Council reaches rates rise compromise

Aaron Hawkins
Aaron Hawkins
As Dunedin continues to come to grips with the effects of Covid-19, the Dunedin City Council has signalled an updated 4.1% rates rise, increased borrowing, and the creation of a pandemic relief fund of $500,000.

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.

hamish.maclean@odt.co.nz

 

Comments

View all

A rates rise from a DCC living in delusional la-la land. Look out your window and what do you see? I see an economy that has lost 15-25% and these "leaders" are increasing rates for non-core & special interest projects items. All the temporary government money printing will come home to roost soon and more businesses are going under or down-sizing. If there ever was a reason for a rates-strike, then this is one.

"Dunedin City Council has signalled an updated 4.1% rates rise"
That is fantastic !!!!
My income has just taken a 62% cut, so the reduction from 6% to a 4.1% increase has lifted my spirits enormously.
"savings included $1.8million 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."
Hahaha
That is funny. The head DUNCE's definition of savings, is not being as obviously, expansively, entitled.
Good on you Sue, for highlighting the sacrifices our beloved leader is willing to make. I'm sure it would have got lost in all the other detail we will never get to see, unless you had raised the matter.
What disturbs me the most is how bitterly sarcastic I'm becoming.
Maybe I could get some counseling from the mental health initiative the government is providing, because they obviously unticipated that I'd need it.
Then again playing hopscotch on George Streets new dots could be a solution as well, after all, that is what the Dunedin Undemocratic Non Council of Elites is promoting.

ODT, 28th May.
Yesterday, Mr Hawkins said he, too, wanted a rates freeze.
Rather than deferring projects, he wanted to borrow the money instead.
The rates increase would have generated about $10 million, he said.
"I don’t think now is the time to be slashing public spending, but I also appreciate that putting rates up from July 1 is an increasingly difficult proposition for a growing number of people.
"This way, we can do both."

Mr Hawkins failed to do either. He lied or is incompetent. Also after watching some of yesterday's meeting I can confirm he is a bully. His behavior was disgraceful and immature and while Vandervis's was little better, it is Hawkins who is in a position of power which he used together with his popularity of other councillors to mistreat Vadervis. Meanwhile Councillor Radich continues to impress me.

Hey Mr Mayor, Here are some cost-cutting suggestions for you that probably aren't in your coloring book. You know the big parking lot out at Momona, the one that has airplanes right next to it? The "CEO" makes $250K and the "Executive Staff" make $150K, given the significant downturn in travel how do you justify these salaries? I noticed the same people seem to be board members across the DCC. For example, Tony Allison is a board member on City Forestry, Dunedin Airport and Otago Politech. Between just these government entities Allison gets over $100K. In addition to these 3, Allison is a board member on at least 11 other organizations earn A LOT OF MONEY. How could he possibly have any time to add value as a board member? How do you justify $500K for Bidrose? How do you justify the recent pay raise for the DCC? Why does DCC have so many Non-Disclosure Agreements for former employees? Especially at the airport? Why do board members on the various DCC entities get so much money? How are they selected? Why does DCC have so many employees doing redundant work? Was DCC reimbursed by other government entities for work done while "re-deployed" during CORVID 19? How are contracts awarded?

Has Dunedin ever had a set of councillors so completey out of touch with economic reaity?
Unemployment is rising rapidly. Many people have had salaries and wages cut. Many more job cuts are coming in Dunedin. The NZ economy is on track to have negative growth this year. The NZ inflation rate before covid was about 2%.
But lets just ignore all that. Lets embark on a whole lot of ego spending and then lets force a massive increase in rates.
And turning George St into a mall is as much an ego project as the bridge to no where and the foreshore dreams.

Just where is the logic? Do Greens think all proerty owners are wealthy with tubs of money lying around waiting to be spent? Are Greens convinced they only have this one shot to force their dystopian version of the future on Dunedin?

Other councils around the country are trying to help ratepayers by not increasing rates. Not this bunch of ideologs.

So we are celebrating a reduced rates increase that is nearly 3 times the rate of inflation (1.62%)! The originally proposed amount of 6.5% is over 4 times the rate of inflation?
That's an abject failure in my opinion.

Quote: - "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."

On one hand, we are told all councillors were presented with ALL options including a 0% rates increase.
YET:
Quote: - "However, Cr Jules Radich said councillors had not been given an option of a 0% rates rise with no increase in borrowing."

So really, all options haven't been presented for voting. More like a small range of options that all contain large amounts of borrowing. All this borrowing? What's going on? Why is Dunedin becoming so entrenched in debt?

I thought Bidrose was being celebrated on her appointment in 2013 to get the books in order.

Quote:- "The vote passed 11-4. Crs Radich, Carmen Houlahan, Lee Vandervis and Doug Hall voted against the decision."
The sensible voices of required austerity. The real financial problems will surface within the next 12 months. Big changes within DCC are inevitable.

View all

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