Savings made as council closes Holdings company
Published on 26 March 2024
Whanganui District Council has now completed its review of council-controlled organisations (CCOs) and made final decisions in a closed council meeting on Tuesday 26 March, 2024.
Mayor Andrew Tripe says, “Further to bringing our economic development agency Whanganui & Partners in-house, the council has also decided to close down Whanganui District Council Holdings.”
He says subsidiary companies such as GasNet, the Port companies and the New Zealand International Pilot Academy (NZICPA), will now report directly to the council’s CCO Committee.
“Including the $118k saved from the Whanganui & Partners decision and a reduction in the number of directors at the port companies, we’re now looking to save about $380k per year as a result of these moves to simplify and streamline our CCOs,” says Mayor Andrew.
“The CCO review aligns with our six-point plan to keep rates increases affordable,” he says. “We’re looking at growing Whanganui’s population, improving efficiency, looking for alternative funding for projects, cutting council services, selling assets to repay debt and identifying sources of non-rates revenue.
“The council has already locked in $700k of service level cuts across other council services as well as another $1 million of efficiencies from the council’s back office functions bringing the total savings to more than $2 million so far.
“We are also about to start public consultation on our Long-Term Plan 2024-34 and will be seeking feedback from the community on additional service cuts that could be made to reduce costs and minimise rates increases.”
The CCO Review was undertaken to identify cost and efficiency savings and Mayor Andrew says, “One recommendation was for the council to ensure its investments are delivering enough of a financial return to be worth the associated investment risks – higher-risk investments should have a higher return on investment.
“We’ll need to ensure NZICPA stabilises and starts to return to profit after the disruption of Covid 19 which interrupted the flow of international students to the academy. The report found NZICPA has a positive impact on the Whanganui economy, and when student numbers increase it will support nearly 100 jobs and provide $9.8 million of GDP per year into the local economy.”
“GasNet has consistently delivered dividends to its shareholder, but the council needs to balance receiving dividends with a need to reinvest into the development of the business.”
He says, “Appointing one board of directors to oversee both port companies has already saved the ratepayer $63k.”