The briefing is part of the 2020/2021 draft Annual Plan process and gives councillors an early indication on what is being proposed for community consultation, ahead of the Annual Plan being finalised in June. Council will confirm options to be consulted on at its meeting on Tuesday 11 February.
At the briefing staff provided an overview of the state of council’s finances – outlining growth pressures, an historic deficit position, and the need to take into account sizeable unbudgeted expenses.
Lower Hutt Mayor Campbell Barry says the information followed his request for an honest and thorough assessment of Council’s financial position, ahead of councillors being asked to make decisions as part of the Annual Plan process.
“When I was elected Mayor I knew there were significant challenges facing our city – be it in transport, housing or our city’s infrastructure. Since the election the scale of those challenges has become more clear, and it’s long past time we face up to these and have an honest conversation with our community,” Campbell Barry said.
“While rates have been kept low over the past decade, this has come at the expense of essential services and investment in our infrastructure. The cost of new facilities, as well as unbudgeted policies like development waivers, has also put significant strain on Council’s bottom line. Overall these decisions have left our city, and the current Council with a significant bill to pay. We now need to have a conversation about how we pay it.”
“As Mayor, my priority is for our Council to get back to basics and invest in the services and infrastructure that support all of our people to thrive. For us to do this, we are going to have to make some tough choices, particularly about rates. I’m not prepared to put off these decisions – we need to urgently address our Council’s financial sustainability.”
Hutt City Council Chief Executive Jo Miller says that Councillors were briefed on what will be required to achieve its priorities.
“Our city is growing and as more people choose to live here, we need to put money aside to pay for the key things that help our city function properly,” Jo Miller said.
“In order to invest in key services and infrastructure, we have briefed Councillors on the need to change Council’s financial strategy. That’s why we’ve outlined options to increase borrowings up to a peak of $350M over the next ten years as well as a rates rise in 2020/21 of 7.9% for residential ratepayers to do the basics well.”
“While these figures factor in what’s needed to build a new pool in Naenae, the increases mainly address existing and unbudgeted expenses, as well as the legislative requirement for Council to deliver a balanced budget. Even with a rates rise and increased borrowing we’re still looking at a net operating deficit of $13.5M. The deficit situation will need to be eliminated over time. There has to be a better match between the scale of ambition and priority and the resources we have available to deliver them.”
“These are not easy decisions to make and I encourage everyone across our community to have their say during the draft Annual Plan consultation in April.”
“As the Chief Executive, I’ve also committed to making operational savings – of at least $1 million in the current financial year. This will be followed by a line by line review of Council’s budget for the Long Term Plan process next year. If we are to ask our residents to pay more through their rates, we need to be able to demonstrate we can squeeze the most out of every dollar we collect.”
“I have managed a major organisation through a very challenging financial situation. I’m confident that Hutt City Council can get to a place where we have enough funds to have our city running well and to be able to meet community aspirations,” says Jo Miller.
The other major change to the city’s rubbish and recycling to be paid for through an increase in a targeted rate has an indicative start date of 1 July 2021 and would be consulted on through the Annual Plan process which starts in April.
In the past twenty years Hutt City Council has had the second lowest rates rises in the country and very low borrowing levels compared to other councils.
Information on the draft Annual Plan 2020/2021 and Long Term Plan Amendments – Financial Impacts.
View the frequently asked questions.
View the presentation from today’s briefing (1.21mb).
*Figures correct at time of publishing - 05/02/2020