Waimairi staff cuts considered to hold rates

Press, 12 February 1986, Page 8

Waimairi staff cuts considered to hold rates

Waimairi District councillors warned last evening that council staff might have to go as a lastditch effort to keep rate increases within reasonable bounds. The council should set a maximum limit of a 15 per cent increase in rates this coming financial year, Cr Philip Carter told the council’s finance and policy committee. With projected salary increases of more than 24 per cent, the council would have to find how the up to 15 per cent increase could be achieved, he said.

The committee discussed how recent salary increases had affected the council’s expenditure.

The estimated actual cost of salaries this year was $3.32 million, about $200,000 more than estimated. With allowance for a further 10 per cent increase in salaries, the estimated cost of salaries next financial year would be almost $4 million. The committee’s chairman, Cr Martin Hobby said that the present time was unusual because of high salary increases. Normally salaries had kept rate with inflation. Salaries were a large component of the council’s costs, he said. Although their increases could not be controlled by the council, more variable costs could. The council and staff would have to “perform a balancing act”

between those areas with few variable costs and those with larger variable costs.

Cr Brian Shackel said the council had a big responsibility to the ratepayers not to burden them with rates they could not afford.

It had to be strong in its resolve because of the fragile industrial infrastructure of metropolitan Christchurch, he said.

Although "rather nervous” to say so, it might well be necessary to reduce staff numbers to keep the rates at a reasonable level. “I can’t see how, with wage increases estimated at well above 20 per cent, we can keep the rate increases down to 15 per cent without reducing staff,” he said. The District Engineer, Mr John Lamb, said he was concerned about the effect staff reductions would have on council services. So far, cost-cut-ting had been in construction. It was getting to the stage where the council would not only be cutting out construction but also cutting down maintenance, such as on roads and reserves, he said. Several other councillors agreed that it might be necessary to pare staff numbers to keep rate increases low, although as Cr Shackel said staff redundancy would be a last resort. The committee has

asked for a confidential report from the council’s two executive officers on how a less than 15 per cent rate increase can be achieved. Budget Although increased staff wages and salaries have meant that the council has spent more than estimated in some areas, high interest rates have brought its budget out of the red.

According to the ninemonth cost statement presented to the committee last evening, the council’s expenses are almost $300,000 less than estimated for that nine-month period. By the end of the financial year expenditure is expected to be $500,000 less than estimated.

In the half-yearly cost statement presented last November, the council was estimated to be more than $lOO,OOO over budget by the end of the financial year, March 31, 1986. The District Clerk, Mr Peter Chapple, attributed the turnabout to the unexpected high interest levels that the council was getting.

Councillors said they were concerned about the unusually high over-ex-penditure on Jellie Park Aqualand. They have referred the cost statement for fuller discussion to the council meeting on February 18.