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Hamilton City Council has approved its proposed draft budget for the 2023-24 Annual Plan, but it must find an additional $6 million in savings.

Affordability and Council digging into its pockets - not ratepayers – was the clear direction from Councillors today (2 March).
 
Council will stick to the proposed 4.9% average rate increase (set in the 2021-31 Long-Term Plan), agreeing not to go higher.
 
This means, a residential property valued at $830,000* paying annual rates of $2,705 would have a rate increase of $2.55 a week, or $133 a year to $2,838.

As the fourth largest city, Hamilton’s rates remain in the mid to low region of all 67 councils.

With Council facing a forecast balancing the books deficit of $34.4 million, a combination of operational savings, additional rates revenue and potential government funding from the Three Waters Reform, reduces the projected balancing the books deficit to $17 million.

 Councillors have tasked staff to find a further $6 million in savings. Bringing the deficit to $11 million.

 Record high inflation and rising interest rates are the main drivers of the deficit. There’re no new projects or spend, Council’s existing and planned work programmes are simply costing more to deliver.
 
Cyclone Gabrielle’s aftermath on New Zealand’s already fragile economy and supply chain will bring with it impacts to Hamilton Kirikiriroa, but the extent remains unclear.

“We are not alone in this challenge. Most councils and businesses across New Zealand are struggling due to the impact of these significant increases in inflation and interest costs” said Mayor Paula Southgate.

 “But the cost of living is biting the hardest on the community.
 
“We are operating in a volatile market. These decisions we make are hard and we must strike a balance between costs and tackling the big issues of a growing city.

 “Now is not the time to put extra burden on our ratepayers.”

The $374 million Capital Programme was discussed in length, as the largest on record. $175 million is committed in terms of contracts, such as the Peacocke and Hamilton Gardens developments, land purchases of $27 million and the injection of the $37 million in Climate Emergency Response Fund. $86 million is for renewals and compliance.

However, reducing or rephasing uncommitted Capital Programme budgets, does not significantly improve Council’s balancing the books position.

Fees and charges were also adopted today with a motion to explore the trial of lower fees to Council facilities for Community Service Card holders.

And cat desexing looks to stay with a reduced budget of $50,000 (from $100,000) – a win for biodiversity.

The community will have the opportunity to have their say on the draft budget from April to May. The final 2023-24 Annual Plan will be adopted on 29 June 2023.

Draft budget breakdown

Balancing our books means that everyday costs are paid for by everyday revenue.

When the 2021-31 Long-Term Plan was set, a balancing the books deficit of $2 million was forecast for 2023-24. In last year’s Annual Plan (2022-23) this increased to a $12 million deficit, mainly driven by increased inflation, depreciation, and cost changes.

Since then, significant external cost headwinds, largely from increases in inflation and interest, have impacted Council’s 2023/24 balancing the books forecast to $34.4 million.

Notes:

*Property values were set in 2021, as part of the three-yearly revaluation.

Major changes in services should be considered through the Long-Term Plan process, to allow service changes to be considered alongside all other services, and to allow for extensive community engagement. Prep work for the 2024-34 Long-Term Plan is underway and will be presented to Elected Members later in 2023.

 


Read the full agenda here

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