and in the future
CONSULTATION FOR NAPIER’S 2015≥2025 LONG TERM PLAN
key consultation projects...
Pandora Pond Water Sports Project Page 7
Multi-use Velodrome Page 8
Napier Cycling Trails Page 12
Destination Playground Page 9
...have your say back page
INTRODUCTION The Mayor’s Perspective
About this document What is it?
What will the next 10 years bring for Napier, and the Hawke’s Bay region?
A Long Term Plan is a detailed document describing what a Council plans to do over the next 10 years and how it is going to pay for it. Under the Local Government Act 2002 (LGA) a Long Term Plan must be prepared and adopted by the Council every three years.
The Napier City Council is in an excellent position as it prepares this Long Term Plan. This Consultation Document seeks your feedback on what we are planning for the next 10 years.
Consulting on the Long Term Plan is nothing new but an amendment to the LGA in August 2014 means all councils must now produce a Consultation Document like this one.
We are constantly striving to strike the right balance between maintaining Council’s core activities, and meeting the needs of the community in an affordable manner. The way I see it, we live in a compact, family-friendly city with great lifestyle opportunities. We just have to look at how well we compare with bigger cities in, for example, the area of housing.
Why do we need it? We want Napier people to be actively involved in our decision-making processes. This Consultation Document presents the key issues and options facing this city over the next 10 years. It is your chance to have your say on what we are proposing to include in our 2015-2025 Long Term Plan. This Document has been prepared on the basis there will be no amalgamation of Hawke’s Bay councils.
Strategic direction
According to those residents who took part in the National Research Bureau survey in June 2014, it appears many of you agree, with a whopping 99% saying they were satisfied with the opportunities Napier has to offer, the services and facilities provided, and the city environment in general.
Our Vision
I would like economic development to be a key focus for this Council, supporting those people who are considering living and working here while ensuring those who have chosen to be based here receive the support they need. It is not our role to pursue private enterprise, but what we can do is maintain a supportive environment that allows private enterprise to flourish. We need to make sure this city is known as a good place to do business.
To provide the facilities and services and the environment, leadership, encouragement and economic opportunity to make Napier the best city in New Zealand in which to live, work, raise a family, and enjoy a safe and satisfying life.
That is why we want to continue supporting Business Hawke’s Bay. The only way to create a more prosperous Napier is by investing in it. If you want to make money, you have to spend money. Supporting our facilities, such as MTG Hawke’s Bay, to run as efficiently as they can, and supporting major events, such as the Elite & U23 Road National Cycling Championships, is also good for Napier and the rest of Hawke’s Bay. We as a Council have some ideas about how we want our future city to be. Now is your chance to tell us what you think.
Mayor Bill Dalton
1
Over the next 10 years we will continue to grow and maintain a vibrant Napier which surpasses expectations and embraces new opportunities for all aspects of the city.
Our Mission
Our Priorities There are four areas that we want to focus on, and this is how we have grouped the projects on page 7-16
• • • •
Community & Facilities Development & Planning Events & Tourism Infrastructure
What’s in this document? Activity
Page
Key Consultation Projects
6
Other Projects
13
Infrastructure Strategy Summary
17
Financial Strategy Summary
21
Want to know more?
24
Auditors Opinion
25
4 Easy Steps to have your say
25
Upcoming Events
26
How to have your say
26
NAPIER’S 2015≥2025 LONG TERM PLAN CONSULTATION
What do we do? Everything we do is sorted into 11 Groups of Activities, represented by the icons below. The 12th icon for Infrastructure Assets is to represent issues that affect more than one Group of Activities. From page 6 onwards, when you see one of these icons next to a project, it shows what activity this project fits within. For more information about our Groups of Activities, visit www.napier.govt.nz keyword #haveyoursayltp2015
Roading
Stormwater
Wastewater
Solid Waste
Planning & Regulatory
Water Supply
City Activities
Democracy & Governance
Where is Napier City Council at? Napier City is in a good position to plan for the future because:
We have sound infrastructure with good and reliable assets capable of providing quality services now and into the future. This means that our pipe work and our roads are in good condition
A strong financial position compared to other cities – no external debt, lower than average rates and a healthy level of cash reserves
Napier is a compact, family-friendly place to live with affordable housing. Napier has fantastic facilities, is rich in history, has a great climate and a wonderful natural environment. This makes it an attractive place for families to live and work. That gives us a head start compared to many other parts of New Zealand. But we do need to make sure we take note of things that may impact us in the future.
• We have relatively slow population growth Recreation
Social & Cultural
• We have a population that is ageing • We have an economy that needs the right support to
be able to grow
Property Assets
Infrastructure Assets
www.napier.govt.nz keyword #haveyoursayltp2015
2
Our Long Term Plan – The Big Picture We think that now is the right time to invest in the future of Napier Never before has there been a greater opportunity to improve prosperity and lifestyle opportunities for all Napier residents. But growth in Napier depends on the creation of jobs. We see our role as enabling positive growth by supporting businesses to flourish, giving tourists a reason to come here and providing the right platform to encourage events to happen in Napier. By increasing the economic base of Napier, everyone wins.
What we need to know from you, our residents and ratepayers, is:
• How do you want us to invest in the growth
and development of Napier?
• What projects would you like us to do?
We need to continue to attract families to Napier both as tourists and as new residents. At the same time, the proportion of our population who are over 65 is growing. We are considering how we can best support our seniors and maintain the valuable contribution they make to our city.
• How fast would you like us to do them? Some projects are new and we specifically want your feedback on them. Where this is the case look out for this icon
Other projects are included for your information and provide you with further opportunity to give feedback on as well. All projects have information on cost, rating impacts and levels of service.
Much of what is proposed in our Long Term Plan is business as usual. However, there are some focus areas where we are proposing increased investment to grow our city. The focus areas and the related projects leading with the key consultation projects (bolded in the list below) that we want your feedback on, are: COMMUNITY and FACILITIES • Pandora Pond Water Sports • • • •
Project ‘Waverider’ wave generating pool Multi-use Velodrome Destination Playground Development of the Park Island Northern Sports Hub and other sports grounds
DEVELOPMENT and PLANNING • • • • •
City wide reserves and linkages Economic Development Solid Waste management City Vision: small city, BIG ideas West Quay, Ahuriri
EVENTS and TOURISM • Events attraction • War Memorial Conference
Centre upgrade • i-SITE upgrade
INFRASTRUCTURE • Council owned building upgrades • Napier Cycling Trails • Stormwater upgrade
Other icons used in this document are:
How much? Describes the estimated cost and timing of the proposal. Depending on the proposal this could be the total project cost, annual cost or cost over the 10-year life of the Long Term Plan.
3
Are there ongoing operational costs? ongoing operational cost (excl depreciation) of the proposal Debt impact of capital expenditure: Describes the impact to debt levels and how it’s funded
(what and how much)
Does it change our level of service? Describes the benefits residents and visitors will experience from the proposal
NAPIER’S 2015≥2025 LONG TERM PLAN CONSULTATION
Proposed Rate Increases
Do you think we have the balance right?
Rates revenue is one of the ways we get income to provide the community with their services.
• Council is proposing on average rate increases across
ELS OF SERVICE V E L
all ratepayers of 2.9% for 2015/16 Year 1 (1% increase = $18 per average residential ratepayer per year)
• Individual
rate increases or decreases will vary depending on individual circumstances
DEBT
property revaluations will have an impact on individual properties but does not impact overall rate revenue
RATES
• 2014
• We propose setting a cap for our second year of the plan at Local Government Cost Index (LGCI) + 2.5%
• We propose all future years of the plan be set at LGCI + 3%
AFFO
• We
could spend more or less and this will impact the rate we grow, the quality of our services and our infrastructure
Our proposed rates are based on Services and Capital Plan
Affordability is a driver for setting the rating policy. We consider this for the UAGC levels (Uniform Annual General Charge) and differential splits
Our Capital Plan includes the key projects outlined in this Consultation Document, which we think we will provide affordability for our community along with our existing services
We think we’ve got the balance right
R D A BILT
Y
This Consultation Document has been designed to get you thinking about our Plan, asks some questions of you, and encourages you to give us some feedback on whether you think we’ve got it right
Tell us what you think
We need your help in deciding how we grow
WALK
But we want to pick up the pace by:
CRAWL
This is where we think we have been to date. Meeting all our business as usual requirements
www.napier.govt.nz keyword #haveyoursayltp2015
• • •
supporting businesses attracting families providing more opportunities for Napier
RUN
Do you want us to do even more? That might put us at a ‘RUN’ pace.
These projects are contained in our consultation document
4
Our Long Term Plan Budget 2015-25 Where do your rates go?
Area of Spend
“Build it” Projects Capital Spend 2015-2025
“Operate it” Expenditure Operating Spend 2015-2025 includes depreciation
130
166 172
12
61
48
47
INFRASTRUCTURE
Solid Waste
Stormwater
27
88
17
53
0
24
Wastewater
Water Supply
OTHER GROUPS OF ACTIVITIES
0
27
13 9
58 54
20 9 12
167 54 159
10 9
82 54 75
12 14 9
100 109 54 75
Property Assets
Social and Cultural
Planning and Regulatory
City Activities
72 9 55 Recreation
151 54 75 134
For every $100 of rates this much goes on this activity
What percentage is coming from Rates
($ million)
($ million)
Roading
Democracy and Governance
“How we pay for operating it”
Rates
Spend per $100 of rates 60%
Other
$25
40%
74%
Rates Other
$5
26%
Rates
80%
Other
$9
20%
78%
Rates
$7
Other
22%
Rates
79%
Other
83%
$5
17%
100%
Rates
100%
$5
Other 0%
Rates
8%
Other
93%
92%
Rates
90%
92%
Other
$18 8%
Rates Other
61%
$6 39%
Rates
93%
95%
$2
7% Other 5%
Rates Other
$-2
78%
$20 22%
positive return to council “Operate it” includes depreciation, internal charges and overheads “How we pay for it” relates to what the split is between rates and other funding for our operating expenditure 5
NAPIER’S 2015≥2025 LONG TERM PLAN CONSULTATION
these are our
KEYconsultation PROJECTS that we want your feedback on
COMMUNITY and FACILITIES •
Pandora Pond Water Sports Project
• • •
‘Waverider’ wave generating pool Multi-use Velodrome Destination Playground
provide facilities for our communities and attract families to Hawke’s Bay
DEVELOPMENT and PLANNING
EVENTS and TOURISM •
Events attraction - will allow us to attract more events to Napier
•
War Memorial Conference Centre upgrade - ensures our asset meets the needs of our customers
INFRASTRUCTURE •
Council owned building upgrades - will enhance community facilities
•
Napier Cycling Trails - extend the cycle network
•
City-wide reserves and linkages - will provide increased recreation opportunities and maintain and enhance existing landscapes
•
Economic Development - will allow us to assist existing businesses and business initiatives such as Business Hawke’s Bay
Our projects are subject to a business case. Our business cases explore issues such as value for money and financial options. Once we’ve heard back from you we can make a start on these business cases. Costs could change and this could alter the decision to go ahead with the project or not
KEYconsultation PROJECTS Pandora Pond Water Sports Project Further development of recreational facilities is part of an overall package of ideas we are looking at to make the Pandora Pond area more user friendly. It ties in with our Napier Aquatics Strategy, which encourages people to be safe in the water and take part in regular physical activity. We want people to have access to good quality safe aquatic facilities. It will also include new car parking areas, new storage, toilet and changing facilities and an expanded and enhanced reserve area. Pandora Pond is the ideal place for families to enjoy a safe, calm beach environment, protected from waves and rips. This calm environment is ideal for people to learn and enjoy a variety of water sports.
Who could use it?
• • • • • • • •
$ 5.1 5.1
Optimist yachting
$
Paddleboarders
MILLION MILLION
Kayakers Windsurfers Multisports - duathlon and triathlon Waka ama Swimmers Canoe polo
How much? The estimated cost between 2015 and 2017 is $5.1m
Are there ongoing operational costs? $3.00 per average ratepayer per year for ongoing costs. There will be additional costs associated with the removal of rubbish, toilet cleaning, and tending to the gardens.
Debt impact of capital expenditure: No impact on debt levels, funded from reserves
Does it change our level of service? Yes, we are extending opportunities for water activities for our community
OPTIONS TO CONSIDER a. b.
As proposed and costs would be as listed Not do it - no additional costs incurred
Do you support our proposal to develop Pandora Pond as a water sports recreational area?
Waverider We are looking at constructing a ‘Waverider’ wave generating pool. This will enable our communities and visitors to experience board riding in a safe and controlled environment. The waverider operates by spraying water under pressure across and up a soft fall ramp to create a permanent flowing wave in various configurations from a single wave to multiple waves providing a thrilling ride for novices and experienced board riders.
These are becoming increasingly popular attractions and can be found in many theme parks, onboard cruise ships, in hotels and council-operated facilities worldwide.
There are options around how we could run this facility including a Public Private Partnership (PPP), Council Controlled Organisation (CCO) or run by Council. We will look at options as part of a detailed business case.
How much? The estimated cost is $2.1m to build in 2020/2021 Debt impact of capital expenditure: No impact on debt levels, funded from reserves. Are there ongoing operational costs? Our indicative business case shows a positive return, so income is expected to exceed expenditure. We have budgeted net costs of $30,000 per year or $1.20 per average ratepayer Does it change our level of service? Yes, we are extending our range of water activities
7
2.1
$
MILLION
OPTIONS TO CONSIDER a. b. c.
As proposed and costs would be as listed Start this project earlier than 2020/2021 Not do it - no additional costs incurred
Do you support our proposal to construct a ‘Waverider’ wave generating pool?
Multi-use Velodrome Cycling in Hawke’s Bay is hugely popular. With its network of pathways, BMX, mountain bike parks, multi-sport facilities and Ramblers - one of the largest road cycling clubs in the country - participation rates on a per capita basis are amongst the highest in New Zealand. To support the continued growth in cycling in a safe and managed way we are proposing to build a velodrome. It will be a fit-for-purpose multi-use all-season facility to cater for school and club use, and a training facility feeding the high performance programme for track cyclists. The only other indoor velodromes in New Zealand are in Cambridge and Invercargill which are not easily accessible for regular training for cyclists in the lower North Island. The velodrome would attract riders from clubs in the Manawatu, Masterton, Kapiti, Gisborne and Wellington which represents up to 500 competitive riders.
Who will use it? Other sporting codes could use the track for training
purposes and the centre area would have a multi-purpose surface able to accommodate a range of sports including basketball, netball, badminton or futsal, solving an existing shortage of hard court space in Napier. The project fits with our aim to attract events and tourism bringing economic benefit to the city as well as catering for our community through the provision of recreational facilities. There is strong support for a regional velodrome from a wide range of organisations for health, recreational and socio-economic reasons. While other locations will be considered, at this stage our preferred location for the velodrome is Park Island, which is already used by a variety of sporting codes including football, rugby, league, hockey, cricket, archery and cross country. It could be sited in Park Island’s northern Sports Hub, which is yet to be developed.
How much? Our contribution will be $5.1m, a further $5m will be targeted for fundraising, with $5m coming from grants
Debt impact of capital expenditure: No impact on debt levels, funded from reserves
What will it cost to build? The velodrome is $ dependent on partnership funding. The total project cost is still being worked out but is estimated to be $15 million. MILLION It is proposed that we would provide around a third of the project cost, but no more than $5.1 million. To fit within a deliverable and affordable capital plan we have allocated $1 million in 2015/16 for feasibility and design work, and $4.1 million in Year 2016/17 for construction. This would be funded from our reserves account. We will not proceed with this project if our contribution is in excess of $5.1m.
5.1*
Partnership funding will be sought from central and local government, corporates, trusts and individuals. Early expressions of interest have been positive and we are confident we can secure the necessary external funding to make the project a reality.
Who will run it? While options are still being assessed a potential
management structure would be through an external cycling club. We would own the velodrome and a club would manage the day-to-day running of the facility, which would include community bike hire, and running programmes and events on top of the club’s weekly programme of training and race meets. Other core tenants would include regional sports clubs requiring administration space. It is likely there would need to be some operational support from us that would lessen over time. An indicative Business Case has been independently prepared and is available to view on our website. A detailed business case is currently being prepared and will assess the ongoing feasibility of the project including usage rates, revenue, operating costs and economic benefits. The detailed business case, as well as your feedback, will help us decide whether to go ahead with this project, so tell us what you think. Are there ongoing operational costs? $3.00 per average ratepayer per year for net ongoing costs (after the first 3 years and we are in the business as usual phase). There is a risk that revenue targets will not be met ($646,000 average across the 10 years). The consequence of not achieving this revenue will result in a higher cost annually to the ratepayer Does it change our level of service? Yes, because it will be a new facility providing sporting opportunities for track cycling and indoor court space for both residents and visitors
OPTIONS TO CONSIDER a. b.
As proposed and costs would be as listed Not do it - no additional costs incurred
Do you support our proposal to build a Multi-use Velodrome?
* Project costs shown in the grey icon relate to Napier City Council’s contribution only
8
KEYconsultation PROJECTS Destination Playground We believe a Destination Playground would be a useful addition to our city. While we have quite a few playgrounds already, Destination Playgrounds are different in that they have a large selection of play equipment to suit a wide range of ages and abilities. They are modular, which means they can be added to and extended over time.
One of the sites we are looking at for such a playground is Anderson Park, as it already has facilities catering for a range of ages, such as a skate park, a children’s play area, and a miniature railway. It is also home to several community clubs.
$
1.7
MILLION
If we decide to build a Destination Playground, after we have considered the business case, work on the initial stage will start in 2019, with the option of two extensions in the future.
How much? $553,000 - funded from council reserves to build in 2019/20, with the option of two further modules, each costing $569,000 and $583,000 in future years
Are there ongoing operational costs? $3.31 per average ratepayer per year (per module) for ongoing costs, to ensure the playground equipment is safe and maintained
Debt impact of capital expenditure: No impact on debt, funded from reserves
Does it change our level of service? Yes, as it means another exciting playground will be available for children
OPTIONS TO CONSIDER a. b.
As proposed and costs would be as listed Not do it - no additional costs incurred
Do you support our proposal to build a Destination Playground in Napier?
9
NAPIER’S 2015≥2025 LONG TERM PLAN CONSULTATION
City-wide reserves and linkages Napier is surrounded by rolling hills and wide green spaces providing a range of recreation facilities for our communities. To enhance and integrate our existing reserves into a city-wide reserve we plan further development of the pathways and connections that link our existing reserves. Some of this funding will provide enhancement of existing reserves through tree plantings.
This will ensure:
•
We continue to create a network of pathways to link north and south to existing reserves
•
We provide recreational opportunities for our community
•
There is balance and integration across the city
$
4.5
MILLION 3 YEARS
How much? The estimated cost between 2015 and 2017 would be $4.5m, $3.1m funded from financial contributions and $1.4m funded from loans
Are there ongoing operational costs? $2.00 per average ratepayer per year for ongoing costs.
Debt impact of capital expenditure: $1.4m funded from loans
Does it change our level of service? Yes, it would improve the city’s walking/cycling options
OPTIONS TO CONSIDER a. b.
As proposed and costs would be as listed Not do it - no additional costs incurred
Do you support our proposal to develop and maintain city wide reserves and linkages?
Economic Development We are keen to build on the region’s positive economic activity since 2010 by supporting existing businesses, major regional events and regional business initiatives such as Business Hawke’s Bay. We are very supportive of the Hawke’s Bay Business Hub in Ahuriri, instigated by Business Hawke’s Bay, and other business-led organisations such as Napier City Business Inc. Our economic development activities have become more pro-active and regionally focused. We are working in collaboration with Hawke’s Bay’s other councils on several initiatives, such as a revised Regional Economic Development Strategy and a Regional Business Attraction Strategy. Once these strategies are completed, we will develop a focused business-attraction marketing programme in order to ensure that Napier is on the national business radar.
We engage in economic development activities in order to meet the current and future needs of the community for $310,000 enhanced local infrastructure and public services. An PER YEAR example of this is the economic impact of a major event such as the All Blacks/Argentina game which was approximately $3 million. Improved public services and local infrastructure are financed by industrial, commercial and residential real estate rates. Economic growth derived from new investment and jobs will help us to provide for future generations. Hawke’s Bay Regional Council is considering regional funding for Business Hawke’s Bay as part of its Long Term Plan. If agreement is reached then $110,000 will be removed from our Long Term Plan.
How much? $310,000 per year for both Economic Development and Business Hawke’s Bay, in addition to our existing budgets Debt impact of capital expenditure: No capital expenditure
OPTIONS TO CONSIDER a. b.
As proposed and costs would be as listed Not do it - no additional costs incurred
Are there ongoing operational costs? $12.30 per average ratepayer per year. Does it change our level of service? Yes, we are having a high level of involvement in bringing jobs and growth to Napier
www.napier.govt.nz keyword #haveyoursayltp2015
Do you support our proposal to fund Economic Development? 10
KEYconsultation PROJECTS Events attraction Napier is a fantastic place to hold events and we think we could be doing more for our residents, businesses and visitors. We are already supporters of homegrown events such as Art Deco, Horse of the Year and the Hawke’s Bay A&P Show. We have also backed major events being held here, such as the All Blacks-Pumas match at McLean Park in September 2014, and have events like the NRL StormDragons game later this year and the Elite & U23 Road National Cycling Championships 2016-18 to look forward to. That is why we would like to take a proactive approach to attracting major events to Hawke’s Bay and propose budgeting $200,000 a year over the next 10 years to make this happen. It means we can have a serious crack at hosting major events such as the Children’s Games 2018. It could lead to better use of our facilities such as the War Memorial Conference Centre, and Kennedy Park, and get people thinking about all
the different ways they could use a place like McLean Park. Spending money to boost the local economy is backed by evidence. Data from other cities shows the effect public sector investment in events has, with $1.3 million funding having the potential to return $9.5 million.
200,000
$
PER YEAR
The All Blacks – Pumas match held here generated a real increase in total economic activity/Gross Domestic Product (GDP) in the region of approximately $3 million, so there are flow-on benefits for the whole community. The more visitors there are, the better returns for businesses such as accommodation providers and retailers, and if visitors have positive experiences while they’re here, they’re more likely to want to come back. For locals, events can bring employment opportunities, create a sense of pride in their community, and gives us all a chance to showcase nationally and internationally what makes Napier a great place.
How much? We want to keep attracting major events to Hawke’s Bay and propose budgeting $200,000 a year over the next 10 years for this purpose. More events mean more use of Council facilities such as the War Memorial Conference Centre, Napier Municipal Theatre, Kennedy Park and McLean Park Debt impact of capital expenditure: No capital expenditure Are there ongoing operational costs? $8 per average ratepayer per year. This cost has been provided for each year of the plan Does it change our level of service? Yes, it has the potential to bring new and exciting events to Napier for everyone to enjoy
OPTIONS TO CONSIDER a. b.
As proposed and costs would be as listed Not do it - no additional costs incurred
Do you support our proposal to attract more events to Napier?
War Memorial Conference Centre upgrade This 4½ Star Qualmark Venue rated facility is due for an upgrade to ensure it meets the expectations of its current customer base. Until we start this refurbishment we propose spending $145,000 on average a year until the upgrade occurs, to keep the facility well maintained. Full refurbishment
and extension plans in 2023-25 would cost an estimated $4.5m at 2015 prices. This would ensure we have an asset that will meet the future needs of our target customers.
4.5
$
MILLION 10 YEARS
How much? Total upgrade spend $4.5m in 2023-25
Are there ongoing operational costs? Increased costs are anticipated to be offset by increased income opportunities. We will prepare a detailed business case to support the upgrade and ongoing costs closer to the project starting
Debt impact of capital expenditure: Funded from rates and will not impact on debt
Does it change our level of service? Yes, a larger exhibition space will better meet the needs of our customers
OPTIONS TO CONSIDER a. b.
As proposed and costs would be as listed Not do it - no additional costs incurred
Do you support our proposal to upgrade the War Memorial Conference Centre? 11
Council owned building upgrades Napier’s uniqueness is tied to the Art Deco re-development that occurred in the decade following the 1931 Hawke’s Bay earthquake.
Square and the Taradale Plunket rooms and $1.2m for the strengthening of the Council Chambers.
We actively promote protection of this heritage. In general building owners and developers are good at protecting our historic building stock, rather than opting to demolish these architectural icons.
We also want to upgrade the Civic Building in Hastings MILLION Street, starting in 2016. It was built in 1968 and hardly any work has been done on it since. We don’t just want to fix the basics as well as any seismic issues though, so we will be putting together a proposal in the near future that should address not only the standards and expectations of the community and customers, but make the building more efficient for staff and everyone to use.
However, because of the age and the building technology of the 1930s these buildings are becoming difficult, if not impossible, to insure fully. We have set aside $1.5m for work associated with seismic strengthening of council owned buildings, including the Memorial Square building in Clive
OPTIONS TO CONSIDER
As proposed and costs would be as listed Not do it - no additional costs incurred Seismic strengthening to Memorial Square, Taradale Plunket Rooms - no Civic Building Do you upgrade. support our Cost: $1.5m, proposal to debt funded
7.3
How much? Total $7.3m, of which $6m relates to loans and $1.3m from reserves.
a. b. c.
upgrade Council owned buildings?
$
•
$1.5m relates to seismic strengthening of the Memorial Square building in Clive Square and the Taradale Plunket rooms
•
$1.2m for the strengthening of the Council Chambers. We believe it is prudent that this is done in conjunction with the proposed upgrade to meet 100% of the current earthquake building standards
•
$4.6m to upgrade the Council Civic building
Debt impact of capital expenditure: $6m loan. Rates would be needed to pay off the interest and principle repayments at $20 per average ratepayer per year Are there ongoing operational costs? Yes, yearly maintenance already included in our existing budgets Does it change our level of service? Yes, the Civic building will become more user friendly for the community, and our buildings in general will be safer with better working spaces for our staff
Napier Cycling Trails Following on from the initial ‘Bike It’ strategy completed for us in 2002, last year we put together a Napier Cycling Strategy. It sets out the region’s priorities for further cycling infrastructure, building on the more than 200km of on-and off-road paths already in existence. We are also part of the Regional Cycling Governance Group, set up in 2014 and which includes representatives from all five Hawke’s Bay councils.
New Zealand Transport Authority (NZTA) is currently investing in cycle projects around the country. If we put in $500,000 per year, NZTA will match it. This investment will occur every year for six years. By the time this stops we will have a fantastic asset for our community and visitors alike.
1.6*
$
MILLION 6 YEARS
How much? $6.1 million total of which, $1.6m is funded by Napier ratepayers, $3m funded from NZTA and $1.5m from community grants. If the funding is not received from NZTA or grants we will still proceed with this project over a longer period of 18 years and this will be fully funded from our reserves
Are there ongoing operational costs? $6 per average ratepayer once all 6 years are complete
Debt impact of capital expenditure: No impact on debt, funded from reserves
Does it change our level of service? Yes, we would have a larger cycle network for our community
OPTIONS TO CONSIDER a. b.
As proposed and costs would be as listed Not do it - no additional costs incurred
Do you support our proposal for further growth of the Napier Cycling Trails? * Project costs shown in the grey icon relate to Napier City Council’s contribution only 12
this is an update on our
OTHER PROJECTS
These are some of the other projects we consider part of our city’s development and day-today business. We welcome your feedback
DEVELOPMENT and PLANNING •
Solid Waste management - addresses our needs and how we will deal with waste in the future
•
City Vision: small city, BIG ideas allow us to provide a future framework for our city
•
West Quay, Ahuriri - how we can make Ahuriri more user-friendly
COMMUNITY and FACILITIES •
Development of Park Island Northern Sports Hub and other sports grounds - enhance the city’s open spaces and the recreation network
EVENTS and TOURISM •
i-SITE upgrade - allows us to future proof the building and making it user-friendly for our visitors
DEVELOPMENT and PLANNING Our desire for Napier is to build on what is already an attractive city and make it the sort of place friends and family are happy to visit, where tourists feel welcome, and where businesses want to be. To support and encourage job creation we are, with other Hawke’s Bay councils, working on a Regional Business Attraction Strategy and Regional Economic Development Strategy. Investing in growth and development while maintaining essential services is our aim. Are we doing the right thing with our waste management? Do we need to do more work on housing development? Is our vision for the central city and Ahuriri the same as yours? Tell us what you think.
Solid Waste management Waste that isn’t recycled or re-used is currently sent to Omarunui Landfill, which is jointly owned by the Napier City and Hastings District Councils. In about 10 years’ time the area being used right now will be full and the two councils need to decide whether to further develop the Landfill at an estimated additional $35 million ($50 million total spent over the next 35 years), or look at alternative waste disposal technologies that may have environmental and economic advantages over the Landfill. Our share of the total spend on Omarunui Landfill is 36.32%. The Councils have started a project (the Waste Futures study) to investigate alternatives to the way solid waste is currently managed, encompassing the entire waste operation How Much? We are contributing $150,000 to the Waste Futures study to identify a preferred option for future waste management and disposal. The Capital Plan contains provision for Napier’s 36.32% share of the initial $15 million (over the next 10 years) it will cost to develop Valley C in the Landfill to a point where it can accept waste. If the preferred option is to continue landfilling then this will stand and we will in the future add more funding for Napier’s 36.32% portion of the estimated additional $35 million needed over Valley C’s 35 year life. This will mean that Napier will invest an estimated $18.2 million over the next 35 years. However, if another option is preferred then community consultation will be carried out to see if you agree with replacing the funding for Valley C with funding for the preferred option Does this affect rates? The Landfill is funded through user charges so changes to landfill charges do not directly affect rates. However, some services that are rates funded, such as kerbside refuse removal, includes the cost of charges to the Landfill. This means that any change to landfill charges (or any other method to dispose of solid waste) will indirectly affect rates
including collection methods, processing and disposal. This project will be carried out in consultation with stakeholders and a shortlist of options is expected to be developed during the second half of this year. Redevelopment of the recycling centre at Redclyffe Transfer Station is on hold pending the outcome of the Waste Futures study, to ensure that any redevelopment fits in with the longer-term direction of solid waste management in Hawke’s Bay.
Are there ongoing operational costs? Ongoing costs form a large component of the total cost of waste management. These ongoing costs will be carefully considered as part of the Waste Futures study to make sure that an informed decision regarding the future management of solid waste is taken
Will it change the Council’s level of service? We are working through the options and will be talking with key stakeholders to understand the best way forward. We expect to be able to ask the community for your views as part of this options analysis process. The community will be fully informed and able to express views and preferences once investigations have determined the best short list of options for our community to consider. This is likely before the end of the year
CITY VISION: small city, BIG ideas This project provides a framework for the city centre and Ahuriri looking at heritage, design, recreational spaces, parking, transport and how to make the urban area work best for businesses and the community. One of the key issues to be considered during this process is the route to Napier Port, and how this can be enhanced and protected while improving
the integration of the Marine Parade with the city centre. It also includes ‘urban interventions’, creating fun and experimental experiences in selected areas throughout the city.
100,000
$
PER YEAR
How much? $100,000 each year for 5 years Debt impact of capital expenditure: No capital expenditure Are there ongoing operational costs? $3.99 per average ratepayer per year to implement the vision Does it change our level of service? Yes, we are improving the look and feel of Napier
14
OTHER PROJECTS West Quay, Ahuriri What can we do to make Ahuriri more user-friendly? We are considering ways to improve the facilities we provide to make it easier for people to move around, whether on foot, on a bike or in a car.
15
Among the options we are considering is further development of car parking in West Quay, including creating parking spaces behind Ahuriri’s restaurant and bar area and converting the road running through West Quay to a one way system.
2.7
$
MILLION 10 YEARS
How much? The estimated cost between 2015 and 2018 is $2.7m.
Are there ongoing operational costs? $6.83 per average ratepayer, for traffic flow improvements funded from rates (1 year only). We have provided 40 cents per average ratepayer per year for maintaining the car parks, roading and renewals
Debt impact of capital expenditure: No impact on debt, funded from our HB Harbour Board Endowment Land Sale Account
Does it change our level of service? Yes this will increase amenities and improve safety
NAPIER’S 2015≥2025 LONG TERM PLAN CONSULTATION
COMMUNITY and FACILITIES One way you can tell how well a Council is serving its people is by taking a look at the facilities it provides for its residents. Maintaining the community facilities Napier has, such as its swimming pools, libraries and parks, is important to this Council. That is why we are asking you to consider whether we have got it right. One of our major projects that we approved in 2013 was further development of Park Island, and when this development would take place. We welcome your feedback.
Development of the Park Island Northern Sports Hub & other sports grounds The Park Island “Sportsville” Master Plan was previously consulted on during the 2012 Long Term Plan and in 2015/16 we will be continuing development as well as enhancing other sports grounds. During the next 3 years we will be constructing the Northern Sports Hub which includes a third artificial hockey turf, working with the Napier Pirates Rugby and Sports Club on a possible re-location to Park Island, and working with the Hawke’s Bay Regional Council to fix Taipo Stream in an effort to manage stormwater run-off better.
It is part of our plan to significantly expand and enhance the city’s open spaces, recreation network and outdoor sports facilities over the next 30 years. The Sportsville model is aimed at enabling collaboration by different codes in their use of facilities. It will also provide flexibility in allowing for changing sport and recreation patterns.
$
3.3
MILLION 3YEARS
How much? The estimated cost for Park Island’s expansion and development between 2015 and 2017 is $3.3m Debt impact of capital expenditure: A loan of $1.9m would be taken out in the 2016/17 financial year, with rates going towards paying off the loan. The rest of the funding would come from the financial contributions account Are there ongoing operational costs? $3.20 per average ratepayer per year. We would need to maintain the additional sportsfields, increase in rubbish collection and maintain the hiring out of the fields for events Does it change our level of service? Yes, we would be offering extra sporting facilities for the Napier community
EVENTS and TOURISM Tourism is one of the foundation stones of our city. We believe we need to continue to support and grow this part of Napier the best we can. By focusing on the right areas, we can be efficient and effective in how we meet the needs of our community, and the expectations of our visitors. The quality of the facilities available to both residents and visitors is also a factor in economic development and sustainability. It also ties in with the support and encouragement of businesses in maintaining existing jobs, and creating new ones. We think we should be funding the attraction of large scale events, and the upgrade of our facilities such as i-SITE. Do you agree? Tell us what you think.
i-SITE upgrade We propose spending $740,000 between 2017-2019 on alterations to the i-SITE building to make it water-tight, address health and safety issues for staff and to reduce offsite storage requirements. This would be funded by rates.
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We also propose spending $50,000 a year over 10 years towards equipment, furniture and fittings replacement. This amount should also allow us to cover any repainting, recarpeting and redisplaying of merchandise. This would also be funded by rates.
$
740,000 3 YEARS
16
INFRASTRUCTURE strategy SUMMARY Our major infrastructure issues for the next 30 years: The word infrastructure covers much of what we regard as essential services to our residents. We have to make sure that what lies beneath our – and your feet - is of the highest possible standard, or all the exciting things we want to do for this city, and the facilities we provide for our community will not work half as well. Our Infrastructure Strategy outlines our long term approach to managing the city's Water Supply, Sewerage, Stormwater, Roads and Footpaths which have a combined replacement value of $910 million, and other assets. It sets out the major issues for these assets that we will most likely have to deal with over the next 30 years. An Asset Management Lifecycle review was carried out by Waugh Consultants in February 2014. The report found:
• No observable backlog of renewals • Assets can provide current service levels • Napier has adequate funding provision for current renewal needs The authors of the report in their summary findings also made the following comments: “The picture the authors have built up during the analysis completed in this report is that Napier City assets are professionally managed in accordance with appropriate practice and that Napier is very well positioned to meet any future infrastructure related growth or renewal challenges.” Required levels of renewals for the Wastewater, Stormwater and Water Supply systems are expected to increase substantially between 2030 and 2050. Maintenance records show that the number of pipe blockages in the sewer system is trending downwards which is an indicator that the system is performing well. On the other hand, about 40km of the earthenware pipe has already lasted longer than was expected and a Closed Circuit TV (CCTV) inspection has shown that up to 30% of those mains may need replacement. This work may cost up to $6 million to $7 million. The sewer
renewal reserve currently has a balance of $6.1 million and funding for replacement of the earthenware pipes will be from this reserve and from the sewer mains renewal budget. The exact funding mix will be a function of the timeframe over which the earthenware pipes need to be replaced. Detailed inspections of earthenware pipe will be carried out over the next 12 to 18 months to determine the timeframe over which the work needs to be carried out. If the work needed to be carried out over a short timeframe (within 5 years) it could be funded from the sewer renewal reserve. Napier roading management is currently meeting service levels and national requirements, and has been evaluated as efficient and cost effective when compared to its peer group. Napier roading provides ‘value for money’ through using the appropriate technology for the given traffic volume. Napier has slightly rougher roads than other urban networks mostly because of the high roughness on the Napier Hill. We are acutely aware that the provision of essential infrastructure, which meets the needs of our citizens, is core to the economic, social and cultural needs of the city. Provision and maintenance of infrastructure is a critical deliverable of all local councils and this requirement is laid out in the amended purposes of the Local Government Act. Since our last Long Term Plan we have continued to ensure that we understand the current and future needs of our infrastructure. Every three years we develop and update Asset Management Plans. These are put together by the Activity Managers who are engineers, in conjunction with industry experts. These provide a comprehensive picture of our Infrastructure across all activities. We also provide a peer review process across these Activity Management Plans to provide additional assurance and confidence regarding the Plans. The Plans then form the basis for the work that will be undertaken, subject to funding constraints. With each three-yearly review, more knowledge is obtained regarding the assets, its condition and its remaining useful life.
We take a whole-of-life view of our assets Most of our modelling is for 80 years - that tends to be a typical lifecycle for infrastructure. Designing the Solution Identifying the Need
A
E
A LU E)
Decommission, Redeployment or Disposal of Assets
F E T LI
DECOMMISSION
Procuring the Assets
SS
NEW ASSET
(V
As part of our review process in the last three years we now have evidence our infrastructure will last longer than we initially thought. We have updated our depreciation rates, particularly in roading to reflect this extended change of remaining life.
CYCLE
Maintaining and Monitoring Performance
Modifying or Upgrade the Assets
17
NAPIER’S 2015≥2025 LONG TERM PLAN CONSULTATION
Ageing Assets The Waugh report concluded that Napier’s infrastructure assets are being managed appropriately to continue to deliver current service levels and there is no observable backlog of renewals. Adequate funding provision has already been made for current renewal needs but additional funding will be needed in future decades. This is because a large number of pipelines were constructed in the 1960s and 1970s and they will have to be replaced from about 2020-30 through 2060-80. The roading network is in a good condition and renewals are being carried out at a rate that approaches depreciation, but renewal expenditure for the piped assets (water, sewer and stormwater) are still building up to a
Roads and Transportation projected renewals / depreciation
peak because the pipes are relatively young. The level of renewals that is estimated to be required over the coming 30 years is shown on the graphs below. The increases in the required levels of renewals over the next 30 years for piped assets can be clearly seen. For the stormwater asset the provision for catchment upgrades is also shown to demonstrate that we have capacity to increase the renewal provision for stormwater mains by slowing down the rate at which the stormwater system is being upgraded. The position is reviewed during each Asset Management Plan update and adjustments made as required.
Water Supply Mains projected renewals / depreciation 3,500
18,000,000
3,000
14,000,000
Capital
12,000,000
Asset Management
2,500 2,000
Amenity
10,000,000
Cleaning
8,000,000 Street Lights
6,000,000
Bridge and Struct
4,000,000
Drains
2,000,000
Paths
$000s (inflated)
Budget $
16,000,000
1,500 1,000 500 0
Carriageways 2040-41 -2044-45
2035-36 -2039-40
2030-31 -2034-35
2024-25
2025-26 -2029-30
2023-24
2022-23
2021-22
2020-21
2019-20
2018-19
2017-18
2016-17
2015-16
0
Depreciation
Renewals
Stormwater mains projected renewals / upgrades / depreciation
Depreciation
Wastewater mains projected renewals / depreciation
6000
7000 5000
6000 5000 $000s (inflated)
3000
2000
4000 3000 2000 1000 0 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32 2032-33 2033-34 2034-35 2035-36 2036-37 2037-38 2038-39 2039-40 2040-41 2041-42 2042-43 2043-44 2044-45
1000
2044-45
2043-44
2042-43
2041-42
2040-41
2039-40
2038-39
2037-38
2036-37
2035-36
66,000
64,000
62,000 NCC Adopted Population Projection 60,000 Statistics NZ High Projection 58,000
Statistics NZ Medium Projection
56,000
Statistics NZ Low Projection
54,000
2045
2042
2039
2036
2033
2030
2027
2024
2021
50,000
2018
52,000
2015
We have adopted a medium-high growth scenario for all long term planning, as also adopted under HPUDS, with projections refined to a census area unit level.
68,000
2012
As part of a partnership between Hastings District Council and Hawke’s Bay Regional Council, Napier City Council engaged in producing a regionally focused development strategy in 2010. The resulting document, known as the Heretaunga Plains Urban Development Strategy (HPUDS), assists in planning for urban growth during the period 2015-2045. During the interim period to 2015, we had forecasted growth, through previous detailed urban growth strategies within the territorial boundaries.
Population Projection - Napier City
2009
Growth
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Depreciation
Depreciation
2006
2034-35
2033-34
2032-33
2031-32
2030-31
2029-30
2028-29
2027-28
2026-27
2024-25
2025-26
Upgrade Catchments Fund
Renewals
Total Population
Renewals
2023-24
2022-23
2021-22
2020-21
2019-20
2018-19
2017-18
2016-17
0 2015-16
$000s (inflated)
4000
18
INFRASTRUCTURE strategy SUMMARY The projects listed that have been identified as providing capacity for the demand for services that will be created by growth and continue to provide service to existing ratepayers are as follows: 2015-25
2036-45
Cycle Strategy
$6.39m
Ahuriri
Roading and parking projects in the Ahuriri area to improve capacity, safety and amenity
$3.0m
Capital projects and transportation projects
New roads, carriageway widening and intersection upgrades to provide capacity for growth in traffic volumes and for safety improvements
$65.7m
$58.1m
$67.0m
Asset renewals
Renewal of roads and footpaths to ensure that these continue to deliver the required level of service
$66.8m
$93.8m
$107.9m
Additional storage reservoir on existing site in Taradale
To provide storage for growth
Additional storage reservoir on a new site in the Western Hills area
To provide storage for further development
Asset renewals
Renewal of pipes, pump stations and water meters to ensure that the asset continues to deliver the required level of service
Wastewater outfall replacement
Replacement of the existing marine outfall pipe at Awatoto
Asset renewals
Renewal of pipes excluding the outfall, pump stations and the treatment plant to ensure that the asset continues to deliver the required level of service
$19.3m
$29.3m
$43.4m
Catchment upgrades
Upgrading of stormwater reticulations to meet modern design standards, and to provide for growth and climate change. This is an ongoing programme that started in the early 1990s
$14.7m
$18.6m
$22.0m
Asset renewals
Renewal of pipes to ensure that the asset continues to deliver the required level of service
$5.6m
$8.0m
$11.9m
Infrastructure Capital Expenditure by type The graph to the right outlines our capital spend for the ten year plan on Levels of Service, Growth and Renewals. This spend impacts on rates, as well as loans. In some cases our capital spend is funded externally e.g. New Zealand Transport Authority. The following graph depicts total infrastructure capital spend on renewals, growth and increased levels of service. The graph totals each year do not include budgets that were consulted on in prior years, and have been deferred from the original timing, such as the Whakarire Groyne project that is still undergoing consultation.
$2.8m
$11.6m
$9.2m
$16.9m
35,000 30,000 25,000 20,000 15,000 10,000 5,000 0
Level of Services
$26.9m
$30.4m
Infrastucture Capital Spend by Type
Renewals
19
2026-35
Council has applied for funding for the implementation of the Cycle Strategy through the NZTA Cycle funding programme. This project will be carried out in conjunction with other road construction projects to get as much value as possible
$000 inflated
Stormwater
Sewerage
Water supply
Roading
Our Proposed Key Projects
Growth
Depreciation
In addition to the topics discussed on the previous pages, infrastructure has to be managed to deal with a changing environment and other significant issues.
Changing Environment Climate change
Increasing environmental standards
Napier is low lying land and flat so it is sensitive to changes in sea level. The changes in sea level that are predicted over the next 30 years are unlikely to affect Napier but long term improvements to the drainage system will be required. This will involve construction of new stormwater pump stations because some of the current gravity systems will no longer be able to function, relocating at least one pump station and possible constructing new stopbanks. These projects fall beyond the Long Term Plan’s 30 year horizon.
Environmental standards are becoming more stringent over time and this is expected to present new challenges and most likely increased costs. These issues are especially evident in stormwater and wastewater discharges and managing runoff associated with construction activities.
We are thinking of the future. Our design standards already incorporate increased rainfall intensities associated with climate change through to 2090.
Other significant issues Wastewater marine outfall pipe: The marine outfall pipe that takes
treated sewerage from the recently opened Biological Trickling Filter (BTF) plant into the sea is nearing the end of its useful life. The pipe at the beach end of the outfall has severely corroded, a fibreglass repair on the pipeline itself that was made during its installation makes the pipe vulnerable to damage during storms and the diffuser assembly at the end of the pipeline is sinking into the seabed, causing more and more of the discharge ports to block. A detailed study will be carried out during the next three years to more accurately determine when the outfall should be replaced and how much it will cost. We intend to replace the existing outfall with a larger diameter pipeline to increase our ability to discharge Napier’s wastewater. It is estimated that the outfall will cost between $18 million and $30 million (uninflated) to replace. Provision in the amount of $517,000 per year is being made for the replacement of the outfall. This is a charge against the wastewater activities’ operating budget and funds is accumulated in a reserve. The reserve is projected to have $8.7m in it by 2018/19. The balance of the outfall renewal project will be funded from rates funded loans.
Solid waste: The regional landfill at Omarunui consists of several valleys
and each valley has to be developed independently. Currently Valley D is being filled and is expected to be full by 2025. Valley C will be next and the cost to develop it to a point where it can accept refuse is expected to be $15 million, with a further $1m annual development costs (excluding operating costs) over its 35 year life. Napier City Council’s share of costs will be in align with its 36.32% shareholding. Napier City and Hastings District Councils jointly own the landfill and have started a joint project to assess a range of waste disposal options. Options will be shortlisted based on their environmental effects, cost, robustness and proven track record during the second half of 2015. This is a major issue and stakeholders will be consulted throughout the process.
Stormwater upgrade: The stormwater reticulation capacity is being
upgraded to be able to cope with storms with a return frequency of 1 in 10 years. The Plan provides for increased funding for this work. Projects that are planned as part of this programme include:
• the Taradale stormwater upgrade which involves the installation of
more than 1.2kms of new stormwater piping at an estimated cost of $5m of which $3m is provided under this Long Term Plan.
• Upgrading of the CBD stormwater system at a total cost of $5m. McLean Park: We are currently undertaking a review of McLean Park
to ensure we continue to make the most of this asset both now and in www.napier.govt.nz keyword #haveyoursayltp2015
the future. This review will provide more information. We may need to consider new stands to meet seating requirements for New Zealand Rugby events.
Roading: A good road transport network is of critical importance to the city and it is what we spend the most money on. Central government helps pay for the cost of Council owned roads through the NZTA subsidy. The subsidy is sizeable and is an important part of the funding mix for roads. The NZTA provides funding to all Councils and therefore has a very good overview of the condition of roads in general. Through the one network road classification system NZTA are currently suggesting there may be a need to reduce the standards of which Napier's roads are currently maintained. The reason for the suggestion is that Napier's roads are scoring above average on the three Key Performance Indicators (KPIs) that are tracked by NZTA. The three KPIs are Smooth Travel Exposure, Surface Condition Index and Pavement Integrity Index. We have good evidence, reviewed in April 2014 by an internationally renowned road expert, that Napier's roads are maintained at a standard that results in the lowest overall network operation cost. The total amount that is spent on renewals and maintenance is at an optimal point. If we spent a different amount on renewals the resultant change in maintenance costs would be greater, and the total cost would increase. The issue is this: If NZTA decided to reduce their subsidy, Napier ratepayers would be faced with a choice – either fund the lost subsidy ourselves, or reduce the amount of renewals expenditure and increase the amount of maintenance expenditure. Under both scenarios ratepayers are likely to end up paying more. Our position is that the status quo should be maintained and we are in continued discussions with NZTA in this regard.
Te Awa Structure Plan Area: A significant amount of infrastructure
is required to provide roads, stormwater, water supply and wastewater services in the Te Awa structure plan area. The land is held in multiple ownerships and to facilitate development Council has agreed to provide the infrastructure that will be shared by developments within the area and to recover the costs through financial contributions. At present the area is developed to a rural standard and upfront investment is needed for urban development. The Te Awa structure plan shows development to occur in six stages, to limit Council’s financial exposure. Stages 1 and 2 can proceed now and Council will provide the necessary infrastructure when landowners proceed with development. A $6.5 million storm water pump station is required when Stage 3 proceeds and the structure plan therefore requires Stages 1 and 2 to be developed to 65% in order for Council to be obliged to provide infrastructure for Stage 3. Council’s financial exposure will be at a maximum when it has provided infrastructure for Stage 3, estimated at $13.9 million. 20
FINANCIAL strategy SUMMARY Our financial strategy describes how we plan to pay for the services we provide to our communities in a way that is financially affordable and sustainable both now and into the future. We must plan our expenditure in a way that is sustainable to ensure that Napier will have the capacity and resources available to deliver affordable services to our residents and ratepayers in the long term. Napier has significant resources that have deliberately accumulated from contributions from the people of Napier and therefore should be used by them. These resources include:
One of the significant impacts of affordability is in 2019/20 when internal debt raised 15 years ago will be fully repaid. With a lower level of new debt being required there is the ability to reduce the impact of rate increases over the 10 year period of this Long Term Plan. This provides us with further capacity and options after that date.
Whole of Council Capital Expenditure by Type 60,000
50,000
• cash and investments accumulated for the replacement of existing assets or acquisition of new assets,
accumulated surpluses
40,000
and
$000 inflated
• leasehold land and reserves from annual surplus • land available for sale (Parklands residential development)
30,000
20,000
These reserves have provided an opportunity for the Napier ratepayer to fund the following proposed projects in our Long Term Plan, such as:
• Pandora Pond Water Sports Project • Multi-use Velodrome • Economic Development
10,000
-
Renewals
What’s happening with our Investments? These resources (investments) generate income for Council, and as these investments are utilised to acquire additional assets, the income from these current resources, will progressively decline until 2021. This will require Council over a period of time to increase rates to ensure the same levels of service are being achieved. Council has considered carefully the needs of the ratepayer in terms of the services being required and the long-term affordability.
$000s (inflated)
Growth
Over the next 10 years we intend to:
• •
Maintain including replacing (or renewing) the infrastructure
•
Continue to invest in visitor and tourist related activities to enhance the economic performance of Napier, including funding to bring events to Napier and stimulate the local economy
90,000 80,000
Level of Service
The above graph depicts Whole-of-Council capital spend on renewals, growth and increased levels of service. The graph totals each year do not include budgets that were consulted on in prior years, and have been deferred from the original timing, such as the Whakarire Groyne project that is still undergoing consultation.
Cash & Investment ($,000)
Undertake key growth and facility and amenity projects to enhance Napier
This will result in the following:
70,000 60,000
•
The overall rates increases will be limited to inflation based on the local government cost index (LGCI) plus up to 3.0% each year. The actual impacts on individual properties might be considerably more than this, depending on the targeted rates for sewerage and water
• •
Total rates will be approximately 53% of our total income1
50,000 40,000 30,000 20,000 10,000 -
Cash and investments
Total Reserve funds
7.0% 6.0%
a. Capital works programme (summarised in the graph below) Significant capital expenditure planned within the first three years will be funded from accumulated reserves. These are currently held as cash reserves and will therefore reduce the level of funds invested.
5.0%
b. Internal borrowing Council manages debt on a net portfolio basis, and borrows externally only when it is commercially prudent. By borrowing internally, utilising its own cash reserves, Council creates efficiencies by eliminating the external borrowing margin.
2.0%
Planned borrowing for capital works during the first four years will be raised internally and therefore also reduces the level of cash funds available for investment. Beyond 2020/21 the level of borrowing and capital expenditure is lower and less fluctuating. This results in a steady increase in reserve and Investment funds during the last four years of the plan.
Net rate funded debt per capita will not exceed $1500. This was previously $1000. For most of the 10 years of this Long Term Plan debt will be substantially below this level.
Percentage Rates Increases
The movement in Cash and Investment levels depicted above is influenced by two factors:
21
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
4.0% 3.0%
1.0% 0.0% 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25
LCGI
LTP Limits on Rate Increase
Proposed rates increase
Our overall approach to funding is that we fund approximately 50% (with a range over the 10 years of 48% to 52%) of operating costs from rates with 41% (with a range over the 10 years of 39% to 44%) from other sources including user fees and charges and subsidies (from Government agencies such as NZTA and MOH). 1
Total income is defined as total revenue less vested (gifted) assets, as this transaction is non cash
To ensure that the users of the City’s assets pay their fair share;
• we fund depreciation and this funding is used to pay for renewals and;
• use our existing financial resources that have been accumulated over a period of time to fund relevant capital expenditure and;
What is happening to Rates? Examples of Proposed Rates for 2015/16 Examples of the impact of rating proposals for 2015/16 are shown in the following table: LAND VALUE
• when it is not possible we use borrowing to spread the cost of new capital expenditure over a longer period, thereby recognizing intergenerational equity
What is happening with our Debt? We have the following limits2 on debt PARAMETER
MEASURE
PROPOSED LIMIT
Cost of servicing Rate Funding Borrowing
Debt servicing as a percentage of annual rate income
<16%
Liquidity
Liquidity (term debt plus committed bank facilities and liquid financial investments) to existing external debt
>110%
Total (Net) External Debt
Net external debt as a percentage of total income
<100%
Debt per Capita
Net rate funded debt per head of population
Total Interest Expense
Net interest expense as a percentage of total income
CHANGE %
CITY RESIDENTIAL Average
154,700
1,753
1,821
3.8%
Median
139,000
1,665
1,727
3.7%
Quartile 1
113,000
1,518
1,574
3.7%
Quartile 3
180,000
1,900
1,970
3.7%
CBD Average
284,000
6,783
6,585
-2.9%
Industrial Average
405,000
7,372
7,308
-0.9%
296,000
2,577
2,657
3.1%
339,000
1,593
1,681
5.5%
Average - No Sewerage Rate
186,000
1,219
1,340
9.9%
Average - With Sewerage Rate
186,000
1,538
1,675
8.9%
COMMERCIAL/INDUSTRIAL
Average
< $1,500
RURAL Average BAY VIEW
<12%
The three-yearly revaluation of the city for rating purposes was undertaken in 2014 and those valuations apply as the base for setting the general rate for 2015/16. The rating examples should be read having regard for the following matters:
External Debt to Total Revenue 120% 100% 80% 60%
• •
Council’s total rates revenue for 2015/16 will increase by 3.2%
•
as property values directly affect the level of general rates, changes above and below average movements will be inevitable following the revaluation.
•
a change in the allocation of general rates between residential and nonresidential properties has altered rating differentials. The change, being phased in over two years, has no effect on Council’s total rating level, but does reduce the level of general rates allocated to non-residential properties, while increasing rates for the residential category.
•
Increases for Rural and Bay View properties are higher than Council’s overall rates increase. This results from an assessed benefit review of general rate funded services provided to these properties.
40% 20%
2014/152 015/16 2016/172 017/18 2018/192 019/20 2020/212 021/22 2022/232 023/24 2024/25 Limit - External Debt to revenue
RATES 2015/16
MISCELLANEOUS PROPERTIES
During the period of the Long Term Plan, our internal and external debt will remain significantly within the above limits. The following graph depicts the comparison between planned external debt in the future and planned total revenue.
0%
RATES 2014/15
Forecast - External Debt to revenue
Note - external debt peaks between 2018/19 - 2022/23 at $4m before returning to zero.
the impact on existing ratepayers is an increase of 2.9% after allowing for growth in the rating base.
Average Residential Rates
Cost of Servicing Rate Funded Debt 18%
1,705 1,687
Napier
16%
1,797 1,790
Invercargill
14%
1,895 1,828
Hamilton
12%
1,975 1,848
Whangarei
10%
1,942 1,878
Hastings
8%
1,997 1,967
Rotorua
6%
2,129 2,031
Timaru
2%
2,167 2,041
Wanganui
0% 2014/15 2015/16 2016/17 2017/18 2018/192 019/20 2020/21 2021/22 2022/23 2023/24 2024/25 Limit - Cost of Debt servcing to Rates Revenue
Forecast - Cost of Debt servicing to Rates Revenue
When Council sets its rates the rates are calculated to cover both the principal and interest costs of all debt; both internal and external. The above graph depicts the cost of serving the rate funded debt only as a percentage of total rates revenue each year. 2
2,086 2,012
Palmerston North
4%
2,285 2,236
Tauranga 1,998 1,932
AVERAGE
2013/14
2012/13
Napier City continues to be one of the lowest average residential rates in similar sized regions.
Detailed in Council’s Liability Management Policy
22
FINANCIAL strategy SUMMARY Impact of the Local Government Commission’s Report on Debt and Infrastructure In late February, the Local Government Commission (LGC) provided information for the public of Hawke’s Bay regarding the financial position for both debt and infrastructure across the region. The infrastructure data was based on the 2012-22 LTP and council’s current financial positions as at 30 June 2014 such as levels of net debt. The LGC estimated that we would need to spend an additional $45 million to reach equitable position with the other councils within the region. We have based our Financial Strategy on the replacement of assets based on our Assets Management Plans to meet our agreed levels of service with the community and do not believe that the level of replacement of assets as estimated by the LGC is necessary or required to meet the levels of service required by the community. In assessing this position the LGC assumed that the roading and water assets would need to be replaced to 72% of the full replacement value. The LGC, in its assessment of the assets that needed to be replaced, included a number of assets that would not be replaced by any council, and the percentage of those as a percentage of total assets significantly varied between the councils. These assets include road formation and stop banks.
If these impacts were considered by the LGC, then the financial position would significantly differ. Our strong financial position, both in cash and investments (not identified by the LGC as a source of income) ensures that we have the ability to meet our infrastructure requirements as required. We have other revenue sources such as Parklands leasehold land and commercial leasehold land investments. Parklands will produce revenue up until 2023, and in addition the commercial leasehold land investments could be sold if required to create additional cash should a need arise. The report noted that an amalgamated Council until 2021 would be required to use the financial resources being cash investments and reserves to pay for infrastructure replacement, therefore investments would not be ring fenced. This proposal would divert funds that were accumulated for community related projects to infrastructure projects. If this proposal is accepted by the community then the people of Napier would not see the community projects proceed because the funds that were accumulated for these purposes will be used for other infrastructure including roading, wastewater, water supply and stormwater assets. This would be of concern to Napier ratepayers and residents.
The Napier Council and an independent expert disagree with the assessment undertaken by the LGC. By using the same methodology as the LGC but removing the assets that do not need to be replaced, the independent expert estimates that we will have a surplus of $48 million, compared with the $45 million deficit estimated by the LGC. Furthermore the Commission did not consider the impacts of the following when undertaking its assessment:
• That
NZTA will fund a percentage of all Roading replacements. This percentage varies from a low of 51% for Napier to a high of 68% (increasing to 75% in three years’ time) for Wairoa Council.
• That
Napier has significant other income (11% more than other councils per annum) from non-rate funding.
• The programme of internal loan repayments that would see Napier’s internal loans decreasing significantly before 2021, compared with the debt repayments that have been forecasted by other councils.
23
NAPIER’S 2015≥2025 LONG TERM PLAN CONSULTATION
WANT to know MORE? We have other documents available online that contain further details of what we are proposing to adopt in the Long Term Plan or that support our ideas. We would welcome your feedback on these two policies in particular the Development and Financial Contribution Policy and Revenue and Financing Policy. Our other financial policies have been reviewed and are included in the proposed Long Term Plan for information purposes. To view, go to www.napier.govt.nz keyword #haveyoursayltp2015 Document
Content
Asset Management Plans Executive Summaries
More on our ‘big four’ Activities – water supply, wastewater, stormwater and roading
Assumptions
The key assumptions we have made and are considered in compiling our Long Term Plan
Capital Projects
A complete list of major works we intend to carry out over the next 10 years
Community Outcomes
Statements that say what our community wants for the future. These statements provide direction for our strategic planning and other organisations with a stake in Napier’s future well-being
Contributions to decision-making The steps we have taken to include Māori in our decision-making processes processes by Māori Council Controlled Organisations Information about organisations we co-own and help to run – Hawke’s Bay Local Authority Shared Services Ltd, Hawke’s Bay Airport Ltd and the Omarunui Landfill Development & Financial Contribution Policy
There have been some changes to this policy, which outlines the types of contributions (financial and non-financial) that a property developer or a resource consent applicant may have to make towards infrastructure or reserves
Financial Prudence Benchmarks
Targets based on legislative requirements for Key Performance Measures for Councils
Financial Strategy
Our overall strategy that guides our decision making when we consider proposals on funding and expenditure and considers how they affect our services, rates, debt and investments More information on our financial position across 10 years, cash flows and our income and expenditure across 10 years
Financial Statements Groups of Activities Infrastructure Strategy Liability Management & Investment Policies
What we do, why we do it, our performance measures – how well we do it, how funding impacts what we do, and the cost of the services we provide This strategy identifies our significant infrastructure issues over the next 30 years These policies explain how we plan to manage our debts and investments. Under the Liability Management Policy we propose to increase the limit on our debt from $1000 to $1500 per head of population, and we want to have a new limit on the amount of interest payable as a percentage of total income – 12%. Under the Investment Policy we propose to place limits on the dollar amount and length of time investments can be made for in order, to manage risk. We also propose to limit the amount which can be invested per registered Bank
Long Term Plan pre-engagement The feedback we received during our 2015-2025 Long Term Plan ‘Talk To Us ‘campaign leading up to formal engagement report on the Plan Marine Parade re-development
Includes information on current and future projects and work starting this financial year (July)
Napier Aquatics Strategy
This outlines our vision for Napier’s public pools, rivers and beaches for the next 30 years
Park Island Master Plan Overview Approved in 2013, the “sportsville” Master Plan overview is part of our blueprint for enhancing Napier’s open spaces, recreation network and outdoor sport facilities over the next 30 years Policy on the remission and postponement of rates on Māori freehold land
This policy explains the circumstances when rate remissions and/or the postponement of rates may apply to Maori freehold land
Rates Remission and Postponement Policies
This policy explains the circumstances when rate remissions and/or the postponement of rates may apply to land in general ownership
Revenue & Financing Policy
Two proposed changes we want to share with you are:
• •
A proposed change to allocation of General Rates Proposed change to funding of Tourism assets
Significance & Engagement Policy
This policy explains when an issue might be considered significant enough to formally consult with the community, and the type(s) of consultation processes that might be used
The Velodrome Indicative Business Case
An initial assessment of the proposed Multi-use Velodrome in Napier, what it may look like, what it might mean for the community, its benefits and costs
www.napier.govt.nz keyword #haveyoursayltp2015
24
AUDITOR’S OPINION INDEPENDENT AUDITOR’S REPORT
TO THE READERS OF NAPIER CITY COUNCIL’S CONSULTATION DOCUMENT FOR ITS PROPOSED 2015/25 LONG-TERM PLAN INDEPENDENT AUDITOR’S REPORT I am the Auditor-General’s appointed auditor for the Napier City Council (the Council). Section 93C of the Local Government Act 2002 (the Act) requires an audit report on the Council’s consultation TO this THEaudit READERS OFstaff NAPIER CITY COUNCIL’S document. I have carried out using the and resources of Audit New Zealand. We CONSULTATION DOCUMENT FOR ITS PROPOSED 2015/25 LONG-TERM PLAN completed this audit on 10 April 2015. Opinion I am the Auditor-General’s appointed auditor for the Napier City Council (the Council). Section 93C of the Local Government (the Act) requires audit report on the Council’s consultation In my opinion, subject toAct the2002 comments below aboutanthe Council’s statements relating to the Local document. I have carried out this audit using theInfrastructure: staff and resources of Audit New Zealand. We Government Commission’s Report on Debt and completed this audit on 10 April 2015. the consultation document provides an effective basis for public participation in the Council’s Opiniondecisions about the proposed content of its 2015/25 long-term plan, because it:
Responsibilities of the Council and auditor The Council is responsible for:
In my opinion, subject to the comments below about the relating to the fairly represents the matters proposed forCouncil’s inclusionstatements in the long-term plan; andLocal Government Commission’s Report on Debt and Infrastructure: identifies and explains the main issues and choices facing the Council and Napier the consultation provides of anthose effective basisand for public participation in the Council’s City, and document the consequences choices; decisions about the proposed content of its 2015/25 long-term plan, because it: the information and assumptions underlying the information in the consultation document are fairly represents the matters proposed for inclusion in the long-term plan; and reasonable. identifies and explains the main issues and choices facing Council and Napier Statements relating to the Local Government Commission’s Report onthe Debt and Infrastructure City, and the consequences of those choices; and I express no opinion on the statements made on page 23 of the consultation document (and the theininformation and financial assumptions underlying theto information in thedisagreement consultation document are references the Council’s strategy), relating the Council’s with the Local reasonable. Government Commission’s assessment of the Council’s financial position for both debt and infrastructure, including views about the planned replacement of roading and water assets to meet the Statements relating to the Local Government Commission’s Report on Debt and Infrastructure levels of service required by the community.
-
meeting all legal requirements relating to its procedures, decisions, consultation, disclosures, and other actions associated with preparing and publishing the consultation document and long-term plan whether in printed or electronic form;
-
having systems and processes in place to provide the supporting information and analysis the Council needs to be able to prepare a consultation document and long term plan that meet the purposes set out in the Act; and
-
ensuring that any forecast financial information being presented has been prepared in accordance with generally accepted accounting practice in New Zealand.
I am responsible for reporting on the consultation document, as required by section 93C of the Act. I do not express an opinion on the merits of any policy content of the consultation document. Independence We have followed the independence requirements of the Auditor-General, which incorporate those of the External Reporting Board. Other than our work in carrying out all legally required external audits, we have no relationship with, or interests in, the Council.
I express no opinion on the statements made on page 23 of the consultation document (and the Basis of Opinion references in the Council’s financial strategy), relating to the Council’s disagreement with the Local Government assessment of the Council’s financial position for relevant both debt and We carried outCommission’s our work in accordance with the Auditor-General’s Auditing Standards, infrastructure, includingand views planned replacement of roading1 and water assets to meet the international standards theabout ethicalthe requirements in those standards. levels of service required by the community. We assessed the evidence the Council has to support the information and disclosures in the Basis of Opinion consultation document. To select appropriate audit procedures, we assessed the risk of material misstatement and the Council’s systems and processes applying to the preparation of the We carried out our work in accordance with the Auditor-General’s Auditing Standards, relevant consultation document. 1 international standards and the ethical requirements in those standards. We did not evaluate the security and controls over the publication of the consultation document. We assessed the evidence the Council has to support the information and disclosures in the consultation document. To select appropriate audit procedures, we assessed the risk of material misstatement and the Council’s systems and processes applying to the preparation of the consultation document.
S B Lucy Audit New Zealand On behalf of the Auditor-General Wellington, New Zealand
We did not evaluate the security and controls over the publication of the consultation document.
1
1
The International Standard on Assurance Engagements (New Zealand) 3000 (Revised): Assurance Engagements Other Than Audits or Reviews of Historical Financial Information and The International Standard on Assurance Engagements 3400: The Examination of Prospective Financial Information.
The International Standard on Assurance Engagements (New Zealand) 3000 (Revised): Assurance Engagements Other Than Audits or Reviews of Historical Financial Information and The International Standard on Assurance Engagements 3400: The Examination of Prospective Financial Information.
4 easy steps to 1
Read this Consultation Document and any of the support documents. A list of the supprting documents can be found on page 24 of this document.
have your say
These documents and this Consultation Document are available: Online at www.napier.govt.nz keyword #haveyoursayltp2015 and from: Main Reception, Napier City Council Napier and Taradale Libraries National Aquarium of New Zealand MTG Hawke’s Bay
25
2
Think about the projects and issues raised and what you want for Napier in the future
4
Fill in a submission form online at www.napier.govt.nz keyword #haveyoursayltp2015 or complete the submission form on page 27 of this document
3
Share your thoughts with us at one of the events listed on the next page
NAPIER’S 2015≥2025 LONG TERM PLAN CONSULTATION
Upcoming Events We’re holding a series of events hosted by our Councillors in April and May to give you the opportunity to have your say on our Long Term Plan in person. They are: EVENT
DATE
TIME
LOCATION
Pop Up Shop
Thursday 23 April
11.00 am - 2.00 pm
Napier CBD
Friday 24 April
11.00 am - 2.00 pm
Napier CBD
Sunday 26 April
11.00 am - 2.00 pm
Napier CBD
Tuesday 28 April
11.00 am - 2.00 pm
Napier CBD
Thursday 23 April
6.30 pm
Taradale Primary School
Tuesday 28 April
6.30 pm
Nelson Park School
Saturday 2 May
2.30 pm
Port Ahuriri School
Sunday 3 May
2.30 pm
Onekawa School
Suburban Meetings
Deputy Mayor Faye White
Councillor Mark Herbert
Councillor Graeme Taylor
Councillor Maxine Boag
Councillor Michelle Pyke
Councillor Roy Sye
Councillor Annette Brosnan
Councillor Tony Jeffery
Councillor Kirsten Wise
Councillor Keith Price
Councillor Mark Hamilton
Councillor Richard McGrath
How to have your say Submissions must be made either in writing, by way of the form on the back of this document (plus supporting documents if required), or online: www.napier.govt.nz and entering the keyword: #haveyoursayltp2015 ONLINE www.napier.govt.nz keyword #haveyoursayltp2015
POSTAL Complete the submission form on the back, pop it in an envelope and FREEPOST 172273 it back to us: LONG TERM PLAN 2015-25 SUBMISSIONS Napier City Council Private Bag 6010 Napier 4142
IN PERSON Complete the submission form at any of these locations: Napier City Council Civic Building Reception, Level 1, 231 Hastings Street Napier Napier Library Station Street, Napier Taradale Library 24A White Street, Taradale National Aquarium of New Zealand Marine Parade, Napier MTG Hawke’s Bay 1 Tennyson Street, Napier
www.napier.govt.nz keyword #haveyoursayltp2015
26
YOUR FEEDBACK
on our Long Term Plan First name: Last name:
Phone number:
What do you think? We would like to hear from you about the proposals in our Consultation Document for our Long Term Plan 2015-2025.
Email: Postal address: All submissions must be in writing. To make a submission complete this form or online: www.napier.govt.nz keyword #haveyoursayltp2015. Please print using ink (not pencil) as this helps ensure that photocopies of your submission are easy to read. You may attach a more detailed submission on A4 sized paper if you wish. Your name and feedback will be public documents. All other personal details will remain private. Your submission will be included in the agenda for the LTP meeting. This agenda will be available to the public. You may speak in support of your submission at the LTP meeting in front of Council but you do not have to. If you want to speak at this meeting, please include a DAYTIME phone number for us to arrange a time for you to speak.
1 Do you support our proposal to develop Pandora Pond as a water
6 Do you support our proposal to fund Economic Development?
sports/recreation area?
a. As proposed and costs would be as listed
a. As proposed and costs would be as listed b. Not do it - no additional costs incurred Comments:
b. Not do it - no additional costs incurred Comments:
7 Do you support our proposal to attract more events to Napier?
2 Do you support our proposal to construct a ‘Waverider’ wave
a. As proposed and costs would be as listed generating pool? b. Not do it - no additional costs incurred a. As proposed and costs would be as listed Comments: b. Start this project earlier than 2020/2021 c. Not do it - no additional costs incurred Comments:
8 Do you support our proposal to upgrade the War Memorial
3 Do you support our proposal to build a Multi-use Velodrome?
a. As proposed and costs would be as listed b. Not do it - no additional costs incurred Comments:
Conference Centre? a. As proposed and costs would be as listed b. Not do it - no additional costs incurred Comments:
9 Do you support our proposal to upgrade Council owned buildings? 4 Do you support our proposal to build a Destination Playground in Napier? a. As proposed and costs would be as listed b. Not do it - no additional costs incurred Comments:
a. As proposed and costs would be as listed b. Not do it - no additional costs incurred c. Seismic strengthening to Memorial Square, Taradale Plunket Rooms- no Civic Building upgrade. Cost: $1.5m, debt funded Comments:
10 Do you support our proposal for further growth of the Napier Cycling reserves and linkages? Trails? a. As proposed and costs would be as listed a. As proposed and costs would be as listed b. Not do it - no additional costs incurred b. Not do it - no additional costs incurred Comments: Comments:
5 Do you support our proposal to develop and maintain city-wide
Do you have any other feedback?
I wish to present my submission in person at the Long Term Plan meeting
Yes
No
If you wish to speak at the meeting, we will contact you to arrange a time. (The Long Term Plan meeting will be held on 8-9 June 2015)
ALL SUBMISSIONS MUST BE RECEIVED AT THE NAPIER CITY COUNCIL NO LATER THAN 12 NOON ON 13 MAY 2015
Return this form to: FREEPOST 172273, LONG TERM PLAN 2015-25 SUBMISSIONS, Napier City Council, Private Bag 6010, Napier 4142