Holding the lid down on rates rises is causing all sorts of pressure in the Auckland Council’s budget. Paying for sports facilities is one of the more pressing problems – so the council is looking at other revenue streams to fill the increasing gaps.
Auckland’s sports facilities aren’t keeping up with its fast-growing and increasingly diverse population. They’re ageing and in short supply, and the funding gaps are beginning to show. In a report to the council’s Environment and Community Committee, policy analyst Nancy Chu gave an example of indoor courts – by 2021 the city will be 21 courts short. “It costs $5 million per court. That’s another $100 million we have to raise in four years to cater for demand. The gap is likely to widen to 42 courts by 2031 and the cost per court is likely to increase.” The users of these facilities are mainly 5- to 15-year-olds playing netball, futsal, badminton, basketball and doing gymnastics.
The council is trying to develop a Sport Facility Investment Plan to outline its long-term approach to the sector. The committee has previously agreed that it wants increased participation in sport in Auckland, focusing on sport at community level. Now it needs to find the money. It was asked to agree in principle to expand current revenue streams by introducing new user fees and charges; increasing rent revenue from community sport club leases; introducing new targeted rates; and generating revenue from commercial activities at council properties. Examples include allowing cafes or coffee franchises to lease council land; charging boat ramp fees; or charging commuters to park in council sports grounds.
The committee agreed in principle to consult to expand revenue streams to potentially increase funding. In other words – we’d like to squeeze more money out of the sport-playing public but we know it’s a bad look so we’re trying not to spook anyone. You get to have your say.
Councillors have carefully tip-toed around issues of wording and phrasing so the question being asked is not “do you want to pay more for your kids to play sport?”. Chairwoman Penny Hulse expressed the hope that this conversation with the community is not skewed: “If we’re clear with our community about what we want to buy for them then consultation makes sense. If it’s seen as another revenue grab from council then consultation doesn’t make sense.” She said if the question was ‘Do you want to pay for something you don’t pay for now?’ the answer would be ‘absolutely not!’. But another question is ‘Do you think it’s fair for, you know, netball to be paying through the roof while rugby pays nothing? So I think we just have to be a bit mindful of how we talk about this.”
Independent Māori Statutory Board member Glenn Wilcox said: “I can tell you the answer to this consultation now. Who’s the fool going to say ‘Yes, charge me more’?”
At the moment, two of the main funding sources are rates and development contributions. Political promises to hold rates to 2.5 percent, at a time when housing and transport issues are sucking up large chunks of the budget, have put strain on that source. And development contributions not only have legal restrictions on how they can be used (only for new fields), those charges have been dropped substantially to encourage affordable housing.
Councillor Wayne Walker pointed out that in days past, Reserve Contributions equated to about 7.5 percent of a development – now the amount is the equivalent of about 1 percent. He calls the difference “phenomenal”, saying it’s “basically the financial deficit that’s putting us in the hole that we’re in now. And what we’re doing is putting all the [sports] clubs in the same hole. And we’re digging that hole.”
Hulse: “You’ll remember there was a huge push to reduce development contributions to keep housing affordable. So this is the constant drive … housing affordability, reduce development contributions.”
Walker: “Well that’s a myth, madame chair.”
Hulse: “Yeah I know but that was certainly the thinking of the council at the time.”
Goff: If you bite the bullet and crack the teeth and you still have nothing to chew on, you haven’t got very far.”
The council’s report says user fees and charges account for 12 percent of sport and recreation revenue in Auckland compared with the New Zealand local authorities average of 32 percent. “Auckland ratepayers subsidise a much larger proportion of the expenditure for sport and recreation facilities, which are used by less than 25 percent of the populace.” That’s something that Mayor Phil Goff would like to explore further, saying the figure surprised him. He’d like to see some analysis on how other local authorities are coping with the issue.
“I don’t think there is an elected representative around this table that doesn’t think this thing is a pretty challenging exercise,” he told the committee. “A long life in politics tells me that if you’re going to go out and say ‘we’re going to charge your kids to play on the sports ground’, they’re not going to embrace you as a kind and warm-hearted, good representative. They’re going to say, ‘what is in your head?’ Having said that, we’ve got a real challenge. We have to be really specific about how we go about this exercise … if anyone here thinks we’re going to go out and try to sell a charge that is likely to discourage participation in sport or likely to disadvantage an already disadvantaged community then I think you’ve got it wrong. Neither of those things will work so there has to be some bottom lines.
“Having said that … if we do nothing, actually nothing gets provided. We might have to bite a bullet but let’s do it in such a way that we’re not on a hiding to nothing, because if you bite the bullet and crack the teeth and you still have nothing to chew on, you haven’t got very far.”
Goff would like to explore the possibility of relationships with private companies and with philanthropic organisations, although the option of ‘McDonald’s Long Bay Regional Park’ was firmly ruled out. And – “For those who think we can increase gambling machines, forget it – we have a sinking lid policy and we should stick with it. We are not going to solve our problems by creating further social problems.”
Goff expressed the (optimistic) hope that a problem shared may come up with some consensus around the issue.
“In the end for this consultation exercise to work … we have to be honest and open and transparent about [it] and then put forward a range of key options. If you only put forward options that say ‘we’re going to take more money out of your pocket, from your kids, then we may as well not do it, because we know what the response will be.
“It’s a tough problem but we need to address it. If we do it badly it will be one step forward and 10 steps back.”
It wasn’t lost on councillors that political promises kept by the now-Mayor have made raising money difficult.
Councillor Richard Hills: “This is what happens if we keep rates at a level … suddenly we start charging everyone for everything separately and it’s a pointless exercise.”
Councillor Ross Clow, the finance committee chairman, said the whole thing was a hornet’s nest.
“Remember,” he said. “You can actually increase rates.”