‘Massive’ impact is expected on projected rates – up to 25.5% in Year 1 itself, in Hamilton after the new Government instructed councils to retain water services.
Bringing the costs of water service delivery back into council budgets has made a dramatic change to potential rates impacts for the Council, as long-term draft budgets set in November excluded all water services costs from rates bills from 2025/26.
This has added hundreds of millions of dollars in costs, and an urgent revision, to the previous draft budgets. It means the Council will now reconsider the plan, and the consequential impacts on rates, at its meeting of 20 February.
Detailed financial modelling provided by the Council staff at a briefing yesterday showed sharp increases in projected rates in Years 2 to 5 in the plan.
The rates increases originally proposed in November from Years 2 to 5 were 12.9%, 8.7% and then two years at 6.3%. Returning the costs of water services changes these figures to four consecutive years of 14.1% rises. Both sets of figures assume a 25.5% increase in Year 1.
Hamilton Mayor Paula Southgate said the impact is massive for Council’s budgets, with water services making up around 30% of Council’s operating costs and capital investment.
“The need to include water service delivery in our Long-Term Plan beyond year 2 significantly changes our financial projections, placing further cost pressure on Council…Waters infrastructure is expensive, especially for a fast-growing city.”
Promising to raise this with the Minister for Local Government, Mayor Southgate said her focus meanwhile would on “finding the right solution for Hamilton.”
Council will be asked to adopt an updated draft Long-Term Plan at the 20 February 2024 Council meeting, ahead of community consultation in March-April 2024.
– from NewsViews
