Council identifies cost-saving measures to address rates
The Whanganui District Council could cut $2 million worth of services and sell $16m in assets as part of a six-point plan to alleviate rates rises.
Mayor Andrew Tripe said the whole country had unacceptably high rates and the council needed to find ways to address rates affordability in Whanganui.
Chief executive David Langford has tabled a new organisational strategy for the council with the aim of making rates more affordable for the community while improving the council’s overall performance
Measures include increasing nonrates revenue by $800,000, securing alternative funding for $8m of council projects, proposing $2m of service cuts and identifying $16m of assets that could be sold to repay debt.
The council also wants to find a 2 per cent efficiency saving for year one of the long-term plan and implement an “invest to save” programme to deliver ongoing annual savings of 1 per cent per annum.
“All councils including ours continue to face inflationary pressures meaning we have to pay more to deliver services. Our first draft of budgets for the long-term plan has already indicated that next year’s rates increase could be more than 17 per cent unless we take action to control costs,” Tripe said.
“The triple whammy of what I call the three ‘i’s of high inflation, interest rates and insurance costs have seen unprecedentedly high rates increases with many councils issuing doubledigit rates rises. Whanganui’s average increase of 7.9 per cent is the highest for a long time and has come at a
tough time for many in the community.”
Decisions on service level reductions or selling of assets would sit with councillors.
Tripe said the level of projected rates increase would not be affordable for the community.
“The cost-of-living crisis isn’t over yet and many households have yet to feel its full effects. Quite a number of properties are on fixed-term mortgages and these will expire in the next six to 12 months. When they do, households will really start to feel the
impact of the recent increases in the official cash rate [OCR] interest rate.”
Tripe said he was impressed with the new organisational strategy presented to councillors.
“I think this strategy’s going to be game-changing,” he said.
Langford said it was important for councillors and the community to see that council management had a plan for how it will lead the organisation and improve how it does its business.
“This not only covers things like process and system improvements, it also includes building the right kind
of organisational culture and looking after our people. We need a strong ethos of accountability that supports the organisation to deliver excellence for our community. A big part of this is ensuring budgets are being managed in a disciplined and prudent way and that there’s a focus on continual improvement.”
He said cost-saving measures had been under way for some time.
“An example of this is our vacancy management programme where the leadership team reviews all vacancies before they are advertised.
Through this process, a number of non-critical roles have already been identified as savings and put on hold.
“We’ve also reviewed our vehicle fleet, identifying a number of underutilised vehicles to be sold to shrink the size and cost of the fleet.”
Langford said over the past few weeks the council’s senior leadership team had spoken to managers and staff and asked them to make a concerted effort to look for opportunities to increase efficiency and cut costs.
A review of council-controlled organisations (CCOs) is nearly complete and this is also expected to identify cost efficiencies.
Tripe said the cost-of-living pressures people are facing were always top of mind for him. “Through the Future for Local Government review, I’m part of a national group advocating for increased government funding allocated to councils so we have the resources to empower communities to get things done and build stronger regions into the future.”