Hamilton City Council to propose $6.3b spend, ‘dramatic’ rates rises over 10 years

At its next full meeting, Hamilton City Council will propose a budget of $6.3 billion to keep the city running for the next 10 years.

At its next full meeting, Hamilton City Council will propose a budget of $6.3 billion to keep the city running for the next 10 years.

To “balance the books”, the council said it would need to increase rates by an average of 19.9 per cent - $11 per week - in the next financial year.

This would be followed by an average 15.5 per cent in rates rises each financial year to 2029, a 9 per cent increase in 2029/30 and 5 per cent rates rises each year after that to 2034.

Meanwhile, properties with a pool are in for an even higher targeted rates rise next financial year: an increase of 22.3 per cent.

The council’s billion-dollar budget, and the proposed rates increases, were revealed in a draft 2024-34 Long Term Plan consultation document attached to Thursday’s full council meeting agenda, where elected members will vote to approve the document and its “underlying information”.

According to the draft consultation document, “rates have not kept up” with increasing costs and the council has been “using the city’s mortgage” to build new roads, buy land for community assets, invest in residential and industrial land and roll out free rubbish and recycling collection services.

The result of this borrowing, the draft document said, has been increased repayments.

“We’re expecting to pay $18 million more in interest next year than previously forecast.”

The document said Hamilton’s median residential rate was $2838 in the current financial year.

“This is around $800 less on average than other councils we looked at,” the document said.

“If our proposed rates increase goes ahead, our median residential rates will still be lower than most of the other big cities and our neighbouring councils, who will also be increasing their rates.”

The document said the council recognised the proposed rates rise was “dramatic”, but necessary for the council to avoid breaching its legal debt-to-revenue limit in 2026/27.

“A key focus of the draft Long Term Plan is to make the rates rises as low as we possibly can next year,” the document said.

“The alternative would be to balance the books more quickly, but rates rises would need to be higher in 2024/25 and 2025/26.”

What the council is planning to spend

The council’s draft consultation document said its proposed financial strategy was aimed at “sustainably funding” projects.

“To keep the city running, we will spend $6.3b over the next 10 years.”

Spending on Three Waters services made up about 30 per cent of the council’s budget, with $1.05b allocated for wastewater, $311m for stormwater and $535m for water supply (a total of about $1.89b).

In February, the council said it faced significant changes in its budget as a result of reincorporating the costs of Three Waters services.

Other items in the council’s planned operating expenditure included $1.34b for transport, $669m for venues, tourism and major events and $779m for “support services”.

Also included in the council’s proposed Long Term Plan budget is a $16.9m contribution towards a walking and cycling bridge “that will provide more ways to access the central city and connect to nearby parks, residential areas and schools”. The project is being supported by $31.5m in funding from the Crown’s Infrastructure Acceleration Fund.

Hamilton Mayor Paula Southgate said the council faced “one of [its] toughest budgets”.

In the draft document’s opening message to ratepayers, Hamilton Mayor Paula Southgate said the council faced “one of [its] toughest budgets”.

“The budget proposed is lean,” Southgate’s message said.

“There are no pet projects. In fact, many aspects that make city living nice have been put on the back-burner.

“No matter what we do, a significant rates rise is required.”

In Southgate’s message, she noted she was was “personally disappointed”.

“I’ve heard how unhappy people are with the proposed rates rise. I hear you. This consultation process is your chance to have your say.”

The council will meet to vote on the draft consultation document on Thursday, March 14 at 9.30am.

Community consultation on the Long Term Plan will run from March 19 to April 21, followed by verbal submissions to the council in May.

The council are scheduled to consider feedback in June and confirm a final 2024-34 Long Term Plan on July 4.

Maryana Garcia is a Hamilton-based multi-media reporter covering breaking news in Waikato. She previously wrote for the Rotorua Daily Post and Bay of Plenty Times.

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