Dunedin City
Council budgets are again under the microscope, as staff seek
to bridge a looming shortfall threatening to push up rates by
11.9% next year.
The council's senior management team has been holding a
series of meetings with activity managers across the
organisation this week, to scrutinise initial financial
projections for the 2012-13 year.
The discussions came as council finance and corporate support
general manager Athol Stephens yesterday confirmed the
council, in effect, faced an 11.9% rates increase next year.
That was if a $5 million annual shortfall in dividend
payments from Dunedin City Holdings Ltd - revealed earlier
this year - was not addressed by savings in other areas, he
said.
The council had included a 7.4% draft rates increase for
2012-13 in this year's annual plan projections, but the DCHL
shortfall would in effect push that forecast up to 11.9%, if
left unchecked, he said.
However, councillors had already directed staff to find
savings and achieve a "much reduced" rates increase, he said.
Dunedin Mayor Dave Cull could not be reached for comment
yesterday, and Mr Stephens could not say exactly what that
figure might be ahead of debate by councillors.
However, he expected it was "probably" going to be "somewhere
less than 7.4%".
"That's a real challenge, there's no question about that."
Just how those savings would be achieved was yet to be
confirmed, but staff had already made 106 suggestions
following a request earlier this year, Mr Stephens said.
The specific suggestions remained confidential, but included
changes to capital spending, corporate and activity costs, he
said.
"Some were do-able and some were not. We're really now
getting down to the nitty-gritty of what offerings genuinely
have legs."
This week's meetings were an annual process in preparation
for plan hearings each January, but the DCHL shortfall
created extra pressure this year, Mr Stephens said.
Councillors had already decided on some cost-saving
initiatives this year, including changes to the Logan Park
redevelopment and seal extension plans, as well as possibly
shaving $3 million from the Otago Settlers Museum upgrade.
They have also been investigating two options for a
council-controlled organisation for water that could save at
least $1.7 million a year, or increase dividends to the
council by up to $5 million a year - a claim yet to be tested
by the council's working party.
Council chief executive Paul Orders also announced
restructuring of the council's executive management team
earlier this month, aimed at streamlining the organisation
and saving money.
The move has already resulted in council customer services
general manager Grant Strang opting for voluntary redundancy,
amid suggestions more changes could follow.
Yesterday, Mr Orders said this week's meetings were a
"critical part" of the budget process, but staff had not been
given a specific savings target.
All options remained on the table, including changes to
council capital project plans, operating costs and service
levels, he confirmed.
One-off savings could be important, but the council also
needed "a savings mindset ...
driven throughout the organisation".
Mr Stephens said results of the budgeting process would be
given to councillors before next year's annual plan and
long-term plan deliberations, beginning in January.
chris.morris@odt.co.nz
A name, residential address, and (preferably residential) telephone number is required from readers who comment on ODT Online. These details will not be visible to site visitors.