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Dunedin is in a better position concerning New Zealand Transport Agency funding for roading over the next four years.
But the city is planning for how it will deal with annual reductions for the three years after that, the Dunedin City Council says.
The DCC will receive from the NZTA a flat funding assistance rate of 59% of the cost of road works and road construction work required in Dunedin in 2015-16. The rate will reduce 1% a year from then until the target rate of at least 52% is reached.
The funding rate is better, overall, than the council previously received from the NZTA.
It is expected to remain that way until 2020-21, when the annual decreases will bring the total funding available down to below what is available from the NZTA at present.
DCC transportation programme engineer Michael Harrison said the news, released in the past few weeks, was the best result the council could have expected. Whether services, and what specifically, would need to be cut from 2020-21 was yet to be worked out.
But the long transition would mitigate what would otherwise have been a significant financial burden on ratepayers.
The council had previously been concerned a sudden change to the worst-case scenario, at that stage a 49% funding rate, would have amounted to $2.15 million less income each year.
Ratepayers would have had to pick up the shortfall to retain the same level of service.
That figure would now be much less.
Mr Harrison said he was analysing what the future decreases would mean year by year and a report would go to councillors in the next few months.