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Draft Long-Term Plan Budget Released

 

Hamilton City Council Elected Members will next week consider a staff recommendation to consult with the community on a proposed starting point of a 4.9% average general rates increase and four targeted rates to fund specific projects.

The proposals are outlined in the draft 2021-31 Long-Term Plan budget put forward by Council staff.

The budget outlines a programme that would see Council spend $2.5 billion on capital over the next 10 years.

The four targeted rates proposed in the budget are aimed at enhancing walking, cycling and public transport, supporting community attractions like Hamilton Zoo, Waikato Museum and Hamilton Gardens, plus restoring the city’s gullies and responding to climate change. A proposed separate rate will also help fund projects in the central city, including those aimed at opening up Hamilton to the river.

If approved by Councillors after consultation with the community next year, the targeted rates, applied to all rateable properties, would mean an additional annual average increase of $200 per residential property.

The existing Hamilton Gardens targeted rate would be incorporated into the community attractions targeted rate.

The staff proposals, yet to be formally discussed by Elected Members, are based on five priorities for the city. The priorities were developed by Councillors after an engagement programme that began last year and sought to identify what residents most value about Hamilton, and what would make the city even better.

Mayor Paula Southgate said the Council was facing “mammoth” costs driven by central government, particularly in relation to water and compliance. The staff report says Hamilton will need to invest heavily in water infrastructure over the next decade – making up about one third of all rates bills.

There were also legislative requirements placed upon the city to enable growth, and increasing government requirements in relation to climate change and transportation. Hamilton City Council has already asked central government to support councils in addressing these issues and would continue to seek some kind of co-funding arrangements, she said.

“All councils, particularly high-growth councils, have a massive funding gap when it comes to infrastructure needed for growth. We’re not alone in this and in fact we may be slightly better off than some other councils because of good planning. But that doesn’t make it any easier on Hamilton ratepayers so we must continue to work with government in that area,” Southgate said.

“All these things will be discussed next week before Council lands on a position to take out to the community for comment. All Councillors will have strong views and while we won’t always agree, we all want what is best for the city.

“I’m also personally committed to investing in the central city, including opening Hamilton up to the river. People in Hamilton have been saying it for years and that is clearly a priority for them. Let’s get on with it and deliver.”

Mayor Southgate has cautioned that Councillors will have “plenty to say” during the two-day meeting and that any decisions were a long way off. More importantly, “every single Hamiltonian” will have an opportunity to comment and work alongside Council to get the best result for the city.

“The report is a sound basis for discussion but let’s be frank – it paints a very challenging picture for the city. I won’t be supporting everything in the report but there are some very important proposals that I am 100% behind,” she said.

“For example, this Council has made a strong commitment to looking after what we already have, so I will be supporting considerably more money going into maintenance of the city’s existing assets. I also want to see a greater investment in community facilities right throughout the city. I support a greener city and want to see Council more proactively addressing issues around biodiversity and climate change.”

The proposed budget outlined in the report will see Council balancing its books (everyday revenues paying for everyday costs) in Year 5 (2025-26).

The net debt-to-revenue ratio (how much Council borrows for every dollar of revenue) drops from its current level of 229% to 216% in Year 10 after reaching a maximum of 280% in Year 5, while remaining within the Local Government Funding Agency limit in each year.

The investment in infrastructure will see Council’s net debt increase from $619 million in 2020/21 to $1.129 billion by 2030-31.

Staff have prepared two alternative rating scenarios for Elected Members to consider:

  • A 4.9% average general rates increase plus four new targeted rates to an average total additional annual increase of $100 per residential household. This would require significant cuts to the Council’s capital and operating expenditure.
  • A 3.8% average general rates increase and the existing targeted rates as per the 2018-28 10-Year Plan, requiring even further cuts to the Council’s capital and operating expenditure.

Chief Executive Richard Briggs says the proposed budget responds to the five priorities driven by the community and provides the best opportunity for Elected Members to decide on what the community consultation looks like.

“I have been relentless in my direction to staff that our purpose is to improve the wellbeing of Hamiltonians. What staff and I are recommending achieves this, but we’re also very aware of the need to consider affordability to ratepayers.

“The alternative scenarios are there to provide Elected Members a comprehensive view of all of their options. It will be for Councillors to decide what proposals they want to take out to the community and that is what they will be debating next week,” Briggs said.

“Whatever happens, I have been given a very clear direction from the Mayor that we run a very, very comprehensive engagement programme so that all Hamiltonians have a say well before anything is decided.”

Read the agenda and draft budget here

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