“Since 2008, the Council has been spending more than it is earning and borrowing to pay the difference”
- a quote from HCC LTP 2015-25, Volume 1 p12. Each Hamilton City Council LTP since has repeated that statement and promised “a Rates increase of X% over the next 2-3 years will allow HCC to balance the books and start to repay debt”. This has never happened and debt continues to grow, from $440 million in 2015 to $1.2 billion in 2025, despite X+% increases and the creation of new ways to increase Rates (SUIPs, UAGC, targeted rates). A significant decrease in spending does not seem to be the first option.
The latest draft LTP suggests a Rate increase of 19.9%, followed by 4 years at 15.5% (The current average Rate of $2862 would increase to $6107), and still predicts net debt increasing to $1.2 billion in 2025 ($19,650 per ratepayer), $1.4 billion by 2026 ($22,000 per ratepayer) and $2.03 billion by 2029 ($29,000 per ratepayer).
Council debt is secured by the value of ratepayers’ properties and Lenders are assured that their money is safe because the Local Government Rating Act allows councils to enforce payment of Rates. Maybe Lenders should not be so confident that payment of the debt can be enforced if council debt equates to $19,000 or $29,000 per ratepayer.
Mayors and Councillors are elected to protect the interests of ratepayers. They are paid generous salaries for what are, for many Councillors, part-time jobs. (Ask those who hold, or have held, positions as MP and Councillor at the same time). The elected members have been reckless in allowing debt to increase beyond the ability to pay, leaving no buffer for disaster, and overseeing a Council that has been operating for 16 years in what is effectively an insolvent position. Where is the protection for ratepayers?
If ratepayers were shareholders and elected Councillors a Board of Directors the Councillors would be in grave danger of prosecution for reckless trading and trading while insolvent (see the case of Jenny Shipley and Mainzeal).
J.M.Bragger
Hamilton
Projects/Previous-Long-Term-Plans/2015-25/Hamilton-10-Year-Plan-2015-25-Volume-1.pdf
I think the councillors are less to blame, but rather it's through devious means staff have managed to put councillors in a straitjacket (using laughable instruments such as codes of conduct), making councillors unable (or fearful) to hold the staff's feet to the fire and be accountable for the mess they've generated over successive generations of staff. Reform of the LGA is desperately needed to codify how costs and revenue are accounted for, to prevent government grants being accounted for as revenue, and to ensure that supposedly "free" loans from government are included in the debt cap, and not counted as revenue either. Finally, an amended LGA needs to enforce a "CPI - X" regime to drive rates down, no…
Yes! If I ran my household budget like the Council runs theirs, I would be hauled before the Courts long before the debt got to such astronomical figures and told to stop and get into line or go to jail. Demand they take responsibility for it - not give to us. Absurd when you think about it.
Great you're bringing this up. Now, how to change it?