Summary of 4 December Finance Committee meeting
A quarter of the way through the financial year Hamilton City Council is in a solid financial position against a range of fiscal measures.
In a series of reports to yesterday’s monthly meeting of the Council’s Finance Committee, the organisation’s financial situation was presented as sound and within budget – although senior staff have signalled anticipated costs emerging for the Council in the second half of the year, resulting in budgets in line with expectations.
The Annual Monitoring Report to October 2018 showed a positive variance against the Council’s accounting result ($11.2M) and balancing the books measure ($7.9M) – delivering a budget surplus for the organisation.
Although the organisation is generating more revenue from fees and charges, staff told the committee they expected an expenditure “catch-up” in the second half of the year as contracts and consultant costs eventuate.
In the Capital Monitoring Report, General Manager Development Chris Allen confirmed very positive traction in delivering the Council’s significant capital programme. Although some projects are likely to be deferred to align with contractors’ availability, the programme remained largely on track with budgeted funding shared across all of the Council’s groups and assets. The Council’s capital programme over the next three years is its largest ever, totalling $772M.
As part of that report, the committee approved a $4.7M renewals project to replace floodlights at Seddon Park (see separate media release), and also recommended to the Council it commit $1.75M to a project which will see a section of the city’s river path network in the central business district repaired. The river path project, just north of the Claudelands Bridge, is part of the Te Awa Cycleway and the repair will see the construction of a timber retaining wall and soil nails into the slope so the path can be reopened. The Council will seek an NZTA subsidy to help fund the work. Planning for the project will be carried out this financial year and it is expected to be complete by June 2020 – or potentially sooner if contractor availability allows.
The Council also approved a revised Investment and Liability Management Policy. The policy controls and provides guidelines on the Council’s borrowings and investments, and outlines the controls that should be in place to prudently manage risks. The policy is required by the Local Government Act and must be reviewed every three years, and was a required outcome under the 2018-2028 10-Year Plan.
Staff will continue investigating options to mitigate a funding shortfall on growth infrastructure arising from the submission of large subdivision consents shortly before the Council adopted its 2018/19 Development Contributions Policy. This work seeks the recovery of costs of large infrastructure projects which will benefit these future developments, which would not otherwise be recovered because that infrastructure was not included in the prior policy. The Council will work on finding a solution early and are confident there are good options available to address the funding gap. Staff will present back to councillors in February 2019.
The committee also received a progress report on the 10-Year Plan 2018-28 non-financial performance indicators. The discussion focussed on the merits of perception-based measures in the report, particularly those from the Quality of Life Survey. The bi-annual survey gleans information from the city’s residents on their perception of life in Hamilton and how the council is performing. A summary of the survey results can be accessed here.