TAURANGA CITY COUNCIL. Pre-election report VOTE VOTE VOTE

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1 TAURANGA CITY COUNCIL Pre-election report VOTE VOTE VOTE VOTE VOTE VOTE

2 2 TAURANGA CITY COUNCIL PRE-ELECTION About this report The Local Government Act 2002 requires the Chief Executive to prepare a Pre-Election Report before each local government election. The goal is to provide information to the community and prospective candidates to enable an informed election debate around the issues and opportunities facing the Council. This report provides financial information for the three years preceding the election, this financial year (2016/17) and the three years following the election. It is based on the information contained in Tauranga City Council s 2013/14 and 2014/15 audited Annual Reports, the estimated un-audited 2015/16 Annual Report, the 2016/17 Annual Plan, the Long Term Plan and the proposed amendment to the Long Term Plan Creating Tauranga s Civic Heart. This proposed amendment is currently under consultation and the outcomes of the project will influence the financials for the next three years. Decisions are expected to be made by the end of August. As a result, we have included two sets of financials for the next three years in this report: the original adopted Long Term Plan budgets for 2017/18 to 2019/20, and the amended financials for those years should the Long Term Plan Amendment be adopted as proposed. This report also sets out information about the major projects in progress or planned over these years, and identifies the key strategic issues facing Tauranga and the Council. These are linked to our city s population growth, its economic, social, environmental and cultural wellbeing, future priorities for transport and urban form. Together this should help readers consider how well the Council has performed to date, and what we have on our plates for the next Council s term of office. For more information on Tauranga City Council, its activities or financials please visit our website at and refer to the Long Term Plan or the latest Annual Plan for 2016/17.

3 Pre-election Report 2016 Contents 4 WELCOME FROM THE CHIEF EXECUTIVE 5 WE RE TRENDING 5 A snapshot of the city, its growth, its economy, and a look at the years ahead 7 THE BIG PICTURE 7 Challenges and opportunities in building a great city 13 WHAT S THE? 13 Key projects for next year and the three years after that 17 RUNDOWN 17 What we ve been up to in the past three years 18 THE BOOKS 18 Our financial strategy 18 Financial position 21 Funding impact statements

4 4 TAURANGA CITY COUNCIL PRE-ELECTION From the Chief Executive Our city is changing rapidly. Tauranga is growing fast, and becoming more of a metropolitan city year by year. People and businesses are moving here, we are conducting major projects to reinvigorate our city centre, and our suburban centres are growing too. We want to build a successful city, a competitive city, on the back of our growth. This is a city that balances the four well-beings: economic, social, environmental and cultural. Economic wellbeing should enable social, environmental and cultural development. And social, environmental and cultural wellbeing also create economic opportunities of their own. We therefore need to ensure our strategies, plans and projects deliver on each of the well-beings. In October you will choose your future mayor and councillors, those who will represent you in these partnerships, and set the direction for our city on your behalf. This report aims to give you an overview of the key issues for the next few years the big projects, the strategic challenges and opportunities we need to look into and will add to the public discussion in the run-up to the elections. Garry Poole Chief Executive In parallel we need to make sure our city can continue to grow, to welcome more people and businesses while improving lifestyle and amenity. This means planning for growth and putting thought into our urban form and our transport system. This will continue to be a big part of our work, one of our biggest challenges in terms of financial management, and a great source of opportunities to be seized in the coming years and decades. We can t do all this on our own. Building a great city requires a collaborative effort and successful partnerships with public agencies, businesses, voluntary organisations and Tangata Whenua. It requires co-investment and thought leadership to help us through change and keep our city interesting and new. It also requires a joint effort to develop our city s identity. VOTE

5 WE RE TRENDING 5 We re trending Here s a snapshot of our city, its growth, its economy, and a look at the years ahead. Growing population, growing city 2013 census 117, estimate 124, projection 181,112 New rating units (ratepayers) each year This means there are new ratepayers joining us every year, who help to pay to keep our city running and great to live in, and use the infrastructure, facilities and services. The growth in the number of ratepayers for the past two years has exceeded what we d projected in the Long Term Plan (LTP). This growth is anticipated to continue through the current year and into / / /17 +1, / / / SmartGrowth projections used from 2017/ There has been a major increase in people building new houses in Tauranga over the last two years. New dwelling permits issued last year totalled almost 1,600 which is 86% higher than the ten-year average. This trend is projected to continue through this year and the next. Residential Building Consents for New Builds ( ) Development Contributions ( ) $30M Citywide Development Contributions Local Development Contributions 1200 $22.5M 800 $15M 400 $7.5M Developers and new home builders provide money to pay for the additional infrastructure required for a growing population. Development contributions received last year totalled $27m which is 79% above the ten-year average. Higher than budgeted development contributions are expected to continue through this year and the next.

6 6 TAURANGA CITY COUNCIL PRE-ELECTION Jobs and economy Our economy is healthy And we have more jobs to go around Meaning less unemployment 4.6% GDP growth vs 3.6% national average 3.7% growth in employment vs 2.4% nationally 4.6% for the Bay of Plenty against 5.7% nationwide But they re mostly lower-paying jobs And not in knowledge intensive industries $51,070 vs $56,030 mean annual earnings 29% vs 32% nationwide Statistics NZ March 2016 labour market statistics, Infometrics 2015 economic profile, Westpac Regional Roundup May 2016 Building and running the city Your Council currently owns $3.4 billion WORTH OF physical assets (facilities, infrastructure, property etc.). Set against $297 million OF NET DEBT at 30 June 2016 Overall, our city has equity OF $3.2 billion Rates will help cover $143 million OF THE operational costs of running the city this coming year. And we ll spend $140 million (capital expenditure) ON infrastructure & assets. Decisions are made by your 11 Elected Members: one Mayor and 10 Councillors And they re implemented by Council s approx. 600 staff along with our contractors & consultants.

7 THE BIG PICTURE 7 THE BIG PICTURE The big picture Challenges and opportunities in building a great city With every challenge come opportunities. Our job as a council is to face these challenges and embrace the opportunities they present. Think of our growth: successfully accommodating more people and businesses has a cost, but also exciting potential return on investment vibrancy, talent, economic activity, diversity, fresh thinking and innovation. We need to champion the opportunities that growth presents, and take our chance to build a great city. Here are some topics that we as a council and a city will need to consider in the next few years. We need to provide for the needs of our rapidly growing city, and to be able to pay for it Managing growth is top of the agenda, and will remain there for a while. Our population is growing faster than we d anticipated, and central Government is putting increasing pressure on councils to free up land for housing and business. To do this we need to provide the core infrastructure upfront roads, water, wastewater and stormwater networks and open space to enable this land to be subdivided. Once these new housing areas are in place they will also require adequate community facilities. We need to make sure we can accommodate this rapid growth, with the appropriate zoning and provision of land with the necessary infrastructure. We work to fund the core infrastructure from development contribution revenue. However, growth still puts pressure on our debt levels as we are required to forward-fund infrastructure investment and recover costs from development contributions over time. We need to plan ahead so that we deliver investment in time for demand, and stage development to manage the impact on debt. Community facilities and wider public amenity cannot be funded from development contributions so require funding through rates. In our Long Term Plan we have committed most of our available debt capacity to fund growth. The graph on the next page shows how close we will be getting to the debt-to-revenue ratio limit of 225% set by Council in its Financial Strategy and the 250% limit currently set by the Local Government Funding Agency for Council borrowing through this agency. We are also moving closer to the total debt limit of $500 million set in the Council s Financial Strategy. This graph is based on the capital programme set out in the Long Term Plan (LTP). Should the Civic Heart LTP amendment result in the council investing in additional buildings, whether they be administration buildings, a library, or a museum, the Council-imposed debt limits would be exceeded for several years from In the last two years, residential housing growth has been well in excess of LTP projections (last year the number of new dwelling consents was almost 1,600, which is 86% higher than the ten-year average). As a result, expenditure on growth-funded infrastructure is needed earlier than projected in the LTP. This will put further pressure on debt limits, which would push above the Financial Strategy debt-to-revenue ratio limit by Without alternative funding, this would constrain our ability to invest in core and community infrastructure. Recognising these growth pressures, Tauranga City Council, along with New Zealand s four other growth councils, has been identified by central Government as a potential recipient of support, through a new $1 billion infrastructure investment programme to assist councils in making more land available for housing. A significant challenge for Council is to balance expenditure to serve new growth with investment in the city for community infrastructure, such libraries, community centres and art and culture facilities, which help to create a city that fully delivers on social, cultural, environmental and economic well-being. So to recap: we need more land to meet demand for housing, development-ready with infrastructure in the ground, the capacity to deliver more services and amenities to more people, while limiting the impact on debt and rates increases for residents.

8 8 TAURANGA CITY COUNCIL PRE-ELECTION THE BIG PICTURE 0 Closing External Debt $m Final LTP June 2015 (Inflation Adjusted) % % % % % % 2015/ / / / / / / / / /25 0% Growth Debt Other Debt Debt to Revenue Ratio Debt to Revenue Ratio Limit 225% Debt to Revenue Ratio Limit 250% What we re already doing about it: Planning ahead through the SmartGrowth partnership, zoning and planning for new urban growth areas. Staging development and using just-in-time investment and developer agreements to minimise the impact of growth on rates and debt. We are confident Tauranga will continue to grow, but the duration of the current very high growth is more challenging to predict. So we re planning for resilience and agility in new developments, giving ourselves the ability to ramp up or slow down the forward infrastructure programme in line with development activity. Participating in discussions around the National Policy Statement on Urban Development Capacity. Central Government has also proposed to support high growth councils through a $1 billion fund for infrastructure development in high growth areas. If these proposals address the current debt constraints we are facing, and if the Government finds ways of de-risking additional debt councils would incur to meet the policy s requirements, we will consider the offer favourably. This is our chance to: Ensure infrastructure planning and investments are sustainable with an eye to future environmental requirements, technology and trends in the way people want to live, work and play (e.g. sustainable and efficient transportation). Put more thought into place-making: how we plan, design and manage community facilities and infrastructure, to create public spaces and experiences that better promote social connectedness and people s health, happiness, and wellbeing. Ensure new and affordable housing areas are available ahead of demand into the future. Maintaining, and where we can, improving the quality and efficiency of our core infrastructure and services so that Tauranga can remain a safe, inspiring and beautiful place to live.

9 THE BIG PICTURE 9 THE BIG PICTURE We need to look at our urban form We don t want a disjointed city, a collection of sprawling suburbs. Tauranga should work as a whole our city centre and suburban centres need to have their respective purposes and not conflict with one another. We have great suburban centres like Greerton Village, Mount Maunganui and Bethlehem Town Centre, that each have their own identity and offering shopping areas, community facilities and public spaces. Our city centre needs its own purpose as a central business district and a space for recreation and entertainment. We need to understand these dynamics better to build a city that works for everyone. We also need to look into the form in which our city is growing. If our population keeps growing as it is, at some point we will run out of developable land. We need to put serious thought into how we can provide more residential options through intensification, growing upwards instead of outwards where it makes sense. How can we encourage the development of different types of housing, like two or three storey terraced apartment buildings? What do we need to provide for this type of offering to be attractive to buyers, and the surrounding communities? How do we bring the development community on the journey with us? We will need to work on this with the community in the next few years. Transport planning and co-investment with NZTA and the Regional Council. Making changes to the city plan to allow for higher density housing in new developments, and planning in advance for social infrastructure. This is our chance to: Influence the demand for higher density housing options by devising an offer both appealing and sustainable, in collaboration with the development community. Help provide options for more affordable housing. Build a liveable city that makes sense and is easy to navigate, and help our centres to grow into their own. Work with partners to plan for an urban form that promotes health, accessibility and social connectivity, for all our communities including our ageing population. Better understand the future workplace dynamics and work locations. Reduce environmental impacts, energy use, travel times and costs by giving options to people to shop, work and play closer to home. Increase the vibrancy of our city centre through higher density, and attract more investment into the city. What we re already doing about it: Developing and implementing the City Centre Spatial Framework as part of our City Centre Strategy. This framework considers the relationships between the spaces and activities in the city centre and provides a range of strategies for creating a vibrant, safe and active centre. Starting work on intensification: what it could achieve and what it would take to achieve it. We have started research and analysis in a project called Compact City that you ll hear more about soon. Scoping work on developing a coherent centres strategy.

10 10 TAURANGA CITY COUNCIL PRE-ELECTION THE BIG PICTURE We need to future-proof our transport system Transport impacts everyone who lives in, works in or visits Tauranga. It supports our businesses and the development of our economy. It plays an important part in preserving the lifestyle we all seek in Tauranga. Residential and commercial growth in Tauranga places increasing pressure on our transport network. Even with the recent completion of large infrastructure projects by us at the Council and by the New Zealand Transport Agency (NZTA), there is some congestion at peak hours. This will inevitably increase over the next 30 years. We need to plan ahead and work together with partners to deliver an integrated transport system. This will allow us to expand our opportunities and keep on track to build a city that s great to live in, easy and safe to get around and supportive of the industries that bring money into our city. The continued support of organisations such as NZTA, the Port of Tauranga, KiwiRail and the Bay of Plenty Regional Council is essential to our joint success into the future. A. OUR EXTERNAL TRANSPORT CONNECTIONS With the globalisation of the economy, and the growth of the city, our transport connections through road, rail and air are more important than ever. We need to accommodate increased volumes of freight to support our industries like horticulture, and work with the Port of Tauranga to understand how its development and the arrival of an increasing number of mega-container ships and cruise ships will impact our roading and rail network. We need to find ways to limit the impact of increased freight movements on wellbeing and congestion, including advocating for central government investment in rail for freight. We need to provide quick, safe links to Auckland and Hamilton, for residents, visitors and businesses. What we re already doing about it: We are working closely with the NZTA to support the delivery and upgrade of state highways. The Tauranga Eastern Link (Baypark Paengaroa) was delivered last year and NZTA has announced it will be building the Tauranga Northern Link (Te Puna to Takitimu Drive) by We are upgrading our airport terminal and capacity. Air New Zealand is increasing seat capacity in and out of Tauranga from November 2016 (80,000 extra seats per year; 13 extra flights to Auckland and six to Christchurch per week). We are beginning to discuss future rail opportunities for our city as part of the Upper North Island Strategic Alliance. This is our chance to: Ensure we have sustainable connectivity with Auckland as the largest economy in New Zealand and our gateway to the world. Better understand Tauranga s transport needs and trends and plan for the future accordingly. Keep in check the environmental impacts of increased freight and vehicular movements (emissions, harbour pollution). Look into emerging freight efficiency technologies (remote trip management, driverless vehicles) and understand what they mean for the future of our network. B. TRAVEL WITHIN THE CITY With a growing population, more cars on the road, more cars seeking to park in the city centre and in suburban centres, inner city transport is a key topic we need to keep addressing. We need to work to maintain the reliability of travel times in Tauranga despite growth pressures. We need to mitigate excess congestion through investments at pinch points, like Turret Road and city centre parking. Most importantly, we need to continue work on developing an integrated transport strategy, to influence the demand and use of roads, instead of limiting our response to increasing capacity. This means continuing to work with the Regional Council on creating public transport that people will choose to use. There s a lot of work to be done to support a modal shift, get people out of cars and into buses, onto bikes and on foot. This will require more investment in walkways and cycleways. It will mean managing our network in favour of buses, bikes and walking. And figuring out how we can help fund the operation of school buses to reduce the cost to the user. What we re already doing about it: Co-planning and co-investing with the Regional Council and the NZTA on transport issues and opportunities. Supporting the completion of the Welcome Bay

11 THE BIG PICTURE 11 THE BIG PICTURE roundabout and the development of the future Baypark to Bayfair flyover. Working with the Regional Council on the Western Bay Public Transport Blueprint, a public transport review involving core transport partners councils, NZTA, and Smartgrowth looking at options to improve public transport prior to new public transport contracts in Working on completing the urban cycle network in Tauranga and starting the construction of the Omokoroa to Tauranga cycle trail in 2017/18. Completing the build of a new floor on the Elizabeth Street car parking building and starting work this coming year on constructing a new car parking building on Harington Street in the city centre. This is our chance to: Reverse the trend in favour of public transport use, champion environmentally sustainable transport options and reduce the city s environmental footprint. Champion health-promoting activities in residents day to day lives, and provide better lifestyle opportunities and experiences. Better understand what customers want, and look at digital opportunities to increase their use of public transport. Make sure whatever investment we make in the city centre, and across the city, ties in with our goal of achieving a modal shift, and is supported by the integrated transport strategy. We need to up our digital game Digital connectivity supports business opportunities, opens doors to new markets, provides for leisure and entertainment, and allows to better understand and serve customers and communities. As individuals many of us rely everyday on the online availability of information and interactions. The digital world now rules the physical in many aspects and we want to embrace the opportunities it presents. We want to build a connected city. We are already leading the way in some aspects, with a 99% coverage of Ultra-Fast Fibre throughout the city. Council s own information technology systems need to be brought up to speed, for example to offer the online services our customers would expect. We are already working on this upgrading our enterprise systems and working on delivering more, better online services in the coming years. But that s merely scratching the surface of what we could be doing in this space to support our businesses, our communities and our city. What we re already doing about it: We ve started to implement our newly-developed Digital Platform Strategy, to help us keep pace with the evolving digital needs of our customers. It sets the tone: Council s customer services are to be digital by default, while also preserving more traditional modes of interaction. It will help us manage data more effectively, and use it to better serve our customers. Through it we will deliver new technical infrastructure, channels, software, and systems for digital interactions within the Council and with customers, businesses, and partners. We re working on delivering a supportive environment for businesses and individuals to access, participate and make the most of digital technologies and the digital economy. The actions in the Western Bay of Plenty Digital Enablement Plan aim to help the sub-region reach its full potential in using digital technology to improve business productivity and people s lives. We ll also be supporting advocacy to develop the digital infrastructure outside our city, in the broader Western Bay. This is our chance to: Make it easier for customers to do business with us. Help Tauranga s businesses grow by improving their use of digital technologies and their access to the digital economy. Attract more businesses to Tauranga, and especially innovative businesses; to nurture our innovation ecosystem digital solutions for logistics, horticulture, health etc. Be bold and look into things like connected infrastructure and intelligent assets, and see how they could help us manage our assets and plan for our infrastructure investment more effectively.

12 12 TAURANGA CITY COUNCIL PRE-ELECTION THE BIG PICTURE We need to help foster innovation to support our job market We need to help create opportunities for our city and growing population to be as economically active as possible. As a council we can take action to support innovation, research and commercial opportunities. We can support collaboration, open doors and make processes easier. We can help ensure companies starting or relocating here have access to skilled staff. There are ongoing opportunities, particularly with our young people, to ensure they gain skills so they can also participate and contribute to the growth of the city. We can better support flourishing, knowledge intensive industries and trades. Tauranga is fortunate to be the home to one of the most active angel investor networks in the country Enterprise Angels. At this stage, most of the Enterprise Angels investment is directed outside the city. We need to foster the development of innovative companies with high-growth potential, to bring this investment and all its spin-offs, such as employment, back into Tauranga. What we re already doing about it: Funding Priority One, our economic development agency supporting local businesses and working on attracting other companies to Tauranga. Championing an increase in education opportunities supporting the development of the future Tauranga campus of the University of Waikato in the city centre. Considering the effective use of council land and investment partnerships to accelerate emerging opportunities e.g. helping create a hub for the subregional marine sector by developing the Marine Precinct in collaboration with the Regional Council. Supporting research and commercial opportunities in the marine biotechnology and aquaculture industry, e.g. the potential Sino-New Zealand Coastal Innovation Partnership between Yantai University and the University of Waikato. This is our chance to: Nurture innovation ecosystems the coming together of businesses with research and development interests, universities, start-ups and venture capitalists to develop and market new products and services. Market the city as a place where innovation and investment in innovation happens, with a focus on our competitive and emerging niches. Adopt innovation and collaboration principles within planning and design processes. We need to define our identity to better market our city There s so much on offer in Tauranga. Defining our identity is an important part of growing up as a city. A strong identity attracts interest, people, investment. It gives residents something to be proud of, stand behind, and promote. To achieve this will require strong leadership, and a vision for the future. What we re already doing about it: Taking a hard look at ourselves. How can we become a magnet for talent and investment? How do we perform on the four well-beings? How can we compete for people, businesses and visitors on the national and international stages? Participating in discussions with Tourism Bay of Plenty, Priority One and other stakeholders on our city s and our region s unique selling points. This is our chance to: Enhance our environment and build an attractive city, to preserve the connection between the natural environment and the built environment. The current and future investment in amenities in the city (Civic Heart, waterfront, streetscapes, Phoenix park, Visitor Information Centre) is the opportunity to give life to a new identity and create a coherent and appealing city. Reconnect with our history and champion our heritage, in collaboration with Tangata Whenua. To nurture and celebrate our cultural richness and diversity. Put ourselves out there to New Zealand and the world. Get ourselves on the map. Sell ourselves as a destination, for whatever we decide we want to be. We re on a journey towards these aspirations. Now what s the plan on the medium term?

13 WHAT S THE? 13 WHAT S THE? What s the plan? Key projects for this year and the three years after that We re working to successfully manage Tauranga s growth into the future providing and maintaining infrastructure for our growing city, delivering efficient services to our community, and investing in Tauranga s future. Our city s growth in the last two years was more rapid than projected in the Long Term Plan quite a bit more rapid, 2.5% last year instead of the 1.6% anticipated. We have therefore needed to bring forward even more capital expenditure on infrastructure, to be able to open up more areas of land for housing and to ensure services such as water and wastewater treatment can be supplied to the growing number of people. Here s an overview of the major projects that are in progress or planned for this year (2016/17) and the three years after that. Note that the total project costs in the tables below may include costs prior to 2016/17 and after 2019/20 as well as those in the four years presented. Providing and maintaining infrastructure for our growing city THIS YEAR NEXT THREE YEARS 2016/ / / /20 Total Cost of Project* Completing the Southern Pipeline The Southern Pipeline project will provide a major wastewater pipeline and pumping stations to divert wastewater from the Chapel Street wastewater treatment plant to the Te Maunga plant. This is necessary to provide for the city s growth in the western corridor (Pyes Pa West, Tauriko, The Lakes). Ugrading the Te Maunga Wastewater Plant This upgrade of the Te Maunga wastewater treatment plant is planned to handle the increase in flow caused by the projected increase in population over the next ten years. A new water treatment plant to supply our eastern areas - Waiari We ll be working on building a third water supply intake and treatment plant for Tauranga, near Te Puke. We need this to cope with the planned increase in population over the next ten years. This project consists of the raw water intake works and treatment plant for supplying our coastal strip. Three new water supply reservoirs We ll be building a new water reservoir on Joyce Road (Pyes Pa), one on Kennedy Road (Pyes Pa also) and one on Welcome Bay Road (the Eastern Reservoir) to ensure the future delivery of water thoughout Tauranga. Bridging the Kopurererua Stream This new bridge will connect the Tauriko growth area to State Highway 36 via Kennedy Road. Pedestrian overbridges at Tauriko / The Lakes We ll be building two new overbridges to provide pedestrian access to the Tauriko shopping centre. $10,000,000 $23,923,399 $0 $0 $99,174,456 $2,801,000 $9,737,000 $803,000 $5,208,000 $49,568,206 $800,000 $7,700,000 $16,200,000 $21,000,000 $54,445,387 $7,955,159 $3,796,565 $0 $0 $15,639,401 $3,300,000 $0 $0 $0 $3,400,000 $2,626,000 $130,000 $1,196,000 $0 $3,952,000 * Total project cost may include costs prior to 2016/17 and after 2019/20 as well as those in the four years presented.

14 14 TAURANGA CITY COUNCIL PRE-ELECTION WHAT S THE? Providing and maintaining infrastructure for our growing city continued THIS YEAR NEXT THREE YEARS 2016/ / / /20 Total Cost of Project* Extending Te Okuroa Drive in Papamoa East Works at Te Okuroa Drive are a key part of providing infrastructure to the development of the Wairakei growth area. Upgrading Kennedy Road The improvements to Kennedy Road are planned to provide key infrastructure to the development of the Pyes Pa growth area. Major upgrades for Domain Road Due to the population growth in Papamoa and subsequent increase in traffic, works are planned to reconstruct Domain Road in order to cope with the increased use. Planning for stormwater works across the city We re continuing to upgrade and improve our stormwater network across Tauranga. Sprucing up the Kopurererua Valley Works are planned to develop cycle/walkways, realign the stream, and plant more trees in our beautiful Kopurererua Valley. Tauranga Domain Athletics Track We ll be resurfacing the Tauranga Domain athletics track in 2017/18. This will be partially offset by a $395,150 contribution from the Tauranga Millenium Track Trust. $4,150,213 $11,423,336 $1,333,802 $78,446 $34,303,443 $2,500,000 $2,359,340 $0 $0 $4,939,340 $0 $0 $0 $6,516,383 $7,499,552 $8,200,000 $8,200,000 $6,000,000 $6,000,000 $77,560,114 $200,000 $100,000 $100,000 $100,000 $3,394,419 $0 $790,295 $0 $0 $940,295

15 WHAT S THE? 15 WHAT S THE? Delivering efficient services to our communities THIS YEAR NEXT THREE YEARS 2016/ / / /20 Total Cost of Project Better software and systems to manage our data and serve our customers A new entreprise system (large-scale software to support business processes, information flows, reporting and data analytics) will allow us to process information more quickly and efficiently and allows for greater self-service of information by the public. Wairoa Active Reserve Development Due to the planned population increase around West Bethlehem, works are planned to develop the Wairoa Active Reserve. This includes sportsfields and facilities. Blake Park Hockey Turf Grant We will be contributing to the development of a third hockey turf at Blake Park. This grant to Tauranga Hockey Association is for $600,000 or a maximum of 25% of the total project cost. Completing the urban cycle network and building the new coastal cycle trail In the coming years we ll be completing the urban cycle network in our city (routes A-J), and building the connection between Omokoroa and Tauranga s Coastal Cycle Route. The cycle trail will run from the Wairoa River Bridge, alongside the rail corridor, all the way to Otumoetai. TECT All Terrain Park Development We have a joint project with Western Bay of Plenty District Council to further develop and maintain the TECT All Terrain Park in Pyes Pa, our outdoor adventure park. More parking spaces in the Elizabeth Street Carpark We re finalising the construction of an additional floor on the Elizabeth Street carpark. This will provide an additional 110 spaces in the CBD. A future sportsfield in Te Tumu Due to the planned growth in the Te Tumu growth area in Papamoa East, land purchase for sportsfield development has been planned for $3,000,000 $1,000,000 $0 $0 $7,000,000 $309,806 $2,809,682 $2,500,000 $2,000,000 $7,659,488 $0 $600,000 $0 $0 $600,000 $752,829 $1,913,000 $0 $0 $2,665,829 $310,000 $260,000 $135,000 $85,000 $4,444,648 $1,040,000 $0 $0 $0 $5,172,000 $0 $0 $4,500,000 $0 $4,500,000

16 16 TAURANGA CITY COUNCIL PRE-ELECTION WHAT S THE? Investing in Tauranga s future THIS YEAR NEXT THREE YEARS 2016/ / / /20 Total Cost of Project More fun on the waterfront We will be doing major works on the Tauranga city centre waterfront to create access to the water. This will include building tidal stairs (planned for 2016/17), a wharf, public areas and a seawall. Creating Tauranga s Civic Heart* The proposed Civic Heart project includes a new civic administration building, improvements to Masonic Park, a new carpark building in Harrington Street and feasibility studies on a museum, new library and a new perfoming arts centre. This project is currently undergoing public consultation. The figures here are those from the original proposal, and are subject to change. Our Digital Strategy We want to be a connected city and take advantage of what technology offers. This project provides funding for digital innovation, contributing to a digitally-enabled city. This work will give the public greater access to Council information online and provide a platform for greater digital interaction. Transforming Phoenix Carpark We will be redeveloping the current Phoenix carpark in the Mount into an urban park. This will include upgrading the public toilets and creating new public areas. Building the future marine hub of the Bay We ll soon start to build Tauranga s own purposebuilt marine servicing facility at Sulphur Point, the Tauranga Harbour Marine Precinct. The precinct will provide a base for boat building and refit businesses in Tauranga. It is jointly funded by Tauranga City Council and the Bay of Plenty Regional Council. The project includes procuring the largest travel-lift in NZ and building the marine infrastructure to go with it. Floodlights for night games at Bay Oval We will be providing a grant to the Bay Oval Trust for lighting at Bay Oval. This will give Tauranga the capability to host a greater number of largescale cricket events, day and night. This project is scheduled for $3,500,000 $1,000,000 $500,000 $0 $6,203,975 $8,615,520 $37,728,435 $35,599,393 $9,763,595 $91,706,943 $1,100,000 $1,400,000 $250,000 $250,000 $4,000,000 $750,000 $1,160,000 $0 $0 $2,000,000 $9,570,000 $500,000 $0 $0 $11,409,250 $150,000 $765,000 $0 $0 $915,000 * Note on Proposed Long Term Plan Amendment Creating Tauranga s Civic Heart Council s civic buildings have been affected by significant weathertightness issues and moderate earthquake risk. Weathertightness issues resulted in relocation of staff from most of the main council buildings in A Civic Space Options project was undertaken, resulting in a proposed Long Term Plan Amendment which was consulted on in June and July Decisions are expected to be made by the end of August The Long Term Plan Amendment proposes to provide new council accommodation with immediately surrounding open space (a civic place) by 2020 on the Willow Street site. An open space area around the building would connect to a proposed new civic square on Masonic Park. The proposal also includes conducting feasibility studies for a library, museum and performance venue. Go to for detailed information on the Civic Heart proposed Long Term Plan Amendment.

17 RUNDOWN 17 RUNDOWN What we ve been up to in the past three years This is a quick run-down of the key projects and decisions that have come out of council in the past three years. Providing and maintaining infrastructure for our growing city We built an interchange at Mangatawa, an off-ramp at Sandhurst Drive and an interchange at Domain Road to allow access on and off the new Tauranga Eastern Link. We laid major water mains at Joyce Road in Pyes Pa to provide water supply to the Tauriko growth area. We started building vertical evacuation structures and bridges in Papamoa East, and decked the coastline with directional evacuation signs to support safe evacuation in the unlikely event of a tsunami. We began to address significant stormwater issues in some of our worst-affected areas across Tauranga. Delivering efficient services to our communities We created a new Council-Controlled Organisation, Bay Venues Limited, to manage and develop our indoor sports and community facilities. We automated the city centre car parking buildings so that people can park 24/7 and pay more easily, and we provided pop-up carparks on Devonport Road and Cliff Road to help meet demand. We laid a new boardwalk around Pilot Bay and installed new family barbecue areas. We installed lighting, irrigation and a new carpark at Blake Park so that people can make the most of the reserve. We built a new library in Greerton, which will provide access to books, information and education but also be a hub for the community to come together. Investing in Tauranga s future We increased our investment in major events to showcase the city, attract visitors and increase our city s vibrancy. We provided land in the city centre for the future Tauranga campus of the University of Waikato, which will provide extended education opportunities to people in Tauranga. We increased support for economic development agency Priority One to promote and enhance the commercial sector in Tauranga. We continued to develop the waterfront, contributing to the Hairy Maclary statues and undertaking landscaping to create an attractive and fun city centre. We kicked off and obtained Regional Council funding for the development of the Marine Precinct, engaged with the local marine industry and successfully completed the sale of lots to marine businesses. While managing rates and debt In June 2015 we sold Route K to NZTA as part of the state highway network. This stretch of road goes from SH29 at the Lakes to the 15th Avenue connection. The $61m we received for this road gave us capacity to construct the new infrastructure required by our growing city and to improve capital investment in areas such as stormwater and city centre renewal and enhancement. Debt has also reduced significantly from a budget of $355m to $297m at 30 June This is due to a combination of unbudgeted land sales, high development contributions revenue and deferral by a year of some capital expenditure.

18 18 TAURANGA CITY COUNCIL PRE-ELECTION THE BOOKS The books Our financial strategy The primary financial strategy for Tauranga City Council revolves around providing the best value for ratepayers using the following key performance indicators: Maintaining Council debt at a level less than $500m Maintaining a debt to revenue ratio of less than 225% Maintaining affordable rate levels by limiting rate increases to CPI (Consumer Price Index) + 2% after growth Maintaining a quantified limit on rates as previous year s rates + rates % limit. Tauranga City Council has achieved each key performance indicator for the last three years as shown below. 2013/14 LTP 2014/15 LTP 2015/16 LTP Annual Report Limit Annual Report Limit Projection Limit Maintain debt less than $500m $365m $402m $304m $412m $297m $355m Maintain a debt to revenue ratio of less than 225% Maintain affordable rate levels through limit on rate % increase after growth 214% 250% 164% 250% 155% 225% 1.0% 5.0% 6.8%* 4.3% 3.5% 3.7% Maintain limit on Rate Collection $105.8m $108.9m $114.2m $114.7m $120.3m** $119.9m Favourable Unfavourable *2014/15 rates included a special levy of 4.5% to create a fund for stormwater alleviation projects. ** Higher rates collection was due to timing of new rating units (more rating units than anticipated when we struck the rates). Financial position The Statement of Financial Position shows what Tauranga City Council owns (its assets) and what it owes (its liabilities) at the end of the financial year. This statement provides a snapshot of Tauranga City Council s net worth (assets less liabilities) at a point in time. Assets and liabilities The Council s net worth is $3,166 million as at 30 June This is calculated as the difference between the total assets and the total liabilities of the Council. Council s net debt is $297m. When we talk about net debt we are referring to Council s borrowings (both current and non-current) offset by its cash and short term deposits. Assets The Council s total assets at 30 June 2016 are worth $3,591 million. The major assets of the Council include: Other non-current assets, including investment properties, intangible assets such as our systems and databases, and the value of investments in Council- Controlled Organisations Bay Venues Limited and the Art Gallery; and Current assets including debtors (people who owe us money), cash and short term deposits. Each year we construct, develop and renew assets around Tauranga. This adds to the value of property, plant and equipment. Liabilities The Council s total liabilities at 30 June 2016 are $425 million. The major liabilities of the Council include: Gross borrowings; and Other liabilities such as trade and other payables. Property, plant and equipment - this includes land, buildings and infrastructure assets such as networks to supply water and treat wastewater, provide roads and manage stormwater throughout the city;

19 THE BOOKS STATEMENT OF FINANCIAL POSITION ORIGINAL LTP PROPOSED LTP AMENDMENT ESTIMATED ASSETS ASSETS - CURRENT 2013/ / / /17 Cash and Short-term Deposits 30,017 35,563 18, Debtors & Other Receivables 17,089 15,330 17,311 15,330 17,914 18,374 18,872 17,914 18,374 18,872 Inventories Derivative Financial Instruments 38 1, , Non-Current Assets Held for Sale 2017/18 10,015 6,042 8,358 4,356 4,818 5,036 2,812 4,818 5,036 2,812 Total Current Assets 57,693 58,442 44,755 21,193 23,347 24,041 22,332 23,347 24,041 22, / / / / /20 ASSETS - NON-CURRENT Derivative Financial Instruments 1,771 1,773 1,858 1,773 1,771 1,771 1,771 1,771 1,771 1,771 Other Financial Assets 5,761 5,953 6,080 6,969 9,366 10,449 11,586 9,366 10,449 11,586 Other Investments - CCO s 82,532 98, , , , , , , , ,955 Other Investments - Other Entities Investment Properties 29,334 40,703 50,283 40,703 30,894 31,719 32,607 30,894 31,719 32,607 Intangible Assets 9,476 7,455 11,942 7,343 9,141 9,029 8,917 9,141 9,029 8,917 Forestry 6,211 10,160 9,236 10,160 6,542 6,717 6,905 6,542 6,717 6,905 Property, Plant & Equipment 3,217,822 3,209,042 3,364,708 3,346,889 3,642,925 3,818,827 4,022,343 3,648,246 3,864,213 4,080,375 Total Non-Current Assets 3,656,067 3,373,590 3,546,358 3,520,354 3,802,152 3,984,185 4,194,259 3,807,473 4,029,571 4,252,291 TOTAL ASSETS 3,410,760 3,432,032 3,591,113 3,541,547 3,825,499 4,008,226 4,216,591 3,830,820 4,053,612 4,274,623 THE BOOKS 19

20 THE BOOKS STATEMENT OF FINANCIAL POSITION ORIGINAL LTP PROPOSED LTP AMENDMENT LIABILITIES LIABILITIES - CURRENT 2013/ /15 ESTIMATED 2015/ / / / / / /19 Payables & Deferred Revenue 33,746 43,288 41,353 34,060 35,371 36,280 37,264 35,371 36,280 37,264 Provisions 6,379 7,083 6, Employee Entitlements 3,659 2,568 3,883 2,568 3,835 3,934 4,041 3,835 3,934 4,041 Deposits Held 4,204 4,526 5,041 4,526 4,406 4,519 4,642 4,406 4,519 4,642 Revenue in Advance Development Contributions 5,005 3,153 2,885 3,153 5,246 5,381 5,527 5,246 5,381 5,527 Derivative Financial Instruments Borrowings 90,000 75,000 30,000 60, , , , , , ,484 Total Current Liabilities 143, ,999 89, , , , , , , ,678 LIABILITIES - NON-CURRENT Provisions Employee Entitlements Derivative Financial Instruments 18,108 28,083 48,302 28,083 18,108 18,108 18,108 18,108 18,108 18,108 Borrowings 305, , , , , , , , , ,622 Total Non-Current Liabilities 323, , , , , , , , , ,164 TOTAL LIABILITIES 466, , , , , , , , , ,842 NET ASSETS 2,943,803 3,012,462 3,166,499 3,077,150 3,315,277 3,473,442 3,658,216 3,316,624 3,477,060 3,662,782 EQUITY Retained Earnings 776, , , ,842 1,007,252 1,080,218 1,167,798 1,009,154 1,083,104 1,171,584 Other Reserves 2,167,373 2,169,638 2,292,023 2,141,308 2,308,025 2,393,224 2,490,418 2,307,470 2,393,956 2,491,198 EQUITY 2,943,803 3,012,462 3,166,499 3,077,150 3,315,277 3,473,442 3,658,216 3,316,624 3,477,060 3,662, /20 20 TAURANGA CITY COUNCIL PRE-ELECTION THE BOOKS

21 THE BOOKS Funding Impact Statement The Funding Impact Statement shows how Tauranga City Council will pay for its budget each year. The statement includes where the money will come from, how much money will come from each available source and where the money will be spent. These statements reflect the growth of the rating base and the increase in building activity in Tauranga, and the increase expenditure to cater for this growth by investing in infrastructure and facilities and upping our delivery of services. Overall the financial results for Tauranga City Council for the year to 30 June 2016 reflect the growth in residential property in Tauranga over the past year. This is reflected in higher development contributions (DCs) with total DCs for the year of $27m $10m above budget. Almost 1,600 new dwelling permits were issued for the year, which is 86% above the ten-year average. In operational revenue and costs the higher levels of activity in Tauranga are reflected in higher demand and associated user fee revenue across a range of Council activities, along with higher operating costs incurred as Council meets this demand. FUNDING IMPACT STATEMENT ORIGINAL LTP PROPOSED LTP AMENDMENT ESTIMATED SOURCES OF OPERATING FUNDING General Rates, Uniform Annual General Charges, Rates Penalties Targeted Rates including targeted rates for Water Supply Subsidies and grants for operating purposes Interest and Dividends from Investments 2013/ / / / /18 84,639 91,441 95,723 99, , , , , , ,015 37,660 39,505 42,051 43,512 45,189 47,640 49,731 45,189 47,639 49, /19 4,161 4,322 4,095 4,452 4,394 4,529 4,657 4,394 4,529 4,657 4,459 4,228 2,991 1,834 2,463 2,649 2,786 2,462 2,649 2,786 Fees and charges 34,844 38,503 40,069 38,415 34,523 35,902 37,498 34,079 36,225 37,831 Local authorities fuel tax, fines, infringement fees, and other receipts Total Sources of Operating Funding (A) 1,401 1,422 1,045 1,506 1,588 1,629 1,673 1,589 1,629 1, , , , , , , , , , , / / / /20 THE BOOKS 21