Auckland Council financial row: Top officer hits back
Tim Murphy
Tim Murphy is co-editor of Newsroom. He writes about politics, Auckland, and media. Twitter: @tmurphynz
Auckland
In an unusual move, Auckland Council’s chief executive pens a long return-of-serve against an elected councillor over criticism that officials have stymied cost reviews and overspent
A day after Auckland Councillor Maurice Williamson laid out for Newsroom his frustration at lack of financial data supplied by council officials for his Razor Gang committee, the organisation’s chief executive has hit back.
Jim Stabback, who is leaving his role, has published an extraordinary, extended right of reply via the council’s own website, Our Auckland, which does not name Williamson but goes through his criticisms one by one and attempts to refute them. He uses terms cited by Williamson but the article is effectively one, long subtweet of the councillor.
There has been tension for weeks around the council table with multiple councillors alleging obstruction and delay by officials in giving them and Williamson’s committee access to detailed spending information. Williamson, a former IT executive, MP and cabinet minister says he is capable of analysing millions of data points rapidly to identify trends, and had demanded micro details of expenditure.
Among Stabback’s counterclaims are:
- to Williamson’s allegation officials (including Stabback and his chief financial officer Peter Gudsell) delayed and declined to provide line-by-line data to the councillor’s Expenditure Control and Procurement Committee, Stabback says the details are so vast they could not be provided ‘in a neat bundle’ – and the delay was due to staff diverting to deal with the weather emergencies.
- to the suggestion there is no independent or ‘control’ agency with financial oversight in the council, he says Gudsell leads a team of ‘extremely competent finance professionals’ and the council won an award for its transparency
- to Williamson questioning whether the often-quoted $2 billion savings made to the council operations since amalgamation in 2010 are illusory, down to not spending even more money, the chief executive says $2.4 billion has been cut and an ‘enduring’ annual savings target of $90 million remains, despite emergency budget savings on top of that
- to the criticism over staff numbers having risen from 10,100 in 2010 to 12,300 in 2021/22,with salary costs up 102 percent in real terms to $963m, Stabback agrees numbers are up but says that’s “in areas that need them most” like building consent and compliance functions. And on earnings, he blames one of the tightest labour markets in years, and says the proportion earning $200,000 plus a year is lower than the overall public service
- to Williamson’s comments on the ‘grossly over-specced’ central business district HQ office tower, the CEO says the building value is now $250m, up from the $104m purchase price in 2012 and it houses 3000 staff from across the isthmus. No ‘legacy’ buildings inherited from past councils exist and nearly $200m in property sales had been achieved over the decade.
- that the councillor’s calculations on impending interest rate levels and council debt payment increases are wrong. Where Williamson projected debt, unchanged, could lead to $1 billion-plus a year interest payments after a couple of years, Stabback says around 75 percent of debt ($9 billion) is hedged – or at lower rates – out over the next five years. The next financial year’s interest cost is $473 million, or $560m without the proposed sale of the council’s Auckland International Airport shares. “We are not projecting to hit even $700m until 2029/30.”
He says, ‘thousands upon thousands of lines of financial data” have been given to the members of the expenditure control committee “as well as a tool that provided context and an easy interface.”
And Stabback claims members were understanding when it was explained the weather emergencies had delayed the process.
Williamson told Newsroom he was given 100,000 pieces of data (adding up to less than half the council’s annual 2022 spending) a week ago and finally, on Tuesday, enough further information to get to work analysing in micro detail where money went and why. The expenditure control committee was appointed in November.
The chief executive’s article/statement on the Our Auckland council public website, headlined ‘Trust, and transparency underpin council finances’ does not address Williamson’s relating of arguments between the top officials and the councillor in the past months over the rights of councillors to such information – the division between ‘governance and management’.
Stabback’s rebuttal is also silent on Williamson’s questioning of officials attributing spending blowouts to the Covid pandemic and new obligations put on the council by central government.
And he does not attempt to counter Williamson’s predictions that substantial staff cuts, particularly at the higher earning end, will be required, with a large one-off redundancy bill for the council.
Stabback concludes by saying it was “therefore disappointing to read criticism of our approach… We are here to work alongside our decision makers and offer them as much insight as possible into the largest and most complex local authority in Aotearoa.”
Stabback has already announced his resignation, half way into his five-year term, and is set to leave the council mid-year. The current mayoral budget, out for public consultation until March 28, will need to be passed in June for the July 1 financial year.
