people suddenly change modes. If we decide to go down the path of road pricing then we really need a concerted effort to get our PT improvements rolled through faster to help in giving us that capacity.
- Perhaps most importantly is impact road pricing might have on travel demand. The likely result is that traffic volumes (on motorways at least) are likely to fall as people shift to PT or reducing the amount of travel they do. This could be significant as reducing traffic also reduces/removes the justification for many of the roading projects currently on the plans. With those roading upgrades no longer needed it reduces the overall amount we have to spend upgrading our roads and there reduces the funding deficit. There’s a bit of an irony about an infrastructure lobby group pushing a solution that will end up reducing the amount of infrastructure we need – not that they’re probably thinking that far ahead.
I think all three problems have solutions or provide us with good opportunities. Rolling out the new bus network supported by a large network of bus lanes could keep local roads flowing and as well as providing more attractive services. Before introducing such a charging scheme effort can be made to increase the size of the bus fleet and get started on projects like the City Rail Link while the changes in travel behaviour as a result of tolls can help us work out exactly what projects are needed.
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After chopping out Penlink, Mill Road, a bloated East West Link & Lincoln Rd what else is there to chop in the next few years? Most of the wasted money is on state highways which aren’t part of the Council’s budget anyway.
While it would be pretty unworkable to suddenly incentivise more people onto our creaking PT systems and local roads now, there is an opportunity to come 2016. So long as current plans are fully funded and developed on time, and so long as proper fully connected buslanes are also rolled out on all major bus routes. Importantly not intermittent ones.
Because by 2016, with all the higher capacity new trains running at higher frequencies, connected to the New Bus Network at new interchange stations, with convenient and fairer integrated fares, PT in AKL should be ready for the demand increase.
But any tolling of the Motorway Network would have to be matched by a really rigorous bus lane roll-out and enforcement, as there is no point in incentivising people onto buses then allowing those buses to remain stuck in traffic.
Shifting non-critcal journeys off the motorway, or into low demand times [surely there ought to be free times; in the dead of night for example], is likely to be hugely beneficial.
Well yeah, for most of the bus network, if there’s an increase in demand we can just increase frequencies. No problem at all, and really a success story.
The only real exception is the routes that go into the central city, rather than rail feeders, and for that, there’s the CRL.
How much faith do you have in AT to make the hard decisions to roll out bus lanes? Setting up AT as a CCO was meant to reduce political interference and NIMBYISM, but AT still bothers seeking the views/endorsements of Local Boards who will never condone removal of on street parking. AT should just do it and stop wasting time in endless consultations.
Perhaps take a look at the transport policy of New Zealand First. It requires all roading projects to be re-evaluated against criteria to determine whether a PT solution would deliver better results.
I do note, even Brian Rudman in his Herald column remarked NZ First has an outstanding transport policy now. Perhaps that criteria could be applied to all future roading projects promoted for Auckland?
NZ first would normally be the last party I would consider voting for, but as my vote is going to be almost completely based on transport policy, they are currently looking like the best party. I’m not really a greenie either, but some of their policies look quite good too.
It is not only the herald reporting how the council and its CCOs are just spending rates money like water and have got us in the crap. Depts like Auck Transport are to blame also for the problem after all there has been hundreds of thousands blown on staff shuttles when they preach public transport. Lets hope when jobs start getting cut the ones who sign off on that sort of wastage are the first on the list. When it does happen don’t look to the ratepayers for sympathy.
Saving ‘hundreds of thousands’ isn’t going to help. We’re talking billions of dollars needed for infrastructure. You can cut back on as many staff shuttles etc as you want, but there is still going to be a big funding gap.
I’m not convinced there actually is a funding gap. I believe it is merely the narrative that is being peddled by those who want to spend all available funds on roads because they hold personal and ideological hostility towards public transport.
If this ideology also, as a side effect, leads to the demonising Len Brown, well, that is just an added bonus in their view.
“…Would our PT system be able to cope with such an increase in demand…”
It can’t run a proper system now. God help us if it gets a sudden surge.
My colleague (tries) to travel from Papakura to Mt Albert by train. He catches a train to Newmarket, where as his train pulls into the station at around 7.20am he can see on his left his connecting train to the Western line. Only, his service only opens the train doors on the right hand side – forcing him and several others to sprint up the stairs and across the lines then back down again. unfortunately, the western line train doesn’t actully do anything as customer focussed as wait for these passengers – it is 8 out of ten times leaving by the time they arrive on the new platform, leaving them cursing and having to wait another fifteen minutes.
As long as PT in Auckland continues to be run in such a ham fisted way, and with such a cavalier attitude to customer service, it will always be the Micky Mouse option.
PS I may have the whole left hand/right hand thing mixed up, he was quite animated telling his angry tale. Suffcie to say, he will be back in his car just as soon as he can.
Can’t count the amount of times I’ve done that, don’t see why they just can’t open both sides. Even the new emus only open the southbound platform side…
Blame Transdev. Bunch of muppets.
That is pretty poor. The connection the other way (from west to south) is easy getting out on one side of the platform and just crossing over to the south bound side at Newmarket.
There is no real reason why the south to west connection couldn’t be just as easy if the doors opened both sides from the middle line. An easy, zero cost option for Auckland Transport to improve customer service and patronage.
I’ve emailed both AT and Mike Lee to ask them if this can be done.
Did you get a reply?
Not yet. Don’t expect one until during the week though I guess.
I think Len has to cut/defer projects, or he is probably out in 2016.
Not necessarily. You have to remember that most of west and south Auckland have had big rate cuts under the super city. They have long commutes and want to see the city rail loop etc. Just because the Herald has focussed on the angry right wingers in Epsom that have had rates increases, that doesn’t mean the entire city wants to see Auckland go backwards
I’m in the Whau rating zone (west). I’ve had consecutive rate rises over the last few years in the vicinity of 10%pa.
The roads in my area are gridlocked with traffic morning & evening.
There are no bus lanes.
There are no on or off road cycle ways.
There is the train, but until the CRL is built, there is no station anywhere near my work.
As well as low BCR projects like Penlink, council staff numbers, perks, salaries and consolidation need looking at
Jimbo, if you were presented with a 40% rates increase over the last few years and no new services and public transport fare increases then you too would be angry with both the Council and with AT. It really is nothing to do with left vs right and it’s not just Epsom. Believe me, this Council is putting severe financial stress on many families.
Surely even if he cut he would still be out in 2016 wouldn’t he? I thought even the lefties have had enough of him.
All depends on what (who) the voting alternatives are.
It’s ridiculous. You know what people want? Pools and libraries and fixed footpaths, and low rates increases. What are we getting? $12 billion dollars worth of extra roads.
I think Len is captured by the CID lobby, and needs to be constrained or replaced. The least we can do at the moment is write letters to the editor.
Tolls may be the way to go but first we need to know what the revenue is supposed to fund. Expansion of the motorway system (which drivers would expect since they’re paying to use a motorway)? Funds for PT? Road maintenance? Something else? Something creative?
Two cities in the US had very creative responses to their transport needs. One used their transportation discretionary money to build housing in the downtown, thus reducing traffic without limiting growth. Another, a small town, found that their biggest transport problem was that a lot of people didn’t have cars at all, so they bought them all cars.
We have a Council being hung by their own petards.
Latest news is that Holcim to shift cement depot from Onehunga to a new Ports of Auckland facility on the Waitemata.
So all those cement truck movements that have been out of downtown Auckland are now being added to central city congestion.
Why because a Council owned asset the Port company agreed to be the landlord for Holcim’s cement.
Sell the Port Company to the Port of Tauranga, who will focus on developing Marsden Point and Mt Maunganui, who do a great job in moving containers to Auckland.
This will enable Auckland to get their waterfront back.
Auckland Council has to decide if it will be the regulator of its economy or a participant – they cannot do a good job of both.
Time to sell the assets.
I’m not sure why a privately-owned port company would be less likely to tempt Holcim to relocate to their property. Most economists agree that the rationale for asset sales is generally quite weak. We’ve done what we need to by structuring the ports, airports etc as profit-oriented companies, and the actual ownership is more or less irrelevant.
Selling assets will only lead to more the council having less money long term.
This year the airport generated a huge dividend for the council: http://www.aucklandcouncil.govt.nz/EN/newseventsculture/OurAuckland/News/Pages/solidperformancefromcouncilinvestment.aspx
Investment works a hell of a lot better at generating residual income than selling assets off. That’s a one time only windfall. Unless you invest it again, but that sort of defeats the purpose doesn’t it?
Which is why the govt asset sales made no F’ing sense based on what they were claiming.
Don, a privately owned port company would have no interest in providing facilities for the public unless as a token gesture to appease the local council. The public do not provide a revenue stream large enough to interest private investors or corporations.
As a consequence you would see the waterfront covered in revenue generating commercial structures and it would be lost to the city for another generation.
One would assume the size of ship necessary to service two 30,000 tonne import terminals would not fit through the Manukau harbour entrance or fit at Onehunga wharf. Hence the move to Waitemata. So I don’t think there is any port company or council involvement.
The input from Don points up the total folly of the Behemoth called Auckland Council. The scenario Don pointed out was that Ports of Auckland (A Council owned Investment) simply went ahead and Granted Holcim the opportunity to create a brand new Cement Storage area because P.O.A. are the Landlord owner making a decision that created in isolation will now make a Heavy Truck scenario for Auckland City as opposed to the out of the way area at Onehunga, which is where the Cement Depot should have stayed. The Auckland Council seem to sit back (yes Mayor and all) and do not have the basic interest to oversee outcomes that enhance not enhance congestion. But that’s the Auckland Council for you they are at it all the time.
It is not the motorways that need to be tolled it is the CBD cordon. There is already a good public transport option available for everyone who goes in there and a toll would be a good way to get more people using it. The money raised should then be ring-fenced for making access to the CBD even better with CRL and busway improvements.
So much Yes.
There is another aspect to all of this and that is Mayor Len Brown and the way he is using his Presidential type Mayoral Powers quite unwisely. When you promise “Everything to every body” then you smartly spend far more than you have at hand because the GAP in Lens case is $500 million per Annum over 10 years so that is a funding shortfall of $5 billion yet to be found or completely cut out cumulatively. Just imagine the Howling that will go on from Council AND Local Boards who in the main are right into Welfare type Social Projects. The Salaries being paid to Board Chairs in particular are hovering around $70,000 per year and about $40,000 for Board members. These are a considerable leap on what was the going rate before Amalgamation for largely a part time job.
Good to see David Shand defending the monster he created. No word from the superannuated Judge or former nurse who helped. Where do yes men go when there are no more local governments to destroy?
I don’t think your criticism is well founded. David Shand came up with a very sensible plan. Unfortunately that got changed willy nilly by that no nothing Rodney Hide. He’s the real one to blame!
If you want to see insolvency, the US federal Hoghway Trust Fund is a better example than Auckland Council:
http://mobile.nytimes.com/2014/07/09/us/house-committee-takes-step-toward-renewing-highway-trust-fund.html?referrer=
They’ve got around a month and I read it is at the point where repainting individual bridges is being deferred while they arrange diverting funds that would otherwise have gone into pensions into the fund. NZTA is in a better position with the constant petrol tax rises, but they are nowdependent on government loans and asset sale proceeds to push through the government’s current plans. It will be interesting to see if the tax increases can keep pace with the growing build and maintenance costs.
I’ve just spent a week in the US and it is very clear that roading infrastructure here is suffering hugely from under investment for maintenance. On the train from Boston to New York we passed by several bridges that appeared to be supported by temporary bracing, and rusty bridges were everywhere.
This did make me wonder whether the anti urban limit parade we hear from here from time to time would deal with the increase in fuel cost needed to properly fund these repairs. I’ve seen reports putting the infrastructure deficit at around a trillion dollars.
> a trillion dollars
America’s infrastructure deficit is a bit overblown. Those scary figures includes bridges and tunnels that are perfectly sound, but “functionally obsolete” – that is, a decades old traffic model has predicted that they’d need more lanes by now. There’s not really a problem finding funding to keep existing structures safe.
But I do agree that going to America, the whole built environment is just… kind of crap. I guess it’d be pretty expensive trying to maintain all those roads to a New Zealand standard when you’ve got four-lane highways to every 5,000-person town, and one-mile grids of wide arterials heading out over the prairie or desert, waiting for some sprawl to come fill them in.