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The council had wanted to push ahead with a $126.6million package for 2021-24, but the NZ Transport Agency has allocated a 52% subsidy, on average, for $92 million.
As a result, kerb and channel work is set to be slashed, work on fixing footpaths could be scaled back and the road re-sealing budget trimmed.
Dunedin City Council infrastructure services general manager Simon Drew said the council was in a sustainable position in the short term for the 2021-24 programme.
However, the council’s bid to the transport agency was based on what was needed to maintain assets at an appropriate level and the funding shortfall could mean the council might need to pick up a greater share of the burden of its roading programme in future.
Dunedin ratepayers are already looking at a rates rise of 9.8% for next year and rates increases for the next two years are forecast to be about 7%.
Cr Lee Vandervis asked at a meeting last week if the situation created a deferred maintenance issue for the DCC.
Council transport group manager Jeanine Benson replied that it did.
The money required from the transport agency reflected asset management planning — ‘‘so it’s purely condition-based’’.
Cr Jim O’Malley said the lack of money in the transport agency’s pot would create a backlog for all local councils in New Zealand, unless there was a top-up.
The transport agency has said funding, though down on what councils had expected, was up on the allocations from three years ago.
Dunedin was allocated a subsidy for $82million of roads maintenance work for 2018-21.
The timing of the transport agency’s funding indications came under fire at a Waitaki District Council meeting last week and the Government aggravated ill-feeling by announcing a $785million standalone cycling and walking bridge across the Waitemata Harbour.
The cost of the Auckland project would far outweigh the benefits, preliminary work from the transport agency found.
Transport Minister Michael Wood expected the case to stack up better after a more detailed analysis, The New Zealand Herald reported.