Agenda of Annual Plan Council

Annual Plan Council

29 January 2019

An Overview of the Draft Budgets for 2019/20

Department: Finance

EXECUTIVE SUMMARY

1 The purpose of this report is to provide an overview of the draft budgets for the Annual Plan 2019/20, effectively ‘year 2’ of the 10 year plan 2018-28 and outlines the proposed community engagement on the draft Annual Plan.

2 The draft budgets for 2019/20 include an overall rate increase of 5%. This is in line with the limit set in the Financial Strategy.

3 Maintenance costs have increased, reflecting increased costs arising from contracts, the need to address maintenance of some facilities and additional testing, inspections and treatment in Three Waters.

4 Consumable and general costs have increased providing for the establishment of a Project Management Office, funding for Waste Futures and additional ICT costs.

5 Personnel costs have increased reflecting a number of factors including an allowance for in-sourcing of services and replacing consultants/contractors with staff. The increase provides additional support for the delivery of operational and capital projects, boosts risk and compliance roles across the organisation, and corrects the Aquatic Services budget. A number of these increases are fully cost recoverable or offset by savings in other areas of the budget.

RECOMMENDATIONS

That the Council:

a) Adopts the draft 2019/20 operating budget for the DCC Overall as shown/amended at Attachment A for the purposes of developing the Annual Plan 2019/20 and engaging with the community.

b) Considers the proposed approach to engaging with the community on the draft budgets for 2019/20.

BACKGROUND

6 As part of developing the 10 year plan, the Council set out the important issues and choices facing the Council and the Council’s preferred options. Over 5,500 items of feedback were received during the formal consultation period.

7 The Council adopted an ambitious 10 year plan, including investments in a new bridge to connect the city with the waterfront and upgrades of the central city and tertiary areas. At the same time the Council’s budgets provided for the increased costs of the day to day activities to keep the city safe and well maintained, and funded major projects to alleviate the increasing risks of flooding and improve the transport network.

8 The proposed expenditure, debt and rates increase is in line with the limits set out in the Council’s Financial Strategy.

DISCUSSION

Draft operating budget

9 The draft operating budget for 2019/20 provides for the day-to-day running of all the activities and services the Council provides such as cleaning the streets and mud tanks, mowing the lawns, checking buildings are safe, providing clean drinking water and the libraries and museums around the city. The draft budget includes operating expenditure of $311.815 million in the next financial year. The draft operating budget for the Council overall is provided at Attachment A.

10 Each of the Council’s group of activities has developed a draft operating budget. The amount each group will receive from rates or other funding sources and the expected costs of delivery are explained in the Group operating budget reports.

11 There are no changes to levels of services proposed in the draft budget.

Revenue

12 Overall rates revenue has increased by $7.442 million, which is 5% higher than 2018/19. This rates increase is in line with the limit of 5% within the Financial Strategy.

13 The draft budget shows an increase in external operating revenue of $21.098 million. This includes income from New Zealand Transport Agency (NZTA), as well as fees and charges.

14 Fees and charges have been increased by 3% in most cases. There are exceptions to this, for example where the fee is set by legislation. There has been no increase in fees for Aquatic Services. The draft budget includes a proposed increase for on-street parking meters. Details of the proposed fees and charges are included and explained in the Group budget reports.

15 Increased development activity across Dunedin has supported an increase in external revenue in Building Services and Resource Consents, as well as recovering expenditure relating to staff advice on plans from developers in Transport and 3 Waters.

16 The draft budget includes an increase in external capital revenue of $14.289 million. This relates to the capital expenditure programme for Transport projects. The level of NZTA funding is expected to reduce in subsequent financial years as transport projects such as the Peninsula Connection and LED streetlights are completed.

Expenditure

17 The draft budget shows an increase in personnel costs of $4.959 million, 8%. This increase incorporates a general increase across all staff salaries, a reduction in the vacancy allowance budget, an allowance for incremental steps and an increase in full time equivalent staff (FTE). Where appropriate, the costs for staff in infrastructure teams delivering capital projects have been ‘capitalised’.

18 The increased staffing allows for in-sourcing of services, provides for the delivery of operational and capital projects, boosts risk and compliance roles across the organisation, corrects an earlier error in the Aquatic Services budget, and replaces consultants and operating budgets with staff. Some of the roles are fixed term and some are fully cost recoverable or offset by savings in other areas of the budget. The key changes in staffing include:

a) In-sourcing services – Additional FTE have been included in Building Services to allow for in-sourcing of building consents work, to manage the increase in volume of building consents, building inspections and code of compliance certificates. This responds to earlier discussions that DCC should become a net ‘receiver’ of building consent processing from other councils rather than outsourcing this work. The increased FTE also supports a cadet programme to address the current and future resourcing demand. The additional costs are fully recovered by external revenue. (9 FTE)

b) Cost recovery – Biennial staffing for the Masters Games of 3 FTE and for the General Manager DCHL are fully recoverable from external sources. (4 FTE)

c) Operational saving – Additional staff in Community Development and Enterprise Dunedin are offset by savings in operational budgets. (2 FTE)

d) Replacing consultants – Additional staff in Property replace contractors with permanent staff. The Property Services Group now consists entirely of permanent DCC staff. (3.5 FTE)

e) Project management – Internal secondments provide dedicated staffing to progress the South Dunedin Hub and South Dunedin futures projects. (2 FTE)

f) Project delivery – Additional staff in Transport and BIS support the Council to deliver capital and operational projects such as LED streetlights and a document management system. (5 FTE)

g) Risk and compliance - Additional resourcing has been included to address health and safety risks in the Botanic Garden. Resourcing has been increased in procurement, risk and compliance due to the increase in volume of the capital programme and day to day services. (4.6 FTE)

h) Service delivery – additional staffing has been included to ensure the ongoing delivery of day to day services and operational support. This includes a number of part time increases in positions in areas such as Parks and Recreation. (3 FTE)

i) Budget correction – The Aquatic Services budget has been adjusted to reflect actual staffing levels at the facilities, incorrectly budgeted in previous years. In addition to salaried staff, the budget has been developed using a daily roster for each pool and each function within Moana Pool. (8 FTE)

19 Operations and maintenance costs have increased by $4.524 million, 7%. The main increases are due to:

a) Increased costs for maintenance contracts in transport and parks and reserves including monitoring the delivery of contracts;

b) Increased maintenance of Council buildings and Housing, part of the focus on catching up on deferred maintenance;

c) Improved water quality and wastewater process testing, increased CCTV inspection for wastewater and stormwater networks and increased water treatment costs.

d) Software previously owned by Council now being delivered as a hosted service.

e) Increased community road safety project funding.

20 Occupancy and property-related costs such as rates, insurance and energy have increased by $262k, 1%.

21 Consumable and general costs have increased by $7.210 million, 37%. The main increases are due to:

a) Funding for a project management office (PMO). The PMO will provide an efficient and consistent approach to plan, manage and deliver significant capital projects. It will also provide certainty to the construction market on the programme of capital projects so they can be resourced effectively. This funding is an interim measure while internal capacity and capability to deliver this in-house is developed.

b) Project management, review, design and engagement on Waste Futures to consider future options for kerbside collection, landfill and resource recovery facilities, as well as the waste management and minimisation plan.

c) Planning work related to the central city, tertiary, bridge and cycling projects.

d) Additional ICT costs for cyber security and software licensing such as document management.

e) An allowance for Ocean Beach consultancy and other 3 waters compliance costs.

f) Planning and policy consultants to support the delivery of the wider Parks and Recreation plan.

g) Scoping, design, audits and travel demand work for safety and community road safety projects, as well as additional funding for maintenance audits.

h) Civic costs associated with running the local body election as well as elected member costs.

22 Depreciation has increased by $5.598 million, 9% reflecting the impact of the latest revaluations as well as the capital expenditure programme.

Draft capital budget

23 The 10 year plan 2018-28 capital budget provides for replacing existing assets and infrastructure, meeting additional demand (including growth) and improving some levels of service. The total capital programme included in the draft budget is $111 million for the 2019/20 year. This is an increase from the $89.160 million in the 2019/20 year of the 10 year plan. The draft capital budget for 2019/20 for Roading and Footpaths, for example, has been increased from $46.487 million to $58.871 million. This new budget incorporates updates to the LED streetlight project and timing changes to more accurately reflect the capacity to deliver some projects. The draft budget for Three Waters reflects a timing change to Stormwater capital by accelerating $3.500 million of funding to address watercourse issues in 2019/20.

24 Given the increased level of delivery of the capital programme, a full review of the draft capital budget and timing for projects will be undertaken in time for Council consideration during the Annual Plan deliberations in May. Forecast indicates that we Council is likely to spend $85.000 million this year on capital works, which is a significant increase on past years and evidence that the DCC is catching up on maintenance and renewals.

Comparison with 10 year plan

25 The 2019/20 budget is the second year of the 10 year plan. Due to the nature of forecasts, a number of assumptions have changed since the 10 year plan was developed and there are some differences.

a) External revenue is higher than forecast mainly due to the additional revenue from NZTA and increased parking fees.

b) Operational costs are higher than forecast. The reasons for this are explained in the sections above.

c) Interest costs are lower than forecast primarily due to a reduced interest rate assumption. This saving has been partially offset by term loans being drawn down earlier as a result of the changes in the timing of the capital programme. Debt levels remain within the limits set in the financial strategy.

d) Depreciation is higher than forecast due to the increase in valuation for infrastructure assets.

e) The draft capital budget includes the updates agreed by the Council in October 2018 and timing changes in Transport and Three Waters to more accurately reflect the capacity to deliver some projects.

Community engagement

26 The proposed updates made to the draft budgets for the 2019/20 year are not viewed as significant or material in terms of the significance and engagement policy, as they are in line with ‘year 2’ of the 10 year plan 2018-28 and are within the limits of our Financial Strategy.

27 Local authorities are not required to consult on Annual Plans if the plan “does not include significant or material differences from the content of the long term plan for the financial year to which the proposed annual plan relates”.

28 While we are not required to run a Special Consultative Procedure, it is proposed to carry out a community engagement process in March and April 2019 to inform the community on the content of the draft budgets and to provide opportunities for feedback.

29 The focus of the community engagement will be on:

· Describing any differences in draft budgets for 2019/20, including reasons for the differences and why they are not considered significant or material;

· Reminding the community about the activities and projects that were included in the 10 year plan 2018-2028 and continue to be included in the draft budget; and

· Foreshadowing the likelihood that a fuller consultation process will be undertaken for the Annual Plan 2020/21 when waste futures, short term visitor accommodation rating and social housing will need to be considered.

30 Opportunities for community feedback on the draft budgets will be confirmed in a subsequent report. The proposed community engagement activities will include:

· Information sent to every Dunedin household;

· Councillor face-to-face sessions open to all of the community;

· Social media through Facebook and Twitter;

· Networking with communities through Community Boards and other stakeholder groups; and

· Web information and feedback process (as well as hard copy).

31 Annual Plan hearings have been tentatively scheduled for the week beginning 6 May 2019, should Council wish to conduct hearings.

32 All of the community feedback and an analysis of the feedback will be provided to the Council for its consideration at the Annual Plan deliberations in late May 2019.

NEXT STEPS

33 If Council agree to the proposed approach for community engagement, staff will develop the consultation document, plan the various community engagement events and report back to Council prior to the consultation beginning. Hearings have been scheduled for early May 2019 with deliberations scheduled for the end of May 2019.

34 The timing of the capital programme for 2019/20 will be reviewed to take into account the increased delivery of projects. The re-phased programme will be presented for consideration during the deliberations.

Signatories

Author:	Carolyn Allan - Senior Management Accountant
Authoriser:	Sue Bidrose - Chief Executive Officer

Attachments

	Title	Page
⇩a	Overall Council Draft Operating Budget	28

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

The development of the Annual Plan 2019/20 enables democratic local decision making and action by, and on behalf of communities; and meets the current and future needs of the Dunedin communities for good quality public services in a way that is most cost effective for households and businesses.

Fit with strategic framework

	Contributes	Detracts	Not applicable
Social Wellbeing Strategy	☒	☐	☐
Economic Development Strategy	☒	☐	☐
Environment Strategy	☒	☐	☐
Arts and Culture Strategy	☒	☐	☐
3 Waters Strategy	☒	☐	☐
Spatial Plan	☒	☐	☐
Integrated Transport Strategy	☒	☐	☐
Parks and Recreation Strategy	☒	☐	☐
Other strategic projects/policies/plans	☒	☐	☐

The Annual Plan 2019/20 contributes to all of the objectives and priorities of the strategic framework as it describes the Council’s activities; the community outcomes; and provides a long term focus for decision making and coordination of the Council’s resources, as well as a basis for community accountability.

Māori Impact Statement

The Annual Plan 2019/20 provides a mechanism for Māori to contribute to local decision-making.

Sustainability

The Annual Plan 2019/20 contains content regarding the Council’s approach to sustainability. Major issues and implications for sustainability are discussed in the Infrastructure Strategy and financial resilience is discussed in the Financial Strategy.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides an update on the development of the Annual Plan 2019/20.

Financial considerations

The financial implications of the draft budgets are discussed in this report, as well as the Group budget reports.

Significance

The draft budgets are considered to be of low significance given that there are currently no material or significant changes from the content of the 10 year plan 2018-2028 for the 2019/20 year.

Engagement – external

The content of the Annual Plan 2019/20 is of interest to the community and there will be engagement on the draft budgets and content of the draft Annual Plan 2019/20.

Engagement - internal

Staff and managers from across the Council have been involved in the development of the draft budgets.

Risks: Legal / Health and Safety etc.

Refer to the group budget reports and options reports for specific risks considered in the development of the draft budgets.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

Projects identified in Community Board Plans have been considered in the development of the draft budgets; and Community Boards will be involved in the development of the Annual Plan 2019/20.

Annual Plan Council

29 January 2019

Three Waters - 2019/20 Draft Budget

Department: 3 Waters

EXECUTIVE SUMMARY

1. This report provides an overview of the draft 2019/20 budgets for the Three Waters Group, and includes the following (legislatively mandated) groups of activities:

· Water supply

· Sewerage and sewage (Wastewater)

· Stormwater.

RECOMMENDATIONS

That the Council:

a) Adopts for the purposes of developing the Annual Plan 2019/20 and engaging with the community:

i) The draft 2019/20 operating budget for Three Waters as shown/amended at Attachment A.

ii) The draft 2019/20 fees and charges schedules for Water and Wastewater as shown/amended at Attachment B.

Operating Budget

Revenue

External revenue

2. External revenue has increased by $387k, 6% due to an increase in water charges and developer recoveries. The Council will be recovering expenditure relating to staff advice on resource consent applications from developers.

Expenditure

Personnel costs

3. Personnel costs have decreased by $218k, -3%. This incorporates a general salary increase and a regrading of some positions. These increases are offset by reductions because some staff costs are now charged directly to capital projects and 2.0 full time equivalent staff have been transferred to Business Information Services.

Operations and maintenance

4. Operations and maintenance costs have increased by $1.168 million, 11%. The main increases are due to improved water quality testing of $297k, increased CCTV inspection for the stormwater and wastewater networks of $416k, improved wastewater process testing of $169k and increased water treatment chemicals of $285k.

Occupancy costs

5. Occupancy costs have increased by $527k, 5% primarily due to increased energy costs of $199k and insurance of $163k.

Consumables and general costs

6. Consumables and general costs have increased by $309k, 26% which includes an allowance for Ocean Beach consultancy, and allowance for managing watercourse complaints and compliance costs.

Internal charges

7. Internal charges have increased by $450k, 11% primarily due to sludge disposal costs at the landfill.

Depreciation

8. Depreciation has increased by $3.492 million, 14% reflecting the 30 June 2018 revaluation of the 3 waters network.

Fees and charges

9. Some fees and charges for activities in the Three Waters Group have increased:

a. City-wide unit rates for wastewater are calculated on a formula for trade waste charges, using budgeted volume and cost information.

b. The tariff for water has been increased by 2.6% to $1.64 per cubic metre. This is based on cost recovery for water supply.

10. Fees for annual water meter rental charges have not changed as supply fees are based on cost recovery of metered supply and include a component for the cost of meter replacement.

11. A copy of the fees schedule for Water Supply and Waste Water is provided at Attachment B.

Level of service

12. There are no changes proposed to the levels of service, performance measures and targets stated in the 10 year plan 2018-28 for the Three Waters Group in the 2019/20 year.

Signatories

Author:	Tom Dyer - Group Manager 3 Waters
Authoriser:	Simon Drew - General Manager Infrastructure Services

Attachments

	Title	Page
⇩a	Three Waters - Draft 2019/20 Operating Budget	33
⇩b	Three Waters - Draft 2019/20 Fees and Charges Schedule	34

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This report enables democratic local decision making and action by, and on behalf of communities; and meets the current and future needs of the Dunedin communities for good quality local infrastructure in a way that is most cost effective for households and businesses.

Fit with strategic framework

	Contributes	Detracts	Not applicable
Social Wellbeing Strategy	☒	☐	☐
Economic Development Strategy	☐	☐	☐
Environment Strategy	☒	☐	☐
Arts and Culture Strategy	☐	☐	☐
3 Waters Strategy	☒	☐	☐
Spatial Plan	☐	☐	☐
Integrated Transport Strategy	☐	☐	☐
Parks and Recreation Strategy	☐	☐	☐
Other strategic projects/policies/plans	☒	☐	☐

The activities the Three Waters Group primarily contribute to the objectives and priorities of the above strategies.

Māori Impact Statement

The draft budgets provide for ongoing improvements to water quality and water management. There is iwi engagement on a case-by-case basis as projects are developed and implemented.

Sustainability

Major issues and implications for sustainability are discussed and considered in the 50 year Infrastructure Strategy and financial resilience is discussed in the Financial Strategy.

10 year plan/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for Three Waters for inclusion in the Annual Plan 2019/20.

Financial considerations

The financial considerations are detailed in the report.

Significance

Significance will be considered in the development of the Annual Plan 2019/20.

Engagement – external

There has been no external engagement in developing this budget.

Engagement - internal

Staff from across the Council have been involved in development of the draft budgets.

Risks: Legal / Health and Safety etc.

There are no known risks.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

Projects identified in Community Board Plans have been considered in the development of the draft budgets. Boards will be involved in the development of the Annual Plan 2019/20.

Annual Plan Council

29 January 2019

Waste Management - 2019/20 Draft Budget

Department: Waste and Environmental Solutions

EXECUTIVE SUMMARY

1 This report provides an overview of the draft 2019/20 budgets for the Waste Management Group and includes Waste and Environmental Solutions activities.

RECOMMENDATIONS

That the Committee:

a) Adopts for the purposes of developing the Annual Plan 2019/20 and engaging with the community:

i) The draft 2019/20 operating budget for the Waste Management Group as shown/amended at Attachment A.

ii) The draft 2019/20 fees and charges schedules for Waste and Environmental Solutions as shown/amended at Attachment B.

OPERATING BUDGET

Revenue

External revenue

2 External revenue has increased by $420k, 3%. It is expected that around 10,000 extra tonnes of waste will be disposed at the Green Island landfill, and with contract price changes this results in $1.119 million additional revenue from disposal charges. This has been offset by a reduction in waste minimisation returns of $180k and a reduction in refuse bag sales of $500k due to increased competition in the collection of domestic waste. The loss in refuse bag sales revenue has a corresponding decrease in refuse bag collection costs.

Internal revenue

3 Internal revenue has increased by $411k, 42% due to higher volumes for sludge waste disposal from waste treatment plants.

Expenditure

Operations and maintenance

4 Operations and maintenance costs have increased by $370k, 4%. The main increase is due to $320k increased contract prices and tonnage at the landfill. Additional contracted services for waste strategy initiatives of $164k and increased contract costs for recycling collection of $262k are somewhat offset by a reduction in refuse bag collection costs of $446k.

Consumables and general costs

5 Consumables and general costs have increased by $1.227 million, 120%. The main increase is for costs related to the Waste Futures project of $1.100 million. This includes costs for project management, review, design and engagement on future options for kerbside collection, landfill and resource recovery facilities as well as the waste management and minimisation plan. It includes $140k legal and consenting costs associated with extending the Green Island landfill consent.

6 The Ministry for Environment levies at the Green Island landfill has increased by $93k in line with expected tonnage.

Fees and charges

7 Fees and charges have been categorised as ‘inclusive’ or ‘exclusive’ of ETS costs. A copy of the fees schedule for the Waste Management Group is provided at Attachment B. The inclusive landfill charges include costs associated with ETS as these general waste loads contribute to landfill emissions. All waste to landfill attracts the Ministry for the Environments Waste Levy, which is currently set at $10 per tonne.

8 There has been no increase to domestic landfill fees and charges. Fees for compost at the Green Island Landfill, bokashi products and recycling bins have been included on the schedule for completeness.

Service Levels

9 There are no changes proposed to the levels of service, performance measures and targets stated in the 10 year plan 2018-28 for the Waste Management Group in the 2019/20 year.

10 A review of both city and residential kerbside collection services is currently underway as part of the Waste Futures project. This review will inform the design of future collection services which may commence on 1 July 2022. The review will consider Council and community expectations and provide value for money.

Signatories

Author:	Chris Henderson - Group Manager Waste and Environmental Solutions
Authoriser:	Simon Drew - General Manager Infrastructure Services

Attachments

	Title	Page
⇩a	Waste Management Group - Draft 2019/20 Operating Budget	40
⇩b	Waste and Environmental Solutions - Draft 2019/20 Fees and Charges Schedule	41

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

Fit with strategic framework

	Contributes	Detracts	Not applicable
Social Wellbeing Strategy	☒	☐	☐
Economic Development Strategy	☒	☐	☐
Environment Strategy	☒	☐	☐
Arts and Culture Strategy	☐	☐	☒
3 Waters Strategy	☒	☐	☐
Spatial Plan	☒	☐	☐
Integrated Transport Strategy	☒	☐	☐
Parks and Recreation Strategy	☐	☐	☒
Other strategic projects/policies/plans	☒	☐	☐

The activities of Waste Management primarily contribute to the objectives and priorities of the above strategies.

Māori Impact Statement

There will be ongoing engagement with Tangata Whenua on the Waste Futures Project.

Sustainability

Major issues and implications for sustainability will be discussed and considered in the 50 year Infrastructure Strategy and financial resilience is discussed in the Financial Strategy.

10 year plan/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for the Waste Management Group for inclusion in the Annual Plan 2019/20.

Financial considerations

The financial considerations are detailed in the report.

Significance

Significance will be considered in the development of the Annual Plan 2019/20.

Engagement – external

There has been no external engagement in developing this budget.

Engagement - internal

Staff from across the Council have been involved in development of the draft budgets.

Risks: Legal / Health and Safety etc.

There are no known risks.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

Projects identified in Community Board Plans have been considered in the development of the draft budgets. Boards will be involved in the development of the Annual Plan 2019/20.

Annual Plan Council

29 January 2019

Regulatory Services - 2019/20 Draft Budget

Department: Customer and Regulatory Services

EXECUTIVE SUMMARY

1 This report provides an overview of the draft 2019/20 budgets for the Regulatory Services Group, and includes the following activities:

· Building Services

· Compliance Solutions (includes Alcohol Licensing, Animal Services and Environmental Health)

· Parking Operations

· Parking Services (enforcement).

RECOMMENDATIONS

That the Committee:

a) Adopts for the purposes of developing the Annual Plan 2019/20 and engaging with the community:

i) The draft 2019/20 operating budget for the Regulatory Services Group as shown/amended at Attachment A.

ii) The draft 2019/20 fees and charges schedules for Alcohol Licensing, Animal Services, Building Services, Environmental Health, Parking Operations and Parking Services as shown/amended at Attachment B.

Operating Budgets

Revenue

External Revenue

2 External revenue has increased by $1.590 million, 10%. The main increase of $976k is due to an anticipated increase in the volume of Building Services fees for building consents processing, building inspections and code of compliance certificates.

3 Increased revenue is also budgeted from Parking Services and Parking Operations of $685k due to enhanced enforcement, an increase in occupancy of parking facilities and an increase in off-street leased parking fees.

Expenditure

Personnel costs

4 Personnel costs have increased by $907k, 13%. This incorporates a general salary increase and an increase in full time equivalent (FTE) staff.

5 FTE in Building Services has increased by nine to allow for in-sourcing of building consents work (the Council becomes a net ‘receiver’ of building consent processing from other councils rather than outsourcing this work) as well as an increase in volume of building consents, building inspections and code of compliance certificates. The increased FTE also supports a cadet programme to address the current and future resourcing demand in Building Services. The additional personnel costs are offset by increased revenue.

Fees and charges

6 Fees and charges for activities in the Regulatory Services Group have generally been increased by 3% (with some rounding), unless set by statute. This includes dog registration fees. Exceptions to this are highlighted below. A copy of the group fees schedule for the Regulatory Services Group is provided at Attachment B.

7 The model for building consent fees has been revised and the fee structure has been reformatted for 2019/20 and are set out in Schedule B of the Regulatory Services Fees and Charges.

8 Exceptions in Building Services include:

a) New fees have been included for information/property searches, vetting charges, advice from senior staff and fees relating to earthquake prone buildings.

b) The fees reflect an increase in the hourly rate for administration work/officers from $96.70 to $105.00. Building inspection fees reflect an hourly rate increase from $175.70 to $185.00.

c) The fee for a ‘copy of consent documents required for inspections’ has increased from $33.00 to $52.50, reflecting half an hour of the new administration hourly rate. This fee is for providing documents such as electronic reports for building consents, code compliance certificates and residential plans.

d) Fees for site evaluations, extension of time applications and to relocate hot water cylinders have been deleted as they are no longer used.

9 Animal Services fees for impounding dogs, permits to keep more than one dog and implanting a microchip have not increased so that owners are not discouraged from claiming dogs from the pound, applying for permits and having microchips implanted.

10 In Environmental Health, the fee per day for permanent food street stalls has decreased from $34.00 to $26.00 and will be charged monthly. The operator will not be disadvantaged and administration will be simplified.

11 Commentary on proposed changes to fees for on-street parking areas is provided in the Roading and Footpaths Group report.

Service Levels

12 There are no changes proposed to the levels of service, performance measures and targets stated in the 10 year plan 2018-28 for the Regulatory Services Group in the 2019/20 year.

13 Staff are reviewing the most appropriate place to budget for parking revenue and considering shifting the responsibility for managing this to Transport. Any budget shifts will occur prior to 1 July 2019.

Signatories

Author:	Adrian Blair - Group Manager Customer and Regulatory Services
Authoriser:	Simon Pickford - General Manager Community Services

Attachments

	Title	Page
⇩a	Regulatory Services Group - Draft 2019/20 Operating Budget	47
⇩b	Regulatory Services Group - Draft 2019/20 Fees and Charges Schedule	48

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This report enables democratic local decision making and action by, and on behalf of communities; and meets the current and future needs of the Dunedin communities for good quality public services and regulatory functions in a way that is most cost effective for households and businesses.

Fit with strategic framework

	Contributes	Detracts	Not applicable
Social Wellbeing Strategy	☒	☐	☐
Economic Development Strategy	☐	☐	☐
Environment Strategy	☒	☐	☐
Arts and Culture Strategy	☐	☐	☐
3 Waters Strategy	☐	☐	☐
Spatial Plan	☐	☐	☐
Integrated Transport Strategy	☐	☐	☐
Parks and Recreation Strategy	☐	☐	☐
Other strategic projects/policies/plans	☒	☐	☐

The activities of the Regulatory Services Group primarily contribute to the objectives and priorities of the above strategies.

Māori Impact Statement

There are no known impacts for tangata whenua.

Sustainability

Major issues and implications for sustainability will be discussed and considered in the 50 year Infrastructure Strategy and financial resilience is discussed in the Financial Strategy.

10 year plan/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for Regulatory Services for inclusion in the Annual Plan 2019/20.

Financial considerations

The financial considerations are detailed in the report.

Significance

Significance will be considered in the development of the Annual Plan 2019/20.

Engagement – external

There has been no external engagement in developing this budget.

Engagement - internal

Staff from across the Council have been involved in development of the draft budgets.

Risks: Legal / Health and Safety etc.

There are no known risks.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

Projects identified in Community Board Plans have been considered in the development of the draft budgets. Boards will be involved in the development of the Annual Plan 2019/20.

Annual Plan Council

29 January 2019

Reserves and Recreational Facilities - 2019/20 Draft Budget

Department: Parks and Recreation

EXECUTIVE SUMMARY

1 This report provides an overview of the draft 2019/20 budgets for the Reserves and Recreational Facilities Group, and includes the following activities:

· Aquatic Services

· Dunedin Botanic Garden

· Cemeteries and Crematorium (Cemeteries)

· Parks and Reserves (Parks)

· Recreation Planning.

RECOMMENDATIONS

That the Council:

a) Adopts for the purposes of developing the Annual Plan 2019/20 and engaging with the community:

i) The draft 2019/20 operating budget for the Reserves and Recreational Facilities Group as shown/amended at Attachment A.

ii) The draft 2019/20 fees and charges schedules for Aquatic Services, Cemeteries and Crematorium and Parks and Reserves as shown/amended at Attachment B.

Operating Budgets

Expenditure

Personnel costs

2 Personnel costs have increased by $756k, 11%. The Aquatic Services budget has been adjusted to reflect actual staffing levels at the facilities, incorrectly budgeted in previous years. In addition to salaried staff, the budget has been developed using a daily roster for each pool and each function within Moana Pool. Additional resourcing has been included in the Botanic Garden to address health and safety risks and provide a consistent level of communication to visitors and users of the Botanic Garden.

Operations and maintenance

3 Operations and maintenance costs have decreased by $87k, 1%. The main reduction is due to transferring the DVML service level agreement payment for community access of $750k to Community Development and Events, and the event attraction payment of $400k to Enterprise Dunedin.

4 These reductions are offset by increased costs in the Parks and Cemeteries budgets for green space maintenance contracts of $205k, tree and sportsfield maintenance of $130k, hard surface maintenance of $190k, building maintenance of $130k, cemetery and crematorium maintenance of $126k and additional work for Te Rauone Reserve of $200k.

5 Service level agreement payments in Recreation Planning for the Edgar Centre and Surf Lifesaving have increased collectively by $123k.

Consumables and general costs

6 Consumables and general costs have increased by $301k, 29%. This is primarily for planning and policy consultants to support the delivery of the wider Parks and Recreation plan.

Grants and subsidies

7 Grants and subsidies have decreased by $208k, -25%. The Predator Free NZ grant has been reduced by $100k, as agreed by the Council as part of the 10 year plan 2018-28 and the Physio Pool underwriting of $100k has been removed.

Fees and charges

8 Fees and charges for Cemeteries and Parks have generally increased by 3% (with some rounding). There has been no increase in fees for Aquatic Services. A copy of the Reserves and Recreational Facilities fees schedule is provided at Attachment B.

Service Levels

9 There are no changes proposed to the levels of service, performance measures and targets stated in the 10 year plan 2018-28 for the Reserves and Recreational Facilities Group in the 2019/20 year.

10 Staff are reviewing the most appropriate place to budget for public toilets and considering shifting the responsibility for managing public toilets to Property Services. Any budget shifts will occur prior to 1 July 2019.

Signatories

Author:	Robert West - Group Manager Parks and Recreation
Authoriser:	Sandy Graham - General Manager City Services

Attachments

Title

Page

⇩a

Reserves and Recreational Facilities Draft 2019/20 Operating Budget

⇩b

Reserves and Recreational Facilities - Draft 2019/20 Fees and Charges Schedule

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This report enables democratic local decision making and action by, and on behalf of communities; and meets the current and future needs of the Dunedin communities for good quality local infrastructure and public services in a way that is most cost effective for households and businesses.

Fit with strategic framework

	Contributes	Detracts	Not applicable
Social Wellbeing Strategy	☒	☐	☐
Economic Development Strategy	☐	☐	☐
Environment Strategy	☒	☐	☐
Arts and Culture Strategy	☐	☐	☒
3 Waters Strategy	☐	☐	☒
Spatial Plan	☐	☐	☒
Integrated Transport Strategy	☒	☐	☐
Parks and Recreation Strategy	☒	☐	☐
Other strategic projects/policies/plans	☒	☐	☐

The activities of the Reserves and Recreational Facilities Group primarily contribute to the objectives and priorities of the above strategies.

Māori Impact Statement

There are no known impacts for tangata whenua.

Sustainability

Major issues and implications for sustainability will be discussed and considered in the 50 year Infrastructure Strategy and financial resilience is discussed in the Financial Strategy.

10 year plan/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for Reserves and Recreational Facilities for inclusion in the Annual Plan 2019/20.

Financial considerations

The financial considerations are detailed in the report.

Significance

Significance will be considered in the development of the Annual Plan 2019/20.

Engagement – external

There has been no external engagement in developing this budget.

Engagement - internal

Staff from across the Council have been involved in development of the draft budgets.

Risks: Legal / Health and Safety etc.

There are no known risks.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

Projects identified in Community Board Plans have been considered in the development of the draft budgets. Boards will be involved in the development of the Annual Plan 2019/20.

Annual Plan Council

29 January 2019

Economic Development - 2019/20 Draft Budget

Department: Enterprise Dunedin

EXECUTIVE SUMMARY

1 This report provides an overview of the draft 2019/20 budgets for Economic Development, and includes the following activities:

· Destination Dunedin

· Economic Development

· Dunedin i-Site Visitor Centre (Visitor Centre).

RECOMMENDATIONS

That the Committee:

a) Adopts for the purposes of developing the Annual Plan 2019/20 and engaging with the community:

i) The draft 2019/20 draft operating budget for the Economic Development Group as shown/amended at Attachment A.

ii) The draft 2019/20 fees and charges schedules for Economic Development as shown/amended at Attachment B.

Operating Budgets

Revenue

External revenue

2 External revenue has decreased by $87k, -7%. This is a result of reduced partner funding for Study Dunedin and the NZ Consumer and Australia Trade/Consumer areas. This reduction in income is offset by a reduction in associated expenses.

Expenditure

Personnel costs

3 Personnel costs have increased by $103k, 4%. This incorporates a general salary increase and an increase in full time equivalent (FTE) of 0.5. Provision is made for a Consumer and Brand Marketing Advisor (offset by savings in operations and maintenance costs) and 0.5 FTE has been transferred from Enterprise Dunedin to the Ara Toi activity.

Operations and maintenance

4 Operations and maintenance costs have decreased by $44k, -2%. The main decrease is due to the scheduled reduction in Smart City funding of $100k and reduced expenditure due to reduction in partner funding revenue and the appointment of the Consumer and Brand Marketing Advisor. The reduction has been offset by the transfer from Reserves and Recreational Facilities of the DVML service level agreement payment for event attraction of $400k. The decrease is also attributed to recategorisation of expenses to the Consumables and General costs area.

Consumables and general costs

5 Consumables and general costs have increased by $192k, 22%. Expenses associated with attendance of tourism related events have been more accurately categorised resulting in increases in travel, subscriptions, registration fees, advertising/promotions and related reduction in other contracted services (which sits in the Operations and Maintenance area).

Fees and Charges

6 Fees and charges for Economic Development have not been changed. A copy of the fees schedule for Economic Development is provided at Attachment B.

Service Levels

7 There are no changes proposed to the levels of service, performance measures and targets stated in the 10 year plan 2018-28 for the Economic Development Group in the 2019/20 year.

Signatories

Author:	John Christie - Director Enterprise Dunedin
Authoriser:	Sue Bidrose - Chief Executive Officer

Attachments

	Title	Page
⇩a	Economic Development - Draft 2019/20 Operating Budget	71
⇩b	Economic Development - Draft 2019/20 Fees and Charges Schedule	72

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

Fit with strategic framework

	Contributes	Detracts	Not applicable
Social Wellbeing Strategy	☒	☐	☐
Economic Development Strategy	☒	☐	☐
Environment Strategy	☐	☐	☒
Arts and Culture Strategy	☒	☐	☐
3 Waters Strategy	☐	☐	☒
Spatial Plan	☐	☐	☒
Integrated Transport Strategy	☐	☐	☒
Parks and Recreation Strategy	☒	☐	☐
Other strategic projects/policies/plans	☒	☐	☐

The activities in the Economic Development Group primarily contribute to the objectives and priorities of the above strategies.

Māori Impact Statement

There are no known impacts for tangata whenua.

Sustainability

Major issues and implications for sustainability will be discussed and considered in the 50 year Infrastructure Strategy and financial resilience is discussed in the Financial Strategy.

10 year plan/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for the Economic Development Group for inclusion in the Annual Plan 2019/20.

Financial considerations

The financial considerations are detailed in the report.

Significance

Significance will be considered in the development of the Annual Plan 2019/20.

Engagement – external

There has been no external engagement in developing this budget.

Engagement - internal

Staff from across the Council have been involved in development of the draft budgets.

Risks: Legal / Health and Safety etc.

There are no known risks.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

Projects identified in Community Board Plans have been considered in the development of the draft budgets. Boards will be involved in the development of the Annual Plan 2019/20.

Annual Plan Council

29 January 2019

Libraries and Museums - 2019/20 Draft Budget

Department: Ara Toi

EXECUTIVE SUMMARY

1 This report provides an overview of the draft 2019/20 budgets for the Libraries and Museums Group, and includes the following activities:

· Ara Toi (a newly established activity to deliver the Ara Toi strategy)

· Dunedin Public Art Gallery (DPAG)

· Dunedin Public Libraries (Libraries)

· Olveston

· Otago Museum levy

· Toitū Otago Settlers Museum (Toitū), including the Dunedin Chinese Garden.

RECOMMENDATIONS

That the Committee:

a) Adopts for the purposes of developing the Annual Plan 2019/20 and engaging with the community:

i) The draft 2019/20 operating budget for the Libraries and Museums Group as shown/amended at Attachment A.

ii) The draft 2019/20 fees and charges schedules for Dunedin Public Art Gallery, Libraries, Olveston, Toitū Otago Settlers Museum and Dunedin Chinese Garden as shown/amended at Attachment B.

Operating Budgets

Expenditure

Personnel costs

2 Personnel costs have increased by $326k, 3%. The increase provides for a salary increase and an increase in full time equivalent staff (FTE) by 2.5 due to the transfer of 2.0 FTE from Community Development and Events and 0.5 FTE from Enterprise Dunedin.

Operations and maintenance

3 Operations and maintenance costs have increased by $163k, 13%. The main increases relate to DPAG conservation costs, libraries equipment repairs and supporting philanthropy workshop delivery. This has been offset by a reduction of Olveston ground maintenance costs, conservation costs at Toitū and no costs for the Chinese Garden 10 year celebrations.

Consumables and general costs

4 Consumable and general costs have increased by $156k, 13%. The main increases are for research and administration costs for Ara Toi and costs for visiting artists.

Grants and subsidies

5 The budget for the Otago Museum has increased by $142k, 3% to $4.3 million. This includes a general increase to the levy and the first of two annual grants of $76k towards the Otago Museum’s Tangata Whenua Gallery redevelopment as agreed by the Council as part of the 10 year plan 2018-28. The final year of the Discovery World grants of $75k were in 2018/19. There is a separate report on a funding request from the Otago Museum for Council’s consideration.

Depreciation

6 Depreciation has decreased by $245k, -14%. Depreciation is reduced in Libraries and Toitū by $422k due to equipment being fully depreciated. Olveston now incurs depreciation resulting in an increase of $164k.

Fees and charges

7 Some fees and charges for Olveston, DPAG, Toitū and Libraries have increased and others have remained the same, such as the Dunedin Chinese Garden. A copy of the fees schedule for the Libraries and Museums Group is provided at Attachment B.

Service Levels

8 There are no changes proposed to the levels of service, performance measures and targets stated in the 10 year plan 2018-28 for the Libraries and Museums Group in the 2019/20 year.

Signatories

Author:	Nick Dixon - Group Manager Ara Toi
Authoriser:	Simon Pickford - General Manager Community Services

Attachments

	Title	Page
⇩a	Libraries and Museums - Draft 2019/20 Operating Budget	76
⇩b	Libraries and Museums - Draft 2019/20 Fees and Charges Schedule	77

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This report enables democratic local decision making and action by, and on behalf of communities; and meets the current and future needs of the Dunedin communities for good quality public services in a way that is most cost effective for households and businesses.

Fit with strategic framework

	Contributes	Detracts	Not applicable
Social Wellbeing Strategy	☒	☐	☐
Economic Development Strategy	☒	☐	☐
Environment Strategy	☐	☐	☐
Arts and Culture Strategy	☒	☐	☐
3 Waters Strategy	☐	☐	☐
Spatial Plan	☐	☐	☐
Integrated Transport Strategy	☐	☐	☐
Parks and Recreation Strategy	☐	☐	☐
Other strategic projects/policies/plans	☒	☐	☐

The activities of the Libraries and Museums Group primarily contribute to the objectives and priorities of the above strategies.

Māori Impact Statement

There are no known impacts for tangata whenua.

Sustainability

Major issues and implications for sustainability will be discussed and considered in the 50 year Infrastructure Strategy and financial resilience is discussed in the Financial Strategy.

10 year plan/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for Libraries and Museums for inclusion in the Annual Plan 2019/20.

Financial considerations

The financial considerations are detailed in the report.

Significance

Significance will be considered in the development of the Annual Plan 2019/20.

Engagement – external

There has been no external engagement in developing this budget.

Engagement - internal

Staff from across the Council have been involved in development of the draft budgets.

Risks: Legal / Health and Safety etc.

There are no known risks.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

Projects identified in Community Board Plans have been considered in the development of the draft budgets. Boards will be involved in the development of the Annual Plan 2019/20.

Annual Plan Council

29 January 2019

Otago Museum Funding Request

Department: Ara Toi

EXECUTIVE SUMMARY

1 This report provides a summary of the Otago Museum’s request for an adjustment to the Museum’s 2019-20 Funding Levy to $4.838 million. The request is a 12% increase on the 2019 Budget.

2 The Museum has also requested that the DCC provide future annual Levy increases in line with inflation, as opposed to the annual 3% Funding Levy proposed for 2019-20. The Museum has further flagged, but not signalled a specific amount, for capital expenditure assistance on larger compliance projects and some gallery developments.

RECOMMENDATIONS

That the Committee:

a) Notes the Otago Museum’s funding request, correspondence and 2019-20 Draft Annual Plan.

b) Notes that staff will work with the Otago Museum on options for funding and report back to Council in time to inform deliberations for the Annual Plan.

BACKGROUND

3 The Otago Museum is one of Otago’s leading experiences for visitors and locals, with more than 350,000 visitors in the year 2017-18. The Museum’s vision is “to inspire wonder and curiosity about nature, culture and science in all people.”

4 The Museum’s strategic goals, as outlined in the Museum’s 2019-20 Draft Annual Plan, are to maintain a world-class collection; engage with community and stakeholders to inspire lifelong learning; and to business sustainability (including securing and future-proofing the Museum’s financial position and business model).

Otago Museum funding arrangement

5 The Otago Museum Trust Board is a legal entity established under the Otago Museum Trust Board Act (1996). This Act requires the DCC to provide two functions:

a) Serve as an appointment body and select four Board members to the Otago Museum Trust Board.

b) To make an annual payment to the Otago Museum (known as the Otago Museum Levy).

6 Schedule 2 of the Act provides an apportionment to the Museum by each contributing authority; Central Otago District Council; Clutha District Council; and Waitaki District Council. The DCC provides the remainder of the Levy, which generally amounts to over 90% of the annual local government funding contribution.

Current DCC funding for arts and culture

7 The table below shows the DCC’s grant history, current and year on year levels of funding for the Museum, and the rate of inflation.

Grant History	2015/16 Actual $000	2016/17 Actual $000	2017/18 Actual $000	2018/19 Actual $000	2019/20 Draft $000	% Incr. 5 Years
DCC Grant	3,924	3,924	4,001	4,111	4,253	8.4%
Annual Increase in DCC grant %		0.0%	2.0%	2.9% (2% plus 0.9% Clutha share)	3.5%	8.4% (7.5% excl. Clutha share)
CPI % (BERL 2018 Update)		1.4%	1.5%	1.7%	1.7%	6.3%

DISCUSSION

Museum’s funding request and financial position

8 The Museum is requesting a 12% Levy increase to $4.838 million, which the Museum believes will restore baseline funding to a level that covers the cost of core Museum operations including collections care and visitor services. The Museum plans to use a Levy increase to ensure continuation of a $400k surplus typically used to cover general operational capital expenditure. The surplus for this year has been exhausted due mainly to increased staffing costs and other factors at point 12 below.

9 It is of note that the Otago Museum Trust Board Act (1996) specifies contributing Councils must pay a Levy based on a budget adopted by the Museum's Board e.g. if a Levy increase is included and approved by the Board in the Museum’s 2019-20 Budget, then the DCC would be obliged to pay the increase unless the DCC gives notice in writing, objecting to the levies proposed. The Museum’s request to the DCC attaches its draft Annual Plan, which the Museum Board must finalise and adopt by 31 May 2019.

10 The table below shows the Museum’s expenditure history.

Operating Expenditure History	2015/16 Actual $000	2016/17 Actual $000	2017/18 Actual $000	2018/19 Actual $000	2019/20 Draft $000	% Incr. 5 Years
Personnel costs	4,174	4,514	4,821	5,003	5,116	22.6%
Other Expenditure	4,171	4,730	4,772	5,136	4,981	19.4%
Total Expenditure	8,345	9,244	9,593	10,139	10,097	21.0%

11 The Museum has also requested the DCC consider additional measures to an increase in the Levy:

a) Future Levy increases in line with inflation in each subsequent year.

b) The Museum has signalled a further request for capital expenditure assistance on larger compliance projects and some gallery developments, but has not specified an amount at this stage.

12 The Museum has set out the following factors contributing to its current financial position.

a) Increases in staffing costs.

b) An increase in the minimum wage.

c) Drawing on general reserves to fund capital expenditure.

d) Historically ‘frozen’ funding and no additional Levy increases.

13 The Museum’s financial position as at 30/6/18 includes $8.492 million of investment assets and no term debt.

14 The Museum has bequests that are tied to specific activities. There is some scope to look at a legal mechanism to utilise this tied funding that allows more flexibility to account for the Museum’s financial needs.

15 In the light of the challenging financial environment and repeated requests for funding uplifts staff see benefit in considering a higher level of ongoing engagement between the Museum and the DCC at an operational or officer level. There would also be merit in discussing significant funding decisions, such as major increases in payroll costs from the creation of new positions or anticipated capital expenditure requests. This would provide the DCC with a clearer picture of the Museum’s trading position against any impacts on the Council budget arising from future funding requests.

Long-term planning on Otago Museum's funding mechanism

16 The Museum’s recent public appeals for funding, and Clutha District Council’s decision in 2018 to pay only its legally required contribution, have prompted calls for the central government to revisit the prescribed statutory contributions by each authority. Detailed consultations between the DCC, other contributing authorities and the central government have not yet taken place. However, the Minister for Arts, Heritage and Culture has recently said they would be open to a local bill to address these issues.

17 In 2019, the Museum’s Trust has committed to developing a long-term Master Plan identifying national level sources of funding that may support the Master Plan.

NEXT STEPS

18 Staff will work with the Otago Museum on options and report back to Council in time to inform deliberations for the Annual Plan.

Signatories

Author:	Nick Dixon - Group Manager Ara Toi
Authoriser:	Sandy Graham - General Manager City Services

Attachments

	Title	Page
a	Otago Museum Draft Annual Plan 2019-2020(Confidential)
b	Correspondence from Otago Museum(Confidential)

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This report relates to providing a public service and it is considered good-quality and cost-effective.

Fit with strategic framework

	Contributes	Detracts	Not applicable
Social Wellbeing Strategy	☐	☐	☒
Economic Development Strategy	☐	☐	☒
Environment Strategy	☐	☐	☒
Arts and Culture Strategy	☒	☐	☐
3 Waters Strategy	☐	☐	☒
Spatial Plan	☐	☐	☒
Integrated Transport Strategy	☐	☐	☒
Parks and Recreation Strategy	☐	☐	☒
Other strategic projects/policies/plans	☒	☐	☐

The Otago Museum is supported by Council and supports the Arts and Culture Strategy.

Māori Impact Statement

There are no known impacts for tangata whenua.

Sustainability

There are potential long-term implications for the Otago Museum’s economic sustainability.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

There are no implications for the Long Term Plan.

Financial considerations

An increase to the Otago Museum’s 2019-20 Funding Levy would increase Council’s budgetary contribution to $4.838 million.

Significance

This decision is assessed to be of low significance in terms of the Council’s Significance and Engagement Policy.

Engagement – external

There has been no external engagement.

Engagement - internal

Relevant staff provided input into the implications of the Council’s request and correspondence.

Risks: Legal / Health and Safety etc.

There are no known or immediate health and safety risks. The Otago Museum Trust Board Act (1996) specifies that contributing Councils must pay the Levy set by the Otago Museum Board unless the Council lodges an objection with the Otago Museum Board (section 16(1)) of the Act. The Council will commence the objection process if it is decided not to pay an increased Levy in the future.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

There are no implications for Community Boards.

Annual Plan Council

29 January 2019

Property Services - 2019/20 Draft Budget

Department: Property

EXECUTIVE SUMMARY

1 This report provides an overview of the draft 2019/20 budgets for the Property Services Group, and includes the following activities:

· Housing

· Investment Property

· Commercial Property

· Operational Property

· Community Property

· Property Management

RECOMMENDATIONS

That the Committee:

a) Adopts for the purposes of developing the Annual Plan 2019/20 and engaging with the community:

i) The draft 2019/20 operating budget for the Property Services Group as shown/amended at Attachment A.

ii) The draft 2019/20 fees and charges schedule for Housing as shown/amended at Attachment B.

Operating Budgets

Expenditure

Personnel costs

2 Personnel costs have increased by $375k, 12%. The increase incorporates a general staff increase and structural changes that have occurred throughout the current 2018/19 financial year. These changes saw the replacement of contractors with permanent staff. The Property Services Group now consists entirely of permanent DCC staff.

Operations and maintenance

3 Operations and maintenance costs have increased by $944k, 18%. An increase of $478k in the housing portfolio is for additional planned and reactive maintenance, healthy home requirements and legislative changes. The remaining increase allows for additional maintenance of properties across the group. This budget will be subject to further review as asset management plans are developed for the property portfolio. This work will be progressed in time for the 2020/21 budget process.

Occupancy costs

4 Occupancy costs have decreased by $588k, -8%. This is due to reduced building warrant of fitness costs of $305k and reduced rates requirements to better reflect expected actual costs of $266k. The reduced costs have been offset by increased insurance costs across the Property portfolios of $212k.

Depreciation

5 Depreciation has increased by $629k, 7%, due to revaluation of the Property portfolios, required every 3 years.

Fees and charges

6 The current funding policy requires fees and charges for the Housing activity to be set to break even. However, Housing is running at a deficit. Rents for Housing for the coming year have been increased between $1.30 and $2.60 per week (1.1% - 1.5%), which still does not enable the activity to break even. The funding policy for Housing will be reviewed in time for the 2020/21 budget process.

7 The fees and charges for the Community Art Gallery have been transferred from Community Development and Events to Property. Some of the fees for encroachments on road reserves have been transferred from Transport to Property Management. A copy of the fees schedule for the Property Services Group is provided at Attachment B.

Service Levels

8 There are no changes proposed to the levels of service, performance measures or targets stated in the 10 year plan 2018-28 for the Property Services Group in the 2019/20 year.

Signatories

Author:	David Bainbridge - Group Manager Property Services
Authoriser:	Sandy Graham - General Manager City Services

Attachments

	Title	Page
⇩a	Property - Draft 2019/20 Operating Budget	88
⇩b	Property - Draft 2019/20 Fees and Charges Schedule	89

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This report enables democratic local decision making and action by, and on behalf of communities; and meets the current and future needs of the Dunedin communities for good quality local infrastructure and public services in a way that is most cost effective for households and businesses.

Fit with strategic framework

	Contributes	Detracts	Not applicable
Social Wellbeing Strategy	☒	☐	☐
Economic Development Strategy	☒	☐	☐
Environment Strategy	☐	☐	☐
Arts and Culture Strategy	☒	☐	☐
3 Waters Strategy	☐	☐	☐
Spatial Plan	☒	☐	☐
Integrated Transport Strategy	☒	☐	☐
Parks and Recreation Strategy	☒	☐	☐
Other strategic projects/policies/plans	☒	☒	☐

The activities of the Property Services Group primarily contribute to the objectives and priorities of the above strategies.

Māori Impact Statement

There are no known impacts for tangata whenua.

Sustainability

Major issues and implications for sustainability will be discussed and considered in the 50 year Infrastructure Strategy and financial resilience is discussed in the Financial Strategy.

10 year plan/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for Property Services for inclusion in the Annual Plan 2019/20.

Financial considerations

The financial considerations are detailed in the report.

Significance

Significance will be considered in the development of the Annual Plan 2019/20.

Engagement – external

There has been no external engagement in developing this budget.

Engagement - internal

Staff from across the Council have been involved in development of the draft budgets.

Risks: Legal / Health and Safety etc.

There are no known risks.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

Projects identified in Community Board Plans have been considered in the development of the draft budgets. Boards will be involved in the development of the Annual Plan 2019/20.

Annual Plan Council

29 January 2019

Community and Planning - 2019/20 Draft Budget

Department: Community and Planning

EXECUTIVE SUMMARY

1 This report provides an overview of the draft 2019/20 budgets for the Community and Planning Group, and includes the following activities:

· City Development

· Community Development and Events

· Resource Consents.

RECOMMENDATIONS

That the Committee:

a) Adopts for the purposes of developing the Annual Plan 2019/20 and engaging with the community:

i) The draft 2019/20 operating budget for the Community and Planning Group as shown/amended at Attachment A.

ii) The draft 2019/20 fees and charges schedules for Resource Consents as shown/amended at Attachment B.

Operating Budgets

Revenue

External revenue

2 External revenue has increased by $258k, 20%, primarily due to the recovery of expenditure from the New Zealand Masters Games Trust for the 2019 Masters Game and an anticipated increase in the number of resource consents.

Grants and subsidies

3 Grants and subsidies have increased by $101k, 71%, due to a grant from Creative New Zealand for Professional Theatre.

Expenditure

Personnel costs

4 Personnel costs in the Community and Planning Group have increased by $342k, 7%. This incorporates a provision for salary increases and an increase in full time equivalent (FTE) staff of 3.5. Provision is made for a monitoring and compliance officer in Resource Consents and a 0.4 FTE planner in City Development.

5 Community Development and Events provides for 3.0 FTE fixed-term positions for Masters Games. Additional staff resourcing of 0.5 FTE for a community advisor supporting place-based work and 0.5 FTE for a community events advisor supporting civic events are offset by savings in operational costs. Two FTE have been transferred to the Ara Toi activity.

Operations and maintenance

6 Operations and maintenance costs have increased by $587k, 84%. The main increase is due to the transfer of the DVML service level agreement payment for community access of $750k from Reserves and Recreational Facilities, offset by the transfer of Ara Toi project costs to the Ara Toi activity.

Fees and charges

7 Fees and charges for Resource Consents have generally been increased by 3% (with some rounding), unless set by statute. A copy of the Community and Planning Group fees schedule is provided at Attachment B.

8 The fees and charges for the Community Art Gallery have been transferred from Community Development and Events to Property.

Service Levels

9 There are no changes proposed to the levels of service, performance measures and targets stated in the 10 year plan 2018-28 for the Community and Planning Group in the 2019/20 year.

Signatories

Author:	Nicola Pinfold - Group Manager Community and Planning
Authoriser:	Sandy Graham - General Manager City Services

Attachments

	Title	Page
⇩a	Community and Planning - Draft 2019/20 Operating Budget	93
⇩b	Community and Planning - Draft 2019/20 Fees and Charges Schedule	94

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This report enables democratic local decision making and action by, and on behalf of communities; and meets the current and future needs of the Dunedin communities for good quality public services and regulatory functions in a way that is most cost effective for households and businesses.

Fit with strategic framework

	Contributes	Detracts	Not applicable
Social Wellbeing Strategy	☒	☐	☐
Economic Development Strategy	☒	☐	☐
Environment Strategy	☒	☐	☐
Arts and Culture Strategy	☒	☐	☐
3 Waters Strategy	☐	☐	☐
Spatial Plan	☒	☐	☐
Integrated Transport Strategy	☐	☐	☐
Parks and Recreation Strategy	☒	☐	☐
Other strategic projects/policies/plans	☒	☐	☐

The activities the Community and Planning Group primarily contribute to the objectives and priorities of the above strategies.

Māori Impact Statement

There are no known impacts for tangata whenua.

Sustainability

Major issues and implications for sustainability will be discussed and considered in the 50 year Infrastructure Strategy and financial resilience is discussed in the Financial Strategy.

10 year plan/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for Community and Planning for inclusion in the Annual Plan 2019/20.

Financial considerations

The financial considerations are detailed in the report.

Significance

Significance will be considered in the development of the Annual Plan 2019/20.

Engagement – external

There has been no external engagement in developing this budget.

Engagement - internal

Staff from across the Council have been involved in development of the draft budgets.

Risks: Legal / Health and Safety etc.

There are no known risks.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

Projects identified in Community Board Plans have been considered in the development of the draft budgets. Boards will be involved in the development of the Annual Plan 2019/20.

Annual Plan Council

29 January 2019

Governance and Support Services - 2019/20 Draft Budget

Department: Finance

EXECUTIVE SUMMARY

1 This report provides an overview of the draft 2019/20 budgets for the Governance and Support Services Group and includes these activities:

· Business Information Services (BIS)

· Civic and Administration (including Civil Defence)

· Corporate Leadership

· Corporate Policy

· Council Communications and Marketing (CCM)

· Customer Services Agency (CSA)

· Finance and Commercial

· Fleet Operations

· Human Resources (HR)

· Investment Account

· Waipori Fund.

RECOMMENDATIONS

That the Committee:

a) Adopts for the purposes of developing the Annual Plan 2019/20 and engaging with the community:

i) The draft 2019/20 operating budget for the Governance and Support Services Group as shown/amended at Attachment A.

ii) The draft 2019/20 fees and charges schedules for Administration Services, Archives Reference Services and Information Services as shown/amended at Attachment B.

b) Adopts the amended “Policy on charging for Local Government Official Information and Meeting Act 1987 (LGOIMA) requests”, which amends the free hours before charging from three hours to one free hour.

Operating Budgets

Revenue

External revenue

2 External revenue has increased by $483k, 4%. This includes revenue from the election of $200k, and an increase in recoveries from DCHL – see note 4 below.

Expenditure

Personnel costs

3 Personnel costs for the Governance and Support Services Group have increased by $1.987 million, 15%. This incorporates a general salary increase, an increase in full time equivalent (FTE) staff of 9.4 and an increase due to a change in the vacancy allowance budget. A breakdown is provided in the table below.

Personnel Costs	Approved Budget 2019 $000	Draft Budget 2020 $000	Budget Inc (Dec) $000
Governance Support budget	14,258	15,675	1,417
Vacancy allowance	(1,100)	(530)	570
Total personnel costs	13,158	15,145	1,987

4 The changes in FTE include 2.0 FTE transferred from Three Waters, 2.0 FTE for business analyst/project management roles (1 fixed term), 2.0 FTE for project work including South Dunedin Futures and the South Dunedin hub (fixed term), a procurement panels contracts role, a risk compliance role and the General Manager DCHL which is a fully recoverable cost.

5 The vacancy allowance budget has been reduced by $570k from $1.100 million. This budget reflects savings that arise due to staff turnover and the normal delay in fillings vacancies when they arise. The budget was increased for the first year of the 10 year plan only due to the increase in staffing levels across the organisation.

Operations and maintenance

6 Operations and maintenance costs have increased by $512k, 11%. The main increases are in Civic and Administration for election costs of $239k and $266k in BIS for software previously owned by Council now being delivered as a hosted service (including payroll).

Consumables and general costs

7 Consumables and general costs have increased by $3.246 million, 34%. A budget of $1.400 million has been included to fund a project management office (PMO). The PMO will provide an efficient and consistent approach to plan, manage and deliver significant capital projects. It will also provide certainty to the construction market on the programme of capital projects so they can be resourced effectively. This funding is an interim measure while internal capacity and capability to deliver this in-house is developed.

8 An increase in the BIS budget of $1.070 million relates to increases in annual software license fees for a new modern document management system, a platform tool to simplify integration between our various systems and increased costs associated with Microsoft licencing (Windows, Office etc).

9 Civic and Administration increases include election costs of $334k and elected member remuneration and training costs of $124k.

Depreciation

10 Depreciation expense has increased by $634k, 46% primarily due to the capital expenditure projects in BIS.

Fees and charges

11 Fees and charges for Information Services and Archives Reference Services have not been changed.

12 The number of hours free for LGOIMA requests has been reduced from three hours to one hour, and thereafter charged per half hour. A copy of the fees schedule for the Governance and Support Services Group is provided at Attachment B.

13 The “Policy on charging for Local Government Official Information and Meeting Act 1987 (LGOIMA) requests” requires updating to reflect the change in the number of free hours before charging, from three to one. This amended policy is at Attachment C for Council’s approval. The amended policy reflects the Ministry for Justice Charging Guidelines for Official Information Act Requests.

Service Levels

14 There are no changes proposed to the levels of service, performance measures and targets stated in the 10 year plan 2018-28 for the Governance and Support Services Group in the 2019/20 year.

Signatories

Author:	Gavin Logie - Financial Controller
Authoriser:	Dave Tombs - General Manager Finance and Commercial

Attachments

	Title	Page
⇩a	Governance and Support Services - Draft 2019/20 Operating Budget	102
⇩b	Governance and Support Services - Draft 2019/20 Fees and Charges Schedule	103
⇩c	Policy on charging for LGOIMA requests	104

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This report enables democratic local decision making and action by, and on behalf of communities; and meets the current and future needs of the Dunedin communities for good quality public services in a way that is most cost effective for households and businesses.

Fit with strategic framework

	Contributes	Detracts	Not applicable
Social Wellbeing Strategy	☒	☐	☐
Economic Development Strategy	☒	☐	☐
Environment Strategy	☒	☐	☐
Arts and Culture Strategy	☒	☐	☐
3 Waters Strategy	☒	☐	☐
Spatial Plan	☒	☐	☐
Integrated Transport Strategy	☒	☐	☐
Parks and Recreation Strategy	☒	☐	☐
Other strategic projects/policies/plans	☒	☐	☐

The Governance and Support Services Group contributes to the delivery of all of the objectives and priorities of the strategic framework.

Māori Impact Statement

There are no known impacts for tangata whenua.

Sustainability

Major issues and implications for sustainability are considered in the Infrastructure Strategy and financial resilience is discussed in the Financial Strategy.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for the Governance and Support Services Group for inclusion in the Annual Plan 2019/20.

Financial considerations

The financial considerations are detailed in the report.

Significance

Significance will be considered in the development of the Annual Plan 2019/20.

Engagement – external

There has been no external engagement in developing this budget.

Engagement - internal

Staff from across the Council have been involved in development of the draft budgets.

Risks: Legal / Health and Safety etc.

There are no known risks.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

Projects identified in Community Board Plans have been considered in the development of the draft budgets. Boards will be involved in the development of the Annual Plan 2019/20.

Annual Plan Council

29 January 2019

Roading and Footpaths - 2019/20 Draft Budget

Department: Transport

EXECUTIVE SUMMARY

1 This report provides an overview of the draft 2019/20 budgets for the Roading and Footpaths Group and includes Transport activities.

RECOMMENDATIONS

That the Council:

a) Adopts for the purposes of developing the Annual Plan 2019/20 and engaging with the community:

i) The draft 2019/20 operating budget for the Roading and Footpaths Group as shown/amended at Attachment A.

ii) The draft 2019/20 fees and charges schedules for Transport as shown/amended at Attachment B.

Operating Budgets

Revenue

External revenue

2 External revenue has increased by $1.850 million, 226%. The increase includes additional revenue from a proposed increase in fees for on-street parking meters of $1.500 million, an increase in corridor access revenue due to the Aurora pole replacement programme and an increase in developer recoveries. The Council will be recovering expenditure relating to staff advice on resource consent applications from developers.

Grants and subsidies operating revenue

3 Grants and subsidies operating revenue has increased by $1.375 million, 14%. New Zealand Transport Agency (NZTA) funding assistance for operating expenditure projects has increased due to increased operating budgets and incorporates a subsidy for footpath maintenance of $297k previously not subsidised. There has been a reduction in staff recovery costs of $422k.

Grants and subsidies capital revenue

4 Grants and subsidies capital revenue has increased by $14.289 million, 83%. NZTA funding assistance for capital expenditure projects reflects the capital programme currently proposed for the 2019/20 year.

Expenditure

Personnel costs

5 Personnel costs in Transport have increased by $333k, 9%. This incorporates a general salary increase and an increase in full time equivalent (FTE) staff of 5.6. These increases are offset by a reduction because some staff costs are now charged directly to capital projects.

6 The increase in FTE will support improved communication and engagement on the major transport projects and the delivery of safety improvements across the transport network. An additional senior transport planner will support the significant capital project programme. A fixed term FTE has been added to support the LED street light renewal. These costs will form part of the overall capital costs for the project.

7 There is an additional FTE for co-ordinating the city’s parking activities to assist in achieving the objectives of the Integrated Transport Strategy and supporting the implementation of the parking policy.

Operations and maintenance

8 Operations and maintenance costs have increased by $960k, 8%. The main increases are driven by cost escalations associated with the maintenance contracts of $630k. Additionally signal maintenance contract costs have increased $207k, and street light maintenance $101k. The sealed pavement maintenance budget has increased by $200k and community road safety projects budget has increased by $217k. All of these costs are subsidised by NZTA. The increases have been slightly offset by a reduction in street cleaning costs in the central activity area of $149k.

Consumables and general costs

9 Consumables and general costs have increased by $1.731 million, 128%. The main increase relates to planning work related to the central city, tertiary, bridge and cycling projects of $1.000 million, 55% subsidised by NZTA.

10 Other increases are for scoping, design, audits and travel demand work for safety projects of $315k, community road safety projects of $237k, and maintenance audits of $141k.

Depreciation

11 Depreciation has increased by $941k, 5% reflecting the 30 June 2018 revaluation of the Transport network.

Fees and charges

12 Fees and charges for activities in Transport have been generally increased by 3% (with some rounding). There has been no increase to corridor access request (CAR) as the fee structure for CAR work is currently under review. A copy of the Transport fees schedule for 2019/20 is provided at Attachment B.

13 Some of the fees for encroachments on road reserves have been transferred from Transport to Property.

14 The schedule of fees for on-street parking meters have been transferred from Parking Operations to Transport. Over the last ten years there has been no increase in on street parking fees. On-street parking fees have been increased between 50 cents and $1. This fee proposal addresses the significant period of time since a fee increase and begins the process of reviewing on and off street parking costs in the CBD.

15 Council wishes to align the Resident’s parking permit year to the Council financial year (currently 1st December to 30th November). It is also proposed to introduce a refund mechanism to encourage surrender of permits should the user move house/flat part way through the year to a non-permit area.

Service Levels

16 There are no changes proposed to the levels of service, performance measures and targets stated in the 10 year plan 2018-28 for the Roading and Footpaths Group in the 2019/20 year.

Signatories

Author:	Richard Saunders - Group Manager Transport
Authoriser:	Simon Drew - General Manager Infrastructure Services

Attachments

	Title	Page
⇩a	Roading and Footpaths - Draft 2019/20 Operating Budget	110
⇩b	Roading and Footpaths - Draft 2019/20 Fees and Charges Schedule	111

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

Fit with strategic framework

	Contributes	Detracts	Not applicable
Social Wellbeing Strategy	☒	☐	☐
Economic Development Strategy	☒	☐	☐
Environment Strategy	☒	☐	☐
Arts and Culture Strategy	☐	☐	☐
3 Waters Strategy	☐	☐	☐
Spatial Plan	☒	☐	☐
Integrated Transport Strategy	☒	☐	☐
Parks and Recreation Strategy	☒	☐	☐
Other strategic projects/policies/plans	☒	☐	☐

The activities of the Roading and Footpaths Group primarily contribute to the objectives and priorities of the above strategies.

Māori Impact Statement

There are no known impacts for tangata whenua.

Sustainability

Major issues and implications for sustainability are discussed and considered in the 50 year Infrastructure Strategy and financial resilience is discussed in the Financial Strategy.

10 year plan/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for Roading and Footpaths for inclusion in the Annual Plan 2019/20.

Financial considerations

The financial considerations are detailed in the report.

Significance

Significance will be considered in the development of the Annual Plan 2019/20.

Engagement – external

There has been no external engagement in developing this budget.

Engagement - internal

Staff from across the Council have been involved in development of the draft budgets.

Risks: Legal / Health and Safety etc.

There are no known risks.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

Projects identified in Community Board Plans have been considered in the development of the draft budgets. Boards will be involved in the development of the Annual Plan 2019/20.

Annual Plan Council

29 January 2019

Living Wage Update

Department: Community and Planning

EXECUTIVE SUMMARY

1 This report provides an update on the implementation of the Council’s commitment to pay a living wage for DCC staff and the investigation of options for requiring contractors to commit to paying a living wage to their staff.

2 This report also provides an update on developing a Service Delivery Policy that provides a framework for undertaking reviews and consideration of insourcing or outsourcing of services.

RECOMMENDATIONS

That the Committee:

a) Notes the Living Wage Update Report.

BACKGROUND

3 The Living Wage Movement Aotearoa New Zealand defines the ‘living wage’ as “the income necessary to provide workers and their families with the basic necessities of life. A living wage will enable workers to live with dignity and to participate as active citizens in society.”

4 The living wage concept is an alternative to the market rate and the minimum wage rate set by Central Government each year. It reflects the basic expenses of workers and their families such as food, transportation, housing and childcare.

5 The 2018 living wage is $20.55 per hour and the 2018 minimum wage is $16.50. Currently Wellington City Council is the only council recognised as an ‘accredited living wage employer’. The criteria for becoming an accredited living wage employer is provided at Attachment A.

6 Around five years ago, senior management made an operational decision to ensure all employees are paid the living wage. At the 10 year plan Council meeting on 11 December 2017 there was discussion on the living wage and the Council resolved to:

· Commit to paying all staff, on permanent or fixed term contracts, at or above the living wage; and

· Request a report be provided to the draft Annual Plan 2019/20 on options to include contracted staff over time in the commitment to pay a living wage and to consider, as part of that report to bring some services back in house.

7 The full resolution is provided at Attachment B.

DISCUSSION

Living wage for DCC employees

8 The following table provides a summary of the minimum wage rates over the last five years paid to DCC employees, compared with the minimum wage and the living wage. Until the most recent round of negotiations there was a delay in implementing the changes to the living wage. This will change from this year as we update the rate as it changes.

Year	Central Government minimum wage	Living wage	DCC minimum wage
2014	$14.25	$18.80	1/07/2014 - $18.67
2015	$14.75	$19.25	1/07/2015 - $18.86 1/12/2015 - $19.05
2016	$15.25	$19.80	1/07/2016 - $19.43 1/12/2016 - $19.53
2017	$15.75	$20.20	1/07/2017 - $19.80
2018	$16.50	$20.55	1/07/2018 - $20.55

Living wage for DCC contractors

9 Staff have been investigating the implications of, and potential process and criteria for requiring contractors to commit to paying a living wage to staff undertaking services for the DCC.

10 A high-level summary of the factors that have been considered and some of the findings are provided for the Council’s information.

a) Status of contracts: For the living wage principles to apply to existing contracts, the DCC would need to be renegotiate existing contracts to include obligations to pay all staff on permanent or fixed term contracts at or above the living wage. The Council could include a living wage commitment as new contracts are negotiated, and as current contracts are up for renewal.

b) Range and scope of contractors: The DCC is a large organisation and has a significant number of contracts of varying size of contract and sectors. As such, it may not be practicable for all contracts to have the ‘living wage commitment’ requirement. If the Council was to seek living wage accreditation, all indirectly paid workers employed by contractors, delivering a service to the Council on a ‘regular and on-going’ basis would need to commit to paying their staff the living wage or have agreed milestones to that effect. For accreditation, ‘regular and on-going’ workers includes at a minimum cleaners and others coming in to the Council to do regular work, but not contracts with printers, telecommunication providers and electricity retailers. Further consideration on the scope of contractors that should include the ‘living wage commitment’ requirement (eg segmented by size of contract or industry sector).

c) Increased costs: It is likely that the living wage requirement would lead to increased costs for such contracts. It is difficult to quantify the additional cost to the DCC at this stage as it is unknown what DCC contractors are currently paying their staff, what future volume of work is likely to be awarded to particular contractors and the range and scope of contracts to which these principles will be applied to.

d) Compliance monitoring: If a ‘living wage commitment’ is required, it is likely that there would also be costs associated with compliance monitoring of the living wage commitments. Further consideration across a range of factors is required for compliance monitoring, including the use of ‘director acquittals’ or documentation evidence for compliance, penalties for non-compliance and independent auditing.

e) Implementation: It is possible that some contractors may not have the systems to comply with the living wage requirement (eg. staff may be paid a higher rate when undertaking DCC work compared to their ‘normal’ rate of pay). The Council could consider allowing contractors to adopt an alternative mechanism that achieves the same outcome (eg. a lump sum ‘top up’ payment for relevant staff). Further work would need to be undertaken on the practicalities implementing a ‘living wage commitment’ requirement with contractors.

f) CCOs: Council could consider requesting its council controlled organisations (CCOs) to adopt the living wage principles and commit to paying their staff the living wage. Auckland Council and Wellington City Council have included CCOs in their living wage programs, whereas Christchurch City Council has not included CCOs. Staff will undertake discussions with DCHL and further analysis of the potential implications of CCOs committing to living wage for their staff.

11 Staff will continue to investigate the implications of, and potential process for requiring contractors to commit to paying a living wage to staff undertaking services for the DCC. A report with options will be provided to the Council in May 2019 as part of the Annual Plan deliberations meeting.

Outsourcing and insourcing services

12 The matter of bringing services back in house or outsourcing some services is a key strategic decision. There is a wide range of factors that need to be considered in decision-making including: conducting feasibility and viability studies; consultation with affected staff; set up costs; additional health and safety obligations; potential impact on local economy; ongoing impact on operating budgets; and ongoing succession planning and resourcing issues.

13 Section 17A of the Local Government Act 2002 requires all councils to undertake reviews of the cost-effectiveness of current arrangements for delivering services unless a legal or cost-benefit exemption applies. Reviews must consider specific options which would involve one or more other councils, including jointly owned council controlled organisations (CCOs) or shared services arrangements.

14 Section 17A reviews must be undertaken within two years of a contract ending, when the Council is considering a significant change to service levels and within six years of the last review. The DCC undertook a high-level review of all its services in collaboration with Otago councils in 2016/17 and more detailed regional reviews of solid waste, regulatory services and waterways and harbours are currently in progress.

15 Staff are currently developing a ‘Service Delivery Policy’ that will provide a framework for future reviews. This policy will include principles and criteria on insourcing or outsourcing services, and could include references to the living wage principles. It is proposed that staff continue to develop the Service Delivery Policy and include references to the living wage principles.

NEXT STEPS

16 Staff will continue to develop a draft Service Delivery Policy and investigate the implications of, and potential process for requiring contractors to commit to paying a living wage. A report will be provided to the Council in May 2019 as part of the Annual Plan deliberations meeting.

Signatories

Author:	Tami Sargeant - Senior Policy Analyst
Authoriser:	Sue Bidrose - Chief Executive Officer

Attachments

	Title	Page
⇩a	Living wage employer accreditation policy	118
⇩b	Council living wage resolution - 11 December 2017	119

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This decision relates to providing local infrastructure, public services and regulatory functions and it is considered good-quality and cost-effective.

Fit with strategic framework

	Contributes	Detracts	Not applicable
Social Wellbeing Strategy	☒	☐	☐
Economic Development Strategy	☒	☐	☐
Environment Strategy	☐	☐	☒
Arts and Culture Strategy	☐	☐	☒
3 Waters Strategy	☐	☐	☒
Spatial Plan	☐	☐	☒
Integrated Transport Strategy	☐	☐	☒
Parks and Recreation Strategy	☐	☐	☒
Other strategic projects/policies/plans	☒	☐	☐

Living wage commitments impact on the social and economic wellbeing of residents and communities.

Māori Impact Statement

There are no known impacts for tangata whenua.

Sustainability

Living wage commitments has implications on economic and social sustainability.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

The DCC’s commitment to paying all staff, on permanent or fixed term contracts, at or above the living wage is included in the 10 year plan and Annual Plan.

Financial considerations

At this stage, the financial impact for including contracted staff over time in the commitment to pay a living wage is unknown.

Significance

This decision is considered low in terms of the Council’s significance and engagement policy.

Engagement – external

There has been no engagement with external parties at this stage.

Engagement - internal

Staff from procurement, policy and the executive leadership team have been involved in drafting this report.

Risks: Legal / Health and Safety etc.

There are no known risks at this stage.

Conflict of Interest

No conflicts of interest have been identified at this stage.

Community Boards

There are no implications for Community Boards.

Annual Plan Council

29 January 2019

2019/20 Rating Method

Department: Finance

EXECUTIVE SUMMARY

1 The draft budget as presented has an overall increase in rates of 5.0%. This increase in rates is collected through various funding mechanisms within the rating method.

2 The proposed changes to the rating method are discussed in this report. These include increases to the community services targeted rate (increase of 1.7%) and the stadium differentiated rates (increase of 1.8%).

3 Note the differential rating category previously known as “Forsyth Barr Stadium” has been renamed the “Stadium: 10,000+ Seat Capacity”.

RECOMMENDATIONS

That the Council, for the purposes of community engagement:

a) Approves an increase in the community services targeted rate for the 2019/20 year to $237.50 including GST.

b) Approves an increase in the Stadium: 10,000+ Seat Capacity differentiated rates for the 2019/20 year based on the June 2018 Local Government Cost Index of 1.8%.

c) Approves the current rating method for the setting of all other rates for the 2019/20 year.

BACKGROUND

4 The purpose of this report is to detail the proposed changes to the rating method for the 2019/20 year.

5 In addition, the Council established the Rates and Funding Advisory Panel to review and provide advice on matters relating to the rating method. This report provides an update on the work undertaken last year by the Panel.

6 Please note that unless specified, all rating figures in this report are GST inclusive.

DISCUSSION

7 The draft budget for the 2019/20 year proposes a 5.0% increase in rates. This increase in rates is collected through various funding mechanisms within the rates policy. The proposed changes are discussed in more detail below.

Community Services Rate

8 Over the past few years it has been agreed that the community services targeted rate should be increased annually by the Local Government Cost Index (LGCI). Allowing for both the June 2018 LGCI of 1.8% and rounding to the nearest 50 cents this would increase this from $233.50 to $237.50 for the 2019/20 year. The community services rate is a fixed charge on all rateable properties.

Stadium Rates

9 Since the 2013/14 year, the differentiated stadium rates have been inflation adjusted annually. For the 2019/20 year, it is proposed to increase these rates by the June 2018 LGCI of 1.8%.

Schedule of Rates

10 Attachment A, summary of current and proposed rates, provides details of the individual rates and the amount collected from each rate.

11 Attachment B, summary information, provides a summary of fixed charges and general rates.

Overall Impact

12 The following table shows the overall rates income (including GST) by property category for 2018/19 and 2019/20.

Category	2018/19 ($’000)	2019/20 ($’000)	$ change ($’000)	% change
Residential	109,695	115,280	5,585	5.1%
Lifestyle	5,375	5,666	291	5.4%
Commercial	51,090	53,541	2,451	4.8%
Farmland	5,015	5,246	231	4.6%
Total	171,175	179,733	8,558	5.0%

13 The table below shows, for the average value property in each category and the total estimated rates for 2019/20. The examples include general rates and the community services rate for all properties. Targeted rates are included for residential and commercial properties only.

Including GST	Capital Value	Rates 2018/19	Rates 2019/20	$ change ($’000)	% change
Residential	326,800	2,261	2,362	101	4.5%
Lifestyle	561,000	1,929	2,020	91	4.7%
Commercial	1,307,000	15,954	16,686	732	4.6%
Farmland	1,157,000	3,176	3,331	155	4.9%

14 Attachment C provides further sample property rate impacts for each category of property. The sample property rate impacts incorporate:

· The forecast rate increase of 5.0%.

· An increase of $4.00 in the community services rate.

· An increase of 1.8% in the differentiated rates paid by the Stadium: 10,000+ Seat Capacity.

Rate Maximum

15 Under the Local Government (Rating) Act 2002, certain rates must not exceed 30% of total rates revenue. This includes the use of a uniform annual general charge and any targeted rates that are set on a uniform basis excluding targeted rates set solely for water supply or sewage disposal. Based on the draft budgets, these rates represent 25% of total rates revenue.

Rate Rebate

16 When considering the affordability of rates on low income households, for the 2017/18 year, around 2,900 residential properties received a government funded rates rebate. The average rebate was $566; the maximum rebate available was $620.

Rates and Funding Advisory Panel

17 The Panel was established to consider matters relating to the rating method. The work of the Panel during the last year was focused on residential properties being used for short term visitor accommodation (STVA). A separate report on this issue has been provided to the Council for consideration.

18 The Panel also discussed central city targeted rates. Consideration of a new targeted rate for those properties benefiting most from the central city development projects will continue to be progressed by the Panel.

OPTIONS

19 No options are provided as this report is giving effect to the current rate method and previous decisions of the Council.

NEXT STEPS

20 If adopted, the proposed rating method will be included in the supporting documentation that accompanies the draft 2019/20 budget.

21 While the Council is engaging with the community on the draft 2019/20 budget, rate account information will be available on the DCC website that shows the proposed rating impact by individual rate account.

Signatories

Author:

Carolyn Allan - Senior Management Accountant

Authoriser:

Gavin Logie - Financial Controller

Dave Tombs - General Manager Finance and Commercial

Attachments

	Title	Page
⇩a	Summary of current and proposed rates	124
⇩b	Summary information	125
⇩c	Sample rates	126

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This decision relates to providing a regulatory function and it is considered good-quality and cost-effective.

Fit with strategic framework

	Contributes	Detracts	Not applicable
Social Wellbeing Strategy	☒	☐	☐
Economic Development Strategy	☒	☐	☐
Environment Strategy	☒	☐	☐
Arts and Culture Strategy	☒	☐	☐
3 Waters Strategy	☒	☐	☐
Spatial Plan	☒	☐	☐
Integrated Transport Strategy	☒	☐	☐
Parks and Recreation Strategy	☒	☐	☐
Other strategic projects/policies/plans	☒	☐	☐

This decision fits with the strategic framework because it provides the necessary rates funding to implement the activities included in the draft 2019/20 budget.

Māori Impact Statement

There are no known impacts for tangata whenua.

Sustainability

There are no implications for sustainability.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

The proposed rating method will be set out with the draft 2019/20 budget material during the community engagement period.

Financial considerations

The proposed rating method will be set out with the draft 2019/20 budget material during the community engagement period.

Significance

This decision is considered low in terms of the Council’s Significance and Engagement Policy.

Engagement – external

The proposed rating method will be set out with the draft 2019/20 budget material during the community engagement period.

Engagement - internal

Internal engagement has occurred with staff in the relevant departments.

Risks: Legal / Health and Safety etc.

There were no risks identified.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

There are no known implications for Community Boards.

Chairperson	Mayor Dave Cull
Deputy Chairperson	Cr Chris Staynes
Members	Cr David Benson-Pope	Cr Rachel Elder
	Cr Christine Garey	Cr Doug Hall
	Cr Aaron Hawkins	Cr Marie Laufiso
	Cr Mike Lord	Cr Damian Newell
	Cr Jim O'Malley	Cr Conrad Stedman
	Cr Lee Vandervis	Cr Andrew Whiley
	Cr Kate Wilson

Author:	Lynne Adamson - Governance Support Officer
Authoriser:	Sharon Bodeker - Team Leader Civic