Agenda of Council - Wednesday, 11 December 2024

Palmerston North City Council

Minutes of the Council Meeting Part I Public, held in the Council Chamber, First Floor, Civic Administration Building, 32 The Square, Palmerston North on 06 November 2024, commencing at 9.02am.

Members

Present:

Grant Smith (The Mayor) (in the Chair) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin.

Apologies:

Councillors Rachel Bowen, Lorna Johnson (late arrival) and William Wood (early departure).

Councillor Lorna Johnson entered the meeting at 9.19am during consideration of clause 188-24 She was not present for clause 187-24.

Councillor William Wood left the meeting at 12.26pm after consideration of clause 197.6-24. He entered the meeting again at 3.04pm after consideration of clause 198.5-24. He was not present for clauses 197.6-24 to 198.5-24 inclusive.

Councillor Billy Meehan left the meeting at 4.27pm during consideration of clause 199-24 He was not present for clauses 199-24 to 202-24 inclusive.

	Karakia Timatanga
	Councillor Debi Marshall -Lobb opened the meeting with karakia.

187-24

Apologies

Moved Grant Smith, seconded Debi Marshall-Lobb.

RESOLVED

1. That Council receive the apologies.

Clause 187-24 above was carried 14 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin.

Declarations of Interest

The Mayor Grant Smith (Item 13 and 14) and Councillor Vaughan Dennison (Item 13) declared an interest in clause 202-24 but stated they would consider the items with an open mind.

Councillor Leonie Hapeta declared a conflict of interest in Item 21 Confidential Recommendations from the Community Committee (clause 202-24) and took no further part in discussion or debate.

188-24	Public Comment
	Nigel Fitzpatrick spoke on Item 10 Transport Funding Implications (clause 197-24). He spoke in support of separated cycleways to improve the safety of the roads for bike riders (young and old) and drivers. He thanked Council for what they had done to improve the safety of Featherston St for bike riders and encouraged Council to continue funding shared pathways. Karen Griffiths and Tom Poole, residents of Purdie Place, spoke on Item 8 Stormwater Improvements in Milson (clause 190-24). They stated that residents of Purdie Place are also vulnerable to flooding, and asked that Council officers engage with Purdie Place residents during the detailed design process. They requested that both sides of the waterway be equally protected from flooding, with a similar height wall on both sides. Evelyn Strugnell, resident of McGregor St, spoke on Item 8 Stormwater Improvements in Milson (clause 190-24), in reference to the flooding caused by the stream opposite her property. She would like to see better drainage in the area; pipes need to be made bigger, stream needs to be widened, and drainpipes cleaned regularly. Councillor Lorna Johnson entered the meeting at 9:19am.
	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED That Council receive the Public Comments.
	Clause 188-24 above was carried 15 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin.

Tributes - Peter Michael Willis, Baldeep Dhillon and Roger Clausen.

Mayor Grant Smith, read out tributes to Peter Michael Willis, Baldeep Dhillon and Roger Clausen.

189-24

Petition: Flooding at Julia Wallace Retirement Village

Petition presented by Elisabeth Gosse, resident of Julia Wallace Retirement Village. Elisabeth spoke, on behalf of residents, on the flooding of the Village and requested Council act to prevent the Village flooding in the future.

She corrected an error; the Mangaone stream should read the Milson Stream.

She requested environmental impact reports for the commercial area by the airport, the Pillars and the new health centre.

Moved Grant Smith, seconded Debi Marshall-Lobb.

RESOLVED

1. That Council receive the petition for information.

Clause 189-24 above was carried 15 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin.

190-24	Progress on Stormwater Improvements for Milson Memorandum, presented by Mike Monaghan, Manager- 3 Waters and Ricki Freemantle, 3 Waters Activity Manager. An additional motion was moved to ensure that affected residents were kept informed of remedial stormwater work in the area.
	Moved Leonie Hapeta, seconded Vaughan Dennison. RESOLVED 2. That Council provide regular communication updates to affected residents through to completion of physical works.
	Clause 190-24 above was carried 15 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin.
	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED 1. That Council receive the memorandum titled Progress on Stormwater Improvements for Milson.
	Clause 190-24 above was carried 15 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin.

The meeting adjourned at 10.32am

The meeting resumed at 10.55am

191-24

Confirmation of Minutes

Moved Debi Marshall-Lobb, seconded Brent Barrett.

RESOLVED

That the minutes of the ordinary Council meeting of 30 October 2024 Part I Public be confirmed as a true and correct record.

Clause 191-24 above was carried 13 votes to 0, with 2 abstentions, the voting being as follows:

For:

Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin.

Abstained:

The Mayor (Grant Smith) and Councillor Leonie Hapeta.

192-24

Standing Orders - Option C

Moved Grant Smith, seconded Debi Marshall-Lobb.

RESOLVED

That Council adopt Option C (SO 2.12.3) for Item 11 Annual Budget 2025-26 – Timing and Programme Budget.

Clause 192-24 above was carried 15 votes to 0, the voting being as follows:

For:

193-24		Sustainability Committee Part I Public - 16 October 2024 Councillor Barrett presented the recommendations below:
		Moved Brent Barrett, seconded Kaydee Zabelin. RESOLVED 1. That Council adopt the recommendations from the Sustainability Committee of 16 October 2024: Local Water Done Well Update (clause 32-24) Memorandum, presented by Mike Monaghan, Manager Three Waters and Julie Keane, Transition Manager. The COMMITTEE RECOMMENDS 1. That the Local Water Done Well report include the following options: (a) That any joint CCO proposal considers proportionality shareholding and electoral college arrangements, and (b) That an option of establishing a single-Council CCO accountable to PN City Council be also brought back. 2. That Council note the recommendations from the Sustainability Committee of 16 October 2024: Manawatū River Pathway Project (clause 41-24) Memorandum, presented by Glen O'Connor, Manager Transport and Development and Michael Bridge, Service Manager Active Transport. The COMMITTEE RECOMMENDS 1. That Council consider 1b and 1c in conjunction with the 6 November 2024 report to Council regarding Transport Funding, with a view to enabling flexible progress on the Ashhurst riverside and the Feilding shared paths. Note 1b Direct the Chief Executive to continue engagement with affected landowners and progress planning and preparations for the Notice of Requirement over the 2024-2027 Financial Years; with the Notice of Requirement to be lodged in Year 4 of the Long-Term Plan, or earlier if all directly affected landowners provide their written support prior to lodgement. ($350,000) OR 1c Direct the Chief Executive to continue engagement with affected landowners and lodge the Notice of Requirement over the 2024-2027 Financial Years; with land acquisition and construction commencing from Year 4 of the Long-Term Plan. ($800,000).
		Clause 193-24 above was carried 14 votes to 0, with 1 abstention, the voting being as follows: For: Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin. Abstained: The Mayor (Grant Smith).

194-24	Community Committee Part I Public - 23 October 2024 Councillor Johnson presented the recommendations below:
	Moved Lorna Johnson, seconded Patrick Handcock. RESOLVED 1. That Council adopt the recommendations from the Community Committee of 23 October 2024:
	Presentation: Disability Reference Group - Annual Report (clause 24-24) Presentation, by Hugh O’Connell, Chair, Lisa McElvoy and Denise Bethell, members of the Disability Reference Group. The COMMITTEE RECOMMENDS 1. That Council acknowledge the impact of recent changes to disability support services, and that the Mayor, on behalf of the Council, write to Hon Louise Upston asking her to amend the Purchasing Rules to restore flexible funding to the pre-18 March 2024 Levels.
	Presentation: MASH Trust (clause 25-24) Presentation, by Karleen Edwards, Chief Executive and John Fawke, Chair of MASH Trust. The COMMITTEE RECOMMENDS 1. That Council support the proposed concept of Te Whare Oranga outlined by MASH Trust.
	Presentation: Manawatū Tenants Union (clause 26-24) Presentation, by Cameron Jenkins, Coordinator of Manawatū Tenants Union. The COMMITTEE RECOMMENDS 1. That Council endorse the Healthy Homes Commitment in their role as landlord and housing provider, as presented by Manawatū Tenants Union.
	Palmerston North Age Friendly Action Plan (clause 29-24) Report, presented by Amy Viles, Acting Manager Community Development. The COMMITTEE RECOMMENDS 1. That Council endorse the Palmerston North Age Friendly Action Plan and accept the Options Report; and 2. That Council approve the reallocation of the existing $30K of implementation budget towards .3 FTE, for a Community Development Advisor – Age Friendly to: guide the Council’s commitment to be an Age Friendly City, develop a Palmerston North Age Friendly Implementation Plan and to coordinate the internal and external implementation of actions from that plan.
	Clause 194-24 above was carried 14 votes to 0, with 1 abstention, the voting being as follows: For: Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin. Abstained: The Mayor (Grant Smith).
	Moved Lorna Johnson, seconded Patrick Handcock. RESOLVED That Council adopt the following recommendation from the Community Committee of 23 October 2024: Palmerston North Age Friendly Action Plan (clause 29-24) 3. That Council approve Option 1 and refer an additional budget of $50K for the development and implementation of the Palmerston North Age Friendly Implementation Plan to the draft Annual Budget.
	Clause 194-24 above was carried 14 votes to 1, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, William Wood and Kaydee Zabelin. Against: Councillor Karen Naylor.

195-24

Recommendation to Exclude Public

Moved Grant Smith, seconded Debi Marshall-Lobb.

RESOLVED

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
20	Presentation of the Part II Confidential Sustainability Committee Recommendations from its 16 October 2024 Meeting	For the reasons set out in the Sustainability Committee meeting of 16 October 2024, held in public present.

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.

Clause 195-24 above was carried 15 votes to 0, the voting being as follows:

For:

The meeting went into Part II Confidential at 11.11am

The meeting returned to Part I Public at 11.15am

197-24	Transport Funding Implications 2024-2027 Memorandum, presented by Glen O'Connor, Manager - Transport & Development, Scott Mancer, Manager - Finance and James Miguel, Senior Transport Planner. Officers noted that recommendation 2b. should read Increase rather than Decrease Operating Expenditure.
	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED 1. That Council approve adjustments to the Active and Transport Activity Budgets for the 2024/25 financial year as detailed below: a. Decrease NZTA Subsidy Operating Revenue by $736k as detailed in Attachment 1. b. Decrease Operating Expenditure by $1,283k as detailed in Attachment 1. c. Decrease NZTA Subsidy Capital Revenue by $883k for Renewal Programmes as detailed in Attachment 2. e. Decrease NZTA Subsidy Capital Revenue by $1,913k for Capital New/Growth Programmes as detailed in Attachment 3.
	Clause 197.1-24 above was carried 15 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin.
1D	Moved Brent Barrett, seconded Lorna Johnson. RESOLVED Reinstate $632,000 for Active Transport Capital Renewals in Financial Year 2024/25 (Attachment 2).
	Clause197.2-24 above was carried 9 votes to 6, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Brent Barrett, Vaughan Dennison, Roly Fitzgerald, Patrick Handcock, Lorna Johnson, Orphée Mickalad and Kaydee Zabelin. Against: Councillors Mark Arnott, Lew Findlay, Leonie Hapeta, Billy Meehan, Karen Naylor and William Wood.
	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED 1. That Council approve adjustments to the Active and Public Transport Activity Budgets for the 2024/25 financial year as detailed below: d. Amend the Capital Renewal Programme Expenditure as detailed in Attachment 2 (as amended, including 1D above).
	Clause197.3-24 above was carried 11 votes to 4, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Orphée Mickalad and Kaydee Zabelin. Against: Councillors Mark Arnott, Billy Meehan, Karen Naylor and William Wood.
1F	Moved Brent Barrett, seconded Lorna Johnson. RESOLVED Reinstate $150,000 for Capital New Prog 2505 City-Wide Shared Pathways - Slip Prevention in Financial Year 2024/25 (Attachment 3).
	Clause197.4-24 above was carried 14 votes to 1, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin. Against: Councillor Leonie Hapeta.
	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED 1. That Council approve adjustments to the Active and Transport Activity Budgets for the 2024/25 financial year as detailed below: f. Amend Capital New/Growth Programme Expenditure as detailed in Attachment 3 (as amended including 1F and Part II- Sustainability resolutions).
	Clause 197.5-24 above was carried 13 votes to 2, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Lorna Johnson, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin. Against: Councillors Leonie Hapeta and Billy Meehan.
	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED 2. That Council approve adjustments to the Roading Activity Budgets for the 2024/25 financial year as detailed below: a. Decrease NZTA Subsidy Operating Revenue by $60k as detailed in Attachment 4. b. Increase Operating Expenditure by $2,081k as detailed in Attachment 4. c. Increase NZTA Subsidy Capital Revenue by $305k for Renewal Programmes as detailed in Attachment 5. d. Amend the Capital Renewals Programme Expenditure as detailed in Attachment 5. e. Decrease NZTA Subsidy Capital Revenue by $2,461k for Capital New/Growth Programmes as detailed in Attachment 6. f. Amend the Capital New/Growth Programme Expenditure as detailed in Attachment 6.
	Clause197.6-24 above was carried 12 votes to 3, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Orphée Mickalad and Kaydee Zabelin. Against: Councillors Billy Meehan, Karen Naylor and William Wood.
	Councillor William Wood left the meeting at 12.26pm.
	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED 3. That Council amend the operational programme budgets (both NZTA Subsidy Revenue and Expenditure) for business cases and transport planning, as detailed in Table 1. 4. That Council note that by approving the changes in 1 – 3 that this will result in an operating deficit for the Transport Group of Activities of $1,593M and that this will be funded by loans from a net reduction in the capital programme and a transfer of $740k from loan funded Capital Programme 628 – Totara Road Wastewater Consent Renewal Upgrade. 5. That Council note that the recommendations above relate to the 2024/25 Financial Year and implications for the Transport Programme and future years (2025/26 & 2026/27) budget implications will be referred to the appropriate Annual Plan process.
	Clause 197.7-24 above was carried 12 votes to 2, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Lorna Johnson, Orphée Mickalad, Karen Naylor, and Kaydee Zabelin. Against: Councillors Leonie Hapeta and Billy Meehan. Note: Recommendation 4 above was adjusted from the papers to reflect decisions made earlier in the meeting.

The meeting adjourned at 12.35pm.

The meeting resumed at 1.37pm.

198-24	Annual Budget 2025/26 - Timing and Programme Budgets Memorandum, presented by Scott Mancer - Manager Finance and Steve Paterson - Manager Financial Strategy.
	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED 1. That Council note the process for, and timing of, the Annual Budget 2025/26 as outlined in Table 1 of the “Annual Budget 2025/26- timing and programme budgets” presented to Council on 6 November 2024.
	Clause 198.1-24 above was carried 14 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor and Kaydee Zabelin.
	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED 2. That Council recommend the following programmes for inclusion in the draft 2025/26 Annual Budget: a. Operating programmes as outlined in Attachment 1.
	Clause198.2-24 above was carried 14 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor and Kaydee Zabelin.
A*	Moved Brent Barrett, seconded Lorna Johnson. Note: On a motion: That Council reinstate Programme 2476 Bus Hub Detailed Business Case $230K in draft Annual Budget 25-26 and $235K in indicative Annual Budget 26-27. The motion was lost 6 votes to 8, the voting being as follows: For: Councillors Debi Marshall-Lobb, Brent Barrett, Roly Fitzgerald, Patrick Handcock, Lorna Johnson and Kaydee Zabelin. Against: The Mayor (Grant Smith) and Councillors Mark Arnott, Vaughan Dennison, Lew Findlay, Leonie Hapeta, Billy Meehan, Orphée Mickalad and Karen Naylor.
	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED 2. That Council recommend the following programmes for inclusion in the draft 2025/26 Annual Budget: b. Transport operating programmes as outlined in Attachment 2.
	Clause198.3-24 above was carried 14 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor and Kaydee Zabelin.
AA	Moved Brent Barrett, seconded Lorna Johnson. RESOLVED That Council provide budget of $150K in draft Annual Budget 2025-26 and $150K in indicative Annual Budget 2026-27 for shared path planning and preparation for Notice of Requirement.
	Clause198.4-24 above was carried 12 votes to 2, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Orphée Mickalad and Kaydee Zabelin. Against: Councillors Billy Meehan and Karen Naylor.
B	Moved Kaydee Zabelin, seconded Brent Barrett. RESOLVED That programme #2380 - City-wide - Transport - Emergency Reinstatements – be increased to $500k in Financial Year 25/26 (Attachment 3).
	Clause198.5-24 above was carried 8 votes to 6, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Brent Barrett, Vaughan Dennison, Roly Fitzgerald, Patrick Handcock, Lorna Johnson and Kaydee Zabelin. Against: Councillors Mark Arnott, Lew Findlay, Leonie Hapeta, Billy Meehan, Orphée Mickalad and Karen Naylor.
	Cr William Wood entered the meeting at 3.04pm.
C	Moved Karen Naylor, seconded Leonie Hapeta. Note: On a motion: That Programme 2456 - Cliff Road Upgrade remains as outlined in the Long Term Plan (Attachment 3). The motion was lost 6 votes to 9, the voting being as follows: For: Councillors Mark Arnott, Leonie Hapeta, Billy Meehan, Orphée Mickalad, Karen Naylor and William Wood. Against: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Lorna Johnson and Kaydee Zabelin.
D	Moved Brent Barrett, seconded Lorna Johnson. RESOLVED That Council reinstate Programme 2505 City-Wide Shared Paths Slip Prevention to $306k (capital) and $51K (operational) in draft Annual Budget 2025-26, and to $313k (capital) $52K (operational) in the indicative Annual Budget 2026-27.
	Clause 198.6-24 above was carried 10 votes to 5, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Lorna Johnson, Orphée Mickalad and Kaydee Zabelin. Against: Councillors Mark Arnott, Leonie Hapeta, Billy Meehan, Karen Naylor and William Wood.
E	Moved Brent Barrett, seconded Lorna Johnson. Note: On a motion: That Council partially reinstate 2390 Capital New Low Cost Low Risk at $1M in draft Annual Budget 2025-26 and $1M in indicative Annual Budget 2026-27. The motion was lost 6 votes to 9, the voting being as follows: For: Councillors Debi Marshall-Lobb, Brent Barrett, Roly Fitzgerald, Patrick Handcock, Lorna Johnson and Kaydee Zabelin. Against: The Mayor (Grant Smith) and Councillors Mark Arnott, Vaughan Dennison, Lew Findlay, Leonie Hapeta, Billy Meehan, Orphée Mickalad, Karen Naylor and William Wood.
F	Moved Lorna Johnson, seconded Brent Barrett. Note: On a motion: That Council include $632,000 for Active Transport Capital Renewals in the 2025/26 and 2026/27 annual budget drafts. The motion was lost 6 votes to 9, the voting being as follows: For: Councillors Debi Marshall-Lobb, Brent Barrett, Roly Fitzgerald, Patrick Handcock, Lorna Johnson and Kaydee Zabelin. Against: The Mayor (Grant Smith) and Councillors Mark Arnott, Vaughan Dennison, Lew Findlay, Leonie Hapeta, Billy Meehan, Orphée Mickalad, Karen Naylor and William Wood.
	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED 2. That Council recommend the following programmes for inclusion in the draft 2025/26 Annual Budget: c. Transport capital programmes as outlined in Attachment 3 (as amended including resolutions AA, B and D).
	Clause 198.7-24 above was carried 14 votes to 1, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, William Wood and Kaydee Zabelin. Against: Councillor Karen Naylor.
	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED 2. That Council recommend the following programmes for inclusion in the draft 2025/26 Annual Budget: d. Non-Transport programmes as outlined in Attachment 4.
	Clause198.8-24 above was carried 14 votes to 1, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphee Mickalad, William Wood and Kaydee Zabelin. Against: Councillor Karen Naylor
	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED 3. That Council provide direction to officers, for consideration as part of the Annual Budget 2025/26 and 2026-27 process, to support the Centrepoint Theatre rebuild of up to $200k over two years by: a. In-kind support – officer time to support with fundraising, promotion, communications etc; and b. Resource consent and building consent costs – the application process for this is already underway; and c. Grant funding – the quantum to be determined by the Council as part of the Annual Budget process.
	Clause 198.9-24 above was carried 14 votes to 1, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, William Wood and Kaydee Zabelin. Against: Councillor Karen Naylor.
G	Moved Brent Barrett, seconded Lorna Johnson. RESOLVED That in response to the 2024 Residents Survey, Council include a budget of $24,000 for focus group research in draft Annual Budget 2025-26.
	Clause 198.10-24 above was carried 14 votes to 1, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, William Wood and Kaydee Zabelin. Against: Councillor Karen Naylor.
	Moved William Wood, seconded Leonie Hapeta. On an amendment: That in response to the 2024 Residents Survey, Council include a budget of $24,000 ~~$50,000~~ for focus group research in draft Annual Budget 2025-26.  The amendment was carried 14 votes to 1, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin. Against: Councillor Lorna Johnson.
	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED 4. That Council note directions given today will be brought back for Council consideration on 11 December 2024.
	Clause 198.11-24 above was carried 15 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin.

199-24	Māori Ward referendum implications Memorandum, presented by Waid Crockett, Chief Executive and Desiree Viggars, Legal Counsel. Councillor Billy Meehan left the meeting at 4:27pm.
	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED 1. That Council note the advice. 2. That Council note the Chief Executive will produce communications that encourage voter participation and explain Council’s decisions with regard to Te Pūao Māori ward to date and what to expect in voting papers.
	Clause 199-24 above was carried 14 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin.
	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED 3. That Council agree an unbudgeted $20,000 in the 2024/25 financial year to facilitate the preparation, printing and dissemination of educative materials.
	Clause 199-24 above was carried 12 votes to 2, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Orphée Mickalad, William Wood and Kaydee Zabelin. Against: Councillors Lorna Johnson and Karen Naylor.

200-24	Exemption of the Manawatū-Whanganui Regional Disaster Relief Fund, and Palmerston North Performing Arts Trust from being Council Controlled Organisations Memorandum, presented by Sarah Claridge, Governance Advisor. Palmerston North Performing Arts Trust - Annual Report and Annual Accounts 2023/24 Memorandum, presented by Hannah White, Democracy & Governance Manager. Items 13 and 14 were taken together.
	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED 1. That Council exempt the Manawatū-Whanganui Regional Disaster Relief Fund from being a Council Controlled Organisation for three years to 31 August 2027. 2. That Council exempt the Palmerston North Performing Arts Trust from being a Council Controlled Organisation for three years from 30 June 2025 to 30 June 2028, pursuant to section 7 of the Local Government Act 2002.
	RESOLVED 1. That Council receive the Palmerston North Performing Arts Trust Annual Report and financial statements for the year ended 30 June 2024 (Attachments 1-3).
	Clause 200-24 above was carried 13 votes to 0, with 1 abstention, the voting being as follows: For: Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin. Abstained: The Mayor (Grant Smith).

201-24

Council Work Schedule

Moved Grant Smith, seconded Debi Marshall-Lobb.

RESOLVED

1. That Council receive its Work Schedule dated 6 November 2024.

Clause 201-24 above was carried 14 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin.

202-24	Community Committee Part II Confidential - 23 October 2024 Councillor Lorna Johnson presented the recommendations below:
	Moved Lorna Johnson, seconded Patrick Handcock. RESOLVED 1. That Council adopt the recommendations from the Community Committee of 23 October 2024:
	Provisional Local Alcohol Policy - progress update (clause 34-24) Report, presented by Peter Ridge - Senior Policy Analyst. The COMMITTEE RECOMMENDS 1. That Council advise the Alcohol Regulatory and Licensing Authority that it will discontinue the development of the Provisional Local Alcohol Policy 2021 and begin development of a new draft local alcohol policy (Option 4). 2. That the Chief Executive release the decision immediately following the meeting. 3. That the Chief Executive release the report titled “Provisional Local Alcohol Policy – progress update” and the report’s attachments, with appropriate redactions (if any), immediately following the resolution of the appeals to the Alcohol Regulatory and Licensing Authority on the PNCC Provisional Local Alcohol Policy.
	Clause 202-24 above was carried 12 votes to 1, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Lorna Johnson, Orphée Mickalad, Karen Naylor and Kaydee Zabelin. Against: Councillor William Wood. Note: Councillor Leonie Hapeta declared a conflict of interest, withdrew from the discussion and sat in the gallery.

	Karakia Whakamutunga
	Councillor Debi Marshall-Lobb closed the meeting with karakia.

The public part of the meeting finished at 5.00pm.

Confirmed 11 December 2024

Mayor

Memorandum

TO: Council

MEETING DATE: 11 December 2024

TITLE: 2024 Rating Valuations

Presented By: Steve Paterson, Strategy Manager - Finance

APPROVED BY: Cameron McKay, General Manager Corporate Services

RECOMMENDATION TO Council

1. That Council note that the 2024 City rating revaluation has been completed and new values, with an effective date of 1 September 2024, have been authorised for implementation by the Valuer-General through the issue of an unqualified audit opinion on 29 November 2024.

1. ISSUE

1.1 The 2024 city rating revaluation has recently been completed. This memo and an associated presentation will highlight the main outcomes.

2. BACKGROUND

Process

2.1 There is a legislative requirement that the Council commission a revaluation of the City (for rating purposes) at least once every three years. As the previous revaluation was completed in 2021 a new revaluation is required this year. The Council engaged Quotable Value (QV) to undertake this task and this work has now been completed.

2.2 The process for the revaluation is determined by the Rating Valuations Act 1998 and the Rules issued by the Valuer-General pursuant to that Act. Key dates in the revaluation timetable are:

Effective date of revaluation	1 September 2024
Implementation date of new values	30 November 2024
Approximate date of posting to new owners – ratepayers who have provided email addresses for rating communications will have these revaluation notices emailed to them.	11 December 2024
Period for objections closes	3 February 2025

2.3 The new values cannot be implemented without approval from the Valuer-General. His unqualified audit opinion was received on 29 November 2024.

2.4 The 2021 values have been used as the rating base for the 2024/25 rating year. The new values will become effective for rating purposes on 1 July 2025. At the present time the City Council uses the land value as the base for its general rate and the capital value for a new targeted rate whilst Horizons Regional Council utilises the capital value for many of its rates.

Revaluation Outcome

2.5 The previous revaluations in 2009, 2012 & 2015 saw minimal movements in property values following reasonable movements in 2003 and 2006 and a long period with little growth before that. There were significant movements in 2018 and again in 2021.

Table 1: Movements in total values at each City revaluation

	2006	2009	2012	2015	2018	2021	2024
Land value	+125%	-0.5%	-1.1%	+4.7%	+56.0%	+83.1%	-17.6%
Capital value	+54.7%	+1.9%	+0.1%	+3.7%	+28.7%	+60.8%	-8.7%

2.6 In this latest revaluation the capital value of the City has decreased by 8.7% and the land value by 17.6% and varies by category as shown in the following table:

Table 2: Summary new total values & changes by Category

Sector	No. of rating units	2024 CV ($000)	CV % Change since 2021	2024 LV ($000)	LV % Change since 2021
Dairy	103	341,117,300	-1.3%	284,442,500	-3.0%
Pastoral	186	307,262,000	-4.8%	251,347,000	-6.1%
Horticultural	61	87,672,500	-3.8%	62,750,000	-5.0%
Specialist	15	24,311,000	-5.2%	15,990,000	-6.3%
Forestry	18	10,864,000	-3.0%	10,050,000	-3.2%
Mining	2	2,760,000	-4.8%	2,720,000	-4.9%
Lifestyle	1,625	1,838,504,000	-5.6%	921,584,000	-4.3%
Residential	30,070	19,487,137,000	-15.2%	10,846,595,000	-23.8%
Commercial	998	2,548,473,500	-1.1%	1,101,903,500	-3.9%
Industrial	1,033	2,540,689,500	12.1%	1,280,114,500	20.9%
Other	688	2,578,442,600	8.1%	768,575,500	-6.0%
Utilities	89	1,191,494,500	25.7%	43,314,500	-4.3%
TOTAL	34,888	$30,958,727,900	-8.7%	$15,589,386,500	-17.6%

2.7 As can be seen from Table 2 total values have reduced for every category except for Industrial, Utilities and other (reserves & recreation facilities, educational & health establishments)

2.8 The share of the total capital and land values that relate to each sector are shown in the following graphs:

Residential

2.9 Average residential capital and land values and movements by valuation roll QV sale group are shown in following table:

Table 3: Residential – Average Rating Values & Rating Value movements since 2021:

QV Sale Group	No. of Rating Units	Average 2024 CV	Average 2024 LV	CV% Change since 2021	LV% Change since 2021
Aokautere Urban	1,411	900,748	352,183	-13.4%	-20.5%
Ashhurst	1,120	619,920	276,165	-8.8%	-20.9%
Bunnythorpe	168	513,393	260,655	-15.4%	-25.6%
Hokowhitu & Te Awe Awe	4,005	799,990	497,904	-15.3%	-20.5%
Kelvin Grove & Milson & Cloverlea	5,345	668,643	331,197	-14.4%	-26.9%
Longburn	103	499,854	238,107	-15.4%	-31.8%
Palmerston North rural	668	944,746	384,259	-10.1%	-5.0%
Riverdale & Part Awapuni	1,439	668,426	406,550	-15.5%	-22.9%
Roslyn & Terrace End & Brightwater	3,485	604,225	351,783	-15.1%	-26.5%
West End & Papaioea & Central	3,515	620,257	392,084	-16.5%	-23.5%
Westbrook & Highbury & Takaro	4,288	544,654	308,772	-16.7%	-28.4%
Overall	25,547	$669,167	$368,293	-14.9%	-24.0%

The values changes from Table 3 are shown graphically below:

2.10 The distribution of land values over various land value bands is shown in the following graph (2024 valuation in dark blue & 2021 in light blue):

2.11 The distribution of capital values over various capital value bands is shown in the following graph (2024 valuation in dark blue & 2021 in light blue):

Commercial / Industrial

2.12 Changes to land and capital values for this group have been variable with an overall reduction in land value of 3.9% and capital value of 1.1% for commercial properties. By comparison there is an overall increase of 20.9% in the land value and 12.1% in the capital value for industrial properties.

2.13 Changes in the main areas are shown in the following table:

Table 4: Value movements for Commercial & Industrial Properties

Area (Valuation Roll)	No of RUs	Commercial CV % change since 2021	Commercial LV % change since 2021	Industrial CV % change since 2021	Industrial LV % change since 2021
Central Commercial (14740)	393	-2.9	-4.0	11.1	-0.3
Northern Fringe Commercial (14610)	214	-0.2	-11.2	4.8	-6.7
Western Fringe Commercial (14550, 14560, 14600)	246	3.0	5.1	8.4	9.6
Eastern Fringe Commercial (14650, 14660, 14670)	142	1.6	-6.3	6.0	4.0
Terrace End Suburban (14570, 14620, 14680, 14690)	78	-2.6	-7.8	10.3	12.8
Highbury/Awapuni Suburban (14520, 14530, 14540, 14630, 14640)	41	-3.9	-10.4	12.6	-3.7
Hokowhitu/Summerhill/Riverdale (14700, 14710, 14720, 14730)	60	-4.8	-13.1	1.4	-6.0
Northern Industrial (14460, 14470, 14580, 14590)	431	-0.2	7.9	14.1	27.7
Western Industrial (14500, 14510)	303	0.5	13.8	11.4	22.9
Villages (14030, 14040, 14050)	87	2.1	-5.0	2.3	0.6
Rural (14440, 14450, 14460, 14461, 14490)	35	-0.8	4.7	16.2	26.2
All		-1.1	-3.9	12.1	20.9

Potential Impact on Rating Incidence

2.14 The new valuations do not impact on the total rates revenue for the Council – this is determined through the Annual Budget process. They do, however, impact on the allocation of rates from 1 July 2025.

2.15 The land value is the base for the general rate and for the first time in 2024/25 a targeted rate based on the capital value was introduced. A system of differential rating charges a different rate in the dollar to the each of the various differential rating categories. The portion of the total value in each category influences the rates allocated to each category.

2.16 Table 5 below shows there has been a significant movement in the share of the total land value from residential to non-residential (commercial/industrial) and rural/semi-serviced. Without making system changes this would lead to the non-residential and rural/semi-serviced sectors bearing a greater share of the general and targeted rates than previously.

Table 5: Share of total rateable values by differential rating category

	% of old CV	% of new CV	% of old LV	% of new LV
Single Unit Residential	66.5	62.1	72.1	66.6
Multi-Unit Residential	3.5	3.3	3.6	3.4
Miscellaneous	1.6	2.1	1.8	2.3
Non-Residential	16.9	20.4	10.7	13.8
Rural/Semi-Serviced	11.5	12.1	11.8	13.9

2.17 The following four graphs show the number of properties in each band of percentage movement in the land value and capital value. For example, 15,943 single unit residential properties had capital value decreases of between 15% and 20% and 3,797 had land value decreases of between 15% and 20%.

Single unit residential

Multi-unit residential

Non-residential (Commercial/industrial)

Rural/semi-serviced

2.18 A separate report addresses the potential impacts on rates incidence in more detail.

3. NEXT STEPS

3.1 Property owners will have the opportunity to consider individual property valuations and lodge objections, if they wish, provided these are lodged before 3 February 2025. All objections will be reviewed, and a decision made as to whether or not any alteration to the values is warranted. The outcome will be formally communicated to each objector.

3.2 Council staff have provisionally analysed the new values and used this analysis to prepare a separate report regarding rating incidence for Council consideration.

3.3 Feedback provided by the Council will assist staff develop more detailed options for consideration by the Council in February 2025 leading to a proposed approach to be incorporated in the Council’s annual budget for 2025/26.

4. Compliance and administration

Does the Council have delegated authority to decide?		Yes
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
The recommendations contribute to the achievement of action/actions in (Not Applicable)
Contribution to strategic direction and to social, economic, environmental and cultural well-being	Determining rating valuations every three years is a legislative obligation that is required to enable the Council to set rates.

Attachments

NIL

Memorandum

TO: Council

MEETING DATE: 11 December 2024

TITLE: 2024 Rating Valuations - Impact on Rating Incidence

Presented By: Steve Paterson, Strategy Manager - Finance

APPROVED BY: Cameron McKay, General Manager Corporate Services

RECOMMENDATION(S) TO Council

1. That Council note:

a. the new rateable values will be used as the basis for calculating rates effective from 1 July 2025.

b. the valuation changes do not increase the total rates revenue for the Council. However, without further changes to the rating system the valuation significantly alters the incidence of rates both within and between the differential groups of property, and in particular transfer a greater share of the rates to the commercial/industrial sector.

2. That Council instruct the Chief Executive to bring options to the 12 February 2025 Council meeting in response to the change in rating incidence caused by the valuation changes and the planned stage 2 implementation of the greater share based on capital value. These options will include mechanisms such as altering the level of uniform annual general charge; or the differential surcharges applying to the general rate based on the land value; or the targeted rate based on capital value; or a combination of all three.

1. ISSUE

1.1 The 2024 city rating revaluation with an effective date of 1 September 2024 has been implemented and will become the base for value-based rates from 1 July 2025. This memo addresses potential rating implications as well as foreshadowing other changes to the rating system that will need to be considered as part of the Annual Budget process in February.

2. BACKGROUND

Recap of valuation outcomes

2.1 A separate report titled “2024 Rating Valuations” outlines the outcome of the revaluation. In summary the capital value of the City has decreased by 8.6% and the land value by 17.6%.

2.2 For rating purposes, the Council uses a differential system that categorises properties as shown in the following table.

Table 1: Proportions of total land & capital value by differential category

	% of old CV	% of new CV	% of old LV	% of new LV
Single Unit Residential	66.5	62.1	72.1	66.6
Multi-Unit Residential	3.5	3.3	3.6	3.4
Miscellaneous	1.6	2.1	1.8	2.3
Non-Residential	16.9	20.4	10.7	13.8
Rural/Semi-Serviced	11.5	12.1	11.8	13.9

2.3 The distribution of land values over various land value bands for single unit residential properties is shown in the following graph (new values in dark blue & old in light blue):

2.4 The distribution of capital values over various capital value bands for single unit residential properties is shown in the following graph (new values in dark blue & old in light blue):

Potential impact on rating incidence

2.5 The three-yearly revaluation process is a legislative requirement designed to bring the rates allocation base up to date to make it fairer for all.

2.6 The new valuations do not generate additional rates revenue for the Council. They do, however, impact on the allocation of rates from 1 July 2025. The land value is the base for the general rate and for the first time in 2024/25 a targeted rate based on the capital value was introduced. A system of differential rating charges a different rate in the dollar to the each of the various differential rating categories. The portion of the total value in each category influences the general rates and targeted rates allocated to each category.

2.7 The following graph shows the proportion of the total rates assessed on each differential category – showing the actual rates share for 2024/25 and what it would have been for 2024/25 had the rates been set using the new values.

2.8 With the single unit residential property share of the total land value decreasing from 72.1% to 66.6% and capital value from 66.5% to 62.1%, using the new values would see approximately $11m of rates transferred from the residential sector to the non-residential sector ($10.2m) and rural sector ($0.8m).

2.9 Such a significant movement may not be an appropriate outcome. However, there are other factors that will influence the final rates incidence for 2025/26, and these are outlined in the following section.

2.10 The following two graphs show the rates in the $ of value that would be applied for 2024/25 if the new values were used and no other changes were made to the rating system. Because the rateable values are lower higher rates in the $ need to be used to obtain the same total revenue.

Other factors impacting on rates incidence for 2025/26

2.11 In addition to the revised rating valuations rates incidence for 2025/26 will be influenced by the following:

· The proposed second stage of implementation of the targeted rate based on the capital value – in effect approximately doubling the rates to be based on the capital value

· The proposed second stage of implementing the change to the differential surcharge for the rural/semi-serviced (lifestyle) properties

· The extent of the increases required in the fixed charges to fund the proposed budgets for water, wastewater and resource recovery. Based on the first draft of the annual budget to be presented for consideration by Council on 11 December the following fixed charges would be required:

	Actual for 2024/25 ($ GST incl)	Initial draft for 2025/26 ($GST incl)
Water	415	486
Wastewater	375	403
Kerbside recycling	144	189
Rubbish & public recycling	51	83

Metered water charges will also need to increase by approx. 10%

· Whether as a consequence of the revaluation or as a part of the progressive implementation of the capital value-based rate it is considered appropriate to change the differential surcharges for some of the differential categories

· The level of the uniform annual general charge (UAGC).

3. Discussion

Why might an intervention to moderate the impact of the revaluation be appropriate?

3.1 An intervention may be appropriate if it is considered that the rates that would be assessed based on the updated valuations are unreasonable for a significant group of ratepayers. It may also be appropriate as a holding action or temporary measure if the extent of the change in rates is considered unreasonably high.

3.2 Such an intervention was made following the 2018 and 2021 revaluations as on both occasions there was a significant increase in residential land values especially for those at the lower end of the market. The response was to lower the uniform annual general charge and increase the differential surcharge for non-residential properties.

3.3 The circumstances this year are similar again this year although on this occasion there have been reductions in values with the greatest reduction occurring for residential properties.

What type of changes might be possible?

3.4 The following three main tools for change are considered in turn:

· A change to the level of the uniform annual general charge (UAGC)

· A change to the differential surcharges for some categories of property

· Changing the proportion of the rates based on the capital value.

Changing the level of the UAGC:

3.5 The UAGC is an integral part of the Council rating system. It serves to moderate the level of rates (especially for residential properties) by making sure those with low land values pay at least a minimum contribution to fund city services and facilities and those with very high land values do not pay an unreasonably high contribution.

3.6 The UAGC for 2024/25 is $200 per rating unit. It was reduced to this level in 2022/23 from $500 per rating unit in 2021/22. It was reduced to $500 from $690 in 2018/19.

3.7 For many years it was the practice to increase the UAGC annually to keep the fixed component of the rates at similar proportions from year to year.

3.8 Given the higher total rates assessed on commercial/industrial properties the UAGC forms a much smaller part of the individual rates assessed on them compared to residential properties.

3.9 Changing the level of the UAGC would impact not only on the total rates contributed by each differential category but also the incidence of rates within each category.

3.10 One of the arguments to reduce the UAGC to $200 following the 2021 revaluation was that the spread of residential land value had been reduced through the revaluation (lower land values increased by 100% or more whilst higher land values increased by a smaller percentage).

3.11 The reverse has occurred during the 2024 revaluation. The greater reductions in land value have been in the traditionally lower valued areas. These reductions have flowed through to the capital value.

3.12 An option is therefore to increase the UAGC. A scenario is included showing what would happen to incidence if this was increased to $400.

Changing the differential surcharges:

3.13 A fundamental component of the present rating system is that property is grouped by differential category (primarily based on the nature of use) and a general rate is assessed with different rates in the dollar of land value being assessed on each property group.

3.14 The new targeted rate based on the capital value is also categorised in the same manner and surcharges are applied (although not at the same level as for the general rate). There are various reasons for this outlined in the funding impact statement in the Council’s Long-term Plan.

3.15 The Council describes the relationship between the rates charged to each differential group in terms of a factor expressed as a percentage of the rate that would apply if there were no differential rating in place. Each year the Council reviews the differential factors applied to each group.

3.16 When adopting the Long-term Plan the Council signalled its intention that the discount provided through the differential system to semi-serviced/rural properties (lifestyle blocks) of between 0.2 ha and 5 ha would be reduced over two years, 2024/25 and 2025/26. Year 2 of this change will be taken into account in modelling various scenarios for Council consideration.

3.17 If the intention is that the other differential groups should pay similar proportions of the total rates in 2025/26 as in 2024/25 then there will need to be significant changes to the differential surcharges. A number of scenarios are being tested.

The capital value based targeted rate:

3.18 When adopting the revisions to the rating system for 2024/25 Council signalled it intended that its desire was to progressively increase the portion of the value-based rates based on the capital value to 50% over three years. Rates for 2024/25 are based on 16.5% using the capital value.

3.19 At this stage it has been assumed the Council will proceed along the implementation path and base 33% of the value-based rates on the capital value in 2025/26.

3.20 This has been built into scenario testing done to date though one scenario tests what would happen to incidence if the 16.5% portion was retained.

Testing scenarios

3.21 Given the new valuations have just been released and the first draft of the annual budget has just been completed there has not been sufficient time to adequately test scenarios.

3.22 However, the approach taken for this report has been as follows:

· Test what the rates incidence would have been for 2024/25 had the new values been used as the base. The outcomes of this are shown earlier in this memo.

· Test scenarios for 2025/26 all of which assume the new values will be used, the overall rates increase will be 8.9% as per the Long-term Plan year 2, and the fixed charges for services will be as outlined in section 2.3.

3.23 The assumptions for the 4 scenarios are shown in the following table:

Scenario	Values Used	Total rates increase	Differentials	UAGC	CV %
1	2024	8.9%	No change	$200	33%
2	2024	8.9%	No change	$200	16.5%
3	2024	8.9%	No change	$400	33%
4	2024	8.9%	FM (lifestyle) change discount to -40% from -45% CI (non-residential) Reduce LV surcharge from 200% to 150% Reduce CV surcharge from 120% to 80%	$200	33%

3.24 The following graph demonstrates the proportion of the total rates assessed that would be borne by each differential group for each scenario, compared with the actual for 2024/25.

3.25 Some initial observations from the above graph:

· The total rates allocated to each category is not significantly influenced by the move from 16.5% on a capital value base to 33% (scenarios 1 & 2)

· Increasing the UAGC does move some rates from non-residential to residential – this is because there are many more rating units in the residential category.

· Even after making significant reductions to the non-residential differentials the total rates increase for the non-residential category would still be approx. 12.3% compared with 5.8% for single unit residential and 33% for the rural/semi-serviced (lifestyle) category.

3.26 In addition to checking the rates incidence at the differential category level it is necessary to consider the changing incidence at the individual ratepayer level.

3.27 The graphs in Attachment 1 show the number of properties within each band of movement in rates (in both %age and dollar terms). There are graphs for the single unit residential, non-residential and rural differential groups.

3.28 Some initial observations from the graphs include:

· Scenarios 1-3 show significant reductions in rates for many residential properties as the total sum to be collected from each differential category is significantly different from the current year. By comparison these scenarios show significant increases for non-residential properties and rural/semi-serviced.

· Scenario 4 produces an overall outcome by differential category that is more like the distribution for 2024/25. The majority of the rates increases for residential properties are less than 10%. 3,600 residential properties would have increases in the 10-25% band – principally those with high ratios of capital value to land value.

· In Scenario 4 most of the residential rates increases are less than $500 with one-third less than $250.

· Rates movements for non-residential properties vary widely in all scenarios. This is because of the wide variation in value movements in different parts of the City and because of the range of different capital to land value ratios for the properties in this category.

· Scenario 4 moderates the increases for non-residential properties with very high ratios of capital to land value. Even in this scenario there are over 100 such properties with increases over $10,000 with 3 having increases over $100,000, 6 with increases of between $50,000 and $80,000, 7 with increases of between $30,000 and $50,000 and 14 with increases of between $20,000 and $30,000.

4. Conclusions

4.1 As expected the combination of the application of new rating values (most of which have reduced), an increase in the overall rates requirement, increases required for fixed charges for services and the progressive implementation of the capital value based targeted rates make for a very complex story for ratepayers to understand.

4.2 Further analysis and modelling is required to enable acceptable options to be brought to the Council for consideration in February 2025.

5. NEXT STEPS

5.1 Should the Council agree to recommendation 2 to provide options that moderates the effect of the revaluation by making changes, officers will continue further modelling and report the findings to Council in February for consideration.

5.2 The modelling will consider mechanisms such as the level of the UAGC and differential surcharges for the general rate and the capital value based targeted rate and will incorporate the draft total rates requirement for 2025/26 to fund operations.

6. Compliance and administration

Does the Council have delegated authority to decide?		Yes
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
The recommendations contribute to the achievement of objective/objectives in: 14. Mahere mana urungi, kirirarautanga hihiri 14. Governance and Active Citizenship Plan The objective is: Base our decisions on sound information and advice
Contribution to strategic direction and to social, economic, environmental and cultural well-being	Determining rating valuations every three years is a legislative obligation that is required to enable the Council to set rates. The Council is required to prepare Funding Impact Statements that provide the detail of the proposed rating system as part of each year’s Annual Plan.

Attachments

Graphs showing rating incidence movement for scenarios 1-4 ⇩

Memorandum

TO: Council

MEETING DATE: 11 December 2024

TITLE: Annual Budget 2025/26

Presented By: Scott Mancer - Manager Finance, and Steve Paterson - Manager Financial Strategy

APPROVED BY: Cameron McKay, General Manager Corporate Services

RECOMMENDATIONS TO Council

1. That Council instruct the Chief Executive to prepare a draft of the Consultation Document and supporting information for the Annual Budget 2025/26 for consideration by the Council at its meeting on 12 February 2025 and that it contains:

a. Key assumptions outlined in Section 4.

b. Programmes as agreed at the Council meeting on 6 November 2024 and attached for information in Attachment 4

c. Operating budgets as outlined in Attachments 1-3, as amended below.

i. That Council agree a budget for Local Water Done Well Transition support in 2025/26 comprising expenditure of $1.5M funded by way of a grant subsidy of $621,831 and the balance of $878,169 by way of loan.

ii. EITHER:

(A) That Council increase the resource recovery operating budget by $65k to fund the delivery of Programme 2338 – Recycling Contamination Monitoring Development

(B) That Council defer Programme 2338 – Recycling Contamination Monitoring Development by one year to 2026/27.

iii. That Council agree any referrals outlined in Section 5.

iv. That Council agree any additional recommendations from Elected Members.

1. ISSUE

1.1 Officers are in the process of developing the Annual Budget 2025/26 (based on year 2 of the Long-term Plan) (LTP) for consideration by the Council.

1.2 At its meeting on 6 November 2024 Council considered a report focused on the budget process and proposed operating and capital programmes. At that meeting, Council resolved (198-24):

“That Council note the process for, and timing of, the Annual Budget 2025/26 as outlined in Table 1 of the “Annual Budget 2025/26- timing and programme budgets” presented to Council on 6 November 2024.

That Council recommend the following programmes for inclusion in the draft 2025/26 Annual Budget:

a. Operating programmes as outlined in Attachment 1

b. Transport operating programmes as outlined in Attachment 2.

c. Transport capital programmes as outlined in Attachment 3 (as amended including resolutions AA, B and D as follows

AA That Council provide budget of $150K in draft Annual Budget 2025-26 and $150K in indicative Annual Budget 2026-27 for shared path planning and preparation for Notice of Requirement.

B That programme #2380 - City-wide - Transport - Emergency Reinstatements – be increased to $500k in Financial Year 25/26 (Attachment 3)

D That Council reinstate Programme 2505 City-Wide Shared Paths Slip Prevention to $306k (capital) and $51K (operational) in draft Annual Budget 2025-26, and to $313k (capital) $52K (operational) in the indicative Annual Budget 2026-27”

1.3 This report provides an overview of the total budget position and seeks guidance so that a draft of the Consultation Document and supporting information can be prepared for consideration by the Council at its meeting on 12 February 2025.

2 BACKGROUND

2.1 The Council has adopted a timetable that seeks to adopt the Annual Budget (and set the 2025/26 rates) on 4 June 2025.

2.2 This report considers inter alia:

· Changes to significant forecasting assumptions

· Updated information about the implications of the lower levels of subsidy available for the transport activity

· Incorporating the outcomes from the Council’s consideration of programmes at the meeting on 6 November

2.3 Issues relating to the rating system (including the implications of the new rating valuations) are addressed in separate reports to this meeting.

3 BUDGET OVERVIEW

3.1 Tables 1-3 below summarise operating & capital budgets in the draft of the 2025/26 budget compared with the LTP.

Table 1: Funding of Operating expenses	Long-term Plan		Draft Annual budget
	2024/25 $M	2025/26 $M	2025/26 $M
Personnel Depreciation Finance (interest) All Other Operating Expenses	59.3 49.4 14.5 77.9	62.5 50.5 17.0 79.1	64.2 49.7 14.9 79.3
Total operating expenses	201.1	209.1	208.1
Operating subsidies & grants Finance revenue Other revenue	(6.4) (0.4) (38.6)	(6.5) (0.4) (39.2)	(5.5) (0.5) (40.0)
Total operating revenue	(45.4)	(46.1)	(46.0)
Net operating expenses	155.7	163.0	162.1

Less: Depreciation Operating expenses funded from debt Plus: Renewals (3 year rolling average) Debt repayment	(49.4) (5.8) 28.6 7.8	(50.5) (3.9) 30.9 9.6	(49.7) (4.2) 31.2 9.6
Total rates requirement	136.9	149.1	149.0

Table 2: Funding of Capital Expenditure	Long-term Plan		Draft Annual budget
	2024/25 $M	2025/26 $M	2025/26 $M
Renewals Capital for growth Capital new	33.0 15.0 47.4	35.6 12.7 77.2	35.3 12.3 68.1
Total capital expenditure	95.4	125.5	115.7
Funding from external sources	(18.1)	(30.0)	(23.3)
Funding from rates (for renewals)	(28.6)	(30.9)	(31.2)
Funding from additional debt	(48.7)	(64.6)	(61.2)

Table 3: Components of increased rates requirement	Impact on Total Rates for Year 2
Table 3: Components of increased rates requirement	As per LTP	As per draft AB
Interest Costs on Debt	1.8%	0.3%
Debt Repayment	1.4%	1.3%
Rolling Average Renewal increase	1.7%	1.9%
Labour Costs	2.3%	3.6%
Utilities and Insurance	0.2%	0.4%
All Other (Contractors, Professional Services, Materials etc.)	2.1%	1.8%
Revenue (excluding Rates and Grants & Subsidies)	(0.5%)	(1.1%)
Revenue – Operating Grants & Subsidies	(0.1%)	0.7%
Increase in total rates requirement	8.9%	8.9%

3.2 More detailed financial information is provided in the attachments as follows:

· Attachment 1 – High level financial statements

· Attachment 2 – Activity statements in the form included in the annual budget

· Attachment 3 – Detailed sub-activity statements with comments to explain any significant differences to Year 2 of the LTP

· Attachment 4 – Programme budget schedules

4 Significant forecasting assumptions

Inflation

4.1 The LTP 2025/26 budget figures were based on the application of 2023 BERL inflation indicators to the underlying budget data. BERL released interim updated indicators in July and in October released further updated indicators. These indicators are shown in Table 4 below:

Table 4: BERL indicators	2025/26			2026/27
	LTP	BERL Jul 24	BERL Oct 24	LTP	BERL Jul 24	BERL Oct 24
Planning & Regulation	2.1%	3.2%	2.7%	2.2%	3.0%	2.7%
Roading	2.0%	3.2%	3.0%	2.3%	3.2%	3.1%
Transport	2.1%	3.2%	2.9%	2.2%	3.2%	2.9%
Community	2.0%	2.5%	3.0%	2.2%	2.7%	2.9%
Water and environment	2.5%	4.0%	2.5%	2.7%	3.9%	2.8%

4.2 The 2025/26 budgets retain the inflation assumptions used in the LTP. For three of the five activity groups shown in table 4 the latest BERL indicators are higher than the budgetary assumption. Although this will place pressure on operating budgets officers are recommending the LTP assumptions be retained.

Interest rate for borrowing

4.3 The interest rate used in years 1-3 of the LTP is 5%. Recent downward movement in market interest rates (partially offset by increasing lender margins) means there is scope to reduce the assumption for 2025/26 to 4.4%. This lower interest rate assumption has been built into the draft budget and has the effect of reducing the interest expense by approx. $2M.

Remuneration

4.4 Each year the remuneration budget is updated based on the current organisational structure. Assumptions to remuneration budget are reviewed and updated. There has been an increase in remuneration budget due to; increased overtime provision, review of the vacancy assumptions as we are experiencing higher levels of staff retention and lower level of vacancies, and the market and performance provision. There is a small increase in FTE budgeted within the structure in the Planning Services and Contact Centre activities, and these are funded through additional revenue.

Overheads

4.5 Through ongoing review of Council’s budgets, officers have determined that some drivers for allocating costs via the corporate overhead allocation function were not as appropriate as they could have been in the LTP.

4.6 Overheads need to be allocated in a manner that is pragmatic and as efficient as possible but needs to be done in a manner that does not unduly distort what is considered the true cost of delivering each activity. As some activities have targeted funded sources changes to overheads can have an impact when seeking to determine fee and charge structures, but changes in the overhead model does not alter the total rates requirement for Council.

4.7 A significant change is required to the allocation of digital transformation costs. The LTP methodology has allocated the loan funding of this programme, but the corresponding operating expenditure was sitting in a part of the model that was not allocated. This has resulted in a large credit being allocated across Council’s activities in the LTP and a large expense being incorrectly funded in the Organisational Performance activity. This change has resulted in some large movements in the overhead allocation.

4.8 Fleet & Plant as well as Print Synergy have changed from being allocated by the Overhead model to a direct cost recovery model, recognising these activities are able to reasonably easily be directly linked to the activities that consume them.

4.9 Finally, the recent organisational realignment has altered where some activities report internally, and therefore internal management overheads have been updated to reflect these changes. The impact of this change is relatively minor.

4.10 These changes show in the detailed sub-activity budget report in Attachment 3, against the budget line “Remuneration and Net Internal Expenses”.

Utilities & Insurance

4.11 Council has pressure on the utilities budget, noting the national shortage of natural gas supply. Council is a large user of natural gas, for many of its venues – particularly high use venues/locations are the Lido, Central Library, Crematorium and the Civic Administration Building. Officers are working through investigations of alternative power supply options, but this is likely to take some time before alternate energy sources are implemented. Council’s Low Carbon Fund has enabled officers to reduce reliance on some gas supply already. Council’s gas supply contract ended in August 2024. As a single consumer, PNCC was unable to secure its own gas supply contract. Officers were able to negotiate to join an All of Government (AOG) supply, however the increase to the supply price is circa 100% or $300k. The draft budget has been increased by $0.3M compared to Year 2 of the LTP.

4.12 Significant increases in insurance premiums were provided for from 2023/24. Increases in the Local Authority Protection Programme (LAPP) contribution for underground infrastructure are being staged over two years (2024/25 and 2025/26). No specific additional provision has been made for increases in 2025/26 (above the 2024/25 budget). This may cause budgetary pressure but at this stage officers are suggesting no further change be made.

NZTA Funding & Transport Budget pressures

4.13 Following the meeting on 6 November, Officers have adjusted the proposed draft Annual Budget in line with resolutions that were passed. The omissions, as reported, have all been included within the draft budget.

4.14 It should be noted that officers have reduced the operating budgets in the Active Transport activity to match the funding that has been received from NZTA – 22% of the activity class.

Revenue Assumptions (especially fees & charges)

4.15 It is intended that the usual report on proposed levels of fees and charges will be presented for consideration in February. However, as part of the review of the draft budget for 2025/26 officers have considered the following:

· Whether budget revenue assumptions are consistent with the latest nature and level of activity for each activity

· Whether these revenue assumptions fall within the revenue bands described in the Council’s Revenue & Financing Policy

· Whether the revenue assumptions are based on increases in fees and charges that are significant or potentially contentious

4.16 It has been assumed there will be no increase to fees and charges for the following at this stage as they were last increased from 1 July 2024:

· Metered parking

· Rubbish bags

4.17 Inflation related percentage increases in fees & charges have been assumed for:

· Regulatory activities – building, planning, public health & animal management

· Parks & reserves

· Cemeteries (though a larger increase is likely to be proposed for cremation fees given the operating increases especially for gas)

4.18 Increases in association with provisions of the bylaw have been assumed for:

· Trade waste

4.19 Activities where the proposed budgets do not yet meet the target external funding proportions described in the policy include:

· Conference & Function Centre (draft 47% - policy minimum 60%)

· Cemeteries (draft 49% - policy minimum 60%)

· Social Housing (draft 56% - policy minimum 80%)

· Planning Services (private) (draft 79%, policy expectation 100%)

4.20 These are the same activities as were considered during the review of the Revenue & Financing policy as part of the LTP development. At the time Council determined it was prepared to operate outside of the policy targets as options were being considered.

4.21 Revenue assumed from other charges is broadly in line with year 2 of the LTP with the following exceptions:

· Dividends – increase from $150k to $300k to reflect Council’s Statement of Expectation for Palmerston North Airport Ltd

· Planning fees (private) – increased volumes but offset by increased expenses for remuneration and professional services

· Infringement fines – reflecting the new fine regime adopted by the government but offset by increased court costs.

5 Local Water Done Well

5.1 The LTP assumes the water activities will remain a part of the core Council operations throughout the 10 years and despite the pace of development of the LWDW changes it is still appropriate to consider they will remain for at least the 2025/26 year.

5.2 Depending on what decision the Council makes on delivering water services it is expected the Council will incur costs associated with the possible setting up of a new water services entity.

5.3 Until now, Government has provided funding to assist councils with the transition costs that have been incurred. At the current point in time, the proposed budget for 2025/26 is $1.5M, covering transition support and some costs associated with the potential formation of a Water Organisation.

5.4 At the Strategy & Finance Committee meeting of 13 November 2024, a report was provided outlining the allocation of the remainder of the funding provided from DIA.

5.5 Officer advice is to include an expenditure budget of $1.5M in the Wastewater activity in the Annual Budget 2025/26 and to fund it by way of operating subsidy revenue of $621,831 and the balance of $878,169 by loan, recognising that these costs would be establishing a new CCO which will become an asset on Council’s balance sheet. This would add $19k of Rates to 2025/26 (for interest costs), followed by $88k in 2026/27 associated with interest and debt repayment.

6 Recycling Contamination Monitoring Development Programme

6.1 Through the review of the budget, Officers have determined that Programme 2338 – Recycling Contamination Monitoring Development has been included in the proposed budget. This programme is for the purchase of an additional vehicle for a staff member to inspect recycling wheelie bins on a schedule across the city. Current resourcing levels do not allow for this programme to be commenced. If this initiative is to be progressed an increased operating budget will be required. It is expected the sum involved would be circa $65k. If there is no desire to pursue this initiative, this programme can be deferred to 2026/27.

7 COUNCIL REFERRALS

7.1 Council has referred the following recommendations for budget consideration and these sums have not been incorporated in the draft budgets:

Palmerston North Age Friendly Action Plan (clause 29-24) Council 6 November

“That Council approve Option 1 and refer an additional budget of $50K for the development and implementation of the Palmerston North Age Friendly Implementation Plan to the draft Annual Budget.”

Street Lighting (clause 12) Economic Growth Committee 20 November

“That a budget of $120,000 to support a Street Lighting survey be referred to the Annual Budget 2025/26 process.

That a programme to begin upgrading the street lighting on the already identified streets (listed in the Roading Report to the Economic Growth Committee in June 2024) be referred to the Annual Budget 2025/2026 process.”

Centrepoint Theatre (clause 198-24) Council 6 November

“That Council provide direction to officers, for consideration as part of the Annual Budget 2025/26 and 2026-27 process, to support the Centrepoint Theatre rebuild of up to $200k over two years by:

a. In-kind support – officer time to support with fundraising, promotion, communications etc; and

b. Resource consent and building consent costs – the application process for this is already underway; and

c. Grant funding – the quantum to be determined by the Council as part of the Annual Budget process”

Stuff Events (clause 47-24) Culture and Sport Committee 27 November

“That Council refer a new programme of up to $30k per year to support Central District Field Days Innovation Zone proposal to the Annual Budget 2024/25 process.”

8 Programme budgets

8.1 At the Council meeting on 6 November Council received the proposed programme schedules and approved some minor changes. These have been included in today’s report and the updated schedules for the following:

· Operating Programmes

· Capital Renewal Programmes

· Capital Growth Programmes

· Capital New Programmes

These have been re-attached as Attachment 4 for information.

9 NEXT STEPS

9.1 Assuming sufficient direction is provided at this meeting the next step in the process is for a draft consultation document and supporting information (including updated budgets) to be presented to the meeting scheduled for 12 February 2025.

9.2 It is intended the final consultation document and supporting information be adopted on 5 March 2025.

10 Compliance and administration

Does the Council have delegated authority to decide?		Yes
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 objectives?		Yes
Are the recommendations inconsistent with any of Council’s policies or plans?		No
The recommendations contribute to the achievement of objective/objectives in: 14. Mahere mana urungi, kirirarautanga hihiri 14. Governance and Active Citizenship Plan The objective is: Base our decisions on sound information and advice
Contribution to strategic direction and to social, economic, environmental and cultural well-being	The Annual Budget process is an essential procedural step to enable the Council to fulfil its legislatively prescribed planning & reporting accountability obligations

Attachments

1.	Summary high level financial statements ⇩
2.	Cost of Activity statements ⇩
3.	Detailed Sub-activity statements ⇩
4.	Programme schedules ⇩

Memorandum

TO: Council

MEETING DATE: 11 December 2024

TITLE: Palmerston North Quarterly Economic Update - December 2024

Presented By: Stacey Andrews, City Economist

APPROVED BY: David Murphy, General Manager Strategic Planning

RECOMMENDATION TO Council

1. That Council receive the Palmerston North Quarterly Economic Update – December 2024, including:

a. Palmerston North Economic Growth Indicators - December 2024 (Attachment 1), and

b. Palmerston North Quarterly Economic Card Spending Report – September 2024 (Attachment 2),

presented to the Council meeting on 11 December 2024.

1. introduction and purpose

1.1 This memorandum presents a summary of the key themes in the Palmerston North Quarterly Economic Update to December 2024, and the Palmerston North City Centre Quarterly electronic card spending (retail and selected tourism sectors) for the September quarter 2024.

1.2 The quarterly economic update is prepared in-house, utilising data from a range of sources to provide the most up-to-date information available on the city economy. This includes national and global data where appropriate, to inform us of broader conditions that are impacting on local economic conditions.

1.3 The quarterly economic update is organised under the categories of ‘Gross Domestic Product (GDP) and national indicators’, ‘business and jobs’, ‘earnings and income’, ‘spending’, and ‘housing’. National data that influences the city economy, such as the Consumer Price Index (CPI) and the Official Cash Rate (OCR), are also included in the quarterly economic update. This update is attached as Appendix 1.

1.4 The Palmerston North City Centre Quarterly electronic card spending report is prepared in-house and provided as a resource to the city retail sector. This report includes information on retail spending across the city and by precinct, as well as data on retail flows, customer loyalty, and the origin of customers who are spending in Palmerston North. The electronic card spending report for the city is included as Appendix 2.

1.5 Section 2 of this report includes a high-level summary of economic outcomes for the city to December 2024. A more in-depth analysis of economic performance, including the economic outlook for the city, is included within sections 3 to 5 of this report.

2. Economic summary

2.1 GDP contracted -0.4% in the city over the year to September 2024, as economic conditions remained challenging due to restrictive monetary and fiscal policy, and a downturn in spending by households and businesses across the domestic economy. This compares with 0.0% growth, nationally.

2.2 This downturn in economic activity in the city coincides with strong population growth with residents in the city increasing by +1.7% over the year, to 92,500. This compares with +1.8% growth in population, nationally.

2.3 Alongside population growth and the current contraction in GDP, GDP per capita fell by -2.6% over the year to an annual value of $68,692. This compares with a decline in per capita GDP nationally of -1.9%.

2.4 These weaker economic conditions are reflected in the jobs and retail spending figures for Palmerston North, with fewer jobs and continued weakness in spending in the city. Jobseeker benefit numbers have increased across all age groups and total construction investment values have declined. There are some bright spots in the data though, with construction investment in commercial buildings, factories, industrial, and storage buildings holding their own. New dwelling consents in the city also held their own over the year, increasing by +1.0% relative to a -16.7% decline, nationally.

2.5 Carbon emissions per $1m of GDP have continued to fall, with an estimated 102.1 tCO₂ emitted per $1m of GDP generated in the city over the 2023 calendar year. This is down from 121.6 tCO₂ per $1m of GDP generated in the city in 2018.

2.6 Financial market conditions are improving as inflation falls back to the middle of the Reserve Bank of New Zealand (RBNZ) target range of 1%-3%, and interest rates fall faster than previously anticipated. The RBNZ dropped the official cash rate to 4.25% in response to weaker than expected economic activity in November after a prolonged period at 5.5% (May 2023-August 2024). Banks have moved quickly to reduce retail rates to borrowers, as competition for new and existing mortgages heats up. Falling interest rates will start to bring relief for households and businesses throughout 2025, as borrowers roll onto lower rates.

2.7 For now the housing market remains flat with average prices in the city falling -0.7% over the year compared with a -0.6% fall, nationally. Lower house prices alongside rising incomes have boosted affordability in the city with the average house price falling to 4.9 times the average annual household income. This does not mean that housing is affordable for all, however, with many whanau falling below the medium household income of $125,772.

2.8 Positively, rental price inflation has fallen away over the year to September with average weekly rents rising just +0.4% to $495 per week. This follows a period of sustained +4.0% plus per annum annual increases. Rents across the country increased by +2.9% over the same period to an average price of $573 per week.

2.9 The number of households on the public housing register fell by -13.0% over the year alongside a -16.4% fall in the number families on the transitional housing register. This is accompanied by a decline in the number of families in emergency housing in Palmerston North, from 93 in September 2023, to 27 in September 2024. National statistics follow a similar trend. Some of the decline may be explained by the changing MSD criteria for accessing public housing, however, insights from the Ministry of Social Development (MSD) also cite an increase in availability of rental properties and stable prices, as a factor.

2.10 You can read a summary of the outlook for the city and national economy is section 5 of this report.

3. Quarterly economic Update

Gross Domestic product and national indicators

3.1 Infometrics reports that Palmerston North GDP fell by -0.4% over the year to September 2024 as the New Zealand economy slowed in response to restrictive monetary and fiscal policy. This compares with 0.0% growth in GDP nationally. Statistics New Zealand GDP data for the September quarter 2024 is not released until 19 December.

3.2 Latest population estimates for the June 2024 year indicate that the population of Palmerston North increased by +1,600 over the year. This is an annual increase in population of +1.8% in the city, equalling the national annual growth rate of +1.8% over the year. The New Zealand population is now estimated at 5,338,500.

3.3 As expected, per capita GDP also fell over the year driven by the contraction in GDP alongside an increase in the population of the city. This trend was also observed across the wider region, and nationally. Specifically, per capita GDP in the Palmerston North fell -2.6% to $68,692 in the year to June 2024. This compares with a -2.1% fall across the wider Manawatū-Whanganui Region to $54,301 and a -1.9% fall nationally, to $70,905. Figure 1 reflects per capita GDP for territorial authorities across the Manawatū-Whanganui Region.

Figure 1: Per capita GDP timeseries (Regional territorial authorities)

3.4 Net international migration has driven the majority of the population increase both in the city and nationally, with net international migration hitting a record 136,300 over the October 2023 year. Since 2023, the level of net international migration has been declining, falling to 44,907 over the year to September 2024. Of particular influence is the number of New Zealanders leaving the country, with a total of 79,700 estimated to have emigrated overseas over the year to September 2024. Including New Zealanders returning to live in the country, this is a net loss of 54,700 New Zealand citizens over the year. Latest official statistics for the March 2024 year estimate a net 28,600 New Zealanders left the country to live in Australia, with a net 1,400 non-New Zealand citizens also leaving to live permanently in Australia. Early data implies that net migration of New Zealand citizens and residents to Australia continues to be elevated over the later part of 2024.

3.5 Annual inflation (as measured by the Consumer Price Index) fell to 2.2% in the September quarter as consumer demand continued to be dampened by the high cost of living, and increased risk aversion due to falling employment and the slowing economy. The sharper than expected reduction in the rate of inflation is positive, as banks move to reduce interest rates to households and businesses. Six-month mortgage rates have fallen to 5.99% at the time of writing, with two-year rates falling to around 5.7%.

3.6 In response to weaker than anticipated economic activity and falling inflation, the RBNZ has dropped the Official Cash Rate (OCR) by 1.25 percentage points, to 4.25% since August. This follows a policy rate of 5.5% in place since May 2023. Further rate reductions are expected in 2025, with the official cash rate forecast to fall to 3.5% by the end of 2025.

3.7 The volume of carbon emissions generated in the city per $1 million of GDP is estimated to have reduced to 102.1 tCO₂ in the 2023 calendar year. As below, the volume of emissions relative to GDP in the city has been reducing since 2018. This is a positive trend, but it is worth noting that the generation of carbon emissions across the Palmerston North economy, is also influenced by factors outside the control of the city, such as the fuel used to generate electricity at the national level.

Figure 2: Carbon emissions (tCO₂ per $1m GDP)

3.8 As reported in the September quarterly economic update, electricity prices surged over the 2024 winter driven by low lake levels, limited wind generation, and dwindling gas supplies. To date, commercial consumers have taken the brunt of these higher costs with electricity prices rising +9.6% overall over the year. Limited gas supplies have been the dominant driver of higher commercial energy costs, with gas prices up +22.5% over the year. These sharply higher energy prices have curtailed production in some cases due to the elevated cost of production.

3.9 A recent decision by the Commerce Commission gave the go-ahead for Transpower and local lines companies to raise prices to fund the upgrade and maintenance of the electricity grid. This will increase costs to households and businesses from April 2025. As observed, the resilience of the national electricity grid is critical to support business activity and employment, but if energy prices continue to spike from the need to use expensive fuels for generation, more pressure will be placed on producers. Stable energy prices are also central to reducing pressure on household budgets to support recovery of the New Zealand economy.

Business and jobs

3.10 There were 8,186 businesses in Palmerston North in September 2024; an increase of 55 businesses from the previous year. This is an increase of +0.7% over the year, compared with +1.3% growth in business counts, nationally.

3.11 Non-residential consents totalled $98.7m in the city over the year to September 2024, a decline in value of -31.0% compared with the September year 2023. This compares with a -6.4% decline in non-residential consent values, nationally. The decline in non-residential consent values in the city was predominantly driven by a number of large-scale public infrastructure projects nearing completion, with education and healthcare construction values falling by -84.6% and -66.6% respectively over the year. In contrast, construction values for ‘commercial buildings’ and ‘factories, industrial, and storage buildings’ increased by 25.1% and 60.7% respectively over the September 2024 year.

3.12 The Seek Employment report for October 2024 continues to reflect the challenging labour market conditions, with jobs advertised declining and applicants per job increasing. Across the Manawatū Region, job ads were down -28% compared with the year ended October 2023. This compares with a -26% fall in job ads nationally over the year. In contrast, month-on-month job ads in the Manawatū Region increased by 4% between September and October, compared to a -1% fall nationally, implying some strengthening in employment intentions in the Region. Nationally, industries that are hiring include government and defence, with job ads up +15% between September and October 2024, banking and financial services, up +18%, and community services and development rising +7% over the month.

3.13 At the time of writing, filled jobs and earnings data for the September quarter are not available. The latest data for the year ended June 2024 indicates that filled jobs by workplace address decreased by -2.1% to a total of 46,265 over the year with jobs by place of residence up by +0.2% to 35,531. This compares with +0.6% growth, nationally. The impacts of the economic slowdown on employment and earnings levels in the city is an important indication of economic wellbeing.

3.14 The annual average unemployment rate published by Infometrics fell from 4.5% to 4.2% in the September quarter, predominantly driven by a decrease in the number of people looking for work. This compares with an annual average unemployment rate of 4.4% nationally. The national unemployment rate for the September quarter was reported by Infometrics at 4.7%. This compares with the Statistics NZ national unemployment rate for the September quarter of 4.8%. The RBNZ expects the national unemployment rate to rise to 5.2% in the March quarter 2025.

3.15 The number of MSD jobseeker beneficiaries in Palmerston North increased by 402 over the year to September, to a total of 3,321. This is a +13.8% increase (+402) on the previous year, compared with a +12.8% increase, nationally. Of this increase, 282 people were receiving the benefit due to health conditions and disability, compared with an increase in work-ready jobseekers of 120 over the year.

3.16 The number of people receiving the Jobseeker benefit increased across all age groups in Palmerston North and nationally over the year to September 2024. Jobseeker beneficiaries aged between 18-24 years increased by 120 in the city over the year (+16.8%), compared with a +21.9% increase nationally. Over the same period, Palmerston North Jobseekers aged 25-39 years rose by 105 (+10.5%) compared with a +12.9% increase nationally, with recipients aged 40-54 years rising by 108 (+14.4%) in the city, compared with a +9.0% increase nationally. Palmerston North Jobseekers aged 55-64 years increased by 63 (+13.7%), compared with a +9.0% increase nationally.

Earnings and income

3.17 Earnings data for the city for the September 2024 quarter will be released 11 December. Latest earnings data for the city for the June quarter indicated strong earnings growth, with annual earnings up +8.0% over the June 2024 year. This compares with a +7.6% increase nationally. As explained in section 3.19, the rate of earnings growth eased in the later part of 2024, due to spare capacity in the labour markets relative to demand. The strong wage growth that continues in the June 2024 year reflects the flow through of wage agreements to pay packets, and the lingering impacts of wage pressure from 2023.

3.18 The elevated wage growth of the 2022/23 financial year is reflected in the Statistics NZ median salary and wages data, with median earnings in the city increasing by +7.4% over the year to September 2023, to a total of $66,320. This compares with a +6.2% increase nationally to reach a median salary of $67,680. Growth in earnings, both in the city and nationally, continued to reflect the elevated wage inflation that prevailed post-Covid due to tight labour market conditions and strong demand, alongside large scale sector wage agreements settled in 2022 and 2023.

3.19 Early indications of easing wage growth are reflected in the Quarterly Economic Survey (QES) for ordinary time hourly earnings, and the Labour Cost Index (LCI) for the September 2024 year. These measures of wage growth indicate that ordinary time hourly earnings increased by +3.9% over the September 2024 year, compared with a +6.7% increase the previous year and a 5.0% increase over the year to June 2024. The LCI also reflects the easing of wage inflation with the increase in labour costs also falling to 3.9% over the year. Further easing of wage growth is expected in 2024 and into 2025.

Spending

3.20 Retail spending fell -0.4% in the city over the year to October 2024, to a total of $1,494m ($1.49b). This compares with a +0.5% increase in retail spending nationally. Retail spending is in dollar value and does not account for the impact of inflation on the purchasing power of consumers.

3.21 As discussed earlier in this report, the annual rate of inflation over the year to September 2024 was 2.2% with an increase in average household living costs of 3.8% over the year. The annual rate of spending growth continues to come in well below the rate of annual inflation, reflecting the sharp reduction in real spending across the national economy. This sharp contraction of demand has driven down the rate of annual inflation as intended, but it has also delivered a stagnant New Zealand economy with increasing job insecurity. It will take time for confidence to return, and demand for goods and services to rise.

3.22 The pressure on household budgets is further reflected in the decrease in spending on discretionary items. ‘Home and recreational retail’ spending in the city fell by -5.9% over the year to October 2024, with spending on ‘Accommodation’ and ‘Arts, recreation and visitor transport’ down -5.3% and -4.7% respectively, over the same period.

3.23 New car registrations in Palmerston North fell by -3.8% over the year to September 2024 compared with a -6.9% decrease nationally. The number of new commercial vehicle registrations also fell over the year, down -7.4% in the city versus the previous year. This compares with a decrease of -10.1% nationally.

3.24 Tourism spending in the city continues to be impacted by a pullback in spending by domestic travellers. According to the Tourism Electronic Card Transactions (TECT) series, domestic tourism spending in Palmerston North fell -4.3% over the year to September 2024 to a total of $272.6m. This compares with a -3.8% fall nationally. While a small proportion of the city’s total tourism spend, international tourism has strengthened with spending in the city up 10.3% to $26.9m over the year. This compares with an +11.8% increase in international tourism spending, nationally.

3.25 The annual change in guest nights is also a useful indicator of tourism activity in the city and across the country. Over the year to September 2024, guest nights in the city decreased by -9.9% to a total of 416,100. This compares with a +1.7% Increase, nationally. Reflecting the downturn in domestic tourism, guest nights from domestic travellers fell by -12.9% in Palmerston North over the same period, compared with a -5.0% decrease nationally. In contrast, guest nights from international travellers increased +4.8% in the city over the year, compared with a +17.6% increase, nationally.

Housing

3.26 According to QV, house prices in the city fell by -0.7% over the year to October 2024 to an average price of $631,421. This compares with a -0.6% fall nationally to an average price of $902,231. The volume of house sales ticked up in Palmerston North over the year, with 1,190 houses sold in the October 2024 year. This is a +2.9% increase from the previous year compared with a +13.7% increase nationally. In the November Monetary Policy Statement, the RBNZ forecasts house prices to rise +3.5% over the coming year, with prices rising a further +5.9% in the September year 2026.

3.27 Mortgage lending increased to $6.55 billion in the September month 2024, compared with $5.19 billion in July 2023. This represents a +26.1% increase in monthly lending versus September 2023. Mortgage lending to owner-occupiers and investors increased the most, up $744m (+25.1%) and $485m (+54.3%) respectively. Lending to first home buyers lifted by $126m (+10.1%) over the same period.

3.28 Home ownership affordability, as measured by the ratio of the average house price to average annual income, improved over the year to September 2024 with the average house price equal to 4.9 times the average income in the city. This compares with the average house price of 6.7 times the average income, nationally.

3.29 Rental price pressure has eased with average rents increasing +0.4% to $495 per week, in the city over the year to September 2024. This compares with a +2.9% increase nationally to $573. Over the same period, the number of properties rented increased by +0.9% in Palmerston North, compared with a +1.6% increase nationally. As at September 2024, 8,109 homes were rented in the city.

3.30 Renting a home in Palmerston North remains more affordable than in much of New Zealand, with annual average rent making up 19.9% of annual household income, compared with 22.1% nationally. Renting in the city is more affordable than both the Manawatū District and the wider Manawatū-Whanganui region, with average annual rent taking up 21.3% and 21.8% of the average household income, respectively.

3.31 The number of households on the public housing register in Palmerston North fell by -81 (-13.0%) over the year to September 2024. This compares with a -13.2% fall nationally. The number of families on the transfer register in Palmerston North sat at 153 in the September quarter 2024, down from 183 a year ago (-16.4%) compared with a 1.1% fall nationally.

3.32 Households in emergency housing in Palmerston North fell to 27 in September 2024, down from 93 in September 2023. This is a decline in families in emergency housing of -74.2% in the city, compared with a -70.4% fall, nationally. Some of the decrease in the number of families accessing housing support may be explained by the increased level of evidence required to prove housing need. Insights from MSD in the city also highlights the increase in tenancies available and stabilising prices as supportive of providing for housing needs in the city.

3.33 There were 423 consents for new dwellings issued in Palmerston North over the year to September 2024, an increase of 4 (+1.0%) compared with the previous year. This compares with a -16.7% decline in new dwelling consents nationally. The decrease in residential construction has been driven by the high cost of borrowing, elevated development costs, and weak capital gains. A pullback in central government investment in residential development is also weighing on levels of residential development, with Kāinga Ora recently announcing their plans to limit development in the city from 2025 onwards. Economic recovery and improving financial market conditions are expected to support levels of residential investment from 2026.

3.34 Provisional data estimates that a total of 313 of the 423 dwellings consented over the year will add to the housing stock of Palmerston North. This data series is being developed manually, with the purpose of providing greater detail about additions to the total dwelling stock in the city. This series removes ‘relocates’ moved outside the city, adds in ‘relocates’ coming into the city from other parts of New Zealand, and removes uplifted dwellings. This estimate compares with the housing demand forecast in the 2024-34 LTP of 328 dwellings per year from 2024-2027, with 399 dwellings per year on average over the 10-years to 2034^{^[1]}.

4. Palmerston North electronic card spending report – September 2024

4.1 Total electronic card spending fell by -2.6% in the September quarter 2024 to a total value of $358.0m. This compares with a -2.8% decrease in spending nationally.

4.2 Over the year to September 2024, electronic card spending in Palmerston North fell by -0.7% to $1.492 billion. This compares with a +0.5% increase in retail spending nationally over the same period. Of this total, 56.1% continues to be spent in the city centre.

4.3 Spending in the city centre decreased by -0.8% over the year, to a total of $837m. Discretionary spending was most affected by the pullback in consumer demand with ‘Home & recreational retail’ spending down -8.6% and ‘Arts, recreation & visitor transport’ spending falling -6.9% over the year. This trend continues to be consistent with electronic card spending data for many parts of the country, where spending on non-essential goods and services has come under pressure from elevated household costs and uncertainty around wider economic conditions.

4.4 Spending on essential items continues to increase as households and businesses reduce spending on discretionary items. Spending on ‘groceries and liquor’ was the highest growth sector in Palmerston North, up +3.5% compared with the previous year. The trend for grocery spending was similar for the city centre and New Zealand, up by +5.1% and +4.4% respectively over the year.

4.5 Spending on ‘cafes, restaurants, and bars’ fell further over the September year, down -1.1% across the city and -0,5% in the city centre. This compares with weak growth of +0.2% nationally, supported by international tourism. This pullback in discretionary spending is expected as consumers continue to be downbeat due to high costs and concerns about job security.

4.6 ‘Other consumer spending’ increased for a third consecutive quarter in Palmerston North, up +27.8% compared to the September 2023 year. This growth was stronger in the city centre, rising +89.6%% over the year compared with national growth of +3.5%. It is worth noting that ‘other consumer spending’ makes up just +0.1% of total spending in the city, with the highest spending categories being ‘groceries and liquor’ (33.4%) and ‘home and recreational retail’ (30.3%).

4.7 Palmerston North consumers remain relatively loyal to local merchants. The loyalty rate, explained as the percentage of spending by Palmerston North residents at local retailers, was 81.6% over the year to September 2024. Across the Manawatū Region, the loyalty rate increases to 83.0% as consumers from the Manawatū District contribute to spending in the city.

4.8 The annual inflation rate to September 2024 was 2.2%, indicating a real decline in spending across all retail precincts in the city and nationally. This further contraction in spending reflects the challenges facing our retail sector both here in the city, and nationally. Lower interest rates reducing costs for households and businesses are expected to boost demand for goods and services and stimulate economic activity over the coming year.

4.9 The Quarterly Economic Card Spending Report for September 2024 is attached as Appendix 2.

5. Economic outlook

5.1 Challenges persist in the September 2024 quarter, with spending across the economy weakening further, job numbers easing, and private and public investment on a downwards track. The longer term outlook is growing more positive, however, as the economic fundamentals of the city and the region continue to boost resilience, inflation tracks lower, and interest rates look set to fall throughout 2025.

5.2 The impact of higher interest rates will take time to unwind as fixed interest rates continue to weigh on disposable incomes, the global growth outlook remains uncertain, and net migration into the country slows. As a result, GDP growth has remained weak over 2024 with the RBNZ projecting 0.0% growth in the New Zealand economy over the year. Next year presents a more positive scenario with annual GDP growth projected to rise to 2.3% in 2025, increasing to 2.5% in 2026.

5.3 Improving business and consumer confidence will help to drive the New Zealand economic recovery. While business confidence is improving, consumer confidence is lagging behind as households continue to be concerned about the high cost of living amidst increasing job insecurity as the economy continues to slow, and more businesses lay off staff. In a nutshell, there is a way to go yet before we see any notable improvement in economic conditions.

5.4 Immediate investment in the resilience and affordability of our critical energy and roading infrastructure will further support the long term productive capacity of the New Zealand economy, as well as revive confidence in the sustainability of business activity in the country.

5.5 On the upside, interest rates are falling at pace and will cycle through to more households in 2025 as mortgagee holders opt for shorter rates. Demand for New Zealand’s high quality, nutritious, food exports has also surged as Chinese demand for dairy products gets a boost and global red meat supply weakens, increasing commodity prices. The incoming administration in the US drives additional uncertainty in terms of global growth and tradeable inflation from tariffs, but as it stands, export conditions have improved from 2023. We will be watching this space in 2025.

2. Compliance and administration

Does the Council have delegated authority to decide? If Yes quote relevant clause(s) from Delegations Manual		Yes
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 objectives?		Yes
Are the recommendations inconsistent with any of Council’s policies or plans?		No
The recommendations contribute all four strategic goals, but especially: Whāinga 1: He tāone auaha, he tāone tiputipu Goal 1: An innovative and growing city
Contribution to strategic direction and to social, economic, environmental and cultural well-being	Reporting on economic trends in the city and the longer-term outlook for growth, is important for encouraging local business to invest, growing their business and attracting new businesses to the city. It is also important to support businesses to make informed decisions under the current economic conditions.

Attachments

1.	Palmerston North Economic Growth Indicators - November 2024 ⇩
2.	Palmerston North City - Quarterly Electronic Spending Report September 2024 ⇩

Committee Work Schedule

TO: Council

MEETING DATE: 11 December 2024

TITLE: Council Work Schedule

RECOMMENDATION TO Council

1. That Council receive its Work Schedule dated 11 December 2024.

COUNCIL WORK SCHEDULE 11 December 2024

#	Estimated Report Date	Subject	Officer Responsible	Current Position	Date of Instruction & Clause
1	~~5 Dec 2024~~	~~Local Water Done Well – Proposal for consultation~~	~~GM Infrastructure~~
2	~~11 Dec 2024~~	~~Food HQ Innovation Limited - Director's company progress report.~~	~~GM Infrastructure Services~~		6 Sept 2023 Clause 143-23
3	~~11 Dec 2024~~	~~Appointment of CEDA Directors~~	~~GM Corporate Services~~		~~6 March 2024~~ ~~Clause 23 -24~~
4	~~11 Dec 2024~~ TBC	Delivery Model options for Property - CCO/ Trust to include Summerhays Street.	GM Corporate Services	Clarifying report – presented to Community Committee 4 /12	1 May 2024 Clause 66.1
5	~~11 Dec 2024~~ 12 Feb 2024	Review of Fees and Charges 25/26	GM Corporate Services	consider alongside Annual Budget on 12 Feb	Terms of Reference
6	~~11 Dec 2024~~	~~City Revaluation – impact on rates~~	~~GM Corporate Services~~		~~Terms of Reference~~
7		~~Draft Annual Budget 2025/26 – Programme Implications II~~	~~Chief Executive~~		~~Terms of Reference~~
8	early 2025	Report back on Investment Options for PN Airport	GM Corporate Services		6 December 2023 Clause 197-23
	5 Feb 2025	Agree LWDW Consultation Document	Chief Executive	Hearings - Sustainability Committee 16 April	5 Dec 2024 Clause 202-24
9	5 Feb 2025	Civic and Cultural Precinct Master Plan Steering Group – 6-monthly update	GM Strategic Planning		Terms of Reference
10	5 Feb 2025	Review of CEDA and PNCC Appointment of Directors Policies	GM Corporate Services	Establish working party / agree Terms of Reference	2 October 2024 Clause 172
11	12 Feb 2025	Draft Annual Budget 2025/26	Chief Executive		Terms of Reference
12	5 March 2025	Draft Annual Budget 2025/26 for consultation	Chief Executive		Terms of Reference
13	5 March 2025	Remits from PNCC for consideration	GM Corporate Services		Terms of Reference
14	5 March 2025	Alternative Options for BPO - Nature Calls	GM Infrastructure	Waiting on release of Taumata Arowai standards	Council 29 May 2024 Clause 95.11 -25 (rec 2)
15	30 April / 1 May 2025	Hearings of the Annual Budget 2025/26	Chief Executive		Terms of Reference
16	14 May 2025	Deliberations of the Annual Budget 25/26	Chief Executive		Terms of Reference
17	4 June 2025	Remits received from other Territorial Authorities	GM Corporate Services		Terms of Reference
18	4 June 2025	2024 Residents Survey – Action Plan	GM Strategic Planning		Terms of Reference
19	4 June 2025	Adopt Annual Budget 2025-26	Chief Executive		Terms of Reference
20	25 June 2025	Set the Rates for 2025-26	GM Corporate Services		Terms of Reference
21	25 June 2025	Approve Borrowing for 2025-26	GM Corporate Services		Terms of Reference
	25 June 2025	Agree LWDW - Water Services Delivery Plan	Chief Executive
	25 June 2025	Agree revised BPO – Nature Calls	GM Infrastructure
22	8 October 2025	Parking Contract Review Update – Frog Parking	GM Infrastructure		4 September 2024 Clause 156-24
23	8 October 2025	Adopt Annual Report 2024-25	Chief Executive		Terms of Reference
24	8 October 2025	Appointment of Trustees on Council Controlled Organisations	General Manager Corporate Services		Terms of Reference
25	TBC	Summerhays Reports – Partnership Models Expressions of Interest	GM Infrastructure	Lying on the Table	1 May 2024 Clause 66-24 and 74 -24
26	TBC	Effectiveness of Civics Education Initiatives – Annual progress report	GM Customer & Community		29 May 2024 Clause 95.29 -24

Proactive Release of Confidential Decisions

Date of meeting	Report Title	Released	Withheld
6 March 2024	Environmental Health Contract	Report, Resolution, Division	Attachment(s)
26 June 2024	Contract Award - Comprehensive Cleaning Services Contract	Redacted Report, Resolution, Division	Attachment(s)
7 August 2024	Contract Award - Tamakuku Terrace Stage 2 Construction	Redacted Report, Resolution, Division	Attachment(s)
4 Sept 2024	Purchase of a Property on Waldegrave Street	Redacted Report, Resolution, Division	Attachment(s)
2 Oct 2024	Appointments to Council-Controlled Organisations	Report, Resolution, Division	Attachment(s)

[1] The annual housing forecasts include the 20% competitiveness margin required under the National Policy Statement for Urban Development. Actual forecast demand for housing over the first three years of the LTP is 273 per year, with average annual growth of 333 per year over the 10-years of the LTP.

Grant Smith (Mayor)
Debi Marshall-Lobb (Deputy Mayor)
Mark Arnott	Leonie Hapeta
Brent Barrett	Lorna Johnson
Rachel Bowen	Billy Meehan
Vaughan Dennison	Orphée Mickalad
Lew Findlay (QSM)	Karen Naylor
Roly Fitzgerald	William Wood
Patrick Handcock (ONZM)	Kaydee Zabelin

1.	Smart Startups Program ⇩
2.	Invitation Letter to the Mayor of Palmerston North ⇩
3.	2025 Taipei Smart City Summit & Expo Brochure ⇩