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Council To Consider COVID-19 Response Budget

Staff at Hamilton City Council are recommending Council maintain a 3.8% average annual rate increase – but only on the basis of deferring millions of dollars in capital projects and making major savings to cope with the impact of COVID-19.

Councillors will discuss a proposed COVID-19 response budget on Wednesday next week (10 June). The meeting will see them adopt a draft Annual Plan to go out for public consultation from late June. The final decision around rates will be made in early August.

Chief Executive Richard Briggs said the response budget responds directly to the dramatic impact of COVID-19 on the Council’s finances. Council estimates a $22 million drop in non-rates revenue for the next 12 months, from things like building and consent fees, development contributions and money paid to community facilities and visitor attractions like our pools and Hamilton Zoo.

In response, Councillors will be asked to consider more than $7 million in savings and $65 million of capital project deferrals to help make up for the loss of income. Projects that may be potentially deferred include a new river boardwalk for Victoria on the River and infrastructure work in the Peacocke and Rotokauri growth cells.

Savings touted in the budget include more efficient processes, cutting travel and training costs, and freezing wages for Council staff earning more than $70,000 per year.

Potential new items to be funded include an entry upgrade for Hamilton Zoo – Waiwhakareke Natural Heritage Park, plus extra resourcing to help drive economic development in the city and speed up work on environmental initiatives. Councillors will decide on Wednesday whether those proposals, along with a suite of others, are in or out.

The proposed budget includes expanded targeted relief, including $1.1 million for residential ratepayers, businesses, and community groups struggling to pay their rates, including remissions, payment deferrals and extending payment arrangements.

Briggs said helping those who need it most continues to be a priority. Councillors had also asked staff to consider the impact of dropping rates to 2.8%.

“Dropping rates by around 1% would mean, on average, a $25 a year saving for ratepayers. But the long and short-term impacts on the city in terms of service cuts and increasing debt would be significant. Dropping the rates is not something staff are recommending but that will be a decision for Councillors to make.

“We’ve already directed $3.4 million of funding to support the wellbeing of those individuals, businesses, and community groups hit hardest by COVID-19 and it’s paramount that any budget we propose for the next 12 months continues to support those who need it the most. The direction from Councillors in that regard has been very clear.”

Despite savings identified, the report recommends Council maintain the 3.8% average annual rate increase promised to the community in the 2018-28 Long-Term Plan.

This would allow the Council to maintain current levels of service, keep $297 million of capital projects progressing and prepare for the growth still coming, Briggs said.

But it means the Council will delay balancing its books by two years and may need to increase its debt-to-revenue ratio in future years.

Also included in the budget is a proposal to change the Council’s rates remission policy to allow rebates for Hamiltonians suffering hardship because of COVID-19 and a proposal to change how often the Council sends out rates invoices.

The Council’s COVID-19 response budget will be open for feedback from 22 June – 10 July.

View the Council report outlining the COVID-19 response budget.

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