By John McDonald, 2024 Hamilton East Ward By-election Candidate

One of the main narratives being promoted by Hamilton City Council for the Long-term Plan draft is that we need large rates increases to maintain services. Council is trying to frame the Long-Term Plan consultation as a choice between large rates increases or a reduction in the quality/quantity of services. A cynic would suspect we are about to be forced by Council to accept both; paying more to get less.

“Council is proposing to reduce services for more cost savings
Our budgets for 2025/26 and beyond are based on us further reducing the everyday costs to run the city. This would likely mean reductions to some back-office functions and some community facing services that Council provides. We have not yet identified which services would be affected. We will ensure critical services which are legislatively required are not impacted (see pages 27-29).”

Quote from the 2024-34 Long-Term Plan Consultation Summary document

Slide from the “View from the Chief Executive” section of 2024-2034 Long-Term Plan Workshop as included on page 62 of the Agenda of Ordinary Council Meeting – Tuesday, 20 February 2024

The Long-term Plan consultation questions specifically ask “What services would you suggest Council reduces or removes? and “What services do you not want reduced or removed?”. It appears that Council wants us to actively choose reductions in services in exchange of the potential of less harsh rates increases.

Council (the staff and councillors collectively… with some exceptions) also want us to believe that it is not possible to make a significant reduction in Council operating costs without cutting services.

  “It’s easy to make claims about wasteful spending, pet projects, or unnecessary costs,” said Vervoort. “But that’s not very helpful when we want to look at the detail of what our community wants and needs.

 “We need Hamiltonians to be specific about what they want Council to do less, or more, of. What do you love, or not, about the services we provide? That will give Elected Members some rich food for thought ahead of locking in the projects and budget.”

 To address the significant cost increases that councils across the country are up against, there is a proposed 19.9% increase ($11 a week for a median-value residential property) for Hamilton ratepayers next year, followed by four years of 15.5% increases.

Quote from a Hamilton City Council media release email titled “Consultation not the time for kneejerk reactions”, Sent 19 March 2024

 

Is it possible to reduce City Council’s operating costs while also maintaining core services and avoiding extreme rates increases?

Despite what Council is claiming, I think so. This is my view of what services need to be prioritised and where Council spending can be reduced.

[This is an edited version of what I will be sending in for the Long-term Plan public consultation this weekend]

What to keep?

  • Road and footpath maintenance.
  • Drinking water services (cleaning, distribution, and pipe maintenance).
  • Waste water services (collection, piping, storage, and treatment).
  • Rubbish and recycling collection.
  • Stormwater system maintenance and flood protection.
  • City maintenance generally (street lighting, buildings, road signage, mowing parks, maintaining/tidying vegetation, etc.).
  • Libraries and their collections of books and records.

Hamiltonians have been seeing declines in the levels of maintenance around Hamilton City in recent years. Gardens and traffic islands not being weeded, parks not being mowed, more damage to roads and footpaths, debris in cycle-lanes, and neglect of street signs. That is just the easily observable decline in maintenance. What is happening with underground infrastructure and inside large facilities such as treatment plants?

For the recent by-election campaign, I used photographs like this one, with the shiny, new surveillance cameras installed above a street sign that is long overdue for some cleaning and maintenance.

It is not so much a question of lack of funds, it is a question of priorities. We are at a time of competing visions for the future of our City.  That photograph demonstrates the reality of the current City Council’s vision for the future; reduced maintenance, deterioration, degradation, and declines in core services while the rates are increasing to fund additional monitoring, management, and control.

What to cut?

Looking at the chart below from the 2024-34 Long-Term Plan Consultation Document , we can see areas where many millions in costs can be reduced while maintaining the all the core services that were traditionally Council’s responsibility.

Chart from Page 35 of the  2024-34 Long-Term Plan Consultation Document

“Venues, Tourism and Events”

  • The H3 venues (Seddon Park, FMG Stadium, Claudelands Event Centre) need to be put under new management with the aim of making them self-supporting in terms of covering the costs of staff, contractors, site maintenance, and building upgrades.
  • H3 needs to stop costing the City many millions per year subsidising commercial events and private benefits.

I recommend that Hamilton City Council keep the land and buildings, though leases them to new community trusts that will run the facilities and pay for staff, maintenance, and upgrades. Local sports teams and their supporters should be involved in the new community trusts and fund more of the costs of running those facilities. The Claudelands Event Centre (Glowbox Arena) also needs to be self-sustaining. Since it is primarily a venue for commercial events, it should not be an ongoing financial drain on the Council’s books.

“Partnerships, Communication & Maaori”, “Community Services”, “Regulatory & Safety”, ‘Support Services”, ‘Growth”

  • Across those five areas there should be a general reduction in personnel costs. This could be reductions in salaries, bonuses, and consultant fees as well as decreasing staff numbers. These reductions should target management and communications personnel, rather than those who provide practical frontline services.

According to this data published by the Taxpayers’ Union, 1 in 5 staff at Hamilton City Council is a “manager”, with managers getting paid over $110,000 a year on average. The same website also states that Hamilton City Council has 29 communications staff who are paid around $89,000 on average.

  • Halving the number of managers (from 259 to 129) and reducing communications staff to just three people could save the City Council over $14 million per year in salary costs alone. With the significant reduction management and communications staff we could also expect the added benefits of greater transparency and a reduction in the propaganda output from Hamilton City Council.
  • Excess communication and management staff could be offered redeployment to the tasks of gardening traffic islands, cleaning street signs, and mowing the parks… with appropriately reduced salaries. Current maintenance and gardening staff would probably then be entitled to a pay increases, in part for the burden of trying to help former managers and ex-PR staff into productive employment.

“Parks & Recreation”

  • Cutback on the use of fungicides, pesticides, herbicides, and fertilisers in city parks.
  • Invest in lower maintenance gardens and turf  through approaches such as selecting more resilient plant varieties .

Borrowing and contractor costs on the big infrastructure projects

  • Reduce the interest payments on debts, largely by reducing the size of the debts. The interest on borrowing is how capital expenditure becomes future operational costs. Finance costs already account for 11% of Council’s annual costs with interest payments expected to exceed $60 million per year in 2025 (See page 85 and 92 of  the Agenda of Ordinary Council Meeting – Tuesday, 20 February 2024).

A responsible council should be able to regularly maintain and replace its core services assets without needing to get into debt. The ‘end-of-working life’ causing the routine replacement of major pieces of infrastructure is something which is both predictable and can be wisely budgeted for decades in advance of the need. Drastic rates increases and borrowing increases near (or past) the ‘end-of working life’ of major infrastructure assets demonstrates poor stewardship from City Council. It also indicates that funds have been irresponsibly spent on other activities instead of being used on maintaining infrastructure or saving for future infrastructure replacements.

“This is why we need the level of rates increases in the earlier years of the Long-Term Plan, so we have the debt capacity to maintain our assets. We’ve seen in other cities what happens if drinking water and sewage pipes reach the end of their working life – and we don’t want to end up there.”

Page 12 of the 2024-2034 Long-Term Plan Consultation Document.

  • Improve the contract negotiation practices within Hamilton City Council to strongly protect the City from budget blowouts and higher costs due to incompetence and/or corruption. This should be applied to the big-budget ‘Three Waters’ and transport projects as a priority.
  • Hold contract negotiators, and/or the CEO, personally liable when their poor negotiations cause the City to accumulate millions in unnecessary costs and debts.

According to the Ratepayers’ Union, Hamilton City council has spent over $300 million on contractors and consultants in recent years. That is an insanely high amount and Council needs to explain if that figure is correct.

  • Council should form consortia and syndicates with other councils to share technical expertise and gain bulk purchasing discounts for transport and ‘Three Waters’ infrastructure. Those saving should reduce the need for rates increases.
  • The council should not increase its debt for projects such as the “Eastern Pathways – School Link” along Te Aroha Street and Ruakura Road.

That proposed Te Aroha Street/Ruakura Road project is now budgeted to cost almost $30 million and had a plan to install over a dozen raised platforms/crossings and more than four in-lane bus stops. A financially disturbing aspect of that project (and likely other NZTA/Waka Kotahi co-funded projects), is that Council treats the millions in project-based road funding from central government as “revenue”.  City Council’s approach is to then use that extra “revenue” to justify increasing the debt ceiling and allow more Council borrowing. Each $1 of revenue allows $2.80 of borrowing…and the current culture within Council views that borrowing limit as a target.

“Safety” and “Smart City” technology

  • Reduce spending on surveillance and monitoring devices such as cameras and Bluetooth recorders.
  • The data storage, software, data processing, and other IT costs can also be reduced by disbanding the CitySafe surveillance systems and halting “Smart City” projects. Crime in Hamilton City has increased greatly in recent years, despite the increase in cameras. This demonstrates that having more cameras does not decrease crime.
  • Traffic counting can be done with older, simpler, and less intrusive technology.

Other Information Technology

  • For information technology spending, Council should move away from expensive corporate licences to open source software with in-house development and trouble-shooting capabilities.
  • Consortia and syndicates with other councils could be used to share technical expertise, improve systems, and achieve economies-of-scale.  Core public services reliant on digital technology should be maintained in-house with local capabilities and not be dependent on foreign corporations.

“Traffic calming” obstacle maintenance

  • Remove the raised platforms, speed bumps, and inappropriate cycle-lane barriers to reduce ongoing maintenance costs within the transport network.

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Consultation for the Hamilton City Council Long-term Plan 2024-2034