We need $216.5M to maintain our assets over the next 10 years, but we’ve only been allocated $114.1M.
At our workshop last week, the Howick Local Board received an update about our asset portfolio and it was pretty confronting. Over the next 9 years, we need $216.5M to maintain our existing assets (like playgrounds, libraries, and leisure centres). But Auckland Council has only allocated us $114.1M, leaving a 47% gap!
We've got enough funding to cover our priority renewals (those in the worst shape), but if we don't maintain all assets they will degrade, reducing their ability to serve the community. Deferring maintenance leads to higher costs in the future as parts break.
We're looking at all options to help close this gap, including changing how we deliver services to rely less on physical assets, optimising the assets we do have, and working with partners to deliver outcomes. But the scale of the challenge means none of this will be easy.
Council have two main funding sources for our assets:
🛠 operational expenses (like day-to-day maintenance, utilities) are covered by rates ($3B), fees ($1.9B) and other revenue ($1.3B).
🏗 capital expenses (like major renewals, new assets) are funded through operating revenue ($1.1B), subsidies ($0.9B), and debt ($1.7B) which is paid off over the lifetime of the asset (like you would a mortgage). To keep the interest manageable, council tries to keep the debt below 250% of revenue (270% absolute max).
New assets can also get funding from development contributions ($0.2B) which is a charge that properly developers pay to help fund assets in the area they're building. These funds cannot be used for anything other than the asset they were collected for.
The good news for Howick Local Board is that our venues for hire (valued at $4.5M) are generating enough revenue from hirage to cover their own day-to-day expenses. But as these buildings need more significant renewal, we need capital funding. And our libraries (valued at $32M), pool and leisure centres (valued at $15.6M) need upgrading so they can keep pace with our growing, changing population as well as shifts in technology and demands. And we know our playgrounds aren’t delivering what our communities need, with gaps especially in Flat Bush.
It’s important to note that Local Boards don't determine what our budget is, we only get (some) control over where our allocated budget goes. How much money each Local Board gets is decided by the Governing Body made up of the Mayor and 20 Councillors. Funding used to be based on what assets we had plus some discretionary funding, but this year we’ve moved to a different formula (known as fairer funding) which is based on population (80%), deprivation (15%), and land area (5%). For example, Howick has the largest population (160k), but lower deprivation (11%) and land area (69.7km2).
The Governing Body decides how much money they want Local Boards to have, then staff allocate it using this formula. Local Boards get less than 10minutes every year to present our feedback and beg for the resources we need to serve our communities. And not all the Councillors even bother to turn up to listen.
Auckland Council group OPEX from Long Term Plan 2024-2034
While the 21 local boards have a huge impact on their communities, they represent a small part of a large complex organisation. To put this into context:
🛠 Auckland Council operating budget for this year is $5,133M – all local boards are $491M (5%) and Howick is $37M (0.7%, 3rd highest).
🏗 Auckland Council’s capital budget for this year is $4,274M while all local boards are $212M (5%) and Howick is $10M (0.2%, 6th highest)
The cause of these issues go back before the creation of Auckland Council, with legacy councils building assets that they couldn’t afford to maintain. But even since the amalgamation, decisions have compounded the issues – like not fully funding depreciation until now so debt has ballooned. And in 2020, Auckland Council passed an emergency budget which slashed the capital spending. For Howick Local Board, the capital funding for 2021 went from a planned $20M to $1.5M. While it’s slowly increased over time, it’s never come back to the previous levels and never enough to compensate for the deferred maintenance.
Some budget pressure can be helpful - it makes us challenge decisions and focus on prioritising what’s important. The Howick Local Board has achieved significant savings over the past few years AND managed to deliver more value for our communities. But the growing gap is leaving our assets in a poor state and forcing us to make short-term decisions to balance our budgets.
This is a challenge across Auckland so there's a regionwide portfolio review underway to provide quality advice to local boards. We're expecting staff to come back to us in November and December with more information for the newly elected Board, with the intention of putting in place a plan by July 2026. This will be a major challenge for the new Howick Local Board to tackle.
Fixing the underlying issues will take longer but is essential for a thriving city. In my opinion:
💰 our budgeting process needs more focus on the outcomes – what do we need, not just what we’ve always done
👥 local boards need more opportunities for genuine involvement in regional decisions – we know our communities, help us serve them better
🏘 council needs to be more agile and responsive – we’re too slow and cumbersome, weighed down by complex structures
📑 staff need to provide more quality advice to elected members so we’re making the right decisions – 15 years to develop asset management plans is too slow
🏛 government needs to provide councils more funding sources so they’re not relying on debt and rates – portion of GST would be a good start
Because our workshop are open to the public, the materials are published online: https://infocouncil.aucklandcouncil.govt.nz/Open/2025/07/20250724_HLBWC_ATT_13171_WEB.htm