The DCC building in the Octagon. Photo by ODT.
The Dunedin City Council has pencilled in a 3% rates rise
for its next budget, but only after a last-minute warning the
council was ''tempting fate'' by planning to spend $600,000 in
Councillors yesterday ended three days of debate and
deliberations by signing off on a draft budget for the
2014-15 year containing the 3% increase.
The draft would be released for public consultation in March,
after which councillors would deliberate on submissions
before signing off on the document in June.
The proposed 3% rates increase was itself an increase from
last week, when the council unveiled a pre-draft budget
containing a 2.5% rates increase - hammered out after months
of cost-cutting efforts by staff.
The 2.5% increase had freed up $633,000 of ''headroom''
within the budget, but left councillors to decide whether to
bank the savings or spend the money and increase rates up to
the council's self-imposed limit of 3%.
Councillors opted to invest $454,000 of the savings in a
variety of initiatives, including support for heritage
building owners, the investigation of future ''invest to
save'' opportunities, and more work on improvements to the
city's aquatic facilities.
The remaining $179,000 would be spent on accelerating debt
repayments, which Dunedin Mayor Dave Cull said would send an
important signal to the community and international credit
agency Standard & Poor's.
Debt repayment remained a priority to address ''the major
risk we have in front of us'', he said.
''It's incumbent upon us to stick to that commitment and to
illustrate the fact that we intend to, no matter what the
''I think it's an important signal, as much as anything
However, the decisions prompted warnings from some
councillors, including Cr Lee Vandervis, who predicted the
extra debt repayments, while a ''nice gesture'', were
That was because the council was awaiting the results of its
review of the Forsyth Barr Stadium's operating model, which
could change the situation.
''Although it's a nice gesture to say we want to knock
$179,000 off the debt, I think it's highly unlikely to
occur,'' he said.
Cr Richard Thomson - chairman of the council's finance
committee - said he, too, was ''slightly nervous'' about
committing the last of the council's headroom to debt
To do so was ''tempting fate enormously'' when the council
would face requests for grants from community groups, he
''We could very easily find ourselves in annual plan
deliberations, having to reverse that view. I'm not sure
that's the right way to go about it,'' he said.
Instead, the council should enter public consultation on its
budget with a 2.9% increase, and $179,000 available to spend,
and decide about debt repayments later, he believed.
However, other councillors spoke in support of spending
decisions, including deputy mayor Chris Staynes, who said it
was better to consult on a 3% increase and reduce it later,
Cr Jinty MacTavish said the council should be signalling its
intent to use any spare savings for debt repayment.