HCC finances

If one looks at the HCC 10-year financial data within the ‘Prospective Statement of Comprehensive Income’, which shows 10 years income and expenditure, there are a number of questions that require answers:

Why do personnel costs increase from $73 million to $80m or 9% in

2018/19 over the previous year. Only

$225,000 relates to increasing the minimum wage and if every employee was given say a 3% increase in pay this would only amount to $3m leaving $4m to explain.

Why are operating costs increasing by 23% in 2018/19?

Why are professional fees increasing from $8m to $12m, an increase of 52%?

In 2017/18 (this year) HCC is projecting an end of year operating surplus of $8.6M but in 2018/19 it is projecting a surplus of $73m and 2019/20 a surplus of $119m. Why is it necessary for HCC to maintain a surplus in excess of $100m over the next 10 years?

At the end of 2018/19 HCC will have

$5.5m on term deposit, $6.9m 2019/20 and

$7.7m the following year. None of these funds has been required for expenditure on any project or to repay debt, but as a result of HCC taking funds out of ratepayers’ savings.

The whole basis upon which two consecutive years’ rates increase of 10% seems to be flawed. What and how development contributions is able to be used seems open for debate and maybe the council’s accounting policies over the use of these funds should be investigated. Otherwise why are other city councils who are also experiencing similar or even greater growth (e.g. Auckland and Tauranga) not increasing their rates to the same extent?

Ian Bridge

Hamilton