Council report reveals savings of $5.7m

The Queenstown Lakes District Council has reached its goals for reducing costs for infrastructure services in less than half the estimated time, cutting $5.7 million off budgeted costs.

But one councillor has questioned the evidence for actual savings.

The intention to merge the council's engineering services with the council-controlled organisation Lakes Engineering and bring most of the management work done by external contractors in-house was launched in March 2009.

It led to the creation of the council department Infrastructure Services in October 2009.

QLDC general manager infrastructure services Mark Kunath told the council's utilities committee yesterday it was predicted expected benefits would be met within two years but they had been reached after nine months.

As part of the restructuring, staff numbers for the area were increased from 19 full-time equivalent (FTE) staff to 25.5 FTEs in the new team.

At the same time, the use of consultants was decreased from a level of 18.4 FTEs to 4.5 FTEs.

Consultant costs represent the major part of the savings, with a total of almost $2 million cut from the engineering management consultants' budget in 2009-10 and 2010-11.

Capital project consultant cost reductions have so far proved to be $317,000 a month.

After deducting extra salary costs for the growing internal capital works team, the annual savings on capital works consultancy will be $3.2 million.

The change to Infrastructure Services had secured additional unbudgeted revenue from the New Zealand Transport Agency of about $500,000, for projects which had not previously been funded.

Total savings so far were $5.7 million, compared with the predicted of $3.3 million.

"It has been an outstanding result," Mr Kunath said.

While Crs John R. Wilson and Dick Kane, along with committee chairman John Mann, praised the effort, Cr Vanessa van Uden was not so impressed.

"I am disappointed ... not so much for the results, which are probably in there. But the only real figure is the monthly savings on consultant costs of $317,000. Everything else is just comparisons to budgets. I see no other actual indications of real savings," she said.

Mr Kunath dismissed this criticism, saying if the new structure had not been implemented, there would not have been savings.

It was agreed the infrastructure department should produce a more detailed report for the committee.


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