Auckland ratepayers will be saddled with an estimated bill of $220 million each year to run and maintain the $5.5 billion City Rail Link once it opens in 2026.

The costs are outlined in more than 1000 pages of just-released documents for an extraordinary budget committee meeting on Wednesday where Mayor Wayne Brown will present his first “Mayoral proposal” for a new 10-year budget.

Brown has already signalled an 8 per cent rate rise in 2026 to meet the running costs of the CRL, which is taking 10 years to build and half-funded by the council and the Government.

“The chickens are coming home to roost. The running costs of the City Rail Link alone are expected to account for about 10 per cent of rates paid by Aucklanders in the third year of the 10-year budget,” Brown said.

Auckland Mayor Wayne Brown will table his cost-cutting budget proposal on Wednesday. Photo / Jason Oxenham

Council officers say once the 3.4km tunnelled rail line and two new stations between Britomart and Mt Eden open, “the council will face significant additional costs to provide more rail services and maintain new infrastructure”.

A summary table of the estimated annual costs to the council shows ratepayers will shell out $160m in interest on loans to build the project, $41m for depreciation, more commonly known as wear and tear; and $64m in operating costs to run the stations, extra rail services the project will enable and track charges from KiwiRail.

These costs come to $265m, but the net cost to ratepayers will be about $220m after $44m of revenue is taken into account, including some funding from Waka Kotahi NZ Transport Agency.

Following modelling that indicated a 14 per cent rates rise was needed to balance the budget next year, Brown is proposing a raft of cost-cutting measures to reduce this down to 7.5 per cent for households.

The City Rail Link looks set to cost $220m to operate and maintain after it opens in 2026.

This will be followed by a rates increase of 3.5 per cent in 2025, 8 per cent in 2026 for a one-off hit related to the City Rail Link, and about 3 per cent thereafter.

The advice from officers is that the council continues to face “significant financial challenges” externally and a legacy of short-term measures to address budget shortfalls, which need more permanent solutions.

A key part of Brown’s proposed budget is selling a long-term lease for the Port of Auckland’s operating business while keeping the waterfront land in public ownership.

Port of Auckland is on Wayne Brown's radar in the 10-year budget. Photo / Michael Craig

He wants the proceeds to go into an “Auckland Future Fund”, starting at about $3b to $4b, that will invest in diversified assets along the lines of the NZ Super Fund.

The fund will include the council’s remaining $1.3b share portfolio in Auckland Airport that could be sold down into more diversified assets, and possibly the $833 million of proceeds from the partial sale of council shares in the airport this year.

Brown said: “Any natural disaster or pandemic would impact Auckland’s airport or ports… it makes sense to spread our exposure to risk across different markets.”

The sale of the port business is being fiercely opposed by the Maritime Union and it is unclear if Brown has the numbers around the council table to offload the port business.

The mayor also has cost-cutting plans for transport, but a few sweeteners as well, such as a $50 cap per week on all buses, trains, and ferries in the inner harbour, and allowing passengers to use PayWave with an Eftpos card, rather than the Hop card.

Aucklanders may soon have other tap-and-go methods to use public transport in Auckland.

Auckland Transport’s $16b capital programme for the LTP has been reduced to $14b in the mayoral proposal, including cuts to “low-value initiatives that cost too much” like $80m on raised road tables, and reducing the cycleway budget by $141.5m to $430m.

The budget also includes proposals to combine back-office services for all council-controlled organisations (CCOs) such as IT, property management and HR, and defunding earthquake strengthening.

Brown said he was adamant these capital works cuts were “not solely a cost-cutting measure”.

“The mayoral proposal seeks to improve Auckland Council’s core services by prioritising issues that really matter to Aucklanders and pausing those that don’t make a real difference or should be funded externally,” he said.

At Wednesday’s meeting, the mayor, all 20 councillors, and two members of the Independent Māori Statutory Board, will determine what items from the mayoral proposal will be included in the four-week public consultation on Auckland Council’s 10-year budget beginning in February.

Following public consultation and comprehensive deliberations, the 10-year budget will be finalised and adopted in June 2024.