Hamilton City Council’s latest financial update is a strong indicator of the economic challenges ahead for the 2024-34 Long-Term Plan.
A report going to the Council’s Finance and Monitoring Committee on Thursday reveals a balancing the books deficit of $27.7 million to end 2022/23, against a budgeted shortfall of $14.4 million.
The biggest contributors to the $13.3 million difference, interest costs ($8.4 million) and depreciation ($3.3 million), are external impacts that councils across the country are being impacted by.
Finance and Monitoring Committee Chair Maxine van Oosten said describing these times as unprecedented would be an understatement.
“Since being elected in late 2019, I have seen our Council confronted by two years of fluctuating COVID-19 restrictions, at various lockdown levels.
“These challenges have since been compounded by inflation pressures and high interest costs, set within a backdrop of governmental reform and transformation.
“The cumulative effect has placed immense strain on our ability to balance the books.”
The report shows Council delivered a record $321 million worth of capital projects in 2022/23, a $70 million increase on the previous year and a four-fold jump on the $86 million delivered in 2016/17.
The year-on-year growth in the capital programme comes with ongoing expenditure to fund the corresponding interest, depreciation, operational and maintenance costs of the projects – which flows into the balancing the books figure.
Councillor van Oosten said the scale of the capital programmes “require a thorough review and reset”.
“We must be transparent about what's achievable and concentrate on priorities that bring the highest benefits.”
Hamilton Mayor Paula Southgate said the economic context is heavily informing preliminary discussions as Council starts to develop its next long-term plan.
“Elected Members will have to make some difficult decisions and trade-offs about what are the absolute ‘musts’ Council will fund and the levers we can pull to do so.”