Potential cost savings of $1.35 million for the coming year will most likely go towards getting Whakatāne District Council’s budget “back in the black” rather than lowering the predicted rates increase.

Most councillors supported this direction at a briefing updating them on progress of the draft budget for this year’s annual plan, to be adopted on June 25.

The savings equate to 1.7 percent of the rates requirement for the 2026-2027 year.

Councillors were offered options for how to apply the savings. These included lowering the projected average rates rise for this year from 9.4 percent to 7.7 percent (Option 1), applying the entire $1.35 million to reducing the operating deficit (Option 2), putting 1 percent toward reducing the operating deficit with the remaining 7 percent held as a contingency fund to cover inflation being higher than predicted (Option 3), or putting part toward rates reduction and the rest for reducing the operating deficit (Option 4).

This was the third planning meeting at which staff briefed elected members on budget matters and sought guidance on options ahead of approving the draft Annual Plan Budget on March 5.

The reductions were found after council requested staff to “leave no stone unturned” in seeking cost reductions at a full council meeting on December 4.

The Long-term Plan 2024-2034 indicated the need for an overall 9.4 percent revenue increase from rates for the third year of the plan, the upcoming 2026-2027 year.

Cost reductions included projected lowering of inflation, reductions in operating costs and increases in fees and charges.

Finance general manager Paul Davidson said $725,000 of those savings were reliant on forecasted lowering of inflation by economic agency BERL, which had the potential to be higher than predicted.

He suggested holding that amount in a contingency fund to cover any unexpected inflation costs, with anything left put toward balancing the budget at the end of the term.

Included in the cost savings is a reduction in full-time equivalent employees by 16 compared to those approved for year three of the long-term plan back in 2024.

This includes removal of the planned 13 new full-time equivalent roles and removing roles in which the positions are currently vacant.

The vacant roles that would not be filled included an archivist, an environmental planner, a role in consent renewal, a business analyst, an animal control officer, a project support officer and a visitor information officer.

Three new roles have been added in legal services, finance and transitioning to Local Waters Done Well.

Mr Davidson said the savings would affect the time within which the council would return to a balanced operating budget.

However, a recent roading review that significantly increased the value of the council’s roading assets meant that depreciation had to be increased on those assets.

This extra cost set the time period back to where it was previously tracking.

Option 3, to put $1 million toward balancing the budget and $700,000 into a contingency fund, was favoured by six of the 11 councillors with two others stating that they were, as yet, unsure but were leaning that way.

Andrew Iles was alone in selecting option 1, which would see the entire amount put toward reducing rates.

“People are still hurting out there. We need to keep on top of our costs better.”

Gavin Dennis and Wilson James were in favour of option 2, to put the whole amount toward balancing the budget without any contingency fund.

Mayor Nandor Tanczos said the council couldn’t keep rates down by borrowing to pay for an operating shortfall.

“That is short-term thinking that only leads to even bigger rates rises in the future.

“This council has indicated that we need to do the opposite – bring actual operating costs down and head the books back into the black.

“This is the fiscally responsible thing to do, and ratepayers will be better off as a result.”

Other budget considerations to be discussed further at the meeting on March 5 are the Rex Morpeth project; changes to the waste disposal levy; the isite, which was discussed at a public-excluded session on Wednesday; new licence plate recognition technology for parking control; and dredging to improve access to the Whakatāne Yacht Club.