Memorandum
TO: Council
MEETING DATE: 14
May 2025
TITLE: Community
housing partnership programme
Presented
By: Julie
Macdonald, Manager Strategy and Policy
APPROVED BY: David
Murphy, General Manager Strategic Planning
RECOMMENDATION(S) TO Council
1. That Council
receive the memorandum titled ‘Community housing partnership
programme’ dated 14 May 2025.
2. That Council
refer consideration of budget allocation to the ‘Development
Subsidy’ fund established by the Support and Funding Policy to the Annual
Budget deliberations at this meeting.
1. ISSUE
1.1 The
purpose of this memo is to inform Council’s decision-making about the
Community Housing Partnership Programme agreed to in the 2024-2034 Long-Term
Plan.
1.2 The
memo informs Council of the findings from a community survey, and describes
some examples of ways other councils have responded to growing need for
community housing.
2. BACKGROUND
2.1 The
Mahere whare Housing plan, adopted with the
2024-2034 Long-Term Plan, includes the objective to “provide social
housing and support community-led housing initiatives”.
2.2 Specific
objectives in the Mahere whare Housing plan are:
“To develop a Community Housing Partnership
Programme” (year 1)”
and
“Support social housing providers through a community
housing partnership programme (from year 2)”
2.3 In
March 2024 staff advised Council that a small research project would be
completed in year 1 to inform Council decision-making on the future shape and
resourcing for this programme.
2.4 Staff
advised Council that this investigation would be completed within existing
staff resources.
2.5 Staff
have now completed a project to gather the views from those involved in housing
in our community.
2.6 Council
has also determined a programme of work for housing more generally, and
made resolutions about the terms of reference for this work in December 2024.
The outcomes of both Workstream A: Investigate of social housing service
delivery models for Council housing and Workstream B: Review property holdings to identify opportunities for
revenue generation are relevant to any decisions that may arise out of
consideration of the current report.
2.7 This
information is provided to Council as it deliberates on the Annual Budget to
provide an opportunity for elected members to consider resourcing should they
choose to do so.
3. Findings
from a survey of housing providers
3.1 Attachment
1 provides a detailed summary of survey respondents and survey findings.
Purpose of the survey
3.2 The
survey had two purposes:
1)
To identify the barriers to the development of more community housing in
Palmerston North, and
2) To identify the kind of support that would be most
beneficial in addressing those barriers
3.3 We
directed the survey via direct email to organisations who provide community
housing, to those who develop community housing (or could potentially do so),
and to those who are advocates for community housing.
3.4 We
asked Rangitāne o Manawatū for their feedback, and circulated the
survey more widely to Kāinga Ora – Homes and
Communities, Massey University, housing advocates, and others. In total, we
approached around 70 entities to take part.
Survey respondents
3.5 Twenty
organisations responded to the survey, including Tanenuiarangi Manawatū
Charitable Trust and two different areas of Kāinga Ora – Homes and
Communities.
3.6 Of
the twenty organisations who responded to the survey, only Homes for People and
Kāinga Ora – homes and Communities directly provide community
housing services, and Te Tihi o Ruahine Whanau Ora Alliance supports home
ownership opportunities. Some other respondents identified as having an
advocacy role.
3.7 Most
survey respondents were involved in the development or building of homes in
some way.
Future plans
3.8 Organisations
planning or considering developing new community housing were:
§ Massey University
§ Kāinga Ora – Homes and
Communities
§ Te Tihi o Ruahine Whānau Ora
Alliance
§ Homes for People
3.9 Some
building companies also indicated they were considering community housing
development for the private market (including the development of more
affordable products).
Barriers to more community housing
3.10 Survey
participants identified a range of barriers to the development of more
community housing. The ‘cost of land’ and
‘consent requirements’ were most frequently identified, followed by
the ‘availability of land for housing’.
3.11 When asked
to identify the one most significant barrier to more community housing in
Palmerston North, the main responses were ‘consent requirements’,
followed equally by ‘cost of land’ and ‘lack of
funding’.
3.12 See
Figures 3 and 4 in Attachment 1.
Forms of support
3.13 Participants
were asked to rate the kinds of support that could assist in overcoming the
barriers they had identified.
3.14 A large
majority of respondents (84%) indicated that ‘availability of land’
would be ‘very helpful’. Most respondents (62%) suggested
‘access to funding’ would be ‘very helpful’ or
‘of some help’ (29%), and that ‘access to technical
support’ would be ‘very helpful’ (53%) or ‘of some
help’ (37%). Almost all respondents noted that ‘help to navigate
the housing development process’ would be ‘of some
help’ (70%), and a small proportion (20%) said it would be ‘very
helpful’.
3.15 When asked
to identify the one form of support that would make the greatest different to
community housing in Palmerston North, ‘access to funding’ was the
main response, followed by ‘access to land’.
3.16 See Figures 5 and 6 in Attachment 1.
4. Analysis
of survey responses and discussion
4.1 Figures
7 to 11 in Attachment 1 provide a summary of responses to the survey by theme.
The themes are ‘land’, ‘funding’,
‘process’, ‘technical matters’, and ‘co-ordination.
Each figure is replicated here, with a brief discussion of the matters raised.
Note – the categories used to reflect the number of the 21 respondents
who answered positively for each question are:
Theme 1: Land
Figure 7 [from Attachment 1]: Summary of
survey responses about LAND
Commentary:
4.2 Availability
of land was the third-most frequently identified barrier to community housing.
4.3 In
December 2024 Council resolved to undertake Workstream B. Review
property holdings to identify opportunities for revenue generation and also
agreed on Terms of Reference for this work.
4.4 Council
has also decided to achieve social housing outcomes through the Summerhays
Street property (currently on hold, pending the outcome of Workstream B), Huia
Street property, and the depot site.
4.5 Workstream
B includes a focused investigation of opportunities for additional revenue
from:
§ Investment and strategic properties
§ Council-owned standalone carparks
4.6 The
outcome of this investigation, and the eventual implementation of Plan Change I
(Increasing housing supply and choice), will be relevant to the access to land
by community housing providers.
Theme 2: Funding
Figure 8 [from Attachment 1]: Summary of survey responses about FUNDING
Commentary:
4.7 Funding
was consistently identified as an issue for survey respondents, both for land,
and in general. Some of the responses about funding provided wider commentary
about housing affordability:
Examples of such comments are:
“for most low income people, the price of the
rental is the major problem”
and
“cost of the work and materials alongside design
and Council fees”.
4.8 There
are a variety of mechanisms through which councils can assist with funding.
These include:
§ Grants funding for costs associated
with development or operation
§ Development Contributions, rates,
technical services, or other subsidies
4.9 Through
the Support and Funding Policy, Council has a
facility for the subsidy of charges for for-purpose organisations. This fund is
for:
§ Development Contributions
§ Building Consent costs
§ Resource Consent costs
This provision includes community housing providers but not
private businesses. Council has not currently allocated any funding towards
this funding programme, but instead has signalled that approaches for support
will be considered on a case-by-case basis.
4.10 In March
2025 the Housing Minister announced an ‘overhaul’ of the
Development Contributions system, to be enacted by mid-2026 and applied from
2027. The proposal is to replace the existing system with a Development Levy
system, which will retain a discretionary Council decision-making element. The
effects on costs for developers and housing providers are, as yet, unknown.
Theme 3:
Process
Figure 9 [from Attachment 1]: Summary of survey responses about PROCESS
Commentary
4.11 Some
process barriers were identified by the survey participants.
4.12 The Development and Regulatory Group has developed an operational
workplan to improve the delivery of services to customers. Building and
Planning staff already offer pre-application meentings to customers.
4.13 The Group
also provides the Build Palmy newsletter and regular forums as a resource for
the development community. The purpose of this service is to connect those in
the industry with each other, and to make sure the development community is up
to date with current information and issues.
4.14 The General Manager Development and Regulatory has noted the survey
findings and confirmed that these will continue to inform responses to
customers, including information provided through the website and other
machanisms.
Theme 4:
Technical matters
Figure 10 [from Attachment 1]: Summary of survey responses about TECHNICAL MATTERS
Commentary
4.15 Access to
technical support (including planning, legal, and design) was identified by a
small number of respondents as a barrier to more housing, but was generally
considered to potentially be a useful form of support.
4.16 Some of
the technical elements of designing, building, and then operating a community
housing service involve the straightforward acquisition of services from
experts, and are accompanied by direct costs (e.g. legal and design).
4.17 Council
does not have current mechanism for subsiding the direct technical costs,
beyond the Development Subsidy fund described above. A subsidy of technical
costs would require additional budget allocation. There is a small
‘delivering change’ budget, which is targeted at supporting
collaborative pre-application processes for strategic or innovative
developments.
4.18 Some other
technical elements are less able to be directly translated into the commercial
acquisition of services (e.g. advice on good practice for service providers).
4.19 Council
currently supports the Housing Needs Monitoring Group through its support of
the Housing Advice Centre. This group provides networking and information for
community housing services, including Council’s own social housing.
Theme 5:
Co-ordination
Figure 11 [from Attachment 1]: Summary of survey responses about CO-ORDINATION
Commentary
4.20 Co-ordination
of community housing services and initiatives did not emerge as a main issue
through the survey.
4.21 Council
and community initiatives to support co-ordination include the Housing Needs
Monitoring Group, Build Palmy, and the Palmerston North Insecurity Response
Collective.
5. DISCUSSION
5.1 The
survey of community housing providers and developers has provided a useful
insight into some of the barriers and potential forms of support to encourage
more community housing in Palmerston North.
5.2 The
findings provide a snapshot of current views, in an environment where there are
significant national reforms underway.
5.3 The
overhaul of the Development Contributions system and the new Crown lending
facility for Community Housing Funding Agency (available to registered
Community Housing Providers) will potentially affect the barriers experienced
by providers wishing to develop more community housing. The new funding
arrangements were announced in March 2025, and the changes to Development
Contributions will not take effect for a further two years.
5.4 Locally,
Council is aware of process barriers for housing providers, and has initiatives
underway in response. Council is also undertaking Workstream B. Review
property holdings to identify opportunities for revenue generation which
includes the future of Investment and strategic properties and Council-owned
standalone carparks.
5.5 Future
decisions about the Summerhays and Huia Street properties, and the depot site,
will also impact on the longer-term housing picture.
5.6 Some
other councils have considered the barriers to community housing in their
communities, and have responded with a variety of support mechanisms. These
include subsidies for fees, grants, and loans. Attachment 2 provides some brief
descriptions of support for community housing provided by New Zealand councils.
6. Conclusions
and Next Steps
6.1 The
limited information provided by the survey of community housing providers
suggests that there are mechanisms available to Council that would potentially
encourage increased community housing outcomes.
6.2 Several
of the potentially helpful mechanisms are already under consideration, or in
place. Significant among these is the outcome of the property review
(Workstream B).
6.3 Council
also has an existing mechanism (through the Support and Funding Policy) to
subside Development Contributions, Building Consents, and Resource Consents.
Council could decide to reinstate a budget to that funding stream (see
recommendation 2).
6.4 Most
financially significant amongst the identified barriers to community housing is
the cost of land. Any initiative to consider addressing that barrier would
require further investigation and the allocation of significant funding and /
or the repurposing of Council land. Such consideration would most appropriately
be made through an annual or Long-Term Plan budget cycle.
7. Compliance
and administration
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Does the Council have delegated
authority to decide?
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Yes
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Are the decisions significant?
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No
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If they are significant do they
affect land or a body of water?
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No
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Can this decision only be made
through a 10 Year Plan?
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No
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Does this decision require
consultation through the Special Consultative procedure?
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No
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Is there funding in the current
Annual Plan for these objectives?
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Yes
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Are the recommendations
inconsistent with any of Council’s policies or plans?
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No
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The recommendations
contribute to: Whāinga 1: He tāone auaha, he tāone
tiputipu
Goal 1: An innovative and growing city
Whāinga 2: He
tāone whakaihiihi, tapatapahi ana
Goal 2: A creative and exciting city
Whāinga 3: He
hapori tūhonohono, he hapori haumaru
Goal 3: A connected and safe community
Whāinga 4: He
tāone toitū, he tāone manawaroa
Goal 4: A sustainable and resilient city
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The recommendations contribute to this
plan:
15.
Mahere whare
15. Housing Plan
The objective is: Provide social
housing and community-led social housing initiatives
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Contribution to strategic
direction and to social, economic, environmental and cultural well-being
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The purpose of the advice in
this report is to inform Council’s decision-making about community
housing. Community housing outcomes contribute to all four strategic goals.
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Attachments
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1.
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Attachment
1: Summary of survey findings ⇩ 
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2.
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Attachment
2: Examples of council housing support ⇩
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Memorandum
TO: Council
MEETING DATE: 14
May 2025
TITLE: 2025/26
Annual Budget - Deliberations
Presented
By: Steve
Paterson, Manager - Financial Strategy & Scott Mancer, Manager - Finance
APPROVED BY: Cameron
McKay, General Manager Corporate Services
RECOMMENDATION(S)
TO Council
1. That Council
instruct the Chief Executive to prepare a draft Annual Budget 2025/26 for
consideration and adoption by the Council at its meeting on 4 June 2025 and
that it incorporates the following:
a. An
increase of $372K in the operating expense budget for Transport (Roading) for
the maintenance of street trees offset in part by a $223k reduction in the
operating expense budget for Active Communities (Sportsfields and Local
Reserves) (Attachment 3);
b. Operating
programmes (including carry forwards relating to Programme 1520 – Digital
Transformation and Programme 2346 - Organisation-wide system replacement or new
systems initiatives) as outlined in Annual Budget 2025/26 – Schedule of
Proposed Operating Programmes (Attachment 4);
c. Capital
new programmes including carry forwards and amendments as outlined in Annual
Budget 2025/26 – Schedule of Proposed Capital New Programmes (Attachment
5);
d. Capital
growth programmes including carry forwards and amendments as outlined in Annual
Budget 2025/26 – Schedule of Proposed Capital Growth Programmes
(Attachment 6);
e. Capital
renewal programmes including carry forwards and amendments as outlined in
Annual Budget 2025/26 – Schedule of Proposed Capital Renewal Programmes
(Attachment 7);
2. EITHER
a. That Council create
a new operating programme of $90,000 for the investigation of bus and vehicle
pickups and drop offs off-road zone and other options in large green space-road
reserve on Featherston Street opposite Boys High and direct the Chief Executive
to report back on the findings of the investigations and potential options to
inform future annual budgets.
OR
b. That Council does
not proceed further with investigation of bus and vehicle pickups and drop offs
off-road zone and other options in large green space-road reserve on
Featherston Street opposite Boys High.
3. EITHER
a. That Council adopts
Option 1 – Maintain the status quo with no changes to the existing layout
for left hand turning lanes onto Rangitikei Street from Featherston Street, at
no cost
OR
b. (i) That Council
create a new capital new programme to reinstall left hand turning lanes onto
Rangitikei Street from Featherston Street and safely direct cyclists onto the
footpath to create a shared pathway at the intersection by:
· Option
2 – Reinstating left turn lanes on Featherston Street and creating a
shared use path (within existing footpath space), at an estimated cost of
$747,000 OR
· Option
3 – Reinstating left turn lanes on Featherston Street and constructing
shared use path (widen existing footpath into private property) at an estimated
cost of $1,509,300 excluding property purchase and demolition related costs OR
· Option
4 – Removing the separated cycleways at the intersection and painting
sharrows line markings indicating cyclists may remain on road at an estimated
cost of $532,000
AND
b. (ii) That the Chief
Executive report to Council prior to any physical work commencing on the option
above with regard to NZTA approval of proposed works, safety risk rating
implications and any other considerations
4. That the draft
Annual Budget 2025/26 include the following rating assumptions:
a. Uniform Annual
General Charge of $300
b. Differential
surcharges unchanged from those included in the draft for public consultation
c. Targeted rates for
services adjusted as necessary to reflect changes to the budgets for the
activities concerned.
5. That Council refer
a budget of $1,000,000 for Programme 2231 – City Wide Public Transport
– Additional Bus Shelters to the Annual Budget 2026/27 process.
6. That Council note
that the priority for Programme 1003 – Whakarongo Intersection Safety
Upgrades as set in the 2024-34 Long-Term Plan has been changed and is now
intended to enable greenfield residential subdivision development, as set out
in Attachment 8.
7. That Council note
that where assumptions change as a result of external funding application
decisions, Officers will report to Council. The categories of programmes to
which this applies are:
a. NZTA funding
requests as outlined in section 2.4.2
b. Better Off Funded
programmes as outlined in Attachment 5
c. Multi-Cultural
Facility as outlined in section 2.4.2
1. ISSUE
This report is the vehicle
through which the Council formally considers submissions to the Annual
Budget. It is the mechanism by which Council, provides direction to
enable officers to finalise the budget for decision on 4 June.
The report also collates
referrals to the budget debate; and brings Elected Member attention to updated
information identified since the draft budget went out for consultation to
ensure that the final budget is based on current data.
2. BACKGROUND
2.1 Community
Engagement
Council consulted on the Annual
Budget and in doing so sought feedback on the direction, budget and programmes
proposed.
The consultation document
prompted feedback by posing the following questions:
· What
are your thoughts on our proposed Annual Budget 2025/26?
· What,
if anything, would you like to see changed?
· Are
there any specific activities or services we should be considering more or less
of, and why?
The Communications and
Marketing Summary is attached for information (Attachment 1).
164 submissions were received
(106 online, 17 emails, 40 forms and 1 partner submission from Rangitāne o
Manawatū). 32 of the submitters signalled they wished to present orally to
one of the four hearings sessions held by the Council. Minutes of those
hearings meetings on 30 April are included in this agenda.
Elected members have received
copies of all submissions and they have also been published on Council’s
website.
A Summary of Submissions
is attached for information (Attachment 2).
As outlined in the summary the
key issues/topics raised by submitters were:
· Spending
reduced and/or changed between activities
· Do
not support the budget and expressed a general unhappiness about it
· Support
for Highbury Cultural Hub proposal
· Do
not support the rates increase or the calculation methodology.
· Like
to see a focus on transport including cycleways, roading and footpaths
· Some
support for the budget and acceptance of the changes proposed.
Comments made in relation to
user charges for trade waste, planning and miscellaneous services will be
considered by Council on 4 June.
2.2 Key
Assumptions
A number of key assumptions were
made when developing the draft Annual Budget for consultation, including
interest rates, inflation and opening debt levels.
Given the prevailing volatile
global geo-political and economic climate there was risk that budgetary
assumptions would not reflect the actual position in due course. No
changes are recommended at this stage. If the position changes throughout the
year, material matters will be brought to the Council for consideration.
Later sections in this report
contain information about proposed carry forwards for incomplete 2024/25
programmes and therefore the assumed opening debt balance has been reduced from
$311.6M to $296.6M.
The opening debt balance
assumption for 2025/26 impacts the interest and debt repayment budget expense
amounts.
The assumed carry forwards
reduce the proposed interest expense and debt repayment for 2025/26, as shown
in Table 2 in section 2.2.3.
2.3 Update
to operating programme and operating budget
Attachment 4 is an
updated schedule of all operating programmes. Where changes to a programme
budget has been included, commentary is provided. Below are highlights for
Elected Member attention.
2.3.1 Street tree
maintenance budget
The current street tree
maintenance contract ended on 31 March 2025 and has been going through a robust
procurement process. Officers have identified that there is a current budget
shortfall from the proposed contract amount, post negotiations with the
preferred supplier. In order to meet service level expectations, the
operating expense budget has been increased by $372K.
In an effort to offset the
rating impact of this change, efforts have been made to determine whether there
are other operating budgets that could be reduced. As a consequence, the
operating budget for Sportsfields and Local Reserves has been reduced by
$223K.
The combined changes result in a net operating increase
of $149K in order to retain the service level for street tree maintenance
Refer to Attachment 3 for further detail.
2.3.2 Operating
Programme carry forwards
Officers have included carry
forwards from 2024/25 for the following loan-funded operating programmes:
· Programme
1520 – Digital Transformation
· Programme
2346 – Organisation Wide – System replacement or new systems
initiatives
It should be noted that in
carrying forward part of Programme 1520, the carry forward is broken into both
the professional services and remuneration budget. This is reflective of the
inputs required to deliver this programme. Programme 2346 also increases the
professional services budget also reflective of the requirements for this
programme to be delivered.
These
carry forwards have been included with the professional services and
remuneration budgets revised, to allow committed programmes to be completed.
2.3.3 Operational
items referred to debate
Elected Members have resolved
that several items to are to be considered when finalising the annual
budget.
Council should consider the items
listed below and determine whether there is to be any budgetary adjustment.
Massey University Foundation
At the Council meeting of 2
April 2025, the Massey University Foundation presented an update on future
projects and plans. Included in this was a request for $1,000,000 (over 3
years) to be funded by an operational grant from Council to Massey University
Foundation. Massey Foundation spoke to their submission on 30 April, and the
request for support was revised to $300,000 for 2025/26 only.
Basketball Manawatū
At the Culture and Sport
Committee meeting of 26 March 2025, Basketball New Zealand & Basketball
Manawatū presented about the financial challenges that the organisation is
facing and the work they do in the region. A partnership request was made, and
subsequently referred to this meeting, for:
· A
partnership proposal not a discount
· 3-year
agreement from 2025-2027
· Signage
and branding across Basketball Manawatū’s leagues, events and
competitions
· Local
advocacy as required
· $30,000
in-kind venue hire & office lease per annum.
At the same meeting, the Committee resolved
‘That the Chief Executive work with Sport Manawatū,
Basketball New Zealand and Basketball Manawatū to understand the
association’s ongoing sustainability and a plan going forward.’ Officers
and Sport Manawatū have met with Basketball Manawatū, and, as at the
time of writing, are awaiting further information from the association
regarding their sustainability and future plans.
Once this information has been received, officers could
provide updated advice to Council to inform future support decisions; a report
could be provided to the Culture and Sport Committee on 25 June 2025 or 10
September 2025.
2.4 Update
to 2025/26 capital programme
Attachments 5, 6 and 7
are up to date schedules of capital new, capital growth and capital renewal
programmes. There are several updates from the draft Annual Budget released for
consultation, for which key commentary has been included.
2.4.1 In parallel
with the consultation period, Infrastructure Group officers reviewed the
current anticipated spend and delivery for the 2024/25 year. While, the draft
2025/26 Annual Budget had no initial provision for carry forward of capital
programmes from 2024/25, $13.6M has been identified for carry forward into
2025/26. This was itemised for Elected Members in the Capital Delivery 2025/26
report, presented to Council on 7 May 2025.
2.4.2 Officers have
been working on the assumption that by including the carry forwards into the
2025/26 budget, that the capital programme is not to be larger (financially)
than was consulted on. Officers have identified several deferrals and
reductions for the 2025/26 capital programme to offset the level of carry
forwards proposed. There is not a direct relationship between a carry forward
and deferral/reduction. In some case there are multiple reductions and
deferrals to offset the carry forward. The full details of these are available
in the attached schedules.
Biosolids – Short Term
Strategy
As Elected Members are aware, a
strategy to manage biosolids in the short term has been developed as part of
the on-going Nature Calls project. An extension to the compost disposal field
at Awapuni has been scoped. Technical work has been undertaken to ensure that
this is a viable solution. A larger work programme is being developed for
delivery in 2025/26. Officers have incorporated this new programme in
conjunction with the carry forward adjustments to the future capital programme.
Programme 2556 –
Landfill Biosolids Disposal Field has been created for $1,655K
1.
2.
2.1
2.2
2.3
2.4
2.4.1
2.4.2
2.4.3
In addition to those carry forwards set out in the Capital
Delivery 2025/26 report, below, we highlight programme updates that officers
have also incorporated into the attached schedules.
Aokautere & Whakarongo
Growth – repurposing an existing growth programme
Since the adoption of both the
2024-34 Long-Term Plan and the draft Annual Budget 2025/26 for consultation,
strategic land use priorities have shifted. As a result of safety issues for
intersections at James Line/SH3, Summerhill/Ruapehu Drive, Old West Road/SH57
and Pacific Drive/SH57, Council cannot approve greenfield subdivision resource
consents at Whakarongo and Aokautere until upgrades on these intersections are
completed. Officers recommend repurposing of Programme 1003 – Whakarongo
Intersection Safety Upgrades towards these intersection upgrades to enable
short-term greenfield residential development. NZTA approval is required for
design of these intersections and officers will be work closely with NZTA on
this. Attachment 8 has further details.
Officers have repurposed
Programme 1003 – Whakarongo Intersection Safety Upgrades towards
Whakarongo and Aokautere intersection upgrades to meet short-term growth needs.
School Speed Limit Signage
The Government has changed
rules around school signage. Officers estimate $655,000 is required to meet the
requirements around these signs being in place by the end of June 2026. The
cost estimate is based on Council installing 37 electronic signs and 155 static
signs. The final number, and cost, of these signs will be contingent on the
outcome of the speed management plan process that will be undertaken later this
year. Officers are awaiting notification from NZTA as to whether they will be
funding or co-funding these signs. Should NZTA co-fund these signs, some of
this Council funding may not be required.
As there was no budget
provision for this, a new capital programme (2554 – School Speed Limit
Signs) of $655K has been included to ensure Council meets its legal
obligations.
Low Cost Low Risk –
Electronic Safety Signage
Officers recently applied for
Low Cost Low Risk funding from a national fund established by NZTA.
The
three items included in the application were:
a) El Prado Drive/Railway Road
intersection improvements in making a signalised intersection to gain heavy
freight efficiencies.
b) Improvement funding for Stoney
Creek Road and Kelvin Grove Road for vertical and horizontal road pavement
improvements
c) No. 1 Line/Rongotea Road
intersection to install electronic limited speed zone that meets the current
speed management criteria for unsafe intersections.
NZTA
have recently advised that $350,000 has been allocated to No. 1 Line/Rongotea
Road. The funding share of this is $178,500 NZTA and $171,500 Council.
A
new programme (2555 – Low Cost/Low Risk – Electronic Safety
Signage) for $350K has been included to action work at No.1 Line/Rongotea Rd as
it is a previously identifed project of the Palmerston North Integrated
Transport Initiative (PNITI).
Transport Choices –
Bus Shelters
Council received $5M funding
from NZTA under the Transport Choices programme for substantial upgrades to the
city’s bus shelter assets. This programme terminates at 30 June
2025. To date we have installed 30 bus shelters and purchased another 50
that are not yet installed. It is estimated that a budget of $2M will be
required to complete the installation of these remaining shelters, depending on
the specific locations of where these are to be installed.
Discussions
with NZTA are currently ongoing around their expectations on when these
remaining shelters will be installed, however officers believe a two-year
timeframe is reasonable.
Programme
2231 City Wide Public Transport – Additional Bus Shelters currently has
$204,000 for the 2025/26 financial year. This budget is fully funded by
Council. Officers recommend that the budget for installing the remaining 50 bus
shelters is provided for over the next two financial years at $1M per annum.
This will enable approximately 25 bus shelters per year to be installed.
Programme
2231 City-wide Public Transport – Additional bus shelters has been
increased from $204K to $1M in 2025/26 towards completion of the transport
choices work.
Multi-Cultural Facility
Officers
have been working on design and construction for a new multi-cultural facility
located in the Civic Administration Building. In March 2025, Officers advised
via a briefing that an opportunity had been identified to increase the project
budget through DIA’s Lottery Community Facilities Fund to achieve enhanced
outcomes with the design of the facility. Specifically, an additional
foyer/entrance via Red Square, and a set of wider doors internally into the
main event space. The cost of construction for those design elements has come
in higher than initial engineer estimates. If successful, the funding
application will cover a reasonable portion of the increased costs, limiting
the impact on Council’s funding. An outcome of this application is
expected in mid-late June. Should this funding application be declined, a
revised approach will be considered.
Programme 2350 – Cultural
Facilities – New Multicultural Facility has been increased by $167K, with
capital revenue of $113K assumed in order to continue Council’s
commitment to this project.
2.4.3 Other
capital carry forwards
Other smaller carry forwards
are set out in Attachments 5, 6 and 7. Officers can now proceed with these
programmes as they have been scoped appropriately. These programmes are:
· Programme
1972 – CET Wildbase Recovery Digital Capacity
· Programme
2501 – City Library – Creative Interpretive Heritage Markers for
Cuba Street Area
· Programme
2539 – BOF – Te Hotu Manawa o Rangitane Marae wharenui and
wharepaku upgrade
2.4.4 Capital
items referred to debate
Elected Members have resolved
that several items to are to be considered when finalising the annual
budget.
Council should consider the capital
items listed below and determine whether there is to be any budgetary
adjustment.
Featherston Street –
Intersection
The Economic Growth Committee
at its meeting on 9 April 2025 resolved,
“to refer a new
capital programme to the Annual Budget deliberations to reinstall left turn
lanes onto Rangitikei Street from Featherston Street, and safely direct
cyclists onto the footpath to create shared pathway at the intersection, on
receiving an officer report.”
Attachment 9 contains a
high-level assessment of the four options for this work. The four options are
summarised as shown in Table 1 below.
The assessment details
benefits, disbenefits and rough order costs of the options, including the
status quo (Option 1). Officers have included Option 4 (a non-footpath or
shared path option) due to the safety concerns with Option 2 and the potential
costs & property acquisitions involved with Option 3. Officers note that
Options 2, 3 and 4 all have higher safety risk scores than Option 1.
|
Table 1: Featherston
Street Intersection Options
|
|
Options
|
Notes
|
Rough Order
Costs
|
|
1
|
Maintain status quo (i.e. no changes to existing
layout)
|
Most favourable safety risk score of the four options
|
No cost
|
|
2
|
Reinstate left-turn lanes on Featherston
Street and create shared use path (within existing footpath space)
|
Concerns around directing cyclists safely onto footpaths
due to width of footpaths, tight corners and poles/cabinets on footpaths,
shops and entranceways on the edge or across footpaths, conflicts between
pedestrians and cyclists, cyclists choosing to use road due to narrow
footpath
|
$747,000
|
|
3
|
Reinstate left-turn lanes on Featherston
Street and construct shared use path (widen existing footpath into private
property)
|
Involves purchasing private property near the intersection
to enable safe shared paths to be created
Further work is required to accurately price this option,
and this estimated cost excludes property purchase costs, demolition of
properties and other site works required for this option (may be an
additional $2-3M)
|
$1,509,300
|
|
4
|
Remove separated cycleway at the
intersection and paint sharrow line markings indicating cyclists may remain
on road
|
Sharrows (meaning ‘share
arrows’) are a road marking in the form of a bike symbol with two
arrows above it. (see picture inset below). Sharrows show people on bikes
where they can ride on the road (sometimes, in the middle of the lane),
acting as a cue to let drivers know people on bikes can ‘claim the
lane’. This option increases the safety risk score due to the potential
of cycle/vehicle conflicts as the cyclists are in the vehicle lane as they
move through the intersection.
|
$532,000
|
It should be noted that the
Featherston Street/Rangitikei Street intersection is a NZTA owned and
controlled intersection. As such, any work that is undertaken on this
intersection will need their input, and ultimately, their approval. It is
likely that NZTA will have concerns around any changes to the intersection that
could compromise the safety of users of the intersection.
It should also be noted that
any changes to the intersection layout would be at 100% Council’s cost as
there is no NZTA funding available for this work.
Featherston Street –
bus pick up and drop off investigation
The Economic Growth Committee
at its meeting on 9 April 2025 resolved,
“Direct the Chief
Executive to investigate bus and vehicle pickups and drop offs off-road zone
and other options, in large green space-road reserve on Featherston Street
opposite Boys High, to inform future annual budgets.”
Officers will investigate these
works and provide a report back in the 2025/26 financial year to inform future
budgets. As there is no provision for this investigation in the current draft
budget, a new operating programme of $90K is required to complete these
investigations.
2.4.5 Tables 2
– 4 below provide the updated summary of the proposed draft Annual Budget
2025/26 compared to the Long-Term Plan. Note items referred for debate are not
incorporated at this stage.
|
Table 2: Funding of Operating expenses
|
Long-term Plan
|
Draft Annual
budget
|
|
|
2024/25
$M
|
2025/26
$M
|
2025/26
Consultation
draft
$M
|
2025/26
May draft
$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
|
63.0
49.7
14.9
80.6
|
63.3
49.3
14.5
82.0
|
|
Total operating expenses
|
201.1
|
209.1
|
208.2
|
209.1
|
|
Operating subsidies & grants
Finance revenue
Other revenue
|
(6.4)
(0.4)
(38.6)
|
(6.5)
(0.4)
(39.2)
|
(6.1)
(0.5)
(40.1)
|
(6.6)
(0.5)
(40.2)
|
|
Total operating revenue
|
(45.4)
|
(46.1)
|
(46.7)
|
(47.3)
|
|
Net operating expenses
|
155.7
|
163.0
|
161.5
|
161.8
|
|
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)
(5.1)
31.2
9.6
|
(49.3)
(5.9)
31.0
9.1
|
|
Total rates requirement
|
136.9
|
149.1
|
147.5
|
146.7
|
|
Table 3: Funding of Capital Expenditure
|
Long-term Plan
|
Draft Annual
budget
|
|
|
2024/25
$M
|
2025/26
$M
|
2025/26
Consultation draft
$M
|
2025/26
May draft
$M
|
|
Renewals
Capital for growth
Capital new
|
33.0
15.0
47.4
|
35.6
12.7
77.2
|
35.3
12.3
68.0
|
34.8
16.1
63.9
|
|
Total capital expenditure
|
95.4
|
125.5
|
115.6
|
114.8
|
|
Funding from external sources
|
(18.1)
|
(30.0)
|
(23.3)
|
(13.5)
|
|
Funding from rates (for renewals)
|
(28.6)
|
(30.9)
|
(31.2)
|
(31.0)
|
|
Funding from additional debt
|
(48.7)
|
(64.6)
|
(61.1)
|
(70.3)
|
|
Table 4: Components of increased rates
requirement
|
Impact on Total
Rates for 2025/26
|
|
As per LTP
|
As per draft AB (consultation)
|
As per draft AB (May)
|
|
Interest Costs on Debt
|
1.8%
|
0.3%
|
0.1%
|
|
Debt Repayment
|
1.4%
|
1.3%
|
1.0%
|
|
Rolling Average Renewal increase
|
1.7%
|
1.9%
|
1.8%
|
|
Labour Costs
|
2.3%
|
2.8%
|
2.8%
|
|
Utilities and Insurance
|
0.2%
|
0.4%
|
0.4%
|
|
All Other (Contractors, Professional Services, Materials
etc.)
|
2.1%
|
1.7%
|
2.4%
|
|
Revenue (excluding Rates and Grants & Subsidies)
|
(0.5%)
|
(0.9%)
|
(1.2%)
|
|
Revenue – Operating Grants & Subsidies
|
(0.1%)
|
0.2%
|
(0.1%)
|
|
Increase in total rates requirement
|
8.9%
|
7.7%
|
7.2%
|
An
updated set of financial statements have been included in Attachment 10,
for information.
2.4.4
2.4.5
2.4.6
The current year performance regarding the delivery of the
capital programme, was presented to Council on 7 May, which highlighted an
underspend for the 2024/25 capital programme. Officers are aware of the size of
next year’s programme in comparison. We are continuing to work to
identify any other potential reductions and deferrals for the proposed capital
programme. Any further changes to the programme will be provided ahead of, and
tabled at, this meeting. This list will include any risks or implications
associated with further reductions and deferrals for the 2025/26 capital
programme.
3. Rating incidence
The Consultation Document and
Supporting Information contained a number of assumptions about the rating
system for 2025/26. No changes are proposed to those assumptions other
than recognising the fixed charges for services (water, wastewater and rubbish/recycling)
will need to be adjusted to reflect any changes to underlying activity budgets.
4. NEXT
STEPS
Direction provided by the
Council will assist officers to prepare a draft of the final Annual Budget
2025/26. It is intended this will be adopted at the Council meeting on 4
June 2025.
5. Compliance and administration
|
Does 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?
|
Yes
|
|
Is there funding in the current
Annual Plan for these actions?
|
Yes
|
|
Are the recommendations
inconsistent with any of Council’s policies or plans?
|
No
|
|
The
recommendations contribute to:
All 4
Goals
|
|
The
recommendations contribute to this Plan:
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
|
Adopting an annual budget/plan
each year is a fundamental legislative requirement and without this in place
the Council will not be able to set rates for the year and therefore fund any
of its actions, plans or strategies.
Palmerston North City Council
consults on its annual budget to ensure public awareness of any proposed
changes since the Long-Term Plan was agreed.
|
|
|
|
Attachments
|
1.
|
Communication
and Marketing Summary - Draft Annual Budget 2025/26 Consultation ⇩ 
|
|
|
2.
|
Summary
of Submissions - Draft Annual Budget 2025/26 ⇩ 
|
|
|
3.
|
Street
Tree Maintenance Additional Information ⇩
|
|
|
4.
|
Annual
Budget 2025/26 - Schedule of Proposed Operating Programmes ⇩
|
|
|
5.
|
Annual
Budget 2025/26 - Schedule of Proposed Capital New Progammes ⇩
|
|
|
6.
|
Annual
Budget 2025/26 - Schedule of Proposed Capital Growth Programmes ⇩
|
|
|
7.
|
Annual
Budget 2025/26 - Schedule of Proposed Capital Renewal Programmes ⇩
|
|
|
8.
|
Aokautere
Growth - repurposing an exisiting programme ⇩
|
|
|
9.
|
High
Level Options Assessment - Featherston Street Intersection ⇩
|
|
|
10.
|
Annual
Budget 2025/26 - Financial Statements ⇩
|
|
