Hamilton City Council has deferred a decision on a Government funding package until it gets clearer answers from Government on financial impacts and has the chance to consider community views from an ongoing consultation.
In July 2021 Government announced a $2.5 billion package to support councils transition through the Three Waters Reform. The money is split between a ‘no worse off’ allocation of $500 million towards costs of transition, and $2 billion in ‘better off’ funding for councils to use on community wellbeing projects including climate change resilience and housing.
Hamilton’s potential share of the funding is $58.6 million, of which $14.6 million is available this year and the remainder in 2024. Council has until September to sign an agreement with Government for the first tranche of funding.
At yesterday’s meeting Council considered whether to develop projects for the $14.6 million in funding this year, or defer a decision on funding. Should Council decide to participate, it would use the Long-Term Plan process in 2023/24 to identify and plan projects within the full $58.6 million budget.
Council noted Government was yet to provide certainty on costs and funding associated with the reform which could affect Hamilton’s financial position. Councillors noted other unknowns including:
- how Government will calculate the amount of Council debt which would transfer to the new waters organisation,
- the shortfall between Hamilton’s anticipated transition costs and what Government has indicated it will provide, and
- the exact scope of assets and responsibilities, including stranded assets, which would transfer to the new entity.
Council is also yet to review feedback from Hamiltonians on the reform legislation. Hamilton’s public consultation on the reform is now underway and closes on 7 July. Council will consider community views as part of its submission to a parliamentary select committee by 22 July.
At yesterday’s meeting Council decided not to proceed with any application for funding until public submissions have been considered and there is greater certainty on financial issues. Staff were instructed to continue discussions with Government departments to get answers to the financial questions, and report back to Council before Tranche 1 funding closes on September 30.