The blowtorch is on Dunedin City Council staff to save
more money as part of a push to accelerate debt repayments.
Staff are already under pressure to find $4.6 million in
savings by early next year to achieve a targeted rates rise
of no more than 4% for the 2013-14 financial year.
That was part of a council push announced last year to limit
rates rises to no more than 5% in 2012-13 - a goal already
achieved - followed by 4% and 3% in the following two
However, new budget guidelines issued to senior staff
last month - and now released to the Otago Daily Times - showed
councillors wanted to go further cutting costs.
Staff have instead been asked to identify ways of trimming
more from capital and operational costs, to free up 1% of the
expected 4% rates rise for other uses.
That meant additional savings of $1.2 million would need to
be found from a variety of potential sources.
Mayor Dave Cull said the most likely use of the money saved
would be to accelerate the repayment of council debt.
Alternatively, the savings could be used to lower the rates
rise for the year to 3%, or use the spare money for a new
project, although that was considered unlikely, he said.
The savings goal was "challenging", but staff had responded
well to similar challenges to date, he said.
Council chief executive Paul Orders said when contacted debt
repayment was "clearly a key issue for councillors", and
cost-cutting options were being considered.
"It means the days of growth budgets are over as far as the
Dunedin City Council is concerned," he said.
The guidelines were drawn up following a workshop with Mr
Cull, his councillors and senior staff on August 9.
They were released to the ODT , following a request under the
Local Government Official Information and Meetings Act 1987.
Mr Cull said options identified by staff to achieve the
additional savings would be considered when budget meetings
began in January.
Mr Cull confirmed that could include cuts to service levels -
as the guidelines noted - but councillors would have the
final say about whether the price of cuts was too high.
The "general rule" given to staff on capital spending was
that no new projects could be added to the 10-year capital
spending programme agreed at this year's long-term plan
hearings, the guidelines said.
Those wanting to add a project considered "unavoidable" would
have to find something else to remove from the programme, or
demonstrate the savings that would result from adding the
project by itself.
Inflation would also have to be absorbed into budgets "to the
greatest extent possible", the document said.
The council's water and waste services and transportation
staff were also asked to provide more information about
spending plans, including whether projects could be delayed
or removed, and the risks of doing so.
On the operational side, advice to managers was to
"scrutinise" all activities, revenue sources and expenditure,
as the review "needs to be more than just a conventional
"Activity managers should consider all options including how
we deliver services, restructuring service delivery to reduce
costs, finding efficiencies and opportunities for innovation
and maximising revenue opportunities."
Budgets catering for expected staff salary increases would
need to be offset elsewhere, as would those making allowances
for inflation in some areas, the guidelines said.
While the aim was to keep service levels within those in the
council's long-term plan, "your ultimate aim is to reduce
rates", the guidelines said.