As its debt deepens, the Dunedin City Council’s financial sustainability has been called into question by mayoralty candidate Lee Vandervis.
Cr Vandervis has been a consistent critic of council spending and the performance of council-owned companies.
At a meeting this week he sought to put pressure on council chief executive Sandy Graham to say whether she believed the trajectory of debt was sustainable.
However, he was told council staff were implementing what had been asked of them by councillors and borrowing was taking place within agreed parameters.
The council last year agreed to a gross debt limit of 250% of revenue for its 2021-31 long-term plan. This enabled it to back a $1.5 billion programme of budgeted capital works for the decade.
Significant elements include projects aimed at responding to infrastructure needs for a growing population, preventing flood damage in South Dunedin, reducing carbon emissions, modernising the network of underground pipes, paying for roading and footpaths and upgrading waste management.
The council also budgeted for an accelerated capital spend this year.
The upshot for council debt is a budgeted increase of $106 million in the 2022-23 financial year, followed by projected increases of about $61 million, $67 million, $62 million, $56 million, $45 million, $43 million, $31 million and $44 million.
A $1.5 billion budgeted capital programme for the decade from 2021 is well up on the $878million that was considered necessary for the 10 years from 2018.
Discussion about debt arose on Tuesday after the council had received a broad update about its strategies.
Cr Vandervis said financial data showed debt was to increase by $100 million annually and this was unsustainable. He was also worried about interest rates.
It is understood the $100 million figure is a reference to group debt, which includes debt from council-owned companies.
Cr Vandervis asked Ms Graham if the council’s financial strategy "of increasing our debt by $100 million every year" was unsustainable.
Dunedin Mayor Aaron Hawkins said the financial strategy was determined by the elected arm of the council.
Cr Vandervis reasserted he wanted an answer from the chief executive.
"The rudeness of your comments aside, councillor, the question has been answered," Mr Hawkins said.
