$1m savings 'windfall' to be allocated

Dunedin city councillors will today have to decide how best to use nearly $1 million ''windfall'' in savings that could trim the coming year's rates increase to 3.2%.

Councillors were presented with the latest information towards the end of the second day of 2013-14 draft annual plan deliberations yesterday.

Council financial planner Carolyn Howard said earlier savings of $674,000 had increased to $992,000 by late yesterday, after further budget savings were identified.

The extra savings came from a reduction in elected member remuneration budgets, a revision in the timing of some water infrastructure spending - which lowered debt servicing costs next year - and savings within city property.

Together, the savings meant councillors could opt for a rates increase of 3.2% - well below its targeted increase of no more than 4% - if the money went unspent, councillors were told.

However, Dunedin Mayor Dave Cull said he would be reluctant to consider that option, as the community appeared to support the council's plans for accelerating debt repayment while keeping rates to 4%.

''My feeling is the community supports that and I would not personally support using this windfall of savings to lower the rates,'' he said.

Instead, the money could be invested to achieve equal or greater savings in other areas, for example by accelerating repayment of core council debt that would trim $150,000 a year off debt-servicing costs, Ms Howard told councillors.

Alternatively, the savings could fund already planned projects, offsetting the need for additional borrowing and the interest costs that came with it, she said.

For example, the money could pay for a planned technology upgrade within the Dunedin Public Libraries, eliminating the need to borrow $1 million for the project, as planned, in 2016-17, she said.

Mr Cull pointed out that would save $100,000 in interest costs, meaning savings of $2 million over 20 years.

Councillors voted to limit any rates increase to a maximum of 3.9%, for the purposes of discussion, so they could begin considering a list of small grants requested by community groups, ranging from $5000 to $30,000.

That process would conclude today, and councillors would then decide how best to allocate the savings.


Add a Comment

Our journalists are your neighbours

We are the South's eyes and ears in crucial council meetings, at court hearings, on the sidelines of sporting events and on the frontline of breaking news.

As our region faces uncharted waters in the wake of a global pandemic, Otago Daily Times continues to bring you local stories that matter.

We employ local journalists and photographers to tell your stories, as other outlets cut local coverage in favour of stories told out of Auckland, Wellington and Christchurch.

You can help us continue to bring you local news you can trust by becoming a supporter.

Become a Supporter