Christchurch City Council

Agenda

 

 

Notice of Meeting:

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

 

Date:                                    Tuesday 23 February 2021

Time:                                   9.30am

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

 

 

Membership

Chairperson

Members

Mayor Lianne Dalziel

Deputy Mayor Andrew Turner

Councillor Jimmy Chen

Councillor Catherine Chu

Councillor Melanie Coker

Councillor Pauline Cotter

Councillor James Daniels

Councillor Mike Davidson

Councillor Anne Galloway

Councillor James Gough

Councillor Yani Johanson

Councillor Aaron Keown

Councillor Sam MacDonald

Councillor Phil Mauger

Councillor Jake McLellan

Councillor Tim Scandrett

Councillor Sara Templeton

 

 

18 February 2021

 

 

 

Principal Advisor

Dawn Baxendale

Chief Executive

Tel: 941 6996

 

 

Samantha Kelly

Team Leader Hearings and Council Support

941 6227

samantha.kelly@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 2021 - 2031

23 February 2021

 

 

 


Council - Long Term Plan 2021 - 2031

23 February 2021

 

TABLE OF CONTENTS

 

1.        Apologies / Ngā Whakapāha................................................................................ 4

2.        Declarations of Interest / Ngā Whakapuaki Aronga................................................. 4

Staff Reports

3.        Draft Long Term Plan 2021-2031......................................................................... 5   

 

 


Council - Long Term Plan 2021 - 2031

23 February 2021

 

 

1.   Apologies / Ngā Whakapāha

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

2.   Declarations of Interest / Ngā Whakapuaki Aronga

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 2021 - 2031

23 February 2021

 

 

3.     Draft Long Term Plan 2021-2031

Reference / Te Tohutoro:

21/37334

Report of / Te Pou Matua:

Peter Ryan, Head of Performance Management,
Peter.Ryan@ccc.govt.nz
Bruce Moher, Head of Financial Management (Acting),
Bruce.Moher@ccc.govt.nz

General Manager / Pouwhakarae:

Diane Brandish, General Manager Finance and Commercial (Acting), Diane.Brandish@ccc.govt.nz

 

 

1.   Purpose of Report

1.1       The purpose of this report is to present to the Council for consideration and adoption of :

1.1.1   The information that provides the basis for preparation of the Council’s draft 2021-31 Long Term Plan, and which is relied on to shape the Consultation Document;

1.1.2   The draft LTP Consultation Document (with the report from Audit NZ to follow on 4 March 2020);

1.1.3   The consultation and engagement process to be undertaken by the Council.

2.   Officer Recommendations / Ngā Tūtohu

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 19 February 2021;

3.         Adopts the information that provides the basis for the Council’s draft Long Term Plan 2021-2031 and relied on by the content of the Consultation Document to be adopted by the Council, and which is the information set out in Attachment A;

4.         Notes that a full version of this information can be found at:

a.         Long Term Plan 2021–31 : Christchurch City Council (ccc.govt.nz)

5.         Adopts the Consultation Document in principle (Attachment B) for consultation, subject to the inclusion of the Auditor-General’s report required by s.93C(4) of the Local Government Act (LGA) 2002. The latter will be supplied to the Council meeting of 4 March 2020, at which point  formal  adoption of both the LTP and audit report can occur;

6.         Authorises the General Manager Finance and Commercial and the Chairperson of the Audit and Risk Management Committee to make any non-material amendments to the documents and/or information attached to or referred to in the staff report, as well as amendments that may be required to ensure the documents and/or information align with the Auditor-General’s report.

7.         Approves the following process for consultation:

a.         Consultation Document available to the public on 12 March 2021;

b.         The period for making submissions will run from 9am on 12 March to midnight on 18 April 2021;

c.         For people who wish to, opportunities will be provided for them to present oral submissions, the following time allocations will apply:

i.          Community Boards, Te Rūnanga o Ngāi Tahu, Papatipu Rūnanga, Environment Canterbury and other local councils – 10 minutes

ii.         Groups and organisations – 5 minutes

iii.        Individuals – 3 minutes

d.         Oral submissions will be heard between 3 May and 19 May 2021 (specific hearing dates to be confirmed);

e.         All submissions will then be considered before the Council meets on 21 and 23 June 2021 to adopt its 2021-2031 Long Term Plan.

             Secretarial Note: The Audit and Risk Management Committee’s recommendations referred to in recommendation 2 will be provided separately.  

3.   Requirement of the Local Government Act 2002

3.1       The Local Government Act (LGA 02) requires local authorities to adopt a Long Term Plan every three years. The Council’s current Long Term Plan was adopted in June 2018.

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 02).

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 (s93(6) LGA 02).

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 2021-31 Long Term Plan.

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 02).

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 2021-31 Long Term Plan (s 93G LGA 02).

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 LGA 02, at the meeting of 4 March 2021.

3.8       The information to be adopted by the Council before it adopts the Consultation Document is set out in Attachment A. Also attached is the Financial Strategy (Attachment C) and Infrastructure Strategy (Attachment 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 02). The Council delegated to its Finance and Performance Committee 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    The Council’s Audit and Risk Management Committee (ARMC) met on 19 February 2021. 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.

4.   Process

4.1       The Draft Long Term Plan 2021-2031 has been developed over the last 18 months by staff as well as guidance from the Mayor and Councillors. This included guidance on the overall direction and parameters to apply to the development of the draft Long Term Plan, including expectations for balancing the speed of earthquake recovery with rates affordability.

4.2       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.

4.3       The LTP process was guided by the Elected Members’ Letter of Expectation, which sought improvements over certain aspects of the 2018 process. The new process was approved by the LTP project team, Executive Team, Finance & Performance Committee and Council. It was also considered by ARMC. 

4.4       The LTP project team was chaired by the Chief Executive. Work stream leads were appointed to be accountable for the delivery of each component of the LTP.

4.5       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 Performance Management Unit. The External Advisory Group provided advice and oversight to staff and Elected Members.

4.6       The Council played an active role in reviewing the information that will provide the basis for preparation of the draft Long Term Plan. The Council met regularly from August 2020 to January 2021 to review the key documentation relevant to their particular terms of reference.

4.7       Regular monthly updates have been provided to Finance & Performance Committee and ARMC on both the process and draft content of the developing LTP.

4.8       As the draft LTP evolved, Council staff held a lengthy series of workshops with the Mayor and Councillors to obtain overall direction and to fine-tune specific details. This commenced in July 2020 and concluded in January 2021.

4.9       This provided opportunities for Councillors to debate their priorities for the draft Long Term Plan 2021 and their expectations for matters such as rates increases, level of debt, financial headroom, the capital works programme, levels of service and savings options.

4.10    The LTP contains a focus on Covid-19 recovery and climate change response. In line with the Letter of Expectation it also has a focus on resilience.

4.11    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.

4.12    The draft Long Term Plan recommends (in the opinion of senior management, and based on the advice provided by Councillors) the best balance between financial, risk and service delivery to the community.

4.13    The focus of the Consultation Document will be on the optimal balance described above. Note that other options (including options around greater and lesser spending/rates percentages) were carefully analysed by senior management and councillors, but were considered to have less advantages than the Council’s recommended option.

4.14    This is because of the greatly increased risk that goes with higher rates increases/spending (for example, risks around debt, headroom and capital programme delivery) and equally the loss of opportunity that goes with lower rating/spending (impacts on critical asset renewal programmes, loss of capital works, reduction in core levels of service, and failing to support central government in fostering economic growth as part of Covid recovery.)

4.15    This focus on an optimal balance has been considered in detail by the LTP project team, Legal Services, Audit NZ and the ARMC.

4.16    All parties consulted have advised that they accept the logic of this process and approach. Legal advice confirms that it complies with the relevant provisions of the Local Government Act 2002.

4.17    A full Consultation Document for the LTP has been developed by staff. Audit NZ met with staff on 17 February to further discuss this document. They have suggested some changes and staff are actioning these now as a priority.

4.18    However this extra information will take time to collate and verify, which will clash with the notification periods for Council reports. To mitigate this the draft Consultation Document attached to this report contains a placeholder to this effect on page 4. A new version of the Consultation Document containing the extra information will be circulated for councillors to consider prior to their meeting of 23 and 25 February. 

4.19    When Council meets to consider the draft Long Term Plan on 23 and 25 February, it is intended that Council will resolve to adopt the information that provides the basis for preparation of the draft LTP (but not the Consultation Document), subject to receipt of the Audit NZ opinion on 4 March.

4.20    Due to resource constraints Audit NZ will then attend Council on 4 March 2021 to deliver their report. The supporting information, Consultation Document and audit opinion will then be formally adopted at that meeting.

5.   Financial Implications

5.1       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.

5.2       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.

5.3       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 2021-31.

5.4       With some limitation on borrowing capacity prior to 2028 and also taking into account deliverability and affordability, Council has restrained it proposed core capital programme in the first three years. A total programme of $5.7 billion over the Long Term Plan period is proposed.

5.5       Significant operational savings of $34 million are proposed from the first year of the Long Term Plan, additional to the $18 million savings made in the 2020/21 Annual Plan. These are partly in response to a post COVID-19 reduced revenue base and partly from a thorough review of operating costs.

5.6       Residual operational borrowing due to COVID-19 has been minimised by an improved CCHL dividend for 2020/21 and proposed surplus land sales over the next two years.

5.7       An average rates increase to all existing ratepayers of 5.56% is proposed for 2021/22. For residential ratepayers this will be 5.0%. Rates increase are forecast to be over 4% for the following five years before dropping to around 3%. A total cumulative rates increase over the Long Term Plan period of 47.8% is forecast.

5.8       The Council’s net debt to revenue ratio increases materially in the 2023 – 2025 period, partly due to Council borrowing taking over from Crown funding for the completion of the Canterbury Multi Use Arena. The ratio reaches a peak in 2028 of 244% before starting to decline. Staff believe current and forecast debt can be serviced comfortably.

5.9       A key feature of the financial strategy is to ensure the ability to access funding through borrowing if the unexpected happens. Minimum debt headroom of $400 million has been maintained in all years except 2026 ($396 million) and 2028 ($384 million).

5.10    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.

5.11    The proposed Long Term Plan meets all financial prudence benchmarks across all years except for a marginally unbalanced budget in 2024/25. This is the residual impact of increasing the rating for renewals to an appropriate level over time, within the bounds of ratepayer affordability, which commenced in 2015 and is considered prudent.

5.12    The proposed Long Term Plan does not provide for inflation protecting the principal of the Capital Endowment Fund. Low interest rates mean it is not feasible to do so while still providing funding for economic and community development.

6.   Consultation and Hearings Process

6.1       Preparing and adopting a Long Term Plan is a matter of high significance. For this reason the LGA 02 requires the Council to use the special consultative procedure when consulting with its community on adoption of the Plan (s 93(2) LGA 02).

6.2       The requirements for a special consultative procedure are set out in s 83 LGA 02. If approved by the Council, the following process will comply with those requirements:

6.2.1   The Consultation Document will be available to the public on 12 March 2021;

6.2.2   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 2021-31 Long Term Plan;

6.2.3   The period for making submissions will run from 9am on 12 March to midnight 18 April 2021;

6.2.4   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;

6.2.5   It is proposed to hold a series of community discussions between 12 March and 18 April 2021.  These discussions will allow the community to engage directly with Elected Members and Council officers;

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

6.2.7   For people who wish to, the opportunity to present their views orally will be available between 3 May and 19 May 2021 (specific dates to be confirmed),the following time allocations will apply;

·     Community Boards, Te Rūnanga o Ngāi Tahu, Papatipu Rūnanga, Environment Canterbury and other local councils – 10 minutes

·     Groups and organisations – 5 minutes

·     Individuals – 3 minutes

6.2.8   All submissions will then be considered before the Council meets on 23 and 25 June 2021 to adopt its 2021-31 Long Term Plan.

 

Attachments / Ngā Tāpirihanga

No.

Title

Page

a

LTP 2021 Draft Mayor's Proposal

13

b

LTP 2021 Draft Consultation Document

24

c

LTP 2021 Draft Financial Strategy

73

d

LTP 2021 Draft Infrastructure Strategy

95

e 

Auditor-General's Opinion (Under Separate Cover)

 

 

 

In addition to the attached documents, the following information is available:

Document Name

Location / File Link

Draft Long Term Plan 2021- 31

 

 

1.    Treaty Relationships

2.    Financial Overview

3.    Funding Impact Statement and Rating Information

4.    Financial Prudence Benchmarks

5.    Community Outcomes and Strategic Framework

6.    Summary of Grants

7.    Activities and Services - Statements of Service Provision

8.    Capital Programme

9.    Potential Disposal of Council-owned properties

10.  Prospective Financial Statements

11.  Significance and Engagement Policy

12.  Revenue, Financing and Rating Policy

13.  Liability Management Policy and Investment Policy

14.  Council-controlled Organisations

15.  Fees and Charges

16.  Reserves and Trust Funds

17.  Capital Endowment Fund

Supporting documents

·    38 Draft Activity Plans and 14 Draft Asset Management Plans

 

 

 

Confirmation of Statutory Compliance / Te Whakatūturutanga ā-Ture

Compliance with Statutory Decision-making Requirements (ss 76 - 81 Local Government Act 2002).

(a) This report contains:

(i)  sufficient information about all reasonably practicable options identified and assessed in terms of their advantages and disadvantages; and

(ii) adequate consideration of the views and preferences of affected and interested persons bearing in mind any proposed or previous community engagement.

(b) The information reflects the level of significance of the matters covered by the report, as determined in accordance with the Council's significance and engagement policy.

 

 

 

Signatories / Ngā Kaiwaitohu

Authors

Peter Ryan - Head of Performance Management

Ian Thomson - Senior Legal Counsel

Bruce Moher - Head of Financial Management

Ryan McLachlan - Reporting Accountant

Diane Brandish - Acting General Manager Finance and Commercial (CFO)

Andrew Jefferies - Manager Funds & Financial Policy

Approved By

Helen White - Head of Legal Services

Diane Brandish - Acting General Manager Finance and Commercial (CFO)

Dawn Baxendale - Chief Executive

  


Council - Long Term Plan 2021 - 2031

23 February 2021

 

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Council - Long Term Plan 2021 - 2031

23 February 2021

 

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23 February 2021

 

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23 February 2021

 

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