Elected members started discussions yesterday about budgets shaping the draft annual plan and they spoke of financial pressures and a challenging economic climate.
That included the effect of Cyclone Gabrielle on New Zealand, delivering capital spending in Dunedin at a pace that was sustainable and managing expectations about the extent of operational spending that might be prudent in years to come.
The budgets indicate an overall rates increase of 6.5%.
The shape of the council’s capital programme has yet to be settled upon, but it will not run as high as an earlier forecast of $204.5 million.
Cost escalations and rising interest rates stopped that.
The next year’s capital programme is shaping to be more like $145 million.
The council is also not headed for a balanced budget, mainly because the cost of fully funding depreciation associated with water assets would force a large rates rise.
Dunedin Mayor Jules Radich said budgets were being prepared at a time of large price increases.
Cr Lee Vandervis provided an evocative assessment.
"What we have ... is a financial-climate emergency," he said.
Cr Vandervis listed previous decisions he considered to be unwise, such as spending on cycleways and a park-and-ride scheme.
He said it was clear the council had been on an unsustainable path of capital spending.
"Keenness of the idea a dollar spent today is better than a dollar spent in the future is now shown to be untrue."
Cr Jim O’Malley said the council was tasked with making the right decisions at the right time.
"Deferral is not necessarily good business," he said.
Cr O’Malley said suggestions of a potential need to review service levels were aimed at discussions the council would need to have next year as it contemplated the 2024-34 long-term plan.
Cr Christine Garey said the budgets were being discussed during a fiscally challenging time amid interest rate rises, alarming inflation and supply-chain issues as a result of Covid.
Cyclone Gabrielle might also produce flow-on effects such as constrained transport funding.
Cr Garey said the council needed to keep in mind the big picture.
"These are the times we need to translate our concern about climate change into action."
Cr Steve Walker said cycleways spending produced "fabulous upsides", such as health benefits.
