Christchurch City Council

Agenda

 

 

Notice of Meeting:

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

 

Date:                                     Tuesday 21 June 2016

Time:                                    9.30am

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

 

 

Membership

Chairperson

Deputy Chairperson

Members

Mayor Lianne Dalziel

Deputy Mayor Vicki Buck

Councillor Jimmy Chen

Councillor Phil Clearwater

Councillor Pauline Cotter

Councillor David East

Councillor Jamie Gough

Councillor Yani Johanson

Councillor Ali Jones

Councillor Paul Lonsdale

Councillor Glenn Livingstone

Councillor Raf Manji

Councillor Tim Scandrett

Councillor Andrew Turner

 

 

15 June 2016

 

 

 

Principal Advisor

Dr Karleen Edwards

Chief Executive

Tel: 941 8554

 

Megan Pearce

Team Leader Hearings and Council Support

941 8140

Megan.Pearce@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

 


Annual Plan 2016/17 and Amended Long Term Plan 2015-25

21 June 2016

 

Council - Terms of Reference

 

 

Chair

The Mayor

Membership

The Mayor and all Councillors are members of Council

Quorum

Half of the members if the number of members (including vacancies) is even, or a majority of members if the number of members (including vacancies) is odd.

Meeting Cycle

To be separately considered

 

 

The Council has the power to: (these powers cannot legally be delegated)

·         Make a rate

·         Make a bylaw

·         Borrow money, or purchase or dispose of assets, other than in accordance with the long-term plan

·         Adopt a long-term plan, annual plan or annual report

·         Appoint a Chief Executive

·         Adopt policies required to be adopted and consulted on under the Local Government Act 2002 in association with the long term plan or the preparation of the local governance statement

·         Adopt a remuneration and employment policy

 

The Council is also responsible for:

·         Reviewing and making decisions, when required, on the District Plan

·         Approving all Council strategy and policy, except that specifically delegated to a committee or subcommittee

·         Adoption of, and amendment to, Committee Terms of Reference, Standing Orders and Code of Conduct

·         Approving or amending the Triennial Agreement  and Local Governance Statement

·         Reviewing and making decisions on representation reviews

·         Appointing and discharging trustees, directors or office holders to Council’s Council-Controlled Organisations  and Council Organisations, except where specifically delegated to a committee or officer, and determining the remuneration for trustees, directors or office holders

·         Dealing with issues of significant community importance

·         Monitoring progress on earthquake recovery

Considering recommendations from Council committees, subcommittees, Community Boards, the public, stakeholders and others, and making Council decisions with regard for the requirements of Sections 76 – 81 of the Local Government Act 2002

 

 


Annual Plan 2016/17 and Amended Long Term Plan 2015-25

21 June 2016

 

TABLE OF CONTENTS

 

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

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

3.       2016/17 Annual Plan and Amendments to 2015/25 Long Term Plan.................................. 5   

 

 


Annual Plan 2016/17 and Amended Long Term Plan 2015-25

21 June 2016

 

 

1.   Apologies

At the close of the agenda no apologies had been received.

2.   Declarations of Interest

  


Annual Plan 2016/17 and Amended Long Term Plan 2015-25

21 June 2016

 

 

3.        2016/17 Annual Plan and Amendments to 2015/25 Long Term Plan

Reference:

16/650634

Contact:

Ian Thomson

Ian.thomson@ccc.govt.nz

941 6469

 

 

1.   Purpose of Report

1.1       The Council has recently undertaken a special consultative procedure in respect of the Consultation Document and underlying information prepared as the basis for the 2016/17 Annual Plan and proposed amendments to the 2015/25 Long Term Plan;

1.2       The purpose of this report is to present information and recommendations for consideration before the Council decides whether or not to adopt the 2016/17 Annual Plan and the amendments to the 2015/25 Long Term Plan.

 

 

2.   Staff Recommendations

That the Annual Plan 2016/17 and Amended Long Term Plan 2015-25:

1.         Receives the information included in and attached to the staff report;

2.         Adopts the Mayor’s recommendations set out in Appendix B;

3.         Adopts the summary of the rates impact of the proposed changes to the draft 2016/17 Annual Plan and draft amendments to the 2015/25 Long Term Plan set out in Appendix C;

4.         Adopts the proposed changes to the Council’s capital programme in the draft 2016/17 Annual Plan and draft amendments to the 2015/25 Long Term Plan set out in Appendix D;

5.         Adopts the proposed changes to the Council’s operating expenditure in the draft 2016/17 Annual Plan and draft amendments to the 2015/25 Long Term Plan set out in Appendix E;

6.         Adopts the proposed changes to the policies, fees and charges in the draft 2016/17 Annual Plan and draft amendments to the 2015/25 Long Term Plan set out in Appendix F;

7.         Adopts the minor changes and errors set out in Appendix G;

8.         Agrees, in accordance with section 100 of the Local Government Act 2002, it is financially prudent not to set the Council’s operating revenues at a level sufficient to meet the projected operating expenses in the 2019/20 year of the 2015/25 Long Term Plan;

9.         Receives the Auditor’s report on the amendments to the 2015/25 Long Term Plan;

10.       Adopts the amendments to the 2015/25 Long Term Plan, comprising the draft amendments to the 2015/25 Long Term Plan, and the changes set out in Appendices D, E, F, and G adopted by resolutions 3 – 7 above;

11.       Authorises staff to incorporate the amendments into the 2015/25 Long Term Plan.

12.       Adopts the 2016/17 Annual Plan, comprising the draft 2016/17 Annual Plan, and the changes set out in Appendices D, E, F, and G adopted by resolutions 3 – 7 above;

13.       Authorises the Chief Financial Officer and the Head of Financial Management (jointly) to borrow in accordance with the Liability Management Policy sufficient funds to enable the Council to meet its funding requirements as set out in the 2016/17 Annual Plan;

14.       Revokes the exemption from being a Council-controlled Organisation granted to CCHL Six Ltd under section 7 of the Local Government Act 2002 with effect from 1 July 2015;

15.       Authorises Christchurch City Holdings Ltd to provide funding to Development Christchurch Ltd of up to $3 million per annum for the next five years;

16.       Authorises the Chief Financial Officer to make any necessary amendments required to ensure the published 2016/17 Annual Plan and amendments to the 2015/25 Long Term Plan are in accordance with the Council’s resolutions at its meeting on 21-22 June 2016;

17.       Applies Option 2 of Clause 6(3) of the Canterbury Earthquake (Rating) Order 2012 (as extended by the Greater Christchurch Regeneration Act 2016);

18.       Having set out rates information in the Funding Impact Statement and the Revenue and Financing Policy contained in the 2016/17 Annual Plan (adopted by resolution above) the Council now proposes to set and assess those rates and for that purpose:

19.       Resolves to set the following rates under the Local Government (Rating) Act 2002 for the 2016/17 financial year, commencing on 1 July 2016 and ending on 30 June 2017 (all statutory references are to the Local Government (Rating) Act 2002):

(a)    a uniform annual general charge under section 15(1)(b) of $117.56 (inc GST) per separately used or inhabited part of a rating unit.

(b)   a general rate under sections 13(2)(b) and 14 at different rates in the dollar of rateable value. Note, if the late Mayoral changes are adopted the decimals below will change.

 

Differential Category

Rateable Value

Rate Factor (cents/$ capital value) (inc GST)

Standard

Capital Value

0.317888

Business

Capital Value

0.527694

Remote Rural (Farming and Forestry)

Capital Value

0.238416

 

(c)    a water supply targeted rate under section 16(3)(b) and 16(4)(b) set differentially depending on whether a property is connected or capable of connection to the on-demand water reticulation system, as follows:

 

Differential Category

Rateable Value

Rate Factor (cents/$ capital value) (inc GST)

Connected (full charge)

Capital Value

0.041844

Serviceable (half charge)

Capital Value

0.020922

 

(d)   a restricted water supply targeted rate under sections 16(3)(b) and 16(4)(a) on all rating units with one or more connections to restricted water supply systems of $180.00 (inc GST) for each standard level of service received by a rating unit.

(e)   a land drainage targeted rate under sections 16(3)(b) and 16(4)(a) on all rating units in the serviced area of 0.025889 cents per dollar of capital value (inc GST).

(f)    a sewerage targeted rate under sections 16(3)(b) and 16(4)(a) on all rating units in the serviced area of 0.069543 cents per dollar of capital value (inc GST).

(g)    a waste minimisation targeted rate under sections 16(3)(b) and 16(4)(b) set differentially depending on whether a full or partial service is provided, as follows:

 

Differential Category

Basis for Liability

Rate Charge (inc GST)

Full service

Per separately used or inhabited part of a rating unit

$142.47

Partial service

Per separately used or inhabited part of a rating unit

$106.85

 

Note:

The full service charge is assessed on every separately used or inhabited part of a rating unit in the serviced area. The partial service charge is assessed on every separately used or inhabited part of a rating unit outside the kerbside collection area, where a limited depot collection service is available (75% of the full rate). Where ratepayers elect and Council agrees, additional levels of service may be provided. Each additional level of service will be rated at the full service charge.

(h)   a water supply fire connection targeted rate under sections 16(3)(b) and 16(4)(a) on all rating units receiving the benefit of a water supply fire connection of $111.75 (inc GST) per connection.

(i)     an excess water supply volumetric targeted rate under section 19(2)(a) set for all land connected to a water supply and metered for extraordinary use during the rating year of $0.73 (inc GST) per m3 or any part of a m3 for consumption in excess of that assessed by the water supply targeted rate for each rating unit.

For example, if a rating unit is assessed $730 for the water supply targeted rate, that rating unit's consumption allocation is 1,000m3 (730 divided by 0.73c/m3). Liability for the excess water supply volumetric targeted rate commences when consumption commences of the 1001st cubic metre by that rating unit.

(j)     an active travel targeted rate under section 16(3)(a) and 16(4)(a) of $20.00 (inc GST) per separately used or inhabited part of a rating unit.

20.       Resolves that all rates be due in four instalments, and sets the following due dates for payment:

Instalment

1

2

3

4

Area 1

15 August 2016

15 November 2016

15 February 2017

15 May 2017

Area 2

15 September 2016

15 December 2016

15 March 2017

15 June 2017

Area 3

31 August 2016

30 November 2016

28 February 2017

31 May 2017

 

Where the Instalment Areas are defined geographically as follows:

 

Area 1

Area 2

Area 3

Includes generally the Central City and the suburbs of St Albans, Merivale, Mairehau, Papanui, Riccarton, Addington, Spreydon, Sydenham, Beckenham, Opawa and Banks Peninsula.

Includes generally the suburbs of Shirley, New Brighton, Linwood, Woolston, Mt Pleasant, Sumner, Cashmere and Heathcote.

Includes generally the suburbs of Belfast, Redwood, Parklands, Harewood, Avonhead, Bishopdale, Ilam, Fendalton, Hornby, Templeton and Halswell.

 

 

21.       Resolves to add the following penalties to unpaid rates:

(a)    a penalty of 10 per cent will be added to any portion of any instalment not paid for instalments one to four on the following dates:

Instalment

1

2

3

4

Area 1

18 August 2016

18 November 2016

20 February 2017

18 May 2017

Area 2

20 September 2016

20 December 2016

20 March 2017

20 June 2017

Area 3

05 September 2016

05 December 2016

03 March 2017

06 June 2017

 

(b)   an additional penalty of 10 per cent will be added on 01 October 2016 to any rates assessed before 1 July 2016 and which remain unpaid on 01 October 2016.

(c)    a further penalty of 10 per cent will be added if any rates to which a penalty has been added under (b) above remain unpaid on 01 April 2017.

 

 

3.   Key Points

3.1       Earlier this year the Council adopted a Consultation Document and the underlying information it relied on, prepared as the basis for the draft 2016/17 Annual Plan and proposed amendments to the 2015/25 Long Term Plan;

3.2       The Consultation Document and the underlying information were made publicly available, and members of the public were given opportunities to present their views and preferences in response.

3.3       Those opportunities were available from Wednesday 6 April to Saturday 14 May 2016.  The responses have been analysed to identify the matters commented on, the reasons for those comments and the overall themes that emerged from the consultation process.

3.4       The result of this work has been provided to elected members to assist with their deliberations, and is attached as Appendix A to this report.

3.5       Also attached are the following Appendices:

Appendix B:  the Mayor’s recommendations;

Appendix C:  a summary of the rates impact of the proposed changes to the draft 2016/17 Annual Plan and draft amendments to the 2015/25 Long Term Plan;

Appendix D:  the proposed changes to the Council’s capital programme in the draft 2016/17 Annual Plan and draft amendments to the 2015/25 Long Term Plan;

Appendix E:  the proposed changes to the Council’s operating expenditure in the draft 2016/17 Annual Plan and draft amendments to the 2015/25 Long Term Plan;

Appendix F:  the proposed changes to policies, fees and charges in the draft 2016/17 Annual Plan and draft amendments to the 2015/25 Long Term Plan;

Appendix G:  minor changes and errors.                     

       

4.   Financial Overview

4.1       The 2016/17 Annual Plan contains significant variations from what was proposed in the 2015/25 Long Term Plan because of a number of outcomes in the 2015/16 year, including settlement of the Council’s insurance claim for more than was budgeted.  In addition, the capital programme was substantially under-delivered in the 2015/16 year (which meant lower borrowings), and growth within the city’s rating base was higher than expected.

4.2       These changes, coupled with the decision to modify the capital programme for the 2016/17 year so that it is better aligned with the Council’s ability to deliver, have substantially reduced the need to borrow in that year.  Because of this the capital release programme has been reduced by $150 million and deferred to start in 2017/18.  New borrowing will be reduced by $304 million in 2016/17.

4.3       The result is that rate increases for existing ratepayers can be reduced from the 7.18 % forecast in the 2015/25 Long Term Plan to 4.8% in 2016/17.  Full details of rates, including the total rating requirement for general and targeted rates, and indicative rates for individual properties, are provided in the Funding Impact Statement in the 2016/17 Annual Plan.

4.4       The Mayor’s recommendations include several late changes which are not included in the 4.8% above. These changes are identified in Appendices, B, C, D, and E.  If all are adopted the rate increase for existing ratepayers will increase to 4.9% and the general rate decimals will change.

4.5       Since the Council adopted it’s 2015/25 Long Term Plan, staff have further updated all capital projects with better cost estimation and timing. The net effect, when combined with the under-delivery of the capital programme in the 2015/16 year, is a reduction of $620 million over the first three years of the 2015/25 Long Term Plan, but a reduction of only $132 million over the full ten year period of the Plan.

4.6       The capital release section of the Financial Strategy has been updated following consultation, and as a result of the smoothing of the capital programme. The original $750 million of capital release has been reduced to $600 million, and the remaining $400 million has been moved to $200 million in each of 2017/18 and 2018/19.

4.7       Other changes to the Long Term Plan are as a result of the better than planned financial performance in 2014/15 and 2015/16, the insurance settlement referred to earlier, and a reduction in the estimated cost of SCIRT repairs (partly offset by changes to the Cost Sharing Agreement).

 

5.   Legal Considerations

5.1       The Consultation Document and the underlying information relied on in the content of that document was prepared and adopted by the Council in accordance with the requirements of sections 93A – G, and 95A of the Local Government Act 2002.

5.2       The special consultative procedure was used, as required by section 95B of the Act when consultation is undertaken in respect of an amendment to a Long Term Plan at the same as consultation on an Annual Plan.

5.3       Section 41A of the Act enables the Mayor to take a lead role in the development of the Council’s plans, including the Long Term Plan and the Annual Plan.  This is reflected in the Mayor’s recommendations set out in Appendix B, which have been prepared with input from the Chief Executive and the Chief Financial Officer.

5.4       Section 100(1) of the Act requires local authorities to set each year’s operating revenue at a level sufficient to meet operating expenses, in other words a balanced budget.  Despite that provision, section 100(2) allows the Council to set projected operating revenues at a different level if the Council resolves it is financially prudent to do so, having regard to a number of matters set out in that section.

5.5       The Council signalled in the 2015/25 Long Term Plan that it would be financially prudent not to operate a balanced budget in the years 2019/20 and 2020/21.  As a result of the amendments now proposed to the Plan this has been reduced to the 2019/20 year only.

5.6       The Canterbury Earthquake (Rating) Order 2012 enables the Council to decide, for each financial year, to reassess rates during the rating year rather than only at the start of the year (Option 2 clause 6(3) of the Order).  The reason is so that rates in Christchurch can reflect changes in capital value as a result of building, demolition and subdivision since the earthquakes.

5.7       It is recommended that the Council resolves to apply Option 2 for the 2016/17 year, as it has done since the Order was made.

5.8       Section 7 of the Local Government Act 2002 allows the Council to exempt a small organisation it has established from being a Council-controlled Organisation.  The Council must do this by way of resolution, having taken into account the nature and scope of the activities provided by the organisation and the cost and benefits, if an exemption is granted, to the Council, the organisation and the community (section 7(5)).

5.9       The effect is that the directors of exempt organisations are not required to comply with the reporting obligations contained in the Act, including the preparation of audited financial accounts and statements of intent.

5.10    The exemption is to remain in place only whilst an organisation continues to be a non-trading entity, and can be revoked at any time should it be proposed that the organisation be activated for any particular purpose.

5.11    At the time it adopted the 2015/25 Long Term Plan, the Council also resolved to grant an exemption under section 7 to CCHL Six Ltd.  Since then the company has been used as the vehicle for establishing Development Christchurch Ltd as a Council-controlled Organisation.  As a result, it is no longer appropriate for the company to be exempt from the obligations referred to above.

5.12    Staff therefore recommend that the Council revokes the exemption granted to CCHL Six Ltd in June 2015.

 

6.   Development Christchurch Ltd

6.1       The Council has received a request from CCHL to approve CCHL providing Development Christchurch Ltd (DCL) with funding of up to $3 million per annum over the next five years.

6.2       The Council’s approval is required by CCHL as the Council resolution of 30 April 2015, which established DCL required CCHL to provide equity funding of $1.5 million for two years. As DCL has developed its business plan the initial funding model has proven to be unsustainable, and additional funding from CCHL is required.

6.3       The request proposes that the $3 million per annum will fund the projects in DCL’s current work plan as outlined in the company’s Statement of Intent.  Any additional projects will require funding to be agreed on.

6.4       It is also proposed that the CCHL funding will come from its dividend income over the period without impacting on the dividends paid to the Council in the 2016/17 Annual Plan or the amended 2015/25 Long term Plan.

 

7.   Consultation Fulfilment

7.1       Recent amendments to the Local Government Act 2002 were made with the purpose of improving public participation in the decision-making process before the adoption of documents such as the 2016/17 Annual Plan and amendments to the 2015/25 Long term Plan.

7.2       The Consultation Document was released for public consultation on Wednesday 6 April and the period for presenting views and preferences to the Council closed on Saturday 14 May. The Consultation Document was made available at the Civic Offices, Service Centres and Council libraries and copies were delivered to a number of stakeholders, including residents associations.

7.3       Links were provided on the Council’s website to the information relied on by the content of the Consultation Document and prepared as the basis for the 2016/17 Annual Plan and the amendments to the 2015/25 Long Term Plan.

7.4       The consultation process included radio advertising, articles in Council publications, email newsletters to subscribers, the website link referred to above, and the ability for views to be presented electronically.  The Council staff also used other e-democracy tools such as Facebook and Twitter.

7.5       People were encouraged to present their views, and all comments received were summarised and distributed to the Mayor and Councillors.

7.6       The Council held breakfast meetings with local business representatives and community and NGO groups.  A youth workshop was also organised.

7.7       Staff provided Mahaanui Kurataiao Ltd with a copy of the Consultation Document and invited it to the NGO breakfast meeting.

7.8       New initiatives included opportunities for community meetings, Community Board forums and city-wide Councillor events. These enabled participants to present their views to individual elected members, either at community venues or at the Civic Offices.  Staff were available to assist elected members with the Council’s response and, where appropriate, to record any comments made.

7.9       Opportunities for audiovisual interaction were made available to Banks Peninsula residents.

7.10    At the end of the process a day was set aside for members of the public to simply turn up and present their views to the Mayor and Councillors (“the last chance open mic”).  The intention was to give people an opportunity to appear in front of the full Council if that was what they preferred to do.

7.11    While this was reasonably effective the general consensus was that improvements could be made to ensure the day was better structured and more “user-friendly”.

7.12    259 electronic or mailed responses were received and 168 Facebook consultation surveys were completed.  Facebook was used more extensively than during the consultation for the 2015/25 Long Term Plan, with more views presented through this medium than any other.

7.13    As a general comment the nature of the views presented reflected a more pragmatic acceptance of the Council’s proposed direction through its proposed amendments to the Long Term Plan than was apparent in 2015. 

7.14    Also, there did not appear to be a great deal of concern about the timing of the capital programme, apart from occasional disappointment that some community facility projects had had their timing pushed back.  This was often mitigated however by the recognition that such projects still retained their priority in the programme.

7.15    Some of the sharpest commentary was in response to proposals to increase a number of fees and charges.  There seemed to be a perception that some of the increases proposed would potentially act in opposition to the achievement of community recovery goals.

7.16    Facebook responses emphasised support for both community-related projects and getting on with the capital programme.  This did not appear to mean disapproval of the 2016/17 Annual Plan and/or the amendments to the 2015/25 Long Term Plan, but rather a desire to get the balance right and the most efficient and effective results.

7.17    It is the view of the Legal Services Unit that the special consultative procedure undertaken in respect of the proposals to adopt the 2016/17 Annual Plan and amendments to the 2015/25 Long Term Plan was carried out in accordance with the requirements of the Local Government Act 2002.

 

Attachments

No.

Title

Page

a

Annual Plan Report 2016-17 - Final - Appendix A - Submissions Thematic Analysis

13

b

Annual Plan Report 2016-17 - Final - Appendix B - Mayor's recommendation

28

c

Annual Plan Report 2016-17 - Final - Appendix C - Rates impact

32

d

Annual Plan Report 2016-17 - Final - Appendix D - Capital changes

33

e

Annual Plan Report 2016-17 - Final - Appendix E - Operational changes

34

f

Annual Plan Report 2016-17 - Final - Appendix F - Policies, fees and charges

35

g

Annual Plan Report 2016-17 - Final - Appendix G - Minor changes and errors

143

 

 

Signatories

Authors

Ian  Thomson

Bruce Moher

Senior Legal Advisor - Governance

Planning & Reporting Manager

Approved By

Diane Brandish

Peter Ryan

Peter Gudsell

Karleen Edwards

Head of Financial Management

Head of Performance Management

General Manager Finance & Commercial

Chief Executive

  


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Annual Plan 2016/17 and Amended Long Term Plan 2015-25

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