Hamilton City Council says it is facing substantial cost increases in coming years to continue delivering its current services for the community.
A two-day information session this week is exploring how much more it will cost Council to provide the current level of services in 2024/25 and beyond, and what the implications could be for ratepayers.
The Council says the impact of high inflation, interest rates and depreciation on the 2024-34 Long-Term Plan have been signalled for months, with significant rates increases needed in years to come in order to address the financial challenges.
“I’m proud of what we have achieved through some challenging times,” said Mayor, Paula Southgate.
“However, the financial environment has significantly changed. We’re paying more on all fronts – from concrete, steel, power, insurance to labour and more.
“These are the materials we need to maintain and renew pipes and roads across the city, and keep our city in working order.”
She said the inflation pressures were already impacting Council’s budgets and the organisation is bracing for further cost escalation in its Long-Term Plan.
For example, Council’s costs for contracted cleaning of its facilities are expected to rise by 13.2% next year – a combination of increased labour costs and the addition of new facilities such as Te Kete Aronui Rototuna Library.
“My priorities are clear – we must deliver the services expected from our communities – and look after the assets we’ve got. But there are some things we simply cannot afford to do,” said Mayor Southgate.
At Hamilton Pools, the price for water quality chemicals has jumped by 25% over the last two years. Costs to feed impounded dogs at Council’s Animal Education and Control facility have climbed 20% in the same timeframe. Maintaining the city’s parks has become costlier due to hikes in the cost of sand (15%), fungicide (31%) and fertiliser (48% – 57%) in the last year alone.
Looking ahead to what Council’s capital works programme will cost in the Long-Term Plan, independent forecasts are expecting concrete and quarrying expenses to increase by 12.5% and 10.7% respectively in this financial year.
On top of the inflation increases, interest and depreciation will cost Council an additional $36 million in 2024/25 from what was in the previous Long-Term Plan.
“These increases show the scale of what councils across the country are facing – it is not unique to Hamilton or how we operate.”
“Councils up and down the country face the same challenges. We are looking at just what it will take to keep running the city well – there’s nothing new or gold-plated,” said Mayor Southgate.
Mayor Southgate and Chief Executive Lance Vervoort will present the first cut of the draft 2024-34 Long-Term Plan budget later this month (28-29 November).
“Through the process, we will listen closely to the community to hear their views,” she said.