Supplementary Agenda of Council

Council

27 January 2021

Reports

10 Year Plan 2021-31 Overview Report

Department: Executive Leadership Team and Finance

EXECUTIVE SUMMARY

1 The purpose of this report is to provide an overview of the draft budgets and what will be included in the draft 10 year plan entitled “The future of us”. The draft 10 year plan 2021-2031 (the 10 year plan) sets the direction for the Dunedin City Council (DCC) for the next 10 years. It sets out the services and activities we will provide, the projects we will carry out and the level of service the community can expect. The plan will also include how much we expect things to cost, how we will pay for them and what that means for rates and debt.

2 The report highlights challenges the DCC faces in maintaining activities during a time of uncertainty – both external and internal, while proposing how these challenges will be met. It provides a high level summary of the key aspects of the draft 10 year plan and provides an overview of various reports on this agenda.

3 The budgets propose a rate rise of 9.8% in year one with an average rate increase in years 2-10 of 5.68%. This level of increase delivers a balanced budget. Even with this level of rate increase, savings are required, and the draft budget includes the requirement to save $4m which staff are working to achieve. The budgets do not provide for any additional resource for several key activities that need to be progressed, but propose that this work will be funded by reprioritisation of existing resources.

4 Draft capital expenditure budgets outline a significant capital programme that anticipates a total spend of $1.5 billion dollars over the 10 year period. This does mean an increase in debt levels. The bulk of the capex spend is on the renewal of existing infrastructure with some new projects also funded. Delivery will be a major challenge for this level of capital spend and these figures will be reviewed in May 2021 as part of the deliberation process.

5 The draft budgets are not final and will be subject to full consideration by the Council and consultation with the community over coming months. The consultation will aim to ensure a wide range of community views are canvassed in advance of the final decisions on the 10 year plan in May 2021.

RECOMMENDATIONS

That the Council:

a) Adopts the draft 10 Year Plan 2021-2031 forecast financial statements for the purposes of developing the 10 Year Plan 2021-2031 and engaging with the community.

b) Notes that any resolution made in this meeting related to 10 year plan reports may be subject to further discussions and decision by the meeting.

BACKGROUND

6 As part of the 10 year plan process, Council must develop a consultation document to provide an effective basis for public participation in the decision-making process relating to the content of the 10 year plan. The consultation document needs to:

· Provide a fair representation of the matters that are proposed to be included in the 10 year plan, explaining the overall objectives of the proposals;

· Explain how rates, debt and levels of service might be affected;

· Identify and explain significant and other important issues and choices facing Council, and the consequences of those choices;

· Include a summary of the financial strategy and the infrastructure strategy.

7 The draft budgets are not final but are proposed for consultation purposes. If Council choses to do everything included in the draft budgets the outcomes would be:

· An overall rate increase of 9.8% in 2021/22, and an average annual rate increase of 5.68% per year over the following nine years.

· The capital budget of $1.5 billion over the 10 year period, will mean that debt will reach $869 million by 2031.

8 Following the consultation period, decisions will be made at Council’s deliberations meeting in May, and then the final plan will be adopted in June 2021, with implementation on 1 July 2021.

DISCUSSION

The impact of COVID-19

9 The DCC, has an important role to play in the city’s economic and social recovery from COVID‑19. The uncertainty created by COVID-19 however, presents challenges for developing long term budgets. Further lockdowns may influence the economic outlook, impact how we consult and impact our ability to deliver capital programmes if the supply chain is impacted by ongoing travel and border restrictions.

10 At the same time, various parts of the community are dealing with the impacts of COVID-19 while others are yet to feel the full effects. These effects are both social and economic and create challenges across the board.

11 The need for continued investment to help support the local economy while trying to balance issues of affordability, the need to allow for growth and the fallout from the pandemic make the preparation of the draft budgets very challenging.

Sector reform and legislative change

12 Alongside the economic challenges, the prospect of reform provides uncertainty to the planning and budget process. The government has signalled reform in the 3 Waters area and in the resource management arena. This includes freshwater reform, reform of the Resource Management Act 1991, and new national policy statements. There is uncertainty about how these reforms will affect individual councils and the sector generally. The changes will impact on work programmes, but these budgets have been prepared on a status quo basis as the current level of information is not sufficient to do anything else. It is however, likely that a full amendment to the 10 year plan will be required earlier than 2024 to address these and other changes including in the planning and compliance areas.

Levels of service

13 The draft budgets maintain current levels of service in all areas in year one of the 10 year plan.

14 Levels of service will increase in future years once the outcome of the kerbside consultation is known and when the South Dunedin Community Hub and Mosgiel Pool are completed.

Community Outcomes

15 The well-beings of our community have been considered through all aspects of the development of the 10 year plan. Community outcomes were reviewed, and minor changes approved at the 25 August 2020 Council meeting. We have examined how our activities and projects contribute to community outcomes, and these are highlighted throughout the 10 year plan.

Measuring and reporting on delivery

16 Council has committed to refresh the Strategic Framework. There will be a project plan presented in May 2021 that will outline the process for this review. While levels of service have been reviewed as part of the 10 year plan process to simplify language used, and incorporate levels of service for new initiatives including zero carbon measures, it is recommended that a full review of levels of service is undertaken as part of the strategic framework refresh. This will ensure levels of service align with strategic priorities.

17 Importantly, as part of this process, measures will be developed to ensure that there is regular and improved performance reporting to Council in 2021/22. Each activity will report quarterly on progress against levels of services targets provided for in the 10 year plan along with financial reporting against budgets.

18 This work, alongside a review of the Resident’s Opinion Survey data, will be used to develop future budgets to ensure that the focus of the organisation is aligned to the aspirations of the Council and the community.

Operational matters

19 The organisation is also entering a new phase with a new CEO and changes to the senior management team that are still being finalised. The focus of the leadership team will be on setting the organisation up to deliver the projects and priorities from the 10 year plan. As part of this, a quality improvement programme (QIP) will be developed and implemented across the organisation to ensure that staff are focussed on delivering services as effectively as possible.

20 It is likely that efficiencies will be found by improved use of technology, process improvements and gains via the QIP. This will allow us to potentially free up existing capacity or make savings. As such most requests for additional staff have not currently been incorporated into the draft budgets.

21 In particular, the Climate 2030 Rapid Review has indicated that in order to achieve Council’s Zero Carbon 2030 target, additional resource, or reprioritisation is required in a number of departments – notably transport and urban form areas. Specific departmental resources have not been allocated for this work and the QIP will be used to identify if there is capacity or suggest reprioritisation of existing staff.

The draft budgets

Draft operating budget 2021/22

22 The draft operating budget for 2021/22 provides for the day-to-day running of all the activities and services the DCC provides such as core water and roading infrastructure, waste management, parks, pools, libraries, galleries and museums. The draft budget includes operating expenditure of $321.865 million (refer to Attachment A).

23 The proposed rate increase of 9.8% delivers a balanced budget. However, even with this level of increase, savings are required. The budget includes a required saving of $4 million. Staff are currently looking for ways to achieve this. There will be a report back to the May 2021 deliberations on how these savings have been achieved.

24 The draft budget funds the delivery of key initiatives including for Zero Carbon and Sustainability ($831k) and South Dunedin Future ($500k). Funding is continued in the draft budget of $300k for place-based community grants.

25 Each of the DCC’s groups of activities have developed a draft operating budget. The key changes in funding sources and expected costs of delivery are explained in the group operating budget reports.

26 The draft budget provides a net surplus of $118k. The group operating budgets show a net surplus of zero with a few exceptions. Four groups including Waste Management, Regulatory Services, Parks and Recreation and Governance and Support Services show an operating surplus reflecting revenue generating activities, capital revenue and vested assets. Transport shows an operating deficit reflecting a shortfall in renewal funding.

Revenue

27 The draft operating budget for 2021/22 shows overall rates revenue increasing by $15.987 million, which is 9.8% higher than 2020/21.

28 External revenue has increased by $3.563 million, 5.0%. External revenue budgets were reduced in the 2020/21 budget to reflect anticipated decreases due to COVID-19. The net effect was a reduction of $6.488 million. In most areas, these reductions have been reinstated with exceptions in the Ara Toi and Economic Development groups. The main changes to external revenue are:

· Waste Management – an increase of $3.203 million, reflecting increased tonnage at the Green Island Landfill (including a reinstatement of COVID-19 reductions) and increases in levy and Emission Trading Scheme (ETS) costs being passed on to consumers.

· Property – an increase of $419k mainly reflecting the reinstatement of reductions relating to COVID-19 rent relief.

· Parks and Recreation group – an increase of $597k due mainly to partial reinstatement of revenue estimates following a reduction in the 2020/21 budget due to Covid-19

· Community and Planning group – an increase of $593k reflecting ICC’s contribution towards the ICC Women’s Cricket World Cup 2022 (ICC WCC 2022), Masters Games cost recoveries and Resource Consents revenue increasing.

· Governance and Support Services group – a reduction of $1.804 million primarily related to the Waipori Fund, reflecting current market conditions.

29 Fees and charges have increased by 3% in most cases. There are exceptions to this, for example, where the fee is set by legislation. These are discussed in the group budget reports.

30 The draft budget includes a reduction in external capital revenue of $12.464 million, -43.9%. This relates to reduced NZTA funding of the capital expenditure programme.

31 One of the challenges is NZTA renewal funding constraints. The draft budget assumes that NZTA will not subsidise the renewals budget at standard subsidy rates. In order to continue investing in the renewal of the network and ensure levels of service are maintained, the DCC will fund $4 - $6 million per annum more than normal subsidy rates provide. The shortfall will be funded by debt in the short term but over the period of the 10 year plan, this shortfall will be funded by rates.

Expenditure

32 The draft budget shows an increase in personnel costs of $1.457 million, 2.1%. This increase incorporates an increase in full time equivalent staff (10.5 FTE). The key changes include:

· Governance and Support Services group (6.0 FTE) – additional resource has been included to progress the Zero Carbon and Sustainability and South Dunedin Future projects

· Governance and Support Services group (2.0 FTE) – additional resource to internalise the project management office will be met by savings in the consulting budget and will be reflected in the updated budget in May

· Community and Planning group (3.6 FTE) –additional resources to deliver on increased workload associated with National Policy Statements

· Three Waters (2.0 FTE) – additional resource is included to address resilience issues including standby rosters and succession planning for an ageing workforce with specialist skills

· Property (1.0 FTE) – the addition of an energy graduate position 75% subsidised from the Energy Efficiency and Conservation Authority for two years

· Parks and Recreation group (-3.4 FTE) – a reduction due to the temporary closure of Mosgiel Pool for the 2021/22 season while the new facility is constructed.

33 Operations and maintenance costs have increased by $902k, 1.3%. The main changes are due to:

· Waste Management – an increase of $1.914 million relates to increase in costs associated with operating the Green Island Landfill and recycling collection cost increases.

· Property – an increase of $776k mainly relating to the continuation of the multi-year programme of exterior maintenance at the Railway Station

· Parks and Recreation group – an increase of $320k due to an increase in maintenance contract costs

· Community and Planning group – an increase of $301k funding for the ICC WCC 2022

· Governance and Support Services group – a reduction of $2.290 million includes the removal of budget for Dunedin Railways Ltd, a reduction in project management costs and savings needed across the organisation.

34 Occupancy and property-related costs such as rates, insurance and energy have increased by $1.593 million, 6.1%.

35 Consumables and general costs have increased by $844k, 3.5%. The main changes are due to:

· Waste Management – an increase of $670k mainly due to increased waste levy costs, reflecting increased volume at the Green Island Landfill

· Transport – an increase of $409k mainly relating to project planning for Shaping Future Dunedin Transport Programmes

· Community and Planning group – an increase of $552k funding for the ICC WCC 2022 and planning consultancy costs associated with National Policy Statements ($180k)

· Governance and Support Services group – a reduction of $600k reflecting required savings across the organisation. Increases are included within this group for software licence fees, South Dunedin Future and Zero Carbon.

36 Grants and subsidies expenditure has decreased by $1.176 million, -10.9% reflecting the removal of the $950k COVID-19 fund, included in the 2020/21 budget.

37 Depreciation has increased by $2.530 million, 3.5% reflecting the impact of the latest revaluations as well as the capital expenditure programme.

38 Interest expense has decreased by $2.060 million, -17.1% reflecting a reduced interest rate. Note that interest expense has been reallocated across all budgets to reflect asset value and the capital expenditure programme.

Draft operating budget 2021/22-2030/31

39 An Income Statement for the 10 year period is provided in Attachment B. Forecast financial statements for the 10 year period are provided in Attachment C.

40 The draft operating budget for the 2022/23 – 2030/31 years reflects proposed changes in levels of service, impacts from the capital expenditure programme and cyclical activities, for example elections and Masters Games. The budget also reflects the Financial Strategy requirement to ensure that everyday costs of running the city can be funded from the everyday revenue (excluding any non-recurring/non-cash items) consistently by the end of the 10 years. The budgets also reflect the significant forecasting assumptions including inflation.

Draft capital budget

41 The draft capital budget for the 10 year plan provides for replacing existing assets and infrastructure, meeting additional demand (including growth) and improving some levels of service. Across the Council’s activities, we are proposing to spend $1.515 billion across the 10 years. The draft capital budget for the Council overall is provided in the Capital Expenditure Report 2021-2031.

42 Depreciation expenditure provides a fair representation of renewals expenditure over the long term. Over the 10 years, the total depreciation budget is $889 million. The proposed level of investment in renewals of $950 million represents the required level of spend needed to support current levels of service as well as the need for increased investment on an aging infrastructure network including buildings and operational plant.

Debt

43 Debt is forecast to be $869 million in year 10 of the draft budget, 208.7% of revenue. The gross debt limit for the 10 year plan is set as 250% of revenue.

Consultation

44 Community consultation on the “The future of us” will use many of the consultation methods tried previously along with a range of different approaches aimed at ensuring a wide cross-section of the community has access to the information and the opportunity to participate in the process. Clear measures for the success of the consultation are also included for the first time.

45 The provision of community housing is the subject of a separate report and presents possible options for consultation including who should be eligible to rent our community housing, how rents should be set and funded and whether or not the Council wishes to grow its current social housing portfolio.

46 Waste minimisation, kerbside and the new landfill are significant elements of both the operating and capital budgets. There will be specific consultation on a new kerbside collection regime and an allowance in the budget to build a range of diversion facilities aimed at meeting the goals of the Waste Minimisation Plan.

47 In December 2020, Council voted to include $21.5 million for the development of a mid-sized theatre in the city in the draft 10 year plan, which is to be consulted on over the next few months. The funding covers the potential cost of redeveloping the Athenaeum – in Dunedin’s Octagon – into a mid-sized theatre, which was identified by Councillors as their preferred option at the December meeting. An alternative option, also being considered at the request of Councillors, would see the Mayfair Theatre in South Dunedin redeveloped instead.

48 Six transport projects known as Shaping Future Dunedin Transport will also be included as part of the consultation, along with questions about where to locate additional public toilets.

NEXT STEPS

49 This report outlines current challenges associated with maintaining DCC activities and assets in a growth environment.

50 If Council adopts the draft budget, DCC will be able to maintain existing levels of service and deliver a balanced budget for 2021/22.

51 Should the Council wish to adopt the draft budget with amendments, there are areas where changes could be made, these include:

a) Requesting DCC stop current activities or reduce levels of service in specific areas.

b) Adding in any additional funding for unfunded items.

52 The next steps are that the Council will need to consider the rating method and the draft group budgets before confirmation of draft budgets for community engagements purposes.

Signatories

Author:

Sandy Graham - Chief Executive Officer

Gavin Logie - Acting General Manager Finance

Carolyn Allan - Senior Management Accountant

Authoriser:

Sandy Graham - Chief Executive Officer

Attachments

	Title	Page
⇩a	Draft Budget 2021-22	14
⇩b	10 Year Income Statement	16
⇩c	10 Year Forecast Financial Statements	18

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

The development of the 10 year plan 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 10 year plan 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

There has been pre-engagement with Mana whenua as part of the process and hui are planned with both Mana whenua and taurahere in the next phase of the consultation.

Sustainability

The 10 year plan presents papers considering various aspects of 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. The Climate 2030 Rapid Review and DCC Emissions Reduction Opportunities report addresses a range of other issues. The consultation process also focuses on how consultation can be delivered more sustainably.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides an overview of the draft 10 year plan 2021-2031.

Financial considerations

The high level financial implications of the draft budgets are discussed in this report. Group budget reports and options reports provide full financial details as appropriate.

Significance

The 10 year plan is considered to be of high significance in terms of the Council’s Significance and Engagement Policy.

Engagement – external

There will be extensive community engagement on the draft budgets and content of the 10 year plan in 2021.

Engagement - internal

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

Risks: Legal / Health and Safety etc.

Any specific risks in the development of the 10 year plan are considered in the relevant supporting documents. The significant forecasting assumptions highlight these in detail and the assumptions have driven the content of the 10 year plan.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

Many projects and items identified in Community Board Plans have been incorporated in the draft budgets following engagement with Community Boards during the development of the plan. Boards will have further opportunities to participate during the consultation and submission phases of the process.

Council

27 January 2021

Financial Strategy

Department: Corporate Policy

EXECUTIVE SUMMARY

1 A Financial Strategy provides a guide for considering proposals for funding and expenditure, it makes transparent the overall effects of proposals on services, rates, debt and investments, and is a document required as part of the 10 year plan.

2 This report seeks Council approval of the draft Financial Strategy for the purpose of public consultation for the 10 year plan 2021-31.

RECOMMENDATIONS

That the Council:

a) Approves the draft Financial Strategy, with any amendments, for consultation as part of the 10 year plan 2021-31.

BACKGROUND

3 Section 101A (1) of the Local Government Act 2002 (LGA) requires all councils to prepare and adopt a Financial Strategy. The purpose of a Financial Strategy is:

· To facilitate prudent financial management by providing a guide for considering proposals for funding and expenditure; and

· Provide a context for consultation, by making transparent the overall effects of proposals on services, rates, debt and investments.

4 At its meeting on 10 November 2020, Council set a debt limit for the purpose of preparing the 10 year plan 2021-31, and for inclusion in the draft Financial Strategy. The Council resolved the following:

Moved (Mayor Aaron Hawkins/Cr Christine Garey):

That the Council, for the purposes of setting the draft 10 year plan:

a) Approves setting a debt limit of 250% as a percentage of revenue; and

b) Notes that this would be subject to public consultation on the draft financial strategy.

Division

The Council voted by division:

For: Crs Sophie Barker, David Benson-Pope, Rachel Elder, Christine Garey, Doug Hall, Carmen Houlahan, Marie Laufiso, Mike Lord, Jim O'Malley, Chris Staynes, Steve Walker, Andrew Whiley and Mayor Aaron Hawkins (13).

Against: Crs Jules Radich and Lee Vandervis (2).

Abstained: Nil

The division was declared CARRIED by 13 votes to 2

Motion carried (CNL/2020/001)

5 The debt limit, as approved at the November 2020 meeting, has been included in the draft Financial Strategy.

DISCUSSION

6 Council must, as part of its 10 year plan, prepare and adopt a Financial Strategy for all of the years covered in the plan. (Attachment A).

7 Section 101A (3) of the LGA sets out the information that must be contained in a Financial Strategy and includes statements on:

· Factors that will have a significant impact on the 10 year plan, e.g., change in population, land use, and capital expenditure;

· Limits on rate increases and debt;

· Ability to provide and maintain levels of service, and meet additional demands within the rate and debt limits;

· Policy on giving securities for debt;

· Objectives for holding investments; and

· Targets for investment returns.

8 The factors that may have a significant impact on the 10 year plan have been identified as COVID-19, climate change and achieving the goal of making Dunedin City net carbon neutral by 2030, 3 water reform, and the impact of a high growth scenario in terms of population, land use, and capital expenditure.

9 Balancing increasing costs and affordability have been considered in proposing a limit on rate increases.

10 The ability to provide and maintain levels of service, and meet additional demand for services, e.g., providing essential infrastructure for growth, has been provided for in the 10 year plan draft operating and capital budgets, within the rate and debt limits proposed.

11 Information on giving securities for debt, objectives for holding investments and targeted investment returns are summarised from Council’s Treasury Risk Management Policy.

Other Proposals in the draft Financial Strategy

Rate Increases

12 Rate increases in the current Financial Strategy (2018-28) are limited to no more than 8% in year one, and for years 2-10 to 5% on average, annually over the period. The draft Financial Strategy (2021-2031) proposes limits on rate increases to no more than 10% in year one of the plan, and in year 2-10, to 6.5% on average, annually over the period.

13 The higher rate increase limits proposed reflect the need for greater investment across the city, and changes to levels of services, e.g., the enhanced kerbside collection programme.

14 Average Dunedin rates for Dunedin residents will still be less than the national average for city councils.

Operating Surplus

15 The Finance Strategy 2021-2031 proposes two measures related to operating surplus:

· Forecast total operating surplus greater than zero for each year of the plan

· Aim to ensure everyday costs of running the city can be funded from everyday revenue (excluding any non-recurring/non-cash items) consistently by the end of the 10 years.

16 The second measure ensures that the Council can sustainably fund it day to day operations (including capital renewals).

Surplus Funds

17 The draft Financial Strategy proposes enabling Council to consider using proceeds from the disposal of an asset to invest in an income generating asset, e.g., the Waipori Fund, rather than using those proceeds to pay down debt. Council could decide to do this at the time it would give approval for the disposal of the asset.

Income from Group Companies

18 The 10 year plan does not include the receipt of any dividends from group companies. The draft Financial Strategy acknowledges this but provides that the Council will work with DCHL to explore the option of a dividend stream in future years, on the basis that any dividend delivered could be sustained.

OPTIONS

19 Council is required to have a Financial Strategy for consultation as part of the 10 year plan. The draft strategy provided includes previous Council decisions for the purposes of consultation. Options have not been presented but Council is able to modify the draft Financial Strategy.

NEXT STEPS

20 The draft Financial Strategy, with any amendments will be finalised for public consultation as part of the Supporting Documents for the 10 year plan.

21 Key elements of the Financial Strategy will be incorporated into the Consultation Document, including commentary on the proposed limits for debt and rate increases.

Signatories

Author:	Sharon Bodeker - Corporate Planner
Authoriser:	Gavin Logie - Acting General Manager Finance

Attachments

	Title	Page
⇩a	Draft Financial Strategy	30

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This decision enables democratic local decision making and action by, and on behalf of communities, and promotes the social, economic, environmental and cultural well-being of communities in the present and for the future.

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 10 year plan contributes to 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. The Financial Strategy is a key component of the work to support the development of the 10 year plan.

Māori Impact Statement

There are no known impacts for tangata whenua.

Sustainability

The Financial Strategy considers matters of sustainability and financial resilience over the 10 year period.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

The financial limits will impact directly on the development of the 10 year plan, including the level of capital works that could be undertaken over the 10 year period, and levels of service provided.

Financial considerations

The Financial Strategy sets rate and debt limits that inform the development of the 10 year plan work programmes.

Significance

The Financial Strategy is considered significant in terms of the Council’s Significance and Engagement Policy and will be consulted on as part of the 10 year plan process.

Engagement – external

There has been no external engagement in the development of the draft Financial Strategy.

Engagement - internal

Various departments have been consulted on in the preparation of the Financial Strategy, including finance and corporate leadership.

Risks: Legal / Health and Safety etc.

There are no identified risks.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

The Financial Strategy underpins the 10 year plan budget and will be of interest to Community Boards, as many operating and capital matters relevant to Community Boards are in the draft 10 year plan.

Council

27 January 2021

Capital Expenditure Report 2021-2031

Department: Corporate Policy

EXECUTIVE SUMMARY

1 This report seeks approval of the draft capital budget for the purposes of developing the 10 year plan 2021-31, and consulting with the community.

2 The draft budget currently represents an investment $1.515 billion over the 10 years made up of $950.5 million for renewals, $487.5 million for new capital, and $77.4 million for specific growth expenditure in Three Waters.

3 Council considered options for some capital projects at its meeting on 14 December 2020, and decisions made at that meeting have been incorporated into the draft capital budget.

RECOMMENDATIONS

That the Council:

a) Approves the capital budget for the purposes of developing the 10 year plan 2021-31 and consulting with the community.

BACKGROUND

4 Capital budgets have been prepared for all activities of council, taking into consideration the following:

· Asset management plans, incorporating current condition assessments and risk profiling to inform the timing of any renewal

· Priority of work – renewals over new capital

· Ability to deliver – both internally and the available market capacity

· Timing of work – achievably over the 10 year period

· Climate change and zero carbon targets – assessment of possible impacts from capital proposals

· Ability to fund – debt limits and our ability to service debt

· Legislation – requiring works to be undertaken

5 A number of option reports were considered by Council at its meeting on 14 December 2020, and the decisions made at this meeting have been incorporated into the capital budgets as follows:

· Shaping Dunedin Future – inclusion of six transport projects developed to ensure that transport disruption is minimised during and after the construction of the new Dunedin Hospital ($51.2 million);

· Performing Arts – inclusion of funding for the development of a performing arts facility, noting two options are to be consulted on, the Athenaeum and the Mayfair Theatre ($17.1 million);

· Moana Pool – inclusion of funding for a low emissions heating upgrade ($3.4 million);

· District Energy Scheme – inclusion of funding for a district energy scheme, noting two options are to be further investigated, an Octagon area low emissions heating upgrade, and connection to an existing scheme ($11.1 million).

DISCUSSION

6 The draft capital budget for the 10 year plan provides for replacing existing assets and infrastructure, meeting additional demand (including growth) and improving some levels of service. Across the Council’s activities, we are proposing to spend $1.515 billion over the 10 year period. The draft capital budgets are provided at Attachment A.

7 Capital expenditure is funded as follows:

· Funded depreciation – for renewals

· Debt – for new capital, and any shortfall in funded depreciation for renewals

· Waka Kotahi NZTA grant funding – renewals and new capital for transport projects

· Other third party contributions for new capital – e.g,: Trust funding for the new Mosgiel Pool

· Development contributions – for growth capital

8 The graph below shows the overall proposed capital budget by renewals, new capital and growth.

Renewals

9 The capital budget provides for $950.5 million of renewals expenditure, including an inflation adjustment of $116.8 million over the 10 year period. Table 1 provides the renewals budgeted for each activity group.

Table 1 – Renewal capital expenditure by activity group

Activity	Draft Budget 2021-31	2018-28 Plan	Increase
Ara Toi	$15.6 m	$13.9 m	$1.7 m
Economic Development	$0.1 m	-	$0.1 m
Governance	$34.3 m	$27.5 m	$6.8 m
Property	$168.2 m	$50.2 m	$118.0 m
Regulatory	$4.6 m	$3.6 m	$1.0 m
Reserves & Recreation	$77.0 m	$52.7 m	$24.3 m
Roading & Footpaths	$245.8 m	$161.1 m	$84.7 m
3 Waters	$395.9 m	$208.7 m	$187.2 m
Waste Management	$9.0 m	$2.9 m	$6.1 m
Total	$950.5 m	$520.6 m	$429.9 m

10 The programme of renewals is based on the latest asset management plans, which focus on asset condition, risk assessment, planning and delivery opportunities, and long-term asset solutions that provide value for residents, businesses and the environment.

11 The proposed level of investment represents a considerable uplift on the previous 10 year plan and has been based on current information, and the required level of spend needed to support current levels of service. The uplift also represents the need for increased investment on an aging infrastructure network including buildings and operational plant.

Depreciation

12 Depreciation expenditure is the systematic write-off of an assets value over that asset’s useful and/or economic life. As such depreciation provides a fair representation of renewals expenditure over the long term.

13 Table 2 shows the relative comparison between renewals and depreciation for the 10 year period 2021-31.

Table 2 – Renewal capital expenditure vs Depreciation 2021-31

Activity	Renewals Capex 2021-31	Depreciation 2021-31	Over/(Under)
Ara Toi	$15.6 m	$13.6 m	$2.0 m
Economic Development	$0.1 m	$0.3 m	($0.2 m)
Governance	$34.3 m	$27.0 m	$7.3 m
Property	$168.2 m	$138.5 m	$29.7 m
Regulatory	$4.6 m	$2.3 m	$2.3 m
Reserves & Recreation	$77.0 m	$79.6 m	($2.6 m)
Roading & Footpaths	$245.8 m	$249.1 m	($3.3 m)
3 Waters	$395.9 m	$373.2 m	$22.7 m
Waste Management	$9.0 m	$5.4 m	$3.6 m
Other	$0.0 m	$0.1 m	($0.1 m)
Total	$950.5 m	$889.1 m	$61.4 m

Renewals Funding

14 Depreciation (and therefore renewals expenditure) is funded from annual revenue including rates, fees and charges and NZTA renewals grant funding. Where the level of spend exceeds these combined income lines in any given year, the additional investment will be funded by debt.

15 The above table shows a shortfall over the 10 year period, which will require additional debt funding to deliver the planned programme.

Ara Toi

16 Renewals for the Ara Toi Group is budgeted as $15.6 million. The renewal projects include:

17 Dunedin Public Art Gallery: $0.6 million for heating and ventilation system, and exhibition lighting.

18 Dunedin Public Libraries: $12.9 million for purchasing lending and reference collection materials, minor capital equipment purchases (e.g., barcode scanners, library shelving, public area furniture, etc.), and the replacement of the Radio Frequency Identification system implemented across the network of libraries.

19 Toitū Otago Settlers Museum: $1.8 million for renewal of the permanent galleries 10 years after their opening, LED lighting replacement, and minor equipment and technology upgrades.

Governance

20 Renewals for the Governance Group is budgeted as $34.3 million. The renewal projects include:

21 Business Information Systems: $28.2 million for initiatives including replacing asset management software and the corporate finance system, upgrading rates and regulatory systems.

22 Fleet operations: $4.9 million has been provided for fleet vehicle replacement over the 10 year period.

23 Communications and marketing: $1.0 million for street banner hardware, the DCC’s website (design and installation), and intranet renewal.

Property

24 Renewals for the Property Group is budgeted as $168.2 million. The renewal projects include:

25 Property asset renewals: $120.3 million has been provided for asset renewals for the following property portfolios:

· $21.7 million for commercial properties

· $21.4 million for community property

· $11.9 million for investment property

· $42.6 million for operational property

· $22.6 million for community housing

26 Asset renewal projects include a number of lift replacements, roof replacements, flooring replacements, and compliance work across all of the portfolios.

27 Healthy Homes Upgrades: $3.1 million has been provided for healthy homes upgrades.

28 Under the Residential Tenancies (Healthy Homes Standards) Regulations 2019, all rental properties must meet specific and minimum standards for heating, insulation, ventilation, moisture ingress, drainage, and draught stopping.

29 All rentals must comply within 90 days of any new or renewed tenancy after 1 July 2021, with all rentals complying by 1 July 2024.

30 The DCC currently owns 936 community housing units, which will require upgrades over the first three years of the 10 year plan.

31 Palmyra Refurbishment: $4.1 million has been provided for the refurbishment of the 42 housing units.

32 Asbestos remediation works: Under the Health and Safety at Work Act 2015, building owners are required to produce Asbestos Management plans for all buildings. $8.2 million has been allocated for remediating any asbestos issues requiring remediation that are discovered following surveys of all DCC owned buildings.

33 Seismic remediation works: Under the Building (Earthquake-Prone Buildings) Amendment Act 2016, building owners are required to carry out seismic assessments for all buildings that fit the profile (age, building type, structure, etc.). $6.0 million has been provided for completing any structural strengthening work that is required following the surveys. This work will be completed for all DCC owned buildings.

34 Specific Properties: provision for renewals work on specific properties include:

· $1.7 million for the Dunedin Library refurbishment

· $3.6 million for the town hall, municipal chamber exterior and lift

· $3 million for the Civic Centre exterior, roof and windows

· $5.7 million for community hall renewals

· $2.9 million for Edgar Stadium refurbishment

· $2.6 million for tarpits

· $2.4 million for the Railway Station exterior and lift

· $1.1 million for Olveston House renewals

· $1.1 million for public toilet renewals

· $1.5 million for investment property lift replacements

· $0.9 million for the Dunedin Public Art Gallery refurbishment

Regulatory

35 Renewals for the Regulatory Group is budgeted as $4.6 million. The renewal projects include:

36 Parking Operation Replacement Equipment: $3.4 million is included in the budget to provide for the replacement of approximately 30 parking meters each year. There are currently 330 pay and display meters on the street. This budget will also cater for plans to increase some of the paid parking areas around the city.

Reserves and Recreation

37 Renewals for the Reserves and Recreation Group is budgeted as $77.0 million. The renewal projects include:

38 Moana Pool: $16.1 million has been provided to renew aging and poor condition building assets at Moana Pool. The majority of works form part of the Moana Pool Masterplan. Renewals include windows, changing rooms, lifts, structural works, gym refurbishments and plant assets such as boilers, pumps and treatment systems.

39 $3.8 million has been provided to replace the poor condition hydro-slides at Moana Pool.

40 Community Pools: $4.3 million has been provided to renew community pool plant and built assets at the Port Chalmers and St. Clair swimming pools.

41 Botanic garden: $1.9 million has been provided to renew public facilities, buildings and structures.

42 Recreational Facilities: provision for renewals is made up of the following:

· Green space funding of $6.1 million has been provided for the renewals of soft and living assets such as sports turf, trees and gardens, including drainage and irrigations systems.

· Playground funding of $9.7 million has been provided to renew aging and poor condition playground equipment and soft-fall surfaces across the cities network of 111 playgrounds and skate parks.

· Recreational facilities funding of $29.8 million has been provided for the renewal of public facilities and built recreational assets such as gymnasiums, sports pavilions, changing rooms, toilets, coastal structures, athletics facilities, sports field lights, hard surfaces (paths, car parks, skate parks, tracks), heritage and cultural structures.

43 St Clair/St Kilda Transition Plan: $4.2 million has been provided to fund the delivery of the St. Clair Transition Plan, including the renewal of the geo-bag structure (sand-sausage), and delivery of the Kettle Park Transition Plan. These transition plans are designed to support the management of the St Clair sea wall and beach.

Roading and footpaths

44 Renewals for the Roading and Footpaths Group is budgeted as $245.8 million. The renewal projects include:

45 Footpath renewals: $48.2 million has been provided for footpath renewals. Footpaths are aging with some nearing or over their expected useful economic lives. Condition has declined since 2013/14 with programmes deferred for the broad band roll-out. Since 2016/17 investment has increased, averaging 2.17% of the network per annum but below the asset management target of 4%. The budget proposes increasing investment to address this issue preventing further deterioration.

46 Gravel road re-metaling: $14.3 million has been provided to undertake gravel road re-metaling. We have relied on a strategy of spot metalling which, while saving on material costs, over time is not the most cost-effective approach. A sustained and pro-active method of renewal that would become area focused, reducing cartage and mobilisation costs is being proposed.

47 Major drainage control: $49.2 million has been provided for this. The budget allows for sustained investment in Kerb and Channel renewals to improve condition and avoid further deterioration. The culvert and mud tank network is aging with many assets nearing or at the end of their expected useful economic lives. The budget therefore allows for culvert and mud tank renewals to address anticipated failures.

48 Pavement rehabilitations: $17.2 million has been provided to undertake pavement rehabilitation work.

49 Pavement renewals: $84.7 million has been provided for pavement renewals. The condition of the sealed network is deteriorating and the level of service targets for renewal investment and road roughness are not being met. Average annual investment over the past five years has been 5.07% of the sealed network versus a target of 6%. The programme seeks to address this by increasing the average annual investment in the network.

50 Structure component replacement: $22.6 million has been provided for this.

51 Traffic services renewals: $9.7 million has been budgeted to undertake this work.

3 Waters

52 Renewals for the 3 Waters Group is budgeted as $395.9 million. The renewal projects include:

53 Water supply: $158.6 million for water supply, includes Central city renewals of $10.3 million, water supply resilience of $57.7 million and other water renewals of $90.6 million.

54 Wastewater: $162.7 million for wastewater renewals includes, metro wastewater treatment plant resilience of $82.4 million, other wastewater renewals of $69.6 million, and rural wastewater schemes of $10.7 million.

55 Stormwater: $74.6 million for stormwater renewals includes central city renewals of $21.5 million, Mosgiel stormwater pump station and network renewals of $21.5 million, and other stormwater renewals of $31.6 million.

56 This renewals programme is informed by recent condition assessment programmes on treatment plants and performance data, down to the individual asset level where possible.

57 The effects of deferred renewals are evident in asset failure and inability to meet required levels of service such as resource consent conditions. For example, at certain wastewater treatment plants high rates of inflow and infiltration cause treatment plant ‘wash-out’ resulting in poor performance, and foul sewer overflows both to the environment and into private property. Assets contributing to these level of service failures are generally part of the ‘renewals backlog’.

58 The proposed renewals programme only includes projects that are required to maintain service levels or meet existing service level shortfalls. Renewals will proactively target significant risk areas, such as highly critical assets in order to prevent significant service level failure. Where possible during renewals, network rationalisation (downsizing or up-sizing pipes upon renewal, combining double-ups or re-configuring parts of the network) will be carried out.

Waste Management

59 Renewals for the Waste Management Group is budgeted as $9.0 million. The renewal projects include:

60 Forrester Park Closed Landfill: $3.8 million has been budgeted for culvert pipe renewal in 2029/30 and 2030/31. This culvert carries stormwater underneath the closed landfill and CCTV inspection of the pipe has revealed that it is nearing end of life.

61 Kerbside bin replacement: $2.0 million has been budgeted for ongoing bin replacements.

New Capital

62 Table 3 shows the new capital budgeted by each of the activity groups. Details of the major projects for each activity are provided.

Table 3 – New capital by activity group

Activity	Draft Budget 2021-31	2018-28 Plan	Increase (Decrease)
Ara Toi	$4.7m	$3.7m	$1.0m
Community & Planning	$4.0m	$3.5m	$0.5m
Economic Development	$0.3m	$0m	$0.3m
Governance	$13.0m	$7.2m	$5.8m
Property	$46.6m	$14.3m	$32.3m
Regulatory	$0m	$0.1m	($0.1m)
Reserves & Recreation	$36.5m	$14.7m	$21.8m
Roading & Footpaths	$193.8m	$211.5m	($17.7m)
3 Waters	$88.4m	$96.5m	($8.1m)
Waste Management	$100.2m	$6.2m	$94.0m
Total	$487.5m	$357.7m	$129.8m

Ara Toi

63 New capital for the Ara Toi Group is budgeted as $4.7 million. Of this $2.6 million is for the Dunedin Public Art Gallery (primarily for acquisitions), $0.9 million for Toitū and $1.2 million for libraries, including $0.5 million acquisitions for the new South Dunedin library.

Community and Planning

64 New capital for the Community and Planning Group is budgeted as $4.0 million. The major new capital projects are:

65 Warehouse Precinct Upgrades - $1.0 million is included over the 2021/22 – 2022/23 financial years for the completion of the final stage of the Warehouse Precinct Plan. This involves the planning and delivering of streetscape improvements within the northern sections of Bond Street, that will integrate with the surrounding environs.

66 Minor Amenity Centres Upgrades - $2.0 million is included over ten years for amenity upgrades to a range of centres. It is phased to allow for significant upgrades every second year, with $100k in intervening years when planning will be undertaken. This phasing aligns with Transport group budgets for infrastructure upgrades to suburban centres.

67 Street Trees and Furniture (City Development) - $1.0 million is included over ten years for street furniture, trees and plants, to provide minor city-wide amenity improvements outside of the central city and suburban centres.

Governance and Support Services

68 New capital for the Governance and Support Services Group is budgeted as $13.0 million of which $12.7 million is for the Business Information Services department. The major new capital projects are:

69 Customer self-service portal – $3.2 million is provided for a new customer self-service portal that will enable rate payers to access DCC information, log a complaint, pay for rates and any other online services that the DCC can provide through a DCC web interface/portal. This will be developed over the 2021/22 – 2025/26 period.

70 Smart City Internet of Things - $4.2 million is provided for this initiative. Smart cities use Internet of Things (IoT) devices such as connected sensors, lights, and meters to collect and analyse data. This data is used to improve infrastructure, public utilities and services. The DCC currently has the Smart Water Metre project now underway, and the LED Light project using IoT. This program of work, which will run from 2024/25 through to 2030/31, will have a systematic approach for implementing all DCC’s IoT capacity.

Property

71 New capital for the Property Group is budgeted as $46.6 million. The major new capital projects are:

72 Public toilets - $2.1 million is included over the 10 year period to increase the number of public toilets in Dunedin. A “Changing Places Bathroom” will be constructed in the 2021/22 year, and two public toilets are budgeted to be completed each year thereafter.

73 Performing Arts Centre - $21.9 million has been provided in the budget, from 2024/25 – 2027/28, for the future provision of a performing arts centre. Staff are working on the development of two options, the Athenaeum as the preferred option, and the Mayfair as a potential alternative, for consultation in March/April 2021.

74 South Dunedin Library and Community Complex - $11.6 million has been provided in the budget, from 2021/22 – 2023/24. At the 24 November 2020 Council meeting, approval was given for the demolition of the existing buildings, and the building of a new single-storey library and community complex on the site at 278 King Edward Street.

75 District Energy Scheme - $11.1 million has been provided in the budget, from 2021/22 – 2025/26. At the 14 December 2020 Council meeting, a decision was made to further investigate two shortlisted Octagon-Area Low Emissions Heating Upgrade options (the electrical Octagon-Area District Energy Scheme, and connection to the existing Pioneer Energy Ltd District Energy Scheme followed by the Future City District Energy Scheme), and include a capital budget of $11.1 million.

Reserves and Recreation

76 New capital for the Reserves and Recreation Group is budgeted as $36.5 million. The major new capital projects are:

77 Mosgiel Pool –$15.7 million has been provided to complete the construction of the new aquatic facility in Mosgiel over the 2021/22 – 2022/23 period. A further $3.4 million has been included for consequential works associated with the development. External funding raised by the Taieri Community Facilities Trust of $4.05 million will contribute towards this development.

78 Moana Pool improvements - $4.1 million has been provided for Moana Pool. At the 14 December 2020 Council meeting, a decision was made to include $3.4 million for a Moana Pool Low Emissions Heating Upgrade, comprising improvements to energy monitoring systems and installation of a second heat recovery heatpump, followed by either a wood pellet boiler or an air source heatpump. Of the $3.4 million for the heating upgrade, $1.9 million is included in this budget, and the balance is in the renewals budget.

79 The balance of $2.2 million has been budgeted for Moana masterplan improvements, such as a new lift from reception, multi-use room for swim squads, dive pool seating and provision for a new café facility should there be support for this pending a feasibility study.

80 Parks and recreation - $9.2 million has been budgeted for parks and recreation, including $4.3 million for playground improvement, and $4.4 million for recreation facilities improvements.

Roading and Footpaths

81 New capital for the Roading and Footpaths Group is budgeted as $193.8 million. The major new capital projects are:

82 Shaping Future Dunedin - $51.2 million from 2021/22 to 2028/29 has been budgeted for this project. At the 14 December 2020 Council meeting, a decision was made to include a set of six capital projects that have been developed by the Connecting Dunedin Partnership. The projects have been collaboratively developed to ensure that transport disruption is minimised during and after the construction of the new Dunedin Hospital. The detail of the six projects is provided in the report “Shaping Future Dunedin Transport Programme” being considered at the 27 January 2021 Council meeting.

83 Central City Upgrade - $60.0 million has been provided over the 10 year period for the central city upgrade project. The aim of this project is to improve safety, accessibility and amenity in the central city area. The project will increase safety, particularly for pedestrians and cyclists, and contributes to a more vibrant, thriving central city environment.

84 City to waterfront (bridge) connection - $20.0 million has been provided from 2024/25 to 2027/28 for this project. The aim of this project is to improve the pedestrian and cycle connection between the city centre and harbour. Staff are working with mana whenua and other stakeholders over coming months to review the objectives and scope of the project, to ensure that it meets a broad range of aspirations for the city, including mana whenua cultural values, economic revitalisation, regeneration of the waterfront as well as transport, sustainability and art and creativity in infrastructure objectives. Staff will report back to Council in May 2021 as part of the 10 Year Plan process. In the meantime, the $20.0 million agreed by the Council in 2018 has been retained in the capital budget.

85 Dunedin urban cycleways - $21.9 million has been provided for over the 10 years of the plan for this project. Dunedin’s urban cycleways programme has a focus on road safety, and on providing an appropriate level of service to encourage the uptake of cycling for everyone. Waka Kotahi (NZTA) is working closely with the Council to develop the city’s cycling infrastructure and is supporting the programme with project funding and guidance. Dunedin urban cycleways are made up of the Arterials cycleways which seeks to close the gap in terms of levels of service across the city, the Tunnels Trail connecting Dunedin to Mosgiel, and North East Valley.

86 Low cost, low risk improvements - $20.0 million has been provided for over the 10 years of the plan for minor safety improvements.

87 Peninsula connection - $9.7 million has been provided in year one of the 10 year plan, to complete the series of improvements to Portobello Road and Harrington Point Road. These improvements aim to improve safety for all road users, provide for walking and cycling, improve resilience to high tide and weather events, and improve efficiency and travel time reliability.

3 Waters

88 New capital for the 3 Waters Group is budgeted as $88.4 million. The major new capital projects are:

89 South Dunedin Flood Alleviation - $33.5 million has been provided for over the 10 year period for this project. A capital works programme is planned to mitigate flooding in South Dunedin. The programme is informed by work on existing hydraulic models, flow monitoring and incorporation of groundwater models. The programme will increase resilience to future rainfall events and includes work on the Forbury and Portobello Road areas.

90 Ross Creek / Mt Grand resilience - $27.2 million has been provided for over the 10 year period, to increase water supply resilience and enable water stored in the recently refurbished Ross Creek Reservoir to be transferred to Mt Grand Water Treatment Plant for treatment and distribution.

91 Port Chalmers water supply - $14.4 million has been provide from 2027/28 – 2030/31, to increase water supply capacity from the Dunedin metropolitan system to Port Chalmers. The intention would be to decommission the two raw dams and water treatment plant at Port Chalmers that are only used to service cruise ships at the height of summer and install a new water supply pipeline from the Mount Grand treatment plant to Port Chalmers.

92 Metro wastewater treatment plant - $7.0 million has been provided from 2021/22 – 2023/24 to improve plant resilience.

Waste

93 New capital for the Waste Group is budgeted as $100.2 million. The major new capital projects are:

94 Waste Futures - $29.3 million has been provided for the roll out of a new kerbside collection system, plus development of additional waste diversion facilities including an organics facility, a mixed recyclables sorting facility, a plastics granulation facility, a centrally located Rummage Store, and a bulk waste transfer facility. This project has a strong focus on the minimisation of waste, the minimisation of carbon dioxide emissions from waste, cost effectiveness of services to ratepayers, the reduction of environmental impacts as a result of waste operations, and the provision of refuse collection and kerbside recycling services that meet ratepayer expectations.

95 Smooth Hill - $56.4 million has been provided from 2024/25 to 2028/29 for the development of Smooth Hill to replace the Green Island Landfill on its closure.

96 Green Island landfill solar farm - $5.1 million has been provided in 2030/31, with a further $5 million needed in 2031/32 for a solar farm. The final cap of the closed Green Island landfill would be used for a large installation of solar panels linked to the electricity export infrastructure at Green Island Wastewater Treatment Plant, to supplement the electricity generated by destruction of landfill gas. This electricity can to be used to either off-set the operational costs of the Green Island Wastewater Treatment Plant, or the operational costs of future waste diversion facilities established at Green Island, with any excess sold into the national grid.

97 Gas collection system - $5.0 million has been provided from 2022/23 to 2025/26 for growth of the Green Island landfill gas collection system. The system has undergone a programme of improvement since 2017, with the number of gas wells also increasing from 14 to 26. The number will continue to increase to 55 as the landfill is progressively closed. The gas is used to produce electricity via a Gas Engine located at the Green Island Wastewater Treatment Plant, with the excess destroyed via a Gas Flare. The Gas Engine was second hand when purchased and has been in operation for 7 years. The Gas Engine is unable to utilise all the available gas from the landfill and a larger engine will be required to reduce Council’s Emission Trading Scheme obligations over the medium to long term. The final 55 gas wells will continue to operate and be maintained long after closure of the landfill.

Growth Capital

98 The three waters budget includes $77.3 million for growth capital as follows:

Table 4 – growth capital

Activity	Draft Budget 2021-31
Water supply	$17.7m
Wastewater	$32.2m
Stormwater	$27.4m
Total	$77.3m

99 3 Waters infrastructure is required to service areas rezoned within the 2GP and Dunedin's change in status to a ‘medium’ growth city under the National Policy Statement for Urban Development Capacity. The need to comply with this (through Variation 2 of the 2GP), means new capital expenditure is required to upsize existing networks and create new reticulation assets for water, wastewater and stormwater.

100 Funding for this capital expenditure will come from a combination of development contribution revenue and debt depending on the relative timing of the expenditure and associated revenue.

101 The Development Contribution (DC) policy is currently being updated to incorporate this new expenditure into the unit rates for charging purposes. The current operating statements exclude any additional DC revenue that may arise from the change in these unit rates – these values will be incorporated into the final draft LTP prior to consultation.

Signatories

Author:

Sharon Bodeker - Corporate Planner

Authoriser:

Gavin Logie - Acting General Manager Finance

Sandy Graham - Chief Executive Officer

Attachments

	Title	Page
⇩a	Total Capital Expenditure	59
⇩b	Ara Toi Capital Expenditure	60
⇩c	Community and Planning Capital Expenditure	61
⇩d	Economic Development Capital Expenditure	63
⇩e	Governance and Support Services Capital Expenditure	65
⇩f	Property Capital Expenditure	66
⇩g	Regulatory Services Capital Expenditure	67
⇩h	Reserves and Recreation Capital Expenditure	68
⇩i	Roading and Footpaths Capital Expenditure	69
⇩j	Three Waters Capital Expenditure	70
⇩k	Waste Management Capital Expenditure	71

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 Activity Groups contribute 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 discussed and considered in the 50 year Infrastructure Strategy and financial resilience is discussed in the Financial Strategy.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for each Activity Group for inclusion in the 10 year plan.

Financial considerations

Financial considerations are detailed in the report.

Significance

The draft budgets are considered significant in terms of the Council’s Significance and Engagement Policy, and will be consulted on as part of the 10 year plan 2021-31.

Engagement – external

There has been no external engagement in developing the draft budgets for the Activity Groups.

Engagement - internal

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

Risks: Legal / Health and Safety etc.

There are no identified 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; and Community Boards will be consulted on the 10 year plan 2021-2031.

Council

27 January 2021

2021/22 Draft Operating Budget - 3 Waters

Department: 3 Waters

EXECUTIVE SUMMARY

1 This report provides an overview of the operating expenditure (opex) budgets for year one of the 10 year plan for the 3 Waters Group, and includes the following activities:

· Water

· Wastewater

· Stormwater

RECOMMENDATIONS

That the Council:

a) Adopts for the purposes of developing the 10 Year Plan 2021-31 and consulting with the community

i) The draft 2021/22 operating budget for the Three Waters Group as shown/amended at Attachment A.

ii) The draft 2021/22 fees and charges schedules for the Three Waters Group as shown/amended at Attachment B.

operating budgets

Revenue

Rates

2 Rates have increased overall in the 3 Waters Group by $4.922 million.

External Revenue

3 External revenue has increased by $473k, 7% due to increased water revenue resulting from increased fees and revenue collection process improvements.

Expenditure

Personnel costs

4 Personnel costs have increased by $308k, 4%. This includes additional resources to address frequency of staff on standby rosters, planning for an ageing workforce and business resilience. There is some offset from reduced contractor spend.

Operations and maintenance

5 Operations and maintenance costs have decreased by $90k due mainly to a reduction in sludge cartage fees.

Occupancy costs

6 Occupancy costs have increased by $504k, 5% which reflects increases in rates $341k, insurance $100k and electricity $117k.

Consumables and general costs

7 Consumables and general costs have decreased by $303k, 17% due to a reduction in operational engineering consultancy spend and transfer of coastal monitoring budget to Parks ($161k).

Internal charges

8 Internal charges have increased by $493k, 11% due to a $459k increase in sludge disposal costs at the landfill based on current activity. The increase includes $147k for anticipated incinerator maintenance and $59k due to price rises reflected in increased ETS and waste levy costs. There are also additional fleet costs of $48k due to increased staff.

Depreciation

9 Depreciation has increased by $1.483m, 5% reflecting the capital expenditure programme.

Interest

10 Interest has decreased by $2.181m, 40% due to a reallocation of interest expense across all budgets to reflect asset value and the capital expenditure programme.

fees and charges

11 Fees and charges for activities in the 3 Waters Group have either remained the same or have generally been increased by 3%. There are some exceptions as follows:

a) Wastewater unit rates have increased by 10.53% for NFR/TSS per kg and 22.22% for volume per cubic metre.

b) Treated water per cubic meter - Central Water Scheme Tariff for water sold by meter has increased by 4.69%.

Signatories

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

Attachments

Title

Page

⇩a

3 Waters Draft Operating Expenditure Budget 2021/22

⇩b

3 Waters Draft Fees and Charges 2021/22

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 Three Waters Group activities 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.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for the Three Waters Group for inclusion in the 10 year plan.

Financial considerations

Financial considerations are detailed in the report.

Significance

The draft budgets are included in the development of the 10 year plan 2021-31, and they form the basis for setting rates, which is considered significant and is consulted on.

Engagement – external

There has been no external engagement in developing the draft budgets for the Three Waters Group.

Engagement - internal

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

Risks: Legal / Health and Safety etc.

There are no identified 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; and Community Boards will be consulted on the 10 year plan 2021-2031.

Council

27 January 2021

2021/22 Draft Operating Budget - Roading and Footpaths

Department: Transport

EXECUTIVE SUMMARY

1 This report provides an overview of the operating expenditure (opex) budgets for year one of the 10 year plan for the Roading and Footpaths Group.

RECOMMENDATIONS

That the Council:

a) Adopts for the purposes of developing the 10 Year Plan 2021-31 and consulting with the community

i) The draft 2021/22 operating budget for the Roading and Footpaths Group as shown/amended at Attachment A.

ii) The draft 2021/22 fees and charges schedules for the Roading and Footpaths Group as shown/amended at Attachment B.

operating budgets

Revenue

Rates

2 Rates have increased overall in the Roading and Footpaths Group by $2.971 million, 17%.

Grants and subsidies (operating and capital)

3 Grants and subsidies revenue has decreased by $12.847 million.

4 Capital grants have decreased by $13.023 million, 46%. Waka Kotahi funding assistance for capital expenditure projects reflects the capital programme proposed for the 2021/22 year, a 1% subsidy rate reduction and an anticipated shortfall in renewals funding.

5 Waka Kotahi funding constraints (partly driven by the impact of the COVID-19 pandemic and current income shortfalls in petrol tax) along with changing priorities for Waka Kotahi funding, means that in the short term at least, renewals funding will be limited to $7 - $8 million per annum, short of the $10 - $14 million per annum based on standard Waka Kotahi subsidy rates of 51% – 53%. We need to continue investing in the renewal of the network to ensure levels of service are maintained, therefore it is anticipated that in the short term at least there will be an additional funding requirement from the DCC. This will be financed through a combination of debt and rates funding over the course of the 10 year plan.

6 Operating grants have increased by $176k, 2%. This reflects the increased operational maintenance expenditure associated with the increased costs for the new road maintenance contract that commenced on 1 May 2020. This increase has been partially offset by a 1% subsidy reduction in the Waka Kotahi funding assistance rate.

Expenditure

Operations and maintenance

7 Operations and maintenance costs have increased by $74k, 0%. This is due to a number of factors outlined as follows:

a) Costs are largely associated with the maintenance contracts, in particular the new combined road maintenance contract that commenced on 1 May 2020. This resulted in sealed pavement maintenance costs increasing by $1.174 million, traffic services costs increasing by $802k, street cleaning costs increasing by $380k and routine drainage maintenance decreasing by $639k.

b) A budget of $200k is included for Shaping Future Dunedin Transport Programmes to support travel planning work to promote active and public transport modes.

c) Pre-seal repair costs decreased by $1.400 million due to the re-classification of pre-reseal repairs as capital expenditure.

d) Emergency works costs decreased by $500k due to the removal of the emergency works budget provision.

Consumables and general costs

8 Consumables and general costs have increased by $409k, 15%. This combines an increase in project planning of $355k to $825k for Shaping Future Dunedin Transport Programmes and an increase in professional services required to support the structural renewals programme covering repairs to bridges, sea and retaining walls.

Depreciation

9 Depreciation has increased by $1.531 million, 7% reflecting the 30 June 2020 revaluation and the capital expenditure programme.

Interest

10 Interest has increased by $1.339 million, 112% due to a reallocation of interest expense across all budgets to reflect asset values and the capital expenditure programme.

fees and charges

11 Fees and charges for activities in the Roading and Footpaths Group have increased by 3%.

Signatories

Author:	Jeanine Benson - Group Manager Transport
Authoriser:	Simon Drew - General Manager Infrastructure Services

Attachments

	Title	Page
⇩a	Roading and Footpaths Draft Operating Expenditure Budget 2021/22	84
⇩b	Roading and Footpaths Draft Fees and Charges 2021/22	85

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 Roading and Footpaths Group activities 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.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for the Roading and Footpaths Group for inclusion in the 10 year plan.

Financial considerations

Financial considerations are detailed in the report.

Significance

The draft budgets are included in the development of the 10 year plan 2021-31, and they form the basis for setting rates, which is considered significant and is consulted on.

Engagement – external

There has been no external engagement in developing the draft budgets for the Roading and Footpaths Group.

Engagement - internal

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

Risks: Legal / Health and Safety etc.

There are no identified 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; and Community Boards will be consulted on the 10 year plan 2021-2031.

Council

27 January 2021

2021/22 Draft Operating Budget - Reserves and Recreational Facilities

Department: Parks and Recreation

EXECUTIVE SUMMARY

1 This report provides an overview of the operating expenditure (opex) budgets for year one of the 10-year plan for the Reserves and Recreational Facilities Group, and includes the following activities:

· Aquatic Services

· Dunedin Botanic Garden

· Cemeteries and Crematorium

· Parks and Recreation (Parks)

RECOMMENDATIONS

That the Council:

a) Adopts for the purposes of developing the 10 Year Plan 2021-31 and consulting with the community

i) The draft 2021/22 operating budget for the Reserves and Recreational Facilities Group as shown/amended at Attachment A.

ii) The draft 2021/22 fees and charges schedules for the Reserves and Recreational Facilities Group as shown/amended at Attachment B.

operating budgets

Revenue

Rates

2 Rates have increased by $1.263million. The main changes include $523k for interest and depreciation, $422k for increases in Parks maintenance and occupancy costs and $225k for coastal planning activities. Offsetting these increases is a reduction of $167k of costs due to the temporary closure of the Mosgiel community pool, to allow for the construction of the new facility.

External Revenue

3 External revenue has increased by $597k, including:

· $468k increase in Aquatics due mainly to partial reinstatement of revenue estimates following a reduction in the 2020/21 budget due to Covid-19 lockdown and the addition of Sunday swim schools.

· 3% increase in fees and charges across the Reserves and Recreational Facilities Group.

Grants and subsidies (operating and capital)

4 Grants and subsidies revenue has increased overall by $524k.

5 Capital grants have increased by $559k reflecting a one-off contribution from the Ministry of Business Innovation and Employment Tourism Infrastructure Fund towards the new Tunnel Beach car park and toilet.

6 Operating grants have decreased by $35k due to reduced funding in 2021/22 for the City Sanctuary (Urban Link) predator free programme.

Expenditure

Personnel costs

7 Personnel costs have decreased by $134k due to the temporary closure of Mosgiel Pool for the 2021/22 season while the new facility is constructed.

Operations and maintenance

8 Operations and maintenance costs have increased by $320k due to an increase in maintenance contract costs for ecological/track maintenance, University of Otago Oval and greenspace contracts.

Occupancy costs

9 Occupancy costs have increased by $99k, the main changes include:

· $34k increase in gas charges at the crematorium

· $27k increase in ground rental charges

· $40k increase in rates.

Consumables and general costs

10 Consumables and general costs have increased by $200k, the main changes include:

· $87k increase for asset condition and valuation assessments. This increase is consistent with year three of the contract.

· $225k increase in coastal planning costs including $150k for investigative work at Kettle Park to inform future planning for this site. There is a corresponding reduction of $161k in Three Waters coastal planning budgets.

· $95k reduction in external contractor auditing costs.

· $21k reduction in City Sanctuary (Urban Link) consultant and legal fees.

Grants and subsidies

11 Grants and subsidies have decreased by $29k. The main driver is the removal of the one-off $30k grant provided to Mountain Bike Otago in 2020/21.

Depreciation

12 Depreciation has increased by $271k, 6%, reflecting the capital expenditure programme.

Interest

13 Interest expense has increased by $252k, 34%, due to a reallocation of interest expense across all budgets to reflect asset value and the capital expenditure programme, partially offset by lower interest rates.

fees and charges

14 Fees and charges for activities in the Reserves and Recreational Facilities Group have been increased by 3% generally across activities.

Signatories

Author:	Scott MacLean - Acting Group Manager Parks and Recreation
Authoriser:	Robert West - Acting General Manager City Services

Attachments

	Title	Page
⇩a	Reserves and Recreational Facilities Draft Operating Expenditure Budget 2021/22	91
⇩b	Reserves and Recreational Facilities Draft Fees and Charges 2021/22	92

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 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

The activities of the Reserves and Recreational Facilities Group take into account the Council’s approach to sustainability.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for the Reserves and Recreational Facilities Group for inclusion in the 10 year plan.

Financial considerations

Financial considerations are detailed in the report.

Significance

The draft budgets are included in the development of the 10 year plan 2021-31, and they form the basis for setting rates, which is considered significant and is consulted on.

Engagement – external

There has been no external engagement in developing the draft budgets for the Reserves and Recreational Facilities Group.

Engagement - internal

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

Risks: Legal / Health and Safety etc.

There are no identified 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; and Community Boards will be consulted on the 10 year plan 2021-2031.

Council

27 January 2021

2021/22 Draft Operating Budget - Waste Management

Department: Waste and Environmental Solutions

EXECUTIVE SUMMARY

1 This report provides an overview of the operating expenditure (opex) budgets for year one of the 10 year plan for the Waste Management Group.

RECOMMENDATIONS

That the Council:

a) Adopts for the purposes of developing the 10 Year Plan 2021-31 and consulting with the community

i) The draft 2021/22 operating budget for the Waste Management Group as shown/amended at Attachment A.

ii) The draft 2021/22 fees and charges schedules for the Waste Management Group as shown/amended at Attachment B.

operating budgets

Revenue

Rates

2 Rates have increased by $1.175 million. This reflects an increase in the kerbside recycling rate of $1.751 million, and a reduction in general rates of $0.576 million.

3 The increase in the kerbside recycling rate is a realignment to ensure that the targeted rate fully funds the activity. The rate has not increased from $66.30 since 2015/16. During this time there have been material increases in contract costs, changes in costs for the recycling market and an increase in contaminated recycling. The new rate of $106.10 incorporates five years of the above increases as well as preparing for the new kerbside collection contract to commence in 2022/23. The rate increase is necessary to recover associated cost.

External Revenue

4 External revenue has increased by $3.203 million.

5 Landfill revenue at Green Island has increased by $2.785 million due to expected increased tonnages of material, and to increases in the Waste Disposal Levy (WDL) and Emission Trading Scheme (ETS) costs being passed on to consumers. Tonnages of materials forecast for 2019/20 were reduced due to the expected economic impacts of COVID-19. As the economic impacts have been less than expected, the forecast for 2021/22 represents a return to normal rather than any significant increase in waste to landfill.

6 Waste Strategy revenue has increased by $328k as a result of the waste levy increase.

Internal Revenue

7 Internal revenue has increased by $475k, 40% due mainly to increased sludge and screenings from Tahuna wastewater treatment plant.

Expenditure

Operations and maintenance

8 Operations and maintenance costs have increased by $1.914 million.

9 ETS emission units represent one metric tonne of carbon dioxide (or carbon dioxide equivalent). ETS costs have increased by $852k reflecting a 50% anticipated increase in the market costs for carbon emission units (from $25 to $37.50 per unit) and an increase in the tonnage of waste to Green Island landfill. This increased cost has been partially off-set by significant improvements to the landfill gas collection system.

10 The landfill contract variable component has increased $459k due to the increase in tonnage.

11 Recycling collection costs have increased by $388k due to increased contract costs as a result of stricter limits on acceptable contamination, and limited markets for recyclable materials.

12 Refuse and litter collection costs have increased by $189k in line with increased contract costs.

13 Servicing of community recycling centres has increased by $110k due to an increase of recycling hubs from two to five facilities.

Consumables and general costs

14 Consumables and general costs have increased by $670k.

15 Waste disposal facility operators must pay the Waste Disposal Levy based on the weight of material disposed of at their facility. The Waste Disposal levy has increased by $561k due to a rise in cost from $10 per tonne to $20 per tonne on 1 July 2020.

16 Consultancy budgets have increased by $100k to $1.45 million for the Green Island landfill reconsenting process, proposed Smooth Hill landfill consenting process, design and consenting process for waste diversion infrastructure, and procurement of new kerbside service contracts.

fees and charges

17 Fees and charges for activities in the Waste Management Group have increased as required to cover increases to both Waste Disposal Levy (increase from $10 to $20 per tonne) and Emission Trading Scheme obligations (increase from $25 to $37.50 per tonne). Fees and charges for activities that do not incur Waste Disposal Levy or Emissions Trading Scheme charges remain unchanged, except for the after hours public weigh charge which is increasing by 11%.

18 Fees and charges at the Green Island landfill have been recalculated to reflect the installation of a second weighbridge. Charges that were based on ‘cost per tonne’ are now based on ‘cost per 50 kg (or part thereof)’.

Signatories

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

Attachments

	Title	Page
⇩a	Waste Management Draft Operating Expenditure Budget 2021/22	102
⇩b	Waste Management Draft Fees and Charges 2021/22	103

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 are no known impacts for tangata whenua.

Sustainability

The activities of the Waste Management Group take into account the Council’s approach to sustainability.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for the Waste Management Group for inclusion in the 10 year plan.

Financial considerations

Financial considerations are detailed in the report.

Significance

The draft budgets are included in the development of the 10 year plan 2021-31, and they form the basis for setting rates, which is considered significant and is consulted on.

Engagement – external

There has been no external engagement in developing the draft budgets for the Waste Management Group.

Engagement - internal

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

Risks: Legal / Health and Safety etc.

There are no identified 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; and Community Boards will be consulted on the 10 year plan 2021-2031.

Council

27 January 2021

2021/22 Draft Operating Budget - Property Services

Department: Property

EXECUTIVE SUMMARY

1 This report provides an overview of the operating (opex) budget for year one of the 10-year plan for Property Services, and includes the following activities:

· Community Housing

· Investment property

· Commercial property

· Operational property

· Community property

· Property management and land advisory

RECOMMENDATIONS

That the Council:

a) Adopts for the purposes of developing the 10 Year Plan 2021-31 and consulting with the community

i) The draft 2021/22 operating budget for the Property Group as shown/amended at Attachment A.

ii) The draft 2021/22 fees and charges schedules for the Property Group as shown/amended at Attachment B.

operating budgets

Revenue

Rates

2 Rates revenue has increased by $1.350 million.

External revenue

3 Total external revenue has increased by $419k. Revenue from investment properties has increased by $572k, as a result of some rentals moving back to pre COVID-19 levels, increases through rent reviews, and leases in previously vacant spaces.

4 Revenue from community housing has increased by $242k. The increase for the 2020/21 year took effect on 1 January 2021, being six months of increased rental. The current budget reflects that increase for a 12 month period.

5 Revenue from community property has decreased by $320k, being $77k for the Regent Theatre in line with lease and Property Arrangement Grant changes, and $255k for 278 King Edward Street.

Grants and subsidies revenue

6 Grants and subsidies revenue is budgeted at $60k. This is a subsidy from the Energy Efficiency and Conservation Authority to fund the new energy graduate position.

Expenditure

Personnel costs

7 Personnel costs have increased by $102k. Full time equivalent (FTE) staff in Property Services has increased by 0.9 FTE to 38.3 FTE due to the addition of an energy graduate position (fixed term).

Operations and maintenance

8 Operations and maintenance expenditure has increased by $776k. This includes increases of $550k for structural maintenance (exterior) at the Railway Station, $115k for planned and reactive maintenance for public toilets throughout the city, (previously budgeted for by Parks and Recreation Services), and $125k for living wage contract increases for cleaning.

Occupancy costs

9 Occupancy costs expenditure has increased by $818k. This includes $450k rates increases across all portfolios, $250k of ground rent increases in the investment portfolio, and $160k increased energy costs across all portfolios.

Consumables and general costs

10 Consumables and general costs have reduced by $139k, due primarily to the three-yearly cycle of valuations.

Interest

11 Interest cost has decreased by $1.434 million, due to a reallocation of interest expense across all budgets to reflect asset value and the capital expenditure programme, and of lower interest rates.

fees and charges

12 As part of the 2020/21 Annual Plan, community housing rental fees were due to increase on 1 August 2020. Due to the impacts of COVID-19, this increase was postponed until 1 January 2021.

13 Recent amendments to the Residential Tenancies Act 1986 do not allow for rents to increase more than once in any rolling 12-month period. This means that Council cannot increase these again fees until 1 January 2022 at the earliest.

14 As a review of community housing policy is ongoing, including reviewing the mechanism to set rents, it is proposed to have no increase in community housing rents in the 2021/22 year, to allow any annual rent increases to revert to the usual timing of August, with the next increase (if any) proposed for 1 August 2022.

15 Community Gallery fees are mostly unchanged while encroachment license fees have increased by 2-3%.

Signatories

Author:	David Bainbridge-Zafar - Group Manager Property Services
Authoriser:	Robert West - Acting General Manager City Services

Attachments

	Title	Page
⇩a	Property Draft Operating Expenditure Budget 2021-22	110
⇩b	Property Draft Fees and Charges 2021-22	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 Property Group activities primarily contribute to the objectives and priorities of the above strategies.

Māori Impact Statement

There are no known impacts for tangata whenua.

Sustainability

The activities of the Property Group take into account the Council’s approach to sustainability.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for the Property Group for inclusion in the 10 year plan.

Financial considerations

Financial considerations are detailed in the report.

Significance

The draft budgets are included in the development of the 10 year plan 2021-31, and they form the basis for setting rates, which is considered significant and is consulted on.

Engagement – external

There has been no external engagement in developing the draft budgets for the Property Group.

Engagement - internal

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

Risks: Legal / Health and Safety etc.

There are no identified 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; and Community Boards will be consulted on the 10 year plan 2021-2031.

Council

27 January 2021

2021/22 Draft Operating Budget - Governance and Support Services

Department: Finance

EXECUTIVE SUMMARY

1 This report provides an overview of the operating expenditure (opex) budgets for year one of the 10 year plan for the Governance and Support Services Group, and includes the following activities:

· Business information services

· Civic and administration

· Civil defence

· Communications and Marketing

· Corporate leadership

· Corporate policy

· Customer services agency

· Finance

· Fleet operations

· Human resources

RECOMMENDATIONS

That the Council:

a) Adopts for the purposes of developing the 10 Year Plan 2021-31 and consulting with the community

i) The draft 2021/22 operating budget for the Governance and Support Services Group as shown/amended at Attachment A.

ii) The draft 2021/22 fees and charges schedules for the Governance and Support Services Group as shown/amended at Attachment B.

operating budgets

Revenue

Rates

2 Rates have increased overall in the Governance and Support Services Group by $4.119m, following the reallocation across all Council groups.

Rates penalties

3 Rates penalties have increased by $518k, reflecting reinstatement to pre-Covid levels.

External Revenue

4 External revenue has decreased by $1.804 million. This primarily relates to the Waipori Fund where all income lines have been reduced to reflect current market conditions.

Tax Refund

5 Tax refund revenue has been reduced by $414k reflecting lower group assessable income available for donation tax credits.

Expenditure

Personnel costs

6 Personnel costs have increased $886k, primarily due to additional FTE to progress the Zero Carbon and Sustainability, and South Dunedin Future projects.

Operations and maintenance

7 Operations and maintenance costs have decreased by $2.290m.

8 This reduction is primarily attributed to the following:

· $1.000 million funding for Dunedin Railways Ltd for 2020/21 year only,

· $600k savings from the project management office,

· $700k council-wide savings required to ensure the Council’s net operating surplus meets the target set in the Financial Strategy.

Consumables and general costs

9 Consumables and general costs have decreased overall by $600k.

10 This includes council-wide savings of $1.515 million required to ensure the Council’s net operating surplus meets the target set in the Financial Strategy.

11 These required savings have been partially offset by the following additional costs:

· Software licence fees of $327k, reflecting the new Microsoft license type necessary for post-Covid operations and an enhanced virtual working environment (Zoom, VDI, VPN and Secure-access software); and

· Costs associated with delivery of key initiatives including South Dunedin Future, $125k and Zero Carbon, $485k.

Grants and subsidies

12 Grants and subsidies have decreased by $982k reflecting the removal of the $950k
Covid 19 fund.

Depreciation

13 Depreciation has increased by $353k, reflecting the capital expenditure programme.

Interest

14 Interest expense has increased by $681k, due to a reallocation of interest expense across all budgets to reflect asset value and the capital expenditure programme.

fees and charges

15 Fees and charges for activities in the Governance and Support Services Group remain unchanged from 2020/21.

Signatories

Author:	Carolyn Allan - Senior Management Accountant
Authoriser:	Gavin Logie - Acting General Manager Finance

Attachments

Title

Page

⇩a

Governance and Corporate Support 2021/22 Draft Expenditure Operating Budget

123

⇩b

Governance and Support Services Draft Fees and Charges 2021/22

124

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 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

The activities of the Governance and Support Services Group take into account the Council’s approach to sustainability.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for the Governance and Support Services Group for inclusion in the 10 year plan.

Financial considerations

Financial considerations are detailed in the report.

Significance

The draft budgets are included in the development of the 10 year plan 2021-31, and they form the basis for setting rates, which is considered significant and is consulted on.

Engagement – external

There has been no external engagement in developing the draft budgets for the Governance and Support Services Group.

Engagement - internal

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

Risks: Legal / Health and Safety etc.

There are no identified risks.

Conflict of Interest

There are no known conflict 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 consulted on the 10 year plan 2021-2031.

Council

27 January 2021

2021/22 Draft Operating Budget - Ara Toi (Arts and Culture)

Department: Ara Toi

EXECUTIVE SUMMARY

1 This report provides an overview of the operating expenditure (opex) budgets for year one of the 10 year plan for the Ara Toi (Arts and Culture) Group, and includes the following activities:

· Dunedin Public Art Gallery (DPAG)

· Dunedin Public Libraries (Libraries)

· Olveston House (Olveston)

· Otago Museum levy

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

RECOMMENDATIONS

That the Council:

a) Adopts for the purposes of developing the 10 Year Plan 2021-31 and consulting with the community

i) The draft 2021/22 operating budget for the Ara Toi (Arts and Culture) Group as shown/amended at Attachment A.

ii) The draft 2021/22 fees and charges schedules for the Ara Toi (Arts and Culture) Group as shown/amended at Attachment B.

operating budgets

Revenue

Rates

2 Rates revenue has decreased by $83k.

External Revenue

3 External revenue has increased by $73k, 7%, providing a partial recovery to pre COVID-19 levels.

Expenditure

Personnel costs

4 Personnel costs have decreased by $32k reflecting minor changes in salaries and overtime.

Grants and subsidies

Otago Museum levy

5 The budget for the Otago Museum is unchanged at $4.535 million incorporating the following:

a) The grant of $75k towards the Museum’s Tangata Whenua Gallery redevelopment has been removed per the 2018-28 10 year plan.

b) A new budget line is included for the unpaid portion of the Clutha District Council levy of $75k.

c) Rates relief of $8k has been continued.

Depreciation

6 Depreciation has decreased by $270k, -20%, due to some assets at Toitū being fully depreciated.

Interest

7 Interest expense has decreased by $566k, -60%, due to lower interest rates and a reallocation of interest expense across all budgets to reflect asset value and the capital expenditure programme.

fees and charges

8 Fees and charges for room rental in the Library have increased as a result of improved facilities, including a new sound system. Increases are in the range of 18.8% - 30.0% across the range of rooms for hire.

9 Fees and charges in Toitū/Lan Yuan/DPAG have increased by between 2% - 5%.

10 Fees and charges in Olveston have increased 6% for one hour tours with high tea due to increased catering costs and 12% for one hour guided tours (croquet tea and biscuits), also to cover increased costs.

Signatories

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

Attachments

	Title	Page
⇩a	Ara Toi Draft Operating Expenditure Budget 2021/22	130
⇩b	Ara Toi Draft Fees and Charges 2021/22	131

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 Ara Toi Group activities primarily contribute to the objectives and priorities of the above strategies.

Māori Impact Statement

There are no known impacts for tangata whenua

Sustainability

The activities of the Ara Toi Group take into account the Council’s approach to sustainability.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for the Three Waters Group for inclusion in the 10 year plan.

Financial considerations

Financial considerations are detailed in the report.

Significance

The draft budgets are included in the development of the 10 year plan 2021-31, and they form the basis for setting rates, which is considered significant and is consulted on.

Engagement – external

There has been no external engagement in developing the draft budgets for the Ara Toi Group.

Engagement - internal

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

Risks: Legal / Health and Safety etc.

There are no identified risks

Conflict of Interest

There is no known conflict 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 consulted on the 10 year plan 2021-2031.

Council

27 January 2021

2021/22 Draft Operating Budget - Regulatory Services

Department: Customer and Regulatory Services

EXECUTIVE SUMMARY

1 This report provides an overview of the operating expenditure (opex) budgets for year one of the 10-year plan for the Regulatory Services Group, and includes the following activities:

· Alcohol Licensing

· Animal Services

· Building Services

· Environmental Health

· Parking Operations

· Parking Services (enforcement)

RECOMMENDATIONS

That the Council:

a) Adopts for the purposes of developing the 10 Year Plan 2021-31 and consulting with the community

i) The draft 2021/22 operating budget for the Regulatory Services Group as shown/amended at Attachment A.

ii) The draft 2021/22 fees and charges schedules for the Regulatory Services Group as shown/amended at Attachments B and C.

operating budgets

2 The draft operating budget for 2021/22 provides for ‘business as usual’, but reflecting the sale of the Dowling Street carpark.

Revenue

External Revenue

3 External revenue has decreased by $35k. The main revenue changes incorporate the following:

a) Parking Operations decrease of $175k, due to the sale of Dowling Street carpark ($258k revenue reduction) offset by $83k due to fee increases across the network.

b) Animal Services increase of $67k, due to proposed changes in dog registration fees and anticipated increase in dog numbers.

c) Building Services increase of $62k, due to a new administration fee for the Southern Building Control Group (SBCG) Producer Statement Author Register and revenue increases in Records of Title and Certificates for Public Use.

d) Environmental Health increase of $41k, due to fee increases and new E Scooter charges.

Expenditure

4 Overall expenditure has decreased by $61k. The main expenditure changes incorporate the following:

a) Depreciation costs have decreased by $129k due to a delay in the replacement of parking meters.

b) Interest expense has decreased by $72k, 100% due to a reallocation of interest expense across all asset owning budgets, and reduced interest rates.

fees and charges

5 Animal Services fees (including dog registration) have been increased by a range of 0% to 4.2%.

6 Most Building Services fees have not been increased. An increase in one levy has been made and a new administration fee has been included for the SBCG Producer Statement Author Register (previously administered by Invercargill City Council).

7 Environmental Health fees have increased by a range of 0% to 3.7%.

8 For e-scooter operators, fees of $0.13 per ride and an annual administration fee of $500 are proposed. These align with fees in other territorial authorities of similar size and will recover costs of administration and assessment process, data reporting, stakeholder engagement, compliance, monitoring and use of public space.

9 For Parking Operations both on-street and off-street fees are unchanged, other than 17% for both on and off-street all day parking to reflect appropriate market pricing in a metro area.

10 Leased off-street car park fees have also been increased by between 2.7% and 3.6%.

11 Parking Services (enforcement) fees have increased by a range of 0% to 3.7%.

Signatories

Author:	Paul Henderson - Acting Group Manager Customer and Regulatory Services
Authoriser:	Simon Pickford - General Manager Community Services

Attachments

	Title	Page
⇩a	Regulatory Services Draft Operating Expenditure Budget 2021/22	138
⇩b	Regulatory Services Draft Fees and Charges 2021/22	139
⇩c	Draft Schedule B Building Consents Application Fees 2021/22	147

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

Māori Impact Statement

There are no known impacts for tangata whenua.

Sustainability

The activities of the Regulatory Services Group take into account the Council’s approach to sustainability.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for the Regulatory Services Group for inclusion in the 10 year plan.

Financial considerations

Financial considerations are detailed in the report.

Significance

The draft budgets are included in the development of the 10 year plan 2021-31, and they form the basis for setting rates, which is considered significant and is consulted on.

Engagement – external

There has been no external engagement in developing the draft budgets for the Regulatory Services Group.

Engagement - internal

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

Risks: Legal / Health and Safety etc.

There are no identified 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; and Community Boards will be consulted on the 10 year plan 2021-2031.

Council

27 January 2021

2021/22 Draft Operating Budget - Community and Planning

Department: Community and Planning

EXECUTIVE SUMMARY

1 This report provides an overview of the operating expenditure (opex) budgets for year one of the 10 year plan for the Community and Planning Group, and includes the following activities:

· City Development

· Resource Consents

· Community Development and Events RECOMMENDATIONS

That the Council:

a) Adopts for the purposes of developing the 10 Year Plan 2021-31 and consulting with the community

i) The draft 2021/22 operating budget for the Community and Planning Group as shown/amended at Attachment A.

ii) The draft 2021/22 fees and charges schedules for the Community and Planning Group as shown/amended at Attachment B.

operating budgets

Revenue

Rates

2 Rates have increased by $357k.

External Revenue

3 External revenue has increased by $593k. This is made up of $382k from the International Cricket Council’s contribution towards the Women’s World Cup 2022 (ICC WWC 2022), $102k from Masters Games cost recoveries, and a $116k increase in Resource Consents revenue bringing consent revenue back to pre COVID-19 levels.

EXPENDITURE

Personnel costs

4 Personnel costs have increased by $315k, due to additional resources in City Development to deliver an increased workload on new National Policy Statements including Urban Development, Indigenous Biodiversity and Highly Productive Land. There are also increased staff costs for the Masters Games being held in Dunedin in 2022, which are recoverable.

Operations and maintenance

5 Operations and maintenance costs have increased by $301k, primarily due to the ICC WWC 2022.

Occupancy costs

6 Occupancy costs have increased by $74k due to ICC WWC 2022 of $48k and increased insurance $25k.

Consumables and general costs

7 Consumables and general costs have increased by $552k. This is primarily due to ICC WWC 2022 of $258k, planning consultancy costs of $180k associated with the new National Policy Statements, and an increase in budget for major and premier event bidding transferred from Enterprise Dunedin of $75k.

Grants and subsidies

8 Grants and subsidies have decreased by $185k due to a $190k reduction in property arrangement grants.

Interest

9 Interest expense has decreased by $209k, due to a reallocation of interest expense across all asset owning budgets, and a decrease in interest rates.

fees and charges

10 Resource consents staff charge out rates have increased by 2% to 3%. Fixed fee for some application types have increased by 14% to 55% to better reflect actual cost.

11 Waiver of Category A resource consent application fees have been updated to reflect alignment with the rules of the 2GP. Category A fees are considered to have a high element of public good (e.g. large murals, significant tree pruning, temporary signs for one-off cultural events by not-for-profit organisations). Fee waivers impacts are anticipated to cost $55k and are provided for in the draft budget.

12 Two new fees are introduced for consent monitoring: monitoring fee for other visits, and monitoring fee for visits determined necessary after resource consent granted.

13 The site contamination search fixed fee has increased by $100 to better reflect cost. The increase includes an addition of $75 for archive search charge. Although the archive search charge is a Business Information Services (BIS) charge, this was added to the site contamination fee in the Community and Planning Group fees and charges schedule.

a) Commercial site search fee per site – increases from $330 to $430.

b) Residential site search fee per site– increases from $180 to $280.

Signatories

Author:	Nicola Pinfold - Group Manager Community and Planning
Authoriser:	Robert West - Acting General Manager City Services

Attachments

	Title	Page
⇩a	Community and Planning draft Operating Expenditure Budget 2021/22	153
⇩b	Community and Planning Draft Fees and Charges 2021/22	154

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 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

The activities of the Community and Planning Group take into account the Council’s approach to sustainability.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for the Community and Planning Group for inclusion in the 10 year plan.

Financial considerations

Financial considerations are detailed in the report.

Significance

The draft budgets are included in the development of the 10 year plan 2021-31, and they form the basis for setting rates, which is considered significant and is consulted on.

Engagement – external

There has been no external engagement in developing the draft budgets for the Community and Planning Group.

Engagement - internal

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

Risks: Legal / Health and Safety etc.

There are no identified 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; and Community Boards will be consulted on the 10 year plan 2021-2031.

Council

27 January 2021

10 Year Plan 2021-2031 Community Consultation

Department: Community and Planning

EXECUTIVE SUMMARY

1 This report provides an update on the proposed approach for consulting the community on the draft 10 year plan 2021-31. It outlines the proposed methods for seeking feedback and seeks confirmation of the objectives of the consultation and how we will evaluate its success.

2 The consultation approach incorporates new elements designed to encourage wider community participation and feedback.

3 Consultation is scheduled to take place between Tuesday 23 March 2021 to Thursday 22 April 2021. The consultation forms part of the Council’s ongoing engagement with the community.

RECOMMENDATIONS

That the Council:

a) Approves the proposed plan for community consultation on the draft 10 year plan 2021-31, including the measures for success.

BACKGROUND

4 The DCC’s engagement with the community on 10 year plans is undertaken in accordance with the Local Government Act 2002 (LGA). The key requirements are set out in s.93 (the long term plan), s.82 (the principles of consultation) and s.83 (the special consultative procedure). More detail is included in Attachment A.

5 Amendments to the LGA introduced in 2014 made the special consultative procedure less formal and provided for more flexibility in seeking and recording community feedback.

Development of the consultation plan

6 Community consultation on the 10 year plan forms part of ongoing engagement with the community. As outlined in the DCC’s Significance and Engagement Policy, ‘consultation’ forms part of the spectrum of participation, and is used when public feedback is sought on options or decisions.

7 Early engagement was undertaken between 20 September and 30 October 2020. The goals were to inform the community, encourage feedback and to increase awareness of the 10 year plan process prior to formal consultation. The feedback was used to inform the draft 10 year plan and the formal consultation.

8 In preparing the community consultation plan, staff also looked at best practice across other councils and used feedback from the December 2020 Council meeting on early engagement. Key feedback included:

· The importance of consultation being meaningful and inclusive

· The need to ensure that all residents have the opportunity to be heard as part of the 10 year plan and as part of ongoing DCC engagement and

· The need to achieve a balance of voices and ensure people feel heard.

9 Staff also used feedback from discussions and focus groups with mana whenua, youth, and people from the business and arts sectors to shape the consultation plan. This feedback highlighted:

· The value of opportunities for face-to-face interactions with Councillors and greater visibility of Councillors throughout consultation

· The importance of consultation taking place where the people are

· Messaging should be adapted to different audiences

· The benefits of utilising existing networks to enhance communications reach, and

· The importance of stimulating intergenerational discussions on the future of the city.

DISCUSSION

Key themes

10 While the consultation topics and content will be dependent on the outcomes of the 10 year plan Council meetings this month, it is anticipated the key themes will include: housing, transport, affordability and sustainability, Zero Carbon 2030 and climate change, and waste minimisation, as well as the economy, growth, COVID-19 and partnership with Māori.

11 The consultation will seek feedback on some topics within these themes. A number of the topics are also the subject of ongoing engagement with the community, which will extend beyond the 10 year plan consultation period.

Objectives of the Community Consultation

12 The proposed consultation plan for the 10 year plan 2021 – 31 is provided at Attachment B. The intended outcomes to be achieved are:

a) The whole community has had the opportunity to engage in the 10 year plan consultation process

b) Residents are well informed on the key opportunities and challenges facing the city

c) People feel that they have been heard

d) The consultation is seen by residents as part of an ongoing programme of engagement.

13 The focus of the plan is on the quality of the consultation and ensuring that the whole community, and particularly those groups who have been under-represented in past consultations (such as Māori, Pāsifika and youth) have the opportunity to take part.

14 The objectives include obtaining feedback from the community on some key questions and as well as more general feedback, to enable the creation a robust 10 Year Plan. We also need to meet legislative requirements, set out in the LGA.

Measures of success

15 In the past, the quantity of submissions and other items of feedback has been used as an indicator of success. For example, a total of 5,691 feedback items were presented to Council as part of the 10 year plan consultation 2018-28 and used as an indicator of a successful consultation, in the absence of defined measures of success.

16 The consultation on the 10 year plan 2021-31 will have other measures of success in addition to the quantity of feedback.

Proposed effectiveness measures

17 The measures of success will be agreed as part of the consultation plan for the 10 year plan 2021–31 and applied to assess the impact and effectiveness of the consultation and to establish a ‘baseline’ for future consultations.

18 The proposed measures include:

a) the quantity of submissions

b) the diversity of submitters

c) the percentage of residents aware of the 10 year plan consultation

d) the satisfaction of residents with the consultation and

e) the satisfaction of councillors with the consultation.

19 Success will be measured through: a survey to be sent to a representative sample of the community following the consultation; Residents’ Opinion Survey; and gathering demographic and other data on respondents and submitters. A post-consultation evaluation discussion with councillors is also proposed.

The consultation plan

20 The consultation plan builds on what has previously proved successful and introduces new elements to reach different parts of the community. For example, the DCC’s consultation document, Investing in our great small city (Te Whakatāpae i tēnei taone) won the 2018 Best Plain English Document in the New Zealand Public Sector and the consultation document for this 10 year plan will build on that. The new elements are explained in more detail below.

21 The key elements of the consultation plan include:

· Consultation document and feedback form (on recycled paper) delivered to all households.

· On-line feedback form

· Launch event (arts-focussed and interactive) e.g. temporary mural. The details are currently being finalised with Ara Toi staff.

· Face-to-face opportunities with Councillors and staff, including:

i. Drop-In Centre (in the Octagon engagement space). See further detail below.

ii. Presence at scheduled events in the community (e.g. Chamber of Commerce ‘Business After 5’ events, South Dunedin Festival).

iii. Community Boards, Strategy partnerships and other stakeholder groups supported with collateral to host local meetings.

iv. Communities invited to host drop-in pizza events in local venues, to be attended by Councillors and staff with free pizza provided.

· Information and feedback stands at Council facilities and other locations with high foot traffic (e.g. University Link, Mosgiel Library and Blueskin Bay Library)

· Youth Council activity.

· Hui at the three local marae and a hui with members of the local Pāsifika communities.

· Social media, as a means of inviting, receiving and updating on feedback, including using the Social Pinpoint tool as a means of receiving feedback.

· Public hearings.

22 A range of communication tools will be used for raising awareness of the plan and inviting feedback. The website, including Infographics and animations, will remain a key tool. Shareable digital content for use by Councillors, staff and others, (including youth and other interested parties) will be produced. This will include photos and video clips of Dunedin people who link to a range of different demographics, talking about what the future of Dunedin is to them and inviting people to participate. We will utilise our networks of stakeholders to disseminate information.

23 A radio advertising campaign is planned, which will be able to be targeted at under-represented groups. The consultation will be publicised in Council’s FYI publication and local media, including community newsletters, with a feature in the Star. New elements include advertising on the back of buses and Council vehicles ‘wrapped’ with the 10 year plan brand. The opportunity will also be taken to use the America’s cup screen in the Octagon outside of race times, to promote the consultation.

Mana whenua engagement activities

24 As part of DCC’s ongoing commitment to working in partnership with Māori, separate hui with each of the two local runaka (Te Rūnaka o Ōtākou and Kati Huirapa Rūnaka ki Puketeraki) and with taurahere at Araiteuru Marae are being progressed. In addition to providing an opportunity for feedback from Māori on the 10 year plan, these hui will also be used to agree topics for future discussion such as the development of a Māori Strategy and Thriving City Indicators.

New elements

25 The new elements proposed for the consultation on this 10 year plan are outlined in more detail below. These are included in response to feedback, including the need to keep consultation and engagement “fresh” and easy to understand, and to enable all sectors of the community to have their say.

Octagon Drop-In Engagement space

26 The Octagon engagement space (formerly used for the Waterfront engagement) will provide a visible central and interactive space with online content, where people can find out about the plan, interact with staff and Councillors and provide feedback (online or in-hard copy). The space will be staffed for set hours each day with staff and Councillors rostered on. Specialist staff can be called down as required, or days set aside when staff and collateral relating to specific consultation topics (e.g. kerbside) will be on-site.

Refreshing of face-to-face interactions in the community

27 On the basis of positive feedback from past consultations, the community-based opportunities for face-to-face interactions will follow a similar format as previously. Most of these will be based in the community at locations where people are already meeting i.e. information and feedback stands at Council facilities and other locations with high foot traffic (e.g. University Link, Mosgiel Library and Blueskin Bay Library).

28 We will also have presence at scheduled events in the community (e.g. Chamber of Commerce ‘Business After 5’ events and South Dunedin Festival). Community Boards, strategy partnerships and other stakeholder groups will also be supported with collateral to host local meetings and communities invited to host pizza meetings in local venues. The latter idea responds to feedback particularly from youth, that food can provide an effective incentive for some under-represented groups to participate.

29 Staff and Councillors can choose to wear branded T-shirts to raise awareness of the 10 year plan and to make staff and councillors easily identifiable at consultation meetings and events. Branded e-vehicles will also be parked outside some venues to increase awareness of the events.

Digital technology

30 New elements include use of iPads, rather than postcards, as the primary feedback methods and possible use of Social Pinpoint to record feedback. The use of iPads aligns with sustainability goals; reduces processing time; and enables submitters to see other feedback and their own, on screen, as laptops or computer monitors will be available at all sites. Postcards will still be available for those not comfortable with computers and iPads.

Increased focus on social media

31 There will be more focus on social media, than previously. Shareable videos and other content will be created for distribution and use on a variety of social media channels. The increased use of social media may increase the reach to different groups compared than our more traditional methods. It also provides a contingency in the event of any COVID-19 lockdown. Existing stakeholders, including as members of Council Strategy governance and advisory groups, will also be encouraged to promote the consultation and inform their networks.

Communication tools

32 New branding and design elements are proposed which focus on Dunedin residents. These are discussed below.

33 New communication elements include a radio campaign, as it can be more easily targeted to different demographics and listeners, than print advertising. Other means of raising awareness of the consultation include ‘wrapping’ Council e-vehicles with the 10 year plan brand and advertising on the back of buses.

Evaluation

34 As outlined above, data on respondents will be gathered to determine the reach of the consultation, together with surveys following the consultation, to assess its effectiveness and to form a baseline for future consultations and other engagement activity.

Branding and design

35 New branding and design elements are proposed. The brand focuses on people and is entitled ‘The Future of Us’.

36 The new 10 year plan branding uses the DCC logo, which reflects different things to different people. Some see the Octagon. Some see gothic windows reflecting our historic architecture. Some see a stylised map of the city, while others see tukutuku panels.

37 For the 10 year plan branding, staff have taken the DCC logo and fashioned it into a heart, which represents us getting to ‘the heart of the matter’ on a range of topics that we care about our community and that everyone can be involved in determining the future of our city.

38 The branding supporting the heart logo, features a bright palette of colours that highlights the topics we want to discuss with our community and reaches out to encourage their visions and gather their concerns about the future of Dunedin, ‘The Future of Us’.

COVID-19 contingencies

39 Last year, due to lockdown, we experienced disruption to the delivery of our collateral for consultation. This also affected face-to-face events.

40 The possibility of Dunedin (or New Zealand) moving to higher alert levels during the consultation period is factored in with an increased reliance on on-line approaches such as social media. Zoom meetings and online chats can also replace some proposed ‘face-to-face’ opportunities, if required.

Costs and resourcing

41 The plan balances the ambition to generate greater engagement using new and creative methods with the practical pressures around resourcing delivery and managing costs. If the plan is approved, we will take a whole of Council approach to its delivery. Staff from a range of departments will be encouraged to be involved, along with elected members, and asked to prioritise the consultation, in order to ensure its success.

42 It is estimated that the time commitment for Councillors would be up to 28 hours spread over the four week period of the consultation. This does not include time spent at hearings, social media management and attending meetings with your own networks.

43 This estimate is based on one councillor being rostered on, with staff, in the Octagon Drop-in space two hours per day (e.g. between 11am and 1pm daily). If councillors wish to commit further time for this aspect of the consultation, the scheduled times for councillor interaction could be increased (e.g. 10am to 2pm daily).

Table 1: Estimates of time commitment requirements

10 Year Plan consultation activity resourcing	Estimated monthly time commitment per councillor
Attending Octagon Space – rostered on for 2 x 2 hour slots (11am – 1pm) over one month.	4 hours
Attending DCC convened local face-to-face consultation stands in Council facilities or other high traffic locations (e.g. University Link, South Dunedin Library and Mosgiel Library) Ideally at least 2 councillors at each of the proposed 8 events for 2-hour slots.	6 hours
Attending events run by community and businesses (e.g. Business after 5, South Dunedin Festival, Farmers Market, community pizza events) All councillors will be welcome to attend all events. There will be a roster to ensure there is some councillor attendance at each event.	4 -6 hours
Councillors’ own network events (e.g. Sports and Rotary clubs)	Councillor choice
Mana whenua consultation activities (hui at 3 local marae)	9 hours
Pāsifika hui	3 hours
Total estimated time commitment per Councillor over the 4 week period	26 – 28 hours

44 The cost of the consultation is higher than for previous years. New costs include:

· Radio advertising and advertising on the backs of two buses and ‘Future of Us’ branding for two Council e-vehicles.

· Videos, interviews and collateral

· Social media boost

· Post engagement survey.

OPTIONS

Option One – Approve the proposed plan for community consultation on the draft 10 year plan 2021-31, including the measures for success. (Recommended Option)

45 This option delivers the approach outlined in this report and detailed in the attached consultation plan. It includes measures for success.

Advantages

· Responds to feedback from Councillors, focus groups and other stakeholders.

· Builds on previous experience and good practice.

· Incorporates some new elements to encourage increased participation.

· Includes a process for measuring success and provides a baseline against which to measure the success of future consultation initiatives.

Disadvantages

· Increased costs to deliver new aspects of the consultation.

Option Two – Approve a revised approach for community consultation

46 This option allows for amendments to the proposed consultation plan presented in this report.

Advantages

· Offers an opportunity for Councillor refinements to the proposed approach.

Disadvantages

· Could require additional resourcing or planning, over and above that already scoped.

NEXT STEPS

47 The next steps will include developing the consultation collateral and fitting out the Octagon Drop-in space.

48 Councillors will be invited to consultation events, as well as provided with consultation material and social media content. Training and familiarisation will also be provided prior to the consultation period commencing.

49 The consultation document will be created following the outcome of the January Council meetings. In order to allow for design and to achieve print and distribution deadlines, the final designed document will be available for noting by Council at the end of February 2021.

50 The scheduled key dates for consultation and decision-making are:

· Distribution of the consultation document from 16 March 2021.

· Formal consultation will run from Tuesday 23 March 2021 to Thursday 22 April 2021.

· Hearings are scheduled to take place for the week beginning Monday 3 May 2021.

· Deliberations are scheduled for the week beginning Monday 24 May 2021.

Signatories

Author:	Nicola Pinfold - Group Manager Community and Planning
Authoriser:	Robert West - Acting General Manager City Services

Attachments

	Title	Page
⇩a	Legislative requirements - Community engagement on 10 Year Plans	168
⇩b	Community Consultation Plan	169

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 10 year plan is part of the Council’s strategic framework. Forecast budgets, projects and activities associated with the implementation of the other strategies are included in the 10 year plan and reviewed in each Annual Plan Year.

Māori Impact Statement

Consultation and engagement processes for the 10 year plan will ensure there is opportunity for Māori to contribute to the decision-making process. Mana whenua were included as part of early engagement.

Sustainability

Consultation will provide an opportunity for the community to express their views and aspirations relating to DCC’s work towards sustainability and wider climate change ambitions.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

Early engagement was undertaken in relation to the 10 year plan and related strategies and policies.

Financial considerations

The costs of the consultation activity exceed the 10 year plan consultation budget of $60,000 by between $45,000 and $53,000 depending upon which elements are included. These additional costs will be met by reprioritising existing budgets.

Significance

Plans for consultation on the 10 year plan are of interest to the community and are an important part of the overall development of the 10 year plan for the city. The significance of this report setting out the Consultation Plan for approval is assessed as low in terms of Council’s Significance and Engagement Policy.

Engagement – external

External engagement was held with various stakeholders including youth and mana whenua, business and arts sectors, in developing the consultation approach outlined in this report. External engagement will take place as part of formal consultation outlined in the report.

Engagement - internal

The approach outlined in the report has been developed internally by the Marketing and Communications, Customer Service Agency, Finance, Events and Community Development, Governance and Corporate Policy teams, with input from 3 Waters and Council’s internal Community Engagement Advisory Group.

Risks: Legal / Health and Safety etc.

There may be some health and safety risks relating to face-to-face public engagement and COVID-19 may impact face-to-face activities. Contingency plans have been developed in accordance with central government guidance and risks will be managed as the plan is implemented.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

This material will be of interest to Community Boards.

Council

27 January 2021

2021-22 Rating Method

Department: Finance

EXECUTIVE SUMMARY

1 The draft budget as presented for 2021-22 proposes an overall increase in rates of 9.8%. This increase in rates is collected using the rating method. The proposed rates charged to individual rate accounts incorporate the budget increase and changes in the rating database.

2 The proposed changes to the rating method are discussed in this report. These include increases to the community services targeted rate (increase of 2.0%) and the stadium differentiated rates (increase of 2.0%).

RECOMMENDATIONS

That the Council, for the purposes of community engagement:

a) Approves an increase in the community services targeted rate for the 2021-22 year of $2.00 to $102.00 including GST.

b) Approves an increase in the Stadium 10,000 plus seat differentiated rates for the 2021-22 year based on the June 2020 Local Government Cost Index of 2.0%.

c) Approves the current rating method for the setting of all other rates for the 2021-22 year.

BACKGROUND

3 On 14 December 2020 the Council considered a report on General Rate Differential and moved the following recommendation:

“Moved (Cr Doug Hall/Cr David Benson-Pope):

That the Council:

Decides for the purposes of preparing the 2021/22 Rating Method report for the Ten Year Plan Council Meeting in January 2021 to maintain the current general rate differentials.

Division

The Council voted by division:

For: Crs David Benson-Pope, Rachel Elder, Christine Garey, Doug Hall, Carmen Houlahan, Marie Laufiso, Mike Lord, Steve Walker and Andrew Whiley (9).

Against: Crs Sophie Barker, Jim O'Malley, Jules Radich, Chris Staynes, Lee Vandervis and Mayor Aaron Hawkins (6).

Abstained: Nil

The division was declared CARRIED by 9 votes to 6

Motion carried (CNL/2020/124)”

4 The purpose of this report is to demonstrate the impact of the proposed rate increase by property and property category for the 2021-22 year and confirm the proposed changes to the rating method.

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

DISCUSSION

6 The overall increase in rates to be collected is driven by the draft budget for 2021-22 which proposes a 9.8% increase. This increase in rates is collected using the rating method.

7 The rating method comprises two main elements, general rates and targeted rates, as demonstrated on Attachment A. Attachment A provides a summary of current and proposed rates, provides details of the individual rates and the amount collected from each rate. Attachment B, summary information, provides a summary of fixed charges, general rates and total rates.

Community Services Rate

8 The Council has a community services targeted rate (CSTR) which funds the Botanic Garden and part of the Parks and Reserves activity. The CSTR is a fixed charge on all rateable properties and is normally increased annually by an indexed amount. Last year however, the CSTR was reduced to $100.00 from $240.50 as a way of managing the impact of the 2019 property revaluation. In previous years the increase has been based on the Local Government Cost Index (LGCI). Allowing for the June 2020 LGCI of 2.0% would increase this from $100.00 to $102.00 for the 2021-22 year.

Stadium Rates

9 The Council has a rating differential for the Stadium for the general rate, the economic development/tourism rate, the capital value based drainage rate and the capital value based fire protection rate. Since the 2013-14 year, the differentiated Stadium rates have been inflation adjusted annually. For the 2021-22 year, it is proposed to increase these rates by the June 2020 LGCI of 2.0%.

Kerbside Targeted Rate

10 The rate has been increased for the 2021/22 rating year from $66.30 to $106.10 including GST. This is the result of a redistribution of rate income into the targeted rate from general rates as well as increased costs of the service. The targeted rate now reflects the true cost of delivering this service.

Overall Impact

11 The following table shows the overall rates income (including GST) by property category for 2020-21 and 2021-22.

Category	2020-21 ($’000)	2021-22 ($’000)	$ change ($’000)	% change
Residential	121,574	133,904	12,330	10.1%
Lifestyle	5,984	6,712	728	12.2%
Commercial	55,347	60,275	4,928	8.9%
Farmland	4,702	5,102	400	8.5%
Total	187,607	205,993	18,386	9.8%

12 Attachment C provides sample property rate changes for each category of property. The sample property rate changes incorporate:

· The forecast rate increase of 9.8%,

· An increase of 2.0%, $2.00 in the community services rate,

· Changes to the mix of other targeted rates, and

· An increase of 2.0% in the differentiated rates paid by the Stadium.

Rate Maximum

13 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 21% of total rates revenue.

OPTIONS

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

NEXT STEPS

15 If adopted, the proposed rating method will be included in the supporting documentation that accompanies the draft 2021-22 budget.

16 While the Council is engaging with the community on the 10 year plan 2021-31, 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 - Acting General Manager Finance

Attachments

	Title	Page
⇩a	Rating Method	180
⇩b	Summary Information	181
⇩c	Sample Property Rates	182

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 10 year plan 2021-31 contributes to objectives across the strategic framework, as it describes the Council’s activities, which are aligned to community outcomes. It also 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

There are no known impacts for tangata whenua.

Sustainability

Sustainability is an underlying principle of the DCC’s strategic framework. Activity in the 10 year plan 2021-31 supports the DCC to embed the principles of sustainability across DCC work.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

The proposed rating method will be set out with the 10 year plan 2021-31 budget material during the community engagement period.

Financial considerations

The rating method gives effect to the draft budget. The financial implications of the draft budget are discussed in 10 year plan 2021-31 overview report and the group budget reports.

Significance

There will be full engagement on the rating method as part of the 10 year plan 2021-31 process, which will cover any issues of significance.

Engagement – external

The content of the 10 year plan 2021-31 is of interest to the community and there will be a full community engagement process.

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.

There are no identified risks.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

The rating method will be of interest to Community Boards.

Council

27 January 2021

Notification of 2GP Variation 2: Additional Housing Capacity

Department: City Development

EXECUTIVE SUMMARY

1 This report seeks approval to notify Variation 2: Additional Housing Capacity to the second generation Dunedin City District Plan (2GP). The proposed notification date is 3 February 2021.

2 Variation 2 comprises a number of discrete changes to the 2GP that will add additional housing capacity into the Plan. These changes include rule changes for the General Residential 1 and Township and Settlement zones that will enable additional infill development and intensification, rezoning additional areas of medium-density ‘General Residential 2’ zoning, 16 new ‘greenfield’ residential sites (totally 101 ha) along the urban boundary that are being rezoned from rural or rural residential to residential. Together, it is expected that these changes will provide for an estimated 2000-2500 new houses. The changes also make better provision for social housing.

3 The decision to approve notification is primarily a procedural decision made under Clause 5 of Schedule 1 of the (Resource Management Act) RMA to allow the public submissions and further submissions processes to commence. It is based on councillors’ satisfaction that a proper assessment of options has occurred as required by section 32 of the RMA.

4 Notification of Variation 2 is included in the mail-outs of the third instalment of rates notices between 14 January and 11 February (see Attachment). The notification is subject to the decision that is the subject of this report.

RECOMMENDATIONS

That the Council:

a) Approves, having had particular regard to the section 32 RMA report, notification of Variation 2 to the second generation Dunedin City District Plan

b) Resolves under section 48(1)(a)(i) and section 7(2)(j) of the Local Government Official Information and Meetings Act 1987 to withhold the attachments to this report (provided electronically) until 3 February to prevent the disclosure or use of official information for improper gain or improper advantage

c) Resolves to delay the rules provided for in section 86B(3) of the RMA from taking effect until Variation 2 becomes operative.

d) Resolves to delegate power to lodge a submission under Clause 6, First Schedule RMA on the variation to the Chief Executive Officer (or delegate) or Chair of the Hearing Committee (Cr David Benson-Pope)

e) Delegates to the Chief Executive Officer (or delegate), the power to correct or authorise the correction of, typographical errors or to make minor amendments to the content of Variation 2 or its accompanying section 32 reports.

BACKGROUND

5 A variation is a proposal for amendments to a District Plan before it is made fully operative (while it is still considered a ‘proposed plan’). The legal requirements for public notification of a variation to the proposed District Plan are set out in Schedule 1 to the RMA (http://www.legislation.govt.nz/act/public/1991/0069/latest/DLM240686.html).

6 Dunedin City Council (DCC) notified the second generation District Plan (2GP) on 26 September 2015. In total, 83 appeals were lodged with the Environment Court, and they are currently being resolved through informal meetings and Environment Court-assisted mediation. Until appeals are resolved the Plan cannot be treated as fully operative.

7 Reports to Council or decisions by Council on Variation 2 to date include:

· 12 February 2019 – Planning and Environment Committee – Initiation of changes to the Second Generation District Plan.

· 22 September 2020 – Planning and Environment Committee – Update on Variation 2 to the 2GP.

8 As outlined in these reports, the purpose of Variation 2 is to respond to the Housing Capacity Assessment for Dunedin City (January 2019) report (https://www.dunedin.govt.nz/__data/assets/pdf_file/0010/704962/Housing-capacity-assessment-for-Dunedin-City.pdf) which indicated a shortfall in residential capacity of approximately 1,000 dwellings over the medium term (2021-28) and 4,700 over the long term (2028-48). The National Policy Statement for Urban Development requires Council to respond to that shortfall. Maintaining adequate future housing capacity in the Plan is also necessary to ensure the District Plan does not drive up house prices through not providing adequate opportunities for new houses to be built.

9 Variation 2 comprises a number of discrete changes to the 2GP that will add additional housing capacity into the plan. Variation 2 is not a comprehensive review of the Residential section’s rule framework nor of zoning across the city. A more comprehensive plan for growth out to 30 years will be completed as part of a review of the Dunedin Spatial Plan (future development strategy) that must be prepared jointly with the Otago Regional Council (ORC) by the end of 2022.

DISCUSSION

10 The changes in Variation 2 include:

a) zoning changes for some sites, which will result in:

· new greenfield residential sites for development in areas that were zoned rural or rural residential

· more areas of medium-density zoning (where the density of housing can be increased)

b) rule changes for the General Residential 1 and Township and Settlement zones (which is most of suburban Dunedin) that will:

· make better provision for social housing

· remove the restrictions on who can live in family flats

· allow smaller site sizes and provide for duplexes

· create more flexibility for development through changes such as making it easier to average out site sizes in subdivisions

· improve how the plan manages the development of areas rezoned for new houses (greenfield sites) to encourage good urban design and well-managed infrastructure.

11 The decision to approve notification of variation 2 is primarily a procedural decision to allow the public submissions and further submissions processes to commence. It should be based on councillors’ satisfaction that Variation 2 has been developed robustly by staff in accordance with the evaluation requirements outlined in section 32 (s32) of the RMA
(http://www.legislation.govt.nz/act/public/1991/0069/latest/DLM232582.html).

12 Planners must evaluate options as to how well they will achieve the objectives of the Plan (or the purpose of the RMA if objectives are being reviewed) and also consider the benefits and cost of any regulation, including by way of examining the effectiveness and efficiency of provisions. They must also consider any higher order policy instruments that sit at the regional or national level. For Variation 2, the requirements of the National Policy Statement for Urban Development are of particular importance.

13 A summary of the amendments to the 2GP included in Variation 2 and the s32 report for Variation 2 has been provided electronically to Council members. Amendments are indicated by way of mark-up of existing 2GP content, with strike-through for 2GP text being deleted and underline for 2GP text being added.

14 The required public notice informing ratepayers of Variation 2’s notification (clause 5(1A) of Schedule 1 of the RMA) has already been included in the third instalment of rates mail-outs, some of which have been mailed out starting on 14 January. The mail out finishes on the 11 February 2021. The full details of Variation 2 and the s32 report will not be publicly released until the date of notification of Variation 2 (3 February).

15 Using the rates mail-outs to meet the requirements for public notice as set out in the First Schedule to the Resource Management Act 1991 (RMA) provides a significant cost saving (approximately $40,000) to Council compared with separately sending letters to all ratepayers. The scheduled date for public notification is Wednesday 3February 2021.

16 In addition to the legally required public notice in the ODT and rates mail-out, the following additional communications methods are being used:

a) Letters to all ratepayers whose properties are being rezoned or are subject to any other mapping changes (e.g. changes to overlays)

b) FYI article

c) City Development News articles

d) DCC social media.

17 Similar to what was done for the 2GP, the City Development team will set up a ‘front counter’ service to help members of the public understand the effect of changes proposed in Variation 2 and explain the submissions process to those who wish to participate. This will be located in the new DCC community engagement space opposite the visitors’ centre in the Civic Centre building.

Decision on Rules Taking Effect

18 Section 86B of the RMA sets out when rules in variations to proposed plans have legal effect (meaning they are considered alongside the 2GP until they become operative and replace the 2GP’s rules). The objectives and policies of variations to proposed plans have immediate legal effect.

19 Legal effect means the provisions (rules or objectives and policies), where relevant, will be considered alongside the provisions in the 2GP when processing an application for resource consent. Where both sets of provisions are applicable, they will be weighted according to which stage the submission, hearing and appeal process is at and how many submissions are in support/opposition of the provision. Where there are a high number of submissions in opposition, it is unlikely the provision will be afforded much weight.

20 The RMA states that all rules protecting or relating to water, air, soil (for soil conservation), aquaculture activities, and that protect: historic heritage, significant areas of indigenous fauna or significant indigenous vegetation, have immediate legal effect upon notification unless the local authority resolves that the rule only has legal effect once the proposed plan becomes operative.

21 The third decision requested in this report is to resolve to delay the rules provided for in section 86B(3) from taking effect until Variation 2 becomes operative. This decision must be made before public notification and be included in the public notification.

22 This decision can be rescinded at any time, and past practice has been to rescind this resolution once decisions are released on Variation 2, which is the time when all other rules normally have legal effect

OPTIONS

Option One – Recommended Option – Approve notification of Variation 2 on 3 February 2021

23 Under this option, Council would approve the notification of Variation 2: Additional Housing Capacity on 3 February.

Advantages

· Will allow the submission process to start on a plan change that will provide for a range of rule and zoning changes that will add capacity for an additional 2000 to 2500 homes to be built and will provide expanded capacity to create ancillary residential units (family flats).

· While land availability monitoring doesn’t show a lack of capacity until the medium term, there is feedback that there is an immediate shortage of development opportunities in the city and a lack of competition in the housing market.

Disadvantages

· The timetable for Variation 2 has not allowed for as extensive a pre-consultation phase as was undertaken for the 2GP.

Option Two – Delay Variation 2

24 Under this option, Council would delay Variation 2 to allow more time to develop the options in the variation.

Advantages

· Delaying Variation 2 could enable more pre-consultation, which could ‘iron-out’ more issues. (Variation 2 has been fast-tracked to enable a quick response to the housing crisis in Dunedin. It has not had as extensive a pre-consultation phase as was undertaken for the 2GP).

Disadvantages

· Delays in getting the additional housing capacity ‘on stream’ meaning a longer period of having fewer housing options in the city. Lack of competition in the housing market can contribute to increased housing prices.

NEXT STEPS

25 If approved, Variation 2 will be notified on 3 February and will be open for submissions until 4 March.

26 After the submission process finishes, submissions will be summarised by staff and a summary published. At this point certain people may make ‘further submissions’ on other people’s submissions. Hearings will then be held for any submitters who wish to speak to their submission and decisions made by the Hearings Panel.

Signatories

Author:

Anna Johnson - City Development Manager

Authoriser:

Nicola Pinfold - Group Manager Community and Planning

Robert West - Acting General Manager City Services

Attachments

	Title	Page
⇩a	Rates Insert letter 2GP Variation 2	193

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This decision enables democratic local decision making and action by, and on behalf of communities; and promotes the social, economic and environmental well-being of communities in the present and for the future.

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	☒	☐	☐

Variation 2 to the 2GP will provide additional housing capacity throughout Dunedin. The District Plan is Council’s principal policy document for enabling land use development envisaged by the various strategies of Council.

Māori Impact Statement

In accordance with Clause 3 of the First Schedule to the RMA, tangata whenua of the area who may be affected have been consulted.

Sustainability

Sustainable management is a fundamental principle of the RMA, and Variation 2 is being developed in accordance with this principle.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

Decisions on where residential development can be intensified or areas that can be rezoned residential are reliant on the availability of public infrastructure capacity. Work programmes to improve or create infrastructure capacity to facilitate the changes in Variation 2 are being considered in the 10 Year Plan.

Financial considerations

The cost of Variation 2 notification has been kept to a minimum by including the notification letters with the rates notices.

Significance

The decision to approve notification of Variation 2 is primarily a procedural decision to allow the next stage of Variation 2’s development to occur, which includes submissions and hearings.

Engagement – external

The Planning for Housing Survey conducted in October/November 2019 provided the general public the opportunity to give their views on where additional housing capacity should be provided in Dunedin, what types of housing should be enabled, and the extent to which design controls should be applied through the district plan. The Institute of Surveyors, Otago Regional Council, developers and relevant 2GP appellants have also been engaged in developing Variation 2.

Engagement - internal

There has been significant engagement with Council’s infrastructure departments, particularly 3 Waters and Transportation, to ensure that Council infrastructure is able to provide for proposals for intensification of existing residential areas and urbanisation of greenfield areas or that additional infrastructure upgrades required to support growth are included in the proposed 10 Year Plan.

Risks: Legal / Health and Safety etc.

There are no legal or health and safety risks associated with making this decision.

Conflict of Interest

There are no conflict of interest risks associated with making this decision.

Community Boards

The Community Boards have not been consulted as Variation 2 has been developed, but Community Boards will be invited to a presentation on the 2GP.

Mayor	Mayor Aaron Hawkins
Deputy Mayor	Cr Christine Garey
Members	Cr Sophie Barker	Cr David Benson-Pope
	Cr Rachel Elder	Cr Doug Hall
	Cr Carmen Houlahan	Cr Marie Laufiso
	Cr Mike Lord	Cr Jim O'Malley
	Cr Jules Radich	Cr Chris Staynes
	Cr Lee Vandervis	Cr Steve Walker
	Cr Andrew Whiley

Author:	John Christie - Director Enterprise Dunedin
Authoriser:	John Christie - Director Enterprise Dunedin