As well as discussing SkyPath (and the Mayor’s recent dramas), tomorrow’s meeting of the Council’s Governing Body is also set to work through the 2014/15 Draft Annual Plan and adopt the Draft for consultation. There are a few unresolved matters in the Annual Plan discussions – particularly reference to an $18 million operational funding shortfall for Auckland Transport that is described below:
Officers reported to the 21 November 2013 Budget Committee meeting on Auckland Transport’s request for an additional $18 million of operational funding relative to the 2014/2015 projections in their Statement of Intent. Since then, discussions have been held with Auckland Transport to address their funding shortfall. It has been agreed that further scrutiny of Auckland Transport’s operating expenditure budgets is required. A joint group of officers will undertake this review over the next few months. Auckland Transport are also reviewing the shortfall in parking revenue where current charges appear to be below market.
This is a pretty massive request for additional funding – one which was previously rebuffed by the Mayor when he originally proposed the budget a few weeks back. Given that Auckland Transport slashed the price of its off-street parking rates in the city centre in recent times, it’s no wonder that has been identified as an area that could raise additional revenue. This should have an additional benefits too, for example there are times when I have needed to drive to town for a meeting (shock horror) only to find the car parking buildings full which indicates that the pricing is probably set too low. The buildings being full are also something you can’t tell before you enter as the parking info system seems about as reliable as the bus real time system.
It would also be nice to start to see some of the efficiencies from rail electrification and integrated ticketing (you know, how we don’t need 4 staff on every train to clip tickets any more) actually filtering through as well. Both should also help to increase patronage and therefore revenue too, especially once people start to see and experience the new trains. Patrick and I were lucky enough to get a trip on one of them last night and the quietness and quality of them is going to blow people away. Let’s just hope the last thing cut in any budget shortfall is public transport services.
Returning to the parking issue, if we look a bit closer at the number in the Annual Plan, it does seem like an extraordinary amount of operational expenditure is going into off-street parking in the 2014/15 Annual Plan:
What the table above shows is that on-street parking and enforcement is a pretty profitable activity: $62.4 million of income and only just over $10 million of expenditure. Yet off-street parking seems to be an absolutely enormous drain on resources with a crazy $133 million of operating expenditure and only $28.6 million of income. Something tells me this has to be either an error or some strange accounting trick that has led to such a giant number – one that’s way higher than in the 2013/14 Annual Plan.
Regardless of what’s led to a requirement of $105 million net subsidy of off-street parking being required, it appears that this is having a huge impact on Auckland Transport’s budgets. Off-street parking should be a profitable activity for Auckland Transport – particularly as many of the central city buildings use up some pretty prime real estate that could otherwise be put to a much better purpose. Removing the $105 million net subsidy to off-street parking would not only eliminate the budget shortfall, it would free up a huge amount of additional operational funding that could go to more worthy areas like improving public transport services, footpath quality and so on.
The other numbers in the Draft Annual Plan that caught my attention related to the level of public transport service expenditure by mode:
Presumably, the expenditure on buses and ferries have just been mixed up – it’s hard to imagine how you could have $160 million of operating cost for the ferry network and have buses being so incredibly profitable. It is a bit worrying though to see official documents like the Draft Annual Plan making pretty basic errors when it relates to levels of expenditure up to $100 million.
Finally, pages 188-197 of the Draft Annual Plan report outlines the capital expenditure programme for the 2014/15 year. Below is a list of some of the more interesting projects proposed for capital expenditure in that year:
There are still a few key gaps where projects will be required to deliver the new public transport network (Te Atatu interchange, Wellesley Street bus improvements are two that come to mind) which aren’t funded to any great degree in the 2014/15 Annual Plan. Whether this puts the new network’s delivery at risk perhaps depends on the timing of when different parts of the network are rolled out. Generally the capital programme for 2014/15 looks pretty good though – particularly exciting to see the next generation of city centre projects finally coming through.