The title of this page is a quote from James Frick, and a particularly relevant one for councils and Government. I thought it would be good to go into a bit of depth about how our budgets are set and how the money is divided up. For me, figuring out how money is allocated was one of the bigger learning curves in the initial period of settling in as a board member.
Every quarter we are given a financial update on how the board is tracking on the annual spend we are allocated. We are also given an update on our Work Program, a document that focuses on all the various initiatives the board has chosen to spend its money on.
Well, that isn’t completely true. There are quite a few items in the work program we don’t get to choose to spend any money on – these are regionally determined and out of our control.
The first thing to do is understand the different ways the spending is cataloged.
Funding is ‘split’ across three areas – Governance, Locally Driven Initiatives (LDI) and Asset Based Services(ABS).
Asset Based Services is probably the part that interests people the most on first look- as it’s the biggest pot of money. It is split into two parts – Capital Expenditure (CAPEX) and Operational Expenditure (OPEX.)
Operating Expenditure is allocated to boards based on what it costs to keep the assets in their area running at a service level that is equal across Auckland. An example – Library Hours are the same across the area, so each library will receive OPEX funding to ensure those hours are met.
Capital Expenditure is funding for ‘new’ things or upgrades. This could be things like a new swimming pool – or an upgrade to air conditioning in the library.
You’d think that Local Boards might have quite a lot of say in this area but we don’t really. We can advocate for initatives that would require capital expenditure and ensure that assets in our area aren’t “forgotten,” but we can’t direct money from one project to another. To use the library as an example again, we couldn’t knock 2 hours a week off the opening hours and reallocate that money to upgrade the air conditioning.
Governance is the money that is required to run the Local Board properly. This includes the member’s remuneration as well as the costs of support staff to ensure everything runs smoothly. You can read my post about what we do to learn a bit more about these staff. Again, something we have no say over.
Finally, we get to what we can allocate – the “Locally Driven Initiative” funding. This money is distributed to Local Boards “based on population(90%) , size of the local board area (5%) and the level of deprivation.(5%)”
Auckland Transport also comes to the party a little bit, with $10 million across the 21 local boards that can be allocated toward transport projects we advocate for. This could be things like a new pedestrian crossing, increased signage or a speed feedback sign.
Prior to Covid-19 hitting, we were hard at work on a draft work programme for next year. This is where we decide how we spend that LDI funding. All of the different departments come with proposals for ways that money could be spent and we have to weigh up whether that is a good use of money or not. This means we evaluate how things have worked in the past, how they could work in the future, and how well that aligns with our Local Board Plan and what the community has told us they are interested in.
I haven’t included any actual figures in this post – because things are so variable over the years and particularly at the moment. You can see an example of how the previous board spent money over a year in the Annual Board report – available here: https://www.aucklandcouncil.govt.nz/plans-projects-policies-reports-bylaws/our-annual-reports/documentslocalboardreports20182019/annual-report-puketapapa-2018-2019.pdf
Hopefully that helps understanding the role of a Local Board better. If you have a project in the area you are interested in, it’s important to realise the Board can’t just allocate money directly to it. “Good things take time” as the cheese ad says, and we have to follow a process. However, we do have Grant programs that run every year where community groups can apply for up to $5000 to make a project reality. Our first round will be coming up later this year – keep an eye out.