Extraordinary Meeting of Council
Tuesday 10 March 2020
Mayor Wise, Deputy Mayor Brosnan, Councillors Boag, Browne, Chrystal, Crown, Mawson, McGrath, Price, Simpson, Tapine, Taylor, Wright
Next Council Meeting
Thursday 12 March 2020
ORDER OF BUSINESS
Conflicts of interest
Announcements by the Mayor
Announcements by the management
1 Proposal for Draft Annual Plan 2020/21 and consultation material.................................. 3
1. Proposal for Draft Annual Plan 2020/21 and consultation material
Type of Report:
Local Government Act 2002
Reporting Officer/s & Unit:
Adele Henderson, Director Corporate Services
1.1 Purpose of Report
The purpose of the report is to formally approve the underlying information and approve key decisions from Council for the development of the draft Annual Plan 2020/21.
a. Note that the draft 2020/21 Annual Plan and consultation document will be reported back for Council adoption on 31 March 2020.
b. Note the proposed rates increase for 2020/21 will be a 6.5% average increase in rate requirement for existing ratepayers.
c. Note that the consultation, for the kerbside waste collection as outlined in the Waste Minimisation and Management Plan (WMMP), informs the community that the cost of implementation will be smoothed over two years by utilising Council reserves in Year 1 (20/21).
i. The impact to rates for 20/21 is 1.3%.
ii. The approximate increase to rates in 21/22 is likely to be 0.8%.
d. Note that new requirements of $12.1 million have been identified to support Council’s number one priority being water, of which, there is no rates impact for 20/21, however there is a rates impact for 21/22 of 0.6%.
i. Note the Water Supply Masterplan will be brought to Council in a separate report for adoption.
ii. Of the $12.1 million, $7.3 million in new requirements are for Water Supply.
iii. Council agree to provide extra funding for the Chlorination Review of $200k, funded from loans-rates which will impact on rates in 21/22.
iv. Council agree to provide new funding of $200k for the development of a Water Safety Plan, funded from renewals.
v. Council agree to provide additional funding for the Outfall of $4 million to be funded from renewals
1. Council note the risks as outlined in this paper and that Officers will bring back to Council any further costings once the investigation process is further underway.
e. Note that Council have allocated $25 million in total for 20/21 across 3 Waters to support water being the number one priority.
f. Note that targeted engagement has occurred with those residents impacted by the proposed targeted rate associated with the Whakarire Rock Revetment and Council will receive further information at the 31 March Council meeting.
i. Agree the budget allocation based on new estimates will be $2.2 million.
ii. Agree the private contribution to be held at the same amount as per the 2019/20 consultation, resulting in a change to the public/private split to 2.5% private/97.5% public.
g. Note the new funding requirements of $2.3 million, funded from development contributions, to support development in Te Awa.
h. Note that the funding for the Long Term Plan requirements of $240k is funded from the Urban/Suburban Growth fund
i. Note the funding for community engagement of $100k is funded from the Urban/Suburban Growth fund
j. Note that Council may require external borrowings as part of this Annual Plan ($20m) depending on the timing of projects. External borrowings were identified in the Long Term Plan to occur in 20/21 ($30m)
k. Note that the proposed changes to the Revenue and Financing Policy and Council’s rating policies will be brought to Council in a separate report at the 31 March Council meeting.
l. Note that changes to the Revenue and Financing Policy will be consulted on concurrently with the Annual Plan consultation including.
i. changes to the Rates Remission Policy and Rates Postponement Policy.
m. Note the proposed capital plan for 20/21.
i. Note the revision and impact to the capital plan for the remainder of the 2018-28 Long Term Plan as a result of the changes proposed in the 20/21 capital plan.
n. Adopt the high level consultation plan.
o. Adopt changes to fees as specified in the document titled Fees & Charges 20/21.
p. Agree that the library site selection will be included as a consultation matter, subject to the library site selection process and preferred option being brought in a separate report to Council for adoption.
q. That the documents and underlying information can be amended for minor refinements as for adoption of reports on 31 March 2020.
r. Note the supporting documentation for the draft Annual Plan 2020/21 be received.
s. Approve the underlying information and the financial information as the basis for the development of the Annual Plan consultation document 2020/21 and full Annual Plan for 20/21.
t. Resolve that the draft 2020/21 Annual Plan be prepared on the basis of this report and supporting documentation including the resolutions made above and any decisions made at this meeting.
That Council discuss the officer’s recommendation.
1.2 Background Summary
The local authority must prepare and adopt an annual plan for each financial year (LGA Section 95).
The purpose of the annual plan is to:
a) Contain the proposed annual budget and funding impact statement for the year to which the annual plan relates and
b) Identify any variation from the financial statements and funding impact statement included in the local authority’s long-term plan in respect of the year and
c) Provide integrated decision making and coordination of the resources of the local authority and
d) Contribute to the accountability of the local authority to the community
The purpose of this report is to obtain decisions from the Council on the key matters and budget considerations for incorporation in the 2020/21 Annual Plan. Supplementary reports are provided as supporting financial information for the Annual Plan.
The 2020/21 draft Annual Plan process involves the further refinement of the annual plan contained for the year within the Council’s Long Term Plan (year 3 of the LTP). It allows Council to review the projects and operations for that year, and make changes based on budget allocations and priorities for that year, and to consider new proposals, changes, increased costs, and other factors that may have emerged since the Long Term Plan was adopted.
Recent changes to the Local Government Act 2002 create more flexibility as to whether the Council needs to consult with its community on an Annual Plan and that is an option available to Council where there are no significant or material differences from the Long Term Plan.
An assessment of the significance or public interest in a matter drives discussions with elected members on the need for consultation. This is assessed annually as the Annual Plan is developed.
The process to develop council’s annual budget for 2020/21 involved a series of workshops with Councillors to set direction on the budget. These seminars occurred on 27 November, 4 December, 12 December, 23 January, 5 February, 10 February, and 20 February. Councillors were provided with cost pressures and efficiencies that could be made, and set direction to stay within the financial caps as outlined in the Finance Strategy.
The average rates increase approved in the Long Term Plan 2018-28 was 5.1%.
The review of the Annual Plan information involved a detailed review of baseline expenditure and financial forecast. Budget reductions were made as part of ongoing efficiency programmes. This review has offset other cost pressures across the organisation including: unplanned expenditure associated with Council’s responsibilities as last man standing in leaky building claims; resulting changes to budgets from Council approving water as its Number 1 Priority in 2019/20; Coastal Hazards working group are considering funding for a contributory fund; New waste contract, and impact of kerbside recycling contract introduced in 2019/20; Legislative requirements to meet Healthy home requirements for Council’s social housing portfolio; Legislative changes for Climate change responsibilities; Change in the purpose of Local Government to include well-being and the need to identify what initiatives and costs council wishes to consider.
Known cost pressures for upcoming contracts were also addressed in the expenditure review. Funding adjustments were made to move some projects from rates to loans due to the inter-generational benefit of those projects.
There are known pressures within the national and international insurance markets. Council are currently working towards looking at options for loss modelling to ensure that its insurance requirements would be met in an event of a large scale event. Insurance costs for 2019/20 were $400k higher than planned, and this has resulted in an insurance cost increase for 2020/21.
The Local Government Cost Index (LGCI) has been specifically prepared for the sector and provides an appropriate inflation index for the capital plan budgets for Year 3 of Long Term Plan. Operational expenditure has been based on known costs and LGCI only applied where appropriate.
The latest release of the LGCI index from BERL shows upward cost pressures on the Council’s cost base.
A review of fees and charges was undertaken to ensure that the appropriate cost recovery remains in place to ensure that the ratepayer is not unfairly burdened.
Budget changes and discussions for Annual Plan 2020/21
Outline of the 2019/20 decisions which impacted on the 20/21 budget
As signalled in the Annual Plan 2019/20, there were several decisions made at that time which impact the 20/21 Budget including ongoing higher cost of recycling, entering into a new kerbside waste contract, bringing forward and adding new water projects and the Kennedy Park ablution block. The cost of recycling continues to be smoothed in the 20/21 year, with the full cost falling to the 21/22 year.
Kerbside rubbish collection
During December 2017 consultation with the community occurred around the joint Waste Minimisation and Management Plan (WMMP). Over 7,000 submissions were received by Napier and Hastings as part of this process and the preferred options were adopted by Council 4 September 2018. The preferred option voiced by the community regarding waste collection, was an option of wheelie bins as a collection receptacle for a Council-provided kerbside waste collection service for residential properties and select commercial properties. In 2019/20, Council signalled in its Annual Plan that it would go out to tender for a contract for the waste collection service and this contract has now been let and the enhanced service will commence on 1 July 2020.
Ø For the purposes of the Annual Plan 2020/21, the cost of implementation will be smoothed over two years by utilising Council reserves in Year 1 (20/21).
Ø For 20/21, Average rates will increase by 1.3% to account for the changes associated with WMMP.
Ø The approximate increase to rates in 21/22 is likely to be 0.8%.
Ø The enhanced service includes the provision of a 120L Council-owned wheelie-bin for weekly collection of rubbish. In an effort to incentivise customers to put out less waste, a fortnightly opt-in solution will be available in the future.
Ø In the commercial areas, an ability to have waste collected up to 3 times per week will be provided based on the level of payment per rated unit (if the rates bill for the property has 3 charges, the property will receive 3 collections).
In the deliberations for the 2019/20 Annual Plan, Council highlighted water is the number one priority. At that time, Council agreed to a re-calibration of the water supply capital works programme and brought forward $7.8M of projects to improve the water supply. Since that time, officers developed a Water Supply Model and Water Supply Masterplan for Napier. The masterplan has led to a review of overall priorities and several new projects have been added. These tools enable Council to develop the key projects required to deliver a safe, quality, resilient water supply to Napier into the future. Council are aiming to deliver the following projects in 20/21, with the main goal for Council’s water team to provide low manganese water to the network:
· 2 new bores, treatment and connecting mains into our network to have low manganese water
· 2 x test bores to confirm the quality and flow at our proposed new borefield sites and finalising their location
· Ongoing investigation into an appropriate site for a replacement reservoir on the Napier hill and potential site purchase (if not already completed)
· Development of a zone for Tamatea and Parklands to manage dirty water and to start on leakage management
· Design of the water treatment plants
· Design of the mains connecting borefields to reservoirs and back to the network
· Improvements to the network for fireflow
· More access points to the network for cleaning.
A major factor in the delivery of the identified projects is the process of gaining a new “global” resource consent from the Hawke’s Bay Regional Council for Napier’s water supply. A key part of this consent will be understanding where Napier can locate the proposed new borefields, and their impact on the surrounding water users and the local rivers. Water conservation will be a key input into the Resource Consent application as well as assessments around the environmental impacts of Napier’s water takes.
Napier’s water take resource consent is due for renewal in 2027. The renewal application will take years to develop supporting documentation so Council will be progressing this with the new borefield projects. This will provide Council with certainty around the community water supply for the next 30 years and the goals that Napier need to achieve around water conservation.
Ø For the purpose of the Annual Plan 2020/21, there is $7.3 million in new requirements, however there is no rates impact to 20/21. There is a rates impact for 21/22 of 0.6%.
Ø Councillors have a choice of fully consulting on these new projects or informing the community of this proposal. Given the level of interest in water Councillors have set direction to inform the public of the water projects. The public will still have the ability to provide feedback during consultation.
Ø Provide new funding of $200k for the development of a Water Safety Plan, funded from renewals.
Ø Due to the second major recalibration of the water supply programme since the LTP was adopted in 2018 (the first being in the development of the annual plan 2019/20), a separate report will be brought to Council on the Water Supply Masterplan, and if adopted, the Water Supply Masterplan will form part of the supporting documentation for the Annual Plan 2020/21 consultation document.
Safe Chlorine-free drinking water review
In 2019/20, Council commissioned for an independent review to identify the costs and options for developing Napier’s water network into a modern, resilient water supply with either chlorine as a way to manage health risk or going chlorine-free.
The Safe Chlorine Free Drinking Water Review will deliver a business case outlining the two main options for drinking water supply:
1. Maintaining our current planned service delivery, with residual Chlorine disinfection as the main safety barrier, and implementing the new Water Safety Plan framework and
2. Developing options for a chlorine free network that the Ministry of Health are likely to approve as an appropriate alternative.
The business case will include the technical considerations of both options and likely costs. These options will then form the basis of consultation with our community on the preferred option.
The review/business case will need to be developed in conjunction with the New Zealand Ministry of Health (MoH) The MoH has indicated that residual disinfection may become compulsory for New Zealand water supplies unless a demonstrably safe alternative is provided. This project will investigate what the safe alternative could be, and the time and cost to implement it. Working with the MoH will help to ensure that any option proposed through the review/business case is likely to be accepted as an alternative to residual disinfection.
Ø For the purpose of the Annual Plan 2020/21, Council has prioritised the review and allocated extra funds because the cost of the review is unknown until the tender process is complete.
Ø Extra funding for the Chlorination Review of $200k, funded from loans-rates which will impact on rates in 21/22.
Wastewater Outfall Pipeline
Officers have identified a need to repair a seepage and are carrying out additional monitoring to assess effects upon the environment. No repair method has been able to be carried out to date. Council has added an extra $4 million to enable repair or replacement of the current outfall pipeline – this will be integrated into investigations and capital works to not only repair but to enable improved treatment methodologies, increase storage, and improve conveyance and diffusion of wastewater to the ocean or via alternative methods of disposal.
Ø For the purpose of the Annual Plan 2020/21, an extra $4 million has been added to the capital plan from renewals.
Ø It is currently unknown how much funding will actually be needed until investigations are further underway. Fixing the outfall has been highlighted as a risk in the risk section and officers will bring back to Council any further costings once the investigation process is further underway.
Library site selection
Officers have investigated site options for a new Napier Library, which included a long list of 17 site options, where three were identified as being strongly aligned to the best site criteria requirements, and were investigated in more detail. Two of the three sites have subsequently been deemed to be unsuitable for a variety of reasons. The remaining option being a refit or rebuild on the original site, has been identified as the proposed option.
A separate report will be brought to Council detailing analysis of the three options with the proposed engagement and consultation approach on the preferred option. It should be noted that the consultation is limited to the site selection and is not about the options for the construction and development of any building at this time. Options around the build will be brought to Council and the community in a separate process once further investigations and analysis has been undertaken.
Ø The proposed library site option will be consulted on with the community as part of the Annual Plan 20/21 consultation process subject to Council adopting the current library site as its proposed option. Legal advice is being sought on whether this matter require a separate special consultative procedure or whether it can be undertaken through the Annual Plan consultation process.
Te Awa Development
Officers have identified the requirement to provide infrastructure now to support private development at Te Awa. In the LTP it was not anticipated that development would occur at such a rate. Council needs to ensure that it provides adequate infrastructure to enable development and deliver to its requirements under the National Policy Statement for Urban Development Capacity for areas zoned for residential development.
Ø For the purpose of the Annual Plan 20/21, new requirements of $2.3 million have been identified to support the Te Awa Structure Plan. Of which, $500k is for wastewater, $1 million for stormwater, and $800k for transport. There is no rates impact as it will be funded by development contributions.
Ø Officers are developing a Masterplan for Te Awa (Structure Plan) and this will be presented to Council once complete.
Major Projects/Shared Service/Internal Delivery of services
As part of Council’s ongoing review of the delivery of services, Council has considered its personnel requirements for the delivery of both its internal operations and capital works programme for 2020/21.
Key drivers for improved internal delivery of services:
ü Increased level of capital projects
ü Stormwater Bylaw implementation
ü Water programme implementation
ü Increased compliance and environmental requirements e.g. water testing
ü Central government minimum wage adjustments and Remuneration Authority
ü Statutory and legislative requirements (H&S).
ü Community Engagement
ü Long Term Plan additional resourcing requirements
ü Governance support for professional development, resourcing and meeting Local Government requirements for Elected Members.
Council’s Street Management Programme provides patrols in the CBD, supports a CCTV network in Ahuriri, CBD, Taradale, Maraenui and Marewa shopping centres, and supports the Outreach Programme (for the homeless).
The CBD patrols were implemented as a temporary measure in 2016 to help curb the rising issue of begging and rough sleeping in the CBD.
The Street Management Programme was reviewed last year and officers are currently investigating the option to change the patrols into ambassador roles and to bring the CCTV network in-house. In the meantime, the CCTV network, currently managed by an external Trust is failing and in need of replacement.
Ø For the Annual Plan 20/21, Council has allocated $500k to replace and expand the network using the latest technology and will manage the network itself. This capital investment will enable the network to add cameras with the ability to include mobile technology and to add further cameras easily. Council will work with Police, incorporating data and feedback from the community on camera locations.
Ø A future operating model for patrols is still under consideration.
Council provides 376 housing units across 12 villages, with the majority (304) being retirement flats. This housing supports people on a low income with low assets and a special housing need.
The housing stock is old and while it has been maintained, there has been little improvement or renewal work done on the units. There is limited accessibility, space and facilities. The new healthy homes standards require Council to heavily invest in heating, ventilation and insulation in the units.
Income from the subsidised rents is used to maintain the units and provide the service. This year, for the first time in over a decade, Council reviewed the subsidy levels for rent. While there were increases applied, the current income from rent will not cover the projected costs to maintain the housing over the next 10 years.
Officers have investigated several options for the provision of housing and are currently undertaking a detailed analysis of two shortlisted options. One option is to sell or lease all of the housing portfolio to another entity and the other is to retain part or all of the housing but reconfigure the stock (i.e. remove and rebuild and/or sell some of the units). Consultation will occur with the community, including our current tenants, before any decision is made.
Ø For the Annual Plan 20/21, existing renewal funds have been utilised to start funding the new heathy homes requirement of $1.6 million.
Te Pihinga (a new horizon) is an urban redevelopment project focussed on growing economic and social prosperity in Maraenui. Officers are working with a number of agencies including, Kāinga Ora to utilise land for housing development and community facilities that will encourage a thriving community where people live to their full potential.
Officers are working with the community currently to create a concept design for a community facility that will support employment, training, and entrepreneurship with a focus on Rangatahi as well as whanau development. The facility will act as an incubator and will provide access to digital technology.
Ø For the Annual Plan 20/21, there is some capital funding allocated of $1 million, and $1 million for 21/22, with additional funding being sought from other funding providers.
A revetment is a rock structure on the shoreline that prevents erosion from king tides and storm events. Council have a resource consent to build a revetment that will protect the reserve and properties on Whakarire Avenue. As well as providing protection to the land, the project will reinstate the public’s access to the reserve. This project is included in Council’s Long Term Plan 2018-28 as funded by general rates. Council then undertook a LGA Section 101 (3) review to ascertain the public/private benefit resulting from the project. Officers provided recommendations to Council on 16 October 2018. On 11 December 2018, Council agreed to a 3% private benefit, to the residents of Whakarire Ave properties, from the resulting project and targeted consultation was undertaken as a result of the project being included in the Annual Plan 2019/20. In 2019/20 annual plan consultation, on a targeted rate, feedback from general community of 107 submitters, was 14% disagreed, 33% agreed, and 53% neutral. Of Whakarire Residents, 86% disagreed, and 14% were neutral.
In the Annual Plan deliberations 2019/20 Council decided more consultation with affected residents as to the necessity, final form and funding options of the proposed revetment before project proceeds. $1.7m was allocated in 20/21 budget (including inflation) during Annual Plan 2019/20 deliberations. Funding source was to remain as a loan from reserves paid through general rates, until such time that Council makes a formal decision on a targeted rate for Whakarire. Since that time, Officers have undertaken further consultation with residents and residents were asked to provide their feedback by 31 January 2020. Officers have also reviewed the timing of the project and project costs, with revised costs of an estimated $2.2 million. Council will be provided with residents feedback, payment options for residents, information on costings and project timing at the 31 March Council meeting for decision.
Ø For the Annual Plan 20/21, the private contribution will be held at the same amount as the 2019/20 contribution, resulting in a recommended change to the public/private split to 2.5% private/97.5% public.
Ø As per the 2019/20 Annual Plan deliberations, Council acknowledges that this funding split would not form any basis for the work that is being undertaken by the Coast Hazards Working group in determining their future work and allocation of costs to the community.
Ø Council will need to update the Revenue and Financing Policy to include the targeted rate for residents of Whakarire Ave. As this has already been consulted on in the Annual Plan 2019/20 with both residents and general public, and further consultation has been undertaken with residents, the policy can be updated.
Changes to policies
Council is proposing to amend the Revenue and Financing Policy and Council’s rating policies. A separate report will be brought to Council at the 31 March Council meeting. Council has undertaken a first principles approach to the review of the Revenue and Financing Policy including rates, and held a series of seminars with Elected Members on 6 December, 12 December, 31 January, 10 February, 17 February, 25 February for Elected Members to set direction. Council will consult separately with the community on the Revenue and Finance Policy.
The following key changes are proposed:
Ø The modification of the funding splits in the Revenue and Financing policy
Ø The continuation of use of Land Value as the base for the general rate, for 2020/21 with ratepayers to be asked whether Council should consider moving to Capital Value as the valuation base for the calculation of the general rate in the future.
Ø Changes to the differential categories applying to Council’s General Rate with the 6 existing differential categories reduced to two new categories of Commercial and Residential\Other. Commercial properties are proposed to be charged 2.5 time the base rate applied to the residential\other category.
Ø The introduction of a new Stormwater Targeted Rate to be charged on Capital Value with a Commercial differential of 2.5 times (similar to the general rate differential).
Ø A change to the definition of a separately used or inhabited property (SUIP) for the UAGC and other uniform rates (except water and waste water) to remove the exemption for separate units used by the same family and introduce a rates remission policy for separate units used by the same family.
Ø A change to the definition of a (SUIP) relating to wastewater and water for commercial properties with multi separate units (including motels) based on number of units for water and waste water rates. Those with water meters will only pay one rate per meter.
Ø The inclusion of a new targeted rate for the proposed Whakarire Revetment targeted rate on residents of Whakarire Avenue.
Proposed changes to the Rates remission policy include:
Ø Remove a historic remission applied to some residential properties in commercial areas.
Ø Introduce a new remission policy for properties either not receiving or receiving a reduced level of service for the Refuse collection and Kerbside recycling targeted rates.
Ø Introduce a new remission policy for SUIPs charged where a residential property is used as a single family residence.
A proposed change to the rates postponement policy includes:
Ø Remove a historic postponement applied to a small number of rural properties.
Major projects update
Napier Library – Civic Precinct
In mid-2017, the Library and Civic buildings were assessed as earthquake prone. Staff are currently spread across three temporary sites, and the main city library has been operating from the MTG Hawke’s Bay building.
Officers have investigated site options for a new Napier Library, and three sites were identified, with a refit or rebuild on the original site being the preferred option.
The Civic building, on the corner of Hastings and Station Streets and next door to the former main library building, is due to be demolished this year. Officers are currently in negotiations for a hotel development on that site. Officers are also considering how to integrate council facilities into the same area as creating a civic precinct alongside a hotel will revitalise this area of town and provide benefits to the central city.
A working group has been established to progress an integrated project for the hotel, library and Civic building including looking at options, costs and master planning of the area. The preferred options from the working group will be part of the Long Term Plan consultation with the community next year for their feedback and input.
Ø For the Annual Plan 20/21, the main budget allocation for 20/21 has been moved to 21/22.
Project Shapeshifter – National Aquarium of New Zealand development
Project Shapeshifter is the name given to the National Aquarium of New Zealand development. The project business case was submitted to the Ministry of Business, Innovation and Employment (MBIE) in December 2019.
This proposed project is not just an expansion of the current aquarium – instead, the aim is to build a new, nationally significant National Aquarium and Oceans Centre. Such a facility will raise awareness of environmental issues and empower visitors to support the conservation of species and ecosystems.
There will be significant community consultation around Project Shapeshifter outside of the annual plan process – however, before that stage is commenced, Council is first seeking MBIE approval of the business case and confirmed central government funding support.
Ø For the Annual Plan 20/21, the main budget allocation for 20/21 has been moved to 21/22, as the project is currently being considered by Council in a separate process due to the high levels of Significance.
Ø At the Sustainable Napier Committee on 13 February 2020, the Committee recommended to Council that the project will not progress any further as set out in the detailed business case without Central Government capital support of a minimum of $35 million and a commitment to ongoing operational costs in recognition that the facility is of National significance. Council will consider these recommendations at the next ordinary Council meeting on 12 March 2020.
Napier Aquatic Centre
A new aquatic facility is a key project for Napier, and will benefit the community’s health, wellbeing and recreational needs.
Officers have completed the concept design and engineering plan for the centre, and started preparing the earthworks at our new site, on the corner of Tamatea and Prebensen Drive.
The concept design will deliver Napier a modern, fit for purpose facility with increased pool space and better accessibility so that more people can participate in aquatic sport and recreation and learn how to be safe and confident in the water.
Ø For the Annual Plan 20/21, the budget allocation for 20/21 has been moved to 21/22, as the project is currently on hold while a decision is forthcoming from the High Court regarding a judicial review challenging the decision-making process for the project. As a result of the delay this may impact on the anticipated cost of the project.
Ø Council is considering the future of the project which may include further consultation depending on the outcome of the High Court decision.
Ø The outcome of the High Court decision will inform Council’s next steps in relation to this project
Fees and Charges
Increase to some fees to maintain cost recovery
Increases are proposed to some of the council’s fees (Cemeteries, Parks and Reserves, Wastewater, Stormwater, Water Supply, War Memorial Centre, Transfer Station, Trade Waste) to maintain cost recovery. The cost of providing these services has risen and fees need to rise to ensure the services are funded by the users and not subsidised by ratepayers. Other fees and charges have been reviewed and most have gone up by the appropriate cost inflator to maintain cost recovery. New charges have been added to the following: Faraday Centre for family passes, concession cards, group rates; Aquarium for room hire rates; and SoundShell for stage hire rates. Digital property fee for scanned property files has been reduced.
Other matters considered
The main allocations for Council’s big 4 capital investment projects i.e. New Aquatic Facility, Aquarium Expansion, Library, and Civic Building have been moved from 20/21 to 21/22.
Some allocation has been made to ensure Marine Parade Pools is maintained.
Council will consider a contribution towards the establishment of a Food Hub in Hastings outside of the Annual Plan in the Matariki Regional Development Strategy forum, due to more information being required.
Allocation has been included for property purchases, and any property purchases will be brought to Council through the year for decision.
A request to fund the Hawke’s Bay Community Fitness centre Trust will be considered as part of the development of the LTP 2021-31.
Legal costs are unknown, some funding has been included in the Annual Plan, but may not be sufficient.
Council would loan-fund any potential settlement for weather tightness claims.
The Outfall requirements are currently not known. There may be a requirement for further funding to mitigate the risk.
To fund any preliminary requirements for the Civic Building, costs will be ring-fenced against the sale of the site.
Potential investments from sale of leasehold land will be explored.
Council has discussed the establishment a cadet programme. No budget allocation has been allowed in the Annual Plan 20/21. This will be further explored and funding options brought back to Council.
Council has increased responsibilities to Maori under the Treaty of Waitangi, and there is likely to be a funding requirement to meet these responsibilities. No funding provision has been made for 20/21 until more details are known.
Additional costs will be incurred as a result of the development of the LTP 2021-31.
To support the implementation of the Stormwater Bylaw, funding allocation has been set aside for increased resources.
Allocation for CBD development projects has been moved out to 2021 until further design work is undertaken.
Funding for the War Memorial has been moved into 2020/21 as the project has not commenced into construction in 2019/20.
Iron Pot public access has been moved from 2019/20 to 20/21.
Funding for Inner Harbour renewals has been moved out to 21/22 as an Inner Harbour Masterplan is currently being developed to inform any further design and funding requirements.
For more information on capital programme movements refer to the attachments.
Over the last two years Council have become actively involved in the management of the Faraday Centre. Council are now responsible for the facility and are undertaking a review including; levels of service, property ownership, operational structure, operational budget and capital investment. The Faraday Centre building requires earthquake strengthening and discussions are being undertaken with the current building owner in relation to this matter.
Provincial Growth Fund
The Central Governments Provincial Growth Fund (PGF) was created with a $3 billion fund to stimulate and provide jobs to the New Zealand regions. The Hawke’s Bay councils have collectively being working together on applications to this fund to seek funding for key projects that meet the objectives of the PGF. To date, the status of Council’s applications is:
· National Aquarium - PGF approved $350k towards development of a full business case. Council have initiated discussions with Central Government to fund a minimum of $35 million towards the capital cost, and contribute to the ongoing operating costs.
· Port Access Enhancement – PGF approved $200k.
· Maraenui development - no formal feedback received.
· Westshore Sandy Beach - no formal feedback received
· Premier Ahuriri Estuary Park- no formal feedback received.
· Napier Inner Harbour Development – no formal feedback received.
1.4 Significance and Engagement
An assessment of the significance of the changes from the Long Term Plan 2018-28 was undertaken as part of the development of the Annual Plan 2020/21. This included both operational and capital expenditure changes.
The following matters have been included in the Consultation Document 2020/21 for feedback from the community
1. Library site selection
2. Water related projects
3. Waste minimisation
4. Major projects update
5. Community Housing
6. Te Pihinga
7. Street Management
8. Whakarire Revetment
9. Street Management
10. Capital plan
11. Amendment to Revenue and Financing policy (note this is a separate consultation with the community)
The consultation and submission period for the Annual Plan 2020/21 is from 7 April 2020 to noon 13 May 2020. Submissions can be made online on the Council website. A flyer will be sent to all households outlining the process and how they can feedback.
Councillors will engage with the community via two community meetings on the Annual Plan 2020/21. A video series will be launched with the Mayor to advise the community on the Annual Plan. There will be a formal hearing and deliberation process on 8 June. Council will consider all feedback from the community both online and from the meetings when making its final decisions on the Annual Plan 2020/21. The high level consultation plan is attached.
The introduction of a targeted rate to residents of Whakarire Avenue has been assessed as triggering high significance as this group is particularly affected. As such, targeted engagement with residents of Whakarire Avenue has occurred in the development of the Annual Plan 2019/20 and further engagement subsequently to that to ensure those residents are encouraged and have opportunity to provide feedback.
The changes to fees and charges has been assessed as low significance because they have a small impact on a large population.
Council is proposing to amend the Revenue and Financing policy and Council’s rating policies (refer to ‘changes to policies’ section in this report).
Consultation on these policies is a legal requirement under the Local Government Act 2002.
When considering the changes to the Annual Plan 2020/21 from the Long Term Plan 2018-28, Council officers reviewed its compliance against the Councils Financial Strategy and its Financial Prudence benchmarks.
As part of the Long Term Plan 2018-28 Council approved a LGCI + 5% as its cap for rates increases. The proposed Annual Plan rates increase is within this level at 6.5% (including the waste collection level of service adopted as part of WMMP)
Another key benchmark for Council is the Rates limit Benchmark, which is a measure of the rates income limits. The Council budget complies with this requirement.
In addition, the Balanced Budget Benchmark has been met.
Council may require external borrowings as part of the 20/21 Annual Plan ($20m) depending on the timing of projects. The Long Term Plan 2018-28 forecast external borrowing ($30m) to occur in 20/21 and be fully repaid by 2025/26 . A large capital plan ($72m), the effect of reduced Parklands sales and increased development costs for the new Parklands stages have contributed to the requirement for external borrowing in 20/21.
New 3 Waters Projects included in 2020/21
Council has identified additional water related projects for 20/21 totalling $12.1m. The additional funding is required to improve water supply and supply low manganese water to the network and to repair a seepage at the wastewater outfall pipeline. There is no rates impacts for 20/21.
WMMP Implementation costs
The decision to adopt the WMMP including enhanced levels of service for both recycling and rubbish have been consulted on. Cost impacts were provided as part of the consultation, however these were not factored into both Napier and Hastings Long Term Plans at the time. The tender has been let and the costs differ to the original information due to the changing market for these services and the Emissions Trading Scheme (ETS) costs that have risen considerably. As the response to consultation on the WMMP was significant (over 7,000 people), Council are comfortable that they have considered all options when providing budget for this service.
The WMMP costs of waste will be included in the Annual Plan 20/21, this will result in a rates increase of approximately 1.3% that was not included in the Long Term Plan for 20/21. To smooth the financial rating impact, implementation will be smoothed through the use of reserves for 20/21.
Impacts of 2020/21 programme on 2021/22 rates increase
In the development of future Annual Plans there is the ability to further refine the annual budgets contained in that year within the Councils Long Term Plan. It allows Council to review the projects and operations for that year, and make changes based on budget allocations and priorities for that year, and to consider new proposals, changes, increased costs, and other factors that may have emerged since the Long Term Plan was adopted.
Social & Policy
The following risks were noted as part of the development of the Annual Plan 2020/21:
• Outfall degradation
• Costs associated with review of water network including dechlorination
• Faraday Centre earthquake strengthening costs
• Construction cost escalations (including pool)
• Inner Harbour quantum of work required
• LTP Library assumption 2,000 sqm (Strategy seeking 2,500 sqm)
• Increased capital cost for new pool due to delays (if project goes ahead)
• Parklands net profit - Parklands margins impacted by increased costs
• Parklands timing of sections
• No capital reserve
• Triennial agreed initiatives with HB regions Mayors
• Potential revenue impacts of name change for War Memorial
• Length of time to complete property scanning project (dependent on level of resourcing)
• Street management operational activity
• Napier Inner City Marketing – request to increase targeted rate
• PGF Funding - Aquarium
• Funding of initial scope work for Civic complex work (no capital project available) - non project related costs associated with due diligence for Civic site
• Health monitoring costs for staff
• Moving to the Living Wage and cost impacts
• Additional resources for stormwater bylaw outcomes
• Insurance cost increase
• Faraday Centre level of service and management change
• Loan funding impact of waters projects and war memorial
• Street cleaning costs, public toilets cleaning
• Traffic management costs relating to cruise ships
• Climate Change direction from Council - Climate change initiatives - increased focus and legislative changes for Climate change responsibilities
• Funding for Civic Building next steps (contingent on decision on library site options)
• Coastal Hazards working group are considering a funding model for a contributory fund
• Council approved water is our Number 1 Priority – additional costs are being incurred - water related costs including flushing
• Initial work will be carried out on a replacement ERP and Asset Management System.
• Hawke’s Bay Museums Trust temporary library relocation 3 year mark ends September 2020
• Regional archives
• 3 Waters review and business case development and costs (including revaluations)
• No funding has been provided for in the 20/21 budget for the definition and development of a sustainability strategy.
• Weather tight claim and associated legal costs
• Minimum wage movements
• Well-being implementation - change in the purpose of Local Government to include Well-being
• Housing – long term sustainability of Council’s housing portfolio
• Rates database review and impact on rate payers
• LTP amendments requiring increased resource e.g. 3 Waters, chlorination, Civic, Coastal Hazards.
The options available to Council are as follows:
a. Approve the underlying information as the basis for the development of the Annual Plan consultation document 2020/21.
b. Not approve the underlying information as the basis for the development of the Annual Plan consultation document 2020/21.
c. Approve in part the underlying information as the basis for the development of the Annual Plan consultation document 2020/21.
1.7 Development of Preferred Option
Option A – approve the underlying information as the basis for the development of the Annual Plan consultation document 2020/21 and Annual Plan. The development of the Annual Plan has been through a robust review and workshopped with Elected Members. This report contains the best information available to date.
a High Level Consultation Plan ⇩
b Financial Information 20/21 ⇩
c Fees and Charges 20/21 ⇩
d 20/21 capital plan including revision to remaining years of LTP ⇩
e Capital plan changes for 20/21 ⇩
Extraordinary Meeting of Council - 10 March 2020 - Attachments
High Level Consultation Plan – Annual Plan 2020-21
The Annual Plan 2020-21 relates to year three of the current Long Term Plan (LTP). It has been identified that consultation will be undertaken as proposed changes to year three are considered material enough to invite the community to provide feedback to assist in the Council’s decision-making process. There are no matters that provide options for the community to consider, instead the matters require and ‘inform only’ approach. However, the community will be invited to provide feedback on these matters (and any other matters they wish to comment on) through the consultation process. Consultation will take place for one month from 7 April to 13 May 2020.
Significance and Engagement Policy
The proposed changes to year three of the Long Term Plan, being the Annual Plan 2020-21 are largely related to changing the timing of planned projects (mainly water), the introduction of charges to the new rubbish collection service, and increases to rates now that more detailed costings are known. These changes moderately affect all ratepayers and the whole community. Through Council’s feedback channels, water is identified as being of significant interest to the Napier community. The matters included in the Annual Plan consultation will also be of high interest to specific parties affected (e.g. waste management providers, environmental groups etc) and other key stakeholders, particularly Māori.
Progress on key projects in the Long Term Plan will be of interest to the community.
The objectives of the consultation are to:
· Create awareness of the Annual Plan 2020-21
· Inform the community of changes to year three of the Long Term Plan
· Actively invite the community to provide feedback through a range of communication channels and engagement activities
· Update the community about progress on key projects
· Highlight SayitNapier.nz as a key tool to provide feedback
The consultation approach is commensurate with the process and changes proposed, but also recognises that the Council supports transparent and accessible consultation processes. As such, a range of engagement activities and promotional tools are identified to encourage participation from a range of people in the community. No matters in the consultation process have options for community feedback, however, the significance of the changes requires Council to inform the community of the changes proposed for the 2020-21 year and to provide an opportunity for the community to give their feedback.
A consultation document outlining the key changes, why the changes are proposed and the effect of those changes (e.g. rates impact) will be developed. This will form the basis of consultation. The consultation document will continue the ‘What’s Changed for Napier’ theme and will utilise the existing ‘Say it Napier’ website and branding.
The document will clearly define the key changes (and impacts) and will provide updates on major matters and projects. There will be links to further information and/or FAQs for people who would like more detail.
There are a number of related communications and engagement processes occurring at the same time or just after this consultation process. The Annual Plan Consultation Document and Engagement Activities provides an opportunity to highlight and link to them. These topics are:
· Water, Our Number One Priority
· 3 Waters Review
· Waste Services
· LTP Pre-consultation engagement – the Wellbeings
· District Plan Review
Access to Consultation Document
The community will be encouraged to access the consultation document and to provide feedback online at our consultation website, Say it Napier. Some hard copies will be available on request, at engagement activities, at the Customer Services Centre and Napier Libraries. These will also be distributed to agencies who work with those with low internet access or capability to complete a submission online.
A one-pager summary brochure will be created and distributed to Napier households with reference to the full consultation document.
Communication & Engagement Tools
Promotion of the consultation will be widespread, with a range of engagement opportunities being available and communication channels utilised (see below). Existing engagement activities and communication channels will be used with some additional targeted activity.
Two Annual Plan community sessions:
· Video and presentation (Councillor led)
· The Panel - Q & A with Portfolio Councillors and Staff
· Mix and mingle – informal opportunity to discuss matters
· Make a submission
· Q & A with the Mayor and Ward Councillors
· Ask us Anything (Mayor and staff) - see communications tools below
Oral submissions, including any funding requests, will be heard and considered during a hearings meeting on 8 June 2020.
Adoption of the Annual plan is set down for 26 June 2020.
Week One – Launch Video (Mayor) – What is an Annual Plan, why are we consulting, what’s changed, what does this mean for you, call to action (meetings / submissions)
Week Two – Post community session (Mayor) – What the community is saying, promote next session
Week Three – Live Chat (Mayor and Staff) – Ask us Anything
Week Four – Call to Action – “Say it Napier” from various community members and staff, finishing with the Mayor – make a submission, “Say it Napier”
Promotion of community sessions
Say it Napier Website – including an individual rates calculator (for the two options for Waste Collection)
Napier City Council Website – Home page banner link to Say it Napier
Remarket – website to facebook – website visitors ‘served up’ facebook posts (investigating)
Advertising (print, radio, digital) – including Proudly Napier, billboards, rates insert, geo targeted online (google display network)
Community Distribution list
Letterbox leaflet (summary one pager)
A project plan will be created to operationalise this plan and will outline detailed tasks and activities.
The capital works programme outlined in the LTP includes a substantial investment in a variety of projects. For the Annual Plan 2020/21 there have been several changes where projects have been re-phased. There have also been requirements that have been identified since the LTP and some projects which are no longer required. The tables below outline key changes made to 2020/21.
Table one: Variation between LTP Y3 and Annual plan 2020/21
Activity names as used in the LTP
Change between LTP Y3 and Annual Plan 2020/21
Community and Visitor Experiences
Changes over $500,000 to a project between LTP year 3 and Annual Plan 2021/22
Details of changes over $500,000 to 2020/21
· Borefield No.1 Rising Main (New project), $5 million from [funding source] for new bore as a requirement to remove manganese from the water supply network.
· New Water Treatment Plan, $2 million has been moved from 2019/20 as there are two treatment plants to be built and the timing of the second plant will be outside of 20/21 and identified in the LTP budgets.
· Borefield No.2 Land purchase, $1.5 million has been moved from new Taradale borefields to fund this project.
· Replacement of Enfield Reservoir – $1.5 million has been moved from 2019/20 as this allocation will be used to start the design and land designation process once land is secured.
· New Bores in Awatoto - $1.5 million – additional funding requirement arisen out of Water Supply Model and Water Supply Masterplan.
· Awatoto Industrial and Philips Road Bore - $800K additional requirement due to growth.
· District Monitoring Project - $560K additional budget approved as part of the 2019/20.
· New Reservoir Western Hills - $500K has been deferred as this funding is part of the Mission development and timing is subject to the progress of the subdivision.
· Ahuriri Masterplan project 11 – Pandora catchment improvements – 800K moved to 21/22 because stormwater modelling is still underway.
· Ahuriri Masterplan project 3 – Improve Direct Outfalls - $800K moved to 21/22 because stormwater modelling is still underway.
· New Pump Station in Bay View – $2.6 million deferred to 21/22 because stormwater modelling and masterplanning needs to occur first.
· Te Awa Structure Plan – new requirement - $1 million additional funding to fund infrastructure to enable development in Te Awa, funded by development contributions.
· Wastewater Treatment Plant Upgrade – new requirement - additional funding of $2 million is required for urgent repairs.
· Wastewater Outfall replacement – additional $1.9 million is required for investigations and design to address the outfall leak issue.
· Sewer pipe renewal budget – moved to waste water outfall repairs budget - 500K
· Pandora Industrial Main – 700K moved from 2019/20 because further investigation is required before work can be specified and programmed.
· Te Awa Structure Plan – 500K new requirement to fund infrastructure to enable development in Te Awa, funded by development contributions.
· Te Awa Structure Plan – new requirement - $800K additional funding to fund infrastructure to enable development in Te Awa, funded by development contributions.
· Te Awa Avenue (Ellison to NBHS) - $1.2 million has been moved from 2019/20, as the project is deferred until NZTA funding is secured.
· Intersection safety improvement projects - $820K moved from 2019/20 as the work on Kennedy Road/Marewa Shops upgrade was unable to be completed this year.
· CBD Development – $4 million deferred until 21/22 and 22/22 for the Marine Parade Piazza and Emerson Street Upgrade to give adequate time to develop a comprehensive masterplan for the CBD and to develop detailed designs for the individual projects.
· Ahuriri Masterplan – Iron Pot Public Access - $4 million has been moved to 20/21. In the 2019/20 Annual Plan design costs remained in 2019/20 with the remainder of the allocation to be moved to 20/21. The draft Inner Harbour Masterplan has developed high level designs for the Iron Pot, and this plan will be brought to Council for consideration and then consultation with the community prior to adoption. There is a high level of risk involved with undertaking a detailed design ahead of this process.
· Inner Harbour Facilities I.A.R (renewals) - $2 million moved to 21/22 while Inner Harbour Masterplan is finalised and asset condition assessments undertaken. The Masterplan will then inform what works and funding allocation is required. Some budget has been retained to replace the pontoons at the Nelson Quay ramp.
· Property Holdings – Property Purchase – new requirement - $1.8 million for property purchase.
Community and Visitor Experiences
· Reserves Activity – Whakarire Ave Rock Revetment – $1.7 million has been moved from 2019/20 as the project was delayed due to further consultation with residents being required. An additional $500K has been added to the budget due to increased cost estimates, so the allocation is $2.2 million.
· Napier Conference Centre Activity – War Memorial build - $1 million moved from 2019/20 to reflect timing of new concept design.
· Kennedy Park Activity – Main Ablution Block - $650K moved from 2019/20 as not all construction will be underway in 2019/20.
· MTG Activity – New Collection Shelving - $500K deferred until 21/22 as the collection shelving is only needed once there is new storage (under the collection storage facility project).
· Library Activity – Napier Library Rebuild - $3.8 million deferred to 21/22 as Council are considering the location of the library as part of the wider project to address the Civic precinct.
· Aquatic Centre Activity – Napier Aquatic Centre Expansion - $19.3 million moved out of 20/21 due to project delay.
· National Aquarium of NZ Activity – Expansion project - $33 million moved out of 20/21 due to project delay.
Overview of changes to Capital Programme
The following charts show overall changes made to 2020/21 and how that impacts across the LTP programme
Chart 1: Comparison of total capital spend between LTP and revised budgets based on changes to 2020/21
Chart 2: Comparison of total capital spend between LTP and revised budgets for Water Supply
Chart 3: Comparison of total capital spend between LTP and revised budgets for Wastewater
Chart 4: Comparison of total capital spend between LTP and revised budgets for Stormwater