City books slashed by a thousand cuts

Wednesday, 8 November 2023

The city is close to broke and ultimately its residents will have to foot the bill by paying more and receiving less in services.

That was the tacit message delivered to councillors on the first day of a two day workshop designed to inform them of where savings to city budgets could be sought.

A deficit of $75m means Long Term Plan discussions have been coloured with a parsimonious hue.

Tuesday’s proceedings were prefaced by the city’s chief executive Lance Vervoort by saying: “This is one of the toughest and most challenging ten year plans this council’s ever faced.”

The council, many hundreds of millions of dollars in total debt, really only has two strategies at its disposal to bring the books (slowly) back into the black - raise more revenue, and spend less money.

To add insult to injury, Mayor Paula Southgate told colleagues that “I would suggest this is not the time for new priorities”. Those presumably are things like new community space; a need highlighted during debates about the demolition of Founders Theatre.

At two previous workshops councillors asked staff to consider a suite of cuts, walk-backs and deferrals.

They were: introduce paid parking, defer projects including some greenfields developments, cut most of the city’s transport programmes including the eastern school link plan, consider paid parking in the city centre and cut community projects like the planned Rototuna pools.

Those suggested reductions came from the capital portfolio alone.

Staff came back to councillors with the following suggestions on Tuesday:

– Move Alexandra Street Upgrade (Collingwood to Hood) from funded to recommended, saving $6.0 million but to be considered with the balance of Alexandra Street upgrade and Caro Street upgrade.

– Move Waikato Museum Entrance and Profile from base funding to recommended funding, saving $8.6 million if approved and move the timing of Infrastructure Acceleration Funded water main replacements from next year to 2025 or 2026 saving $1.5m.

These savings come in the central city alone - many of the cuts are spared from the central city in the next three years as a result of contractual obligations associated with the Infrastructure Acceleration Fund grant.

The community at large could see more than $7m worth of cuts from capital expenditure in the coming three years.

They might come in the following areas: reduce the budget for Nature in the City by $4.1 million in first 3 years of the new plan, reduce the budget for Sports Park Improvements by $1.8 million in the first 3 years and reduce the budget for Waiwhakareke by $2 million in first 3 years.

Suggestions from staff do not spare transport funding either, in spite of repeated warnings that without major changes the city will choke with traffic.

Most of the potential cuts would come in transport.

A reduction of in the amount spent of cycling and micromobility over the next decade to the tune of $27.5m is on the table, as is a walk-back of $33.1m of funding slated to connect a slew of city schools with improved walking and cycling infrastructure.

Further to those, a $30.9m reduction over ten years to road safety projects as part of the national Road to Zero project is slated, as is a potential $2m per annum reduction to walking schemes in the city.

Then came the real blows - delivered via a section concealed by its innocuous title: “level of service.”

The up-shot for most Hamiltonians is that that level of service would reduce in the next decade despite rising rates.

Some $106,680 of grants for community groups would disappear alongside $100,000 for subsidised cat desexing, $75,000 worth of “marketing and collaboration” from the nature in the city scheme, and a whopping $2,500,000 grant allocated to an indoor recreation centre.

The kicker comes in the suggestion that the commitment the council has made to pay its contractors the living wage could be rendered null and void.

“We could make a saving by removing the requirement for the Living Wage to be applied to contractors. This would kick in when the two key contracts expire (July 2024/July 2025). However, this would effectively mean a $3.30 per hour pay cut for low paid workers who perform essential tasks for Council and represent a potentially vulnerable cohort of our community,” reads this section of the slides put to councillors.

An alternative suggested is not to reduce pay directly, but discard the link between contractor pay and the pay of council staff.

Ultimately the decision to make these cuts will be made by councillors on November 28, 29 when elected members vote on a concrete Long Term Plan.