Council job losses are not being ruled out in the costs cutting exercise being undertaken by Tauranga City Councillors.

At the second annual plan workshop meeting today, councillors will discuss possible cuts to the city's planned spending as they intend to reduce a $100 million budget by a third.

'The process is not finished yet,” says Mayor Stuart Crosby.

'The councillors are still focused on issues of staffing levels, and that will relate to the workload obviously and any other operational savings that we can make.”

Asked if this would be job losses, he replied: 'It's not an area I want to get into yet. Definitely we size our organisation to the workload.”

'We are definitely making a significant change from what we indicated two years ago, and the reasons for that are twofold.”

There's been a significant drop in growth, and the economic environment that the world and New Zealand finds itself in has also changed.

It means the city is receiving less income from development contributions, and the rating income base is not growing as anticipated.

From three per cent annual growth over the last three years, it has dropped to one per cent, says Stuart.

'We are only budgeting on one per cent, even though it's a little bit more than that.”

The council is working on a number of issues revolving around the annual plan and finances, says Stuart.

'One is a desire to reduce debt through the capital works programme in particular – and that's what yesterday was about – reducing another $30 million off, so there is significant reduction in the debt requirement for the next year which will keep us within our treasury management policy.

'The second issue is that we are in year three of a partial rate-funded debt reduction programme, and we are looking to smooth that year three over a couple of years, so it's not all one big hit this year – so that's another tool that we are using.

'We are also focused on reducing council operating costs, which will also have an impact on the rating requirement.

'In saying that, we are also being advised that we need to have this year still a higher-than-probably-wanted rating requirement, because if we reduce it too much then again that will impact on our overall finances.”

The draft annual plan the council will complete over the next week or so will be audited and the final plan after public consultation will also be audited.