Auckland Mayor Wayne Brown faces an alternative to selling airport ...

Auckland councillors are gathering around the council chamber at the Auckland Town Hall for day two of the budget meeting due to start at 10am.

Councillors have two choices when they reconvene at 10am to finalise this year’s budget: Support Mayor Wayne Brown’s proposal for a partial sale of airport shares, or keep the shares for now.

The debate continues today after a seven-hour meeting yesterday failed to reach a consensus.

Brown arrived at the meeting wearing a black cap with the words “That’s what I do, I FIX STUFF, and I know things”.

The mayor withdrew his plan to sell the council’s entire airport shareholding after it became clear he did not have the numbers.

After reading the mood of the room midday through yesterday’s session, he proposed a partial sale of the shares in a bid to strike a “consensus” with fellow councillors in what he called his “latest, latest, latest budget”.

Brown’s new proposal is to sell 8.09 per cent of the 18.09 per cent holding, which he said would achieve savings of $28 million next year, instead of $60m from selling all the shares, but it hinges on the outcome of an alternative plan put on the table just before the meeting closed yesterday.

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Just before the meeting adjourned at 5pm yesterday without any decisions on Brown’s latest proposal, Manukau councillor Lotu Fuli tabled an alternative proposal, seconded by her Manukau colleague Alf Filipaina, to consider selling the shares as part of next year’s 10-year budget, holding household rates to 6.8 per cent and increasing debt from the $100m in Brown’s proposal to $160m.

It is understood Fuli’s amendment has been worked up by 10 councillors opposed to the sale of the airport shares, valued at $2.2 billion.

If Fuli’s amendment passes today with 11 or more votes, it will seal the budget and Brown’s proposal will not proceed.

“I’m proposing we will fill the gap with a general rates increase of 7.7 per cent for the average residential property,” said Brown - 1 per cent higher than his previous figure of 6.7 per cent to hold the household increase at the rate of inflation,” Brown said after tabling his latest proposal yesterday.

The new overall rate rise is 11 per cent, with businesses paying more than households.

He has also proposed cutting local boards’ discretionary funds by $4m and requiring council chief executive Jim Stabback to find another $5m in cuts.

Earlier in the day, council group chief finance officer Peter Gudsell said increasing debt is a short-term answer that could make the remainder of the year or next year harder and was not a prudent approach.

Gudsell said debt “reduces headroom to deal with future shocks”.

He called it “not a credible or prudent approach to financial management” and said it would only defer decisions on how to close the budget gap.

In an unusual move, Brown gauged the mood of the room before lunch by giving each councillor five minutes to say what kind of budget they would like, adjourning the meeting for an “open workshop” for councillors to speak freely without jeopardising their speaking rights during the formal business of the budget meeting.

Both sides of the airport debate gave impassioned speeches, with Mike Lee calling the sale the biggest asset sale in Auckland’s history and Maurice Williamson saying even the good times are bad for holding the shares.

Williamson said more costs are coming down the pipeline for the council, warning that he had been told the final cost of the City Rail Link will be $7.5b instead of $5.5b.

“We do not need to own an asset that is not washing your face,” Williamson said.

Councillor Kerrin Leoni said the airport shares should only be sold as a last resort, and she would be happy to consider a small increase in council debt.

Several councillors said a lot of the issues - the sale of the shares, spending cuts, revenue and debt - would be better dealt with in the 10-year budget, which comes next year.

Deputy Mayor Desley Simpson said Aucklanders deserve a budget that doesn’t hurt too much, and that’s for both residential and business ratepayers.

She said inflation and Reserve Bank rate rises had heaped extra costs on the council.

While the council had expected these as potential costs, devastating weather in summer had made the situation much more difficult, she said.

Simpson said councillors should be careful in raising rates too much because of the cost-of-living expenses people are facing for things like transport and food costs and paying mortgages.

Councillor Richard Hills said he didn’t like any of the budget levers - spending cuts, raising debt, higher rates or selling the airport shares.

“The focus for me was reducing the level of those cuts to our community, reducing the staff cuts, reducing what I feel is mean cuts to what is going on in the city, the environment ... I could keep going on,” he said.

The North Shore councillor said public feedback on the budget was the biggest on record, with more than 70 per cent of people saying they weren’t happy with the scale of the cuts.

Last month, Brown reduced suggested deep cuts to arts and social services, including the Citizens Advice Bureau, following public feedback.

In a late twist just hours before yesterday’s meeting, Albany councillor Wayne Walker declared he is the beneficiary of a $3m shareholding in Auckland Airport held in the estate of his late father.

Walker and two other councillors with family links to airport shares, Julie Fairey and Chris Darby, were cleared by council staff and the Office of the Auditor-General to vote on the share issue.

Brown closed the meeting by saying it “is a very hard budget and I want to ensure that we take our time to work through the process properly”.

“I have always said it may take a couple of days of constructive debate. There is no issue with that, we are simply adjourning to another day,” he said.