‘It’s a bad situation’: Auckland councillors worried about $400 million transport funding hole

Auckland councillors are getting the jitters about a looming $400 million funding hole in the transport budget that would throw plans for roading, public transport and safety projects into disarray.

This follows a revelation by the Herald that the NZ Transport Agency, Waka Kotahi, has indicated it will fund only $2.3 billion of the $2.7b the council sought over the next three years from fuel taxes and road user charges.

Finance committee chairwoman Desley Simpson said without the extra $400 million “the council will be extremely limited in the transport investment we can deliver for the city because, frankly, so much of what we do is jointly funded”.

She was referring to the fact that many projects undertaken by Auckland Transport qualify for a 50 per cent subsidy from Waka Kotahi. The loss of $400m from Waka Kotahi could put up to $800m worth of projects at risk of being axed or deferred.

“It’s a bad situation,” said another councillor.

The problem has arisen over a pool of money in the National Land Transport Programme (NLTP) from fuel taxes and road-user charges, which is distributed by Waka Kotahi to top-up councils’ transport plans.

The money is broken down into categories for local road maintenance, road safety, public transport services and public transport infrastructure.

In late May, Waka Kotahi approved indicative funding allocations to councils from the NLTP, which were mostly lower than they asked for but an increase from the previous three-yearly NLTP. The available funding was not enough to meet the demands of councils throughout New Zealand.

Auckland put in a bid for $2.7b, significantly more than the $1.93b it was allocated in the 2018-2021 NLTP.

The board of Waka Kotahi will confirm the final funding allocations when it adopts the NLTP later this month, leaving little time for Auckland Mayor Phil Goff and council officials to claw back the $400m.

A source told the Herald it might work out all right but if it doesn’t then “holy s…”.

Alarm bells have rung at Audit NZ, which has been in talks with council management about the funding hole.

If the funding problem is not resolved soon, the council may need to temporarily borrow more money to cover any shortfall until the situation is remedied, according to a council paper.

Another sticking point is the Auckland Council and the Government have a separate, mutually agreed transport plan for Auckland, called ATAP (Auckland Transport Alignment Project).

Goff and Simpson said Transport Minister Michael Wood has given a commitment that the Government’s share of funding ATAP will be paid in full.

Said Simpson: “We have a signed agreement for our funding in ATAP from the Government. We expect them to deliver on it. If the Government reneges, that’s a breach of contract.”

Wood refused to guarantee the council would get its $2.7b over the next three years, telling the Herald “we’re committed to deliver on the funding allocated for the agreed ATAP programme over the 10-year period”.

In a leaked letter from Wood to Goff, the minister agreed to fund the ATAP package over the next 10 years but said ATAP does not identify how NLTP expenditure should be allocated.

When it comes to the NLTP, said Wood, “there is no agreement as to a minimum annual spend for each of the 10 years”.

A mayoral spokesman said it is widely known there are cost pressures that Waka Kotahi is working through and the council acknowledges the huge demand for funding by councils across New Zealand.

“We expect the Government to deliver on its formal funding agreement with Auckland Council to ensure that the critical projects our communities need are delivered as planned,” said Goff.

It is not unusual for Auckland Council to push back projects in its 10-year budget from the early years to the latter years because of funding pressures.

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