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Introduction to the Long Term Council Community Plan
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The 3 yearly preparation of the Long Term Council Community Plan
(LTCCP) is a cornerstone of the accountability requirements of the Local
Government Act 2002. The intention of the Act is very explicit, which
is to pro-actively involve the community in decision-making processes,
of which this plan forms a fundamental part. The plan contains a vast
amount of information related to this Council's policies, financial
forecasts, work programmes, intended outcomes, funding methods and
many other areas.
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On this page
This introduction, together with the following section '10 years in 10 minutes', highlights some of the key issues included in the LTCCP and the results of the consultative process on the draft LTCCP. Auditor's Report and Disclaimer.
The availability of the draft LTCCP was extensively notified in various Hawke’s Bay newspapers, both those that are subscribed to and those which are free. A comprehensive summary of the Plan was included in the April issue of the Council’s ‘The Big Picture’ publication distributed free to homes in the region. Four public meetings were held throughout the region which 72 people attended. By the time submissions closed on Monday, 22 May 2006, 66 written submissions had been received which contained over 200 individual issues and items raised by submitters. Thirty four submitters presented their submissions in person to Council on 13, 14 and 15 June. The major issues considered under each Group Activity and other headings were as follows: - Environmental Management (43 issues and items raised)
A wide variety of issues were raised under this activity. Particular mention was made of the central government’s requirement of Council to meet the new National Environmental Standards for Air Quality, especially the PM10 emission standard by 2013. There were also passionate pleas from submitters for Council to reconsider its approach to land clearance. This particularly related to Council’s current preferred methods of educating land owners and providing incentives as opposed to regulating land use. Further requests were made of Council to limit ongoing urban sprawl and to consider carefully the ramifications of ongoing coastal development, particularly in existing wilderness areas. - Land Drainage and River Control (10 issues and items raised)
The majority of issues raised under this activity related to the enhancement and increase in flood capacity for the Karamu Stream and various tributaries. All the submissions were in support of Council’s initiatives in this area and therefore the programme will commence from 1 July 2006 as intended but with the possibility of accelerating enhancement works in future years. - Biosecurity (10 issues and items raised)
Issues raised related to both plant and animal pests, and many of the items raised will be more appropriately considered as part of the review of the Regional Pest Management Strategy. A number of submitters raised issues in regard to implementation of existing strategies and various matters will be investigated as a result. Additional targeted rate and general funding resources will be committed to Animal Health Board activities to match the intended programmes over the coming years, as well as the reinstatement of contributions towards the national costs of the Bovine Tb National Pest Management Strategy. - Hazard Management (9 issues and items raised)
The majority of issues raised related to coastal hazards and Council’s approach to monitoring these hazards. Council made no change to the Draft Plan with respect to the submissions made. - Land Transport (25 issues and items raised)
Many submitters commented on the pending peak oil scenario that is developing world wide and the consequences on society, particularly the need for public transport. Many comments were made about the existing subsidised passenger transport services, and how these could be improved, as well as about the extent of the Total Mobility service. In response to the submissions received, Council has committed an additional $12,000 per year for the period of the Plan to further promote the subsidised passenger services and $15,000 to carry out a marketing plan for the services in year 1. Council also committed $20,000 per year (adjusted for inflation) for support from general funding sources for Total Mobility users who are outside the targeted rating area. This contribution is capped annually and criteria for accessibility to this funding will now be determined. - Economic, Cultural and Social Well-Being (52 issues and items raised)
There were numerous requests for funding support for various projects and initiatives, with particular support for the work of Sport Hawke’s Bay and the need for greater public funding of this entity. Submitters also commented on Council’s support for Hawke’s Bay. Incorporated with views split for and against the level of support (currently $400,000 per year) and how the funding is utilised. At the request of the Mayors of Wairoa, Napier, Hastings and Central Hawke’s Bay, Council has agreed to participate in a working party which will investigate the funding of major infrastructure investment in the areas of sport and recreation, open space areas and, to a lesser degree, arts and culture. Council has supported this proposal as it accepts that there is currently a fragmented and ad hoc approach to the public funding of these public assets and also a limit to what individuals, corporates or other trusts are able to provide as funding support for these activities. As a consequence of this decision, Council did not approve funding requests for any grants related to these activities pending the outcome of the findings from this working party and further specific consideration of the issues by Council. There were also considerable comments and support from submitters on Council’s proposal to develop a vision and associated policy for the development of further publicly accessible open space areas in rural settings. Submitters were strongly in favour of this initiative. However, some cautioned against the rating implications of such a move while others encouraged Council to secure public access and use rights, particularly in coastal areas, before further areas were developed. Council will now proceed over the course of the coming year to develop vision for publicly accessible open space areas in the region and develop associated policy on how Council will work towards the vision established.
Council has increased expenditure commitments in a number of areas. The expenditure levels shown below refer to average payments to be made during each year of the plan: - Policy Development (+$63,000)
This expenditure relates to the rolling reviews that will occur for the Regional Coastal Plan, the Regional Resource Management Plan and Regional Policy Statement and is required for consultant and legal inputs. - NES for Air Quality (+$36,000)
This is to provide for Council’s preliminary response to the new National Environmental Standard for Air Quality. This amount excludes any future subsidy that may be initiated by Council to encourage the conversion from wood burning heating devices to more clean burning methods of heating domestic homes. - Environmental Monitoring and Related Resource Management (+$63,000)
Council has committed funds for the ongoing maintenance of groundwater models and for monitoring programmes for lakes, estuarine areas and soils. - Navigation and Safety (+$13,000)
This amount is for the management of shipping activities in the coastal marine area, and the information requirements related to this. - Building Act (+$10,000)
This sum has been provided to help meet Council’s obligations with respect to the Building Act amendments that have been made by central government. - Biodiversity Protection Grants (+$81,000)
In year 2 these grants are projected to increase by $61,000 and in the following year to the full amount. There will be increases in grants available for on-farm wetland development, other significant regional wetlands, and the introduction of a grants scheme for estuarine and coastal cliff areas. - Agrichemical collection (+$30,000)
Funding for a 3rd collection each year has been provided, as well as associated disposal costs. - Soil Conservation Grants (+$60,000)
This sum will be for additional Soil Conservation Grants under the Regional Landcare Scheme from 2007/08. - Karamu Stream Enhancement (+$45,000)
This amount will meet the general funding contribution to the enhancement of the Karamu Stream. - Hazard Management Initiatives (+$66,000)
This sum is for additional hazard management initiatives including coastal processes monitoring, flood risk modelling and initiatives to meet Council’s obligations under the new Civil Defence Emergency Management Group Plan. - Total Mobility (+$22,000)
This sum will be used to meet the local share of Total Mobility services for those users who live outside the targeted rating areas for subsidised transport services. - Cycleways/Pathways (+$8,000)
Council has guaranteed a contribution of $50,000 for the further development of pathways in 2007/08 and 2008/09.
General funding rates for Council include the general rate (levied on land value) and the uniform annual general charge. Included in the LTCCP are the following projected movements in general funding rates: 2006/07 $351,000, 2007/08 $584,000, 2008/09 $450,000, 2010/11 $150,000 and 2012/13 $100,000. Despite allowances for inflation throughout the 10 year period of the plan, general funding rate increases are not proposed in every year of the Plan. The reason is that Council's nonrate revenue sources of income (i.e. investment returns) are projected to increase substantially more than the impact of inflation on costs. However, it should be noted that if Council chooses to commit additional resources beyond those planned, then additional general funding rate movements will be required. There are several reasons for the increases in general funding rates. They are: - The additional expenditure commitments previously outlined in this introduction;
- The impact of the willow sawfly remedial works currently being undertaken which are partially funded from general funding rate sources;
- The commitment of Council to achieve a balanced annual operating budget position by 2008/09 when excess cash operating reserves will have been exhausted.
The impacts of these movements on general funding rates are outlined for the 2006/07 year in the section following, ''10 years in 10 minutes''. However, as an overview, the uniform annual general charge is projected to move beyond the current level of $30.89 (excl GST) in 2005/06 to a peak of $44.45 (excl GST) in the 2010/11 year. The portion of the general funding rates collected under the Land Value method will see a movement from $7.69 (excl GST) in 2005/06 per $100,000 of land value to a peak of $9.83 (excl GST) in 2012/13. Council's general funding rate funds about 25% of Council's general funded activities, with the balance being met by Port dividends, leasehold rentals, interest and operating reserves.
Targeted rates cover all flooding and drainage schemes, animal and plant pest management strategy programmes, Animal Health Board Tb vector control programme, and subsidized public transport. Almost all targeted rates will increase in the next year with the range of movements being -20% to +31%. A broad average for the term of the plan will be in the vicinity of 5%. These increases are principally to counter the effects of projected inflation. However in the early years they also reflect: the extraordinary price movements that have occurred(particularly in pump drainage areas for electricity costs); the provision of standby generator capacity; additional capital works to take account of growth; and the full impact of the willow sawfly remediation works which will again require a $120,000 movement in the Heretaunga Plains Flood Control Rates in 2006/07. The area of targeted rating with the greatest level of uncertainty as to the accuracy of targeted rates included in the LTCCP is biosecurity. This particularly relates to the targeted rates for implementation of the Regional Animal Pest Management Strategy as it is currently under review. However, on the basis of the comments received on a discussion document relating to the review of the Strategy and Council’s deliberations on these matters, it has been assumed that the targeted rate for Animal Pest Control to implement Council’s Regional Animal Pest Management Strategy will increase by the rate of inflation during the 10 year period of the Plan. However, this rating requirement could alter from 1 July 2007 depending on the final outcome from the review of the Regional Animal Pest Management Strategy. The other area of uncertainty relates to the targeted rate for Council’s contribution to the Bovine Tb National Pest Management Strategy. Certain assumptions have had to be made in regard to this rate particularly the size of the programme that will occur in the Hawke’s Bay region and the local share of vector management costs to be incurred. Should there be detrimental changes in any of these assumptions, they have the potential to impact significantly on the targeted rate required and, therefore, Council will more deliberately assess the level of the Bovine Tb targeted rate each year.
In Part 4 of this plan and specifically on pages 9 to 14, Council's Investment Policy is stated. This policy is particularly important and relevant as Council is in the extremely fortunate situation of being well-endowed with a number of investments which provide anon-rate source of revenue. The principal investments which provide this revenue flow are Council's 91.67% shareholding in the Port of Napier Ltd, leasehold land portfolios in both Napier and Wellington, and the funds to be reinvested from the sale of leasehold properties in Napier, which currently amount to $23M. Council holds other investments, but these are for specific purposes: loan repayment sinking funds; depreciation reserves; disaster reserves; special purpose reserves; and Council's required working capital. Council has virtually no flexibility in the use of these reserves because of the very specific reasons for their establishment, which are specified as part of Council's Investment Policy. Council has minimum debt, so there is little to be gained from liquidating investments to repay debt. Accordingly, Council's over-riding philosophy with regard to its investments is to optimise returns in the long term (i.e. capital gain) while deriving a satisfactory ongoing investment yield. Each investment type is subject to an acceptable level of risk and other stated criteria. Council has established, as part of its investment policy, flexibility to use $500,000 per year from the sale of Council's leasehold endowment properties for purposes other than reinvestment in other investments. The balance of any sale proceeds from its leasehold endowment property will be used for reinvestment in appropriate investments with the objective of providing an ongoing source of income to Council as well as long term capital growth. At the present time, the only agreed use of these funds is for a further grant of $125,000 for the McLean Park redevelopment and $200,000 per year to be made available as interest-free loans to the territorial local authorities in the region to assist with the upgrade of reticulated wastewater systems in various communities throughout the region. Council has approximately $23M invested on bank term deposits, these funds having been accumulated from the freeholding of leasehold land in Napier. Council will invest these funds in line with the objectives and policies set out in Council's Investment Policy which is specified in Part 4 of this plan. Several submitters commented on the Investment Policy of Council as has been stated earlier, but Council made no changes to the policy as a consequences of these submissions.
In February 2004 Council's Asset Management and Biosecurity Committee considered the Te Karamu report ‘Te Karamu, Catchment Review and Options for Enhancement'. This report identified the total cost to implement the recommendations at $14.2M. This was split between required upgrade works for improving the flood capacity of the stream and various tributaries of $6.1M and the balance of $8.1M for extensive enhancement works, including access facilities for public enjoyment and recreation. The draft LTCCP contains provision and allowance over the full 10 years for improvement works to the flood capacity of the Karamu Stream and various tributaries. These works will occur between Pakipaki and the confluence of the Raupere Stream and Clive River. All improvement works above Pakipaki will be a matter for further consideration given the cost of these works, the likely beneficiaries and the issue of storage of floodwaters in this part of the catchment. The estimated costs of the enhancement works in the report were approximately $280,000 per kilometre of waterway. At the time the report was presented to Council, there were no proposals about when the works would be undertaken or how they would be funded. There was also no consideration of the cost of maintaining these works. Consequently, in order to prepare a credible LTCCP these issues have now been considered. Reaches of the stream will now be prioritised, to progress the enhancement on a staged basis in conjunction with the required flood capacity works. Where possible and practical, it is intended to harness the enthusiasm and support from the community, developers and adjacent landowners to assist with progressing the works. With this support, staff believe that the enhancement work can progress at a reasonable rate with an annual external cost to Council of $100,000. To maintain effectively the works already completed, it is proposed that this provision be increased by $10,000 annually. Over 25 years the total enhancement cost will amount to $86,000 per kilometre of enhancement works. Provision has also been made in the plan for the employment of an additional staff member to oversee these enhancement works, and to manage other enhancement areas. Funding of this expenditure will be met equally from: - General funding rates
- The Karamu Drainage Catchment Scheme
- Havelock North properties.
The consequences of this funding split are that general funding ratepayers will pay an increase in the UAGC per year of approximately 55c per property; Karamu Drainage Catchment Scheme ratepayers an additional 5% increase in their rates in the 2006/07 year; and Havelock North ratepayers have the introduction of a new targeted rate set on a uniform basis per property of approximately $6. All submitters who commented on the Karamu Stream enhancement works were supportive and, therefore, Council will commence the enhancement plans as proposed in the LTCCP.
The Minister for the Environment issued a National Environmental Standard (NES) for air quality in 2005. These standards are a national regulation with which Council must comply under the Resource Management Act 1991. From 1 September 2005, Council was required to manage and track emission reductions in order to achieve the PM10 (particulate matter less than 10 micron in size) NES limits of 50 micrograms per cubic metre (24 hour average) by 2013. Air quality monitoring in Napier and Hastings already shows the PM10 concentrations exceed the NES on many occasions, mostly in winter. Consequently, Council is required to develop management measures to reduce concentrations of PM10 in order to meet the standard by 2013. Several other Regional Councils (particularly Environment Canterbury) have been grappling with this issue for some years. Environment Canterbury have included in their policy response a subsidised scheme for the introduction of alternative heating sources for solid fuel heaters. The reason for this is that solid fuel heaters (i.e. most wood burners and open fires) are the primary cause of PM10 emissions in that region. This is also the case on the Heretaunga Plains. Over the next year or two Council will consider its policy response to the NES requirements. At present the plan includes financial allowance for the policy and scientific investigations to determine the best response and also for some additional staff resources from 2008-09 should a regulatory framework be introduced. However, because, to date, insufficient investigation and policy consideration have been undertaken, there has been no provision made for any subsidised incentive for property owners to change their current form of solid fuel heating to more clean burning methods. Given the relatively tight timeframe that Council is having to work within to comply with the standards by 2013, it is possible that during the course of this LTCCP a special consultative process may be required to amend the adopted plan to reflect any subsidised scheme that may be introduced as a consequence of the policy analysis.
Submissions received on the LTCCP in 2004 included requests for Council to establish additional areas for public access for recreational purposes. Council's response was to undertake to complete an inventory of areas throughout the region that are available to the public for access, particularly open spaces in rural areas. This exercise has now been completed and shows that the region has many areas (including Crown Land, territorial authority land, Regional Council land and areas managed by the Department of Conservation) which are available for public access and recreation. There are also significant access points for the public to the coast. After considering the results of the inventory exercise and debating the matter, Councillors made the following decision on the further acquisition or development by Council of public access areas in rural settings: “Council will be willing to consider the strategic acquisition or partnerships for the development of further open space areas in rural settings and particularly those that are in environments that are of high ecological or landscape value or extensively used by the public, with such funds to be sourced from Council's sale of leasehold land discretionary spending fund”. Consequently, Council's investment policy has been amended to allow such flexibility without having to undertake a special consultative process in each instance. In the meantime, funds have been provided in 2006/07 to undertake the development of a vision for Council in relation to open space areas for the public. A considerable number of submitters commented and supported the proposal by Council to establish open space areas in rural areas either through partnership or acquisition. Council will now develop a vision in relation to open space areas for the public and a related policy for how this may be achieved.
In the LTCCP 2004-14 Council committed to a high level strategic review of its approach to water management in the region, particularly to consider present and future demands. This was prompted by Council's identification that one of its key priorities and responsibilities was the management of water. This review was completed in February 2006 on behalf of Council by Environmental Management Services Ltd and the findings are contained in the report ''Hawke's Bay Regional Council - Water Management Review''. This review is available on Council's website and contains 76 recommendations that have been categorised 'high', 'medium' and 'low'. Council has had a preliminary discussion on the recommendations contained in the review and related these to the projects and programmes contained in the LTCCP. This was to ensure the issues that Council agrees require attention will be actioned on a priority basis during the period of this plan. As a consequence of the review there have been some moderate increases in resources committed to the management of the region's water resources. However, at this time, Council is satisfied that the resources committed are adequate to address, within a reasonable timeframe, the matters raised in the review. Very few submissions were received on this matter and, therefore, the proposals as contained in the draft LTCCP will remain but with the understanding that, should the work in this area be accelerated, there will be a need for additional resources particularly in the area of policy development and the required research and investigation needed to support sound policies.
Over the past decade, Council has taken direct responsibility for the provision of subsidized passenger bus services on the Heretaunga Plains. These services are currently provided through a concessionary fare scheme and over the past year the operator has found the viability of the scheme difficult to sustain. Consequently, Council has approved fare increases, the contracting of various poor-performing service runs, and the inclusion of additional routes to help improve the viability of the service. As a result there has been an increase of $35,000 in targeted rates for these services in 2006/07. One issue which has been raised is whether or not the quality of buses provided for the services should be improved. Currently, there are three super low-floor buses servicing the routes but if these types of buses were to be used on all routes, then a further $220,000 would be needed to provide the existing services, and half of this would be sourced from the targeted rate. Councillors considered this matter and did not support an increase in targeted rates by a further 25% ($110,000) to provide super low-floor buses for all services. They believed that over time these types of buses will become the standard form of bus provided and considered that this should be allowed to happen through a gradual process as buses are replaced rather than requiring the extra funding immediately. There were no submissions received which supported the addition of further super low floor buses and, therefore, these will be added to the fleet through a natural replacement process as opposed to an immediate upgrade programme. Numerous comments were made about the subsidised bus services and these have been previously commented on.
The special regional projects reserve was set up in accordance with the Hawke's Bay Endowment Land Empowering Act 2002. Since that time, the funds that have accumulated in the reserve have been used to support a number of special regional projects, including: - Support for various indoor sporting, recreational and events centre facilities in the region (e.g. Pettigrew-Green Arena in Taradale ($1,677,450), A W Parsons Stadium in Waipukurau ($346,673), Wairoa Community Centre in Wairoa ($128,605 which is still to be paid);
- A kiwi rearing enclosure and facilities at Lake Opouahi ($100,000);
- A facility for the storage and retrieval of regional archives ($250,000 plus interest from 1 July 2004 which is still to be paid);
- Interactive displays about natural hazards in Hawke's Bay as part of the redevelopment proposal for the Hawke's Bay Cultural Trust facility in Napier ($100,000 plus interest from 1 July 2004, which is still to be paid).
A small balance of approximately $100,000 remains in the reserve and Council will use this for the regional project of providing public access to the Pekapeka Wetland at Pakipaki. This expenditure is planned to occur in the 2008/09 year.
Every 6 years Council is required to carry out a process to identify community outcomes for the intermediate and long term future of the region. This exercise was last undertaken in 2004 and was a collaborative exercise between the five local authorities in the region and therefore will not be undertaken again until the next LTCCP is prepared in 2009. In 2004 the following Community Outcomes were identified: A Prosperous Region - A strong, prosperous and thriving economy
- Transport, infrastructure, and services that are safe, effective and integrated.
A Vibrant Community - A lifetime of good health and wellbeing
- Safe and secure communities
- Supportive, caring and inclusive communities
- Strong regional leadership and a sense of belonging
- Safe and accessible recreational facilities
- Communities that value and promote the unique culture and heritage.
A Clean and Healthy Environment - An environment that is appreciated, protected and sustained for future generations.
These outcomes belong to the Hawke's Bay community – they are not Council outcomes. The role of Council is initially to give the community an opportunity to have its say in identifying these outcomes (which occurred in 2004) and then to determine how Council will contribute to furthering them. This is specified in Part 1 pages 14 – 18 of this plan. Effective partnerships in collaboration between local government, central government, nongovernment agencies, businesses and individuals will help the community work towards achieving the identified outcomes and this is already occurring. Every 3 years Council will report to the community on its progress in achieving the outcomes and this will next be undertaken in 2007, again as a collaborative exercise involving the other local authorities in the region.
The development of the Long Term Council Community Plan has been a challenging exercise for staff, councillors and the community alike. There is considerable benefit from this process, particularly in terms of Council fully understanding the roles and responsibilities we have and the programmes we wish to implement for the well-being of our region and its communities. The consultative process, while involving only a small proportion of the total regional population, does provide benefits. Council was impressed with the high quality of submissions received which reflected a greater understanding of the Regional Council’s role and the value of involvement in the submission process. However, with the pending review of the implementation and effectiveness of the Local Government Act 2002 by the Department of Internal Affairs, there is the opportunity for reflection on various aspects of the process. Several submitters expressed concern at the significant demands that are placed on submitters either as individuals or organizations when they wish to comment and input into the LTCCP process of a number of Local Authorities. Their view is the timelines are particularly tight and for voluntary organisations, it is even more difficult to have a meaningful and informed input. Council intends to raise this matter during the review process and to discuss the merits of staggering the preparation of Long Term Council Community Plans in different years which would be of considerable assistance to submitters, Councils and the audit process. The Council now looks forward to the challenge of undertaking the commitments that have been enshrined in this document and expresses a special appreciation to those members of the community who have had input into the process, through submissions, attendance at public meetings or other feedback mechanisms, and to the considerable number of staff who have helped develop this Plan. Eileen von Dadelszen - Chairman
Andrew Caseley - Chief Executive
- Introduction to the Plan by the Chairman and Chief Executive
- Ten Years in Ten Minutes
- Auditor's Report
- Community Outcomes
- Your Regional Councillors
- Hawke's Bay Region - A Profile
- Introduction
- Environmental Management
- Land Drainage and River Control
- Biosecurity
- Hazard Management
- Land Transport
- Economic, Cultural and Social Wellbeing
- Community Representation
- Introduction to Forecast Financial Statements
- Prospective Income Statement
- Prospective Statement of Changes in Equity
- Prospective Balance Sheet
- Prospective Cash Flow Statement
- Notes to Accounts
- Accounting Policies
- Summary of Significant Accounting Policies
- Significant Forecasting Assumptions
- Policy on Development Contributions and Financial Contributions
- Investment Policy
- Liability Management Policy
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