2023-24 Annual Plan

One of our key measures to track how our finances are looking is whether we are 'balancing the books'.

When we have a balancing the books deficit in a particular year, this means we are expecting to spend more money on everyday costs that year, than we are expecting to receive in revenue.

Everyday costs are what we need to pay to provide a whole range of services for Hamiltonians, from pipes, parks, roads and playgrounds, to the water you use for your coffee, and removing the waste from your shower, sinks and toilet. Everyday costs also include your rubbish and recycling and the running of facilities such as Hamilton Zoo, Hamilton Gardens, libraries, Hamilton Pools, Waikato Museum and more. 

Everyday revenue comes from rates paid by property owners and fees and charges when people use a Council service (like dog registration or building consents), and grants and subsidies for our operating activities (like funding from Waka Kotahi for transport maintenance).

Because of the impact of inflation and interest rates, our forecast balancing the books deficit at the start of the 2023-24 Annual Plan process was $35 million. This means we'd be spending $35 million – or around 10% – more than our revenue in the 2023-24 year. 

Council has identified a combination of cost reductions and additional revenue to help improve our financial situation. This includes a proposed increased entry fee for non-Hamiltonians aged 16 and over to access the enclosed areas at Hamilton Gardens to an average of $20 from early 2024, and pushing out the feasibility study on developing a roof over the Lido Pool at Waterworld by one year. 

We’ve also received funding towards some of our existing programmes through central government’s Better Off fund, which increases our operating revenue for 2023-24.

Together, these changes would bring the forecast balancing the books deficit down from $35 million to $15 million. We will need to borrow money to cover the remaining $15 million. This represents around 4% of our everyday costs. 

Find out more on the impact on our financial strategy

It was important to Council to keep the average rates increase to 4.9%, which is what we set for the 2023-24 year in the Long-Term Plan. Council also asked staff to find savings, or projects to delay, to help to reduce the $35 million deficit. Council was also clear it did not support reductions in services that the community receive and appreciate (such as how often rubbish is collected), or facilities the communities use (such as library opening hours).

Based on this, Council is now proposing the following changes in the draft Annual Plan:

• Stick to the 4.9% average rates increase set for the 2023-24 year in the 2021-31 Long-Term Plan.

• Reduce operating expenditure by $7.9 million. Some of the things covered in this are set out below; a full list is available here:

  • reducing our spend on contractors and consultants by $1.3 million, including delaying the Lido Pool feasibility study by one year, saving $220,000;
  • reducing our spending on information services by $1.25 million by slowing down our investment in developing new technology and processes;
  • reducing how much we spend on staff salaries and wages by $500,000;
  • reducing the maintenance on our new assets for just one year by $3 million.

• Increase operating revenue by $1.3 million. Some of the things covered in this are set out below; further detail is available here:

  • increasing the average entry fee for people from outside Hamilton aged 16 and over visiting the enclosed specialty areas at Hamilton Gardens from $10 that we proposed in the Long-Term Plan to $20. This will bring in around $320,000 extra revenue in 2023-24 and ensures that non-ratepayers who visit the enclosed gardens are contributing to the significant cost of upkeep;
  • increasing the water charges for commercial and industrial customers, generating $280,000; and
  • increasing tradewaste fees and charges, generating $340,000.

• Better Off funding of $14.65 million from government to fund a range of projects. $10.5 million of this is operating revenue to fund existing projects, which directly reduces our balancing the books deficit.

• We will need to borrow money to cover the remaining $15 million deficit.

Hamilton Gardens:

The Hamilton Gardens is an internationally recognised and award-winning destination.

Council’s 2021-2031 Long-Term Plan proposed a fee of $10 for visitors to Hamilton aged 16 and over to access the enclosed gardens. This will start in early 2024 in line with the opening of the new Visitor Entry Precinct.

There will be no fee for Hamilton Kirikiriroa residents, or for anyone under the age of 16 years.

Everyone, no matter where they live, will continue to have free access to the wider gardens which include Roger’s Rose Garden, Rhododendron Lawn, Camellia Garden, the children’s playground, Turtle Lake and Hamilton Gardens Café.

Currently, the day-to-day operation of Hamilton Gardens is funded through Hamilton City Council ratepayers and revenue gathering activities such as venue hire, retail sales, and tours.

To help improve Council’s financial position, an increase to an average of $20 for non-Hamiltonians aged 16 and over to access the enclosed gardens has been proposed in the draft Annual Plan. This would also be more in line with the cost of other similar offerings.

In 2023-24, this is expected to bring in $320,000 extra revenue.

Lido Pool (Waterworld):

In the 2021-31 Long-Term Plan, we planned to increase recreational swim space in our city by putting a seasonal dome over the outdoor pool (Lido Pool) at Waterworld.

A seasonal dome is a removable structure that covers the pool and means our outdoor pool will be useable in winter.

This project is currently in its early stages, with work on finalising the business case underway.

To help improve Council’s financial position in 2023-24, the draft Annual Plan proposes delaying the feasibility study for a year.

A citywide investigation into the future aquatics provision and needs analysis is currently underway in partnership with Sport Waikato. A delay to this project would also enable the incorporation of this needs analysis into the Lido feasibility study.

• We’ve also delayed some capital projects (the replacement of existing assets or the development of new assets for the future benefit of the city). These are things like upgrading our water treatment plant or building a new bridge.

• The 2021-31 Long-Term Plan budget for the capital programme in Year Three (2023-24) was $278 million. With changes made in the current financial year (2022-23 Annual Plan), the forecast capital programme for 2023-24 increased to $453 million.

• We’ve looked at all of the projects planned for 2023-24 and identified some that we will not be ready to start, or that can be pushed out a year without any significant impact in the short term. By doing this we’ve managed to reduce the capital programme for the year to $340 million – a decrease of $113 million.

• By reducing the capital budget we will be saving on interest and depreciation costs which make up some of our everyday costs.