Overhaul of Queenstown projects to tackle $400m debt

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Desperate times, desperate savings measures. 

A Queenstown council debt squad has run the ruler over major spending – identifying $168 million in potential savings. 

The debt squad’s recommendations – 14 months in the making – will eventually go to full council for consideration. 

Its whopping $168m worth of savings – unveiled at a press conference this morning (Friday) – are made up of: 

– $72.4m from a crackdown on water demand in the Wakatipu 

– $65.8m from a new approach to forecasting cost estimates 

– $6.9m from changes to the Annual Plan for 2010/11 

– $22.7m from a revised community services programme. 

The proposed savings are estimated to reduce council’s peak debt levels – forecast to eventually soar towards a $392m debt bomb by 2019 – to $266.9m. That’s a forecast debt reduction of $125.7m. 

Of the $72.4 m water demand savings, Queenstown Lakes District Council finance boss and deputy chief executive Stewart Burns says: “The significant savings to be found in water demand management can only be achieved if targets for leakage and consumption reductions are met which will be a challenge for the council and the community.” 

Burns warns further savings on capital spending of $28m also need to be found to be able to deliver an affordable 10-Year Plan. 

The plan to attack massive council debt comes after the Auditor-General told Parliament Queenstown’s 10-Year Plan was “financially unsustainable”. 

Any actual decisions changing the future capital programme have to be made by full council when it considers the Annual Plan and 10-Year Plan for 2012-22. 

The debt squad is outgoing mayor Clive Geddes, deputy mayor John S. Wilson, councillor and mayoral candidate Vanessa van Uden, councillor John Mann, councillor Leigh Overton, council chief executive Debra Lawson and Burns. 

In its annual report 2008-09, the debt mountain of council and its quangos stood at $123m – having grown by $31m.