City councillor Angela O'Leary says there is no need for proposed large rates increases in Hamilton.

She says the city's supposed bleak financial situation has been manufactured to justify large rates increases so millions can be spend on unnecessary large projects.

"The financial gap created convinces the public of the need for a large rates increase, while the money is actually being used to spend up large on projects," Ms O'Leary said in a personal Facebook post on February 26.

During the 10 year plan meetings at the end of 2017, the city council voted to increase rates by 9.5 per cent a year for two years to ensure the city was not running off debt.


Ms O'Leary's comments appear to have prompted a sharp rebuke from Mayor Andrew King, who released a statement on March 1.

"Uninformed commentary was confusing the community," he said, although Ms O'Leary would not say if she thought the mayor's comments were directed at her.

The city's current financial model that was approved by council last year takes into account development contributions and other factors to help council not spend money which will be needed later for future projects.

"I have no doubt some people prefer to sling mud rather than try to research the facts, but negative comment and innuendo about how our finances are reported show a lack of understanding of the true situation and the council's processes," Mr King said.

"Councillors have been thoroughly briefed on our financial position and councillors have voted on the way forward."

When Hamilton News spoke with Ms O'Leary this week she reaffirmed the current model is there to try and persuade people Hamilton is in a dire debt situation.

"In March last year there was this message of a big black hole and we need to put rates up. But on the other hand as we have gone through the 10 year plan there is a big spend up happening, so my constituents are really concerned and are very confused," she said.

"It is really hard to explain the finances and I get that, but we have caused the confusion and I think that it has not been transparent."


Ms O'Leary said that because of the confusion and the lack of understanding around the finances, people will be too scared to create submissions for the 10 Year Plan.

 Hamilton Mayor Andrew King. Photo / Tom Rowland
Hamilton Mayor Andrew King. Photo / Tom Rowland

At the same time as voting to increase Hamilton's rates the council also voted to spend $12 million to buy three central city buildings to demolish for Central City Park and also a $3.9 million redevelopment of Garden Place.

"We forget that this is actually public money and the only reason we are there as councillors is to advocate for the people in our city and we have not done that. And that is why I have been so outspoken on the financial strategy.

"It should be consolidated accounting, everything should be crudely explained, everything should be in the bucket and then you manage it through the budget like you would do through a household budget," Ms O'Leary said.

"We have different ways in which we measure our financial performance," Mr King said.

"We have a legal requirement to show our position at a point in time from an accounting perspective and we also have measures which give a better indication of where the city will be in the future.

"It's like being given money to put an extension on your home in the future. If you treat that money as regular income and spend it on your rent, power and fuel you won't have that money when it's time to build the extension.

"Instead you'll have to borrow to build it.

"We need to be clearly able to see what our future responsibilities are."

"This is not a situation caused by any one person, or even any one council, but we have an opportunity to deal with it now.

The 10 year plan begins its public consultation at the end of March with the public encouraged to make submissions on issues in the plan.