Keep spending reins tight

Photo: ODT files
PHOTO: ODT FILES
The present Dunedin City Council is spending a lot of money. Rates and debts are increasing just as they did several years ago. Alarm about those rises prompted a period of belt-tightening.

Will similar alarm be raised in the years ahead?

Councillors have a taxing job balancing spending priorities, and rates and spending could become a central issue in the coming election.

Every council has every reason why rates must go up and borrowing increase. There are always worthy causes and demands. There are always infrastructure deficits.

At the moment, this is exacerbated as the council faces pressure in particular to tackle water and drainage issues in South Dunedin. Bills for such work are always huge.

The councillors this year exceeded their so-called self-imposed "cap" of an average 5% increase in rates over 10 years. One of the issues with a cap is that it easily becomes a target. It would have been an extraordinary surprise if any increase was well under the "cap".

The projected rating increase has risen to 5.3%. Is that too high?

This looming 5.3% accumulates on top of 7.84% last year, when the cap was 8%. As well, most fees and charges rose 4% and an extra $135million was to be borrowed. That rate rise was the second-largest since the local government reorganisation of 1989.

The year before the increase had been 2.99%, with the "self-imposed" cap at 3%. While this might at first sound modest, it was still well above inflation, although in the region of local government cost inflation.

It is usually argued, with some justification, that local body inflation rises faster than general inflation, suppressed as they are by cheaper imports and electronic goods. But what about all those ratepayers on fixed incomes? What about those facing financial pressures? Rates are one the largest bills faced by households.

It is easy for councillors to believe they are doing their best. They are also spared the pressure of profit and loss and potential bankruptcy does not loom. Councils can always raise rates. Businesses often cannot raise prices.

Councils have a tendency inherently to be inefficient and not as hard-headed as some businesses. When councils compete directly with the private sector, when they do not hold a monopoly on services, they are easily eclipsed. In Dunedin's case, its performance with its landfill (even allowing for all the extra Government imposed regulations) and crematorium generate little optimism its arms can operate thriftily. Even an operation at arm's length, like council-owned Citibus was, struggled to do well in a competitive arena.

Mayor Dave Cull was reported from a recent council meeting as agreeing with the need for financial discipline, and the council was doing just that while responding to a long list of community requests.

That is the heart of the issue. There will always be too many worthy community issues, and councillors have to make tough and unpopular calls. The only way rates and debt rises can be curtailed are by hard-headed decisions that are likely to upset significant parts of the community and by ruthless efficiency efforts in the council itself.

In many ways councillors are between a rock and a particularly hard place. Can they, say, reject the South Dunedin hub or more money on cycleways or whatever.

There is always a need. There are always projects that would be wonderful to have.

Mr Cull has argued the council has to "invest" if Dunedin is to thrive. There is some truth to that.

But the costs all add up, and there is always a tendency for staff numbers and costs to rise. The pennies quickly become pounds.

To be able to "invest" in particular premier projects and in the fundamentals like water, sewerage and roads, the council cannot proceed with all its bigger projects and it must keep spending reins tight everywhere else as well.

Comments

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"Councillors have a taxing job"- no, they tax, tax and tax some more for their projects that most do not want or use.

Total reform is required; direct polling/approval of any project greater than $5m new "investment" that they want. Spending approx $100,000 on a mail referendum to save $5m is the best investment Dunedinites could ever make on their city's future especially with out of control DCC. If such a peoples control on the technocrats exists; then the stadium would not have happened, along with the elimination of carparks, building of cycle ways and the bridge to nowhere. These unpopular "investments" would not happen or get off the drawing board.

This bunch of councilors can't tell the difference between needs and wants.
Dunedin needs proper and well maintained drainage.
Some Dunedinites want many fripperies, fancy bridges, many more bike tracks. South Dunedin needs a hub, but does that need to cost $10 million? Probably not. $60 million to turn George st into an empty wasteland. Really needed, no.
Ratepayers are not an endless source of funds to pay for peoples wants.

Again well said, as the saying goes wrt the pretty bridges vs drainage, if you put lipstick on a pig it is still a pig.

Stop wasting money on more cycle lanes like the one to the Peninsular. Only the Lycra clad Priesthood use them. They are a very small minority but very noisy.

ODT is this Fake News? 'council faces pressure in particular to tackle water and drainage issues in South Dunedin. Bills for such work are always huge.' Cull has refused to accept that South Dunedin's flooding is lack of maintenance or drains its climate change. He Cull and Councillors need to be held accountable the Rate payers of Dunedin should hold his feet to the fire and take him and Councillors to court for lying wasting Rate payers money. If I won Lotto, I'd start a fund to progress this, just because he is standing down soon imho doesn't make Cull and or Bidrose exempt from legal action against of what they have done or haven't done.

Reminds me of that old show song ‘I’m just a girl that can’t say no.’ I remember being at a recent Annual Plan budget setting meeting ( not the recent one) where a councillor said publicly, in all seriousness, ‘This is a budget which has something for everyone.’ For heaven’s sake, it’s not like sharing the lollies out equally amongst the kiddies. But I suppose councillors don’t want to risk losing votes by saying NO to any group coming to them seeking money.

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