LTP 2018-2028 Prioritisation Workshop PRESENTATION TO COUNCILLORS 16 th NOVEMBER 2017 1
Strategic Priorities 1. Prioritisation Workshop on 9 November – key points from Workshop 2. Chief Executive’s Recap 3. Director’s Revised Activity Summaries 4. CAPEX Summaries 5. Workshop Discussion and Rationalisation 2
2018 - 2028 LONG TERM PLAN 9 Councillor Project Prioritisation 16 Councillor Project Prioritisation Development Contributions (DC) Policy Review Completed 30 Treasury Management Update 2017 NOV 2017 Councillor Strategic Direction Setting • and (February-June) DEC 2017 LTP Environmental Scan and population • projections finalised (May) Council approved Vision, Community • Outcomes and Strategic Priorities approved (June) 7 Extraordinary meeting of Council for Draft Financial JAN 2017 Draft Infrastructure Strategy 1st cut to Strategy update, Draft Infrastructure Strategy update and • Draft Significant and Engagement Policy Council (July) 14 Council approval of the Finance and Infrastructure Draft Business and Asset Management • Strategy Plans completed(August) Fostering Maori Participation in Council Decision Making for Approval • Activity Summary presentations to Revenue and Financing Policy 25 Adoption of Estimates committees Treasury Policy for approval Future Tair ā whiti Draft Consultation Document Formal LTP Consultation Programme Proposal for approval Discussion WTF LTP Early Engagement and • feedback to Councillors (September – Draft Activity Summaries for approval Significance & Engagement Policy for approval October)LTP key dates Draft Development Contributions Policy • Revenue and Financing Policies workshops (October - November) 3
2018 - 2028 LONG TERM PLAN 2 Consultation Document approved 12 Formal Consultation begins Submission analysis and staff responses prepared 13 Formal Consultation closes FEB 2018 MAR 2018 APR 2018 MAY 2018 8 Provide draft Consultation JUN 2018 Document to the Auditors 22 Present the draft Long Term 1-13 Asset Management Plan for approval JUL 2018 and Business Plans Revised Adoption of Revenue and and Adopted. Financing Policy and new remissions policies for consultation, 14-16 LTP Hearings / Deliberations with Council (if Provide draft LTP Document to required) the Auditors 28 Council adopts 2018-2028 LTP Adopting Report 4
Key points from 9 November workshop Central Government opportunities • WTF • Long Term Plan Strategic Alignment • CE’s LTP Think-piece • Scenario Refinement • 5
What we got clarity on… Investigate alternative CCTO arrangements • Core asset renewals, meet statutory requirements, health & safety/risk • Drop some levels of service to deliver on roads and three waters • Discretion to move capital projects (Taruheru Walkway not funded) • Drainwise – ok to spend where MAXIMUM impact could be achieved • Prepared to revise the strategic priorities as a result of not being • achievable 6
Strategic Priorities recap… • Thrive Tair ā whiti • Thrive Tair ā whiti • Tair ā whiti Wai • Early Adopters • Intelligent infrastructure • Intelligent investments • Mana Tair ā whiti 7
Strategic Priorities Revision? Tair ā whiti Wai Improve the wellbeing of our waterways and coastal environments including protection of healthy soils Intelligent infrastructure Invest in existing and future core infrastructure needs, with a focus on cost efficient and effective designs Intelligent investments make sensible, long-term decisions on investments and borrowing, and always seek the best value for community money. 8
Bones of a revised Financial Strategy Go back to basics & do the basics well – focus on core infrastructure • (legal requirements) & maintain existing levels of service (and enhance through trade-offs e.g remove non-essential assets) Have a manageable capital expenditure programme at an acerage • of $30M per annum Keep rates & debt sensible & affordable (4.5-6% & debt 150% total • revenue) Reduce reliance on rates income and ensure that the user does pay • costs residing with the primary beneficiary to ensure ratepayers aren’t subsidizing private benefit (e.g roads for forestry ) 9
Bones of a revised Financial Strategy Increase grants & positive partnerships with central government and • local agencies to deliver key but not necessarily core work (e.g ECFP, 1B trees, Navigations) Have smart investments & delivery models that make a good level of • return (Joint ventures, Treasury Management) Make sure growth pays for growth as far as possible (DCs) • 10
Bones of a revised Financial Strategy Maximum shareholder benefit from the CCTO through increased • dividends and exploring other CCO delivery models GHL dividend of $1.8M vs $1.5M distribution • Pamoa harvest ($3-4M) + carbon credits • Support Initiatives to grow the rates revenue base e.g. Tairawhiti • Economic Development Action Plan (TEAP) and Maori Land Review 11
The BLURPLE scenario (shades of blue & salmon) Current legislative requirements will be met and significant risks managed. Our core-assets will have some improvements to the current under performance. While there may be decreases in some budget and some reduction in staffing levels, the overall level of service is maintained for most activities. Capital projects with opex implications will still be prioritised ($1M = $100k opex). Special enhancement projects (for example Titirangi revegetation) will be delivered if external funding is gained. Accessibility of facilities and provision of services maintained at the current levels. This scenario does not include the Taruheru Walkway or additional funding for future Navigations maintenance infrastructure (not already committed to). 12
Shades of some salmon – but mostly all blue 5.5% rates increase • Capital expenditure around 30M with peaks for major projects • 13
Activity Changes $M Water supply Waste water Storm water Flood Protection Solid Waste Management Roading Recreation and Leisure Governance and Support Environmental Services Planning and Development $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 Planning and Environmental Governance Recreation Solid Waste Flood Roading Storm water Waste water Water supply Development Services and Support and Leisure Management Protection LTP Year 1 2018/19 $5.2 $9.3 $8.9 $9.6 $30.0 $3.9 $1.8 $2.8 $7.4 $5.6 Annual Plan 2017/18 $5.0 $9.0 $9.6 $9.6 $24.7 $4.0 $1.8 $2.8 $7.1 $5.2 Annual Report 2016/17 includes CAPEX $5.0 $11.3 $8.9 $11.3 $33.9 $4.1 $2.7 $2.0 $8.2 $4.9 LTP Year 1 2018/19 Annual Plan 2017/18 Annual Report 2016/17 includes CAPEX 14
CORE AND MAJOR PROJECTS Year One 2018/19 Current Scenario: $26.2M Core Capital $7.8M Major Projects $33.9M +$10M External funding (Major) 15
Director Discussions The scenarios based on 5.5% • Whats in what isn’t? • What do you want in? What do you want out? • CAPEX and direction on programme of works • Possible alternative scenarios for the consultation document? • Current 5.5% (or less) • Alternative - If we increase by XX you receive XX • 16
Partnering with ECT What does a “Partnership” look like? • Understanding each other drivers and bottom lines (investment • priorities/Trust Deed/community priorities) Common outcomes? Best for region? Tairawhiti First? • What are Councils collective priorities – gain agreement, negotiate • and make it happen (MoU) 17
Investment from ECT – on?... Pool • Lawson Field • Tairawhiti Navigations (observatory, inner harbour etc…) • Community Facilities Strategy • MAR (Eastland Group)? • Waipaoa Flood Control? • Others? • 18
Next Steps Draft key points for ECT discussion (Dep Mayor?) – seek agreement • through an MoU Refine budgets based on feedback – high level agreement on 14 • December Will outline high level what you will/will not get for rates Key consultation points for the consultation document Draft Financial Strategy and Infrastructure Strategy – more work! • Full draft estimates and rates modelling impact January for inclusion • 19
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High Level Scenarios Council Options Drivers/Activities Reconciling to Base Rates of 5.5% Roading Base Rates 7.36% Roading 3.65% Salary and wages 3 Waters 1.25% Pay back operational debt(roading, provision) Salary and wages 2.00% Infrastructure (drainwise, wastewater compliance) Pay back Debt 0.46% Less reduced costs/LOS -1.90% Increased/Reduce levels of service 0.00% 5.5% 21
High Level Scenarios cont. Comments Priorities? Base Current Partial Costs Full Costs Roading 2.50% 3.65% 70% of projected increase is 100% of roading works covered. covered. 3 Waters Compliance 1.25% 1.25% Salary and Wages 2.00% 2.20% Reduced only to 2% level. Based on $20.5m total, actuals align to 2.2%. Support Services 0.61% 0.61% Includes increases needed for Health & Safety. Pay back operational debt 0.46% 1.00% Repays operational debt over With an additional 0.5% pay 20 years. back of load in now completed within 10 years. Environmental Services and Protection 0.56% 0.56% Legislation compliance. Transformation and Relationships 0.25% 0.25% Aligning with compliance of Plan deliverables. Liveable Communities 0.39% 0.39% 8.02% 9.91% 22
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