Council seeks savings as fuel costs bite

The head of Nelson City Council is asking staff to find cuts to help manage the impact of rising fuel costs, councillors have been told.

Last week the council’s chief executive, Nigel Philpott, told the council’s delivery oversight committee that the council would need to find a contingency of up to $500,000 to cover the “inevitable tail” of high fuel prices currently impacting the country.

It came after mayor Nick Smith asked what the risk was to the council’s books from the fuel crisis, particularly in regard to existing contracts.

Deputy chief executive and executive director delivery Alec Louverdis said they had set up a group to look at “all things relating to fuel”.

While the council was yet to see any impact, it was inevitable it would come, he said.

“The reality is that, as time goes by and we look at how the crisis is playing out, I have no doubt that there will be some discussions with our contractors, not just from an operational point of view, but also from a capital point of view, in terms of how those matters are starting to bite.”

That wasn’t just limited to fuel supply, but the flow on effects, such as the arrival of materials in New Zealand from overseas, he said.

“We’re looking at contingency plans.”

Philpott said it was a “significant issue” and while he had been assured there were no supply issues, he was concerned about the rising cost of fuel.

“I’m being told at the moment there is no current problem, and we’ve got plenty of access to all types of fuel, but obviously the price is going up significantly, and that’s what worries me as chief executive.”

No-one knew when the war in Iran would end, and even when it did there would be a “tail” that would keep prices higher, and he was concerned about the impact on the council, he said.

He told the committee he would be talking to staff on Tuesday to find areas in existing programmes where money did not need to be spent right now.

An example he gave was $99,000 set aside for public art.

“That’s very important, and as a city we’re proud of what we’re doing with our public artworks, but … we may say actually right now we will not spend money on those works,” he said.

“We have to think about the potential downstream costs to this council and to the ratepayer to cover that.”

The council needed a contingency of about $500,000 to cover increasing costs, he said.

“I’m asking staff to think about where we could find savings over the next six months.”

By Warren Gamble, Nelson Mail