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Long Term Plan 2018-28 — Consultation Document 1

Long Term Plan 2018-2028Consultation Document

It’s steady as we grow

2 Western Bay of Plenty District Council — Te Kaunihera a rohe mai i nga Kuri-a-Wharei ki Otamarakau ki te Uru

3 — Mayor’s message

4 — What is the LTP?6 — How to have your say

7 — 01 The pace of change

11 — 02 Getting around13 — Key Proposal: Walking and cycling investment

15 — 03 Protecting our environment and resources

19 — 04 Building communities21 — Key Proposal: Western Bay Museum funding22 — Key Proposal: Arts and culture investment

24 — 05 Managing our finances34 — Key Proposal: Debt management approach

36 — Changes to user fees

36 — Upcoming projects

Welcome to the 2018-2028 Long Term Plan (LTP)

Contents


It’s steady as we growMayor’s messageWelcome to this 2018-28 Long Term Plan Consultation Document, which provides you with an overview of the key issues, priorities and projects for the District over the next 10 years.

This plan responds to the strong population growth the Western Bay has experienced, and which is likely to continue. Our growing population creates pressure on the demand for Council services, but good planning and a prudent approach to finances means we’re in a strong position moving forward. This is due to the investment we have already made in wastewater and water supply systems, roading upgrades and community facilities such as parks, reserves, walkways, cycleways, playgrounds and skate parks.

It’s About YouDuring 2017, we held community conversation events throughout our District, to ask you what you want for your community. Four key themes emerged from the feedback we received, which have formed the basis of this Consultation Document:

• The pace of change – the District is growing and changing rapidly

• Getting around – we need a safe and efficient transportation network

• Protecting our environment and resources – our communities feel proud about the Western Bay environment and want to look after what we have

E nga mana, e nga reoE nga karangatanga maha

Tena koutou

To everyone, all voicesAll the many alliances and affiliationsGreetings

• Building communities – we value community connections and a sense of place

So, what can you expect from this Council over the next 10 years? Our primary focus will be to continue to provide core services and infrastructure, and to invest prudently in our communities. We know that rates affordability is a key issue for both ratepayers and Council, so we are keeping rate increases as low as possible without compromising the levels of service we deliver. We are also committed to continuing our prudent management of debt, which will have reduced from $140m in 2013 and is likely to be under $100m by June 2018.

Future focusYour feedback has helped to shape the direction of Council’s work programme over the next 10 years, which includes some important policy and planning projects that are in their early investigative stages. Although we aren’t making decisions on these right now, we still want to let you know about them and provide an indication of the approach we intend to take. You’ll find discussion about them in the following pages - look for the icon.

The topics include:

• Planning for growth across the District

• Enabling the housing our community needs

• Investigating alternative recycling and rubbish collection models

• Changing the way we fund growth-related projects.

Key proposalsOur steady approach means there are no major decisions to be made through this Long Term Plan, but we do want your feedback on four key proposals:

1. Walking and cycling investment

2. Western Bay Museum funding

3. Arts and culture investment

4. Debt management approach

Have your sayWe encourage you to give us feedback on these proposals and to come along to our next round of Have Your Say opportunities during April and May – see page six for more details on when and where. Please take the time to explore this document and share your views with Councillors and staff. Feedback on this Long Term Plan will close on Friday, 4 May 2018.

Thank you to all those who have participated in our LTP process over the last 16 months.

Garry Webber Mayor, Western Bay of Plenty District


The Long Term Plan is essentially the District’s blueprint for the next 10 years. It sets Council’s direction for the future, and the projects and services that are planned to get us there - in line with Council’s legal obligations, infrastructure needs and community priorities. The LTP summarises the financial impact of these things, setting out our assumptions, what our expenditure will be and how it will be paid for.

What is the LTP?

Long Term PlanStrategic direction across all

Council activity areas, e.g. stormwater, transportation,

recreation and leisure.

Financial StrategyHow we manage

the books.

30 Year Infrastructure

StrategyLooking after our existing assets to

ensure they continue to meet the needs of our communities, and providing

infrastructure for the future.

All of this information sits as supporting documentation to this Consultation Document and is available online.

westernbay.govt.nz/LTP2018-2028moreinfo

This sits within three key documents:

LTP


The Consultation Document is used to inform the community of the overall direction we intend to take over the next 10 years and to focus on the key proposals.

Through the 2017 ‘It’s About You’ community conversations you gave us feedback on what was important to you. This fell broadly into four key themes.

01 — The pace of change

02 — Getting around

03 — Protecting our environment and resources

04 — Building communities

This document has these four key themes and also includes a section on how we manage our finances to deliver services to the community – it is essentially our Financial Strategy.

We’ve flagged each section so you know what we’re seeking:

Key Proposal This is an issue where we are proposing options we want your feedback on. We identify our preferred option and the impact each option will have on rates.

Future Focus This is flagging the big conversations we need to have over the next three years.

Infrastructure This is flagging the key infrastructure issues we are likely to be facing under each theme.

Not every project we’re funding is set out in the Consultation Document - a lot of work progresses as business as usual. There’s a lot more detail provided in the supporting information for this LTP, which you can download from our website or view at Council’s service centres.

Consultation document

Go to the page number to view the proposal, options and our preferred option.

01 — The pace of change — Page 7

There are no significant decisions to be made now. But we’ll continue work on our growth planning schedule for Omokoroa, Katikati, Te Puke and Waihi Beach.

02 — Getting around — Page 11

We need to make a decision on funding for walking and cycling.

03 — Protecting our environment and resources — Page 15

There are no significant decisions to be made now. But we’ll be doing a lot of work over the next three years reviewing how our rubbish and recycling is managed. You can see more information in this section.

04 — Building communities — Page 19

We need to make a decision on providing funding support for Western Bay Museum.

We need to make decisions on funding for arts, culture and heritage.

05 — Managing our finances — Page 24

We need to make a decision on our approach to debt management.

Proposals we need decisions on


How to have your say

Please read through this document, consider the key issues and options and give us your feedback.

There’s a feedback form at the back of the document you can fill out. Or you can do this by visiting our website www.haveyoursay.westernbay.govt.nz and complete it online.

Want more information?You can find our supporting documentation – the full draft LTP, the draft Infrastructure Strategy and the draft Financial Strategy:

• On our website www.haveyoursay.westernbay.govt.nz• At Council offices and service centres.

Or come and visit us during our roadshow!In April we will be travelling around the District to discuss the LTP and answer any questions you might have.

Katikati — Sat 14 April — 10am-12pmTe Puke — Sun 15 April — 10am-12pmCouncil Chambers — Thu 19 April — 5pm-7pmOmokoroa — Sat 21 April — 10am-12pmWaihi Beach — Sat 28 April — 10am-12pm

For more information visit www.haveyoursay.westernbay.govt.nz or call Council on 0800 926 732

All written feedback must be received by 4pm on Friday, 4 May.


01The District is growing and changing rapidly


The pace of change


The District continues to grow. Since 2013, 3175 more people1 have chosen to call the Western Bay home.

Growth means more use of our existing roads, wastewater systems, water supply, parks, reserves and community facilities. It means more customers for Council and demand for new infrastructure.

We need to be proactive in planning for growth, so that costs can be managed. Through SmartGrowth we work with Tauranga City Council (TCC), Bay of Plenty Regional Council (BOPRC), New Zealand Transport Agency (NZTA), the District Health Board and Iwi to identify future areas for housing, business and industry, making sure that infrastructure can be provided without compromising our natural and cultural environment.

We also work with partners BOPRC, TCC, Priority One and Tourism Bay of Plenty to deliver on economic and tourism goals for the sub-region.

Over the next three years, we’ll be focusing on:

• ‘Master planning’ for Omokoroa and Katikati

• Undertaking a review of where future growth happens

• Developing a housing action plan with our partners.

More detail is provided here:

westernbay.govt.nz/LTP2018-2028moreinfo

Athenree

Maketu

Pukehina Beach

Paengaroa

TAURANGA CITY

Waihi Beach2018: 3,633 2028: 4,118(+13%)

Our growth is expected to continue...

2018: 49,285

2048: 61,729

2028:55,863

The pace of change

1 2013 Census Population of 46,110, and 2018 population of 49,285 from LTP Population, Dwellings and New Lots Projections.

Katikati2018: 5,042 2028: 5,644(+12%)

Omokoroa2018: 3,5492028: 6,230(+76%)

Te Puke2018: 8,324 2028: 8,900(+7%)

+13%

+76%

+7%

+12%

Population projections in the urban growth areas

Future Focus

Planning for growth

OmokoroaOmokoroa is the District’s largest urban growth area. Over the next 40 years the population is expected to grow to 12,000 people.

Over the next year, we will be preparing a plan for the area between the railway tracks and the state highway. This will identify land for housing, a town centre, business development, parks and reserves and community infrastructure such as a school, community centre/library and recreational facilities.

We’ve already received some feedback through previous community conversations that will be used to inform this future planning.

KatikatiKatikati is another growth area for our District. There is enough land zoned for residential development to cater for growth

for the next five to seven years. Decisions need to be made on where future growth will go, and how much future growth will be catered for.

The capacity of the Katikati Wastewater Treatment Plant, natural hazards and the projected costs to upgrade infrastructure may be constraints on growth.

Council will continue discussions with the community over the next year to determine the best approach.

Te Puke and Waihi BeachTe Puke and Waihi Beach will also continue to grow over the next 10 years. There’s already sufficient land zoned for residential and industrial development, so it’s about maintaining this approach.

• Omokoroa Structure Plan • Katikati Urban Growth Area westernbay.govt.nz/LTP2018-2028moreinfo


More information

Enabling the right housing for our community is crucial to ensuring our economy keeps functioning and our community is healthy. The District needs housing for seasonal workers, families, individuals, the elderly population and those on lower incomes. Māori communities also want to develop Papakāinga (communal housing) to meet their community needs.

Council has a role to play in housing to facilitate conversations and work with others to plan for the housing we need, and to remove any barriers Council may be putting in the way.

Working with SmartGrowth, Tauranga City Council and BayTrust, Council has recently completed a Housing Need and Demand Report – and there are some major challenges ahead.

To understand what we can do to respond, and what should be prioritised, we’ll be developing a Housing Action Plan.

Future Focus

Enabling the housing our community needs

• SmartGrowth report westernbay.govt.nz/LTP2018-2028moreinfo

More information

We expect the District to continue to grow over the next 30 years – the population in 2048 is projected to be 61,729 (up from 49,285 today1). To cater for this growth Council is budgeting $121 million (over the next 10 years) for investment in new infrastructure – the majority of which will be invested in Omokoroa.

In the eastern part of the District, provision of an additional water source is required. A decision will need to be made on this within the next five years to ensure sufficient capacity. We have budgeted $5.6 million for this.

Infrastructure

The next 10 years and beyond


• Western Bay District Council Infrastructure Strategy westernbay.govt.nz/LTP2018-2028moreinfo

More information

1 2013 Census Population of 46,110, and 2018 population of 49,285 from LTP Population, Dwellings and New Lots Projections.

02We need a safe and efficient transportationnetwork

Getting around


As a mainly rural area, most of our economic growth is driven from the primary sector. We need a safe, efficient transportation network to support the movement of goods and people.

Transport is the largest activity for Council. And it’s no wonder. We have 1057 kilometres of roading network. That’s a greater distance than travelling from Tauranga to Wellington and back again. We spend around a third of our annual capital and operating expenditure on transportation – approximately $35 million each year. This is for everything from general maintenance, to road seal extensions and widening, to large urban roading projects and safety improvements.

Council is strongly commited to advocating for state highway upgrades to NZTA, particularly the Katikati bypass and upgrades to State Highway 2. We will continue to maintain our network over the next 10 years and we’d like to invest more in walkways and cycleways.

We’re also considering investing more in park-and-ride facilities to support the use of public transport – bus services are provided by the Bay of Plenty Regional Council.

Getting around


Over the last three years we’ve developed our walking and cycling routes, in particular the mainly off-road route from Omokoroa to Tauranga. The long term aim is to establish a network across our District from Waihi Beach to Paengaroa and Maketu, eventually connecting Waihi to Rotorua.

We want to continue with the good work that’s been achieved so far. We’re proposing to increase the funding provided year on year to build walkways and cycleways, so that more can be delivered, faster. This will support the development of the District-wide network, and enable us to leverage external funding.

Local connections in communities such as Katikati, Waihi Beach, Te Puke and Omokoroa will also progress, using local funding sources such as the community board roading budget.

Cycle trails are constructed off road, beside the road and include on road where traffic volumes are low.

Key proposal

Proposal for walking and cyclingRecently constructed or under construction• Paengaroa to Maketu on-road route • 1/4 of Omokoroa to Tauranga• Katikati cycle trail & Uretara Bridge • Te Awa Kahikatea cycle trail in Te Puke • TEL cycleway through to Paengaroa off-road route

Medium-term (2018-2021)• Linkages to packhouses around Te Puke • Te Puke to Paengaroa • Maketu to Kaituna Road • Paengaroa to Lake Rotoiti • Waihi Beach to Waihi • Linkages and extensions in Waihi Beach,

Katikati and Omokoroa

Long-term (2021-2028)• Waihi Beach to Athenree

(& upgrades in Waihi Beach)• Athenree to Katikati

(& upgrades within Katikati)• Katikati to Omokoroa

(& upgrades within Omokoroa)• Tauranga to Te Puke

Option details Costs Annual impacts on ratepayers Preferred Option

Our preferred option is Option 2, increasing funding to do more, faster. This will enable us to complete more of the network over the next 10 years.

1. Continue with current programme The current programme enables us to complete (in 10 years) key connections from Omokoroa to Tauranga, from Kaituna Road to Maketu, and a section of the Waihi Beach to Waihi route. We also recieve subsidies from Central Government.

$345,000 per year Status quo - no additional impact on rates

2. Increase funding to do more faster An increase in funding will mean we can deliver the key routes, faster. This will enable better connections to be established and wider benefits to be delivered to the communities that are connected by the network. It also enables us to develop local connections, including to packhouses, and to receive subsidies from Central Government.

Additional $105,000 per year

$505k property - $2.13

$1.83 million property - $8.03

The options

Waihi Beach

Athenree

Katikati

Maketu

Paengaroa

TAURANGA CITY

Omokoroa

Te Puke

Lake Rotoiti

Waihi


* Note: Programme may change depending on external funding, consents and other agreements.

T.E.L

Note: Property values are based on our example Urban Residential and example Rural Orchard properties.

We’re not anticipating significant changes to how we manage our transport network, but there are potential projects that lay ahead.

Firstly, the NZ Transport Agency has developed a system called the One Network Road Classification. We will need to apply this classification system to the District’s roading network, to understand the financial implications the classifications may have.

We’re working with the NZ Transport Agency on proposed state highway projects. The main projects are the Tauranga Northern Link (TNL), Katikati to Tauranga upgrades, and the Katikati bypass. These will be largely funded by Central Government, but, there are likely to be flow on effects for District roads that need to be factored in.

Technological advances are likely to have a major impact on the transport sector in the future. This will also impact on Council’s level of service and may have financial implications. We’ll continue working with our partners at Tauranga City Council, Bay of Plenty Regional Council and NZ Transport Agency to assess and understand the implications of future transportation developments.

Infrastructure



More information



03Our communities told us they feel proud about the Western Bay environment and want to look after what we have

Protecting our environment and resources

Our communities are proud of the Western Bay environment. They value the natural areas such as rivers, streams and urban parks and want to look after them for future generations.

To maintain these assets we need to manage our resources well. This means reducing waste, being smart about how we use water and thinking about what impacts the quality of our water.

We will continue to work with councils, the Department of Conservation, Tangata Whenua, community groups and others, to deliver projects that improve our biodiversity and our water quality “from the mountains to the sea.”

How we protect our cultural heritage is another area of work Council will be focusing on, working with Iwi and other partners to map our significant cultural heritage sites and develop ways to protect them.

Council manages the three waters - stormwater, wastewater and water supply. We’re in a reasonably good space with our three waters infrastructure – we have good life left in our existing stormwater and wastewater assets, and we’ve progressively upgraded these to cater for growth.

Going forward, we know higher environmental and public health regulations will increase costs for our water supply, as well as for managing stormwater and wastewater discharges. We’ve factored these into our budgets up front. We think this is prudent – other approaches would effectively mean we’re ‘kicking the can down the road’ and could potentially lead to steeper costs in later LTP years.

See page 18 for more information.

Protecting our environment and resources


Continuing investment in water, wastewater and stormwater management

The way we manage our rubbish and recycling is an area we’ve been focused on over the last year. We had targets to reduce the amount of waste going to landfill – but as a community we’re not meeting them. This may mean a different approach to waste management is needed.

In 2018/19 we will investigate alternative recycling and rubbish collection models, to achieve better oversight and management of solid waste and recycling throughout the District. Any change to the collection model may mean a significant change in levels of service.

As part of the investigation, Council will consider what services are required for Omokoroa as it grows and how these will be funded. Currently a greenwaste facility is provided, with limited hours of operation. The investigation will include what services are or should be provided and the area that would be serviced.

The work requires a detailed business case and analysis of options to be prepared. There are no decisions to make at this stage, but once complete we’ll present the options back to the community for feedback, along with costs.

Future Focus

Investigating alternative recycling and rubbish collection models


Infrastructure


The implementation of the National Policy Statement for Freshwater Management, along with other legislative changes, will most likely require ongoing improvements to water, stormwater and wastewater networks.

The Katikati wastewater ocean outfall is due for renewal in 2037. We’ve included a budget of $13.7 million. Alternative disposal methods will be considered through the consent renewal process.

The Government inquiry into Havelock North drinking water has identified that across the country there are many threats and risks to drinking water. Western Bay’s water supply is generally in good shape, as we’ve invested in deep bores and water treatment systems. However the outcomes of the inquiry report are likely to lead to an increase in compliance standards. Our resource consents for water supply are up for renewal from 2024. We’ve factored in an additional $5.9 million to meet expected regulations and standards.

We also anticipate that sea level rise will have an impact on our coastal assets. We’ve prepared a Coastal Erosion Response Policy to guide our decision making for managing Council-owned coastal land and assets affected by coastal erosion or subsidence. We’ll be assessing new or replacement assets against the criteria of the policy, to understand options and likely costs. We’ve budgeted $220,000 a year for erosion protection works for the next 10 years.

Slips in Omokoroa destroyed part of the coastal walkway in April 2017. There are short term options that will reinstate part of the walkway, towards which affected property owners have made substantial funding contributions. A three-year research programme is underway to investigate longer term improvements to stability. The costs to install and implement this technology are not known at this stage. Any issues, options and associated costs will be identified once the research is complete.

• Western Bay District Council Infrastructure Strategy • Coastal Erosion Responses Policy westernbay.govt.nz/LTP2018-2028moreinfo

More information



04We value communityconnections and a sense of place

Building Communities

Our District has many distinct communities, with a strong sense of connection to their place. The District prides itself on having a buoyant rural economy.

Council provides or supports facilities and services that contribute to these connections and sense of place, and also have social, cultural and economic benefits. These include parks and reserves, playgrounds, community halls and service delivery contracts to support arts, culture and events.

Council also supports marae to be sustainable places that meet the needs of the community – from enabling papakāinga (communal housing), supporting marae waste management practices and building resilience for when emergencies happen.

We value diversity in our communities and are part of the Welcoming Communities pilot programme, that welcomes newcomers into our communities.

Along with Tauranga City Council, we recently agreed on a new direction for arts and culture, recognising the value that arts and culture provide to our communities.

We’re looking at two funding proposals to support this direction.

Building communities


Council has a role in protecting our District’s cultural heritage. We advocate, and partner with our communities to protect significant cultural and heritage sites and artefacts.

The Western Bay Museum, holds and maintains Council’s heritage collection of approximately 10,000 items in Katikati. The museum runs school programmes throughout the year for the entire District, and occasionally holds concerts and theatre productions. In 2017 the museum was visited by 1588 walk-in visitors, 619 students and 244 other groups.

The Museum Trust has recently developed a marketing strategy and strategic plan, and is exploring options to locate parts of the collection throughout the District (beyond Katikati).

In 2015, Council agreed to provide a grant of $60,000 a year for three years, to contribute to the museum’s operating costs. The grant recognised and supported the role of the museum in protecting and celebrating the District’s heritage.

The museum has now requested a grant of $70,000 a year for the next three years. The grant will be used specifically for the role of the museum curator, and for the storage costs for the collection.

Key proposal

Proposal for funding the Western Bay Museum


Our preferred option is Option 2. This option ensures the museum will continue to operate and ensures our heritage collection is protected.

1. Provide no support for the museum. Council would retain ownership of the heritage collection and responsibility for its storage, which is estimated to cost $11,000 per year. The museum would likely close under this option.

$11,000 a year (for storage of the heritage collection.)

District-wide: $0.52

2. Support through District-wide rates for the full $70,000 required for the next three years. Ongoing funding would be reviewed after then.

$70,000 a year District-wide: $3.30

3. Support through mixed targeted and District-wide rates for the full $70,000 required for the next three years, with a split of 50% Katikati targeted rates and 50% District-wide rates. Ongoing funding would be reviewed after then.

$70,000 a year Targeted Katikati rate: $8.10

District-wide rates: $1.65

The options


Note: District-wide rates are a fixed charge per property.

Council has recently adopted a sub-regional Arts and Culture Strategy. This provides a framework to grow and support arts and culture in our communities, to bring social, economic and cultural benefits.

Creative Bay of Plenty and the Arts Incubator are two key agencies tasked with implementing the Arts and Culture Strategy. In order to ensure the strategy is successful, we are considering providing additional funding to these two organisations.

Key proposal

Proposal for funding arts and culture


Our preferred option is Option 2. This option enables Creative Bay of Plenty and The Incubator to carry out key actions from the Arts and Culture Strategy, while also recognising there are other organisations in the Western Bay that Council already supports to deliver arts and culture projects and events. Council also makes one-off funding contributions to arts and culture projects and events through its Community Matching Fund.

1. Provide no additional funding for the Arts and Culture Strategy implementation

Do the best we can with the current level of funding.

$50,000 per annum. Status quo, so no additional impact on rates.

*2. Provide additional funding to enable partial implementation of identified key actions of the strategy

Funding to be provided through:

• An increase to the Creative Bay of Plenty service delivery contract of $50,000 a year

• A grant to The Incubator Creative Hub of $10,000 in year one, $15,000 in year two and $20,000 in years three-to-10.

$60,000 in 2018.

$65,000 in 2019.

$70,000 in 2020.

$505,000 property: Year 1 = $1.53 Year 2 = $1.65 Year 3 = $1.78

$1.83 million property: Year 1 = $5.53 Year 2 = $6.00 Year 3 = $6.46

*3. Provide additional funding to enable full implementation of identified key actions of the strategy, and increased support for arts and culture in the District

Provide additional funding through Creative Bay of Plenty service delivery contract of $123,000 per annum, and provide a grant of $50,000 a year to The Incubator Creative Hub.

$173,000 a year. $505,000 property: $3.13

$1.83 million property: $11.35

The options

• Arts and Culture Strategy westernbay.govt.nz/LTP2018-2028moreinfo

More information


* Note: Property values are based on our example Urban Residential and example Rural Orchard properties.

As the District continues to grow and population demographics change, we need to review what, when and how we provide the facilities our communities will need. Over the next three years we’ll be reviewing our Communities Strategy and Recreation and Leisure Strategy, to set the direction and review our levels of service.

A big part of living in the Western Bay is the harbour and ocean. Water recreation (fishing, boating, kayaking etc) is a favourite pastime for many residents and visitors alike. While there’s water all around us, there are not many good access points to the harbour, particularly for launching boats. We need to look at how and where we provide boat launching facilities, particularly as the population grows and more pressure is placed on existing facilities.

We’re currently revewing future plans for the Omokoroa Domain and boat ramp. We know the Omokoroa boat ramp will be under a lot of pressure as the peninsula grows to 12,000 people, so we’ve included a budget of $6.9 million to upgrade the boat ramp and surrounding area.

Further assessment work is also needed to determine the location and costs of a boat ramp in the northern harbour. We’ve included a provisional budget of $5.2 million for a boat ramp, which can be confirmed once the planning work is complete.

Infrastructure



More information


05We are projecting our net debt to continue to decrease over the next 10 years

Managing our finances


This section of the Consultation Document sets out how we plan to finance our activities in a way that is sustainable over the longer term. Over the last 20 years we’ve seen significant growth in the District – but we were hit hard after the 2007 global financial crisis. We had a high level of debt from our investments in infrastructure and a big decline in growth-related income to service that debt.

Today, our finances are in better shape and so is the economic climate in which we’re operating. Our net debt has decreased from $144 million in 2015, to $100 million today. At a time when many councils with high population growth are facing increasing debt levels, we are projecting our net debt to continue to decrease over the next 10 years. This means we are in a good position to deal with future uncertainties as they arise.

Managing our financesWhere our income comes fromThe majority of our income (68 percent) comes from rates. We also receive income from growth, via financial contributions.

What we spend it onMost of our income is spent on the key infrastructure councils must provide – roading, drinking water supply, wastewater, and stormwater management. For 2018/19 around 63 percent of our expenditure is on roading, stormwater, wastewater and drinking water, with another nine percent spent on recreation and leisure.

How much debt we haveThe growth in the District means we’ve needed to invest in some major capital works. These have been debt funded. After the global financial crisis that started in 2007, our income from growth was less than we expected – which meant we had less funding for interest and loan repayments. In 2015, we asked you about using $2.5 million from a combination of Uniform Annual General Charges, general rate and the roading rate, to contribute to our debt interest and repayment costs. Subsequently, this approach has been used over the last three years.

This, coupled with a significant increase in income from growth over the last two years, means our net debt has reduced from $144 million in 2015 to $100 million. This is ahead of what we forecast for 2017/18 in the 2015 LTP.

Council Revenue 2018/19 (excluding vested assets and revaluations)

68% Rate Income12% Other Revenue11% User Charges9% Financial Contributions

Council Capital and Operating Expenditure 2018/19

29% Transportation19% Other Activities13% Water Supply13% Wastewater9% Recreation & Leisure8% Stormwater7% Regulatory2% Solid Waste



2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Rates before inflation 1.10% 1.20% 1.73% (0.18)% (1.68)% 1.07% 0.39%% (1.71)% (0.05)% 0.12%

*Inflation (LGCI) 2.00% 2.20% 2.20% 2.20% 2.30% 2.30% 2.40% 2.50% 2.60% 2.70%

Rates after inflation 3.10% 3.40% 3.93% 2.02% 0.62% 3.37% 2.79% 0.79% 2.55% 2.82%

Our Financial Strategy sets out how we plan to finance our activities in a way that is sustainable over the long term. It enables the delivery of the Long Term Plan and the 30 year Infrastructure Strategy.

The strategy sets limits on debt and rates increases. Council must work within these limits, ensuring the services our communities expect are provided in a way that balances the affordability of delivering those services.

We are taking the following approaches to managing our finances over the next 10 years:

We will continue to manage our debtIt’s important that we operate in a fiscally responsible way, balancing delivery of services that people want, with the community’s ability to pay for these services. We also need to ensure we have room to move for any unanticipated situations that can arise and are difficult to predict.

The graph on page 27 sets out our limit on debt, our net debt projections and our net debt to revenue ratio projections.

We are proposing some changes to our debt management approach for Year 1 of the LTP. More information on this decision is on page 34.

Our financial strategy

We will continue to manage our rates increasesRates affordability is a key challenge. We’ve set a limit on our rates increases for the next 10 years, and ensured our budget is within those limits.

The rates increase is set at no more than 4 percent per annum (excluding growth.) The table below sets out the proposed average rates increase per annum, for the next 10 years. This includes inflation but excludes growth.

*Note: Inflation is applied using the Local Government Cost Index (LGCI) - an inflation measure based on the cost structures of New Zealand’s local authorities. The LGCI is different to the Consumer Price Index (CPI) as it includes goods which consumers would not normally purchase. These goods, such as bitumen or piping, often have different inflation pressures than goods included in the CPI basket. The Local Government Cost Index is sourced from Business Economic and Research Limited and is a more accurate measure of the cost changes that we are faced with. Using this measure will provide ratepayers with a more accurate picture of how these costs impact on rates.

We will continue to invest in our communities and the future of our District.It’s important to provide good quality infrastructure to attract investment to our District and provide confidence to ratepayers that levels of service can be delivered now

and in the future. We want to encourage growth, as it brings benefits including increased prosperity through investment, community vibrancy and diversity.

We intend to spend $80 million from 2018 to 2028 on renewing our water, wastewater, stormwater and transportation assets, in accordance with our asset management plans.

We also intend to invest $121 million from 2018-2028 for water, wastewater, stormwater and transportation infrastructure to provide for growth. The majority of this is to cater for development and growth in Omokoroa.

We will continue to charge developers a contribution towards the costs of providing this infrastructure. However, we’ll be reviewing our approach over the next three years, as we prepare to transition from financial contributions to development contributions (see the Future Focus section on page 35 for more detail).

We’ll continue the ‘just in time’ approach to providing infrastructure - monitoring the actual uptake of growth.

The graphs on page 27 set out Council’s total budgeted capital expenditure and total budgeted operational expenditure for the next 10 years.

The average rates increase per annum for the next 10 years (for existing ratepayers)


Forecast limit on debt

Total capital expenditure 2018-28

Total operational expenditure 2018-28(Includes interest, depreciation and overheads)

140,000

120,000

100,000

80,000

60,000

40,000

20,000

0

Deb

t ($0

00’s)

200%180%160%140%120%100%80%60%40%20%0%

2019 202820272026202520242023202220212020Net Debt LTP 2018-28 Council’s fixed Net Debt Limit Net Debt to Revenue Ratio (excluding

financial contributions and vested assets)

120,000

100,000

80,000

60,000

40,000

20,000

0

$000

’s

2019 202820272026202520242023202220212020

$60,000,000

$50,000,000

$40,000,000

$30,000,000

$20,000,000

$10,000,000

02019 202820272026202520242023202220212020

Growth Levels of Service Renewals

What rates do we collect to fund services?We use a combination of general rates, roading rates and targeted rates to fund our services.

Rates

General RateThis is a rate based on the capital value of the property. Owners are also required to pay a flat fee known as a Uniform Annual General Charge or UAGC (in 2017/18 this is $245). This is used to fund our day-to-day operations as well as “public good” activities such as maintaining parks.

Roading RatesTo cover the cost of building and maintaining roads, every property owner pays a Roading Rate based on the land value of the property as well as a flat amount known as a Roading Charge. Rural property owners also pay a Rural Works Charge which is used to fund roading projects in rural areas.

Targeted RatesSome residents pay rates for projects that are specific to their particular community or area, or the services they receive. This includes charges for water supply, wastewater as well as rates charges for initiatives such as town centre promotion.

Perc

enta

ge


Proposed rate changes for 2018/19The tables on the following pages set out the proposed rates changes, for a range of property types and different parts of the District. Note that these are based on an example representative property.

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Proposed 2018/19Current 2017/18


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Wastewater Water Roading Rate Other Targeted Rates General Rate


Water Roading Rate Other Targeted Rates General Rate

Roading Rate Other Targeted Rates General Rate



Urban Residential

Rates below based on the example property.

• Land Value: $177,000• Capital Value: $376,000• Water Connection• Wastewater Connection

Example Property

-0.26%Average Rate Increase

Lower Quartile

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Median Values

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RuralRates below based on the example property.

• Land Value: $465,000• Capital Value: $830,000• Water Connection

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• Land Value: $710,000• Capital Value: $1,300,000• Water Connection

Example Property


Rural


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• Land Value: $2,040,000• Capital Value: $2,625,000

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RuralOrchard


• Land Value: $635,000• Capital Value: $1,330,000

Example Property


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RuralOrchard


• Land Value: $810,000• Capital Value: $1,830,000

Example Property


Median Values

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LifestyleBlockLifestyle

Block

Council currently uses $2.5 million a year from a combination of general rates, the roading rate and Uniform Annual General Charges (UAGCs) to contribute to interest and debt repayments. This was agreed through the 2015-2025 LTP.

This approach to debt management has worked well and we’ve significantly reduced our debt. Population growth over the last three years has also contributed as we’ve received more revenue as a result of development.

Key proposal

Proposal to change our debt management approach


Our preferred option is Option 2 – this is reflected in our financials - to contribute $1 million from rates to interest and debt repayments, for year one of the LTP, maintaining the contribution at $2.5 million for years two to 10.

We think this is a financially prudent approach, as we can review the amount of the contribution annually and revise it if we need to depending on our rate of growth.

1. Continue with current approach of contributing $2.5 million a year from rates to interest and debt repayments

This approach means our net debt will reduce at the rate anticipated in the 2015 LTP. Additional rates funding will continue to be required to complete the capital works programme and cover operational expenditure.

Status quo, rates funding is required.

2. Change the debt management approach to contribute $1 million of rates to interest and debt repayments for year one (2018/19) of the LTP only, AND continue with the current approach of contributing $2.5 million a year from rates to interest and debt repayments from year two onwards.

This approach means we will still be reducing the interest and making debt repayments in year one, but at a lower level. This is anticipated to be for one year only, after which time the status quo will resume. We can review this annually.

$1.5 million less rates in 2018/19.

From year two status quo.

$505,000 property = $38.18 less in 2018/19 only.

$1.83 million property = $138.36 less in 2018/19.

The options

The current indications are that population growth, and therefore our revenue from financial contributions, will continue to be strong. We think we can now reduce the amount of the contribution we’re taking from rates to fund interest and debt repayments.

However, we also know that growth is volatile and difficult to predict as there are many factors that influence our rate of growth. An option to manage this is to reduce the amount of the contribution for year one (2018/19) of the LTP only, and maintain the $2.5 million contribution for the following years two to 10. We can revisit this approach each year if necessary.

Note: Property values are based on our example Urban Residential and example Rural Orchard properties.


Over the next 30 years we anticipate spending over $851 million on capital projects for infrastructure, and over $2 billion on infrastructure operational costs. This expenditure enables investment in urban growth areas, achievement of agreed levels of service, and a steady programme of asset renewals. There are some anticipated spikes in expenditure attributable to the wastewater, transportation and water activities. These peaks are considered manageable within Council’s planned debt management approach, and at this stage do not indicate any potential affordability issues in the future.

There are no proposed changes to levels of service; however we have identified some decisions to be made that could change levels of service and therefore the financial profile. We have ensured there is ‘room to move’ to accommodate these potential changes (and other unforeseen events). Council does not have significant backlogs of expenditure or deferred expenditure, so we are in a comfortable position to ensure assets continue to be maintained to meet level of service requirements.

Infrastructure


At the moment we fund (fully or partly) projects that are needed to cater for population growth, by charging financial contributions under the Resource Management Act 1991 (RMA) to those undertaking development so they pay their fair share of infratructure costs. Changes to the RMA in 2017 mean councils can no longer charge financial contributions. For this Long Term Plan we are still using financial contributions. We must transition to development contributions under the Local Government Act 2002, by 2022.

We’ll be starting work on the complex transition over the next three years. Through the 2021-2031 LTP process we’ll be adopting a policy on development contributions to complete the transition.

Future Focus

Changing the way we fund growth related projects


Stormwater Projects: Pio Shores and 2 Mile Creek2018-2021: $4.7 million

Katikati Wastewater Treatment Plant renewals2018-2021: $1.7 million

Omokoroa Town Centre development2018-2021: $674,000

Te Puke Wastewater Treatment Plant upgrades and renewals2018-2021: $2.135 million

Paengaroa playground upgrade / walkway2018: $80,000

District-wide road seal extensions and minor road safety improvements2018-2021: $8.7 million


There are many other projects Council is undertaking that are part of ‘business as usual’, maintaining our current levels of service, that may be of interest to you or to your local community.

The map sets out some of the projects that will be happening in the next three years.

Upcoming projects

Waihi Beach

AthenreeWestern Bay of Plenty District

Katikati

Maketu

Pukehina Beach

Paengaroa

Omokoroa

Te Puna

Te Puke

TAURANGA CITY

We have reviewed our funding approach for Regulatory Services, which includes building services, resource consents, animal control and community protection. You can see more detail in the draft Regulatory Services Revenue and Financing Policy.

Our review of the draft Schedule of Fees and Charges has resulted in some changes to user fees across our range of services. Some of these have been driven by the review of the funding approach for Regulatory Services.

Changes to user fees

General reserve land purchases in growth areas2018-2021: $612,000

• Draft Schedule of Fees and Charges westernbay.govt.nz/LTP2018-2028moreinfo

More information

Long

Ter

m P

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2018

-202

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ears

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Please take some tim

e to answer these quick dem

ographic questionsA

re you? M

ale Fem

ale G

ender Diverse

Prefer not to say

What age group do you belong to?

<15 15-24

25-34 35-44

45-54 55-64

65-74 75+

Prefer not to say

Which of the follow

ing best describes your ethnicity (Choose all that apply)?

NZ European

Māori

Samoan

Tongan C

hinese Indian

Prefer not to say O

ther – please specify

Which part of the W

estern Bay do you live in e.g. Maketu, Katikati?

FEEDBAC

K FO

RMW

estern Bay of Plenty District C

ouncil Long Term

Plan 2018-2028

Long Term Plan 2018-2028

The current indications are that population growth, and

therefore our revenue from financial contributions, w

ill continue to be strong. W

e think we can now

reduce the am

ount of the contribution we’re taking from

rates to fund interest and debt repaym

ents.

How

ever, we also know

that growth is volatile and diffi

cult to predict as there are m

any factors that influence our rate of grow

th. An option to m

anage this is to reduce the am

ount of the contribution for year one (2018/19) of the LTP only, and m

aintain the $2.5 million contribution for

the following years tw

o to 10.

Option 1

Continue w

ith current approach of contributing $2.5

m

illion a year from rates to interest and debt repaym

entsO

ption 2 C

hange the debt managem

ent approach to contribute

$1 m

illion of rates to interest and debt repayments for

year one (2018/19) of the LTP only, AN

D continue w

ith

the current approach of contributing $2.5 m

illion a year

from

rates to interest and debt repayments from

year

tw

o onwards.

4. Proposal to change our debt managem

ent approach (See page 34)

Council has recently adopted a sub-regional A

rts and C

ulture Strategy. This provides a framew

ork to grow and

support arts and culture in our comm

unities, to bring social, econom

ic and cultural benefits.

Option 1

Provide no additional funding for the Arts and C

ulture

Strategy im

plementation.

Option 2

Provide additional funding to enable partial

im

plementation of identified key actions of the strategy

Option 3

Provide additional funding to enable full implem

entation

of identified key actions of the strategy, and increased

support for arts and culture in the Western Bay D

istrict

3. Proposal for funding arts and culture (See page 22)

Our preferred option is O

ption 2 – This option enables Creative Bay of Plenty and The Incubator to carry out key actions from

the Arts

and Culture Strategy, w

hile also recognising there are other organisations in the Western Bay that C

ouncil already supports to deliver arts and culture projects and events. C

ouncil also makes one-off funding contributions to arts and culture projects and events through

its Com

munity M

atching Fund.

Our preferred option is O

ption 2 – to contribute $1 million from

rates to interest and debt repayments, for year one of the LTP,

maintaining the contribution at $2.5 m

illion for years two to 10. W

e think this is a financially prudent approach, as we can review

the am

ount of the contribution annually and revise it if we need to depending on our rate of grow

th.

Please provide any detailed comm

ents, with the appropriate question num

ber, below. You can attach extra pages if needed.


Independent auditor’s report on Western Bay of Plenty District Council’s Consultation Document for its proposed 201828 Long-Term Plan

I am the AuditorGeneral’s appointed auditor for Western Bay of Plenty District Council (the Council). Section 93C of the Local Government Act 2002 (the Act) requires an audit report on the Council’s consultation document. We have done the work for this report using the staff and resources of Audit New Zealand. We completed our report on 15 March 2018.

Opinion

In my opinion:

• the consultation document provides an effective basis for public participation in the Council’s decisions about the proposed content of its 2018-28 long-term plan, because it:

• fairly represents the matters proposed for inclusion in the long-term plan; and

• identifies and explains the main issues and choices facing the Council and district, and the consequences of those choices; and

• the information and assumptions underlying the information in the consultation document are reasonable.

Basis of opinion

We carried out our work in accordance with the International Standard on Assurance Engagements (New Zealand) 3000 (Revised): Assurance Engagements Other Than Audits or Reviews of Historical Financial Information. In meeting the requirements of this standard, we took into account particular elements of the Auditor-General’s Auditing Standards and the International Standard on Assurance Engagements 3400: The Examination of Prospective Financial Information that were consistent with those requirements.

We assessed the evidence the Council has to support the information and disclosures in the consultation document. To select appropriate procedures, we assessed the risk of material misstatement and the Council’s systems and processes applying to the preparation of the consultation document.

We did not evaluate the security and controls over the publication of the consultation document.

Responsibilities of the Council and auditor

The Council is responsible for:

• meeting all legal requirements relating to its procedures, decisions, consultation, disclosures, and other actions associated with preparing and publishing the consultation document and long-term plan, whether in printed or electronic form;

• having systems and processes in place to provide the supporting information and analysis the Council needs to be able to prepare a consultation document and longterm plan that meet the purposes set out in the Act; and

• ensuring that any forecast financial information being presented has been prepared in accordance with generally accepted accounting practice in New Zealand.

I am responsible for reporting on the consultation document, as required by section 93C of the Act. I do not express an opinion on the merits of any policy content of the consultation document.

Independence

In carrying out our work, we complied with the Auditor-General’s:

• independence and other ethical requirements, which incorporate the independence and ethical requirements of Professional and Ethical Standard 1 (Revised); and

• quality control requirements, which incorporate the quality control requirements of Professional and Ethical Standard 3 (Amended).

In addition to this report on the Council’s consultation document and all legally required external audits, we have provided an assurance report on certain matters in respect of the Council’s Debenture Trust Deed. These assignments are compatible with those independence requirements. Other than these assignments, we have no relationship with or interests in the Council.

Clarence Susan Audit New Zealand On behalf of the Auditor-General, Tauranga, New Zealand

www.westernbay.govt.nzTe Kaunihera a rohe mai i nga Kuri-a-Wharei ki Otamarakau ki te Uru

Details inside on how you can comment or give your feedback on the issues raised.

All feedback must be received by 4pm Friday, 4 May 2018

long term plan 2018-2028 - westernbay.govt.nz · committed to continuing our prudent management of...

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