The Hamilton City Council has confirmed an annual average rates rise of 2.8 per cent for the coming year, as an extra $353,000 was also approved so all staff directly employed by the council can be paid at least $22.10 per hour, equal to the living wage.

The increase is 1 per cent lower than what has been proposed in the draft annual plan, and lower than that forecast in the 10-Year Plan.

The council received 198 formal submissions on its draft plan, first presented to the community for comment on June 10.

Since then, the impact on growth revenue has been reassessed with the budget revised to increase revenue by $5 million. The budget maintains $7.3m of operating savings.

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At the annual plan meeting last week, the council confirmed funding in response to Covid-19 including money for a community welfare package ($465,000), rent and rates relief to community groups ($104,000 in total), funding for an economic innovation project ($100,000) and the extension of the council rates rebate scheme for residential ratepayers ($280,000).

Funding for local business support ($250,000) was also approved, including $40,000 for Waikato Food Inc.

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All up, an extra $1.2 million of support for ratepayers, businesses and community groups struggling with the effect of Covid-19 has been provided.

Extra funding was added to support the economic development and environment committees.

The council agreed to put an extra $100,000 into gully restoration and continue funding city safe suburban response for another year. A further $50,000 was tagged for the community lands trust.

Some capital projects were deferred, including the River Plan boardwalk, rejuvenation of the transport centre and some infrastructure work in the city's Peacocke and Rotokauri growth cells.

However, the council will continue with nearly $302.8m worth of capital projects to help get the local economy back on track, while catering for growth.

Money was saved by postponing the demolition of the closed Municipal Pool by a year ($600,000).

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Digitising the library heritage collection was also put on hold, saving $250,000.

Mayor Paula Southgate said the council has pulled "a lot of levers" to drive rates down while continuing to invest in and support the city.

"Covid-19 has thrown us a curveball and we have been forced to be agile and adapt accordingly. But council felt a slight softening of the rates was justified given the extraordinary circumstances we find ourselves in and given the community feedback we have had."

She said the council would have to keep a firm grip on the 2021-31 long-term plan which was the "real" opportunity to fundamentally change direction, if that was required.

"We do need to keep an eye on the detail with the long-term plan coming up because there may indeed be a case for pulling back in terms of quantum and speed of spend. We can't be afraid to do things differently and to take a hard look at fundamentals including how we respond to growth."

The council is now forecasting a balancing the books deficit of $4m in the 2020/21 financial year, with a debt level of $631m.

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The council's work programme and budget for the next 12 months will be formally adopted on August 10.