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Governing Body
18 December
2014
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Long-Term
Plan 2015-2025 - Adoption of Consultation Document and Supporting Information
File No.:
CP2014/04628
Purpose
1. This report recommends that the
Governing Body adopts the Supporting Information and the Consultation Document
for the Long-term Plan 2015-2025 (LTP) for consultation.
Executive
Summary
2. All councils
are required by legislation to adopt a long-term plan (LTP) and review it every
three years. The process to develop council’s second LTP (2015-2025) began in
February 2014. Led by the Mayor, this LTP provides our most significant
opportunity yet to take stock and align budgets with the direction of the
Auckland Plan and ensure we are delivering the right mix of services and
investments for Auckland.
3. On 28 August
2014, the Mayor set out his budget proposal for the LTP 2015-2025, followed by
a separate proposal for rating policy on 30 October 2014. A number of
political workshops and discussions were held over September to early November
to discuss the implications of the mayoral proposals, including discussions
with local boards and CCOs.
4. Following these
discussions, Council met on 5, 6, 18 and 27 November 2014 to make final
decisions for LTP consultation.
5. Council met
again on 9 December 2014 and agreed revised financial projections for the City
Rail Link based on an assumption of government contributions starting in
2018/2019.
6. As part of
finalising local content for consultation, some changes have been made to draft
local board budgets based on a condition of no significant impact to the
overall LTP funding envelope. Some minor budget adjustments have also been made
as staff have finalised draft budgets, primarily to reclassify budgets and
update financial projections to reflect the latest available information.
7. In accordance
with recent changes to legislation, staff have developed a consultation
document and supporting information that reflect the decisions made and provide
the basis for consultation with the community (set out in Attachments B and C).
8. The
consultation document sets out the challenges and opportunities facing
Auckland, along with the key issues for consultation to inform the final LTP
and the proposals and options put forward by council. The Supporting
Information includes the detailed information relied on to prepare the
consultation document. Staff have worked closely with the Legal
Department and the Audit Office to ensure that the consultation document and
the Supporting Information meet legislative requirements and are fit for
purpose.
9. In addition, a
Summary document has been prepared for distribution to all households, which directs
Aucklanders to read the full consultation document and sets out the key issues
and proposals for consultation.
10. Content to
support the development of local board agreements is set out in Section 6 of
the Supporting Information (Attachment C). In addition, local boards have
developed a two-page insert covering the key local proposals and advocacy areas
for consultation which will be sent to all households in the local board area
as part of the Summary document. Key projects for each local board for
2015/2016 are also set out in the consultation document. Local boards meet
between 8 – 16 December 2014 to adopt their content for consultation.
11. The consultation
document and supporting information will be finalised for print and
distributed to libraries, service centres, local board offices and made
available online in time for the start of the consultation process on 23
January 2015.
12. The Summary, including local
board inserts, will also be finalised, printed and distributed to households by
23 January 2015 and online content for ShapeAuckland will be prepared to
provide the consultation hub for the LTP.
13. The next steps to finalise the
LTP are set out in this report. A separate report on today’s agenda sets out
the consultation process, with public consultation opening on 23 January 2015
and closing on 16 March 2015. Final LTP decisions will be made on 7 and 8 May
2015 and the Governing Body will meet to adopt the LTP on 25 June 2015.
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Recommendation/s
That the Governing Body:
a) agree capex
amendments to local activity budgets as outlined in Attachment A to the
agenda report and minor budget adjustments as outlined in the report.
b) adopt the Supporting
Information (Attachment C to the agenda report) for the Long-term Plan
2015-2025 to support the consultation process, noting that:
i) financial
projections have been updated to reflect all budget decisions
ii) updates have
been made to levels of service statements, performance measures and targets
for some CCO group of activities (Section 5)
iii) minor improvements have been
made to the ‘Decision-making allocation for non-regulatory activities’ to
improve clarity of alignment to the LTP activity structure (section 10.2)
iv) permit fees for community events (excluding
those funded by the council) are set at a level that recovers 50 per cent of
the permit related cost (Section 8).
c) adopt the Consultation Document
for the Long-term Plan 2015-2025 to support the consultation process
(Attachment B to the agenda report).
d) delegate responsibility to the
Chair and Deputy Chair of the Budget Committee and also to the Chief Finance
Officer to approve any final edits required to the Consultation Document and
Supporting Information in order to finalise the documents for printing and
distribution.
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Discussion
Background
14. All councils are
required by legislation to adopt a long-term plan (LTP) and review it every
three years. The LTP sets out Council’s activities, plans, budgets and
policies and must be adopted before the beginning of the first year it relates
to, having used a special consultative procedure to consult with the community.
15. The process to
develop council’s second LTP (2015-2025) began in February 2014. Led by the
Mayor, this LTP provides our most significant opportunity yet to take stock and
align budgets with the direction of the Auckland Plan and ensure we are delivering
the right mix of services and investments for Auckland.
16. On 28 August,
the Mayor set out his budget proposal for the LTP 2015-2025, followed by a
separate proposal for rating policy on 30 October 2014.
17. A number of
political workshops and discussions were held over September to early November
to discuss the implications of the mayoral proposals, including discussions
with local boards and CCOs. Following these discussions, Council met on 5, 6,
18 and 27 November to make final decisions for LTP consultation.
18. Key decisions
included:
· an overall annual average general rates
increase of 3.5 per cent each year
· annual inflation adjustments in
development charges and a $20 million per annum increase in the targets for the
sale of non-strategic surplus assets
· an additional $800 million over ten years
in projects for Parks, Community and Lifestyle compared to levels set out in
the Mayoral proposal
· a $6.9 billion basic transport programme
to be included in the draft budget
· consulting with Aucklanders on two levels
of investment for transport (the Basic Transport Network and the Auckland Plan
Transport Network), and if they choose the Auckland Plan Transport Network,
what alternative funding option they would prefer to pay for it – the rates and
fuel tax funding pathway or the motorway user charge funding pathway
· setting the Uniform Annual General Charge
(UAGC) at 13.5 per cent of rates ($385) for 2015/2016
· setting the business sector contribution
at 32.8 per cent of total rates revenue for 2015/2016 and reducing to a
proportion of 25.8 per cent by 2025/2026
· not to adopt a rates transition management
policy
· standardising the rent on council’s social
housing units to be based on 30 per cent of tenants’ gross income and capping
changes to annual rents at $780 per unit
· standardising fees and charges for street
trading, cemeteries and other services
· continuing the City Centre targeted rate
(CCTR) from 2016/2017 to 2024/2025, with an additional levy for residential
ratepayers and funding operating and depreciation costs associated with CCTR
funded projects to be met from the general rate or other revenue sources from
2019/2020
· changes to solid waste services funding
including various indicative targeted rates for waste services across
Auckland, phasing out the subsidy for solid waste services for Hauraki Gulf
Islands and the introduction of user charges for refuse for the legacy Auckland
and Manukau City areas to be gradually introduced from 2016/2017
· the introduction of an annual standard
pre-booked on property inorganic collection service.
19. Council met
again on 9 December and agreed revised financial projections for the City Rail
Link based on:
· $400 million capital expenditure for the
first three years to fund $280 million for enabling works, with the remainder
of the $400 million to be spent on design and property acquisitions for route
protection
· an assumption that government funding will
commence in 2018/2019 commensurate with the planned start of the main
construction work and services planned to start in 2023.
20. The Finance and
Performance committee met on 20 November and approved the re-phasing of $24
million of Information Services (IS) transformation budget forward to the
2014/2015 and 2015/2016 years in order to optimise overall programme outcomes
for the Organisation IS Transformation programme.
Proposed
budget adjustments
21. As discussed
below, local boards have also made some amendments to their draft budgets post
5 November as part of finalising their local content for consultation.
22. Other minor
budget adjustments have been made as staff have worked to finalise draft
budgets for consultation. These minor changes include:
· reclassifying some budgets for
co-governance entities from Parks, Community and Lifestyle to Governance and
Support so that all budgets for the co-governance entities appear in one place
· reclassifying property maintenance budgets
for facilities such as libraries, community halls and swimming pools from
Governance and Support to Parks, Community and Lifestyle to more accurately
reflect the cost of delivering community-based services
· updating some opening balances to ensure
that financial projections are based on the most up to date information
available.
Financial position
23. Included as
Section 3 of the Supporting Information is the council’s financial strategy
which sets out limits for general rate increases and borrowing, along with the
key target of interest cost being no more than 12 per cent of revenue.
24. Section 4 of the
Supporting Information includes our draft prospective financial statements and
an overview of the council’s financial position under our proposal for the LTP
2015-2025, reflecting all of the budget decisions discussed above. The key
elements include:
· proposed overall average increases in
general rates for existing ratepayers of 3.5 per cent each year
· closing projected debt of $10.8 billion in
June 2025
· prudential debt ratios that are within our
limits as follows:
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Measure
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2015/16
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Peak
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2024/25
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Limit
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Closing net debt as percentage of total
revenue
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201.1%
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204.2%
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164.0%
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< 275%
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Net interest as percentage of total
revenue
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11.4%
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12.0%
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10.8%
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< 15%
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Net interest as percentage of rates
revenue
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19.4%
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20.5%
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17.4%
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< 25%
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· accounting surpluses in nine years of the
plan, and operating cashflow surpluses in all ten years.
Other
changes post November decisions
25. A small number
of changes have been made to correct omissions or errors identified, provide
clarification or as a result of new information received since decisions were
made. These changes and the supporting rationale are set out below.
Minor improvements to the Decision-making
allocation for Non-Regulatory Activities
26. Some minor
amendments have been made to the Decision-Making Allocation to improve the
clarity of alignment to the activity structure for the LTP 2015-2025. No
changes have been made to the content describing local or regional
responsibilities; rather the table now makes it clearer where these
responsibilities sit within the council’s activity structure. The
Decision-Making Allocation is provided in Section 10.2 of the Supporting
Information attached.
Changes to
CCO performance measures and targets
· Roads and Footpaths - Following
further work on measures aligned to funding under the basic transport program
for Roads and Footpaths, the Roads and Footpaths customer satisfaction measures
have been reduced from what was previously agreed. They maintain satisfaction
at current FY 2013/2014 levels, but do not improve due to the level of proposed
renewal expenditure under the Basic Transport Network. In addition, a
mandatory Department of Internal Affairs (DIA) measure tracking fatalities and
serious injuries on local roads has been added.
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Level
of service statement
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Performance
measure
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Actual 2013/14
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Annual Plan 2014/15
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Indicative Long Term Plan Targets
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2015/16
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2016/17
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2017/18
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2018/19- 2024/25
(per annum)
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Transform
and elevate customer focus and experience
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Customer
satisfaction - Roads
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71%
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70%
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70%
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70%
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70%
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70%
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Customer
satisfaction -Footpaths
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63%
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65%
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65%
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65%
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65%
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65%
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Customer
satisfaction - Road Safety
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63%
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New Measure
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60%
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60-65%
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60-65%
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60-65%
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The
change from the previous financial year in the number of deaths and serious
injuries on the local road network, expressed as a number
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a)
+21%
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2.66%
reduction from
previous year
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Reduce by at least 9
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Reduce by at least 9
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Reduce by at least 9
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Reduce by at least 9
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· Economic growth and visitor economy -
The below table has been updated to correct a copywriting error resulting
in misalignment of target columns.
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Level
of service statement
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Performance
measure
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Actual 2013/14
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Annual Plan 2014/15
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Indicative Long Term Plan Targets
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2015/16
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2016/17
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2017/18
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2018/19-
2024/25 (per annum)
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Promote
and develop Auckland as a national and international visitor and business
destination, including through the attraction, facilitation, funding and
delivery of major events
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Total
visits to www.aucklandnz.com
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2,178,563
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new measure
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3million
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3.4million
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3.8million
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Increasing to 4million
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Percentage
of Customers satisfied with visitor information centres and services
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92%
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90%
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85%
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85%
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85%
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85%
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Return
on Regional Investment (RORI)[1]
from major events invested in
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$46.3m
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$47m
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$49m
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$86m
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$49m
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Increasing from $55m to $75m
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Percentage
of customers satisfied with delivered major events
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90%
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85%
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85%
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85%
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85%
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85%
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Deliver
information, advice, programmes and initiatives to attract and develop
investment, businesses and a skilled workforce
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Percentage
of stakeholders satisfied with provision of business advice, start-up,
training and mentoring programmes
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94%
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85%
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85%
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85%
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85%
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85%
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Number
of businesses that have been through an ATEED programme or benefitted from an
ATEED intervention
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1500
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New measure
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1500
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1500
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1500
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Average 1500
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Number
of Maori businesses that have been through an ATEED programme or benefitted
from an ATEED intervention
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75
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New measure
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100
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100
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100
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Average 100
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Facilitation
of the establishment, or significant expansion, of multinational and local
companies in target sectors
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5
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New measure
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5
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5
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5
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Average 5
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Number
of live signatories to the Youth Traction Hub Employers Pledge[2]
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n/a (hub not established)
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New measure
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50
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50
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50
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Average 50
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· Investment - As the management of
diversified assets portfolio has moved from ACIL to Auckland Council’s Treasury
department, its corresponding measure has been updated and relocated from the
Investment group of activity to the Organisational Support group of activity.
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Level of service statement
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Performance measure
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Actual 2013/14
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Annual Plan
2014/15
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Indicative Long-term
Plan targets
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2015/16
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2016/17
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2017/18
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2018/19- 2024/25
(per annum)
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Manage
council’s diversified asset portfolio investments to optimise returns
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Rolling
10 year return for diversified financial assets portfolio[3]
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12.9%
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Equal or exceed return on reference portfolio
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Equal or exceed return on reference portfolio
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Equal or exceed return on reference portfolio
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Equal or exceed return on reference portfolio
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Equal or exceed return on reference portfolio
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· Water Supply - Measure has been
updated to now include complaints related to ‘drinking water odour’ to bring in
alignment with Department of Internal Affairs (DIA) requirements.
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Level
of service statement
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Performance
measure
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Actual 2013/14
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Annual Plan 2014/15
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Indicative Long Term Plan Targets
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2015/16
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2016/17
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2017/18
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2018/19-
2024/25 (p. a.)
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Provide uninterrupted access to safe, clean and drinkable
water
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The total number of complaints received by the local authority
about any of the following:
a) drinking water clarity
b) drinking water taste
c) drinking water odour
d) drinking water pressure or flow
e) continuity of supply
f) the local authority's response to any of these issues
expressed per 1000 connections to the local authority's networked
reticulation system
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N/A
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New Measure
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≤10
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≤10
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≤10
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≤10
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Changes to permit fees for community events
27. A report to the 5 November Budget Committee recommended
that the permit fee for community events (excluding those funded by council) be
set at a level that recovers 50 per cent of the permit related cost. No rental
charge was proposed.
28. The Committee amended the staff recommendation with a
resolution which requested the not-for-profit community events incur only a
process fee which covers council costs [Resolution BUD/2014/59 a) iii].
29. Implementing this resolution would result in fees higher
than those initially proposed by staff. We therefore recommend that the
proposed permit fees for community events for the LTP be set at the original
recommendation, which reflects the intention of the amendment.
30. The proposed fees are set out below, to be applied to
community events (including not-for-profit and charity events) across the
region:
· High
impact (over 5,000 participants) - $330
· Medium
impact (500-5,000 participants) - $180
· Low
impact (under 500 participants) - $90
LTP documentation has
been developed to reflect decisions made
31. The Local
Government Act 2002 has recently been amended and sets new requirements for
consultation. The new requirements aim to ensure that both the consultation
material and process provide a more effective basis for the public to
participate in local authority decision-making processes. As a result,
instead of a draft LTP, Councils are required to develop a consultation
document and a set of supporting material that provide the basis for
consultation with the community.
32. In accordance
with above, staff have developed the following documents which reflect
decisions made to date and the changes discussed above:
· A Consultation Document – which sets out the challenges and
opportunities facing Auckland, along with the key issues for consultation to
inform the final LTP and the proposals and options put forward by Auckland
Council
· A set of Supporting Information – which includes the detailed
information relied on to prepare the Consultation Document.
33. In addition, a
Summary document has been prepared for distribution to all households, which directs
Aucklanders to read the full Consultation Document and sets out the key issues
and proposals for consultation.
34. The Consultation
Document (including feedback questionnaire) and Supporting Information are
attached for adoption by the Governing Body (see Attachments B and C).
Developing local board agreements and
consulting on local issues
35. Each year a
local board agreement is developed for each local board that sets out intended
provision of local activities, and the capital and operating expenditure
required to fund these activities. Local board agreements are agreed between
the local board and the governing body as part of the annual plan or long-term
plan process.
36. This year,
content to support the development of local board agreements is set out in
Section 6 of the Supporting Information. In addition, local boards have
developed a two-page insert covering the key local proposals and advocacy areas
for consultation which will be sent to all households in the local board area
as part of the Summary document. Key projects for each local board for
2015/2016 are also set out in the consultation document.
37. In finalising
local content for consultation, minor amendments were made to some local
activity capex budgets to address errors such as a timing, name or location
change or incorrect allocation of funds, on the condition that there was no
significant impact to the overall LTP funding envelope. Capex amendments are
outlined in Attachment A.
38. Some local
boards have also reallocated their discretionary operating budget for Locally
Driven Initiatives between local activities. These changes do not require
Governing Body approval, but they do flow through into the financial components
of the Supporting Information that the Governing Body will adopt.
39. Local boards are
meeting between 8 and 16 December to adopt their content for consultation,
including Local Board Supporting Information and a two-page insert for the
Summary document.
40. Local Board
Supporting Information (Section 6) is provided in Attachment C. Due to the
timing of local board meetings, final content for Orakei and Upper Harbour
local boards will be tabled on 18 December.
Next steps
41. The consultation
document and supporting information will be finalised for print and
distributed to libraries, service centres, local board offices and made
available online in time for the start of the consultation process on 23
January 2015.
42. The Summary, including local
board inserts, will also be finalised, printed and distributed to households by
23 January 2015 and online content for ShapeAuckland will be prepared to
provide the consultation hub for the LTP. Translations of the summary
document will be prepared in Māori, Chinese, Samoan,
Korean, Hindi, Tongan and also in HTML format to
ensure accessibility for visually impaired Aucklanders. The translated
summaries will be available online, at libraries, service centres and local
board offices and will also be actively distributed via council networks.
Further information on the consultation process, including the communications
campaign, is covered on a separate report on today’s agenda.
43. Table One summarises the LTP
process from January to June 2015.
Table One:
Finalising the LTP
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Phase
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Timing
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Public consultation (special consultative procedure)
- Including
over 30 Have Your Say events (which will replace traditional hearings)
between 14 February and 14 March
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23 Jan – 16 March
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Budget
Committee briefings on consultation feedback
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20-22 April
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Local boards
briefings on consultation feedback
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15-23 April (TBC)
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The Budget
Committee will hold discussions with local boards and CCOs
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24, 28, 29 Apr
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The Budget
Committee will make final decisions for the LTP
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7-8 May
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Budgets will
be updated and all LTP documentation, including local board agreements, will
be updated
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May / June
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Local boards
hold workshops to finalise local board agreements, LDI allocation of funds
and fees and charges schedules
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14-20 May (TBC)
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Local boards
will meet to adopt their local board agreements and agree 10-year budgets
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9-16 June
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Governing
Body will meet to adopt the final LTP
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25 June
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Documentation
will be published and made widely available to the public, including an
overview of key decisions made.
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July / August
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Consideration
Local
Board Views
44. Local boards
have been closely involved throughout the LTP process to date. Content
supporting the development of each local board agreement is set out in Section
6 of the Supporting Information for the LTP. In addition, key local projects
for 2015/2016 are listed in the consultation document and a two-page insert for
the relevant local board area will be distributed to all households in the
relevant area setting out the key proposals and advocacy areas for
consultation.
45. Indicative local
budgets reflect the Local Boards Funding policy agreed in August 2014 and
separately identify locally driven initiative funding (LDI) and asset-based
funding.
Māori
Impact Statement
46. Auckland’s point
of difference in the world is its Māori identity. Aligning the long-term
plan to the Auckland Plan focuses council’s efforts on this Auckland Plan
outcome and aligns council activities to contributing to significantly lifting
Māori social and economic well-being. The council through its function and
leadership can play a pivotal role in realising the potential and opportunities
that Māori aspire to.
47. A top-down
approach has been taken to prioritising Māori transformational shift
activities through the LTP process. Three priority areas are set out in
the draft budget (a significant Māori event, marae development and
papakainga development) and an additional fund has been provided to progress
other opportunities to deliver on priorities for maori. A separate report
on today’s agenda reports back on the proposed use of this fund as agreed by Te
Waka Angamua and the Independent Māori Statutory Board (IMSB).
48. The IMSB has
been involved through the LTP process and staff have worked closely with
representatives from the IMSB. Three hui have been held with mana whenua
to date and further hui and engagement will take place to support the
consultation phase.
General
49. The Auckland Council Significance
and Engagement Policy has been used to identify the issues included in the
Consultation Document.
50. Staff have worked closely with
the Legal Department and the Audit Office to ensure that the Consultation
Document and the Supporting Information meet legislative requirements and are
fit for purpose.
Implementation
Issues
51. A key risk to be
managed over the next phase of the process is the successful implementation of
the consultation process. A separate report on today’s agenda sets out the
consultation process for the LTP. A number of changes are proposed which aim
to improve participation and the effectiveness of the process. Staff will
focus on ensuring changes are well communicated to the public and elected
members and actively manage the risks associated with making changes to an
established process.
Attachments
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No.
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Title
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Page
|
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aView
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Capex amendments
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15
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bView
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Consultation Document
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17
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c
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Supporting Information (Under
Separate Cover)
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Signatories
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Authors
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Tanya Stocks - Acting Programme Director - Annual Plan
& Long-term Plan
Ross Tucker - Manager Financial Policy & Strategy
Marion Hutton - Project Co-ordinator
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Authorisers
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Matthew Walker – Acting Chief Financial Officer
Roger Blakeley – Acting Chief Executive
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