Pared rates rises would come at a price

Debt levels will remain higher for longer, but rates increases will be trimmed, if a revised Dunedin City Council budget to be considered next week is accepted.

Councillors will meet on Monday to sign off a draft long-term plan budget, covering the decade to 2024-25, which will then be released for public consultation.

Council staff would table the revised budget at the meeting, showing the impact of changes requested by Cr Richard Thomson during last week's hearing.

The revised budget, released late yesterday, outlined the budget effect of a series of changes.

That included budgeting for a small increase in dividends from the council's companies later in the 10-year period, and adjusting debt repayments to help smooth rates rises.

The result was forecast rates increases closer to the council's self-imposed 3% target in future years, a report by council financial planner Carolyn Allan showed.

But, in return, the repayment of $30 million of stadium debt to be transferred to the council's books could be repaid over a longer period, of 20 years rather than 16.

That, together with other changes, would help hold the council's projected core debt levels at higher levels for longer.

By 2020-21, debt would be $17.6 million higher than otherwise forecast, at $228.5 million rather than $210.8 million, before gradually declining, the revised budget showed.

Debt would not drop below $200 million until 2022-23, a year later than was forecast earlier.

That, in turn, appeared to leave little budget headroom for new capital projects, such as a Mosgiel pool, until later in the 10-year period.

Mrs Allan's report said other possible options could also be considered, including budgeting for future development contributions.

The council took a ''conservative approach'' by not budgeting for any, other than from parts of Mosgiel, and staff did not recommend a change because of continuing uncertainty about the sums likely to be received.

Council staff also considered extending debt repayments for council infrastructure and building upgrades, from 20 years to 30 years, but advised against the change because of the interest costs that would be incurred, she said.

Cr Thomson, speaking during the long-term plan debate on January 22, pushed for the revised budget options to be considered to find room for continued investment in the city.

''I'm not comfortable with the notion that we should be trying to be so heroic that we can do nothing for the next 15 years,'' he said.

The budget picture could yet change again when councillors consider the potential for full or partial asset sales later this year.

Council chief executive Sue Bidrose has confirmed a review of council assets is under way and, once complete, will inform a council debate on the move.

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