Long Term Plan

Transcription

1 It s steady as we grow Long Term Plan Consultation Document Long Term Plan Consultation Document 1

2 Welcome to the Long Term Plan (LTP) Contents 3 Mayor s message 4 What is the LTP? 6 How to have your say 7 01 The pace of change Getting around 13 Key Proposal: Walking and cycling investment Protecting our environment and resources Building communities 21 Key Proposal: Western Bay Museum funding 22 Key Proposal: Arts and culture investment Managing our finances 34 Key Proposal: Debt management approach 36 Changes to user fees 36 Upcoming projects 2 Western Bay of Plenty District Council Te Kaunihera a rohe mai i nga Kuri-a-Wharei ki Otamarakau ki te Uru

3 Mayor s message It s steady as we grow E nga mana, e nga reo E nga karangatanga maha Tena koutou To everyone, all voices All the many alliances and affiliations Greetings Welcome to this Long Term Plan Consultation Document, which provides you with an overview of the key issues, priorities and projects for the District over the next 10 years. This plan responds to the strong population growth the Western Bay has experienced, and which is likely to continue. Our growing population creates pressure on the demand for Council services, but good planning and a prudent approach to finances means we re in a strong position moving forward. This is due to the investment we have already made in wastewater and water supply systems, roading upgrades and community facilities such as parks, reserves, walkways, cycleways, playgrounds and skate parks. It s About You During 2017, we held community conversation events throughout our District, to ask you what you want for your community. Four key themes emerged from the feedback we received, which have formed the basis of this Consultation Document: The pace of change the District is growing and changing rapidly Getting around we need a safe and efficient transportation network Protecting our environment and resources our communities feel proud about the Western Bay environment and want to look after what we have Building communities we value community connections and a sense of place So, what can you expect from this Council over the next 10 years? Our primary focus will be to continue to provide core services and infrastructure, and to invest prudently in our communities. We know that rates affordability is a key issue for both ratepayers and Council, so we are keeping rate increases as low as possible without compromising the levels of service we deliver. We are also committed to continuing our prudent management of debt, which will have reduced from $140m in 2013 and is likely to be under $100m by June Future focus Your feedback has helped to shape the direction of Council s work programme over the next 10 years, which includes some important policy and planning projects that are in their early investigative stages. Although we aren t making decisions on these right now, we still want to let you know about them and provide an indication of the approach we intend to take. You ll find discussion about them in the following pages - look for the icon. The topics include: Planning for growth across the District Enabling the housing our community needs Investigating alternative recycling and rubbish collection models Changing the way we fund growth-related projects. Key proposals Our steady approach means there are no major decisions to be made through this Long Term Plan, but we do want your feedback on four key proposals: 1. Walking and cycling investment 2. Western Bay Museum funding 3. Arts and culture investment 4. Debt management approach Have your say We encourage you to give us feedback on these proposals and to come along to our next round of Have Your Say opportunities during April and May see page six for more details on when and where. Please take the time to explore this document and share your views with Councillors and staff. Feedback on this Long Term Plan will close on Friday, 4 May Thank you to all those who have participated in our LTP process over the last 16 months. Garry Webber Mayor, Western Bay of Plenty District Long Term Plan Consultation Document 3

4 What is the LTP? The Long Term Plan is essentially the District s blueprint for the next 10 years. It sets Council s direction for the future, and the projects and services that are planned to get us there - in line with Council s legal obligations, infrastructure needs and community priorities. The LTP summarises the financial impact of these things, setting out our assumptions, what our expenditure will be and how it will be paid for. This sits within three key documents: LTP Long Term Plan Strategic direction across all Council activity areas, e.g. stormwater, transportation, recreation and leisure. Financial Strategy How we manage the books. 30 Year Infrastructure Strategy Looking after our existing assets to ensure they continue to meet the needs of our communities, and providing infrastructure for the future. All of this information sits as supporting documentation to this Consultation Document and is available online. westernbay.govt.nz/ltp moreinfo 4 Western Bay of Plenty District Council Te Kaunihera a rohe mai i nga Kuri-a-Wharei ki Otamarakau ki te Uru

5 Consultation document Proposals we need decisions on The Consultation Document is used to inform the community of the overall direction we intend to take over the next 10 years and to focus on the key proposals. Through the 2017 It s About You community conversations you gave us feedback on what was important to you. This fell broadly into four key themes. 01 The pace of change 02 Getting around 03 Protecting our environment and resources 04 Building communities This document has these four key themes and also includes a section on how we manage our finances to deliver services to the community it is essentially our Financial Strategy. We ve flagged each section so you know what we re seeking: Key Proposal This is an issue where we are proposing options we want your feedback on. We identify our preferred option and the impact each option will have on rates. Future Focus This is flagging the big conversations we need to have over the next three years. Infrastructure This is flagging the key infrastructure issues we are likely to be facing under each theme. Not every project we re funding is set out in the Consultation Document - a lot of work progresses as business as usual. There s a lot more detail provided in the supporting information for this LTP, which you can download from our website or view at Council s service centres. Go to the page number to view the proposal, options and our preferred option. 01 The pace of change Page 7 There are no significant decisions to be made now. But we ll continue work on our growth planning schedule for Omokoroa,, and Waihi Beach. 02 Getting around Page 11 We need to make a decision on funding for walking and cycling. 03 Protecting our environment and resources Page 15 There are no significant decisions to be made now. But we ll be doing a lot of work over the next three years reviewing how our rubbish and recycling is managed. You can see more information in this section. 04 Building communities Page 19 We need to make a decision on providing funding support for Western Bay Museum. We need to make decisions on funding for arts, culture and heritage. 05 Managing our finances Page 24 We need to make a decision on our approach to debt management. Long Term Plan Consultation Document 5

6 How to have your say Please read through this document, consider the key issues and options and give us your feedback. There s a feedback form at the back of the document you can fill out. Or you can do this by visiting our website and complete it online. Want more information? You can find our supporting documentation the full draft LTP, the draft Infrastructure Strategy and the draft Financial Strategy: On our website At Council offices and service centres. Or come and visit us during our roadshow! In April we will be travelling around the District to discuss the LTP and answer any questions you might have. Sat 14 April 10am-12pm Sun 15 April 10am-12pm Council Chambers Thu 19 April 5pm-7pm Omokoroa Sat 21 April 10am-12pm Waihi Beach Sat 28 April 10am-12pm For more information visit or call Council on All written feedback must be received by 4pm on Friday, 4 May. 6 Western Bay of Plenty District Council Te Kaunihera a rohe mai i nga Kuri-a-Wharei ki Otamarakau ki te Uru

7 The pace of change 01 The District is growing and changing rapidly Long Term Plan Consultation Document 7

8 The pace of change Population projections in the urban growth areas The District continues to grow. Since 2013, 3175 more people 1 have chosen to call the Western Bay home. Growth means more use of our existing roads, wastewater systems, water supply, parks, reserves and community facilities. It means more customers for Council and demand for new infrastructure. We need to be proactive in planning for growth, so that costs can be managed. Through SmartGrowth we work with Tauranga City Council (TCC), Bay of Plenty Regional Council (BOPRC), New Zealand Transport Agency (NZTA), the District Health Board and Iwi to identify future areas for housing, business and industry, making sure that infrastructure can be provided without compromising our natural and cultural environment. We also work with partners BOPRC, TCC, Priority One and Tourism Bay of Plenty to deliver on economic and tourism goals for the sub-region. Over the next three years, we ll be focusing on: Master planning for Omokoroa and Undertaking a review of where future growth happens Developing a housing action plan with our partners. Omokoroa 2018: 3, : 6,230 (+76%) +13% Athenree +12% +76% Waihi Beach 2018: 3, : 4,118 (+13%) 2018: 5, : 5,644 (+12%) TAURANGA CITY +7% Pukehina Beach More detail is provided here: westernbay.govt.nz/ltp moreinfo 2018: 8, : 8,900 (+7%) Paengaroa Our growth is expected to continue Census Population of 46,110, and 2018 population of 49,285 from LTP Population, Dwellings and New Lots Projections. 2018: 49, : 55, : 61,729 8 Western Bay of Plenty District Council Te Kaunihera a rohe mai i nga Kuri-a-Wharei ki Otamarakau ki te Uru

9 Future Focus Planning for growth Future Focus Enabling the housing our community needs Omokoroa Omokoroa is the District s largest urban growth area. Over the next 40 years the population is expected to grow to 12,000 people. Over the next year, we will be preparing a plan for the area between the railway tracks and the state highway. This will identify land for housing, a town centre, business development, parks and reserves and community infrastructure such as a school, community centre/library and recreational facilities. We ve already received some feedback through previous community conversations that will be used to inform this future planning. is another growth area for our District. There is enough land zoned for residential development to cater for growth for the next five to seven years. Decisions need to be made on where future growth will go, and how much future growth will be catered for. The capacity of the Wastewater Treatment Plant, natural hazards and the projected costs to upgrade infrastructure may be constraints on growth. Council will continue discussions with the community over the next year to determine the best approach. and Waihi Beach and Waihi Beach will also continue to grow over the next 10 years. There s already sufficient land zoned for residential and industrial development, so it s about maintaining this approach. Enabling the right housing for our community is crucial to ensuring our economy keeps functioning and our community is healthy. The District needs housing for seasonal workers, families, individuals, the elderly population and those on lower incomes. Māori communities also want to develop Papakāinga (communal housing) to meet their community needs. Council has a role to play in housing to facilitate conversations and work with others to plan for the housing we need, and to remove any barriers Council may be putting in the way. Working with SmartGrowth, Tauranga City Council and BayTrust, Council has recently completed a Housing Need and Demand Report and there are some major challenges ahead. To understand what we can do to respond, and what should be prioritised, we ll be developing a Housing Action Plan. More information More information Omokoroa Structure Plan Urban Growth Area westernbay.govt.nz/ltp moreinfo SmartGrowth report westernbay.govt.nz/ltp moreinfo Long Term Plan Consultation Document 9

10 Infrastructure The next 10 years and beyond We expect the District to continue to grow over the next 30 years the population in 2048 is projected to be 61,729 (up from 49,285 today 1 ). To cater for this growth Council is budgeting $121 million (over the next 10 years) for investment in new infrastructure the majority of which will be invested in Omokoroa. In the eastern part of the District, provision of an additional water source is required. A decision will need to be made on this within the next five years to ensure sufficient capacity. We have budgeted $5.6 million for this. More information Western Bay District Council Infrastructure Strategy westernbay.govt.nz/ltp moreinfo Census Population of 46,110, and 2018 population of 49,285 from LTP Population, Dwellings and New Lots Projections. 10 Western Bay of Plenty District Council Te Kaunihera a rohe mai i nga Kuri-a-Wharei ki Otamarakau ki te Uru

11 Getting around 02 We need a safe and efficient transportation network Long Term Plan Consultation Document 11

12 Getting around As a mainly rural area, most of our economic growth is driven from the primary sector. We need a safe, efficient transportation network to support the movement of goods and people. Transport is the largest activity for Council. And it s no wonder. We have 1057 kilometres of roading network. That s a greater distance than travelling from Tauranga to Wellington and back again. We spend around a third of our annual capital and operating expenditure on transportation approximately $35 million each year. This is for everything from general maintenance, to road seal extensions and widening, to large urban roading projects and safety improvements. Council is strongly commited to advocating for state highway upgrades to NZTA, particularly the bypass and upgrades to State Highway 2. We will continue to maintain our network over the next 10 years and we d like to invest more in walkways and cycleways. We re also considering investing more in park-and-ride facilities to support the use of public transport bus services are provided by the Bay of Plenty Regional Council. 12 Western Bay of Plenty District Council Te Kaunihera a rohe mai i nga Kuri-a-Wharei ki Otamarakau ki te Uru

13 Key proposal Proposal for walking and cycling Over the last three years we ve developed our walking and cycling routes, in particular the mainly off-road route from Omokoroa to Tauranga. The long term aim is to establish a network across our District from Waihi Beach to Paengaroa and, eventually connecting Waihi to Rotorua. We want to continue with the good work that s been achieved so far. We re proposing to increase the funding provided year on year to build walkways and cycleways, so that more can be delivered, faster. This will support the development of the District-wide network, and enable us to leverage external funding. Local connections in communities such as, Waihi Beach, and Omokoroa will also progress, using local funding sources such as the community board roading budget. Cycle trails are constructed off road, beside the road and include on road where traffic volumes are low. The options Waihi Omokoroa Waihi Beach Athenree TAURANGA CITY T.E.L Lake Rotoiti Paengaroa Recently constructed or under construction Paengaroa to on-road route 1/4 of Omokoroa to Tauranga cycle trail & Uretara Bridge Te Awa Kahikatea cycle trail in TEL cycleway through to Paengaroa off-road route Medium-term ( ) Linkages to packhouses around to Paengaroa to Kaituna Road Paengaroa to Lake Rotoiti Waihi Beach to Waihi Linkages and extensions in Waihi Beach, and Omokoroa Long-term ( ) Waihi Beach to Athenree (& upgrades in Waihi Beach) Athenree to (& upgrades within ) to Omokoroa (& upgrades within Omokoroa) Tauranga to * Note: Programme may change depending on external funding, consents and other agreements. Option details Costs Annual impacts on ratepayers 1. Continue with current programme The current programme enables us to complete (in 10 years) key connections from Omokoroa to Tauranga, from Kaituna Road to, and a section of the Waihi Beach to Waihi route. We also recieve subsidies from Central Government. 2. Increase funding to do more faster An increase in funding will mean we can deliver the key routes, faster. This will enable better connections to be established and wider benefits to be delivered to the communities that are connected by the network. It also enables us to develop local connections, including to packhouses, and to receive subsidies from Central Government. $345,000 per year Status quo - no additional impact on rates Additional $105,000 per year $505k property - $2.13 $1.83 million property - $8.03 Preferred Option Our preferred option is Option 2, increasing funding to do more, faster. This will enable us to complete more of the network over the next 10 years. Note: Property values are based on our example Urban Residential and example Rural Orchard properties. Long Term Plan Consultation Document 13

14 Infrastructure The next 10 years and beyond We re not anticipating significant changes to how we manage our transport network, but there are potential projects that lay ahead. Firstly, the NZ Transport Agency has developed a system called the One Network Road Classification. We will need to apply this classification system to the District s roading network, to understand the financial implications the classifications may have. We re working with the NZ Transport Agency on proposed state highway projects. The main projects are the Tauranga Northern Link (TNL), to Tauranga upgrades, and the bypass. These will be largely funded by Central Government, but, there are likely to be flow on effects for District roads that need to be factored in. Technological advances are likely to have a major impact on the transport sector in the future. This will also impact on Council s level of service and may have financial implications. We ll continue working with our partners at Tauranga City Council, Bay of Plenty Regional Council and NZ Transport Agency to assess and understand the implications of future transportation developments. More information Western Bay District Council Infrastructure Strategy westernbay.govt.nz/ltp moreinfo 14 Western Bay of Plenty District Council Te Kaunihera a rohe mai i nga Kuri-a-Wharei ki Otamarakau ki te Uru

15 Protecting our environment and resources 03 Our communities told us they feel proud about the Western Bay environment and want to look after what we have Long Term Plan Consultation Document 15

16 Protecting our environment and resources Our communities are proud of the Western Bay environment. They value the natural areas such as rivers, streams and urban parks and want to look after them for future generations. To maintain these assets we need to manage our resources well. This means reducing waste, being smart about how we use water and thinking about what impacts the quality of our water. We will continue to work with councils, the Department of Conservation, Tangata Whenua, community groups and others, to deliver projects that improve our biodiversity and our water quality from the mountains to the sea. How we protect our cultural heritage is another area of work Council will be focusing on, working with Iwi and other partners to map our significant cultural heritage sites and develop ways to protect them. Continuing investment in water, wastewater and stormwater management Council manages the three waters - stormwater, wastewater and water supply. We re in a reasonably good space with our three waters infrastructure we have good life left in our existing stormwater and wastewater assets, and we ve progressively upgraded these to cater for growth. Going forward, we know higher environmental and public health regulations will increase costs for our water supply, as well as for managing stormwater and wastewater discharges. We ve factored these into our budgets up front. We think this is prudent other approaches would effectively mean we re kicking the can down the road and could potentially lead to steeper costs in later LTP years. See page 18 for more information. 16 Western Bay of Plenty District Council Te Kaunihera a rohe mai i nga Kuri-a-Wharei ki Otamarakau ki te Uru

17 Future Focus Investigating alternative recycling and rubbish collection models The way we manage our rubbish and recycling is an area we ve been focused on over the last year. We had targets to reduce the amount of waste going to landfill but as a community we re not meeting them. This may mean a different approach to waste management is needed. In 2018/19 we will investigate alternative recycling and rubbish collection models, to achieve better oversight and management of solid waste and recycling throughout the District. Any change to the collection model may mean a significant change in levels of service. As part of the investigation, Council will consider what services are required for Omokoroa as it grows and how these will be funded. Currently a greenwaste facility is provided, with limited hours of operation. The investigation will include what services are or should be provided and the area that would be serviced. The work requires a detailed business case and analysis of options to be prepared. There are no decisions to make at this stage, but once complete we ll present the options back to the community for feedback, along with costs. Long Term Plan Consultation Document 17

18 Infrastructure The next 10 years and beyond The implementation of the National Policy Statement for Freshwater Management, along with other legislative changes, will most likely require ongoing improvements to water, stormwater and wastewater networks. The wastewater ocean outfall is due for renewal in We ve included a budget of $13.7 million. Alternative disposal methods will be considered through the consent renewal process. The Government inquiry into Havelock North drinking water has identified that across the country there are many threats and risks to drinking water. Western Bay s water supply is generally in good shape, as we ve invested in deep bores and water treatment systems. However the outcomes of the inquiry report are likely to lead to an increase in compliance standards. Our resource consents for water supply are up for renewal from We ve factored in an additional $5.9 million to meet expected regulations and standards. We also anticipate that sea level rise will have an impact on our coastal assets. We ve prepared a Coastal Erosion Response Policy to guide our decision making for managing Council-owned coastal land and assets affected by coastal erosion or subsidence. We ll be assessing new or replacement assets against the criteria of the policy, to understand options and likely costs. We ve budgeted $220,000 a year for erosion protection works for the next 10 years. Slips in Omokoroa destroyed part of the coastal walkway in April There are short term options that will reinstate part of the walkway, towards which affected property owners have made substantial funding contributions. A three-year research programme is underway to investigate longer term improvements to stability. The costs to install and implement this technology are not known at this stage. Any issues, options and associated costs will be identified once the research is complete. More information Western Bay District Council Infrastructure Strategy Coastal Erosion Responses Policy westernbay.govt.nz/ltp moreinfo 18 Western Bay of Plenty District Council Te Kaunihera a rohe mai i nga Kuri-a-Wharei ki Otamarakau ki te Uru

19 Building Communities 04 We value community connections and a sense of place Long Term Plan Consultation Document 19

20 Building communities Our District has many distinct communities, with a strong sense of connection to their place. The District prides itself on having a buoyant rural economy. Council provides or supports facilities and services that contribute to these connections and sense of place, and also have social, cultural and economic benefits. These include parks and reserves, playgrounds, community halls and service delivery contracts to support arts, culture and events. Council also supports marae to be sustainable places that meet the needs of the community from enabling papakāinga (communal housing), supporting marae waste management practices and building resilience for when emergencies happen. We value diversity in our communities and are part of the Welcoming Communities pilot programme, that welcomes newcomers into our communities. Along with Tauranga City Council, we recently agreed on a new direction for arts and culture, recognising the value that arts and culture provide to our communities. We re looking at two funding proposals to support this direction. 20 Western Bay of Plenty District Council Te Kaunihera a rohe mai i nga Kuri-a-Wharei ki Otamarakau ki te Uru

21 Key proposal Proposal for funding the Western Bay Museum Council has a role in protecting our District s cultural heritage. We advocate, and partner with our communities to protect significant cultural and heritage sites and artefacts. The Western Bay Museum, holds and maintains Council s heritage collection of approximately 10,000 items in. The museum runs school programmes throughout the year for the entire District, and occasionally holds concerts and theatre productions. In 2017 the museum was visited by 1588 walk-in visitors, 619 students and 244 other groups. The Museum Trust has recently developed a marketing strategy and strategic plan, and is exploring options to locate parts of the collection throughout the District (beyond ). In 2015, Council agreed to provide a grant of $60,000 a year for three years, to contribute to the museum s operating costs. The grant recognised and supported the role of the museum in protecting and celebrating the District s heritage. The museum has now requested a grant of $70,000 a year for the next three years. The grant will be used specifically for the role of the museum curator, and for the storage costs for the collection. The options Option details Costs Annual impacts on ratepayers 1. Provide no support for the museum. Council would retain ownership of the heritage collection and responsibility for its storage, which is estimated to cost $11,000 per year. The museum would likely close under this option. 2. Support through District-wide rates for the full $70,000 required for the next three years. Ongoing funding would be reviewed after then. $11,000 a year (for storage of the heritage collection.) District-wide: $0.52 $70,000 a year District-wide: $3.30 Preferred Option Our preferred option is Option 2. This option ensures the museum will continue to operate and ensures our heritage collection is protected. 3. Support through mixed targeted and District-wide rates for the full $70,000 required for the next three years, with a split of 50% targeted rates and 50% District-wide rates. Ongoing funding would be reviewed after then. $70,000 a year Targeted rate: $8.10 District-wide rates: $1.65 Note: District-wide rates are a fixed charge per property. Long Term Plan Consultation Document 21

22 Key proposal Proposal for funding arts and culture Council has recently adopted a sub-regional Arts and Culture Strategy. This provides a framework to grow and support arts and culture in our communities, to bring social, economic and cultural benefits. Creative Bay of Plenty and the Arts Incubator are two key agencies tasked with implementing the Arts and Culture Strategy. In order to ensure the strategy is successful, we are considering providing additional funding to these two organisations. More information Arts and Culture Strategy westernbay.govt.nz/ltp moreinfo The options Option details Costs Annual impacts on ratepayers 1. Provide no additional funding for the Arts and Culture Strategy implementation Do the best we can with the current level of funding. *2. Provide additional funding to enable partial implementation of identified key actions of the strategy Funding to be provided through: An increase to the Creative Bay of Plenty service delivery contract of $50,000 a year A grant to The Incubator Creative Hub of $10,000 in year one, $15,000 in year two and $20,000 in years three-to-10. *3. Provide additional funding to enable full implementation of identified key actions of the strategy, and increased support for arts and culture in the District Provide additional funding through Creative Bay of Plenty service delivery contract of $123,000 per annum, and provide a grant of $50,000 a year to The Incubator Creative Hub. $50,000 per annum. Status quo, so no additional impact on rates. $60,000 in $65,000 in $70,000 in $505,000 property: Year 1 = $1.53 Year 2 = $1.65 Year 3 = $1.78 $1.83 million property: Year 1 = $5.53 Year 2 = $6.00 Year 3 = $6.46 $173,000 a year. $505,000 property: $3.13 $1.83 million property: $11.35 Preferred Option Our preferred option is Option 2. This option enables Creative Bay of Plenty and The Incubator to carry out key actions from the Arts and Culture Strategy, while also recognising there are other organisations in the Western Bay that Council already supports to deliver arts and culture projects and events. Council also makes oneoff funding contributions to arts and culture projects and events through its Community Matching Fund. * Note: Property values are based on our example Urban Residential and example Rural Orchard properties. 22 Western Bay of Plenty District Council Te Kaunihera a rohe mai i nga Kuri-a-Wharei ki Otamarakau ki te Uru

23 Infrastructure The next 10 years and beyond As the District continues to grow and population demographics change, we need to review what, when and how we provide the facilities our communities will need. Over the next three years we ll be reviewing our Communities Strategy and Recreation and Leisure Strategy, to set the direction and review our levels of service. A big part of living in the Western Bay is the harbour and ocean. Water recreation (fishing, boating, kayaking etc) is a favourite pastime for many residents and visitors alike. While there s water all around us, there are not many good access points to the harbour, particularly for launching boats. We need to look at how and where we provide boat launching facilities, particularly as the population grows and more pressure is placed on existing facilities. We re currently revewing future plans for the Omokoroa Domain and boat ramp. We know the Omokoroa boat ramp will be under a lot of pressure as the peninsula grows to 12,000 people, so we ve included a budget of $6.9 million to upgrade the boat ramp and surrounding area. Further assessment work is also needed to determine the location and costs of a boat ramp in the northern harbour. We ve included a provisional budget of $5.2 million for a boat ramp, which can be confirmed once the planning work is complete. More information Western Bay District Council Infrastructure Strategy westernbay.govt.nz/ltp moreinfo Long Term Plan Consultation Document 23

24 Managing our finances 05 We are projecting our net debt to continue to decrease over the next 10 years 24 Western Bay of Plenty District Council Te Kaunihera a rohe mai i nga Kuri-a-Wharei ki Otamarakau ki te Uru

25 Managing our finances This section of the Consultation Document sets out how we plan to finance our activities in a way that is sustainable over the longer term. Over the last 20 years we ve seen significant growth in the District but we were hit hard after the 2007 global financial crisis. We had a high level of debt from our investments in infrastructure and a big decline in growth-related income to service that debt. Today, our finances are in better shape and so is the economic climate in which we re operating. Our net debt has decreased from $144 million in 2015, to $100 million today. At a time when many councils with high population growth are facing increasing debt levels, we are projecting our net debt to continue to decrease over the next 10 years. This means we are in a good position to deal with future uncertainties as they arise. Where our income comes from The majority of our income (68 percent) comes from rates. We also receive income from growth, via financial contributions. What we spend it on Most of our income is spent on the key infrastructure councils must provide roading, drinking water supply, wastewater, and stormwater management. For 2018/19 around 63 percent of our expenditure is on roading, stormwater, wastewater and drinking water, with another nine percent spent on recreation and leisure. How much debt we have The growth in the District means we ve needed to invest in some major capital works. These have been debt funded. After the global financial crisis that started in 2007, our income from growth was less than we expected which meant we had less funding for interest and loan repayments. In 2015, we asked you about using $2.5 million from a combination of Uniform Annual General Charges, general rate and the roading rate, to contribute to our debt interest and repayment costs. Subsequently, this approach has been used over the last three years. This, coupled with a significant increase in income from growth over the last two years, means our net debt has reduced from $144 million in 2015 to $100 million. This is ahead of what we forecast for 2017/18 in the 2015 LTP. Council Revenue 2018/19 (excluding vested assets and revaluations) 68% Rate Income 12% Other Revenue 11% User Charges 9% Financial Contributions Council Capital and Operating Expenditure 2018/19 29% Transportation 19% Other Activities 13% Water Supply 13% Wastewater 9% Recreation & Leisure 8% Stormwater 7% Regulatory 2% Solid Waste Long Term Plan Consultation Document 25

26 Our financial strategy Our Financial Strategy sets out how we plan to finance our activities in a way that is sustainable over the long term. It enables the delivery of the Long Term Plan and the 30 year Infrastructure Strategy. The strategy sets limits on debt and rates increases. Council must work within these limits, ensuring the services our communities expect are provided in a way that balances the affordability of delivering those services. We are taking the following approaches to managing our finances over the next 10 years: We will continue to manage our debt It s important that we operate in a fiscally responsible way, balancing delivery of services that people want, with the community s ability to pay for these services. We also need to ensure we have room to move for any unanticipated situations that can arise and are difficult to predict. The graph on page 27 sets out our limit on debt, our net debt projections and our net debt to revenue ratio projections. We are proposing some changes to our debt management approach for Year 1 of the LTP. More information on this decision is on page 34. We will continue to manage our rates increases Rates affordability is a key challenge. We ve set a limit on our rates increases for the next 10 years, and ensured our budget is within those limits. The rates increase is set at no more than 4 percent per annum (excluding growth.) The table below sets out the proposed average rates increase per annum, for the next 10 years. This includes inflation but excludes growth. *Note: Inflation is applied using the Local Government Cost Index (LGCI) - an inflation measure based on the cost structures of New Zealand s local authorities. The LGCI is different to the Consumer Price Index (CPI) as it includes goods which consumers would not normally purchase. These goods, such as bitumen or piping, often have different inflation pressures than goods included in the CPI basket. The Local Government Cost Index is sourced from Business Economic and Research Limited and is a more accurate measure of the cost changes that we are faced with. Using this measure will provide ratepayers with a more accurate picture of how these costs impact on rates. We will continue to invest in our communities and the future of our District. It s important to provide good quality infrastructure to attract investment to our District and provide confidence to ratepayers that levels of service can be delivered now and in the future. We want to encourage growth, as it brings benefits including increased prosperity through investment, community vibrancy and diversity. We intend to spend $80 million from 2018 to 2028 on renewing our water, wastewater, stormwater and transportation assets, in accordance with our asset management plans. We also intend to invest $121 million from for water, wastewater, stormwater and transportation infrastructure to provide for growth. The majority of this is to cater for development and growth in Omokoroa. We will continue to charge developers a contribution towards the costs of providing this infrastructure. However, we ll be reviewing our approach over the next three years, as we prepare to transition from financial contributions to development contributions (see the Future Focus section on page 35 for more detail). We ll continue the just in time approach to providing infrastructure - monitoring the actual uptake of growth. The graphs on page 27 set out Council s total budgeted capital expenditure and total budgeted operational expenditure for the next 10 years. The average rates increase per annum for the next 10 years (for existing ratepayers) Rates before inflation 1.10% 1.20% 1.73% (0.18)% (1.68)% 1.07% 0.39%% (1.71)% (0.05)% 0.12% *Inflation (LGCI) 2.00% 2.20% 2.20% 2.20% 2.30% 2.30% 2.40% 2.50% 2.60% 2.70% Rates after inflation 3.10% 3.40% 3.93% 2.02% 0.62% 3.37% 2.79% 0.79% 2.55% 2.82% 26 Western Bay of Plenty District Council Te Kaunihera a rohe mai i nga Kuri-a-Wharei ki Otamarakau ki te Uru

27 Forecast limit on debt Debt ($000 s) 140, , ,000 80,000 60,000 40,000 20, % 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% Net Debt LTP Council s fixed Net Debt Limit Net Debt to Revenue Ratio (excluding financial contributions and vested assets) Percentage Rates What rates do we collect to fund services? We use a combination of general rates, roading rates and targeted rates to fund our services. Total capital expenditure General Rate Roading Rates Targeted Rates $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000, Growth Levels of Service Renewals Total operational expenditure (Includes interest, depreciation and overheads) This is a rate based on the capital value of the property. Owners are also required to pay a flat fee known as a Uniform Annual General Charge or UAGC (in 2017/18 this is $245). This is used to fund our day-to-day operations as well as public good activities such as maintaining parks. To cover the cost of building and maintaining roads, every property owner pays a Roading Rate based on the land value of the property as well as a flat amount known as a Roading Charge. Rural property owners also pay a Rural Works Charge which is used to fund roading projects in rural areas. Some residents pay rates for projects that are specific to their particular community or area, or the services they receive. This includes charges for water supply, wastewater as well as rates charges for initiatives such as town centre promotion. 120, ,000 $000 s 80,000 60,000 40,000 20, Long Term Plan Consultation Document 27

28 Proposed rate changes for 2018/19 The tables on the following pages set out the proposed rates changes, for a range of property types and different parts of the District. Note that these are based on an example representative property. Median Values Example Property Urban Residential Urban Residential Land Value: $235,000 Capital Value: $505,000 Water Connection Wastewater Connection 0.25% Average Rate Increase Rates below based on the example property. Change Kaimai (Omokoroa) - Waihi Beach - Wastewater Water Roading Rate Other Targeted Rates General Rate Lower Quartile Example Property Upper Quartile Example Property Urban Residential Land Value: $177,000 Capital Value: $376,000 Water Connection Wastewater Connection -0.26% Average Rate Increase Rates below based on the example property. Urban Residential Land Value: $360,000 Capital Value: $685,000 Water Connection Wastewater Connection 0.79% Average Rate Increase Rates below based on the example property. Change Change Kaimai (Omokoroa) Kaimai (Omokoroa) - - Waihi Beach - Waihi Beach - Wastewater Water Roading Rate Other Targeted Rates General Rate Wastewater Water Roading Rate Other Targeted Rates General Rate 28 Western Bay of Plenty District Council Te Kaunihera a rohe mai i nga Kuri-a-Wharei ki Otamarakau ki te Uru

29 Median Values Example Property Commercial /Industrial Commercial /Industrial Land Value: $300,000 Capital Value: $563,000 Water Connection Wastewater Connection 1.48% Average Rate Increase Rates below based on the example property. Change Kaimai (Omokoroa) Waihi Beach Wastewater Water Roading Rate Other Targeted Rates General Rate Lower Quartile Commercial /Industrial Example Property Land Value: $185,000 Capital Value: $348,000 Water Connection Wastewater Connection 1.09% Average Rate Increase Rates below based on the example property. Upper Quartile Commercial /Industrial Example Property Land Value: $475,000 Capital Value: $1,015,000 Water Connection Wastewater Connection 2.31% Average Rate Increase Rates below based on the example property. Change Change Kaimai (Omokoroa) Kaimai (Omokoroa) Waihi Beach Waihi Beach Wastewater Water Roading Rate Other Targeted Rates General Rate Wastewater Water Roading Rate Other Targeted Rates General Rate Long Term Plan Consultation Document 29

30 Median Values Example Property Rural Rural Land Value: $465,000 Capital Value: $830,000 Water Connection 2.28% Average Rate Increase Rates below based on the example property. Change Kaimai (Omokoroa) Waihi Beach Water Roading Rate Other Targeted Rates General Rate Lower Quartile Rural Example Property Land Value: $340,000 Capital Value: $585,000 Water Connection 1.41% Average Rate Increase Upper Quartile Rural Example Property Land Value: $710,000 Capital Value: $1,300,000 Water Connection 3.47% Average Rate Increase Rates below based on the example property. Rates below based on the example property. Change Change Kaimai (Omokoroa) Kaimai (Omokoroa) Waihi Beach Waihi Beach Water Roading Rate Other Targeted Rates General Rate Water Roading Rate Other Targeted Rates General Rate 30 Western Bay of Plenty District Council Te Kaunihera a rohe mai i nga Kuri-a-Wharei ki Otamarakau ki te Uru

31 Median Values Example Property Rural Dairy Rural Dairy Land Value: $2,040,000 Capital Value: $2,625, % Average Rate Increase Rates below based on the example property. Change Kaimai (Omokoroa) Waihi Beach Roading Rate Other Targeted Rates General Rate Lower Quartile Rural Dairy Example Property Land Value: $1,245,000 Capital Value: $1,460, % Average Rate Increase Rates below based on the example property. Upper Quartile Rural Dairy Example Property Land Value: $3,485,000 Capital Value: $4,371, % Average Rate Increase Rates below based on the example property. Change Change Kaimai (Omokoroa) Kaimai (Omokoroa) Waihi Beach Waihi Beach Roading Rate Other Targeted Rates General Rate Roading Rate Other Targeted Rates General Rate Long Term Plan Consultation Document 31

32 Median Values Example Property Rural Orchard Rural Orchard Land Value: $810,000 Capital Value: $1,830, % Average Rate Increase Rates below based on the example property. Change Kaimai (Omokoroa) Waihi Beach Roading Rate Other Targeted Rates General Rate Lower Quartile Example Property Upper Quartile Example Property Rural Orchard Land Value: $635,000 Capital Value: $1,330, % Average Rate Increase Rates below based on the example property. Rural Orchard Land Value: $1,040,000 Capital Value: $2,512, % Average Rate Increase Rates below based on the example property. Change Change Kaimai (Omokoroa) Kaimai (Omokoroa) Waihi Beach Waihi Beach Roading Rate Other Targeted Rates General Rate Roading Rate Other Targeted Rates General Rate 32 Western Bay of Plenty District Council Te Kaunihera a rohe mai i nga Kuri-a-Wharei ki Otamarakau ki te Uru

33 Median Values Example Property Lifestyle Block Lifestyle Block Land Value: $410,000 Capital Value: $730,000 Water Connection 2.48% Average Rate Increase Rates below based on the example property. Change Kaimai (Omokoroa) Waihi Beach Water Roading Rate Other Targeted Rates General Rate Lower Quartile Example Property Upper Quartile Example Property Lifestyle Block Land Value: $325,000 Capital Value: $550,000 Water Connection 1.71% Average Rate Increase Rates below based on the example property. Lifestyle Block Land Value: $525,000 Capital Value: $946,000 Water Connection 3.19% Average Rate Increase Rates below based on the example property. Change Change Kaimai (Omokoroa) Kaimai (Omokoroa) Waihi Beach Waihi Beach Water Roading Rate Other Targeted Rates General Rate Water Roading Rate Other Targeted Rates General Rate Long Term Plan Consultation Document 33

34 Key proposal Proposal to change our debt management approach Council currently uses $2.5 million a year from a combination of general rates, the roading rate and Uniform Annual General Charges (UAGCs) to contribute to interest and debt repayments. This was agreed through the LTP. This approach to debt management has worked well and we ve significantly reduced our debt. Population growth over the last three years has also contributed as we ve received more revenue as a result of development. The current indications are that population growth, and therefore our revenue from financial contributions, will continue to be strong. We think we can now reduce the amount of the contribution we re taking from rates to fund interest and debt repayments. However, we also know that growth is volatile and difficult to predict as there are many factors that influence our rate of growth. An option to manage this is to reduce the amount of the contribution for year one (2018/19) of the LTP only, and maintain the $2.5 million contribution for the following years two to 10. We can revisit this approach each year if necessary. The options Option details Costs Annual impacts on ratepayers 1. Continue with current approach of contributing $2.5 million a year from rates to interest and debt repayments This approach means our net debt will reduce at the rate anticipated in the 2015 LTP. Additional rates funding will continue to be required to complete the capital works programme and cover operational expenditure. 2. Change the debt management approach to contribute $1 million of rates to interest and debt repayments for year one (2018/19) of the LTP only, AND continue with the current approach of contributing $2.5 million a year from rates to interest and debt repayments from year two onwards. This approach means we will still be reducing the interest and making debt repayments in year one, but at a lower level. This is anticipated to be for one year only, after which time the status quo will resume. We can review this annually. $1.5 million less rates in 2018/19. From year two status quo. Status quo, rates funding is required. $505,000 property = $38.18 less in 2018/19 only. $1.83 million property = $ less in 2018/19. Preferred Option Our preferred option is Option 2 this is reflected in our financials - to contribute $1 million from rates to interest and debt repayments, for year one of the LTP, maintaining the contribution at $2.5 million for years two to 10. We think this is a financially prudent approach, as we can review the amount of the contribution annually and revise it if we need to depending on our rate of growth. Note: Property values are based on our example Urban Residential and example Rural Orchard properties. 34 Western Bay of Plenty District Council Te Kaunihera a rohe mai i nga Kuri-a-Wharei ki Otamarakau ki te Uru

35 Future Focus Changing the way we fund growth related projects At the moment we fund (fully or partly) projects that are needed to cater for population growth, by charging financial contributions under the Resource Management Act 1991 (RMA) to those undertaking development so they pay their fair share of infratructure costs. Changes to the RMA in 2017 mean councils can no longer charge financial contributions. For this Long Term Plan we are still using financial contributions. We must transition to development contributions under the Local Government Act 2002, by We ll be starting work on the complex transition over the next three years. Through the LTP process we ll be adopting a policy on development contributions to complete the transition. Infrastructure The next 10 years and beyond Over the next 30 years we anticipate spending over $851 million on capital projects for infrastructure, and over $2 billion on infrastructure operational costs. This expenditure enables investment in urban growth areas, achievement of agreed levels of service, and a steady programme of asset renewals. There are some anticipated spikes in expenditure attributable to the wastewater, transportation and water activities. These peaks are considered manageable within Council s planned debt management approach, and at this stage do not indicate any potential affordability issues in the future. There are no proposed changes to levels of service; however we have identified some decisions to be made that could change levels of service and therefore the financial profile. We have ensured there is room to move to accommodate these potential changes (and other unforeseen events). Council does not have significant backlogs of expenditure or deferred expenditure, so we are in a comfortable position to ensure assets continue to be maintained to meet level of service requirements. Long Term Plan Consultation Document 35