The Dunedin City Council faces a possible $5.8 million bill to upgrade the Dunedin Botanic Garden, and a warning any attempt to save money by deferring work on the Otago Settlers Museum could backfire.
The revised cost of redeveloping the garden was contained in a staff report to be considered by councillors at this week's 2011-12 pre-draft annual plan hearings.
The $5.857 million bill would be the council's share of redeveloping the garden, including parking, security fencing and entrance improvements, but without the controversial Lovelock Ave realignment.
External funding of $4.456 million would still need to be found, meaning the total project cost would stand at $10.313 million, a report by council botanic garden and cemeteries team leader Alan Matchett said.
However, that was down from the original project cost of $11.3217 million - including $6.2917 million to be paid by the council - when the garden's redevelopment included Lovelock Ave, his report said.
The change amounted to a $434,700 saving for the council, if councillors accepted the revised budget this week.
The proposal would then be part of annual plan consultation before being approved.
However, a separate staff report warned any attempt to save money by deferring the planned fourth stage of the Otago Settlers Museum upgrade could backfire.
The report, by council community life general manager Graeme Hall, said the $8.6 million stage four involved construction of a new museum entrance, foyer and shop and housing for the steam locomotive Josephine.
Deferring the work for one year would reduce rates funding required by $141,000, which was the saving on interest payments for the $8.6 million during the 2011-12 year, his report said.
However, the delay would also bring additional costs, including inflation, reduced revenue and the continued storage of Josephine off site, and put external funding at risk, he said.
The Ministry for Culture and Heritage could ask for its funding, totalling $1.5 million, to be returned, as the funding was dependent on the project time line being met, he said.
Obtaining funding from other external sources might also become more difficult, as delays could "create doubt" about the council's commitment to the project, he said.
"Given the above issues ... it is advised by our consultants that there is no overall saving and they would envisage increased overall costs to the council from such a delay," he said.
Mr Hall's report comes after Cr Syd Brown - the chairman of the council's new finance, strategy and development committee - signalled some capital projects might need to be deferred to ease rates pressure.
He named the museum's fourth stage as an example of a project able to be deferred, but not necessarily a potential deferral that he supported.
Mr Hall's report would be among those considered by councillors as part of their pre-draft annual plan deliberations, which begin with a private workshop today before moving into a two-day hearing tomorrow.
