Road funds change could cost council

Any sudden move to a new rate of Government funding that could create a $4.3 million reduction in work done on Dunedin's roads each year would compromise the city council's ability to maintain acceptable levels of service, the council says.

Dunedin faces a drop in New Zealand Transport Agency funding that could mean millions of dollars less spent on the city's roads each year.

In the worst-case outcome of a review of the funding, which would involve the share of the national land transport fund apportioned to local roading dropping from 53% to 50%, the agency has proposed dropping its contribution to the city's road maintenance and renewal costs from 56% of the cost, to 49%.

That would result in $2.15 million less income for the Dunedin City Council each year.

If ratepayers were not asked to stump up for the shortfall, that would result in a reduction to the value of $4.3 million in the total work able to be undertaken annually, transportation programme engineer Michael Harrison said.

Any reduction in funding for Dunedin would be the result of a new funding methodology based on a series of measures identifying how difficult it would be for an authority to provide its share of the costof its planned work on roading projects.

Measures include the deprivation index, rating units, and lane kilometres.

Local authorities less able to come up with their share of local roading costs would potentially get a higher rate of funding, while authorities more able to come up with the money would get a lower rate.

Four of the five proposed funding options would result in a reduction in funding rates for Dunedin, and one would provide an increase.

In its submission on the proposals, which was approved by councillors this week, the council recommended equal weight be given to each suggested measure, but its main concern was that sudden changes to the level of funding, which were likely to be significant either way, should be avoided.

A transition to the new funding level over a nine-year period would be needed to mitigate what would otherwise be a significant financial burden on ratepayers, it said.

Its preference was for the national land transport fund's present co-investment rate of 53% to remain, and, further, not fall below 50% at any point.

Councillors approved the submission with only editing changes.

debbie.porteous@odt.co.nz

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