Auckland Council’s second quarter results confirm the continued impact of the pandemic and adverse economic factors.
Councilor Desley Simpson, chair of the council’s finance and performance committee, said that with the uncertain outlook for the impact of COVID-19, adverse economic trends, supply chain challenges and a tense work, it will be essential to keep these pressures in mind in the management of the council. finance.
“There is no doubt that the pressure on Auckland’s financial situation is increasing.
“While the exact impact of these financial risks is difficult to predict, we continue to monitor them with a focus on long-term financial viability and board recovery.”
The most recent COVID-19 related lockdown has led to a decline in the use of city services, including public transport and community facilities, while the lockdown, ongoing supply constraints and staffing shortages have contributed under-execution of capital investment programs.
At the group level, direct revenue was $35 million lower than budgeted. Revenues from public transport, parking and community facilities such as recreation centers have declined due to pandemic-related restrictions. This was partially offset by infrastructure growth charges, which increased due to more water connections for new and existing housing and regulatory fee revenues, driven by higher consent volumes and increased complexity of consents.
The group’s direct expenses were $43 million lower than budget, primarily due to delays in work programs, reduced costs for public transportation services and canceled or postponed events.
“That aside, the board has maintained its focus on cost savings and the results show we’re still on track to meet our stimulus budget savings target of $90 million, just hitting over $70.6 million, or 78%,” says Cr Simpson.
Group Finance Director Peter Gudsell says the economic impacts we face continue to affect the delivery of our capital projects.
“Capital investments, both at group and board level, have been affected by construction delays due to COVID-19 lockdowns, supply chain issues and the search for qualified personnel, affecting projects such as Matakana Link Road and Central Interceptor.
“However, despite these challenges, the delivery of capital investments for the consultancy group represented 71%, or $917 million, of the $1,296 million budget for the period, and we delivered on some significant projects, including the first stage of the eastern railway and the Waikato boost. pumping station.”
To help fund capital expenditures in new assets, debt was increased by $106 million. Borrowings this quarter included the issuance of the council’s first offshore green bond of (EUR)500 million.
There were no significant changes across the group for full-time equivalent employees, increasing by 381 in the six months ended December 30, 2021 to 11,310. This was primarily due to filling budgeted vacancies within the council, Auckland Unlimited and Watercare, as well as hiring seasonal workers such as rangers and staff to support summer programs at our swimming pools and leisure centres. Auckland Transport saw a slight increase in project and supply staff to deliver key projects, while Auckland Ports saw an increase in stevedores and operational staff to manage supply chain challenges and increase productivity. The board maintained AA and Aa2 credit ratings from S&P Global Ratings and Moody’s Investor Services respectively.
Read the full quarterly performance report at infocouncil.aucklandcouncil.govt.nz [PDF]