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Councillors began 2020-21 annual plan deliberations yesterday, grappling with an estimated $6.5 million loss in operating revenue - and Dunedin Railways Ltd mothballing costs of $1.1 million - due to the economic fallout from the global pandemic.
That needed to be offset by only $4.8 million staff were able to find in operating savings while maintaining the council’s levels of service.
Dunedin Mayor Aaron Hawkins called the 4.1% rates rise and the commensurate increased borrowing of $7,538,000 - including the $500,000 recovery fund - ‘‘essentially a compromise’’ that allowed the council to continue to provide services people expected while recognising the loss of income many faced.
‘‘For a city of this size and a population of this size, I think it is remarkable that we are able to deliver so much,’’ he said.
‘‘This isn’t a time for us to slash and burn budgets, to massively reconfigure what it is that we offer to our community.’’
After creating budgets, and consulting on an annual plan before the severity of the impacts of Covid-19 were known, councillors yesterday reviewed four new options that viewed the 2020-21 financial year through the lens of economic recovery rather than the growth experienced until March.
They considered a range of options for rates rises and associated borrowing, from the status quo proposal of a 6.5% increase in the rates take to a 0% rates rise, which some submitters called for during this month’s hearings.
The four options presented came with a caveat from the finance department that for every 1% drop in the rates rise, the council would lose another $1.6 million in revenue.
The $4.8 million in savings included $1.8 million in staff cost savings, and council chief executive Sue Bidrose noted that included eliminating a 1.5 FTE addition to the mayoral office for strategic advice.
However, Cr Jules Radich said councillors had not been given an option of a 0% rates rise with no increase in borrowing.
Further, he wanted to see a report into the effects on levels of service a $5.4 million scaling back of operating spending would have.
After the meeting, he said he wanted to ‘‘push’’ staff to come up with some restructuring proposal as an exercise in line with the ‘‘hard, hard decisions’’ many in the community were forced to make.
‘‘They’ve all made cuts. We haven’t taken any hard decisions,’’ he said.
Council city services general manager Sandy Graham said staff could not produce a report that included ‘‘radical changes’’ to levels of service in such a short timeframe and those considerations were better suited to the coming long-term plan process.
Every council department had made cuts, she said.
‘‘Each of them have ratcheted down ... without changing the levels of service.’’
Mr Hawkins said the $500,000 proposed for the Covid-19 recovery fund was a ‘‘placeholder’’ amount that could change.
The vote passed 11-4. Crs Radich, Carmen Houlahan, Lee Vandervis and Doug Hall voted against the decision.