AGENDA

Committee of Council

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grant Smith (Chairperson)

Brent Barrett

Patrick Handcock ONZM

Susan Baty

Leonie Hapeta

Rachel Bowen

Lorna Johnson

Zulfiqar Butt

Billy Meehan

Vaughan Dennison

Karen Naylor

Renee Dingwall

Bruno Petrenas

Lew Findlay QSM

Aleisha Rutherford

 

 

 

 

 

 

 


 

 

 


PALMERSTON NORTH CITY COUNCIL

 

 

 

 

Committee of Council MEETING

 

17 February 2021

 

 

 

Order of Business

 

1.         Apologies

2.         Notification of Additional Items

Pursuant to Sections 46A(7) and 46A(7A) of the Local Government Official Information and Meetings Act 1987, to receive the Chairperson’s explanation that specified item(s), which do not appear on the Agenda of this meeting and/or the meeting to be held with the public excluded, will be discussed.

Any additions in accordance with Section 46A(7) must be approved by resolution with an explanation as to why they cannot be delayed until a future meeting.

Any additions in accordance with Section 46A(7A) may be received or referred to a subsequent meeting for further discussion.  No resolution, decision or recommendation can be made in respect of a minor item.

3.         Declarations of Interest (if any)

Members are reminded of their duty to give a general notice of any interest of items to be considered on this agenda and the need to declare these interests.

 

 

 

4.         Public Comment

To receive comments from members of the public on matters specified on this Agenda or, if time permits, on other Committee matters.

(NOTE:     If the Committee wishes to consider or discuss any issue raised that is not specified on the Agenda, other than to receive the comment made or refer it to the Chief Executive, then a resolution will need to be made in accordance with clause 2 above.)

5.         Confirmation of Minutes                                                                                     Page 7

“That the minutes of the Committee of Council meeting of 10 June 2020 Part I Public be confirmed as a true and correct record.”

6.         Approving the 2021 10 Year Plan Supporting Material (including the Draft Financial and Infrastructure Strategies and Updated Funding and Financial Policies) and Consultation Document for Audit                                                                                           Page 15

Memorandum, presented by David Murphy, Acting General Manager - Strategy and Planning and Stuart McKinnon, Chief Financial Officer.

 7.        Exclusion of Public

 

 

To be moved:

“That the public be excluded from the following parts of the proceedings of this meeting listed in the table below.

The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under Section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution are as follows:

 

General subject of each matter to be considered

Reason for passing this resolution in relation to each matter

Ground(s) under Section 48(1) for passing this resolution

 

 

 

 

 

This resolution is made in reliance on Section 48(1)(a) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by Section 6 or Section 7 of that Act which would be prejudiced by the holding of the whole or the relevant part of the proceedings of the meeting in public as stated in the above table.

Also that the persons listed below be permitted to remain after the public has been excluded for the reasons stated.

[Add Third Parties], because of their knowledge and ability to assist the meeting in speaking to their report/s [or other matters as specified] and answering questions, noting that such person/s will be present at the meeting only for the items that relate to their respective report/s [or matters as specified].

 

 


 

 

 


PALMERSTON NORTH CITY COUNCIL

 

 

Palmerston North City Council

 

Minutes of the Committee of Council Meeting Part I Public, held in the Elwood Room, Conference & Function Centre, 354 Main Street, Palmerston North on 10 June 2020, commencing at 9.00am.

Members

Present:

The Mayor (Grant Smith) (in the Chair) and Councillors Tangi Utikere, Brent Barrett, Susan Baty, Rachel Bowen, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Patrick Handcock ONZM, Leonie Hapeta, Lorna Johnson, Billy Meehan, Karen Naylor, Bruno Petrenas and Aleisha Rutherford.

Apologies:

Councillor Lew Findlay QSM (for lateness)

 

Councillor Lew Findlay entered the meeting at 10.41am during consideration of clause 14. He was not present for clause 14.1 inclusive.

 

11-20

Apologies

 

Moved Grant Smith, seconded Tangi Utikere.

The COMMITTEE RESOLVED

1.   That the Committee receive the apologies.

 

Clause 11-20 above was carried 15 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Tangi Utikere, Brent Barrett, Susan Baty, Rachel Bowen, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Patrick Handcock ONZM, Leonie Hapeta, Lorna Johnson, Billy Meehan, Karen Naylor, Bruno Petrenas and Aleisha Rutherford.

The Meeting adjourned at 9.01am

The Meeting resumed at 9.30am

 

12-20

Amended Minutes - 8 May 2020

Memorandum, presented by Hannah White, Democracy and Governance Manager.

 

Moved Grant Smith, seconded Vaughan Dennison.

The COMMITTEE RESOLVED

1.   That the amended minutes of the ordinary meeting of 8 May 2020 Part 1 Public be confirmed as a true and accurate record.

 

 

Clause 12-20 above was carried 15 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Tangi Utikere, Brent Barrett, Susan Baty, Rachel Bowen, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Patrick Handcock ONZM, Leonie Hapeta, Lorna Johnson, Billy Meehan, Karen Naylor, Bruno Petrenas and Aleisha Rutherford.

  

13-20

Confirmation of Minutes

 

Moved Grant Smith, seconded Tangi Utikere.

The COMMITTEE RESOLVED

1.   That the minutes of the Committee of Council meeting of 20 May 2020 Part I Public be confirmed as a true and correct record.

 

Clause 13-20 above was carried 15 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Tangi Utikere, Brent Barrett, Susan Baty, Rachel Bowen, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Patrick Handcock ONZM, Leonie Hapeta, Lorna Johnson, Billy Meehan, Karen Naylor, Bruno Petrenas and Aleisha Rutherford.

 

14-20

Finalising the Annual Budget (Plan) for 2020/21

Memorandum, presented by Stuart McKinnon, Chief Financial Officer.

The Chief Financial Officer reported that the plan in Appendix 1 contained all the amendments asked for by the Committee at the previous meeting including the additional saving of $500k. He explained that there was an error in the figures regarding the depreciation in the previous meeting, which meant that the Council’s budget had shown as a surplus. In fact, the Council’s budget will be in deficit.

The deficit is not a cash deficit only a paper one. It fundamentally doesn’t change the Council’s financial situation as the Council does not fund depreciation, it only funds actual expenditure on renewals. The ERP project which is being funded over 7 years rather than one year, is also contributing to the deficit.

Officers are comfortable to recommend the deficit be approved, due to the reasons behind it. Audit NZ does not have an issue with it. 

The Committee queried the following parts of the draft Annual Budget:

-     Officer salaries - the Chief Executive is not looking to reduce wages or have redundancies, but will be encouraging staff efficiencies.

-     Venues – reduced revenue assumptions are still correct.  It’s going to take a while for event usage to return to pre-Covid levels.

-     Libraries - no service level cut but overhead costs will be reduced.

-     Deferrals and carry forwards in the Capital Programme will be looked at during the Long Term Plan in 2021.

-     Carry forwards have no effect on the rates. They are already funded but the work has not been completed.

-     Refurbishment of the Community Centres - this project is ahead of schedule so the budget can be reduced.

-     Council does not borrow to pay for renewals.

-     $500k for the streetscape project is enough for this financial year.

-     This year, Council is not penalising ratepayers who have not paid their (quarter 4 ) rates, instead officers are urging ratepayers to contact Council and set up payment plans.

The Committee asked the Chief Executive to reinstated Programme 279 (minor road projects)  budget because it is jointly financed by NZTA and Council.

The motion on library renewals was lost, as the Committee felt that despite the reduced funding for 2020/21, the level of  library service was not going to decrease.

The Committee acknowledged that ratepayers (especially businesses)  needed assistance from Council via a smaller rate increase than was consulted on.

The Committee congratulated the Chief Executive, the Chief Finance Officer and the Finance team for the work they had done to reduce the proposed council rate increase to 1.95%.

Councillor Lew Findlay entered the meeting at 10.41am

 

Moved Aleisha Rutherford, seconded Lorna Johnson.

The COMMITTEE RESOLVED

1.   That Programme 279 (minor road projects) budget be reinstated from $200k back to $851K (noting this is a capital new budget).

 

Clause 14.1 above was carried 15 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Tangi Utikere, Brent Barrett, Susan Baty, Rachel Bowen, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Patrick Handcock ONZM, Leonie Hapeta, Lorna Johnson, Billy Meehan, Karen Naylor, Bruno Petrenas and Aleisha Rutherford.

 

Moved Grant Smith, seconded Tangi Utikere.

The COMMITTEE RECOMMEND THAT COUNCIL 

2.   Adopt the Amended Annual Budget 2020/21, with the report titled “Finalising the Annual Budget (Plan) 2020/21”.

 

Clause 14.2 above was carried 12 votes to 4, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Tangi Utikere, Susan Baty, Rachel Bowen, Vaughan Dennison, Renee Dingwall, Lew Findlay QSM, Patrick Handcock ONZM, Leonie Hapeta, Billy Meehan, Karen Naylor and Bruno Petrenas.

Against:

Councillors Brent Barrett, Zulfiqar Butt, Lorna Johnson and Aleisha Rutherford.

 

Moved Grant Smith, seconded Tangi Utikere.

The COMMITTEE RECOMMEND THAT COUNCIL

3.   Acknowledge that the Prospective Statement of Comprehensive Revenue and Expense for the Annual Budget shows a budgeted deficit of $3.95m for the 2020/21 year, and that using the calculation required by the Local Government (Financial Reporting and Prudence) Regulations 2014, projects a deficit of $6.84m.  For the reasons outlined in the memorandum the Council resolves this outcome is financially prudent having regard for the matters contained in Section 100 of the Local Government Act 2002.

4.   Delegate Authority to the Mayor and Chief Executive to approve the final Annual Budget (Plan) document for publication.

5.   Acknowledge that the adoption of the Annual Budget (Plan) 2020/21 be confirmed as a significant decision within the parameters of the Local Government Act 2002 and that the Council is satisfied that all submissions have been considered and that there has been compliance with the decision-making and consultation requirements of the Act.

6.   Delegate Authority to the Chief Executive to authorise payments to Council-controlled organisations and other external organisations in accordance with their respective service level agreements.

 

Clauses 14.3 to 14.6 above were carried 16 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Tangi Utikere, Brent Barrett, Susan Baty, Rachel Bowen, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Lew Findlay QSM, Patrick Handcock ONZM, Leonie Hapeta, Lorna Johnson, Billy Meehan, Karen Naylor, Bruno Petrenas and Aleisha Rutherford.

 

Note:

Moved Lorna Johnson, seconded Aleisha Rutherford.

On a motion: ‘That the library renewals for programme 188 be reinstated to the 10 Year Plan budget amount of $885K’.

The motion was lost 4 votes to 11, with 1 abstention, the voting being as follows:

For:

Councillors Brent Barrett, Zulfiqar Butt, Lorna Johnson and Aleisha Rutherford.

Against:

The Mayor (Grant Smith) and Councillors Tangi Utikere, Susan Baty, Rachel Bowen, Vaughan Dennison, Renee Dingwall, Patrick Handcock ONZM, Leonie Hapeta, Billy Meehan, Karen Naylor and Bruno Petrenas.

Abstained:

Councillor Lew Findlay QSM.

     

 

 

 

 

The meeting finished at 11.21am

 

Confirmed 17 February 2021

 

 

 

 

 

Chairperson

 


 

 

 


PALMERSTON NORTH CITY COUNCIL

 

Memorandum

TO:                                Committee of Council

MEETING DATE:           17 February 2021

TITLE:                            Approving the 2021 10 Year Plan Supporting Material (including the Draft Financial and Infrastructure Strategies and Updated Funding and Financial Policies) and Consultation Document for Audit

Presented By:            David Murphy, Acting General Manager - Strategy and Planning and Stuart McKinnon, Chief Financial Officer

APPROVED BY:             Heather Shotter, Chief Executive

 

 

RECOMMENDATION(S) TO Council

1.   That the proposed Revenue and Financing Policy and the proposed 2021 Development Contributions Policy be approved for public consultation.

2.   That the Supporting Material (consisting of the following documents) be approved, subject to Audit, as the basis for the Consultation Document for the 2021 10 Year Plan:

·   Council’s 2021 Vision, Principles and Goals, plus Council’s Strategies

·   Council’s Plans (2021-24)

·   Activity levels of service and budgets

·   Financial Strategy

·   Infrastructure Strategy

·   Revenue and Financing Policy

·   Asset Management Plan Executive Summaries

·   2021 Development Contributions Policy

·   Significant Forecasting Assumptions

·   Forecast Financial Statements

·   Rating Information

3.   That the Consultation Document for the 2021 10 Year Plan be approved, subject to Audit.

4.   That the Committee note that the Financial Policies, Supporting Material and the 2021 Consultation Document (amended if necessary following the audit process) will be presented to Council for adoption and subsequent consultation.

5.   That the Mayor, Deputy Mayor and Chair of Finance and Audit be given delegated authority to make minor corrections to the documents before they are provided to Audit NZ.

 

 

 

 

1.         ISSUE

The Council has to adopt its 2021 10 Year Plan (Long-term Plan) by 30 June 2021.  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

·    the quality of the information in the CD.

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; therefore the Committee needs to be sure that the CD and Supporting Material state what the Council wants to consult on.

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.

Note:  Some information is still being prepared and is not currently included in the attachments – e.g. the preface to the Consultation Document, rates examples, the submission form and development contributions fees schedule.  This information will be ready for the final adoption of the material for consultation.  It does not change the overall narrative of the documents.

2.         BACKGROUND

10 Year Plan Direction and Challenges

The Council’s current Vision is Small city benefits, Big city ambition – He iti rā, he iti pounamu.  Council adopted this through the 2018 10 Year Plan.  Elected Members have said that this Vision still describes the type of City they want to create; hence the proposed 10 Year Plan for 2021-31 largely continues the direction, services and projects of the 2018 Plan.

There are also some particular issues that the 2021 10 Year Plan needs to address:

·    Managing our assets and services:  Councils across New Zealand are facing major challenges with their infrastructure, with some high-profile examples of infrastructure issues in some other cities.  Council needs to get ahead of this which means it must ensure infrastructure enables our city.

Council has put a strong focus on its asset management planning and now better understands the condition of its assets.  As a result, Council is facing increased renewals costs, especially for roading, property, three waters and information management.  Currently, Council is underinvesting in these assets.  To address this Council is increasing the investment in renewals and moving to a more proactive maintenance approach for critical plant and equipment.

To ensure the Plan is balanced and affordable, Council is phasing this increase in over several years.  There are risks with this approach.  During the catch-up phase:

·           assets could fail, causing environmental and health and safety problems (e.g. sewer blockages and overflows) 

·           assets may not be repaired in a timely manner, leading to customer complaints about the state of assets (e.g. footpath maintenance)  

·           levels of service may reduce (reduced facility operating hours, or increases in network blockages) 

·           we may need unbudgeted funding to fix faults and breakages.

Council is also facing level-of-service catch up costs.  Over the past couple of 10 Year Plan cycles, there have been gradual increases in community and central government expectations.  Budget pressures meant Council absorbed many of these service increases without corresponding budget increases.  However, their incremental impact has led to a growing gap we can no longer cover. 

 

·    Nature Calls:  this is the biggest financial and environmental decision our city faces.  It is focused on determining the best practicable option for treating the city’s wastewater for up to the next 35-plus years.  A process is now underway to further refine the shortlisted options for how we treat and discharge wastewater in the future.  We need to submit a resource consent application for a new wastewater treatment plant by June 2022.  Our current estimate of the cost to build a likely preferred option is $350m.  It's our biggest project and has a major impact on our budgets and our plans.

 

·    Water reform:  Currently, drinking water, wastewater and urban stormwater are run by Councils.  Under a three-year programme to reform local government three waters service delivery arrangements to improve outcomes, the Government is proposing they are managed by a small number of multi-region entities instead.  At this point, we have agreed to consider the proposal and, as a result, we have been granted $9.4m of central government funding to bring forward some critical renewals and advance key water and wastewater resilience projects.  The timing and design of these reforms is not clear and, as they are not yet at a stage where we can meaningfully consult with our community, we are developing the 10 Year Plan on the assumption we will continue to provide these services.  Whatever happens will have a big impact on the Nature Calls project.  

 

·    Covid-19:  The virus has changed the way we live and has greatly affected some peoples’ livelihoods.  Council recognised the hardship it has brought and adopted a Covid Annual Budget in 2020-21, with a rate increase of 1.95%, down from 4.4% in the proposed annual budget.  This reduction puts pressure on our current budgets, meaning the catch-up budgets mentioned above are even more important right now.  

 

·    Climate change:  Long-term weather patterns are changing, increasing the frequency of drought and flooding.  As part of mitigating the impacts on our infrastructure and services we have included programmes to reduce flooding risk and reduce wastewater flows.  We also have plans and actions to reduce Council and city-wide greenhouse gas emissions.

 

·    Sustainable growth:  The City is projected to grow significantly over the next 10 years.  Housing affordability is declining and we need to ensure housing supply matches demand.  Major infrastructure projects and private development (such as Te Ahu a Turanga: Manawatū Tararua Highway, KiwiRail Regional Freight Hub) will continue to drive this growth and place more pressure on housing affordability and infrastructure.  We are planning our infrastructure to meet this demand for growth and to help address the housing affordability problem.

 

The significant pipeline of central government, residential and commercial infrastructure investment in the Manawatu means the existing contractor resources are stretched, putting upward pressure on prices and extending delivery.

 

·    Earthquake-prone buildings:  Council owns eight earthquake-prone buildings, including the central library, with estimated strengthening costs over the next 15 years of $150m. 

Consultation Document

The draft Consultation Document and proposed 10 Year Plan set out how Council intends to work towards the Vision and to address all these challenges.  Council’s overall aim is to achieve the Vision and address the challenges in an affordable way.  Council considers that it has this balance right in the short-term and will seek community views on this, in particular:

·    do the proposed services and programmes deliver what really matters?

·    has Council got the right emphasis on infrastructure maintenance?

Under current conditions and NZ Local Government Funding Agency rules we will not be able to borrow sufficient funds for Nature Calls.  This means, without change, the 10 Year Plan is not financially sustainable in the longer term.  Given the level of potential change to come with water reforms and Nature Calls we will revisit this issue when we have more certainty.

Strategic Direction

Council is continuing with the 2018 strategic direction.  Strategies and Plans have been updated to reflect that the city and Council are three years into the Small city benefits, Big city ambition – He iti rā, he iti pounamu journey.  The Strategies and Plans are currently being designed for the consultation process.  This will include bilingual headings and translations as appropriate.

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 $1.8 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 medium population and household growth as forecast by Infometrics plus a margin as required by the National Policy Statement for Urban Development.

·    The city has adequate appropriately zoned land or land identified for rezoning 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 requirement to update the City’s wastewater treatment and disposal system (Nature Calls) provides the greatest single challenge to long-term financial sustainability of the Council.  At the present time it has been assumed that an acceptable option can be obtained for $350 million (plus inflation) but there is a high level of risk it could be more or less than this.

·    Council has been increasing its investment in asset management planning and is progressively obtaining better condition assessments of its infrastructure assets.  This information has led the Council to conclude it needs to increase its investment in both asset maintenance and asset renewal.

·    In order to fund Council services and key projects being proposed in the 10 Year Plan, including new capital expenditure of $1,149 million, Council’s rates debt levels will need to increase – debt increasing from a forecast $164 million as at 1 July 2021 to $870 million as at 30 June 2031.

·    These projected levels of debt would mean Council’s own prudent borrowing ratios would be significantly exceeded and it is highly unlikely lenders will be prepared to lend to the Council in such circumstances.

·    The Government is proposing major reform which would include the transfer of three waters functions (or at least drinking water and wastewater) to a small number of regional water entities within the next three years.  Like all Councils our Council is required to plan on the assumption this change will not occur, however the forecast borrowing required for the Nature Calls project is such a significant component of the Council’s debt projections that the Council is not in a position to develop a credible, sustainable long-term financial strategy.

·    It is proposed that once there is more certainty about the three waters proposal and the preferred option for the Nature Calls project an updated strategy will be prepared.

·    Based on these assumptions total rates will need to increase by 6.9% in 2021/22, 8.2% in 2022/23, 8.2% in 2023/24, 7.7% in 2024/25, 12.9% in 2025/26 and increases of between 2.6% and 6.5% in each of the following five 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.  Major issues include Nature Calls, infrastructure renewals, central government water reforms, and keeping the City growing in a sustainable way.

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 2018 but has been reconfigured to recognise changes to the structure of Council activities to align with the goals and strategies.

Development Contributions Policy

The Development Contributions Policy does not form part of 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:

·    New development contribution areas for the Kikiwhenua Residential Area and Napier Road Residential Extension Area, and associated maps.

·    Update of the household growth projections contained within the Policy.

·    Amended appendix maps relating to water, wastewater and local reserve

·    Updated development contributions fees schedule.

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.  No changes are proposed for 2021/22. 

A rating system review is about to commence and the outcomes from the revaluation of the City (dated September 2021) will feed into that later this calendar year and any changes to the system will then be considered for the 2022/23 rating year. 

UAGC & 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

2020/21

CHARGE

2021/22

What it pays for

Water

$255

$307

The cost of provision of water

Wastewater

$241

$299

The cost of treating and disposing of wastewater

Kerbside Recycling

$126

$130

The cost of kerbside recycling

Rubbish & Public Recycling

$64

$66

General rubbish & recycling costs including transfer stations, cleaning up fly tipping, community education

General

$500

$500

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 $1,186 to $1,302 (i.e. 9.8%).  This means the average single unit residential rate (for a property with a land value of $243,000) will increase from $2,639 to $2,820 (i.e. 6.9%), but multi-unit residential properties will increase more than this.  It also means rates for non-residential properties will increase by between 4.2% and 4.6% (without considering the impact of higher increases for pan charges and metered water) and rural/semi-serviced properties by between 2.1% and 2.9%.

A new targeted rate, assessed on properties within a defined area of the central city, is planned to fund the Palmy BID programme of $250k plus GST.  It is proposed that 50% of this sum will be assessed as a fixed amount for each property and the balance as a rate based on the capital value of the property.

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.

The budget for 2020/21 assumes total revenue of $2.5m plus GST will be obtained from metered water users. 

In 2018/19 the fixed component of the charge was simplified and significantly increased.  In 2020/21 two levels of fixed charge was introduced to lower the impact on smaller users.

The overall budgeted cost of water to be funded from rates for 2021/22 has increased by approximately 10% over 2020/21.  To reflect this and maintain a fair comparison with the targeted rate for residential consumers it is necessary to increase metered water charges by a comparable amount, hence increasing the revenue assumption to $2.75m plus GST.

Annual charge $

2020/21

Annual charge $

2021/22

Up to 25mm connection

172.50

190.00

>25mm connection

375.00

415.00

 

Charge $

2020/21

Charge $

2021/22

Rate per cubic metre

$1.265

$1.3915

 

3.         NEXT STEPS

a)         Officers will make any changes to the CD and Supporting Material resulting from the Committee of Council’s decisions.

b)         Officers will forward the CD and Supporting Material to Audit NZ for their review.

c)         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.  Audit will present its report to the same meeting.

d)         Council will consult on the CD and Supporting Material, subject to Audit timing.

e)         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? 

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?  (Note: the audited CD and Supporting Material will be brought back to Council on 3 March for adoption and subsequent consultation through the SCP.)

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

The recommendations contribute to all of the Council’s Goals, Strategies and Plans.

They do this by setting the draft actions and budgets that, subject to consultation, will make up the 2021-31 10 Year Plan; hence help set and deliver the Council’s Goals, Strategies and Plans.

Contribution to strategic direction and to social, economic, environmental and cultural well-being

The Goals, Strategies and Plans are set through the 10 Year Plan.  They are the Council’s strategic direction and they show how Council contributes to social, economic, environmental and cultural well-being.

 

 

Attachments

1.

Draft 10 Year Plan Consultation Document (attached separately)  

 

2.

Council’s 2021 Vision, Principles and Goals, plus Council’s Strategies

 

3.

Council’s Plans (2021-24)

 

4.

Asset Management Plan Executive Summaries

 

5.

Financial Strategy

 

6.

Infrastructure Strategy

 

7.

Rating information and Funding Impact Statements

 

8.

Significant Forecasting Assumptions

 

9.

Activity Levels of Service

 

10.

2021 Development Contributions Policy

 

11.

Forecast Financial Statements

 

12.

Revenue and Financing Policy

 

    


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