Savings achievable, says CEO
Saving Hamilton City Council $83 million over a decade is doable, chief executive Richard Briggs says.
The money will come from four key areas: Delaying the replacement of staff; finding better ways to deliver council’s major projects; contracting out services or forming partnerships; and chopping bureaucracy.
The savings proposal caught the attention of Audit NZ, and auditors working on the long-term plan asked for more information.
Auditors were concerned ‘‘council could be locking in savings that show a better than actual financial forecast’’, Briggs said, but the savings were real and achievable.
On the day councillors adopted the long-term plan, audit director Leon Pieterse said the savings were ‘‘ambitious but reasonable’’.
Ratepayers have been calling for council to cut costs, especially since they’ve been handed a 9.5 per cent rates rise for 2018/19.
Briggs’ savings plan proposes a shake-up, as he said local government could be seen as ‘‘insular, inefficient and bureaucratic’’.
The way Hamilton City Council is operating is unsustainable in the long term, he wrote.
‘‘We need to re-imagine, reconsider and disrupt the way we operate. Belttightening (doing business the same but leaner) won’t address the challenges . . . A fundamental rethink needs to happen.’’
His plans include looking for more central government opportunities, such as the Housing Infrastructure Fund loan for Peacocke, and an incouncil programme designed to break down silos and get council working better.
Smart technology, such as LED street lighting, is already saving money, he said, and a Wintec collaboration allowed council to spend $10,000 on work with a $50,000 budget.
His report set out a plan for saving
$105m, and the single biggest savings area – $46m – is expected to be more efficient delivery of council’s capital programme.
He’s setting up a capital delivery group, which he said could make a
$2 billion programme a reality for about 9 per cent less.
However, council would have to keep a close eye on factors outside its control, such as increasing land prices.
Another $39m is expected to be saved by ‘‘headcount management’’, or delaying staff replacements.
That saved Hamilton City Council $3.1m in 2017/18, Briggs said.
‘‘Contracting out, alliancing or otherwise partnering parts of council operations’’ could save a further $11m, he said.
Changes could happen in areas such as pools, libraries, water maintenance and renewals, and events group H3.
Hamilton City Council is unusual in that it doesn’t contract out many services, Briggs wrote, whereas other councils do.
However, a recent example of a partnership is Rototuna’s indoor recreation centre The Peak – built with the Ministry of Education.
Council also needs to better engage with residents to find these options, Briggs wrote.
For example, council’s Waikato Regional Theatre partnership came about when Momentum Waikato presented in a long-term plan process.
Bureaucracy is also in the firing line, and Briggs expects that to save $9m.
‘‘Removing unnecessary processes that slow down decision-making and service delivery will lead to lower costs,’’ he wrote.
Briggs has $1m to spend on this review over the coming two years and will report progress to the finance committee every six months.
Councillors unanimously endorsed Briggs’ report at a late June meeting.