Report
Date
: 26 April 2024
To
: Chairperson and Committee Members
Finance and Performance Committee
From
: Raj Suppiah
Group Manager - Corporate & Regulatory
Subject
:
Adoption of the Consultation Document, Draft Long Term Plan
and Supporting Information
Item No :
4.1
1.
Recommendation
1.1
That the report from the Group Manager - Corporate & Regulatory dated 23
April 2024 concerning the Adoption of the Consultation Document, Draft Long
Term Plan and Supporting Information be received.
1.2
That the Council adopts for consultation the unaudited 2024-2034 Long-Term
Plan consultation document; and
1.3
That the Council adopts for consultation the Draft 2024-34 Long-Term Plan and
other Supporting Material detailed in paragraph 9 of this report; and
1.4
That the Chief Executive is authorised to approve any final edits required to
the Consultation Document, Draft Long-Term Plan and Supporting Material in
order to finalise the document for printing and distribution.
Executive Summary
The purpose of this report is to recommend that Council approve the 2024-34 Long-term Plan
Consultation Document (CD) and Supporting Material for consultation. Council is required to
have a Long-Term Plan (LTP) and must use the special consultative procedure in adopting the
LTP.
Consultation wil provide Council with formal feedback on its proposed strategic direction,
levels of service, programmes and budgets. This wil then enable Council to finalise and adopt
the LTP by no later than 31 July 2024.
Developing an LTP is an iterative process involving identifying Council aspirations and
balancing that with the community’s ability to pay for the service levels proposed to be
delivered in the LTP. The LTP also considers the chal enges and opportunities that Council and
the community face over the 10 years of the plan.
The Draft CD and proposed LTP is based on Council’s best information at the time. Council wil
adjust the proposed LTP in response to Audit, any submissions received from the community
and new information that becomes available during the consultation period and up to
adoption.
Fol owing the adoption of the Consultation Document and supporting material for
consultation, formal consultation will commence on 1 May 2024. The Communications Team
has developed a Consultation and Marketing Plan that details how Council will consult with
the community on this LTP.
2.
Reason for the Report
2.1
The purpose of this report is to recommend that Council approve the 2024-34 Long-
term Plan Consultation Document (CD) and Supporting Material for consultation.
2.2
Council is required to have a Long-Term Plan (LTP) and must use the special
consultative procedure in adopting the LTP.
3.
Relief provision for the 2024-2034 LTP
3.1
Under normal circumstances, Audit NZ would audit the CD and Supporting Material
prior to public consultation and an Audit Opinion would be included in the CD.
3.2
During the 2023 general election, the incoming Government signal ed its intention
to repeal water services legislation, The ongoing uncertainty around three water
reforms has made it difficult for councils to prepare their LTPs so the new
Government provided councils with relief in the preparation of their LTP, by
presenting options in relation to adoption of their LTP.
3.3
One of the options provided to Councils was the ability to release for consultation
the CD and Supporting Material, without first obtaining audit reports. However, al
councils are still required to get their final LTPs audited. This includes a review of
the assumptions, risks and implications that underlie the whole LTP.
3.4
Management’s recommendation was to take advantage of the reliefs provided and
consult on the LTP with an unaudited consultation document and adopt the Final
LTP no later than 31 July 2024.
4.
Developing the Long-term plan
4.1
Council has held various workshops to discuss the 2024 LTP. These workshops have
included our two Iwi partners, Ngāti Kahungunu ki Tāmaki-nui-a-Rua and Rangitāne
o Tamaki nui-ā-Rua.
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4.2
The LTP development started with the vision and goals setting workshop that
considered the outputs of the Elected Members and Management Strategy Session
and was facilitated by an external consultant.
4.3
Fol owing that the environmental scan and LTP assumptions were workshopped.
The environmental scan continues to be updated and inform the LTP development.
4.4
The next key set of workshops were about “levels of service”, where officers
presented their activities with the focus on our “why,” strategic alignment, and
chal enges and opportunities.
4.5
Officers then started to prepare draft strategies, plans, projects, policies,
programmes and budgets, showing how Council could best deliver the vision and
Focus Areas (in the strategic framework) and workshopped these with Council ors.
4.6
Lastly, we held workshops to prioritise the work programmes and budgets.
4.7
After consultation submissions have been heard officers will finalise the LTP
publication for adoption, and rates will be set.
5.
Consultation
5.1
Fol owing the adoption of the Consultation Document and supporting material for
consultation, formal consultation wil commence on 1st May 2024. The
Communications Team has developed a Consultation and Marketing Plan that
details how Council wil consult with the community on this LTP.
5.2
In addition to having the Consultation Document publicly available, Council wil also
use the fol owing ways to engage with the community:
a) Each ratepayer will be sent a mock invoice detailing the proposed rates for their
property and a Long-Term Plan pamphlet with information on the consultation
items and where they can go for more information.
b) Council will reserve a dedicated page in the Bush Telegraph that summarises the
Consultation Document and informs the reader of consultation timelines and
how to make a submission. During the month of May, every week we will publish
a full page in the BT that will be solely focussed on the LTP. This wil be in
addition to Council’s regular BT pages.
c) Roadshows in May where the Mayor, Councillors and staff will visit 6 towns
across the district (Norsewood, Dannevirke, Woodville, Pahiatua, Eketāhuna,
and Pongaroa) to discuss the Consultation Document and the Draft LTP with the
community.
d) Council wil have a dedicated LTP page on the Council website. The public will
be able to download the Consultation Document and make online submissions
on this page. Council wil also advertise the LTP and encourage submissions on
the homepage of the Council website.
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e) Council will advertise LTP Consultation via Facebook, radio, and the Bush
Telegraph during the consultation period. Advertising posters will also be
produced for display at Libraries and Service Centres.
6.
Significance Assessment
6.1
Council’s Long-Term Plan is the key direction setting tool for Council’s proposed
strategic direction, levels of service, budgets, and programmes for the next 10 years.
This is a significant document and requires formal consultation with the community
prior to adoption.
6.2
Council is required by the Local Government Act and Council’s Significance and
Engagement Policy to use the special consultative process for this consultation.
6.3
The Consultation Document is the key consultation tool for the Council’s Long-Term
Plan. In addition, Council’s Communications Team has prepared a consultation
strategy as set out in paragraph 6 of this report.
7.
Council Strategic Framework
7.1
For this LTP, Council aligned the Strategic Framework with its District Plan. The new
Strategic Framework identifies and celebrates the Tararua District, and everything
that we love about living and working here. It consists of our Vision for the future,
the Foundations that we are committed to, Strategic Enablers that enable us to plan
for the future, as wel as Our Focus Areas and Desired Outcomes that we want to
achieve.
7.2
This Strategic Framework has shaped the development of our draft Long-Term Plan
and the projects, services, activities, and programmes of work we are planning for
the next 10 years.
7.3
The images below, extracted from the CD, summarises the Strategic Framework:
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8.
Consultation Document
8.1
The Consultation Document has been prepared according to the requirements of
the Act.
8.2
As per Section 93B of the Act, the purpose of the consultation document is to
provide an effective basis for public participation in local authority decision making
processes relating to the content of a Long-Term Plan by:
a) providing a fair representation of the matters that are proposed for inclusion
in the Long-Term Plan, and presenting these in a way that:
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i. explains the overall objectives of the proposals, and how rates, debt, and
levels of service might be affected; and
ii. can be readily understood by interested or affected people; and
b) identifying and explaining to the people of the district or region, significant
and other important issues and choices facing the local authority and district
or region, and the consequences of those choices; and
c)
informing discussions between the local authority and its communities
about the matters in paragraphs (a) and (b).
8.3
The key issues for consultation with the community in this LTP are:
a) Rates Smoothing
b) Pahiatua Swimming Pool
c) National Land Transport Programme
d) Economic and Community Development
e) Differential Roading Rates
f) Rates and Remissions Policies Review
i. Town Centre Refurbishment rates
ii. Non-Contiguous Remissions
8.4
Other matters are we are highlighting to the community that we wil be looking at
in this LTP are:
a) Rationalisation of Community Buildings and Council Land
b) Integration of Council services and Community Hubs
c) Birch North Forest – commenced the sale.
d) Service level reviews for
i. Swimming Pool and Campgrounds
ii. Waste Management
iii. Sealed and unsealed roads
e) Major projects
i. Dannevirke Impounded Supply
ii. 3 waters renewals
iii. District Plan/Growth Strategy and Urban Design
9.
Draft LTP and Supporting Information
9.1
The information attached for Council’s review and adoption are:
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a) Draft Long-Term Plan 2024-2034.
Contained within this document are the fol owing key strategies and
information:
i.
Financial Strategy
ii.
Infrastructure Strategy
iii.
Revenue and Financing Policy
iv.
Rates Funding Impact Statements and Rating Policy
v.
Rates Remission Policy
vi.
Forecast Financial Statements and Accounting Policies
vii.
Significant Forecast Assumptions and Risks
viii.
Activity Profiles and Performance Management Framework
ix.
Building community with tangata whenua
b) Other Supporting Information
i.
Significance and Engagement Policy
ii.
Draft Asset Management Policy
iii.
Draft Fees and Charges 2024/2025
10.
Infrastructure Strategy
10.1
The purpose of the Infrastructure Strategy 2024-2054 is to provide reliable
infrastructure that is fit for purpose and future proofs our thriving district for
tomorrow.
10.2
Developing this strategy assists Council to look at what is likely to be required over
the next 30 years; balancing the ratepayer’s ability to pay and future ratepayers
having wel maintained and functioning infrastructure.
10.3
The Infrastructure Strategy, in conjunction with other strategies of Tararua District
Council i.e., Growth Strategy, District Strategy, Finance Strategy and the relevant
Asset and Activity management Plans tell the story about where of Tararua District
Council is currently, expect to be, and how it intends to get there.
10.4
It explores policy considerations, aspirations for growth, and provides an overview
of the key constraints. This includes funding, physical restrictions and data
availability and accuracy. An understanding of the age, condition, and performance
of critical assets, as well as future demand, is important in assessing actual and
planned expenditure to sustainably maintaining assets.
10.5
The objectives in the strategy are:
•
To ensure a reliable supply of safe drinking water to our communities.
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•
To ensure efficient and reliable wastewater treatment that meets
environmental outcomes.
•
To ensure efficient stormwater network capacity that protects from flood
events.
•
To ensure public roads and footpaths are safe, reliable, and resilient.
10.6
The Big Picture issues are:
•
Affordability
•
Infrastructure Age and Condition
•
District Growth
•
Climate change and Natural Hazards
•
Legislative Change
10.7
The priorities and areas of focus are:
•
Improving asset information and infrastructure asset management maturity.
•
Delivering ongoing maintenance and renewals programmes to meet current
renewal levels and with a view to preserving asset life and levels of service.
•
Meeting levels of service concurrently with reactive maintenance, while
developing and implementing capital and renewal programs to meet current
and future demand.
•
Addressing key level of service deficiencies
•
Addressing key network performance issues
•
Improving service delivery and asset resilience to natural hazards and the
effects of climate change
•
Network extensions to enable sustainable urban growth and infil in our
townships.
•
Ensure compliance with resource consents and statutory requirements.
•
Ensure infrastructure and services are developed with environmental
protection as a key consideration.
11.
Financial Strategy
11.1
The financial strategy sets out our planned approach to financial management over
the life of the 10-year plan. It outlines how council intends to manage its financial
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resources, details the funding required to support capital investments and service
delivery, and assess the impacts on rates, debt, service levels, and investment
resulting from decisions made.
11.2
The principles that guide the Financial Strategy are:
•
Affordability – Council will deliver on public value while balancing rates
affordability, sustainability, and reflecting the services this plan details we will
deliver.
•
Financial Stability – Ensuring council manages its finances in a way that
maintains financial prudence and ensures long-term financial sustainability
and resilience.
•
Investment in Infrastructure – Continue to invest in our infrastructure to
ensure our assets are able to provide services now and into the future while
considering inter-generational impacts of council decisions.
•
Revenue Sources – To maximise the amount of external funding received to
reduce the financial burden on ratepayers.
11.3
The key strategies in the 2024-34 Financial Strategy are:
•
Rates Limit: Increase Council’s rates limit to service the increased debt levels,
fund the operational cost increase resulting from investment in infrastructure
and growth projects, and increase cost to meet service levels.
•
Dedicated Debt Repayment: Continue with the dedicated debt repayment
programme which ensures Council has continued financial resilience whilst
continuing to invest in infrastructure that meets existing community needs
and enables growth.
•
Borrowing Limits: Increase Council’s debt limits to enable further capital
investment to improve infrastructure, including community and recreation
facilities that enables growth.
•
Revenue Sources: Alternative funding streams in line with Council’s pricing
strategy and ensure opportunities for external funding is maximised.
•
Balanced budget: Council wil meet s100 of the LGA balanced budget
requirement by fund an appropriate level of depreciation for future asset
renewals and build reserves.
11.4
In our LTP workshops the pressure rates place on our community and the question
of affordability was discussed and informed the proposed rates increases especial y
for Year1.
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11.5
For this LTP believe we have achieved a balance in the rates increase decision but
recognise that rates do contribute to a sizeable portion of household costs.
11.6
In the Financial Strategy, we have set the rates limits for this plan as follows:
•
Years 1 to 5 (2024-2028): rates increase less than 11%;
•
Years 6 to 10 (2028-2034): rates increase in any one year will be maintained
within the weighted average local government cost index, which is calculated
as BERL and specifical y reflects the types of costs faced by councils, plus three
percent, plus two percent dedicated for debt acceleration.
11.7
The proposed rates increase for the LTP are as per the Graph and table below.
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11.8
The table below shows Council’s available headroom. Although Council complies
with all the debt limits except for one in year 5 for the 10 years of the Long-Term
Plan as per its Treasury and Risk Management Policy, Council has very little
headroom (if any) available during years 4 – 6 (2027- 2030) of this LTP.
11.9
In these years Council wil have very little ability to respond to an unforeseen event
should it be required to do so; Council wil also need to be prudent in approving any
unbudgeted expenditure in the years leading up to and including 2027-2030.
11.10
Because of this, in years 2 and 3 of the plan Council will look to become a credit
rated Council, to al ow Council to increase its borrowing limits outside of the
maximum limits imposed under its LGFA covenant of 175%.
11.11
This graph shows the change to Council’s debt headroom based on various
benchmark scenarios, including being credit rated.
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12.
Rates Impact
12.1
The proposed rates increase for Year 1 of the LTP is 10.30%. However, the sector
burden of the rates increases vary. These variances are primarily driven from
changes to rating valuations, cost increases in the 3 waters activities (impacting
urban and Industrial/Commercial) and changes to the roading rates.
12.2
Like many Councils in New Zealand, we’re facing big financial challenges. On
average, local Council rates are increasing by 15%. In this LTP we need to increase
our rates by 16.29% in 2025 (Year 2 of the LTP) to deliver on our service levels, meet
legislative requirements, and fund infrastructure projects.
12.3
The fol owing graph expands on the table above and shows the distribution of the
rates. Though the average rates increase is 10.30%, the increases range from above
20% to less than 5% increases.
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12.4
The UAGC Rates Cap is at 24% and is set at $645.12 compared to 659.95 in the
current year. This was to reduce the sector distribution of rates to the urban and
Industrial/Commercial sectors. Council may, at the completion of consultation,
revisit the sector distribution of the rates and use the tools in its rating system.
13.
Service performance measures
13.1
The LTP should provide a clear basis for assessing a council’s performance. The
service performance information allows communities to effectively assess the
council’s performance and hold it to account.
13.2
The performance reporting framework should reflect the council’s intended
direction, both overall and for each group of activities. It should provide clarity
about what the council plans to achieve in the short term and an indication of its
plans and performance in the longer term.
13.3
In this LTP, Council reviewed its performance measures and made changes to align
them to our strategic framework and focuses its activities on what they need to
measure their performance against. These measures help councils monitor
performance, identify areas for improvement, and demonstrate accountability to
ratepayers.
13.4
The key changes are summarised in Appendix -
Service Performance Measures 2024-
2034 LTP - brief description of changes.
14.
Fees and Charges
14.1
Every year Council reviews its schedule of fees and charges. The fees and charges
set by councils are an important tool for managing affordability and rates increases
by diversifying revenue sources, recovering costs, maintaining affordability for
ratepayers and incentivising responsible use of services.
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14.2
By carefully reviewing and adjusting fees and charges annual y, Councils can ensure
that they remain fair, equitable, and reflective of the cost-of-service provision.
14.3
The key changes are summarised in Appendix -
Proposed Fees and Charges key
changes.
15.
Conclusion
15.1
Recommendation is that Council adopts the unaudited 2024-2034 Long-Term Plan
Consultation Document, the Draft 2024-34 Long-Term Plan and other Supporting
Material for consultation with the community commencing 1 May 2024.
Attachments
1.
TDC - LTP - Consultation Document - 2024 - DESIGN FINAL
2.
Service Performance Measures 2024-2034 LTP - brief description of changes
3.
Proposed Fees and Charges - key changes
4.
DRAFT TDC Fees and Charges 2024-25 250424
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Document Outline
