I hereby give notice that an ordinary meeting of the Orākei Local Board will be held on:




Meeting Room:



Thursday, 4 September 2014


St Chads Church and Community Centre
38 St Johns Road


Orākei Local Board



Extraordinary Item






Desley Simpson, JP


Deputy Chairperson

Mark Thomas



Ken Baguley



Troy Churton



Kate Cooke



Colin Davis, JP



Kit Parkinson



(Quorum 4 members)




Georgina  Morgan

Democracy Advisor


29 August 2014


Contact Telephone: 021 302 163

Email: georgina.morgan@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz




Orākei Local Board

04 September 2014



ITEM   TABLE OF CONTENTS                                                                                        PAGE


23        Deferral of 2014/2015 capital projects                                                                         5   



Orākei Local Board

04 September 2014



Deferral of 2014/2015 capital projects


File No.: CP2014/19701




1.       To seek agreement from the Orākei Local Board to the list of capital projects outlined in Attachment A that are proposed for deferral from 2014/2015, prior to consideration by the Finance and Performance Committee on 18 September 2014.

Executive summary

2.       Prior to decisions being made by the Finance and Performance Committee regarding a 2014/2015 capex deferral programme, engagement was held with all local boards.

3.       Between 12 and 19 August 2014, staff attended 21 local board workshops to outline the capex deferral process and obtain feedback on proposed deferrals affecting each local board area.

4.       On 21 August 2014, the Finance and Performance Committee resolved that decisions on the deferral of local board capital projects from 2014/2015 to 2015/2016 be deferred until local boards have formally considered and responded to each project in full (FIN/2014/47).

5.       The list of capex projects proposed for deferral is outlined in Attachment A.



That the Orākei Local Board:

a)      formally consider and agree the deferral of capex projects outlined in Attachment A to 2015/2016.

b)      note that any projects where timing has been deferred, but project planning is underway, should be given high priority in the 2015/2016 capital programme.





6.       As foreshadowed in the 2014/2015 Annual Plan and LTP workshops, operating budgets for 2015/2016 (the first year of the LTP 2015-2025) would need to be reduced by about $90 million to achieve a 2.5 per cent average rates increase.

7.       It is not possible to reduce the average rates increase for 2015/2016 down to 2.5 per cent solely by reducing or deferring capex in that particular year. The lagged impact of changes in the capital programme on operating budgets means that reducing or deferring capex in 2014/2015 will have a greater impact on rates for 2015/2016.

8.       Since amalgamation the quantum of planned projects each year has exceeded the council parent’s capacity to deliver. While delivery capacity is now increasing, a significant bow wave has built up. This historical underspend is acknowledged in the Annual Plan and factored into council’s rates and debt projections by way of a $207 million assumed underspend. However, the individual projects that will not be delivered are not explicitly identified in the Annual Plan as they had not yet been identified.

9.       Council staff have reviewed 2014/2015 capex budgets to identify work that must be completed this year as a matter of practical necessity, or where not doing the project in this timeframe would negatively impact existing service levels, external revenue or the realisation of efficiency savings.

10.     The specific categories used to develop the list of deferred projects and process undertaken is explained further in Attachment B which was circulated to Local Boards prior to the proposed capex projects for deferral being discussed at a recent workshop.

11.     In order to develop a realistic capex programme for 2014/2015 and contain pressure on rates in 2015/2016, staff recommend that the capex projects included in Attachment A for the council parent be explicitly deferred from 2014/2015 to 2015/2016, and be included as part of the LTP prioritisation process.

12.     Between 12 and 19 August, staff attended workshops for all 21 local boards to obtain feedback on the proposed capital deferral schedules for 2014/2015. This engagement provided opportunity for local boards to ask questions, reinforce the reason for deferring capital funds and provide feedback on the status of projects in alignment to criteria used to assess proposed deferrals.

13.     Of the total proposed projects for deferral tabled at the Finance and Performance Committee on 21 August 2014, regional projects amounted to $80 million, local projects amounted to $35 million and CCO’s collectively deferred $109m.

14.     Staff reduced the total of local projects for deferral by approximately $7 million due to responding to the information provided through the recent workshops held with local boards. These reductions were due to corrections in applying the criteria used for identifying potential deferrals. Attachment A takes into account these reductions.

15.     Local boards also identified projects that are discretionary and could be deferred, but which are very important to their local community. Rather than making decisions about removing any high-priority discretionary projects from the deferral list, staff included these comments in the schedule provided to the Finance and Performance Committee.

16.     The decisions being made are budget adjustments that represent timing changes only. Any decisions to drop or reprioritise projects should be made as part of the LTP process.

17.     Through September and October Local Boards, the Governing Body, CCOs and council staff will all contribute to the development of draft LTP 2015-2025 budgets in response to the Mayoral Proposal. Decisions on discretionary local budgets will be made by Local Boards in October and decisions on regional activities and local asset based services will be made by the Budget Committee on 5-7 November.

18.     Local Board Plans, along with the Auckland Plan and the agreed spatial priorities will help inform this prioritisation. Final decisions on which projects are included in the LTP 2015-2025 will be made by 30 June 2015, following full public consultation.







List of 2014/2015 projects proposed for deferral until 2015/2016 including Local Board feedback



Local Board Memo distributed prior to the workshops on 7 August 2014





Taryn Crewe – Financial Planning Manager Council Parent


Adam Milina - Relationship Manager - Albert-Eden & Orakei Local Boards

Matthew Walker - Manager Financial Plan Policy and Budgeting

Karen Lyons – Manager Local Board Services


Orākei Local Board

04 September 2014










Orākei Local Board

04 September 2014