The Dunedin City Council building control unit is axing plans to recruit staff, but wants to press ahead with a 25% rise in building consent fees - an increase originally needed to pay for the new workers.
The measures were needed to cover a $1.47 million shortfall the unit identified in its 2009-10 budget forecast, which was blamed on the recession and a continuing decline in the demand for consents.
The deficit was revealed in a report by council chief building control officer Neil McLeod, whose unit is responsible for processing and regulating building consent applications for the council.
He said in the report plans to recruit five staff this year had been abandoned, while a sixth staff member who recently resigned has not been replaced.
Instead, the report recommended the planned 25% increase in building consent fees, due to come into force on July 1, should proceed, even though it was intended to offset the cost of new staff.
Mr McLeod's report is to be considered at a full council meeting today.
The proposal followed the continuing decline in both the number and value of consent applications received by the council, as more people opted for less expensive alterations rather than building new homes.
The drop meant a corresponding drop in income for the council unit, which uses consent fees money to cover costs.
Contacted late last week, Mr McLeod said the deficit became apparent "over the last several months" as staff reviewed their budgets.
The lack of recruitment meant staff would be "fully committed" for the immediate future, but there were no plans to allow staff numbers to fall further.
Mr McLeod's report said further staff cuts had been considered, but warned more losses could impede the unit's ability to meet its statutory requirement to process consents within 20 working days, which could place the council's accreditation status at risk.
Mr McLeod said it was possible consent processing times could rise as a result of the changes, while remaining within the 20-day limit.
At present, the unit's average processing time was 15.3 days, he said.Savings of $570,000 had already been found within the unit, by reducing overheads and abandoning recruitment plans, but the 25% fees increase was needed to reduce the $900,000 deficit still forecast.
Even then, a $330,000 deficit might remain, as staff had calculated a 38% fees increase was needed to cover the deficit completely, the report said.
The 25% increase recommended was based on an assumption building activity would increase in 2009-10.
Statistics New Zealand figures released last week showed a continuing drop in the number of new housing units authorised - these have more than halved since June 2007.
Otago figures showed the number of consents granted for new dwellings in Central Otago plunged from 29 to seven, Queenstown Lakes was down from 53 to 30 and Dunedin from 35 to nine.
The figures represented an overall drop in value from $32 million to $15 million.
Building battle in brief:
> Dunedin City Council's building control unit reveals $1.47 million deficit for 2009-10.
> Budget shortfall blamed on economic climate stifling demand for building consents.
> Councillors to consider 25% increase in consent fees, scheduled for July 1, to offset deficit.
