Hurunui District Council. Pre-election Report. July 2016

Transcription

1 Hurunui District Council Pre-election Report July

2 TABLE OF CONTENTS 1. PURPOSE INTRODUCTION SOURCE OF THE INFORMATION PROVIDED IN THIS DOCUMENT BALANCE SHEET FUNDING IMPACT STATEMENT MAJOR PROJECTS PROPOSED OVER THE NEXT THREE YEARS

3 1. PURPOSE The purpose of a pre-election report is to provide information to promote public discussion about the issues facing the Council. The preparation of and the nature of the content in this document is a legal requirement, placed on the chief executive officer of the council, by section 99A of the Local Government Act INTRODUCTION Legislation requires that the following information is provided for residents and ratepayers of the Hurunui District:- A Summary Balance Sheet for the three years leading up to the date of the election and for the three years after the election. A Funding Impact Statement for the year before and three years after the date of the election. Details of the major projects proposed in the 3 years following the election. 3. SOURCE OF THE INFORMATION PROVIDED IN THIS DOCUMENT The information provided in this document is a summary of what can be found in the following publicly available documents. Readers who want more detail should refer to the following audited documents which can be found on our web site ( 2013/14 Annual Report 2014/15 Annual Report 2015/ /17 Annual The data shown in the tables that follow is:- Actual financial results for the Council for the 2013/14 and 2014/15 financial years as per the audited annual reports. Budgets and projections for the 2015/16, 2016/17, 2017/18, 2018/19 and 2019/20 financial years as per the audited 2015/25 and the 2016/17 Annual. 3

4 4. COUNCIL S STRATEGIC DIRECTION The implementation of the New Zealand Drinking Water Standard has considerable cost implications for the Hurunui District. The cost of upgrading the 21 intakes supplying the district s 13 water schemes is estimated at $18m while the annual rate take for the district is approximately $16m. It is clear that the future cost of this work will need to be funded by debt and that council must be a prudent and proactive manager of debt today to ensure that this work is affordable for future generations. In the 2015/2025, the Council set its strategic direction for the 10 years. Two key issues were widely consulted in the development of the : - Managing our debt - Changing the rating system for Water and Sewer Managing our debt: - The key reason for managing debt is to ensure that Council has the ability to meet the significant capital costs involved with complying with Drinking Water Standards by Through the, the Council changed how we utilised the profits derived by the Hanmer Springs Thermal Pools and Spa and made provision for funding depreciation on Water and Sewer Assets Changing the rating system for Water and Sewer: - To ensure that provision of water and sewer remained affordable for all ratepayers in the District, the Council has changed the way it which it rates for water and sewer. - All sewer schemes in the district have been combined and the rates made consistent regardless of which scheme the ratepayer is connected to. - For on-demand township water supplies, the connection charge and the usage rate is the same. - For restricted rural water supplies (except for Balmoral), there was a significant variance between the rates charged for individual water supplies. As a result, instead of moving to an average rate for rural water consumers, the rates will gradually increase over the ten year period at which point there will be a consistent rural water rate. Financial Strategy: Based on the key changes made, the Council developed its Financial Strategy which formed a key part of the. The financial strategy provided for two key limits which the Council will strive to achieve over the ten year period: - Term Debt Limits - Rate Increase Limits Term Debt Limits - The Council has confirmed that its own debt limit shall be no more than the total of income that it derives in any year (excluding Development Contributions and Vested Asset Income). - For the 2016/2017, total income (excluding Development Contributions and Vested Asset Income) has been budgeted at $36.5 million so the maximum amount of debt that the Council can hold is $36.5 million. The forecast amount of debt for the 2016/2017 year is $31 million. Rate Increase Limits: - For, the Council set limits on the rates increases for the ten year period. 4

5 - To allow for the funding of depreciation on water and sewer assets and the change to the use of the profits from the HSTP&S, the Council has opted to stage in the effect on rates over the ten years. - For the first 5 years of the LTP, the Council has set a limit on the overall growth adjusted rate increase of 6%. - For the last 5 years of the LTP, the limit has been set at 3%. - For the 2016/2017 Annual, the growth adjusted rate increase was 5.97%. Risk Management: Council s strategy is focussed on prudent financial management and controlled rate increases to ensure affordability is maintained over the long term whilst ensuring compliance to standards set by central government are achieved. Three Waters Assets - Balancing the books has required a focus on asset management to ensure the full life of assets is utilised, however this is not without risk as taking assets to their full term places greater stress on the infrastructure and increases the likelihood of compromises to the levels of service experienced by our customers. Council has significantly increased its focus on asset management to mitigate this risk. Roading Assets The introduction of the One Network Roading Classification by the New Zealand Transport Agency poses a significant risk to the future funding of roading infrastructure in this district. Signalled decreases in funding are likely to lead to a poorer customer experience across the network and the withdrawal of funding for Special Purpose Roads will place a significant burden on the district for the ongoing maintenance of the Inland Road. Council is working with NZTA to minimise the impact of these changes and continues to lobby for continuation of funding for the Inland Road. Hanmer Springs Thermal Pools and Spa This business unit of Council makes a significant financial contribution to the district on an annual basis. This business is predicated on continuing tourist numbers and access to the thermal water that drives the business. The Hanmer Springs Thermal Pools and Spa Committee provides commercially focussed governance for this business unit ensuring that management remains focussed on and responsive to patronage and thermal efficiency. Council takes a lead role in tourism promotion in the district. 5

6 Assets Current Assets 5. BALANCE SHEET The Balance Sheet shows the assets and liabilities of the Hurunui District Council and the level of ratepayer s equity at the end of each financial year. 2013/14 Actual Council Balance Sheet as at 30 June 2014/15 Actual 2015/16 Budget 2016/17 Budget 2017/ / /20 Cash and Cash Equivalents 4,075 1, Trade & Other Receivables 3,442 3,149 3,442 3,149 3,442 3,442 3,442 Inventories Non-current assets held for sale Total Current Assets 7,965 5,385 4,343 3,945 4,229 4,056 4,146 Non-current Assets Property, plant & equipment - Operational 45,219 46,380 45,208 46,829 46,021 46,090 46,947 - Restricted 37,322 37,315 39,219 39,032 43,282 47,803 49,515 - Infrastructure 286, , , , , , ,441 Intangible assets Forestry Assets Other financial assets Total non-current assets 370, , , , , , ,653 Total Assets 378, , , , , , ,799 Liabilities Current Liabilities Trade & other payables 3,826 3,396 4,995 6,071 4,995 4,995 4,995 Current portion of term debt 2, ,500 2,500 Other Current Liabilities 2,813 3,944 1,782 1,008 1,782 1,782 1,782 Total current liabilities 8,639 7,340 6,777 7,079 6,777 10,277 9,277 Non-current Liabilities Term Debt 14,200 17,200 26,000 31,000 34,000 33,000 30,500 Other non-current liabilities Total non- current liabilities 14,338 18,199 26,000 31,999 34,000 33,000 30,500 Total Liabilities 22,977 25,539 32,777 39,078 40,777 43,277 39,777 Net Assets 355, , , , , , ,022 Equity Asset Revaluation Reserve 199, , , , , , ,695 Other reserves (21,989) (24,332) (23,988) (32,384) (32,024) (34,743) (31,144) Retained earnings 178, , , , , , ,471 Total Equity 355, , , , , , ,022 Note: The actual data is for core Council operations only and excludes the consolidation of Council s share of the activities and assets of Enterprise North Canterbury. All LTP budgets have been prepared on the same basis. 6

7 6. FUNDING IMPACT STATEMENT The Funding Impact Statement shows how funds raised from rates and other sources have been applied to fund expenditure for the Hurunui District Council. Sources of Operating Funding Funding Impact Statement 2013/14 Actual 2014/15 Actual 2015/16 Budget 2016/17 Budget 2017/ / /20 General Rates 6,144 6,196 6,421 6,743 6,888 7,034 7,278 Targeted Rates 8,878 9,504 8,971 9,707 10,688 11,747 12,790 Subsidies & Grants for operating expenditure 3,267 2,466 1,722 1,802 1,730 1,780 1,828 Fees & Charges and other Income 16,996 15,398 15,388 16,291 16,586 18,844 17,561 Total Operating Funding 35,285 33,564 32,502 34,543 35,892 39,405 39,457 Applications of operating funding Payments to staff and suppliers 29,991 27,981 27,818 28,857 29,526 30,273 30,941 Finance Costs 508 1,688 1,267 1,573 1,843 1,999 1,970 Total application of operating funding 30,499 29,669 29,085 30,430 31,369 32,272 32,911 Surplus (deficit) of operating funding 4,786 3,895 3,417 4,113 4,523 7,133 6,546 Sources of capital funding Subsidies and grants for capital expenditure 1,851 2,410 1,985 1,977 1,993 1,984 2,038 Development and financial contributions 1,482 1,861 1,042 1,062 1,090 1,117 1,144 Increase (decrease) in debt 3,850 1,000 7,300 5,661 3,000 2,500 (3,500) Total sources of capital funding 7,183 5,271 10,327 8,700 6,083 5,601 (318) Applications of capital funding Capital Expenditure - to meet additional demand 1,444 2,363 1, ,284 2, to improve the level of service 2,916 4,761 5,528 7,098 3,174 5, to replace existing assets 4,318 5,956 6,400 5,838 5,812 4,933 5,115 Increase (decrease) in reserves 3,291 (3,913) 425 (701) 336 (174) 90 Total applications of capital funding 11,969 9,166 13,744 12,813 10,606 12,734 6,228 Surplus (deficit) of capital funding (4,786) (3,895) (3,417) (4,113) (4,523) (7,133) (6,546) Funding Balance

8 Project Water Supplies 7. MAJOR PROJECTS PROPOSED OVER THE NEXT THREE YEARS The following major projects (defined as those items of Capital Expenditure with an expected cost of greater than $50,000), as outlined in the 2016/17 Annual and the 2015/25, are proposed over the next three years:- Major Projects proposed over the next three years Annual 2016/ / / /20 Developer Created Water Assets 59,496 61,051 62,715 64,438 Amberley Water - t Renewal 66,784 Amberley Water - New deep well water source 256,450 52,630 Leithfield Beach Water - Meter installation 153,870 Ashley Rural Water - Reticulation Renewals 222,169 Ashley Rural Water - New Connections 56,420 57,893 59,472 61,105 Ashley Rural Water - Forestry Reservoir to Henrys Ford 226,730 Waiau Rural Water - Reticulation Renewals 76, ,208 Balmoral Water - Protozoa Testing 61,380 Waiau Township Water - Reticulation Renewals 256,883 Cheviot Water - Main intake upgrade 252,580 Cheviot Water - Parnassus raw water rising main 110,786 Hanmer Springs Water - Flucculation/Clarification process upgrade Hawarden-Waikari Water - Reticulation Renewals 91, ,650 Hawarden-Waikari Water - New water supply bore 108,130 Hurunui Rural Water - Hurunui 1 Reticulation Renewals 393,406 Hurunui Rural Water - Lower Waitohi Reticulation Renewals Hurunui Rural Water - Upper Waitohi Reticulation Renewals Hurunui Rural Water - Source Review 51,290 Hurunui Rural Water - Lower Waitohi - Fletchers Upgrade 102,580 Sewerage 202,335 78,942 Developer Created Sewer Assets 98, , , ,323 Amberley Sewer - Upgrades to WWTP 62,330 Amberley Sewer - Pipe Upgrade I 680,506 Amberley Sewer - Pipe Upgrade F 680,030 Amberley Sewer - Options assessment and AEE 111,100 Hanmer Springs Sewer - Disposal project 3,385,140 Hanmer Springs Sewer - Investigation work to leaking oxidation pond Hanmer Springs Sewer - Capital works to repair leaking pond 55, ,000 Walkari Sewer - WWTP upgrades for RC 657,538 8

9 Project Stormwater & Drainage Major Projects proposed over the next three years Annual 2016/ / / /20 Developer Created Stormwater Assets 98, , , ,323 Amberley Stormwater - Flow diversion from Eastern Drain to the Amberley Beach North lagoon Amberley Stormwater - Drain improvement in Double Corner Road Amberley Stormwater - Drain improvement work in Amberley Beach Rd Roading & Footpaths 52,630 50,000 51,290 54,065 Developer Created Roading Assets 245, , , ,807 Subsidised Capital Expenditure 3,899,833 3,821,780 3,802,883 3,907,337 New Kerb & Channel - Amberley 51,290 54,065 Community Services & Facilities Hanmer Springs Forest Camp Trust - Sewerage Project 300,000 New Public Toilets - Rotherham 97,317 New Public Toilets - Amberley Beach 79,357 Amberley Swimming Pool 4,500,000 Leithfeild Beach Reserve - Tennis Court Surfacing 73,682 Hanmer Springs Reserve - Sports Ground Upgrade 1,081,300 Rural Fire - Replacement Tanker 94,734 Library Collection 70,000 73,682 75,691 77,770 Hanmer Springs Thermal Pools & Spa Miscellaneous Capital 205, , , ,200 Aqua Play Upgrade 102,580 Water Treatment 205,160 Private Pools/High End Bathing 1,025,800 New Slide 1,052,600 I-site Rework 52,630 Hexagonal Pools Revitalisation 1,052,600 Corporate Services Information Technology - Miscellaneous Capital 149, , , ,517 Infrastructure Services - Delivery - 3 Waters - Vehicles 123, , , ,320 Hamish Dobbie Chief Executive Officer Hurunui District Council 9