Regulator Lakes Environmental hit by building slump.
Jobs are being chopped at a Queenstown Lakes District Council quango as the building boom dies a death.
Resource and building consent applications filed with regulatory quango Lakes Environmental dropped 16 per cent between July-October.
November was worse, with building consents alone down 40 per cent on November 2007.
LE’s year-on-year revenue to October took a hit of $436,000 – to $2.6 million – and the quango is running at a bottom-line loss of $35,000.
Official reports from November speak of “a sinking lid policy on staff numbers” and perhaps worse to come. “If consent numbers drop significantly over the next quarter, we will review the sinking lid policy to see whether it is still delivering an appropriate balance of staff numbers to consent activity.”
Minutes of November’s board meeting warn LE boss Hamish Dobbie to “be aware of the likely reduction in income when considering future staff appointments and expenditure”.
In early December, Dobbie told his board an unnamed staffer returning to Australia won’t be replaced “in the short term”. About 65 per cent of LE costs are tied up in wages and salaries of its 80-plus staff.
Dobbie has also been doing some “what if” planning in case things really turn to custard.
Taken over a full financial year, a 15 per cent downturn in consents would see LE report a bottom-line loss of $63,000 on an unchanged cost structure.
A 50 per cent consents drop would see LE in the red by $2.63m – yikes.
Consent processing staff “can be reduced at half the rate of the consent volume decline”, Dobbie believes. So if consents plunge 50 per cent in a worst-case scenario – and this job-reduction formula is applied – then laying off a quarter of all consent staff would save $1.2m yearly.
“Staff numbers could be further reduced if the decline in consent volumes becomes more permanent,” Dobbie intones.
Meantime, he promises his board that LE will chase other ways “to take on more work and thereby increase our revenue base” to make up lost consent revenue.
He tells his board: “The main opportunities currently being pursued …” – these are deleted in the official paperwork released to Mountain Scene.