Council to examine performance of EDU

Dunedin city councillors debate capital expenditure plans yesterday. Photo by Gregor Richarson.
Dunedin city councillors debate capital expenditure plans yesterday. Photo by Gregor Richarson.
Spending is under the microscope as Dunedin city councillors this week grapple with the 2011-12 budget, with its forecast 6.1% rates increase.

Councillors began a two-day public hearing in Dunedin yesterday with some sharp questioning of staff and spending priorities as the pressure goes on to rein in the forecast rates rises.

Also emerging were plans to put DCC staff costs under closer scrutiny and revamped plans for the town hall development.

Reporters Chris Morris and Stu Oldham report.

The Dunedin City Council is turning the microscope on itself, with a review of the council's property portfolio under way and plans to scrutinise the performance of the economic development unit (EDU).

Plans to examine the EDU's performance were raised by Cr Syd Brown - chairman of the council's finance, strategy and development committee - at the first day of the Dunedin City Council's 2011-12 pre-draft annual plan hearing yesterday.

Cr Brown said it was the first of a number of reviews he planned to suggest over the course of the hearing.

The move came after Cr Brown last week signalled a new drive to find savings within council expenditure, although his focus then was on deferring some capital projects if savings could be identified.

Yesterday, Cr Brown said the review should include the unit's results and whether their performance was the most cost-effective way to help stimulate the city's economy.

However, he was not suggesting the EDU was "broken" - merely that it would be prudent for the council to reconsider the unit's performance.

"It [EDU] is just number one on the list," he said.

The review would also include the performance of Tourism Dunedin, which came under the EDU's umbrella, Cr Brown said.

Also yesterday, council city property manager Robert Clark confirmed a review of the council's property portfolio was under way and could lead to some properties being sold.

The council's property assets and investments were worth about $85 million, and together returned a dividend of about $3.8 million a year to the council, but some "secondary investments" were under-performing, he said.

A report in March would detail which properties could be sold, and the likely return on sales, he said.

Cr Brown's proposal to review the EDU's performance triggered debate yesterday, with some councillors criticising the unit while others leapt to its defence.

Cr Lee Vandervis argued a 74% approval rating for the EDU in the last residents' opinion survey was too low "when they are essentially giving away money".

"I'm not convinced the EDU has been as effective as it could be."

Cr Richard Thomson believed the ability to identify operational efficiencies should be a key criteria in the appointment of a new council chief executive.

"I personally believe there's a range of areas in council that need to be looked at with fresh eyes," he said.

Cr John Bezett also supported the move, saying all council departments should be reviewed periodically. However, he believed it should not be seen as a criticism of the EDU's performance.

EDU manager Peter Harris, contacted after the hearing, said he was not surprised by the move, as efforts to measure the unit's success in fostering economic development were "open to interpretation".

With other departments also coming under the microscope, "us being part of that doesn't concern me or come as a great surprise", he said.

The unit and its nine staff, including Mr Harris, together cost about $3 million to run each year, with a portion paid from external funding, he said.

The unit's annual costs included about $1 million distributed to Dunedin companies through industry project grants each year, he said.

Staff were also involved in a review of the council's economic strategy, together with the Otago Chamber of Commerce and other agencies, which began last year.

A draft document should be made public by May, and could also lead to a change in direction for the unit, he said.

"I think that's great - we look forward to that," he said.

Council chief executive Jim Harland also defended the EDU's performance at yesterday's hearing, saying staff were performing in the "upper quartile".

A review could compare their performance nationally or internationally, carried out by council staff or consultants, with cost ranging from $10,000 to over $100,000 depending on travel requirements, he said.

Cr Brown said a detailed review proposal, including costs and a methodology, would be brought to councillors for approval before the review began.

Councillors voted to approve the review - except Cr Fliss Butcher, who abstained because of concerns over the price - with details to be presented to the finance, strategy and development committee for approval.


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