HuttCity_TeAwaKairangi_BLACK_AGENDA_COVER

 

 

Komiti Iti Mahere ā-Ngahurutanga / Mahere ā-Tau Long Term Plan/Annual Plan Subcommittee

 

28 March 2022

 

 

 

Order Paper for the meeting to be held via Zoom

on:

 

 

 

Monday 4 April 2022 commencing at 2.00pm

Members of the public wishing to speak to the item on the agenda are asked to contact democraticservicesteam@huttcity.govt.nz

 

 

Membership

 

 

Mayor C Barry (Chair)

Deputy Mayor T Lewis (Deputy Chair)                                                                                            

Cr G Barratt

Cr J Briggs

Cr K Brown

Cr B Dyer

Cr S Edwards

Cr D Hislop

Cr C Milne

Cr A Mitchell

Cr S Rasheed

Cr N Shaw

Cr L Sutton

 

 

 

For the dates and times of Council Meetings please visit www.huttcity.govt.nz

 

Have your say

You can speak under public comment to items on the agenda to the Mayor and Councillors at this meeting. Please let us know by noon the working day before the meeting. You can do this by emailing DemocraticServicesTeam@huttcity.govt.nz or calling the Democratic Services Team on 04 570 6666 | 0800 HUTT CITY

 

 


HuttCity_TeAwaKairangi_SCREEN_MEDRES

 

PURPOSE

To carry out all necessary considerations and hearings, precedent to the Council’s final adoption of Long Term Plans (LTP) and Annual Plans (AP) which give effect to the strategic direction and outcomes set by the Policy, Finance and Strategy Committee through setting levels of service, funding priorities, the performance framework and budgets.

 

Determine:

§  Development of a framework and timetable for the LTP and AP processes.

§  The nature and scope of engagement and public consultation required.

§  Statements to the media.

§  Such other matters as the Subcommittee considers appropriate and which fall within its Terms of Reference.

§  Informal engagement with the community, and the hearing of any formal public submissions.

§  Consideration of submissions on Hutt City Council’s Assessment of Water and Sanitary Services.

 

Consider and make recommendations to Council:

§  Levels of service, funding priorities, performance framework, budgets, rating levels and policies required as part of the LTP or AP, excluding any policies recommended to Council by the Policy, Finance and Strategy Committee.

§  Consultation Documents.

§  Council’s proposed and final LTP.

§  Council’s proposed and final AP.

§  Final content and wording, and adoption of the final Hutt City Council Assessment of Water and Sanitary Services.

Note:

Extract from the Controller and Auditor General’s October 2010 Good Practice Guide: Guidance for members of local authorities about the Local Authorities (Members’ Interests) Act 1968

 

 

Appointment as the local authority’s representative on another organisation

5.47       You may have been appointed as the authority’s representative on the governing body of a council-controlled organisation or another body (for example, a community-based trust).

5.48       That role will not usually prevent you from participating in authority matters concerning the other organisation – especially if the role gives you specialised knowledge that it would be valuable to contribute.

5.49       However, you could create legal risks to the decision if your participation in that decision raises a conflict between your duty as a member of the local authority and any duty to act in the interests of the other organisation. These situations are not clear cut and will often require careful consideration and specific legal advice.

5.50       Similarly, if your involvement with the other organisation raises a risk of predetermination, the legal risks to the decision of the authority as a result of your participation may be higher, for example, if the other organisation has made a formal submission to the authority as part of a public submissions process.

 

    


1

 

TE KAUNIHERA O TE AWA KAIRANGI | HUTT CITY COUNCIL

 

Komiti Iti Mahere ā-Ngahurutanga / Mahere ā-Tau
Long Term Plan/Annual Plan Subcommittee

 

Meeting to be held via Zoom on

 Monday 4 April 2022 commencing at 2.00pm.

 

ORDER PAPER

 

Public Business

 

 

1.       OPENING FORMALITIES - Karakia Timatanga     

Kia hora te marino

Kia whakapapa pounamu te moana

He huarahi mā tātou i te rangi nei

Aroha atu, aroha mai

Tātou i a tātou katoa

Hui e Tāiki e!

May peace be wide spread

May the sea be like greenstone

A pathway for us all this day

Let us show respect for each other

For one another

Bind us together!

 

2.       APOLOGIES

3.       PUBLIC COMMENT

Generally up to 30 minutes is set aside for public comment (three minutes per speaker on items appearing on the agenda). Speakers may be asked questions on the matters they raise.

4.       CONFLICT OF INTEREST DECLARATIONS

Members are reminded of the need to be vigilant to stand aside from decision making when a conflict arises between their role as a member and any private or other external interest they might have.     

5.       Recommendation to TE KAUNIHERA O TE AWA KAIRANGI | Council - 4 April 2022

Draft Annual Plan 2022-2023 (22/567)

Report No. LTPAP2022/2/57 by the Manager Financial Strategy & Planning 6

Chair’s Recommendation:

“That the recommendations contained in the report be endorsed.”


6.       QUESTIONS

With reference to section 32 of Standing Orders, before putting a question a member shall endeavour to obtain the information. Questions shall be concise and in writing and handed to the Chair prior to the commencement of the meeting.

 

 

 

 

 

 

 

Kate Glanville

SENIOR DEMOCRACY ADVISOR

 


                                                                                       1                                                           04 April 2022

Long Term Plan/Annual Plan Subcommittee

08 March 2022

 

 

 

File: (22/567)

 

 

 

 

Report no: LTPAP2022/2/57

 

Draft Annual Plan 2022-2023

 

Purpose of Report

1.    The purpose of this report is to seek approval of the Draft Annual Plan 2022-2023 and the supporting engagement material.

Recommendations

That the Subcommittee recommends that Council:

(1)   receives the information;

(2)   notes the high level plan as outlined in table 1 contained within the report and that the light engagement is planned for the period 12 April to 3 May 2022;

(3)   notes that officers found costs savings or re-prioritised within the base budget to balance rising costs and to retain the rates revenue increases as projected in the Long Term Plan 2021-2031;

(4)   approves the Draft Annual Plan 2022-2023, as attached in Appendix 1 to the report;

(5)   approves the engagement content attached in Appendix 2 and engagement questions attached in Appendix 3 to the report for public engagement between 12 April and 3 May 2022; and

(6)   agrees that the Chief Executive be delegated authority to make minor editorial changes to the Draft Annual Plan 2022-2023 documents ahead of these being published for public engagement.

 

Executive summary

2.    The Long Term Plan 2021-2031 (LTP) was adopted by Council on
30 June 2021. This lays out Council’s strategic intent and direction for the
10 years from 2021-2031. The LTP sets Council’s strategic direction of getting the basics right to address the challenges that are being faced by the city and achieve the vision for Lower Hutt of a city where everyone thrives.

3.    There was extensive consultation around the LTP, which included early consultation on the direction and focus of the LTP, followed by a consultation period where material was available through a range of media channels, community meetings and in person hearings with Council.

4.    Extensive consultation is not required for the draft Annual Plan 2022-2023 (DAP) as it aligns with the direction set in the LTP. Council has previously agreed to a light-touch engagement for the DAP. This will consist of an online survey with accompanying social media collateral, accompanied by a short, printed document to all households in Lower Hutt. The engagement period is planned to take place from 12 April to 3 May 2022.

5.    At the subcommittee meetings on 16 December 2021 and 28 February 2022 Council progressed a range of budget decisions to be updated in the DAP. This included the decision to keep rates increases at the level set in the LTP, being 5.9% excluding the impact of growth.

6.    Recent Consumer Price Index (CPI) information indicates that higher than planned for inflation continues to be a risk. Statistics NZ reported the December 2021 CPI annual change result of 5.9%. As part of the DAP budgeting process officers worked hard to remain within the budgets set in the LTP. Officers found costs savings or re-prioritised within the base budget to balance rising costs and to retain the rates revenue increases as projected in the LTP.

7.    Affordability of rates is a key consideration of Council. The proposed rates rise equates to an average increase of $2.54 per week per household or an average increase of $132 per annum. Investment in our Three Waters infrastructure makes up about half ($65) of the average $132 per annum rise. The remaining $67 covers cost increases for all the other services provided (including transport, parks, community facilities, rubbish, recycling etc.).

Property Category

Capital value (CV)

2021-2022 Rates

2022-2023 Rates

$ Change Annual

$ Change Weekly

Average Residential, CV $630k

$2,951

$3,083

$132

$2.54

Average Commercial Central, CV $1.8M

$15,119

$16,353

$1,234

$23.73

 

8.    The financial impact of the decisions at previous Council meetings are as follows:

·    The LTP projected to achieve a balanced budget in 2028/29; we remain within this projected timeframe in the DAP.

·    The 2022/23 to 2025/26 capex has increased to $729M in the DAP compared to the LTP capex of $644M. This is largely due to increased costs of the Barber Grove wastewater sewer duplication project and Seaview Wastewater storage tank, the bringing forward of the Petone collecting sewer and the addition of the valley floor growth projects. These projects will help ensure that our water networks are resilient and will support growth taking place in the city.

·    Net debt is projected to peak in the DAP at $618M in 2028/29 compared to a projected peak in the LTP of $573M, largely due to the increased capital programme.

9.    The DAP and engagement material has been updated to reflect the decisions and feedback from Council at the meeting held on 28 February 2022. The Annual Plan Working Group was engaged on the resolution of actions from the 28 February 2022 meeting.

10.  The DAP is attached as Appendix 1.  The engagement material is attached as Appendix 2. Engagement questions are attached as Appendix 3.  This report seeks endorsement of the DAP and Engagement Material to begin engagement with the community on 12 April 2022.

High Level plan for the Draft Annual Plan 2022-2023

11.  Table 1 sets out the timeline for the Annual Plan 2022-2023 process as agreed to by Council.

Table 1: High level plan

Activity

Date

Status

Officers progress initial planning and preparation

August/September 2021

Complete

Council endorsement of high-level plan and key assumptions.

1 November 2021

Complete

Council meeting – Review of cost pressures, work programme changes and reprioritisation, funding options.

 

16 December 2021

 

Complete

Initial DAP and draft engagement material reviewed by Council. Further budget decisions.

28 February 2022

Complete

Council endorse DAP and engagement material for public engagement

4 April 2022

Today

Public engagement - “light” engagement

12 April 3 May 2022

 

Community feedback received and considered

18 May 2022

Council meets to make final decisions

7 June 2022

Council adopts the AP and sets the rates

30 June 2022


Financial overview

12.  The LTP focused on six key priority areas which are continued in the DAP:

·         Investing in infrastructure | Whanake i ngā poupou o te hapori

·         Increasing housing supply | Hei āhuru mōwai mō te katoa

·         Caring for and protecting our environment | Tiaki taiao

·         Supporting an innovative, agile economy and attractive city | Taunaki ōhanga auaha, tāone whakapoapoa

·         Connected communities | Tūhono hapori

·         Being financially sustainable | Whakauka ahumoni

13.  At the Council meetings on 16 December 2021 and 28 February 2022 a range of budget decisions were progressed which have been updated in the DAP. These align with the six priority areas in the LTP. A summary of these decisions is included in Appendix 4 to this report.

Capital investment

14.  Graph 1 shows the updated capital programme in the DAP, with a comparison to the LTP.

15.  The 2022/23 to 2025/26 capex has increased to $729M in the DAP compared to the LTP capex of $644M. This is largely due to increased costs of the Barber Grove wastewater sewer and Seaview Wastewater storage tank, the bringing forward of the Petone collecting sewer and the addition of the valley floor growth projects.

16.  This level of investment will contribute to a resilient city that can more effectively deal with the challenges of population growth and climate change, supporting both our residential and commercial ratepayers.

17.  2022 has seen a shift in how we approach COVID-19 as a country. We are now living and working with COVID-19 across New Zealand. We are considering how contractor and material supply impacts due to COVID-19 will affect the work we have planned for the year ahead. Officers are considering contingency plans and are reviewing the capital programme in light of these considerations ahead of the Annual Plan being finalised in June 2022. Further advice on this will be presented to Council on 18 May 2021.

18.  Detailed capital project lists are included in each activity section in the Draft Annual Plan attached in Appendix 1.

Graph 1: Capital investment plan, comparison of DAP with LTP

Borrowing

19.  The change in the capital programme results in a corresponding adjustment in the level of borrowings we will require. Borrowing levels are maintained within the limits set in our LTP financial strategy. Net debt is projected to peak in the DAP at $618M in 2028/29 compared to a projected peak in the LTP of $573M, largely due to the increased capital programme.

Graph 2: Projected net debt, comparison of DAP and LTP


Balanced budget

20.  The balanced budget position in 2022/23 is projected to be a $26.2M deficit compared to a deficit of $24.6M in the LTP. In the LTP we projected to achieve a balanced budget in 2028/29; we remain within this projected timeframe in this draft Annual Plan.

Graph 3: Projected balanced budget target, comparison of DAP and LTP

The Hutt City Council balanced budget target is defined as the Local Government (Financial Reporting and Prudence) Regulations 2014 definition, modified to exclude from the definition of revenue Waka Kotahi NZ Transport Agency’s Capital improvement subsidies, Infrastructure Acceleration Fund grants and central government COVID-19 Response and Recovery co-funding for Naenae Pool and Eastern Bays Shared Path.

Rates

21.  Council agreed to include a rates revenue increase in the draft Annual Plan 2022/23 which aligns with the Long-Term Plan 2021-2031, being an overall rates revenue increase of 5.9% together with a growth-related rates revenue component of 1.1%. The rates projections in table 2 is indicative modelling based on this decision of Council. 

22.  Affordability of rates is a key consideration of Council. The proposed rates rise equates to an average increase of $2.54 per week per household or an average increase of $132 per annum. Investment in our Three Waters infrastructure makes up about half ($65) of the average $132 per annum rise. The remaining $67 covers cost increases for all the other services provided (including transport, parks, community facilities, rubbish, recycling etc).


 

Table 2: Indicative rates impact for DAP by property category

Property Category

Capital Value

2021/22 Rates

2022/23 Rates

$ Change Annual

$ Change Weekly

Change Amount %

Average Residential

$630,000

$2,951

$3,083

$132

$2.54

4.5%

Average Commercial Central

$1,782,000

$15,119

$16,353

$1,234

$23.73

8.2%

Average Commercial Suburban

$1,644,000

$13,135

$14,230

$1,095

$21.05

8.3%

Commercial Queensgate (Includes assumed increase in value of $20M to reflect improvement works)

$315,000,000

$2,300,864

$2,660,276

$359,412

$6,911

15.6%

Average Rural (no water or wastewater)

$886,000

$1,954

$2,024

$70

$1.34

3.6%

Utilities

$3,000,000

$19,260

$20,856

$1,595

$30.68

8.3%

 

23.  Rates modelling has been updated for the latest rating database information up to the end of January 2022 including projected growth until 30 June 2022.

24.  Rating policy: the reduction in the residential portion of the total general rate from 62% to 61% in 2022/23 as agreed as part of the LTP and the corresponding increases in the commercial portions are included in the projected rates impacts.

25.  The 2021/22 rates for Queensgate are calculated on the current CV of $295M. An assumed estimated increase for Queensgate of $20M (total value $315M) for 2022/23 has been applied in the rating projections in table 2. We have very recently received advice from Quotable Value that the new value to be applied to Queensgate will be $320M. There remains a six week period where Queensgate can raise an objection. Modelling has not been updated to reflect this change in value for Queensgate as yet; this will be done for the final Annual Plan decisions of Council once the rates objection period has passed.


 

26.  Indicative modelling for the impact of rates changes by suburb is included in table 3 below.

Table 3: Indicative residential rates impact for DAP by suburb

Residential suburbs: average rateable value

Rateable value as at 1 July 2022

2021/2022 Rates

2022-2023 Rates

$ Change Annual

$ Change Weekly

Alicetown

$661,500

$3,032

$3,167

$135

$2.59

Avalon

$605,500

$2,888

$3,018

$130

$2.49

Belmont

$711,000

$3,160

$3,299

$139

$2.68

Boulcott

$736,500

$3,225

$3,367

$141

$2.72

Days Bay

$990,000

$3,878

$4,043

$164

$3.16

Eastbourne

$930,000

$3,724

$3,883

$159

$3.06

Haywards

$405,000

$2,371

$2,483

$112

$2.15

Hutt Central

$858,500

$3,540

$3,692

$152

$2.93

Korokoro

$786,000

$3,353

$3,499

$146

$2.81

Lowry Bay

$1,270,000

$4,600

$4,789

$189

$3.64

Manor Park

$580,000

$2,822

$2,950

$127

$2.45

Maungaraki

$688,000

$3,100

$3,237

$137

$2.64

Melling

$539,000

$2,717

$2,840

$124

$2.38

Moera

$506,000

$2,632

$2,752

$121

$2.32

Naenae

$493,500

$2,599

$2,719

$120

$2.30

Normandale

$661,000

$3,031

$3,166

$135

$2.59

Petone

$754,000

$3,270

$3,413

$143

$2.75

Stokes Valley

$486,000

$2,580

$2,699

$119

$2.29

Taitā

$488,000

$2,585

$2,704

$119

$2.29

Wainuiomata

$461,000

$2,516

$2,632

$117

$2.24

Waterloo

$696,000

$3,121

$3,259

$138

$2.65

Woburn

$953,000

$3,783

$3,944

$161

$3.09

 

27.  An online “Rates Calculator” will be used to support the community engagement on the DAP. This will enable ratepayers to see the indicative impact on rates for their specific properties.

28.  COVID-19 continues to add uncertainties to Council operations and effect on ratepayers across the city.

29.  For those ratepayers experiencing hardship Council offers a range of support mechanisms for rates bills. This includes payment plans, rates rebates for those on a low income, and rates postponement for those experiencing financial hardship.

30.  There are a range of central government support mechanisms also in place including the COVID-19 support payment, COVID-19 leave support scheme, COVID-19 short-term absence payment, and COVID-19 tax relief.


Inflation

31.  Inflation rates used in the plan are the Local Government Cost Index (LGCI) prepared by BERL for local government. These rates are prepared annually and most recently received in October 2021.  The adjustors used are based on data to June 2021. Recent Consumer Price Index information indicates that higher than planned for inflation continues to be a risk. Statistics NZ reported the December 2021 CPI annual change result of 5.9%. 

32.  The inflation risks for Council are in part managed through having contracts in place for services and for projects/initiatives. This helps provide a level of certainty in the near to medium-term. As part of the DAP budgeting process officers worked hard to remain within the budgets set in the LTP. Officers found costs savings or re-prioritised within the base budget to balance rising costs and to retain the rates revenue increases as projected in the LTP. Maintaining the rates revenue increase at 5.9% as per the LTP (excluding the growth assumption) has been particularly challenging in the current inflationary environment.

33.  Specific financial risk factors identified through the budgeting process have been brought to Council for decision, for example the reserves maintenance and road maintenance contracts.

34.  The wider economic environment continues to carry a number of uncertainties and risks due to impacts COVID-19 is having. Officers will continue to monitor and provide advice on specific risks as they arise. 

Next Steps

35.  The Draft Annual Plan is attached as Appendix 1.  The engagement material is attached as Appendix 2. Engagement questions are attached as Appendix 3.

36.  The DAP and engagement material is undergoing its final stages of review.  If there are any late changes required to the documents as a result of this review and Council’s consideration, officers recommend that authority is delegated to Chief Executive to make minor editorial changes prior to the engagement beginning on 12 April 2022.

37.  Public engagement will be undertaken from 12 April to 3 May 2022. Analysis of responses will be progressed throughout the engagement period. An interim update will be provided half-way through the engagement period. A final report will be presented at the LTP/AP Subcommittee meeting on 18 May 2022.

38.  Officers will also prepare advice to Council for the subcommittee meeting on 18 May 2022 to reflect any new information available ahead of finalisation of the DAP in June 2022.

Climate Change Impact and Considerations

39.  The matters addressed in this report have been considered in accordance with the process set out in Council’s Climate Change Considerations Guide.

40.  The DAP directly responds to the need to achieve emission reductions, by embedding emission reductions in a range of initiatives. For example, Council’s investment in Naenae Pool includes that the new building would not use natural gas for heating and instead utilise alternative low-carbon energy sources. The DAP also includes a number of projects to reduce emissions, including the decarbonisation of Council facilities (including pools and the Dowse).

Consultation

41.  Extensive consultation is not required, as this DAP aligns with the direction set in the LTP. Council has previously agreed to a light-touch engagement. This will consist of an online survey with social media support, accompanied by a short, printed document to all households in Lower Hutt.

42.  While formal engagement is not required, it is still important for Council to communicate with residents about the progress being made on the LTP and the work planned for the year ahead. 

43.  A short survey will be the main form of collecting feedback from residents on the DAP, hosted on our engagement website (Bang the Table). Officers are progressing a digital-first engagement approach, allowing us to engage with a broad range of stakeholders in an effective and efficient way. A digital-first approach is also prudent given the potential impact of COVID‑19 and will allow us to continue with engagement regardless of the COVID‑19 situation at the time.   

44.  Officers recognise that a digital first approach must also be digitally inclusive. This means supplementing digital efforts with traditional engagement methods. For this reason, we propose to print and distribute a short engagement document to households which will direct readers to the online survey, or to their nearest Council facility where they can access the survey with the support of Council staff if needed.  

45.  Alongside the online survey and printed document, officers will again be hosting an online “Rates Calculator” where residents can enter their address to find specific information about how the proposed rates changes affect their property. Links to this calculator will be included in the survey, and the printed document will also direct readers to where they can find this tool online.

Legal Considerations

46.  The most relevant legislation includes the Local Government Act 2002, Local Government (Rating) Act 2002 and the Rating Valuations Act 1998. The documents referenced in this report have been prepared to meet the legislative requirements.

47.  Under Section 95(2A) of the Local Government Act 2002, if the proposed Annual Plan does not include significant or material differences from the content of the LTP for the financial year to which the proposed Annual Plan relates then Councils can choose not to formally consult.

48.  Council’s Significance and Engagement Policy:

·    sets out the general approach Council will take to determine the significance of proposals and decisions relating to issues, assets or other matters; and

·    provides clarity about how and when communities can expect to be engaged in decisions about different matters depending on the degree of significance Council and its communities attach to those matters.

49.  This policy explains Council’s approach to determining the significance or materiality of a decision and lists the thresholds, criteria and procedures that Council and its community will use in the assessment.

50.  A decision about budgets, assets and other matters is significant if it will mean a material departure from existing policy. A difference or variation is material if it could, itself or in combination with other differences, influence the decisions or assessments of those reading or responding to the engagement document.

51.  Decisions made affecting the Annual Plan are not considered a material departure from our Long Term Plan 2021-2031.

Financial Considerations

52.  Financial considerations associated with the DAP and engagement material have been addressed in the report.

Appendices

No.

Title

Page

1

Appendix 1 - Draft Annual Plan 2022-2023

18

2

Appendix 2 - Draft Annual Plan Engagement Material

170

3

Appendix 3 - Engagement Questions

172

4

Appendix 4 - Previous Budget decisions for Draft Annual Plan 2022-2023

173

     

 

 

Author: Daniel Koenders

Manager Financial Strategy & Planning

 

Author: Amy Dowdle

Senior Communications Advisor

 

Reviewed By: Jenny Livschitz

Group Chief Financial Officer

 

Reviewed By: Jarred Griffiths

Director Strategy and Engagement

 

Approved By: Jo Miller

Chief Executive

 


Attachment 1

Appendix 1 - Draft Annual Plan 2022-2023

 

























































































































































Attachment 2

Appendix 2 - Draft Annual Plan Engagement Material

 



Attachment 3

Appendix 3 - Engagement Questions

 


Attachment 4

Appendix 4 - Previous Budget decisions for Draft Annual Plan 2022-2023