DCC wants greater savings

A fresh round of budget reviews is under way within the Dunedin City Council, as staff search for "hard-core operational savings" to ease the pressure on ratepayers.

Council staff have been asked to put forward new savings initiatives during meetings with acting chief executive Athol Stephens this week.

The initiatives would be considered by the council's executive management team and councillors next week, along with the likely impact on council service levels, and could then be incorporated into the 2011-12 annual plan.

The aim was to reduce the forecast 7.5% rates increase for 2011-12, while minimising the impact on the council's service levels, Mr Stephens told the Otago Daily Times yesterday.

Council staff were also considering the methodology of a series of wide-ranging departmental reviews requested by Cr Syd Brown - chairman of the council's finance, strategy and development committee - during annual plan hearings earlier this year.

The reviews would scrutinise the efficiency of various council operations, to deliver "substantial" savings in time for next year's 2012-13 annual plan process, Cr Brown said.

Staff had been "challenged" to identify new ways of saving money, but it was expected the wide-ranging reviews could also involve peer-reviews by consultants, and a budget of up to $200,000 could be required for the work, Cr Brown said.

Some of the reviews could be completed "reasonably quickly", but others would be more substantial and could take six to eight months.

Cr Brown said in addition to maintaining capital spending "discipline", operational savings would come "straight off the bottom line" and reduce the need for rates increases.

He also wanted scrutiny of ways the council could increase its income base, not by increasing fees but perhaps by outsourcing council staff and services to the private sector where there was capacity to do so.

However, he would not be drawn on whether the reviews would also consider reducing or capping staff numbers within the council - something his colleague, Cr Lee Vandervis, has called for.

"It's just a matter of doing things smarter and better and looking at FTEs [full-time equivalent staff numbers] and part-timers.

"It's just a matter of making sure you're getting value for money in your investment in staff," he said.

He would not say what sort of saving or rates reduction coming from the reviews would be deemed a success.

"I'd prefer not to go there at this stage... I would say substantial savings. The reason I don't want to put a figure on it is that when people get to that figure they stop."

Mr Stephens said staff had not been given a target or goal for the latest round of budget reviews, after former chief executive Jim Harland pushed staff to find $6 million in savings late last year.

That push eventually identified about $4 million in savings, helping reduced the 2011-12 forecast rates increase from 9.1% to 7.5% so far.

Mr Stephens said while budget reviews were a normal occurrence within the council, this week's meetings were the third round held since October last year - which was "not usually" the case.

"It's starting to get a bit hard to find stuff now... But we're completely comfortable with reviews. They happen - that's part of our environment."

The key consideration when identifying savings would be the impact on service levels, with councillors saying they wanted "no more than minor" impacts, he said.

The wider departmental reviews "may lead to" consideration of staffing levels, but hadn't yet.

"It depends on how far you go. If you go hard at it, and you say you're not going to do a whole lot of things, then obviously you'd have to be thinking about staffing levels, and that would be incorporated into any kind of analysis.

"But we haven't done that, because it comes back to that level-of-service question."


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