ŌDC Consulting on the draft 2015-2025 Long Term Plan 100%

Your assets, your community, your future

Page 2 Page 2 Page 3 Page 10 What is a CD? Message from Project updates Seeking

Mayor and CEO and key Issues feedback

Page 12 Page 14 Page 16 Page 18 Where your About our Your rates The finances rate dollar goes Infrastructure Strategy

Page 20 Page 22 Page 22 Page 23 Audit opinion How to have your say Consultation Submission

on our direction dates form

The Long Term Plan sets out the Council’s priorities and activities for the next 10 years. It incorporates policies of Council, the nature and scope of activities undertaken, the capital programme, the sources of funds and proposed changes to fees and charges. It covers everything we do and how we pay for it. It sets the budget for the next decade.

The purpose of the consultation document is to provide for public participation and discussion in the decision making process relating to the Long Term Plan by: •Providing fair representation of the matters that are proposed for inclusion in the plan •Explaining the overall objectives of the proposals and how rates, debt and levels of service may be affected •Identifying significant and other important issues and choices facing the district and the consequences of those choices.

Our Council vision is ‘Strong Community, Strong Future’. We really want to hear your views. Wouldn’t it be great if we all wrote the Plan together?

Why we are sending you a consultation document

A FEW WORDS FROM OUR MAYOR AND CEO

Our Previous Financial Approach Continues Council proposes to continue with its previous strategy to financially position itself to be able to deliver the infrastructure and services needed to support a growing aquaculture industry. Our debt remains low with spending only on essential infrastructure or where grant funding is leveraged.

We continue to maintain your $180 million of infrastructure assets – roads, sewers, water pipes etc and upgrade these as the need arises. Operating these assets and delivering these services comes at a cost, and council endeavours to meet compliance standards and service requirements while managing its finances prudently.

Government imposed increases in compliance standards continue to drives rates increases, for example the new Health and Safety legislation is driving the need for additional resourcing within Council.

Harbour While it is certainly a significant project, the harbour is continuing on the track we set three years ago in the last Long Term Plan. We propose to maintain the capacity for Council to put in $5.4M in the form of a loan from ratepayers (to be repaid in time from user charges), and have secured $18M of grant funding from the Regional Council. We are working with central government to secure the remainder of the required funding. Over the next three years we expect the aquaculture companies to meet the necessary milestones for the investment in the harbour to be released, and for the works to begin.

Wastewater The Ōpōtiki wastewater upgrade project is still in the assessment stage. We have installed measuring and recording equipment in our sewers and we are waiting for rain. The measurements we take will help us decide and design an appropriate solution to the current issues within the network. Both the harbour and the wastewater projects were consulted on in the 2012-22 Long Term Plan.

Other projects Other key projects are the proposed research and technology library and cycleway extensions. We have identified solid waste services, road sealing and development contributions as the three areas that council needs to make some big decisions about. We look forward to your feedback on all issues.

John Forbes, Mayor Aileen Lawrie, CEO

INDEX OF

Available on Council website at odc.govt.nz/ltp

Draft Financial Strategy

Draft Revenue and Financing Policy

Draft Planning Assumptions

Draft Fees and Charges

Draft Council Activities

Future Priorities and Direction

Community Outcomes

Significance and Engagement Policy

Treasury Risk Management Policy and Procedures

Draft Rates Postponement and Remission Policies

Draft Statement of Accounting Policies

Draft Development Contributions Policy

Draft Infrastructure Strategy

Asset Management Plans

Draft Appendices

Draft Funding Impact Statement

Draft Activity Statements

SUPPORTING DOCUMENTATION

PROJECT UPDATES

Ōpōtiki wastewater project What is the issue? The Ōpōtiki sewer system currently suffers from water inflow due to poor materials and difficult installation in the 1950s.

Levels of service are difficult to maintain in heavy weather events when the system becomes overloaded with groundwater and rain water.

We are currently investigating the extent, severity and localisation of the inflow and infiltration. The key outcome will be the scope of replacement activity required. Our budgets have assumed a worst case scenario of full replacement, but the investigation may show this isn't necessary.

Our option for budgeting purposes only

Until the investigation has been undertaken Council cannot provide an accurate costing or timeline of the extent of the replacement and upgrade required. For the purposes of this 2015-25 Long Term Plan Council has assumed full replacement over 5 years.

This project will contribute to the largest debt requirement for Council than any other project, with a proposed total cost of $12.5 million. Every $1 million of loan requires $9 of interest cost per ratepayer.

2016 2017 2018 2019 2020

Design 355,000

Stage 1 2,489,034

Stage 2 3,216,691

Stage 3 3,378,430

Stage 4 3,061,447

PROJECT UPDATES

Harbour progress Council has achieved much over the past year to position itself to successfully deliver a Harbour to service a growing marine industry. The coming year continues with this theme.

Eastern Sea Farms Eastern Seafarms is now a fully locally owned company, which holds the consent to the aquaculture farm. The operating company is Whakatōhea Mussels (Ōpōtiki) Limited with 13 lines of 4km each in the water. A spat (baby mussel) catch was reported in November that exceeded expectations. These activities are all commercially driven but the progress gives Council confidence to proceed further with our infrastructure project to enable the industry access into Ōpōtiki.

Regional Council Heads of Agreement The Bay of Plenty Regional Council and Ōpōtiki District Council signed a Heads of Agreement in December 2014 for the $18M commitment to the project. It has a number of conditions that reflect our project plan and are being worked through. Examples are:

• Reference design and costing completed – came in just below budget

• Costing sensitivity and risk analysis completed with cost of steel being highest risk

• Review of potential other users of harbour and infrastructure in partnership with BOPRC

• Draft MOU being worked on between ODC and Aquaculture companies

In the coming year we will be working through a formal Funding Agreement that will be a binding document that will govern the release of funds. This funding as part of the heads of agreement is dependent on co-funding from Central Government.

Central Government The Ōpōtiki District Council, in collaboration with regional stakeholders and central Government, is working on a business case for the Ōpōtiki Transformation Project using the Treasury’s Better Business Case process. Treasury is supporting the development of the business case. A decision is likely during the LTP consultation process or early in the 2015-16 financial year. Although the funding has not yet been secured we are optimistic of a positive outcome.

Social Planning Council has completed a report on Opportunities, Issues and Implications for Workforce Development with data from MSD, Eastern Seafarms, and Whakatōhea iwi. In the coming year we are planning for Toi-EDA to assist by carrying out a project that will firstly consider the employment needs of the kiwifruit industry and then consider the opportunities to integrate with the aquaculture workforce (potentially a complementary seasonality between the two). External funding assistance has been asked for to carry out this important piece of preparatory

work. In years two and three we see this work stepping up, facilitated by ODC, our partners and industry.

Planning documents The coming year will also see Council cementing the harbour and a marine industry into its relevant planning documents such as the District Plan.

Financial information The following table and graph sets out the numbers relating to the harbour transformation project as previously consulted with ratepayers.

Once construction is complete Council proposed to utilise depreciation funding to repay the loan as quickly as possible.

Revenue from the harbour is expected to start being received once the harbour is completed in 2020, and increase according to the projected aquaculture growth advised to Council as part of the funding work to Central Government.

Over the term of this LTP we will be asking for ratepayers to fund this activity and the loan repayments through rates. This requirement peaks in 2019 before the revenue streams start to kick in. However, once they do, the required funding from our ratepayers reduces as illustrated in the graph above. In year 1 the cost to fund the harbour development activity is roughly $1 per month per ratepayer.

2016 2017 2018 2019 2020

Project

Management

740,681 293,058 267,087 383,416

Construction 21,955,500 19,422,000 8,908,000

Harbour development As part of the Ōpōtiki Harbour Transformation project there are a range of possibilities for the development of the Harbour surrounds. Council will always be restricted by finances in what it can do but there may be some essential infrastructure that could be funded to help start development. Council’s role could range from carrying out initial planning, feasibility assessments, seeking resource consents, through to actually undertaking the development. Council is limited by debt constraints to undertake all of these projects, but may be able to do some. Some of the opportunities for the Harbour surrounds are: • Commercial wharfage (to generate income) • Public wharfage (to provide an income and to enable

public access) • Sewerage pump-out facilities • Ice facilities • Slipways and haul-out facilities • Marinas or berthage areas • Marine haul out and maintenance areas • Retail space

What role do you think Council should take? Which of these opportunities do you think are the most important?

PROJECT UPDATES

The Draft Long Term Plan includes some major projects and some issues that offer the Council options or choices. The Mayor and councillors would like to know whether you agree with the preferred option in the draft or whether you prefer one of the other options presented.

Stormwater, flood relief, marina What is the issue? Ōpōtiki township is sometimes subject to surface flooding when it rains hard. Flooding effects can be compounded by high river levels and tides, although it generally drains away quickly with the next low tide.

Flooding can’t be tackled with one project alone, as it is a network problem, and needs a network solution. In Council’s Infrastructure Strategy we propose a number of projects to address flooding, prioritised in order of effectiveness.

A key project is identifying areas that can be excavated to collect and hold stormwater when the river levels and tides are high. This lowered area will reduce the flooding risk to the surrounding residential areas and can be designed to provide a pleasant public area.

Our options Option 1 Excavate a large area extending from the stormwater outlet into Tarawa Creek, and then into Volkner Reserve, and upgrade the pumping stations and capacity of the network in the areas most affected by surface flooding. This proposed option will cost $2.3 million (with $1.58 million within the term of this LTP, with the remainder to be spent 2038/39 and 2039/40).

Option 2 Upgrade only the pump stations and mains to cater for most stormwater events. This option is slightly less capital cost at $2.2 million, but will incur more annual operating costs for power and maintenance. The capital spend is condensed over a shorter period, meaning a larger impact on Council debt during this LTP.

What are the implications? Approximately $2 million needs to be spent over the next 10 years to improve stormwater management in Ōpōtiki.

Any excavated areas could be further developed (with deepening) to form a marina basin. A facility for boats to go in an out would need to have some sort of motorised control gate to ensure town is protected from floods in the rivers. Council is only proposing to do the excavation needed for stormwater management.

How this will affect your rates For the first three years of the LTP there is no significant difference between either option in terms of the effect on rates(2016 $3 per ratepayer). However option 2 requires an additional $800,000 of debt over years four and five which will increase the rates required to a point where there will be $9 per ratepayer difference between Option 1 and 2.

Preferred Option Council’s preferred option is option 1, where Council upgrades the pump stations and pipework in conjunction with excavating a lower catchment area for excess surface water to run into. This area will allow collection of the water until rivers or tides subside. This also allows alignment in the future with harbour and marina development.

2016 2017 2018 2023

Tarawa Creek Storage Area

20,000 300,000 300,000

Pump Station and pipe up-grades

300,000 430,000 230,000

Total 320,000 730,000 300,000 230,000

2016 2017 2018 2019

Pump Station and pipe upgrades

300,000 730,000 300,000 530,000

2020

300,000

THE KEY ISSUES

Roading seal extension What is the issue? Council currently has a road seal extension policy that lists the unsealed roads within the district that Council plans to seal, and when. However due to funding changes this may no longer be possible.

New Zealand Land Transport (NZTA) funding used to be available for both preparatory works and seal extension. Now, whilst a limited amount is available for minor improvements, the bulk of the cost for preparation works and for the sealing must be met from local sources.

Up until now Council was able to continue with seal extension projects by drawing on reserve funds, and by limited use of the road development contribution reserve. The first of these is now fully depleted and Council is proposing stopping the collection of development contributions.

Our options

Option 1 Discontinue seal extensions projects; instead maintain the existing gravel roads as unsealed roads.

Option 2—Status Quo Continue with a seal extension programme and seal complete road sections as identified in the priority programme, on an annual basis.

Option 3 Continue with a reduced-length seal extension programme – in general seal sections of road that cause dust nuisance to housing clusters on an annual basis.

We don’ expect this issue to have any significant effect on whole of Council debt or rates, this issue is relevant materially to a certain group of ratepayers.

What are the implications?

Our Funding Options Because we have now lost the NZTA funding commitment there are 3 options to fund seal extension works. Option 1 By general rate funding across the whole district. Option 2 By target rate funding the rural community who get the benefit of the seal extension. Option 3 By external contribution of a similar portion to what NZTA previously subsidised of 60%. Ratepayers will contribute the 40% through the general rate across the whole district. *The figures represent what everyone will contribute towards this option through the general rate.

THE KEY ISSUES

Annual Capital Cost

Annual Operational Cost

Option 1 $0 $0

Option 2 (Status Quo)

$196,000 $27,500

Option 3 $107,000 $17,000

Preferred Option Council’s preferred option is Option 1. This will mean existing gravel roads will be maintained as unsealed roads and seal extension projects will be discontinued. But it will also mean there will be no significant impact on your rates or Council’s debt. Council will seal roads where a contribution is made by external parties to cover the lost subsidy from NZTA, the balance will be funded from general rates.

General Rate to everyone

Targeted Rate to rural

Option 1 $0 $0

Option 2 (Status Quo)

$40 $87

Option 3 $22 $48

Contribution*

$0

$16

$9

Do you agree with Council’s

proposed option to discontinue

seal extension projects?

Solid waste

What is the issue? A number of ratepayers who live in the residential clusters just outside Ōpōtiki have asked that we extend the current refuse and recycling collection services to these areas.

With the help of Council’s collection contractor we have looked at the cost of providing the service to Stoney Creek Road, Waiotahi Drifts/Appleton Road and Paerata Ridge (to Thompson Road). There are 143 dwellings in these cluster groups and the annual cost of collection for these would be $34,730.

Our Options Option 1—Status Quo We don’t extend the refuse and recycling collection services to anyone outside of the urban area where collection services are currently provided. Note, there will be an adjustment to the base cost to fairly reflect the cost of the refuse collection being processed through the Resource Recovery Centres.

Option 2 We look to extend the collection service initially to Stoney Creek Road, Waiotahi Drifts/Appleton Road, and Paerata Ridge to Thompson Road.

Our Funding Options Option 2.1 Apply the cost of extending the service, plus a proportion of overheads and contribution to the Resource Recovery Centre operating cost directly to those we are extending the service to.

Option 2.2 Apply a single uniform targeted rate to both urban collection and the proposed extension properties, effectively bringing under the same funding umbrella.

Option 2.3 Charge all properties within the collection area for the service via a targeted rate, those that get a collection get the full charge, and those that don’t but can get a half charge. This follows the same principle as water and wastewater services provided, and shares the cost for extending the service to identified areas.

What are the implications?

We don’t expect this issue to have any significant effect on whole of Council debt or rates. This issue is only relevant materially to a certain group of ratepayers.

Preferred option Council’s preferred option is Option 2.3, whereby we propose to extend the collection service to Stoney Creek Road, Waiotahi Drifts/Appleton Road, and Paerata Ridge to Thompson Road.

Under this option, ratepayers in these areas would pay a full charge to have their refuse and recycling collected or a half charge to have the service available.

Additional

Operational Cost

Targeted Rate for

service

Option 2.1 $34,730 $304

Option 2.2 $34,730 $147

Option 2.3 $34,730 $138 collected

$69 available

Option 1 Status

Quo $0 $136

Additional Operational Cost

Option 1 Status Quo $0

Option 2 $34,730

THE KEY ISSUES

Preferred Option

Council’s preferred option is Option 1, to demolish and replace the section of the wharf that is now designated as unsafe. It is Council’s opinion that this wharf will be main recreation/charter wharf in the long term. The commercial wharfage for the harbour development Council assumes will be provided by the private sector. This option enables Council to spread the impact of the debt increases over a longer term. Being able to demolish and rebuild will be more efficient if there is a single consent process, tender process and construction period. It also avoids the issue of having to temporarily make the site safe.

Wharf facilities What is the issue? Council has recently received an engineering report identifying a section of the wharf is unsafe for use. Consent requirements mean we need to do something about the wharf now. Ideally we would demolish and replace the wharf at the same time to keep costs to a minimum. We had budgeted to undertake works to upgrade the wharf before the harbour project was completed.

Realistically we need to bring this project forward to year one to deal with this issue. We have also included budget for wharf upgrade work of an additional $2 million in year 10. Whether this is needed or not still needs to be decided, and is dependent on the harbour development project going ahead and the resulting growth.

Our options

Option 1 Bring forward $1 million of the $2.2 million we proposed to spend in 2020 to year one of the LTP to demolish and replace the unsafe section of the wharf.

Option 2

Demolish the section of the wharf that is unsafe and leave until 2020 before rebuilding, This will add significant consenting costs to the project.

What are the implications?

Option 1 The impact on rates for the option of demolish and replace in year 1 means that debt and rate requirement will be higher initially. Council does expect a peak debt in 2020 with the wastewater and harbour projects, so this will help spread or ease this impact slightly. The cost of this option is roughly $4 per ratepayer in year 1.

Option 2 The rating impact of this option is later on where it overtakes option 1. It is also the more expensive option in the long run, with a lot of unknowns around the consenting costs.

THE KEY ISSUES

Revenue and financing policy What is the issue?

This policy sets out the guidelines for the funding of Council activities. The logic behind the policy is that a share of the cost of a service should be directed towards those that benefit from the service.

For the 2015-25 Long Term Plan we are proposing to fund the activities on a group basis. The reason behind this is that all of our reporting is based at this level rather than right down at the cost centre level. It therefore makes sense that we tie the funding to the same level that we report at. Making this change will streamline and simplify our reporting approach.

An additional change this year is the inclusion of a targeted recovery through fees and charges. This brings the policy into line with our philosophy that the user should contribute proportionately towards the cost of the activity.

The proposed funding table is below:

Central business district

The Ōpōtiki CBD is an important focal point for the district and it has unique character that is of importance to the community. On the other hand it has a high number of earthquake prone buildings and we are expecting some legislative amendments in the future that we will need to

implement. Council has advocated to government for more sensible provisions around upgrading these buildings that provides more of a balance for rural areas that cannot afford redevelopments. Within the constraints of its regulatory requirements, Council could either:

1 Allow the town’s future to be driven by legislation and market forces; or

2 It could investigate ways to balance character and heritage with risk and affordability.

Do you think council should make provision to better understand the options for our CBD or leave it to the legislative environment and the market?

Growth areas What is the issue? Council is projecting growth within the district on the back of the harbour development project and the expansion in the kiwifruit industry. We have included a number of projects in the latter parts of this Long Term Plan that are responses to estimated demand for Council services. These services are mainly for water and wastewater. In estimating these projects Council has made the assumption that the areas where growth will occur will be:

• Hikutaia/Woodlands • Waiotahi Drifts

In the Infrastructure Strategy we have planned projects to extend water supplies and wastewater services to the Hikutaia/Woodlands area. Waiotahi Drifts already has access to these Council services.

These projects again are demand - and growth - contingent. If we do not experience the assumed growth then some of these projects will not be undertaken. There are aspects of the water supplies projects that are related to security and quality of service rather than growth.

SEEKING FEEDBACK SEEKING FEEDBACK

Development contributions

policy What is the issue? This policy sets out how development contributions will be collected, and how they will be applied towards projects over the term of the LTP.

There have been significant changes within the Local Government Act that relate to development contributions. These changes make collecting and applying development contributions more difficult than they were previously.

Council would like to consult with you about ceasing the collection of development contributions. The reasons for this being the legislative changes as outlined above, but also the fact that there is a strategic desire for Council to be an enabler of development and growth within our district. Taking the requirement to pay a development contribution away from developers will hopefully promote Ōpōtiki as a developer friendly place, and reduce the barriers to growth.

Legal advice states that since council is no longer going to build an event centre, Council should refund the development contributions that are unspent that relate to the event centre.

Our Options

Option 1

Council cease collecting any more development contributions from ratepayers, and apply development contributions to projects that meet the requirements of the legislation over the term of the LTP. Any balance remaining should be refunded to the ratepayers that contributed them. This will require Council to repay just over $400k.

Option 2

Council cease collecting development contributions and refund all development contributions collected

to those that contributed them. This will have the largest impact on debt requirements requiring Council to repay nearly $800k.

Option 3

Council continue to collect development contributions and apply them to growth related projects on an ongoing basis. This option requires more work to maintain the schedules of development contributions, and has uncertainty around determining what the expected growth component will be. This can be difficult to justify, especially given that historically we have decreased in population. This option doesn’t do anything to attract businesses and development to the district. Council will still be required to repay the development contributions that relate to the event centre.

Options 1 and 3 have no impact on rates, Option 2 will require additional rate funding for the projects that meet the new legislative requirements.

Preferred Option

Councils preferred option is option 1, where Council ceases collection of development contributions from 1 July. Council will apply contributions already collected to projects that meet the requirements of the Amendment Act over the term of the LTP, but will not continue to collect any more development contributions.

Council will make a partial refund to those that made contributions prior to 2012. These contributions included the event centre which Council is no longer planning to build.

Do you agree that Council should cease the collection of Development Contributions to help promote growth in the District?

Cemetery $0.28

Council Roading $21.42

Solid Waste $13.97

Public$2

Library $4.41

Stormwater $4.76

Emergency Management

$1.67

Economic Development $1.41

Environmental Planning

$2.17

Water, Waste Water, Public Good

$17.39

Investments $0.81

WHERE DO YOUR RATES DOLLARS GO? Dollars for every $100

Water supplies, sewerage and urban refuse collection are separately rated

Animal Control $1.13

Council Property

$3.14

Regulatory $4.58

Leadership $7.89

Harbour Development

$0.85

Parks and Reserves

$8.13

c Toilets 2.30

Rural Fire Protection

$0.98

Cycleway $1.08

Community Development

$2.07

Playgrounds $0.65

Tourism Promotion / Visitor Information Center

$2.52

Airport -$0.55 through fees revenue

OUR INFRASTRUCTURE STRATEGY— for your information

As part of our 10 Year Plan we are required to have a strategy about how we will manage our water, sewage treatment and disposal, stormwater, and roads and footpaths. The purpose of the Infrastructure Strategy is to look forward into the next 30 years and outline how the Ōpōtiki District Council intends to manage its infrastructure assets.

Infrastructure assets cannot be planned for in isolation. A number of issues shape the community we live in such as the natural environment, service delivery, population, economic environment and land use. This, in turn, influences the management of Infrastructural Assets.

We have developed our strategy to try to ensure the entire network of assets is managed in a way that is fit for purpose, minimises cost over the long-term and ensures that risks to service levels and public safety are acceptable both now and in the future.

Our focus in this strategy is to maintain our current assets and the levels of service they provide through regular maintenance, condition assessment, and where required, renewal works and replacement.

We are assuming growth and extension of existing services following completion of the harbour development project.

Water S

upply S

tormw

ater W

astewate

r T

ransport

Spend $1,030,000 to install a

2.5km new water main as an al-

ternative route for Ōpōtiki water

supply to address the issue with

defects and ruptures in the cur-

rent water mains-subject to MoH

assistance funding (2015-17).

Spend $800,000 to replace the 95-

year-old raw water line from the

booster station on Clarks Cross

Road to the treatment plant. This is

to address the risk of failure which

can take 3-6 hours to repair (2016-

17).

$300,000 required to construct a boost-

er station on Dip Road. This will ad-

dress low pressure issues and remove

the need to replace the reservoir and

pipe off Dickensen Road (2016-18).

Tarawa Creek outlet and storage

area (Stage 1) requires approxi-

mately $640,000 to be spent to

improve the system capacity to a

standard capable of mitigating

surface flooding within the catch-

ment (2015-19).

The existing gravity main in St John

and Richard Street is under capaci-

ty and needs additional 1200mm

diameter main installed, at cost of

$430,000 (2016-17).

Ford-Goring Street pump station and

rising main. A new station and dis-

charge pipe are required to remove

flood risk from the residential area

served. Estimated cost $230,000 (2018

-19).

Ōpōtiki wastewater reticulation

replacement at an estimated cost

of $12 million to address the infil-

tration issues we are currently

having when weather events oc-

cur, which cause loss of service,

health and environment issues

(2015-20).

$1.63 M required to replace the

No.1 pump station and relocate

primary sewage treatment plant

from Volkner Reserve to the exist-

ing effluent disposal site (2021-24).

Southern area of Ōpōtiki township:

$630,000 required to install reticulated

sewer. (2019-22).

Continue to work with NZ

Transport Agency to ensure se-

cure access to Ōpōtiki via the SH

2 bridge over the Waioeka River

is maintained and renewal is

planned (ongoing).

Ongoing assessment of flood risk to

the district’s local road network to

plan for interventions, in particular

should climate change effects exac-

erbate circumstances (ongoing).

Ongoing operation and maintenance of

the district’s local road network at an

estimated cost of $52.3 M (2015-45).

Here are some key things we are proposing in order of priority and impact on issues:

We have identified the areas designated for growth and included projects in our Infrastructure Strategy to provide services to these areas where and when needed.

We have listed some of the key things that we are planning in the four infrastructure activities below for your information, we are not consulting on these. The projects that we are consulting on are addressed elsewhere in this document.

To see a full copy of the Infrastructure Strategy go to www.odc.govt.nz/ltp

Spend $1,105,000 to complete Te

Kaha northern and southern exten-

sions-subject to obtaining funding

assistance from MoH (2016-17).

$245,000 required to upgrade Te

Kaha reservoir supply pipes to reduce

failure risk and to cater for existing

peak demand and from extensions

subject to obtaining funding assis-

tance from MoH (2016-17).

Ongoing pipe and component re-

newals-all supplies: Spend

$1,800,000 on replacing aged as-

sets as required (2015-45).

Upgraded and new pump stations

required in Wellington Street and

Memorial Park catchments. Total

costs expected to be about

$1,04,000 (2018-21).

Tarawa Creek outlet and storage area

(stage 2): $680,000 required to add

more storage and pumping capacity

to meet climate change and sea level

changes (2038-40).

Ongoing asset replacements:

$1,440,000 spend expected (2015-

45).

Hikutaia /Woodlands-part 1 :

Subject to consultation, install sewer

to existing residential area:

$1,550,000 (2019-22).

Hikutaia /Woodlands-part 2 :

Subject to growth demands, install

sewer to serve new areas:

$1,005,000 ( 2021-23).

Ongoing soakage line renewals at

effluent disposal area. Refit to sew-

age pond liner protection layer:

$475,000 (2015-45).

Replacement of bridges: at least 25

bridges will need replacing during the

30 year period at a cost of $15.5 M.

(2015-45).

Ongoing pavement surface renewals:

$23.6 M (2015-45).

Ongoing urban street upgrades and

renewals, street lighting, drain-

age and footpath renewals and

upgrading anticipated: $12.7 M

(2015-45).

HOW YOUR RATES MAY CHANGE

Council has tried to reduce the impact of rating increases on residents, by taking a prudent approach to what is in the Long Term Plan, when it will happen and how it is funded.

Council will monitor the affordability issue closely along with the overall economic climate in the district.

Council has set a rates limit in the Financial Strategy that General Rates increases will be below LGCI plus 3%. This strategy is focused on affordability by tying the cap to the general rate, but allows flexibility for growth and development through targeted rates to those who want additional services from Council. Council thinks that this strategy strikes the right balance between financial prudence in managing rates increases, but also being flexible enough to respond to demand for services when it arises. Council wants to enable growth, not disable it. Having a cap that is restrictive only impedes our district’s ability to grow.

Funding additional services when requested or required through targeted rates effectively means this is a fee for service, an example of where we have proposed a targeted rate for a requested service is the wastewater reticulation extension out Waioeka Road to Eastpack and Opac. Although this project was included in the 2012-22 Long Term Plan, it was not projected to be required until the latter part of the plan, and after the reticulation network in town was completed. In reality though our plan has had to change, for

the better in most parts. Council have chosen to bring this project forward at the request of the two kiwifruit packhouse companies, who are both planning significant expansion in

the short term. A connection to Ōpōtiki’s wastewater reticulation network is an integral and critical part of these expansion projects. These two companies have agreed to pay the loan servicing costs via a targeted rate until the downstream reticulation network is remedied.

This is an excellent example where the use of a targeted rate to fund an additional service can be used to enable growth, or respond to growing demands, without affecting other ratepayers through the general rate.

Council is required to also have a cap on our targeted rates as part of the financial prudence measures. Taking into account the increase in targeted rates next year for the Waioeka wastewater extension, and the proposed expansion in the refuse collection area Council has chosen a cap of 10% on targeted rates. Council is within this limit for the duration of the LTP. That being said, should any further requests for additional services be requested this may impact the level of targeted rates increase. Bearing in mind though that it is only those that receive the service or the benefit of that service that will get charged the targeted rate. It is effectively a fee for service.

The following graphs provide an example of proposed rates increases for year 1 of the Long Term Plan across a range of property values and types.

Rates will differ from property to property due to the differing characteristics, and services offered, to each property. These examples should not be considered absolute and are indicative only.

The figures exclude GST and exclude any charges from Bay of Plenty Regional Council.

Variations or changes made to budgets as a result of consultation on the Draft Long Term Plan will change these indicative rates increases.

WHAT ARE RATES LIKELY TO BE NEXT YEAR?

Our decisions and their impacts on rates and debt level

• We have proposed a number of significant capital projectsover the term of this ten year plan. The majority of these willbe loan funded so that the current ratepayers don’t bear thefinancial burden of long term assets. The repayments forthese loans will be over terms appropriate to promoteintergenerational equity.

• There are no significant changes to levels of service,meaning that the main increases in rates are related toinflation and repayments of loans for asset purchases.

Where we’re starting from

• Over the last two long term plans Council has been focusedon reducing levels of debt and keeping rates as low aspossible. This strategy means Council has a strong balancesheet and minimal debt, among the lowest debt per capitain the country.

• We have a significant group of assets that have, or arenearing the end of their useful lives. We need to renewthese assets in the early stages of this Long Term Plan.

Is this sustainable in the long term?

• We are proposing a significant increase in debt over theterm of this LTP. The bulk of this occurs in the first fiveyears, and relates mainly to the wastewater reticulationreplacement. Over the latter part of the long term plan wedon’t expect any further significant capital expenditure, sodebt doesn’t grow substantially from year five onwards.

• We have set our debt cap measures to reflect Council’sability to service the debt. This ensures that we canprudently manage debt to an affordable level.

Where we’d like to end up

• We would really like to see the district grow in terms ofprosperity. The opportunities for business growth over theterm of the plan are very positive. Council’s goal is to helpenable this growth rather than hamper it. We feel theplacing a rates cap on general rates allows us to be flexiblein response to growth, and demands for additional servicesfrom council. If we use targeted rates to fund expansion orinfrastructure to those that request it then the rest of thedistrict does not contribute towards any of this cost. Councilfeels that this is an equitable approach for a district on thecusp of a significant growth phase.

• Council sees a vibrant future for Ōpōtiki, one whereCouncil, Iwi, and business are working together to provide asafe and constructive environment for families. Councilsees working alongside business and community groups asintegral in bringing the visions and hopes of the district intofruition.

A SUMMARY OF THE FINANCIAL STRATEGY

Rates (increases) Affordability Benchmark Graph compares the council's actual rates increases with a quantified limit on rates contained in the financial strategy included in the council's long-term plan. The quantified limit is LGCI plus 3% on general rates. Council meets this benchmark in all years of the LTP.

Debt Affordability Benchmark. The Council meets the debt affordability benchmark if its actual borrowing is within each quantified limit on borrowing. The following graph compares the council's actual borrowing with a quantified limit on borrowing stated in the financial strategy. One of the quantified limits is that net interest expense will be less than 10% of total revenue. Council meets this benchmark in all years of the LTP.

Essential Services Benchmark. The following graph displays the council’s capital expenditure on network service as a proportion of depreciation on network services. The council meets this benchmark if it’s capital expenditure on network services equals or is higher than depreciation on network services. Council meets this benchmark in all years of the LTP except for year 10. Although we are not predicting to meet this benchmark we still think that Council is being prudent in managing its asset replacement.

Over the first five years of the LTP Council expects to receive additional subsidy revenue than would normally be receivable. These are based around ministry of health funding for capital expenditure relating to water supplies up the Coast, and of course the grants for the harbour development project. During the latter part of the LTP we expect fees and charges to increase as we start to receive revenue relating to the harbour development.

Council borrowings increase to close to $25 million in the first five years of the Plan as can be seen above. $12.5 million is for the wastewater renewal project and $5.4 million relates to the investment in the harbour development project, with the balance made up of a number of other smaller projects. In the latter years of the LTP we have proposed a number of growth related projects funded by loan, these keep the debt up between $20 and $25 million. Although high in comparison to our current debt levels we are still well below our limits set in the financial strategy.

Council operating expenditure for year one of the LTP (2015/16) as shown above in the graph illustrates that the land transport activity is by far the largest cost to Council, followed by community facilities, which includes parks, playgrounds, toilets, property, and the library. This is not inconsistent with other small rural councils around the country. Our costs to Council overall are greatly affected by fluctuations in oil and bitumen prices because of this.

This impact is mitigated by the proposed changes in NZTA funding rates over the term of this LTP. We are currently on a subsidy rate of 52%, but over the next ten years this is projected to increase to 75%, which has a positive impact on our level of subsidy revenue.

Underlying Information

• Council Priorities &

Direction

• Financial Strategy

• Proposed Policies

• Planning

Assumptions

• Infrastructure

Strategy

• Asset Management

Plans

Consultation Document

• Identifies key issues

• Provides options

• Shows how you are

impacted

2015-25 Long Term Plan

• Sets out what

Council plans to do,

and how it will

operate for the next

ten years

• Sums up all of the

underlying

information and

responds to

submissions to the

Consultation

Document

THE OPINION OF OUR AUDITORS

Write a letter to Council

Send a letter to PO Box 44, Ōpōtiki 3162.

Simply include a subject line at the start of your letter which says “Submission to Long Term Plan” and then just write about any or all of the issues that you would like to comment on. Be sure to include your name, address and a daytime phone number and let us know if you would like to come and speak to the council about your submission. You don’t have to come and speak to Council (they will get a full copy of your submission to read) but if you would like the opportunity then a council representative will phone you to make a time.

Email

You can send an email to info@odc.govt.nz

Submission Forms

There is a form at the back of this document that you can cut out and post to us (or it could be scanned and emailed). Submission forms can also be downloaded from our website at www.odc.govt.nz/ltp or collected from our library or customer service desk at 108 St John Street, Ōpōtiki.

Online Submissions

You can complete an online submission on our website at www.odc.govt.nz/ltpsubmission

You can get more information about something you have read in this document at www.odc.govt.nz/ltp

Copies of all relevant supporting documentation is available on our website at www.odc.govt.nz/ltp or at the Council office in Ōpōtiki.

Councillors and appropriate staff members are also available to attend your club, organisation or community event. Please call Gae Newell on 07 3153030 to arrange this.

Having your say is easy. You don’t even need to fill in a submission form (although this is still an option if you would like to).

GET INVOLVED HAVE YOUR SAY

Did you know you

can follow our LTP

posts and discuss

the issues on our

Facebook page at

www.facebook.com/

opotikidistrictcouncil

The consultation period is from Friday 10 April to Monday 11 May 2015. Your can submit your feedback any time between these dates.

The Council will hold a hearing meeting for those who would like to speak to their submission on 28 May 2015.

Tell us what you think by 4.00pm on Monday 11 May 2015.

Name:_____________________________________________________________________

Organisation (if appropriate):__________________________________________________

Postal Address:_____________________________________________________________

Daytime PH:________________________________________________________________

Email:______________________________________________________________________

PrivacyActNote:PleasebeawarethatsubmissionsformpartofthepublicconsultationprocessandassuchwillbereproducedasanattachmenttoapubliclyavailableCouncilagendaandremainonCouncilminuterecords.

The Chief Executive Opotiki District Council PO Box 44 Opotiki 3162

Or drop into the Council office at 108 St John Street, Opotiki

Or email to info@odc.govt.nz

Or fax to 07 315-7050 SEND YOUR

SUBMISSION TO

I/we wish to submit on the following proposals in the Plan:

____________________________________________________________________________________________

____________________________________________________________________________________________

____________________________________________________________________________________________

____________________________________________________________________________________________

____________________________________________________________________________________________

I/we support / oppose (delete one) these proposals for the following reasons:

____________________________________________________________________________________________

____________________________________________________________________________________________

____________________________________________________________________________________________

____________________________________________________________________________________________

____________________________________________________________________________________________

I/we request that Council make the following decisions to address my / our concerns:

____________________________________________________________________________________________

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Comments:___________________________________________________________________________________

____________________________________________________________________________________________

___________________________________________________________________________________________

_________________________________________________________________________________________

_____________________________________________________________________________________ If more space is required please attach additional paper with your name and contact details on each page.

SUBMISSION FORM

PRESENTATION OF SUBMISSION (Please tick as appropriate) If neither of the boxes is ticked, it will be considered that you do not wish to be heard.

I wish to speak in support of my submission at the meeting on Thursday 28 May 2015

I do NOT wish to speak in support of my submission and ask that the following written submission be fully considered

Submissions close 4pm Monday 11 May 2015

All submissions will be acknowledged in writing. All submissions will be made available to the Mayor and councillors who will consider the views and comments expressed when finalising the Ten Year Plan.

WHAT YOU THINK PLEASE TELL US

Harbour Progress—see page 4

There are a range of possibilities for the development of the Harbour surrounds as part of the Ōpōtiki Harbour Transformation project. What role do you think Council should take? Which of these opportunities do you think are the most important?

Comment

Stormwater, flood relief, marina—see page 6

Which option do you prefer?

Option

Roading seal extension—see page 7

Do you agree with Council’s proposed option to discontinue seal exten-sion projects?

Comment

Solid waste—see page 8

Which option do you prefer?

Option

Wharf facilities—see page 9

Which option do you prefer?

Option

SEEKING FEEDBACK Central business district—see page 10

Do you think council should make provision to better understand the op-tions for our CBD or leave it to the legislative environment and the market?

Comment

Growth areas—see page 10

Do you agree with Council on this?

Comment

Revenue and Financing policy—see page 10

Do you agree with simplifying Council funding?

Comment

Development contributions policy - see page 11Do you agree that Council should cease the collection of Development

Contributions to help promote growth in the District?

Comment

THE KEY ISSUES

Thank you for having your say