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Draft Long-Term Plan Confirmed

Hamilton City Council will seek feedback from the community next year on a proposal for a 4.4% annual average general rates rise plus the potential for a new 4.5% targeted rate to help meet government-imposed costs.

The proposals were finalised after two days of intense debate ending today (10 December 2020) about the projects and services to be included in the draft 2021-31 Long-Term Plan, and how those are funded.

Discussions highlighted huge concern from Elected Members about the increasing costs driven by central government for all councils to respond to new legislation, especially around water reform and compliance, climate change and enabling housing growth.

Council proposes ring-fencing and highlighting those costs using a targeted rate made up of:

  • $109 (average, in the first year) per property to cover the increase in government-driven costs associated with three-waters reform
  • $31 (average in the first year, for five years only) per property to deliver changes to the District Plan imposed by new national planning standards.

Staff had initially considered four targeted rates to enhance walking, cycling and public transport, support community attractions like Hamilton Zoo, Waikato Museum and Hamilton Gardens, restore the city’s gullies and respond to climate change, and help fund projects in the central city and along the river.

Those work programmes are now proposed to be funded through general rates, including development at Hamilton Gardens.

Hamilton Mayor Paula Southgate said the discussions had been complex and challenging. Councillors were acutely aware proposed rates needed to be fair and affordable. But the reality was that the city was being faced with a deluge of costs, she said.

“Hamilton City has been bold in making government costs very transparent to our community and we make no apology for that. I hope other councils take some heart from this because I know they are facing exactly the same issues,” she said.

“But we’ve put those costs out there, along with a proposed rates rise, and now it’s time for the community to have their say. This whole budget has been guided by community aspirations and priorities and now we will hear from the community about what they think.”

Mayor Southgate said everyone had made trade-offs but the Council was united in continuing to prioritise looking after existing assets.

“We’ve made a promise to look after what we have – and we’ve stuck to that. I’m pleased about that because past councils have not necessarily had that same commitment and ratepayers have borne the cost."

Over the course of the two days, funding for a number of projects was either removed, reduced or deferred into later years as Elected Members worked to reduce the impact on rates. Proposed changes include:

  • $2.395 million for a new jetty at Hamilton Gardens in years 1 and 2 pushed out to years 6 and 7
  • $3.975 million for an extension to the Hillcrest Library in years 1 to 5 moved to years 6 and 7
  • $6.6 million for a riverbank entrance to Waikato Museum goes from years 1 to 5 out to Year 7
  • $4.212 million previously budgeted to increase accessibility at Wellington Street beach reduced to $1.1 million.

Also among the projects and funding streams put forward was the introduction of a $5 charge for parking at Hamilton Gardens, excluding for those with mobility permits. If approved this would be effective from 1 January 2022.

Only a handful of previously unfunded projects were brought into the draft Long-Term Plan, including:

  • $3 million in 2021/22 for a roundabout at the intersection of Gordonton Road and Puketaha Road
  • $3.6 million across the first seven years towards drainage and irrigation improvements for sports parks.

Both the general rates and targeted rate would increase by 4.9% annually from Year 2.

The plan sees Council balancing its books (everyday revenues paying for everyday costs) in 2023-24 with its net-debt-to-revenue ratio reaching a maximum of 280% in 2026-27.

The draft plan proposes resetting Council’s net-debt-to-revenue ratio limit from the current 230% to align with the Local Government Funding Agency limit of 300% for 2021/22, decreasing by 5% each year until 2025/26 then remaining at 280%.

Chief Executive Richard Briggs was clear that no final decisions have been made.

“Elected Members should be applauded for the constructive approach they maintained over two days, and for their resolute commitment to keeping the wellbeing of the community at the front of their mind while making decisions about what to put in and what to take out of the draft budget.

“The draft Long-Term Plan will now be subject to consultation with the public and I expect we will hear passionate views from our residents and community groups.”

Consultation on the draft Long-Term Plan will run from 5 March 2021 to 7 April 2021.

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