Financial effects of pandemic could linger for council

Dawn Baxendale. Photo: Geoff Sloan
Dawn Baxendale. Photo: Geoff Sloan
Christchurch City Council chief executive Dawn Baxendale believes the council could continue to feel the financial burden of the pandemic for the next five to 10 years. This comes as the council begins to prepare its plan for the next decade. Meanwhile, Mayor Lianne Dalziel has alluded this could prove to be the most “political” plan of her seven-year tenure. Louis Day reports.

This could be a pandemic the city endures for many years to come.

“The financial strain is here and it is here to stay in my view for a very long time because of the nature of what is happening,” Baxendale said.

When asked how many years the city council could bear the burden of Covid-19, she responded: “We are looking at at least five [years] and potentially 10 [years] and that is because the public purse full stop, Government and local authorities, is going to be massively constrained simply because of the work we have had to do in this environment.”

Mayor Lianne Dalziel. Photo: Geoff Sloan
Mayor Lianne Dalziel. Photo: Geoff Sloan
Earlier this year, the pandemic left the city council with a $99 million revenue shortfall, forcing it to have to rework the budget behind its Annual Plan.

After finalising its Annual Plan, the city council is now in the early stages of forming its Long Term Plan for 2021 to 2031, a plan which has been labelled as “absolutely vital” to the future of the city and its council by Baxendale.

Long Term Plans are reviewed every year and budgets can be slightly adjusted each year under the Annual Plan process.

Long Term Plans ultimately set the parameters for the council’s budget and levels of service for the next decade while outlining what the authority wants to achieve in the various communities it is responsible for.

The plan could also open the door to staff cuts being made. While the city council has not let any permanent staff go it has decided not to fill 49 vacant positions and reduced its number of “contract positions” to 27 when there was 126 the same time last year.

Dawn Baxendale. Photo: Geoff Sloan
Dawn Baxendale. Photo: Geoff Sloan
Baxendale said the Long Term Plan could give her the insight needed to assess whether cuts to permanent staff were necessary.

“What comes out of the LTP will allow me to right-size this organisation, simple as that.”

When asked if there was room to cut within the organisation, she responded by saying: “You can always reshape an organisation.”

Dalziel, who was elected as mayor in 2013 and has already overseen the delivery of two Long Term Plans in her time at the city council, alluded this could be the most “political” one yet.

“This time it seems to me to be quite a political environment which it wasn’t the last time,” she said.

“The political environment comes from the fact that we have a group of councillors who have focused on the level of rates increase as a relatively simplistic way of getting people to understand the challenges we are going to face in the next decade.”

Catherine Chu, James Gough Sam MacDonald, Aaron Keown, James Daniels and Phil Mauger formed a chorus of councillors earlier this year which called for the city council to push for a zero per cent rates increase as it looked to rework its Annual Plan in the face of the pandemic.

Baxendale labelled this as “very unrealistic to achieve.” Staff also stated the $122 million in savings needed to achieve no rise in rates would have “severe impacts” on council services and lead to an “unprecedented level of staff redundancy.”

Dalziel believed the political pressure to reduce rates could make the process of delivering the coming Long Term Plan a trying task.

“I feel more significantly now than ever the reality of being just one vote around the table.”

Dalziel said failing to invest in the city’s future could leave it in an “infrastructure deficit.”

“I think any council, not just this council, any council that didn’t seriously look at the state of its infrastructure and invest for the long term, it would face an infrastructure deficit.”

Baxendale also believed the conversation between the city council and the public needed to change under an environment largely constrained by the implications of the pandemic.

“The conversation, I don’t think it has really been there in the past. The conversation has been the public says we want x, the council goes and generally does it, not actually the budget has been this big and you are actually asking for that [something bigger].

 

“You can’t reduce your rates and deliver absolutely everything, you can’t.”

City council staff are currently working to have the budgets, possible savings and the draft capital programme finalised for city councillors by the end of this month.

From there, staff will work with councillors in developing a draft plan that will be sent  out for public consultation. Once the public’s feedback is both received and considered, a finalised plan will be signed off by councillors.

Baxendale said an ideal outcome for her would be a plan that is cohesive, deliverable and cost-effective.

“If we get all of those things, we will have done that because we would have engaged the public and be able to have a mature conversation about what this council does.”

 

 

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