Christchurch City Council

Agenda

 

 

Notice of Meeting:

An ordinary meeting of the Christchurch City Council will be held on:

 

Date:                                     Wednesday 21 February 2018

Time:                                    9.30am

Venue:                                 Council Chambers, Civic Offices,
53 Hereford Street, Christchurch

 

 

Membership

Chairperson

Deputy Chairperson

Members

Mayor Lianne Dalziel

Deputy Mayor Andrew Turner

Councillor Vicki Buck

Councillor Jimmy Chen

Councillor Phil Clearwater

Councillor Pauline Cotter

Councillor Mike Davidson

Councillor David East

Councillor Anne Galloway

Councillor Jamie Gough

Councillor Yani Johanson

Councillor Aaron Keown

Councillor Glenn Livingstone

Councillor Raf Manji

Councillor Tim Scandrett

Councillor Deon Swiggs

Councillor Sara Templeton

 

 

16 February 2018

 

 

 

Principal Advisor

Dr Karleen Edwards

Chief Executive

Tel: 941 8554

 

Elizabeth Hovell

Hearings Adviser

941 8637

Elizabeth.Hovell@ccc.govt.nz

www.ccc.govt.nz

Note:  The reports contained within this agenda are for consideration and should not be construed as Council policy unless and until adopted.  If you require further information relating to any reports, please contact the person named on the report.
Watch Council meetings live on the web:
http://councillive.ccc.govt.nz/live-stream

 


Council Long Term Plan 2018 - 2028

21 February 2018

 

 

 


Council Long Term Plan 2018 - 2028

21 February 2018

 

TABLE OF CONTENTS

 

1.       Apologies................................................................................................................................... 4

2.       Declarations of Interest............................................................................................................ 4

STAFF REPORTS

3.       Long Term Plan 2018-28 Report............................................................................................... 5   

 

 


Council Long Term Plan 2018 - 2028

21 February 2018

 

 

1.   Apologies

2.   Declarations of Interest

Members are reminded of the need to be vigilant and to stand aside from decision making when a conflict arises between their role as an elected representative and any private or other external interest they might have.

  


Council Long Term Plan 2018 - 2028

21 February 2018

 

 

3.        Long Term Plan 2018-28 Report

Reference:

18/46276

Contact:

Peter Ryan

Peter.Ryan@ccc.govt.nz

03 941 8137

 

 

1.   Purpose of Report

1.1       To present to the Council:

1.2       the information that provides the basis for the preparation of the Council’s Long Term Plan 2018-28, and which is relied on by the content of the Consultation Document;

1.3       the draft Consultation Document, including a report from the Auditor-General;

1.4       To enable the Council to consider and, if in order, to adopt the information and the Consultation Document.

 

2.   Staff Recommendations

That the Council:

1.         Receives the information contained and referred to in the staff report and the documents attached to it, including the draft Consultation Document, Financial Strategy and Infrastructure Strategy;

2.         Notes the recommendations of the Council’s Audit and Risk Management Committee at its meeting on 13 February 2018, referred to in the staff report;

3.         Adopts the information that provides the basis for the Council’s draft Long Term Plan 2018-28 and relied on by the content of the Consultation Document to be adopted by the Council, and which is the information set out in Appendix A;

4.         Notes that a full version of this information can be found at:
https://ccc.govt.nz/the-council/plans-strategies-policies-and-bylaws/plans/long-term-plan-and-annual-plans/draft-long-term-plan-2018-28;

5.         Adopts the Consultation Document (Appendix B) for consultation, including the Auditor-General’s report required by s.93C(4) of the Local Government Act (LGA) 2002 (to be supplied as a supplementary);

6.         Authorises the General Manager Finance and Commercial and the Chairperson of the Audit and Risk Management Committee to make any amendments to the Consultation Document and the information on which it relies that may be required to ensure they align with the Auditor-General’s report;

7.         Approves the following process for consultation:

8.         Consultation Document available to the public on 9 March 2018;

9.         The period for making submissions will run from 9 March to 5pm on 13 April 2018;

10.       For people who wish to, opportunities will be provided for them to present oral submissions;

11.       Oral submissions will be heard between 1 May and 19 May 2018;

12.       All submissions will then be considered before the Council meets on 26-27 June 2018 to adopt its Long Term Plan 2018-28;

 

 

3.   Key Points

3.1       The Local Government Act (LGA) 2002 requires local authorities to adopt a Long Term Plan every three years. The Council’s current Long Term Plan was adopted in June 2015.

3.2       Each Long Term Plan must be adopted before the commencement of the first year to which it relates, and continue until the close of the third year of the Plan (s.93(3) LGA 2002).

3.3       The purpose of the Long Term Plan is to describe the Council’s activities and the community outcomes for its district. The Plan is also an opportunity to provide integrated decision-making and co-ordination of the Council’s resources, and a long term focus for its activities. It is a basis for accountability to the community (S.93(6).

3.4       The Council must prepare and adopt a Consultation Document that will enable the Council to consult with its community on the information the Council intends to include in its Long Term Plan 2018-28.

3.5       The purpose of the Consultation Document is to provide a fair representation of the matters that are proposed for inclusion in the Long Term Plan. This must be presented in a way that explains the overall objective of the Council’s proposals for the next 10 years, the effect of these on rates, debt, and levels of service, and which can be readily understood (s.93B LGA 2002).

3.6       Before the Council can adopt the Consultation Document, it must first adopt the information that is relied on by the Consultation Document, and which provides the basis for the preparation of the Long Term Plan 2018-28 (s.93G LGA 2002).

3.7       The Auditor-General will report on the quality of this information and the assumptions underlying it and whether the Consultation Document gives effect to the purpose set out in s.93B.  It is expected this report will be available for inclusion in the Consultation Document by the time the Council meets on 21 February 2018.

3.8       The information to be adopted by the Council before it adopts the Consultation Document is set out in Appendix A. Also attached is the Financial Strategy (Appendix C) and Infrastructure Strategy (Appendix D), both of which are key to the Council’s proposed approach to meeting the challenges of the next 10 years.

3.9       It is the role of the Mayor to lead the development of the Council’s plans, including the Long Term Plan (s.41A(2) LGA 2002). The Council delegated to its Strategic Capability Committee (SCC) the responsibility for advising and supporting the Mayor in her role. This included setting the overall parameters, strategic direction and priorities for the Long Term Plan, and the development of a Consultation Document.

3.10    At its meeting on 7 February 2018, the SCC agreed the Financial Strategy, Infrastructure Strategy, and the Consultation Document be submitted to the Council’s Audit and Risk Management Committee (ARMC), including the amendments requested by the SCC.

3.11    The ARMC met on 13 February 2018. Its Terms of Reference include considering and reviewing the Long Term Plan before it is adopted by the Council. It is to apply similar levels of enquiry, consideration, review and management sign-off as are required for external financial reporting.

3.12    In the ARMC’s opinion preparation of the information that provides the basis for the Long Term Plan 2018-28 is supported by appropriate management sign-offs and has followed the required process.

3.13    The ARMC recommends the Council adopts the underlying information that is relied on by the content of the Consultation Document, subject to receipt of the Auditor-General’s report  required by s.93C(4) of the LGA 2002. This information includes the draft Financial Strategy and Infrastructure Strategy.

3.14    The ARMC also recommends the Council adopts the Consultation Document, including the amendments made at ARMC’s request.

Process

3.15    The Mayor provided guidance for the overall direction and parameters to apply to the development of the draft Long Term Plan. This included expectations for balancing the speed of earthquake recovery with rates affordability.

3.16    Staff worked extensively with Elected Members on a set of strategic priorities to inform the draft, including specific goals and initiatives and linkages to levels of service.

3.17    Management and co-ordination of the Long Term Plan process was led by a Steering Group representing the Executive Leadership Team (including the Chief Executive), the Mayor’s Office, and key financial and communications staff. The group was chaired by the General Manager Finance and Commercial and included the project manager.

3.18    Council Committees played an active role in reviewing the information that will provide the basis for preparation of the draft Long Term Plan. Committees met regularly in August and September 2017 to review the key documentation relevant to their particular terms of reference.

3.19    In addition the Council appointed and engaged the services of an External Advisory Group, chaired by former Mayor Garry Moore and comprising subject-matter experts in the areas of asset management, planning, and finance. The group was supported by the Mayor’s Office and the Chief Executive’s Office.

3.20    The External Advisory Group provided advice and oversight to staff and Elected Members, in particular with regard to preparation of the draft Infrastructure Strategy.

3.21    An external review was also provided by Kathy Dever-Tod (a company director and infrastructure asset management advisor). Her recommendations have been incorporated into the draft Infrastructure Strategy.

3.22    There has been a focus on risk management throughout the Long Term Plan process. This included management sign-off, which required managers accountable for each supporting document to sign off having reviewed the document and it being fit for purpose.

3.23    Another risk management process was the use of a commercial risk management platform to capture and manage key risks to the Long Term Plan process as it developed.

Financial Implications

3.24    The Financial Strategy seeks to reconcile the relationship between the expenditure required to deliver the levels of service the community expects, and the call on funding from rates and debt.

3.25    These factors are inter-related and movement in one causes movement in at least one of the other variables. For example, if rates are reduced then some combination of reduced or delayed expenditure is required, which in turn will likely result in a reduced level of service being delivered, or increased debt.

3.26    The draft Financial Strategy and Infrastructure Strategy present the Council’s proposed solution to these challenges and detail the key financial parameters and limits the Council will operate within over the period of the Long Term Plan 2018-28.

3.27    With limited funding options available the Council suggests rescheduling (through deferring aspects of) the capital programme, as a means of keeping rate increases to an acceptable level. It is proposed that rate increases be held to an average 5.5 per cent in each of the next two years, then reducing over time to be closer to the local government rate of inflation.

3.28    Three capital programme scenarios have been considered with differing levels of investment over the life of the Long Term Plan – low, medium (the Council’s proposed option), and high.

3.29    For the high option, as much as $17.1 billion of work is required over the next 30 years to restore and maintain assets to an optimal level, $6.2 billion of which falls within the ten years of the Long Term Plan 2018-28.

3.30    For the low option, the estimates are $11.1 billion and $3.3 billion, but with a resulting reduction in levels of service.

3.31    The Council’s proposal and the high and low options are explained in detail in the Infrastructure Strategy.

3.32    The Council has a statutory obligation to ensure prudent stewardship and the efficient and effective use of its resources, with financial prudence being measured by a number of benchmarks.

The Council has met all but one of the debt servicing benchmarks. Planned borrowing exceeds the 10 per cent benchmark from 2019 onwards, peaking at 13.7 per cent in 2025 before reducing slightly. If Christchurch was considered to be a high growth Council the benchmark would be 15 per cent. The benchmark was designed to allow comparison between Councils and the legislators did not contemplate the cost involved in recovering from an earthquake. The Council has sufficient funds to service the debt.

3.33    The Council’s net debt to revenue ratio is above the level in the current Long Term Plan for the period 2012-2019, and marginally exceeds 200 per cent in 2023-2025. The higher ratio is caused partly by the Council borrowing directly to offset the reduced capital release from CCHL, and partly due to re-timing of the capital programme. The limit, as set by the Local Government Funding Agency, is 250 per cent, but the staff preference is to hold the ratio well within the 200 per cent limit in order to ensure sufficient ability to borrow in the event of another adverse event. The higher ratio is for a relatively short period and staff do not consider it to be a significant issue.

Consultation

3.34    Preparing and adopting a Long Term Plan is a matter of high significance. For this reason the LGA 2002 requires the Council to use the special consultative procedure when consulting with its community on adoption of the Plan (s.93(2)).

3.35    The requirements for a special consultative procedure are set out in s.83 LGA 2002. If approved by the Council, the following process will comply with those requirements:

3.36    The Consultation Document will be available to the public on 9 March 2018;

3.37    The Consultation Document will advise members of the public where they may obtain the information that is relied on by the document and which provides the basis for the draft Long Term Plan 2018-28;

3.38    The period for making submissions will run from 9 March to 5pm on 13 April 2018;

3.39    The consultation process will include radio advertising, articles in Council publications, email newsletters to subscribers, a website link to access information. People who wish to will also be able to lodge submissions electronically and to use other e-democracy tools such as Facebook where appropriate;

3.40    It is proposed to hold a series of community discussions between 9 March and 13 April 2018.  These discussions will allow the community to engage directly with Elected Members and Council officers;

3.41    Meetings with stakeholder groups will also be held during this period;

3.42    For people who wish to, the opportunity to present their views orally will be available between 1 May and 19 May 2018;

3.43    All submissions will then be considered before the Council meets on 26-27 June 2018 to adopt its Long Term Plan 2018-2028.

 

 

Attachments

No.

Title

Page

a

Draft Long Term Plan 2018-28 underlying documents

10

b

Draft Consultation Document

11

c

Draft Financial Strategy

52

d

Draft Infrastructure Strategy

95

 

 

Signatories

Authors

Monika De Neef - Senior Business Analyst

Peter Ryan - Head of Performance Management

Diane Brandish - Head of Financial Management

Ian Thomson - Special Counsel Governance

Approved By

Diane Brandish - Head of Financial Management

Peter Ryan - Head of Performance Management

Carol Bellette - General Manager Finance and Commercial (CFO)

Karleen Edwards - Chief Executive

  


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21 February 2018

 

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21 February 2018

 

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21 February 2018

 

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