Con­tin­ued strong growth re­ported

Hamilton News - - Front Page - Peter Tif­fany

A me­dia state­ment is­sued by Hamil­ton City Coun­cil says re­ports to this week’s Fi­nance Com­mit­tee in­di­cated a con­tin­ued trend of strong growth in the city, con­tribut­ing to­wards an im­proved fi­nan­cial re­sult against bud­get for the first nine months of the 2017/18 fi­nan­cial year.

Un­like pre­vi­ous post-meet­ing state­ments, this one did not in­clude any com­ment from the com­mit­tee chair­man coun­cil­lor Garry Mal­lett, whose draft monthly re­port was deemed in­ap­pro­pri­ate by the coun­cil’s chief ex­ec­u­tive Richard Briggs.

In­stead the state­ment has com­ments from Mr Briggs on the state of the city’s fi­nances.

Mr Mal­lett told Hamil­ton News he wasn’t party to any part of the me­dia re­lease.

In it Mr Briggs says it’s im­por­tant to note the re­sult re­ported to the com­mit­tee in­cludes cash and non-cash rev­enue and costs, but ev­ery­day rev­enue is still not cov­er­ing the city’s ev­ery­day costs.

The fi­nan­cial per­for­mance against the 2017/18 An­nual Plan showed a sur­plus of $53.4 mil­lion, com­pared to a bud­get sur­plus of $7.5m.

The ma­jor con­trib­u­tors to the favourable re­sult were rev­enue from vested as­sets (roads and other in­fra­struc­ture built by de­vel­op­ers which be­come coun­cilowned) and devel­op­ment con­tri­bu­tions.

Mr Briggs says the ac­count­ing re­sult shows the city is still in a pe­riod of strong growth.

“We re­ceived $30m more from vested as­sets than bud­geted to this point, and $12.4m more in devel­op­ment con­tri­bu­tions,” Mr Briggs says.

“Al­though this looks like an ex­cel­lent re­sult from an ac­count­ing per­spec­tive, we must be mind­ful these are not cash as­sets avail­able for run­ning the city.

“The fig­ures high­light the need for a more trans­par­ent bud­get mea­sure which shows only the rev­enue avail­able to meet day-to­day ex­penses and doesn’t in­clude rev­enue tagged to pay for build­ing new city as­sets like roads and wa­ter pipes.

“The re­vised bud­get mea­sure es­tab­lished as part of the devel­op­ment of the draft 10-Year Plan will pro­vide this trans­parency and en­able the com­mu­nity to de­ter­mine whether the city is liv­ing within its means.”

The me­dia state­ment also says the Fi­nance Com­mit­tee re­ceived mon­i­tor­ing re­ports on key projects, ser­vice lev­els and a third quar­ter re­port from H3, the coun­cil’s ma­jor events and fa­cil­i­ties group.

The H3 re­port showed a $1.2m ($306k at op­er­at­ing level) favourable re­sult against bud­get in part due to in­creased event ac­tiv­ity across the venues, with sub­stan­tially-in­creased at­ten­dance fig­ures largely due to the suc­cess of the HSBC NZ Sev­ens and other events at FMG Sta­dium.

The full re­ports and agenda are avail­able on the coun­cil’s web­site.

Asked to com­ment on the me­dia re­lease, Mr Mal­lett says: “It’s im­por­tant to sep­a­rate the Hamil­ton City Coun­cil from Hamil­ton City.

“They are dif­fer­ent en­ti­ties. The coun­cil is a sub­set of Hamil­ton City.

“Yes Hamil­ton City has en­joyed strong growth.”

He sug­gested speak­ing to a range of de­vel­op­ers and busi­ness op­er­a­tors to de­ter­mine to what ex­tent HCC was a help or a hin­drance in that growth.

“The prob­lem I be­lieve coun­cil faces is that its ac­tiv­i­ties have strayed miles away from be­ing a provider of core in­fra­struc­ture,” Mr Mal­lett says.

“Rates (and a small amount of user pay fees) which are meant to cover the day-to-day ex­penses and to main­tain and re­place that core in­fra­struc­ture, have not been enough to cover the cost of the many as­sets/ser­vices that coun­cil has de­cided to pro­vide.

“H3’s bud­geted an­nual $16.9m loss is a very good ex­am­ple,” he says.

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