PALMERSTON NORTH CITY
COUNCIL
Memorandum
TO: Committee of Council
MEETING DATE: 7 February 2018
TITLE: Approving the 2018 10 Year Plan Supporting Material (including the
Draft Financial and Infrastructure Strategies and Updated Funding and Financial
Policies) and the Consultation Document for Audit
DATE: 30 January 2018
AUTHOR/S: Heather Shotter, Chief Executive, Headquarters
|
RECOMMENDATION(S) TO Council
1. That
the proposed Revenue and Financing Policy and the proposed 2018 Development
Contributions Policy be approved for public consultation.
2. That
the Supporting Material (consisting of the following documents) be approved
as the basis for the Consultation Document for the 2018 10 Year Plan:
· Community Outcomes (Vision, Principles and Goals, plus
Council’s Strategies)
· Groups of Activity information
· Financial Strategy
· Infrastructure Strategy
· Revenue and Financing Policy
· 2018 Development Contributions Policy
· Significant Forecasting Assumptions
· Forecast Financial Statements
· Rating Information.
3. That
the Consultation Document for the 2018 10 Year Plan be approved, subject to
Audit.
4. That
the Committee note that the Financial Policies, Supporting Material and the
2018 Consultation Document (amended if necessary following the audit process)
will be presented to Council on 5 March 2018 for adoption and subsequent
consultation.
5. That
the Mayor, Deputy Mayor and Chair of Finance and Performance be given
delegated authority to make minor corrections to the documents before they
are provided to Audit NZ.
6. That
the Committee note that the following instructions referring items to the 10 Year
Plan have been actioned:
· 4-16, Arts and Culture 12 Dec 2016, 2019 Military Tattoo
· 7-17.2, Sport and Recreation 6 Mar 2017, New Swimming Pool
Investigation
· 14-17, Finance and Performance 20 Mar 2017, Library Heritage
Staircase
· 6-17.14, Committee of Council (Annual Budget) 24 Mar 2017,
Menzshed Toilets
· 6-17.16, Committee of Council (Annual Budget) 24 Mar 2017, School
Travel Plans
· 6-17.24, Committee of Council (Annual Budget) 24 Mar 2017,
Cornerstone Hall Contribution
· 18-17, Community Development 12 June 2017, Asset Management Plans
for Community Centres
· 88-17, Council 12 June 2017, 2018 Vision, Principles and Goals
· 46-17, Finance and Performance 19 June 2017, Rubbish and Recycling
Options
· 54-17.2, Planning and Strategy 7 Aug 2017, Rating Issues
· 18-17, Arts and Culture 14 Aug 2017, Public Arts Register
· 19-17, Arts and Culture 14 Aug 2017, Te Manawa Business Case
· 122-17, Council 28 Aug 2017, Te Manawa Business Case
· 56-17, Planning and Strategy 4 Sept 2017, Te Aroha Noa
· 28-17, Community Development 11 Sept 2017, Social Housing.
|
1. ISSUE
The Council
has to adopt its 2018 10 Year Plan (long-term plan) by 30 June 2018. As
part of this it needs to prepare a Consultation Document (CD) and Supporting
Material. The CD needs to include a report from Audit New Zealand on
whether the CD meets legal requirements and on the quality of the information
in the CD.
Once the CD
has the Audit Report the Council adopts it (and the Supporting Material) for
public consultation. The legislation says that the CD is the
Council’s main tool for the 10 Year Plan consultation. The Council
does not produce a draft 10 Year Plan.
This
memorandum presents the CD and the Supporting Material for the Committee to
approve for audit.
The Committee
should note that once Audit has given its report the Council cannot make
changes to the CD or Supporting Material without triggering another Audit
review. Therefore the Committee needs to be sure that the CD and
Supporting Material state what the Council wants to consult on.
2. BACKGROUND
To prepare the
CD the Council has extensively workshopped its strategic direction, including
its Vision and Goals, Strategies, Financial Strategy and Infrastructure
Strategy. These workshops did not include specific consultation but they
were all based on a good understanding of community views from previous
community engagement. Plus the Council will carry out extensive
consultation on the CD and Supporting Material.
Vision
and Goals and Strategies.
The Council is
proposing a new Vision and Goals:
Small City Benefits, Big City Ambition
The Vision
shows the Council’s aspiration for Palmerston North residents to enjoy
all the benefits of living in a small city, while also having the lifestyle,
education and business opportunities available in much larger metropolitan
cities.
The Council
also has five Goals and six Strategies that show more detail of what Small City
Benefits, Big City Ambition means:
· An Innovative and Growing City: A city that is clever about the way it uses its natural
advantages to encourage and support innovation, entrepreneurship and new
industries, and positions itself to take advantage of change to fuel
sustainable growth, prosperity and wellbeing. The Council’s City
Development and Economic Development Strategies shows in more detail how
Council will make this happen.
· A Creative and Exciting City: A city that draws inspiration from the diversity within its
culture and creates a vibrant urban environment that attracts creative and
clever people, and nurtures creative talent. The Creative and Liveable
Strategy shows in more detail how Council will make this happen.
· A Connected and Safe Community: A city that includes, supports, connects and uses the
talents and advantages of the whole community in the pursuit of prosperity and
wellbeing. A city that has an international reputation as a safe city in which
to live, study, work and play. A city that embraces its Iwi heritage and
partnership, and where people connect with the city’s past, celebrating its
history and heritage. The Connected Community Strategy shows how Council
will make this happen.
· An Eco-City: A
city that is future-focused, planning for and caring about the future,
enhancing its natural and built environment. The city will realise the benefits
to society from creating clean energy, lowering carbon emissions, and reducing
its ecological footprint. The Eco-City Strategy shows what Council will
do to make this happen.
· A Driven and Enabling Council: To govern well, and build
the leadership, culture, capability and capacity required to efficiently and
effectively deliver, together with our community, the change required to
achieve the outcomes in council’s new city vision. To regularly receive
high levels of endorsement from customers, residents, partners, stakeholders
and peers. To meet, beyond expectations, our responsibility to manage and renew
the infrastructure upon which our community relies for its health and
wellbeing. The Driven and Enabling Council
Strategy shows in more detail how Council will make this happen.
The new Vision
and Goals, subject to consultation, will replace the current Vision and Goals
when the 10 Year Plan is adopted in June.
Financial
Strategy.
The Financial
Strategy sets out how the Council will prudently manage
its finances and provides a context for the 10 Year Plan consultation by
showing the overall effects of the Plan’s proposals on services, rates,
debt, and investments.
Key points in the Strategy are:
· Council has assets with a replacement value
of more than $1.7 billion that are generally in good condition and are big
enough to cope with significant city growth.
· The Council’s current debt levels are
moderate for a regional New Zealand city (especially given the range and
quality of services provided).
· Rates levels are comparable with other
districts of our size.
· Council is planning for high population and
household growth over the next 10 years and medium growth beyond that time.
· The city has adequate appropriately zoned
land to cope with the first 10 years of growth.
· Council believes it needs to invest in new
and better catalyst projects to meet its Vision and Goals for the city.
· The greatest challenge to Council’s
long-term financial sustainability is the requirement to update the
city’s wastewater treatment and disposal system. It is currently
assumed that an acceptable option can be obtained for $110 million (plus
inflation).
· To fund the new capital expenditure of
$506.8 million proposed in the 10 Year Plan, Council’s debt will increase
from a forecast $109 million to $349 million.
· To help cope with the additional debt,
rates have been increased to repay $45 million more of the present debt over
the 10 years than was originally proposed.
Total rates will need to increase by 6.4% in 2018/19,
by 5.6% in 2019/20, by 5.8% in 2020/21 and by between 2.6% and 6.7% in each of
the following seven years.
Infrastructure
Strategy.
The Infrastructure
Strategy identifies the significant issues facing Palmerston North over the
next 30 years, identifies the principal options for managing these issues, and
outlines the implications of those options.
The major issues are:
· wastewater treatment upgrading
· provision of another river crossing and regional freight ring road
· developing new infrastructure for growth
· renewing infrastructure
· applying urban design
· facilities to encourage alternative transport modes
· security of water supply
· increasing the resilience of the city's infrastructure
· the impact of climate change
· modernise the Central Energy Trust Arena
· using Council land for housing
· Te Manawa
· The Central Library.
Revenue
and Financing Policy
The Council is required by s.102 LGA to
adopt a revenue and financing policy and to include the policy in the 10 Year
Plan. The policy considers who are the beneficiaries of each of the
Council’s services and how the cost of each service is to be
funded. It particularly addresses the extent to which services are to be
funded from specific users (through fees and charges) and from rates (either
targeted or general). The proposed policy contains no significant change
to the overall funding approach compared to the policy adopted in 2015 but has
been reconfigured to recognise changes to the structure of Council activities
to align with the new goals and strategies.
2018
Development Contributions Policy
The Development
Contributions Policy does not form part of final the final 10 Year Plan
document but the Policy is a fundamental part of the mix of funding
arrangements for the Council and needs to be updated each three years
concurrently with the development of the 10 Year Plan. The broad purpose of the
proposed amendments to the Policy is to improve the administrative efficiency
and clarity; create new development contribution areas for locations serviced
or planned to be serviced by Council infrastructure, and to align the
Policy’s growth projections with the 10 Year Plan. A summary of the
proposed amendments to the Policy are provided below:
· Amendments that seek to improve administrative efficiencies and
clarity of the Policy as follows:
- Alignment of the Policy to legislation that allows Council to
withhold a certificate of acceptance under the Building Act if a contribution
is not paid;
- Insertion of a more detailed description of the integrated water and
wastewater networks and amendments to associated maps;
- Further guidance for the calculation of past and existing gross
floor area; and
- Further guidance relating to dependant dwellings and accessory
buildings being used as equivalent household units.
· New development contribution areas for the North East Industrial
Zone Extension Area, Bunnythorpe, Longburn, and updated associated maps.
· Development contributions to be charged for wastewater, water and
local reserves at Ashhurst, and wastewater for Bunnythorpe.
· Local reserve contributions to be charged for the Napier Road
Residential Area.
· Update of household growth projections contained within the Policy.
· Amended Appendix maps relating to water, wastewater and local
reserve.
Rating
Information
Differentials for General Rate
The Supporting Material contains a
description of the Council’s rating system including the definitions
planned to be used to describe the various differential rating categories for
the general rate. The basic structure of the differential system has remained
unchanged for many years but there have been changes to components of it from time
to time and in particular the descriptions of the various differential
categories.
During this year the Council received a
deputation which challenged the differential category a property had been
allocated to and to an extent the rationale for rates applied to each category,
particularly when there has been a greenfields subdivision. The more
fundamental question about the fairness of the rating system requires more
detailed investigation before any proposals for change can be contemplated.
However in an effort to make the current system easier to understand the
definition of the differential categories has been reviewed and simplified.
The key changes are:
· Removing the two hectare limit for single unit residential property
(R1) – this means all vacant residential land which is serviceable (i.e.
where the Council’s wastewater system is available) will be in this
category – currently vacant residential land over two hectares is
classified in the more highly rated miscellaneous (MS) category.
· Removing the separate categories for multi-storey buildings four
storeys and above – this means all multi-storey buildings will in future
be charged the same rate in the dollar.
· Removing the separate categories for commercial accommodation (CA)
and commercial research (CR) – these categories were introduced many
years ago in contemplation of a change to a capital value based system but have
continued to be rated at the same level as other commercial property –
the change will therefore not affect the rates charged on these properties.
· Making it clearer the situations in which the Council will be
prepared to retain a part of the property in the more lowly rated
rural/semi-serviced category.
UAGC & fixed targeted rates
The Supporting Material includes the following
assumptions regarding the proposed level of the Uniform Annual General Charge
and the fixed targeted rates for services:
|
Charge Type
|
CHARGE
2017/18
|
CHARGE
2018/19
|
What it pays for
|
|
Water
|
$273
|
$272
|
Pays for the cost of providing of water
|
|
Wastewater
|
$246
|
$250
|
Pays for the cost of treating and disposing of
wastewater
|
|
Kerbside Recycling
|
$128
|
$126
|
Pays for the cost of kerbside recycling
|
|
Rubbish & Public Recycling
|
$60
|
$65
|
Pays for general rubbish & recycling
costs including transfer stations, cleaning up fly tipping, community
education
|
|
General
|
$630
|
$700
|
Contributes to paying for all other Council
services and acts as a way of ensuring that all properties contribute a more
equal share of the cost rather than it all being based on the land value
|
The fixed
component of the rates for most residential properties (i.e. those which are
charged all of these rates) will increase from $1,337 to $1,413 (i.e. 5.7%).
This means the average residential rate (for a property with a land value of
$147,000) will increase from $2,433 to $2,579 (i.e. 6%). It also means
rates for non-residential properties will increase by between 6.5% and 6.7% and
rural/semi-serviced properties by between 8% and 9%.
Metered water charges
Metered water charges are legislatively
deemed to be rates and details of these are included in the rating system
section of the supporting material. The metered water tariff comprises a fixed
and a variable component. Currently the fixed component produces total annual
revenue of approximately $130,000 of the total metered water revenue of $2m
p.a. This is insufficient to fund an equitable share of the cost of the
infrastructure required to provide a water supply, nor cover the core fixed
costs of meter renewal and operating costs including meter reading etc.
Historically for small water users, the typical combined annual fixed and
variable charge has been significantly lower than the amount of the targeted
water rate charged to non-metered residential ratepayers.
This inconsistency has been addressed in
calculating the charges for 2018/19 and it is proposed that there will be only
a small increase in the variable per cubic metre water charge but a significant
change in the structure of the of the fixed component of the charges as
follows:
|
Meter size
|
Annual
charge $
2017/18
|
Annual
charge $
2018/19
|
|
Up to 15mm
|
41.40
|
212.75
|
|
19 to 20mm
|
42.55
|
212.75
|
|
25mm
|
54.05
|
212.75
|
|
32mm
|
78.20
|
264.50
|
|
40mm
|
144.90
|
264.50
|
|
50mm
|
144.90
|
264.50
|
|
65 to 80mm
|
286.35
|
460.00
|
|
100mm
|
365.70
|
460.00
|
|
150mm
|
512.90
|
862.50
|
|
200mm or more
|
610.65
|
1,150.00
|
|
|
Charge
$
2017/18
|
Charge
$
2018/19
|
|
Rate per Cubic metre
|
1.173
|
1.1845
|
The fixed
charge for the smaller sized connections compares with the fixed targeted rate
which is proposed to be $272.
Consultation
Document.
The CD is
Council’s main tool for the 10 Year Plan consultation. It has been
designed primarily as an online document and will be interactive.
It describes
Council’s Vision and strategic aspirations and outlines the major issues
(and their options and implications) facing the city and Council. It also
summarises the Council’s Financial and Infrastructure Strategies and
shows people how they can have their say.
It must do all
of this in a simple and concise manner (s.93C LG Act).
Supporting
Material.
The Supporting
Material contains information that the CD relies upon. Most of this information
will be included in the final 10 Year Plan. It includes:
· Community Outcomes
(Vision, Principles and Goals, plus Council’s Strategies)
· Groups of Activity
information
· Financial Strategy
· Infrastructure
Strategy
· Revenue and
Financing Policy
· 2018 Development
Contributions Policy
· Significant
Forecasting Assumptions
· Forecast Financial
Statements
· Rating Information.
Some minor
wording and formatting amendments will be made to this information before it is
formally provided to Audit NZ to make the documents look and read more
consistently. Any changes will be approved by the Mayor, Deputy Mayor and
Chair of Finance and Performance.
Other
information, such as the Council’s proposed new Strategies and Plans,
Arena Master Plan, City Centre Streetscape Plan, etc will be background
information which is publicly available and promoted during the 10 Year Plan
consultation period.
Proposed
10 Year Plan Community Engagement
The engagement
will focus on using online channels to encourage high levels of participation
and drive quality two-way engagement with the community. It will be
branded under the tagline "What's the Big Picture?, Palmerston North,
Your City Your Say". This reflects the boldness of the Council's
Vision and encourages people to think long term about what the city should look
like in 10, 20 and even 100 years’ time. The engagement will
include:
· A dedicated website based on the What's the Big Picture?
message. It will load quickly and be readable on desktops, laptops and
smart devices. It will include an interactive version of the Council's
Vision, where people can click on the spatial picture of the Vision and get
more detail and send Council their comments.
· Enhanced social media outreach, with a focus on reaching a broader
audience. It could include a Facebook live 'Q&A' with Councillors.
· Face to face
community engagement through Let’s Talk with a Councillor sessions, open
sector meetings, villages meetings, and attendance at community events and
community hubs.
Council will
also give submitters the option of attending less formal and more interactive
hearings. The details of this are being worked out and will be included
in the final CD.
Throughout the
documents some links and cross references are still to be completed –
this will be done for the final version.
Closing
Committee loops
Some issues have been raised at various
Committees and referred to the 10 Year Plan process. The following table
indicates how these have been considered through the 10 Year Plan or, in some
cases, other Council processes.
|
Resolution
|
Committee
|
Issue
|
10 Year Plan action
|
|
4-16
|
Arts and Culture
12 Dec 2016
|
2019 Military
Tattoo
|
Prog 1157 includes
support for a Military Tattoo
|
|
7-17.2
|
Sport and
Recreation 6 Mar 2017
|
New Swimming Pool
Investigation
|
Programme 1429:
Swimming Pool Options and Feasibility Assessment
|
|
14-17
|
Finance and
Performance 20 Mar 2017
|
Library Heritage
Staircase
|
Superseded by
Extra-ordinary Council meeting resolution, 16 Oct 2017
|
|
6-17.14
6-17.16
6-17.24
|
Committee of
Council (Annual Budget) 24 Mar 2017
|
· Menzshed
Toilets
· School
Travel Plans
· Cornerstone
Hall Contribution
|
To be built this
year
Prog 1346 extended
for 3 years
To be part of
Kelvin Grove Feasibility Study (Prog 1504)
|
|
18-17
|
Community
Development 12 June 2017
|
Asset Management
Plans for Community Centres
|
draft Plans
prepared as part of 10 Year Plan
|
|
88-17
|
Council 12 June
2017
|
2018 Vision,
Principles and Goals
|
Used to develop
the 10 Year Plan
|
|
46-17
|
Finance and
Performance 19 June 2017 (plus 19 April 2017)
|
Rubbish and
Recycling Options
|
Options considered
through prioritisation
|
|
54-17.2
|
Planning
and Strategy 7 Aug 2017
|
Rating Issues
|
Some changes
proposed to the differential rating categories as part of supporting
material. Further investigation to be undertaken during 2018/19
|
|
18-17
|
Arts and Culture
14 Aug 2017
|
Public Arts
Register
|
Prog 367 includes
funding for arts register and care of public art
|
|
19-17
122-17
|
Arts and Culture
14 Aug 2017
Council 28 Aug
2017
|
Te Manawa Business
Case
|
Te Manawa Trust
Board submitted business case. Further funding for business case in
Prog 1525
|
|
56-17
|
Planning and
Strategy 4 Sept 2017
|
Te Aroha Noa
|
Prog 1493
incorporates Highbury library and Te Aroha Noa
|
|
28-17
|
Community
Development 11 Sept 2017
|
Social Housing
|
Market rents for
new tenants so Council can build new Units included in Prog Nos 1459 and 1522
|
3. NEXT
STEPS
1. Officers will make
any changes to the CD and Supporting Material resulting from the Committee of
Council’s decisions.
2. Officers will
forward the CD and Supporting Material to Audit NZ for their review.
3. When Audit NZ
has finished its review officers will make any necessary changes to the CD and
Supporting Material and present them to Council for adoption at its meeting on
5 March 2018. Audit will present its report to the same meeting.
4. Council will
consult on the CD and Supporting Material between 19 March and 23 April.
5. Council will
consider all submissions and adopt the final 10 Year Plan by 30 June.
4. Compliance
and administration
|
Does the
Committee have delegated authority to decide?
If Yes quote
relevant clause(s) from Delegations Manual <Enter
clause>
|
No
|
|
Are the
decisions significant?
|
No
|
|
If they are
significant do they affect land or a body of water?
|
No
|
|
Can this
decision only be made through a 10 Year Plan?
|
No
|
|
Does this
decision require consultation through the Special Consultative procedure?
|
No
|
|
Is there
funding in the current Annual Plan for these actions?
|
Yes
|
|
Are the
recommendations inconsistent with any of Council’s policies or plans?
|
No
|
Attachments
Nil
