The council will adopt its draft annual plan on July 30 - a month later than originally planned. Photo / File
The council will adopt its draft annual plan on July 30 - a month later than originally planned. Photo / File
Hamilton City Council has delayed finalising its 2020/21 budget and setting rates until it has a closer look at the city's finances and decides what work may need to be put on hold as part of the Covid-19 impact.
The council will now adopt its draft annual plan on July 30 – a month later than originally planned.
Mayor Paula Southgate said: "We would be foolish to box along as though it is business as usual when it's absolutely not."
Covid-19 had "fundamentally changed the landscape" and the council needed to respond.
"Council needs to play its part in rebuilding Hamilton's economy and community and councillors need to use the tools we have to do that.
"We need to know very clearly what the financial position of council is, what we can do to minimise the impact of Covid-19 on ratepayers and residents, what work needs to continue and what needs to go on hold," Ms Southgate said.
The council has already announced a 12-point recovery plan and prepared a pitch to secure government money to help the city withstand the impacts of Covid-19, but Ms Southgate said more time would allow the council to consider more options and think more broadly about the challenges facing the community.
"I think taking an extra month to do that, and do that properly, is the most sensible way forward."
Councillors have made it clear they will be seeking feedback from the community on what is proposed in the annual plan, she said.
Elected members will consider the draft annual plan on June 10, with consultation likely to run from June 22 to July 10.
Earlier this month council chief executive Richard Briggs said the council was forecasting a $33 million drop in revenue because of Covid-19.
He said the impact would likely see the council breaching its debt to revenue ratio limits – meaning it could not legally borrow more money to make up the shortfall and keep the city moving.
The council was already talking to the Government about setting debt to revenue at a more appropriate level for high-growth councils.
Hamilton City Council chief executive Richard Briggs. Photo / Supplied
"We can't be hampered by legislation that is simply not fit-for-purpose. We need to have the ability to pull whatever levers are necessary to help our city recover," Mr Briggs said.
Ms Southgate said at the time: "A big portion of the money we need to run the city is at risk. It will have huge impacts going forward."
On Tuesday this week, the council's Finance Committee was given updates on the state of the council's books with reports on capital portfolio monitoring, annual monitoring, and financial strategy monitoring.
However, the details were all pre-Covid-19, covering the eight months to the end of February.
Financial controller Tracey Musty says that while the council's financial position will have changed considerably since the reports were written, it was important the committee had an opportunity to analyse the financial performance of the period.
The financial strategy monitoring report informs the Finance Committee of the status of the financial measures set out in the 2018-28 10-Year Plan – debt to revenue, net debt, and balancing the books forecasts.
As of February, the debt-to-revenue ratio forecast in 2019/20 was 139 per cent, against a budget of 191 per cent.
The net debt forecast was reduced to $400m compared with the $588m budgeted for 2019/20 in the 10-Year Plan.
The 2019/20 budget saw the council achieve its balancing the books measure, however, the forecast is now for an $8.3m unfavourable result.
The annual monitoring report which tracks the council's financial performance against what's in the 2019/20 Annual Plan, showed that as at February 29, the council had an accounting result surplus of $63.7m, which is $11.4m more than anticipated.
From a balancing the books perspective, the council was tracking $7.8m higher than forecast at the end of February.
