Rotorua Council cutbacks take effect

Staff cuts at the Rotorua District Council have cost $1.2m in redundancy payments. Photo / File

The Rotorua District Council will pay out a total of $1.2 million in redundancy costs after a recent shake-up of the organisation saw 30 staff lose their jobs.

Councillors were updated on the council's financial position at a meeting of its Operations and Monitoring Committee yesterday.

Council officers reported on the financial performance for the 12 months ending June 30, revealing a drop in debt levels and spending and a $715,000 budget shortfall for operating costs, which was very close to the council's Annual Plan budget set in June 2013.

Councillors said they were pleased with the figures saying urgent belt tightening measures put in place pre and post election had done their job.

Council chief financial officer Dave Foster said if the council had not reined in its spending and reliance on debt the figures would have been a lot worse.

He said if the original budget had been adhered to, the council would have had to borrow an additional $6.5 million to balance the books.

As at June 30, the council had total debt of $168.7 million with $5 million in the bank, net debt was lower than signalled in last year's Annual Plan at $163.7 million.

The council finished the year with an operating deficit of $13.27 million which was budgeted at $13.98 million, leaving a shortfall of $715,000.

But Mr Foster said those figures would be adjusted by the time the council's Annual Report was released at the end of September to include items which were not in last year's budget, including the $1.2 million in redundancy costs, changes to asset values and additional landfill costs.

Councillor Mike McVicker, who last year called for staff cuts and debt reduction measures, along with some of his fellow councillors, said the council now knew where it stood and should not be "gun shy" about investing in future infrastructure.

"We now have a clean slate and I would love to see the council come up with a surplus in the coming financial year.

"Fifteen months ago I said we needed to address our debt and staff issues and this has happened.

"But, there are some major infrastructure projects coming up in the next few years - we can't get gun shy, we still need to invest in infrastructure for the future of our city.

"Things have turned around with huge fiscal restraint and don't want to see us go too far and stop spending altogether," Mr McVicker said.