Agenda of Council - Tuesday, 28 January 2025

Council

28 January 2025

Council

MINUTES

Minutes of an ordinary meeting of the Dunedin City Council held in the Council Chamber, Dunedin Public Art Gallery, The Octagon, Dunedin on Tuesday 10 December 2024, commencing at 9.00 am

PRESENT

Mayor	Mayor Jules Radich
Deputy Mayor	Cr Cherry Lucas
Members	Cr Bill Acklin	Cr Sophie Barker
	Cr David Benson-Pope	Cr Christine Garey
	Cr Kevin Gilbert	Cr Carmen Houlahan
	Cr Marie Laufiso	Cr Mandy Mayhem
	Cr Jim O'Malley	Cr Lee Vandervis
	Cr Steve Walker	Cr Brent Weatherall
	Cr Andrew Whiley

IN ATTENDANCE

Sandy Graham (Chief Executive Officer), Robert West (General Manager Corporate Services), Carolyn Allan (Chief Financial Officer), Scott MacLean (General Manager Climate and City Growth), David Ward (General Manager 3 Waters and Transition), Nicola Morand (Manahautū (General Manager Policy and Partnerships)); Sharon Bodeker (Special Projects Manager), Hayden McAuliffe (Financial Services Manager), Richard Davey (Treasurer), Nadia Wesley-Smith (Corporate Policy Manager – Acting), Chris Henderson (Group Manager Waste and Environmental Solutions), Tess Trotter (Waste Planning Advisor), Karen Gadomski (Waste Planning Advisor), Heath Ellis (Acting Group Manager Parks and Reserves), Owen Graham (Senior Land and Leasing Advisor), Lisa Wilkie-Kaiarahi (Team leader Creative Partnerships), Anna Nilsen (Group Manager Property) and Christian German (Capital Delivery Manager)

Governance Support Officer Lynne Adamson

1 Opening

The Very Rev’d Dr Tony Curtis, St Paul’s Cathedral opened the meeting with a prayer.

2 Public Forum

		2.1 Bath Street
		Phil Day apologised for emails he had sent over the last few days which arose from his frustrations with the Bath Street upgrade which he outlined and the effect this has had on him, as the landlord and his tenants over the past four years. Mr Day spoke in opposition to the proposed Rainbow crossing. Mr Day responded to questions.

		2.2 Performing Arts Brent Caldwell and Lawrie Forbes spoke to their PowerPoint presentation on the Dunedin Theatre Network. Messrs Caldwell and Forbes responded to questions.

Moved (Mayor Jules Radich/Cr Mandy Mayhem): That the Council: Extends the public forum beyond 30 minutes. Motion carried

		2.3 Toroa Foundation UNESCO Biosphere Campaign
Chanel Gardner spoke on behalf of the Toroa Foundation in support of Dunedin becoming UNESCO’s first Biosphere Reserve. Ms Gardner responded to questions.
Cr Carmen Houlahan left the meeting at 9.40 am and returned at 9.43 am.
2.4 DCC Consumer Electricity Fund
Andrew Henderson, Executive Officer, Dunedin Budget Advisory Service spoke to his pre-circulated information on the DCC Consumer Electricity Fund and the impact of the recent government cuts in funding. Mr Henderson responded to questions.


2.5 Brighton/Taieri Mouth Road Speed Limit
John Burnip, accompanied by his wife, spoke on behalf of residents of Kuri Bush on a request to lower the speed limit on Brighton-Taieri Mouth Road to 80km per hour. Mr Burnip responded to questions.

2.6 Dunedin Tracks and Trails Update
Paul Coffey and Rachel Elder spoke to their PowerPoint presentation and provided an update on Dunedin Tracks and Trails. Mr Coffey and Ms Elder responded to questions.

2.7 Principles of the Treaty of Waitangi Bill Submission Suzanne Menzies-Culling spoke in support of the Dunedin City Council Principles of the Treaty of Waitangi Bill submission. Ms Menzies-Culling responded to questions.

2.8 Treaty Principles Bill Submission Jen Olsen spoke in support of the Dunedin City Council Principles of the Treaty of Waitangi Bill submission. Ms Olsen responded to questions.
Cr Steve Walker left the meeting at 10.31 am and returned at 10.32 am.
2.9 Treaty Principles Bill Submission
Bridie Lonie spoke in support of the Dunedin City Council Principles of the Treaty of Waitangi Bill submission. Cr Carmen Houlahan left the meeting at 10.33 am and returned at 10.36 am. Ms Lonie responded to questions.

2.10 Treaty Principles Bill Submission
Perā Crowe spoke in support of the Dunedin City Council Principles of the Treaty of Waitangi Bill submission.

2.11 Treaty Principles Bill Submission
Umi Asaka and Akari Yagishita spoke in support of the Dunedin City Council Principles of the Treaty of Waitangi Bill submission.

Moved (Mayor Jules Radich/Cr Steve Walker) That the Council: Adjourns the meeting for 12 minutes. Motion carried The meeting adjourned at 10.52 am and reconvened at 11.06 am.
3 Apologies
	Moved (Mayor Jules Radich/Cr Mandy Mayhem): That the Council: Accepts the apologies from Crs Christine Garey for absence for part of the morning; Crs Kevin Gilbert; Marie Laufiso and Mandy Mayhem for early departure on Wednesday 11 December, from Cr Steve Walker for absence during the day, and Crs Cherry Lucas, Marie Laufiso and Carmen Houlahan early departure on Thursday 12 December 2024. Motion carried (CNL/2024/229)
4 Confirmation of agenda
	Moved (Mayor Jules Radich/Cr Andrew Whiley): That the Council: Confirms the agenda with the following alterations: That Item 11 – Levels of Service 9 Year Plan 2025-34 be taken first on Wednesday 11 December. That Item 21 – Dunedin Theatre Trust Update Report and Item 22 – Bath Street Amenity Upgrade be taken before Item 15 – Community Led Resource Recovery and Construction Industry Waste Reduction Update; That Item 23 – Principles of the Treaty of Waitangi Bill – Submission and Item 24 – Amplify: A Creative and Cultural Strategy for New Zealand 2024-2030 Submission be taken before Item 16 – Lawn Bowling Facilities, Options and Assessment; That Item 25 – Financial Report – Period Ended 31 October 2024 be taken before Item 20 – Revised Meeting Schedule; and That the meeting moves into non public at 1.00 pm on Wednesday 11 December to enable DCHL members to attend the meeting to speak to C4 - DCHL Update Report. Motion carried (CNL/2024/230)

5 Declarations of interest

Members were reminded of the need to stand aside from decision-making when a conflict arose between their role as an elected representative and any private or other external interest they might have.

Moved (Mayor Jules Radich/Cr Cherry Lucas):

That the Council:

a) Notes the Elected Members' Interest Register; and

b) Confirms the proposed management plan for Elected Members' Interests.

c) Notes the proposed management plan for the Executive Leadership Team’s Interests.

Motion carried (CNL/2024/231)

6 Confirmation of Minutes

6.1 Ordinary Council meeting - 25 November 2024

Moved (Cr Cherry Lucas/Cr Mandy Mayhem):

That the Council:

a) Confirms the public part of the minutes of the Ordinary Council meeting held on 25 November 2024 as a correct record.

Motion carried (CNL/2024/232)

Reports

7 Actions From Resolutions of Council Meetings
	A report from Civic provided an update on the implementation of resolutions made at Council meetings.
	The Chief Executive Officer (Sandy Graham) spoke to the report and responded to questions.
	Moved (Mayor Jules Radich/Cr Cherry Lucas): That the Council: a) Notes the Open and Completed Actions from resolutions of Council meetings. Motion carried (CNL/2024/233)

8 Forward Work Programme for Council - October 2024
	A report from Civic provided the updated forward work programme for the 2024-2025 year.
	The Chief Executive Officer (Sandy Graham) spoke to the report and responded to questions.
	Moved (Mayor Jules Radich/Cr Carmen Houlahan): That the Council: a) Notes the updated Council forward work programme. Motion carried (CNL/2024/234)

9 Community Outcomes - 9 year plan 2025-34
	A report from Civic sought approval of the community outcomes for the development of the 9 year plan 2025-34, and consulting with the community.
	The General Manahautū (General Manager Policy and Partnership) (Nicola Morand) and Special Projects Manager (Sharon Bodeker) spoke to the report and responded to questions.
	Moved (Mayor Jules Radich/Cr Cherry Lucas): That the Council: a) Approves community outcomes for the purposes of developing the 9 year plan 2025-34, and consulting with the community. Motion carried (CNL/2024/235)

10 Significant Financial Forecasting Assumptions - 9 year plan 2025-34
	A report from Finance sought Council approval of financial significant forecasting assumptions that would be used in the development of the 9 year plan 2025-2034.
	The Chief Financial Officer (Carolyn Allan), Financial Services Manager (Hayden McAuliffe) and Treasurer (Richard Davey) spoke to the report and responded to questions
	Moved (Mayor Jules Radich/Cr Cherry Lucas): That the Council: a) Approves, for the purposes of developing the 9 year plan 2025-34 and consulting with the community, the significant forecasting assumptions. Motion carried (CNL/2024/236)

12 Revenue and Financing Policy - 9 year plan 2025-34
	A report from Civic sought approval for the draft Revenue and Financing Policy to be used in the preparation of the 9 year plan 2025-34.
	The Chief Financial Officer (Carolyn Allan) and Special Projects Manager (Sharon Bodeker) spoke to the report and responded to questions.
	Moved (Mayor Jules Radich/Cr Cherry Lucas): That the Council: a) Approves the Revenue and Financing Policy to be used in the preparation of the 9 year plan 2025-34. b) Notes that a report on the level of compliance with the Revenue and Financing Policy would be presented to the January 2025 Council meeting. Motion carried (CNL/2024/237)

13 Early engagement community feedback - 9 year plan 2025-34
	A report from Corporate Policy summarised the feedback received by the Dunedin City Council through the early engagement activities undertaken for the 9 Year Plan 2025–34.
	The General Manager Arts and Culture (Jeanette Wikaira) and Corporate Policy Manager – Acting (Nadia Wesley-Smith) spoke to the report, provided clarification to some items and responded to questions.
	Moved (Mayor Jules Radich/Cr Cherry Lucas): That the Council: a) Notes the feedback received from the community through early engagement on the Dunedin City Council’s 9 Year Plan 2025-34 b) Notes that feedback received from the community through early engagement would inform formal consultation on the Dunedin City Council’s 9 Year Plan 2025-34. Motion carried (CNL/2024/238)

Moved (Mayor Jules Radich/Cr Jim O’Malley)

That the Council:

Adjourns the meeting for 45 minutes

Motion carried

The meeting adjourned at 12.29 pm and reconvened at 1.15 pm

Cr Andrew Whiley attended the meeting via zoom, audio visual link.

14 Sustainability Framework Update Report
	A report from Corporate Policy provided an update on progress towards creating a Sustainability Framework for the Dunedin City Council.
	The Manahautū (General Manager Policy and Partnerships) (Nicola Morand) and Corporate Policy Manager – Acting (Nadia Wesley-Smith) spoke to the report and responded to questions.
During discussion Cr Carmen Houlahan entered the meeting at 1.19 pm; Cr Brent Weatherall entered the meeting at 1.30 pm and Cr Bill Acklin entered the meeting at 1.39 pm.
	Moved (Cr Sophie Barker/Cr Kevin Gilbert): That the Council: a) Adopts the United Nations Sustainable Development Goals (SDGs) as the basis for the development of the Dunedin City Council’s Sustainability Framework; b) Requests a facilitated workshop for Councillors to prioritise and align SDG goals and targets with Council’s strategies; c) Requests a report, by the end of February 2025, on the outcome of the workshop Division The Council voted by division For: Crs Bill Acklin, Sophie Barker, Kevin Gilbert, Cherry Lucas, Mandy Mayhem, Jim O'Malley, Brent Weatherall, Andrew Whiley and Mayor Jules Radich (9). Against: Crs David Benson-Pope, Christine Garey, Carmen Houlahan, Marie Laufiso, Lee Vandervis and Steve Walker (6). Abstained: Nil The division was declared CARRIED by 9 votes to 6 Motion carried (CNL/2024/239)

21 Dunedin Theatre Network Update Report
	A report from the Executive Leadership Team proved Council with a final update on the work of the Dunedin Theatre Network (Playhouse Theatre, Athenaeum Theatre and the Mayfair Theatre) and their community led proposal for a networked approach to Dunedin’s performing arts venues.
	The General Manager Arts, Culture and Recreation (Jeanette Wikaira), Group Manager Property (Anna Nilsen) and Capital Delivery Manager (Christian German) spoke to the report and responded to questions.
	Moved (Mayor Jules Radich/Cr Christine Garey): That the Council: a) Notes the Dunedin Theatre Network Update Report. b) Notes as a next step, a Performing Arts Venue Report would be presented to Council in January 2025 for a 9 Year Plan decision. Motion carried (CNL/2024/240)
Moved (Mayor Jules Radich/Cr Christine Garey): That the Council: Adjourns the meeting for ten minutes. Motion carried. The meeting adjourned at 3.02 pm and reconvened at 3.15 pm Moved (Mayor Jules Radich/Cr Mandy Mayhem): That the Council: Extends the meeting beyond 6 hours. Motion Carried

15 Community Led Resource Recovery and Construction Industry Waste Reduction Update
	A report from Waste and Environmental Solutions updated the Council on the establishment of three community-led resource recycling centres and enabling construction waste to be reduced, reused and recycled are action areas in the Zero Carbon Plan 2030.
	The General Manager, Climate and City Growth (Scott MacLean), Group Manager Waste and Environmental Solutions (Chris Henderson), Waste Planning Advisor (Tess Trotter) and Waste Planning Advisor (Karen Gadomski) spoke to the report and responded to questions.
	Moved (Cr Jim O'Malley/Cr Mandy Mayhem): That the Council: a) Notes the Community Led Resource Recovery and Construction Industry Waste Reduction Update. Motion carried (CNL/2024/241)

22 Bath Street Amenity Upgrade
	A report from the Portfolio and Project Support Office presented the developed design for the Bath Street amenity upgrade. The report outlined the key elements of the design, the design process, and the prioritisation of new features subject to the final estimates for the project.
	The General Manager, Climate and City Growth (Scott MacLean) spoke to the report and responded to questions.
Cr Bill Acklin left the meeting and 4.00 pm and returned at 4.12 pm Cr Lee Vandervis left the meeting at 4.09 pm Cr Jim O’Malley left the meeting at 4.29 pm and returned at 4.35 pm Cr Christine Garey left the meeting at 4.35 pm It was moved (Mayor Radich/Cr Steve Walker): That the Council: Adjourns the meeting for ten minutes. Motion carried The meeting adjourned at 4.37 pm and reconvened at 4.47 pm. The discussion on the Bath Street Amenity Upgrade continued. It was agreed that the resolutions be taken in two sections a) to d) and then items e) to f).
	Moved (Cr Mandy Mayhem/Cr Jim O'Malley): That the Council: a) Notes the Bath Street Amenity Upgrade report. b) Approves the use of stock materials from other projects at no cost to the Bath St project in order to deliver a modest upgrade, while remaining in the $1.5m budget set for the project. c) Notes staff would now develop a detailed design for Bath Street in consultation with all relevant stakeholders. d) Notes that any parking changes associated with the detailed design will be considered by the Hearings Panel in advance of above ground works beginning. Motion carried (CNL/2024/242)
	Moved (Cr Mandy Mayhem/Cr Jim O'Malley): That the Council: e) Confirms the installation of a rainbow crossing or crossings in Bath Street/George Street, subject to budget; and f) Requests a report on the detailed design of the rainbow crossing to either Infrastructure Services Committee or Council as soon as possible in 2025. Motion carried (CNL/2024/243) with Councillor Acklin voting against
Cr Steve Walker left the meeting at 5.18 pm and Cr Cherry Lucas left the meeting at 5.20 pm.

23 Principles of the Treaty of Waitangi Bill - Submission
	A report from Corporate Policy sought approval of submission to the Justice Committee on the Principles of the Treaty of Waitangi Bill.
	The Chief Executive Officer (Sandy Graham) and Manahautū (General Manager Policy and Partnerships) (Nicola Morand) spoke to the report and responded to questions.
	Moved (Mayor Jules Radich/Cr Marie Laufiso): That the Council: a) Approves the DCC submission on the Principles of the Treaty of Waitangi Bill. b) Authorises the Chief Executive to make any minor amendments to the submission. c) Notes that the Mayor or delegate will speak to any hearings in regard to the submission. Motion carried (CNL/2024/244)

Moved (Mayor Jules Radich/Cr Mandy Mayhem):

That the Council:

Adjourns the meeting.

Motion carried

The meeting adjourned at 5.22 pm and reconvened at 9.00 am on Wednesday 11 December 2024.

Cr Andrew Whiley was in attendance via zoom audio visual link.

Cr Christine Garey acknowledged those watching via the live stream, and Dr Mai Tamami and Dr Rula Abu-Safieh Talahma who were part of the deputation to Wellington today, and Prof Alison Phipps and friends and colleagues from Gaza. Cr Garey spoke of suffering and the dire situation in Gaza, and of the meeting in May 2024 when Councillors approved a recommendation to write to the Honourable Erica Stanford to advocate for the establishment of a special visa for family members of the New Zealand Palestinian community affected by the war in Gaza. She commented that a deputation had arrived in Wellington to present a wider petition to Parliament on Palestinian issues and highlight the request for establishment of a special visa.

Cr Garey wished Drs Tamami and Abu-Safieh Talahma a safe and productive day and wished them every success.

11 Levels of Service 9 year plan 2025-34
	A report from the Executive Leadership Team sought approval of the draft Levels of Service for 2025-34 groups of activity, statements, and measures. The draft LOS would be included in the draft 9 year plan 2025-34 and as supporting information for the 9 year plan consultation.
	The General Manager Corporate Services (Robert West) spoke to the report and responded to questions.
Cr Christine Garey left the meeting at 9.16 am Cr Carmen Houlahan left the meeting at 9.37 am and returned at 9.40 am Cr Bill Acklin entered the meeting at 9.56 am Cr Christine Garey returned to the meeting at 10.18 pm Cr Jim O’Malley left the meeting at 10.23 am and returned at 10.25 am Cr Cherry Lucas left the meeting at 10.32 am and returned at 10.33 am Cr Mandy Mayhem left the meeting at 10.39 am and returned at 10.42 am Cr Carmen Houlahan left the meeting at 10.43 am and returned at 10.46 am
	Moved (Mayor Jules Radich/Cr Kevin Gilbert): That the Council: a) Approves the draft 2025-34 Levels of Service group of activities, statements, and measures (with the addition of the current Residents Opinion Survey measures) for inclusion in the draft 9YP and supporting consultation information. Division The Council voted by division For: Crs Sophie Barker, Kevin Gilbert, Carmen Houlahan, Cherry Lucas, Mandy Mayhem, Jim O'Malley, Brent Weatherall, Andrew Whiley and Mayor Jules Radich (9). Against: Crs Bill Acklin, David Benson-Pope, Christine Garey, Marie Laufiso, Lee Vandervis and Steve Walker (6). Abstained: Nil The division was declared CARRIED by 9 votes to 6 Motion carried (CNL/2024/245)

Moved (Mayor Jules Radich/Cr Steve Walker):

That the Council:

Adjourns the meeting for 10 minutes.

Motion carried

The meeting adjourned at 10.51 am and reconvened at 11.05 am.

24 Amplify: A Creative and Cultural Strategy for New Zealand 2024-2030 Submission
	A report from Ara Toi and Corporate Policy sought approval of a submission to the Ministry for Culture and Heritage consultation on Amplify: A Creative and Cultural Strategy for New Zealand 2024 -2030.
	The General Manager Arts, Culture and Recreation (Jeanette Wikaira) and Team Leader Creative Partnerships (Lisa Wilkie-Kaiarahi) spoke to the report and responded to questions.
	Moved (Cr Christine Garey/Cr Mandy Mayhem): That the Council: a) Approves the draft Dunedin City Council submission, to the Ministry for Culture and Heritage on Amplify: A Creative and Cultural Strategy for New Zealand 2024 -2030. b) Authorises the Chief Executive to make any minor editorial amendments to the submission. c) Notes that the Mayor or delegate will speak to any hearings in regard to the submission. Motion carried (CNL/2024/246) with Cr Lee Vandervis recording his vote against

Cr Jim O’Malley left the meeting at 11.29 am.

16 Lawn Bowling Facilities, Options and Assessment
	A report from Parks and Recreation dealt with a proposal to create a lawn bowls hub at the Dunedin Lawn Bowls Stadium by developing one and a half artificial outdoor bowls greens on part of the Chisholm Park Recreation Reserve. The project would be funded by the bowls community and on completion would allow the management of the stadium facility and the new outdoor greens under one administration.
	The General Manager Arts, Culture and Recreation (Jeanette Wikaira), Acting Group Manager Parks and Reserves (Heath Ellis) and Senior Land and Leasing Advisor (Owen Graham) spoke to the report and responded to questions.
	Moved (Cr Andrew Whiley/Cr Kevin Gilbert): That the Council: a) Notes the information contained in the Report. b) Notes that public notification of Council’s intention to permit the bowls development and grant a lease of part Chisholm Park Recreation Reserve had been undertaken with no submissions in opposition received. c) Approves the terms of the Agreement to Lease to be executed between The Dunedin Lawn Bowls Stadium Incorporated, Andersons Bay Bowling Club and the Council. d) Approves the development of part of the Chisholm Park Recreation Reserve for artificial outdoor bowls greens and associated facilities. e) Approves the granting of a ten (10) year lease of part Chisholm Park Recreation Reserve incorporating the existing indoor bowls stadium and outdoor bowls greens and associated facilities to The Dunedin Lawn Bowls Stadium Incorporated upon completion of the development and amalgamation of the Andersons Bay Bowling Club and The Dunedin Lawn Bowls Stadium Incorporated. Motion carried (CNL/2024/247)

17 Gift of Land at Portobello from The Otago Peninsula Agricultural and Pastoral Society
	A report from Parks and Recreation provided information on the gifting of approximately 1.1735 hectares of land owned by The Otago Peninsula Agricultural and Pastoral Society to the Council.
	The General Manager Arts, Culture and Recreation (Jeanette Wikaira), Acting Group Manager Parks and Reserves (Heath Ellis) and Senior Land and Leasing Advisor (Owen Graham) spoke to the report and responded to questions.
	Moved (Cr Christine Garey/Cr Kevin Gilbert): That the Council: a) Notes the information contained in the Report. b) Approves the terms of the Agreement for Sale and Purchase executed between The Otago Peninsula Agricultural and Pastoral Society and the Council (as varied by the Deed of Variation) and accepts the gift of land. c) Authorises the public notification of Council’s intention to declare the land referred to in the Agreement for Sale and Purchase as a recreation reserve under section 14 of the Reserves Act 1977. Motion carried (CNL/2024/248)

18 Unitary Authority

A report from Corporate Policy provided options for advancing discussions regarding a possible unitary authority for Otago.

The Chief Executive Officer (Sandy Graham) and Manahautū (General Manager Policy and Partnerships) Nicola Morand spoke to the report and responded to questions.

Cr Carmen Houlahan left the meeting at 11.57 am and returned at 11.59 am.

Moved (Cr Christine Garey/Cr David Benson-Pope):

That the Council:

a) Does not progress discussions about a possible unitary authority for Otago via one of the identified forums.

Division

The Council voted by division

For: Crs Bill Acklin, David Benson-Pope, Christine Garey, Carmen Houlahan, Marie Laufiso, Lee Vandervis and Steve Walker (7).

Against: Crs Sophie Barker, Kevin Gilbert, Cherry Lucas, Mandy Mayhem, Brent Weatherall, Andrew Whiley and Mayor Jules Radich (7).

Abstained: Nil

An equality of votes was recorded 7:7 following which the Mayor used his casting vote against the motion.

Motion lost

Moved (Cr Kevin Gilbert/Cr Sophie Barker):

That the Council:

a) Progresses discussions about a possible unitary authority for Otago with an initial meeting in early 2025 of elected members of the Councils in Otago or their representatives:

Division

The Council voted by division

For: Crs Sophie Barker, Kevin Gilbert, Cherry Lucas, Mandy Mayhem, Brent Weatherall, Andrew Whiley and Mayor Jules Radich (7).

Against: Crs Bill Acklin, David Benson-Pope, Christine Garey, Carmen Houlahan, Marie Laufiso, Lee Vandervis and Steve Walker (7).

Abstained: Nil

An equality of votes was recorded 7:7 following which the Mayor used his casting vote in favour of the motion.

Motion carried (CNL/2024/249)

RESOLUTION TO EXCLUDE THE PUBLIC

Moved (Mayor Jules Radich/Cr Steve Walker):

That the Council:

Pursuant to the provisions of the Local Government Official Information and Meetings Act 1987, exclude the public from the following part of the proceedings of this meeting namely:

General subject of the matter to be considered	Reasons for passing this resolution in relation to each matter	Ground(s) under section 48(1) for the passing of this resolution	Reason for Confidentiality
C1 Ordinary Council meeting - 25 November 2024 - Public Excluded	S7(2)(g) The withholding of the information is necessary to maintain legal professional privilege. S7(2)(h) The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities. S7(2)(i) The withholding of the information is necessary to enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations). s48(1)(d) Check to make report confidential. S7(2)(b)(ii) The withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information. S7(2)(a) The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person.	.
C2 Confidential Council Actions from Resolutions at Council Meetings	S7(2)(a) The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person. S7(2)(g) The withholding of the information is necessary to maintain legal professional privilege. S7(2)(h) The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities. S7(2)(i) The withholding of the information is necessary to enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations).	S48(1)(a) The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.
C3 Confidential Council Forward Work Programme - October 2024	S7(2)(h) The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities.	S48(1)(a) The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.
C4 DCHL Update Report	S7(2)(h) The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities.	S48(1)(a) The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.
C4 Dunedin City Holdings Group - Reappointment of Directors	S7(2)(a) The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person.	S48(1)(a) The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.
C6 Development Contribution - Private Agreement	S7(2)(b)(ii) The withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information. S7(2)(i) The withholding of the information is necessary to enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations).	S48(1)(a) The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.

This resolution is made in reliance on Section 48(1)(a) of the Local Government Official Information and Meetings Act 1987, and the particular interest or interests protected by Section 6 or Section 7 of that Act, or Section 6 or Section 7 or Section 9 of the Official Information Act 1982, as the case may require, which would be prejudiced by the holding of the whole or the relevant part of the proceedings of the meeting in public are as shown above after each item.

Motion carried (CNL/2024/250))

Moved (Mayor Jules Radich/Cr Marie Laufiso):

That the Council:

Adjourns the meeting.

Motion carried

The meeting adjourned at 12.24 pm and moved into non-public.

The meeting resumed in public at 4.30 pm.

19 Letter of Expectation for the year ended 30 June 2026
	A report from Civic sought approval for the draft Letter of Expectation for the Dunedin City Holdings Limited Board.
	The Chief Financial Officer (Carolyn Allan) and Special Projects Manager (Sharon Bodeker) spoke to the report and responded to questions.
	Moved (Mayor Jules Radich/Cr Cherry Lucas): That the Council: a) Approves the draft Letter of Expectation to the Board of Dunedin City Holdings Ltd from the Council, as Shareholder. b) Authorises the CEO to make the changes outlined to the Letter of Expectation to respond to the Council feedback. c) Authorises the Mayor to sign the Letter of Expectation on behalf of the Council as Shareholder. Motion carried (CNL/2024/252)

25 Financial Report - Period ended 31 October 2024
	A report from Finance provided the financial results for the period ended 31 October 2024 and the financial position as at that date.
	The Chief Financial Officer (Carolyn Allan) and Financial Services Manager (Hayden McAuliffe) spoke to the report and responded to questions.
	Moved (Mayor Jules Radich/Cr Cherry Lucas): That the Council: a) Notes the Financial Performance for the period ended 31 October 2024 and the Financial Position as at that date. Motion carried (CNL/2024/253)

20 Revised meeting schedule 2025
	A report from Civic provided a revision to the adopted Council meeting schedule for 2025 for approval, in accordance with Clause 19(6)(a) of Schedule 7 of the Local Government Act 2002.
	The Chief Executive Officer (Sandy Graham) spoke to the report and responded to questions.
	Moved (Cr Steve Walker/Cr Carmen Houlahan): That the Council: a) Approves the revised meeting schedule as attached to this report. Motion carried (CNL/2024/254)

The meeting closed at 5.03 pm

..............................................

MAYOR

Council

28 January 2025

Reports

CEO Overview Report - 9 year plan 2025-34

Department: Civic and Finance

EXECUTIVE SUMMARY

1 This report provides an overview of the draft budgets and what will be included in the draft 9 year plan 2025-34 (the 9 year plan). The draft 9 year plan sets the direction for the Dunedin City Council (DCC) for the next 9 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 budget challenges the DCC faces in delivering its activities while balancing affordability for ratepayers, and how Council intends to fund and finance the high level of capital investment required for the city. It provides a high-level summary of the key aspects of the draft 9 year plan and provides an overview of various reports on this agenda.

3 The draft budget proposes a rate rise of 9.95% in years one to three, reducing to 6% by year nine.

4 The draft capital expenditure budgets provide for an investment of $1.856 billion over the 9 year period. The bulk of the capital spend is on the renewal of existing infrastructure, particularly in the 3 waters and transport activities, and some is for new capital and growth. This capital expenditure budget does mean an increase in debt levels.

5 The draft budgets are not final and will be subject to audit, 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 9 year plan in May 2025.

RECOMMENDATIONS

That the Council:

a) Adopts the draft 9 year plan 2025-34 forecast financial statements for the purposes of developing the 9 year plan 2025-34 and engaging with the community.

b) Notes that any resolution made in this meeting, relating to the 9 year plan reports may be subject to further discussion and decision by the meeting.

BACKGROUND

6 Following the enactment of the Water Services Act Repeal Act on 16 February 2024, at its meeting on 27 February, Council approved taking up the option of preparing an enhanced 2024/25 Annual Plan for community consultation, followed by the completion of a 9 year plan for the period 2025-34.

7 As part of the 9 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 9 year plan.

8 Before Council can adopt the consultation document, it is a legislative requirement that it must be in receipt of a report from an independent auditor confirming that the consultation document provides an effective base for public participation in the 9 year plan process.

9 The consultation document needs to:

· Provide a fair representation of the matters that are proposed to be included in the 9 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.

10 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 9.95% in years one to three, reducing to 6% by year nine.

· The capital budget of $1.856 billion over the 9 year period, means that debt will reach $1.083 billion by 2035.

11 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 2025, with implementation on 1 July 2025.

DISCUSSION

12 The draft budgets as proposed balance the budget by the end of year two, keep rates under 10%, reducing to 6% by year nine, and significantly reduce the amount Council is borrowing each year while still delivering a comprehensive programme of investment into core infrastructure.

Water Reform – Local Water Done Well

13 Council is undertaking a thorough investigation and evaluation of three base models for water service delivery. It will present a report to Council in February 2025 with its analysis of the models, for Council to decide what its preferred delivery model will be. Consultation on the options will be undertaken with the community alongside our consultation on the 9 year plan.

14 In the meantime, the 9 year plan has been prepared on the basis that 3 waters will continue to be provided by Council over the 9 year period. The 9 year plan consultation document will have some discussion on Local Water Done Well, and will reference the separate consultation on the delivery models.

Levels of Service

15 Significant work has been undertaken to develop improved levels of service statements, measures and targets for inclusion in the 9 year plan. The new suite of levels of service retain many of the residential opinion survey measures of satisfaction that are in the existing levels of service, but there is now a greater focus on providing levels of service that seek to show the community what service and activities council will deliver, and what they are receiving for the rates that they pay.

16 The draft budgets maintain current levels of service in all areas of the 9 year plan.

Community Outcomes

17 Council currently has eight community outcomes that are linked to the eight core strategies in the current Strategic Framework, and each outcome is supported by the priorities contained within each strategy. We have examined how our activities and projects contribute to community outcomes, and these are highlighted throughout the 9 year plan.

Zero carbon

18 This 9 year plan has a strong focus what we are doing to work towards achieving our zero carbon goals. Throughout the 9 year plan, consideration has been given to how our activities, proposals and options may impacts both city-wide and the DCC’s emissions. This consideration is documented, where applicable, in the Council reports on the agenda, and within the levels of service work, measure and targets have been identified that will contribute towards our zero carbon goals.

19 The agenda includes a zero carbon high and medium investment options report that asks Council to consider further investment in zero carbon initiatives that are not already provided in the draft budgets.

Capital Expenditure

20 The draft capital budget provides for replacing existing assets and infrastructure. Across the Council’s activities, the proposed budget is $1.856 billion over the 9 years and is made up of $1.101 billion for renewals, $684.305 million for new capital, and $71.381 million for growth expenditure. Of the renewals budget, $866.744 million is provided to replace key three waters and transport infrastructure, building the resilience of these essential assets.

21 The draft budget seeks to strike a balance, taking into account asset management plans, priority and timing of work, ability to fund and deliver, Zero Carbon targets and legislative requirements. Alongside the proposed investment in capital comes additional operational costs such as maintenance, depreciation, and interest costs on the debt required to fund the capital programme.

22 Early work on the draft capital budget in late 2024 meant that the early draft budget exceeded some financial limits and ratios. The draft budget presented today has attempted to balance the various capital programmes with the financial limits Council is required to meet.

23 To find this balance, some projects have been either excluded from the draft budget or rephased. These projects total $272.780 million over the 9 years. It will be for Councillors to determine which, if any, of these projects should be included in the draft budget, taking into account affordability, debt and the impact on rates. There are some items that are not included in the draft budget that will be of high public interest.

Operating Budgets

24 The draft operating budgets provide for the day to day running of all the activities and services the DCC provides to its community. These include 3 Waters services, parks, galleries, libraries, pool, and roading.

25 The rates increase of 9.95% included in the draft budget for the 2025/26 year does not deliver a balanced budget but provides for an improved net deficit of $9.482 million.

26 The revaluation of three waters infrastructure assets in 2022/23 resulted in a significant increase in depreciation. Since this time, the depreciation charge has not been fully funded, and Council has been running an operating deficit budget.

27 Reports are provided for each of the groups of activities that cover their operating budgets for 2025/26 draft in detail, an overview of the operating budgets for year 2 – 9 of the 9 year plan, and proposed fees and charges for the 2025/26 year. The key changes in funding sources and expected costs of delivery are discussed in those reports.

Revenue

Rates

28 The draft operating budget for 2025/26 shows overall rates revenue increasing by $23.782 million, which is 9.95% higher than 2024/25.

29 An increase of $2.390 million, in the 2025/26 year, equates to a 1% increase in rates.

External revenue

30 External revenue has increased by $3.869 million, 3.9%. The main changes to external revenue are:

· City Properties – an increase of $2.616 million reflecting an increase parking revenue as well as property rent and operational recoveries revenue across the various Property portfolios.

· 3 Waters – an increase of $1.120 million due to increases in fees and charges, including water sales and trade waste.

· Regulatory – an increase of $954k due to increased parking enforcement revenue, and to recover increased costs of processing consents and licenses.

31 Fees and charges are discussed separately in the group budget reports. Rather than apply a standard increase of 3%, fee increases for some areas are reflecting the increase in costs from the 2024/25 year.

Grants

32 Grant funding received from NZTA Waka Kotahi for transport activities is based on the nature of the planned capital works, and their eligibility for funding. It is also dependent on how much funding assistance is available, noting that there has been a shortfall in the Funding Assistant Rate in recent years.

33 The 2025/26 draft budget shows operating grants and subsidies revenue is down $151k. The main changes are as follows:

· Roading and Footpaths – operating grant funding has increased by $596k reflecting increased expenditure on subsidised maintenance.

· Governance and Support Services – operating grant funding has decreased by $641k, being the Government’s Better Off Funding package. This funding was used for various projects across Council.

34 Capital grants revenue is up $6.718 million, 47.98%. The main changes are as follows:

· Roading and Footpaths – capital grant revenue has increased by $6.630 million reflecting co-funding from NZTA Waka Kotahi on approved projects in the capital expenditure.

Internal revenue

35 Internal revenue has increased by $4.708 million, 11.5%. The main changes to internal revenue are:

· Waste Minimisation – an increase of $3.641 million due to kerbside collection revenue now accounted for as internal revenue.

· 3 Waters – an increase of $1.353 million due to increased revenue from Better Off Funding.

· Governance and Support Services – an increase $1.184 million due to increased internal corporate charges to all activities.

· Resilient City – a decrease of $1.133 million due to reduced Better Off Funding revenue.

Expenditure

Personnel costs

36 The draft budget provides for an increase in personnel costs of $2.545 million, 3%. The budget does not provide for any pay increase in the 2025/26 year, except for those who receive the living wage.

37 In 2023/24, staff received a union negotiated salary increase. The personnel budget did not provide for this increase, but was absorbed within existing budgets, and savings to be achieved through vacancy management and a slow-down in recruitment.

38 The focus on vacancy management has continued while some vacant positions have been removed from the organisation charts. However, this is still a work in progress, as full alignment of department personnel needs and where vacancies exist has not yet been fully achieved. Staff are still finalising the detailed staff schedules for each group budget so these may be subject to change.

39 While the work continues to align vacancies, some new roles have been created and these are referenced in the specific group reports. Some reports on the agenda request additional staff to give effect to previous resolutions of Council. These new staff members have not been included in the draft budgets.

Operations and maintenance costs

40 Operations and maintenance costs have increased by $4.502 million, 5.0%. The main changes are due to the following:

· Transport – an increase of $1.892 million which includes an increase of $500k for sealed pavement maintenance and $900k for vegetation management.

· 3 Waters – an increase of $1.832 million due to increased network maintenance contract costs, wastewater and stormwater infiltration improvements and increased plant maintenance costs.

· Governance – an increase of $1.602 million largely due a change in the Investment Account of $1.000 million reflecting the allocation of expected savings, and increased elections costs of $733k for the 2025 election.

· City Properties, Waste Minimisation and Resilient City (South Dunedin Future) have all made savings in their operations and maintenance costs. Further details are provided in each of the group budget reports.

Occupancy costs

41 Occupancy and property related costs such as rates, insurance, electricity, and fuel have increased by $1.653 million, 4.6%. These increases have largely impacted the Community Recreation activity with an increase of $652k, Property activity with an increase of $493k and 3 Waters with an increase of $625k.

Consumables and general costs

42 Consumables and general costs have increased by $2.251 million, 8.6%. The main changes are due to the following:

· Three Waters – an increase of $1.808 million due to an increase in consultancy costs for Better Off Funding projects, government levies and engineering consultants.

43 City Properties – an increase of $868k largely due to costs relating to seismic assessments and asbestos management.

Grants and Subsidies costs

44 Grants and subsidies costs have increased by $2.125 million, 19.5%. The main changes are due to the following:

· Vibrant Economy – an increase of $2.324 million due to an additional placeholder Economic Development budget of $2.000 million to support Dunedin Venues Management Limited.

Internal costs

45 Internal costs have increased by $4.708 million, 11.5%. The main changes are due to the following:

· Waste Minimisation – an increase of $3.811 million due the cost of disposing kerbside collection refuse at the landfill now accounted for as internal expenditure.

· The balance of the increase in internal costs is mainly due to increased internal corporate charges to all activities.

Depreciation

46 Depreciation expense has increased by $2.129 million, 1.7%, reflecting the valuation of assets at 30 June 2024 and the capital expenditure programme. The increase is reflected mainly in the Transport, Parks and Recreation, Libraries and Waste activities. 3 Waters depreciation has reduced.

Interest

47 Interest expense has decreased by $84k, -0.3%, reflecting a decrease in interest rates.

48 The annual plan 2024/25 had an interest rate assumption of 5%. For the purposes of preparing the draft 9 year plan, an assumption has been made that the borrowing rate for the 2025/26 year will be 4.12%. The interest rate will remain at 4.12% until 2029/30 when it increases to 5.0%.

Debt

49 The Draft Forecast Financial Statements at Attachment D shows that by 30 June 2034, the estimated debt level will be $1.083 billion which is 173.5% of revenue. The debt limit provided for in the Financial Strategy is 250% of revenue.

Consultation

50 Community consultation on the 9 year plan will use many of the consultation methods used previously, aimed at ensuring a wide cross-section of the community has access to the information and the opportunity to participate in the process.

51 Following Council’s direction, the Consultation document (CD) will contain more fulsome information than in previous years together with additional supporting material online for those who want that. The CD must be audited. The graphic design on this document will be a relatively light touch albeit the document will look professional and be well laid out. The formal CD will not go to all households but will be available in a print version at service centres, at consultation events and by request. It will be available online and will be supported by a website with all the additional material and online submission forms. Paper submissions forms will be available as part of the CD or on request.

52 The content of the CD will be developed following the decisions of Council at this meeting.

53 Alongside the formal CD, a double version of FYI will be produced which will highlight and summarise the key aspects of the 9 year plan. FYI will be distributed to as many households as possible (on the same basis as FYI).

54 An engagement plan will be presented to the 11 February Council meeting, setting out possible engagement activities throughout the submission period.

Signatories

Author:

Sharon Bodeker - Special Projects Manager

Carolyn Allan - Chief Financial Officer

Authoriser:

Sandy Graham - Chief Executive Officer

Attachments

	Title	Page
⇩a	Draft Operating Budget 2025/26 (year 1)	48
⇩b	Draft Operating Budget 2025-34 (9 years)	49
⇩c	Draft Funding Impact Statement 2025-34 (9 years)	50
⇩d	Draft IFRS Financial Statements 2025-34 (9 years)	51
⇩e	Draft Financial Strategy and Other Metrics	55

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	✔	☐	☐
Future Development Strategy	✔	☐	☐
Integrated Transport Strategy	✔	☐	☐
Parks and Recreation Strategy	✔	☐	☐
Other strategic projects/policies/plans	✔	☐	☐

The Group Activities contribute to the objectives and priorities of the above strategies.

Māori Impact Statement

Council budgets impact broadly across all Dunedin communities including Māori. The adoption of Te Taki Haruru – Māori Strategic Framework signals Council’s commitment to mana whenua and to its obligations under the Treaty of Waitangi. Mana whenua and Māori will have an opportunity to engage on the 9 year plan 2025-34.

Sustainability

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

Zero carbon

Zero carbon considerations have been assessed for all the activities of Council, and where relevant, are discussed in each of the reports on the agenda.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides an overview of the 9 year plan 2025-34.

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 9 year plan will be fully consulted on using the special consultative procedure, in accordance with the Local Government Act 2002.

Engagement – external

There will be extensive community engagement on the draft budgets and content of the 9 year plan in 2025.

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 9 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 9 year plan.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

Projects and items identified in Community Board Plans have been considered for inclusion 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

28 January 2025

Infrastructure Strategy - 9 year plan 2025-34

Department: Transport and 3 Waters

EXECUTIVE SUMMARY

1 The Local Government Act 2002 (LGA) requires a local authority’s long-term plan to include an Infrastructure Strategy. The Infrastructure Strategy must identify:

a) Significant infrastructure issues for a local authority during the period covered by its strategy; and

b) The principal options for managing those issues and the implications of those options.

2 This report seeks Council approval of the draft Infrastructure Strategy for the Dunedin City Council (DCC) (Attachment A), for the purpose of public consultation for the 9 year plan 2025-34.

3 Similar to the DCC’s current Infrastructure Strategy in the 10 year plan 2021-31, the draft Infrastructure Strategy for the 9 year plan 2025-34 covers the next 30 years and complies with the prescribed content as set out in the LGA.

4 The draft Infrastructure Strategy is in two parts:

a) Part 1: Three waters – this covers the infrastructure related to the DCC’s water supply, stormwater, and sewerage and sewage activities.

b) Part 2: Transport – this covers the infrastructure related to the DCC’s roading and footpaths activities.

RECOMMENDATIONS

That the Council:

a) Approves the draft Infrastructure Strategy, with any amendments, for public consultation purposes for the 9 year plan 2025-34.

b) Notes the draft Infrastructure Strategy may be amended if needed to reflect any audit recommendations and/or any Council decisions on budgets.

BACKGROUND

5 The LGA requires local authorities to develop a long-term plan. Schedule 10 of the LGA specifies the content that must be included in the long-term plan.

6 Local authorities are required to have an Infrastructure Strategy as part of the long-term plan. The Infrastructure Strategy sets out how the local authority intends to manage its infrastructure assets. As part of a long-term plan, local authorities are also expected to set out their capital expenditure budgets and funding impact statements.

7 Section 101B of the LGA sets out the requirement to prepare and adopt an Infrastructure Strategy, and the content that must be included within the Infrastructure Strategy. The purpose of an Infrastructure Strategy is to identify:

a) Significant infrastructure issues for the local authority over a period of at least 30 years.

b) The principal options for managing those issues and the implications of those options.

8 An Infrastructure Strategy must cover the following infrastructure assets associated with the following groups of activities:

a) Water supply, sewerage and the treatment and disposal of sewage, and stormwater drainage (the three waters).

b) The provision of roads and footpaths (transport).

9 An Infrastructure Strategy is closely linked to a Financial Strategy, which is also required by the LGA as part of the long-term plan. A Financial Strategy considers affordability for ratepayers and the DCC as a whole. 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.

10 The draft Infrastructure Strategy outlines the most likely scenario for the management of the DCC’s three waters and transport infrastructure assets over the next 30 years and shows indicative estimates of the capital and operating expenditure associated with the management of these assets.

11 Section 101B(3) of the LGA stipulates that an Infrastructure Strategy must outline how the local authority intends to manage its infrastructure assets, taking into account the need to:

a) Renew or replace existing assets.

b) Respond to growth or decline in the demand for services reliant on those assets.

c) Allow for planned increases or decreases in the levels of service provided through those assets.

d) Maintain or improve public health and environmental outcomes or mitigate adverse effects on them.

e) Provide for the resilience of infrastructure assets by identifying and managing risks relating to natural hazards and by making appropriate financial provision for those risks.

DISCUSSION

12 In responding to Section 101B(3) of the LGA, the significant issues that have been identified and addressed in the draft Infrastructure Strategy include:

a) Rehabilitating, replacing and renewing Dunedin’s ageing infrastructure.

b) Responding to changes in demand for infrastructure due to population growth, including responding to the development capacity needs outlined in the Future Development Strategy for Dunedin 2024-2054 (FDS).

c) Improving public health and environmental outcomes.

d) Improving infrastructure resilience to natural hazards.

e) Meeting the strategic intent of Te Taki Haruru, adopted by Council in September 2023.

f) Meeting Dunedin’s zero carbon 2030 target.

13 Rehabilitating or renewing Dunedin’s ageing infrastructure is a key priority of the draft Infrastructure Strategy. Dunedin has an established strong and credible market and supply chain support network that is scalable to the level of investment required over the 9 year plan 2025-34 period. Whilst investment by the DCC has been prioritised to respond to the highest need and highest risk areas, infrastructure challenges are present across the city.

14 The FDS has been prepared under the National Policy Statement on Urban Development 2020 and adopted by Council in April 2024. The FDS sets out how the DCC intends to provide sufficient development capacity, which must be ‘plan-enabled’ and ‘infrastructure-ready’. This means that funding for adequate development infrastructure to support the development of land in the FDS medium-term period (2024 - 2034) is to be identified in the 9 year plan 2025-34. The infrastructure to support growth over the FDS long-term period (2034 to 2054) must be included or be identified in the Infrastructure Strategy.

15 The FDS has assumed a high growth scenario from 2024 to 2034 and a medium growth scenario from 2034 to 2054. The FDS identifies the development infrastructure necessary to service this growth. Funding for this development infrastructure has been provided for in the 9 year plan 2025-34 draft operating and capital budgets.

16 In September 2023, Council adopted the Zero Carbon Plan. The implementation of this plan is reflected in the draft Infrastructure Strategy. Three Waters and Transport activities both have significant emissions associated with them, as well as significant potential to contribute to emissions reduction for the DCC and Dunedin as a whole. Both have associated action areas in the Zero Carbon Plan.

17 The Three Waters component of the draft Infrastructure Strategy (IS) notes a key focus on delivering on city and DCC emissions reduction, and supporting urban intensification to reduce city emissions. Key emissions reduction priorities include supporting compact urban form, minimising greenhouse gas emissions from wastewater treatment, replacing fossil fuels with other energy sources and increasing energy efficiency, and exploring options for renewable energy generation associated with Three Waters assets.

18 In terms of Transport, the draft IS has the aspiration to continue to improve safety, provide transport choice, and enable low carbon transport options such as provision of networks that support walking and cycling. However, the draft IS reflects the constrained investment in these areas in the draft 9-year plan, which will significantly constrain the emissions reduction achievable in the transport sector.

19 In the Zero Carbon Investment Packages report (provided under separate cover), transport is a particular focus due its high proportion of total city emissions (34% in 2021/22). Decisions about Zero Carbon packages will have implications for other parts of the draft 9-year plan, including the IS. Amendments may be required to ensure the broader 9 Year Plan accurately reflects these decisions. Council approval for this is addressed in the Zero Carbon report.

Draft Infrastructure Strategy

20 The draft Infrastructure Strategy is in two parts:

a) Part 1: Three waters – this covers the infrastructure related to the DCC’s water supply, stormwater, and sewerage and sewage activities

b) Part 2: Transport – this covers the infrastructure related to the DCC’s roading and footpaths activities.

21 Although subject to similar infrastructure challenges, the three waters and transport activities currently operate within broader contexts with distinct features. The two-part approach of the draft Infrastructure Strategy allows the document to clearly reflect the influence of these distinct contexts for infrastructure management over the 30-year period.

22 Budget matters directly related to the draft Infrastructure Strategy and to the associated costs of the rehabilitation and renewals asset programmes for three waters and transport are covered in the draft Financial Strategy. Infrastructure budgets have been developed to increase levels of asset renewal/replacement to ensure networks continue to meet service performance levels and can accommodate urban growth and resilience needs. The draft Financial Strategy is the subject of a separate report to Council.

23 The draft operating budget information will be populated following the 28 January 2025 Council meeting. Schedules are currently inserted as a placeholder.

24 The key emphasis in the draft Infrastructure Strategy is the strong focus on rehabilitation and renewals.

Draft Infrastructure Strategy Part 1: Three Waters

25 The draft 9 year plan 2025-34 provides for $1.0 billion of capital spend for three waters infrastructure over the 9-year period. There is less certainty around the issues and options for the period 2034 to 2054.

26 The proposed budget for three waters capital investment is consistent with the draft Financial Strategy and aims to maintain affordability for ratepayers as far as possible while accommodating projected urban growth and resilience needs.

27 The three waters drivers and challenges addressed in the draft Infrastructure Strategy are:

Drivers	Challenges
Looking after our people and place	Maintaining or improving public health outcomes Maintaining or improving environmental outcomes Ensuring infrastructure is safe for staff and contractors to operate and maintain
Looking after what we have (things)	Replacing and renewing our ageing three waters infrastructure Maintaining levels of service
Meeting our changing needs	Responding to changes in growth and demand
Improving our resilience	Providing for infrastructure resilience in the face of a changing climate
Delivering on our city and DCC emissions reduction targets	Reducing our emissions and supporting urban intensification to reduce City emissions
Living within our means	Financial prudence and affordability

Looking after our people and place

28 The DCC will work to maintain or improve public health and environmental outcomes by increasing investment over time through existing renewals programmes.

29 Improvements to DCC three waters assets are required to keep pace with increasing public health and environmental expectations. Investment is required to maintain current and future service levels, including enhanced protection of drinking water sources, improved water management practices, and new standards for drinking water, wastewater and stormwater services. Outputs of the system planning programme is guiding capital investment and supports the continued provision of safe drinking water to serviced communities and improved environmental outcomes.

Looking after what we have (things)

30 DCC three waters assets have a value of $4.1 billion, with assets depreciating by approximately $62.4 million annually. The renewals spend profile within the draft Infrastructure Strategy is a significant increase from the previous long-term plan due to the ageing asset base and the risk of not meeting levels of service targets.

31 The DCC is increasing spending on replacing existing infrastructure assets. In some circumstances, ‘like-for-like’ renewals may no longer be enough to meet regulatory requirements and meet the needs and expectations of the community. This means it is likely the proportion of new capital against renewals funding will increase to allow for upgrades that provide capacity for growth and/or resilience to climate change impacts.

32 The DCC will manage the renewal and replacement of ageing infrastructure by planning to renew assets as they reach the end of their useful lives or are shown to be in poor condition.

Meeting our changing needs

33 The DCC growth projections indicate Dunedin’s population will increase under a high growth scenario over 2024-34 and a medium growth scenario from 2034 to 2054. The DCC is planning for growth through specific capacity assessments and targeted capital works to meet projected demand for three waters infrastructure services. The proposed 2025-34 capital programme includes funding for investigation, design and construction of new infrastructure required to service the housing capacity enabled by the 2GP.

34 The FDS identifies that many areas of the city currently have insufficient existing three waters infrastructure to support the existing housing capacity enabled in the plan (transitional residential areas, proposed future intensification areas and new business land). Three waters infrastructure upgrades necessary to support existing housing capacity will be undertaken in the short to medium term. However, upgrades to support transitional areas, proposed future intensification areas and new business land are generally either long term (10-30 years) or very long term (30-50 years).

35 In the short to medium term, renewals are required at water treatment plants to ensure they continue to meet regulatory requirements. Work will also commence on improving the efficiency of water use in the city through initiatives such as demand and pressure management, that will aim to reduce water losses.

36 System planning work has identified that new water sources will be required within the next 10-15 years as well as substantial raw water storage, to ensure that minimum flows in existing rivers can be maintained and Dunedin has sufficient water available in dry periods. In the medium to long term, renewals of water supply pipelines will also be undertaken to improve drinking water system resilience. There will be increased use of green infrastructure for managing stormwater, improving flood resilience and improve stormwater quality. This will benefit the health of freshwater and coastal waters and provides an opportunity to create more greenspaces for Dunedin residents to enjoy.

Improving our resilience

37 Natural hazards pose a lesser risk when infrastructure networks are resilient. Flooding, drought, catchment fire, landslides, rising groundwater and liquefaction in the event of an earthquake pose the most significant risks to Dunedin’s infrastructure. The DCC is working to improve its understanding of natural hazards and to develop options for resilient infrastructure networks into the future.

38 The DCC will manage this issue by ensuring investment in renewals and new capital specifically considers reducing the risk arising from natural hazards and where possible, considers adaptive planning.

Delivering on our city and DCC emissions reduction targets

39 The most effective emission reduction initiatives identified within three waters activities relate to management of wastewater treatment and disposal. Some specific actions have been identified and are being planned, such as changing the way biosolids (a by-product of wastewater treatment processes) are managed in wastewater treatment.

40 To support the Council’s Zero Carbon 2030 target, three waters infrastructure projects will aim to minimise carbon emissions in the design, construction and operational phases.

Living within our means

41 Establishing an infrastructure strategy and funding programmes of works that are financially prudent and affordable to ratepayers is a challenging aspect of infrastructure planning work. This requires managing risk around what is and is not prioritised, what can be reasonably expected to be funded and delivered while remaining affordable to the community and continuing to deliver a sustainable level of asset management over short and long term planning timelines.

Draft Infrastructure Strategy Part 2: Transport

42 The transport part of the draft Infrastructure Strategy sets out the DCC’s strategy for managing its transport infrastructure for the next 30 years.

43 The transport asset base has a total replacement value of $2.4 billion (2024) and assets depreciate by approximately $32.1 million annually.

44 Many of Dunedin’s transport assets are ageing, with many nearing or exceeding the end of their useful economic lives.

45 In the past three years since 2021, the gap between asset management-driven replacement and available funding has been: 2021 (-15%), 2022 (-13%) and 2023 (-9%).

46 The draft Infrastructure Strategy reflects a 29% increase in capital for renewals from the 2022/23 financial year. It assumes the maintenance task (funded through operating cost) stays relatively similar through the years, and that the expectations around delivery for that available budget are similar to the 2024/25 financial year.

47 The transport part of the draft Infrastructure Strategy considers two different types of capital.

· Renewals capital: for example, reseals and kerb and channel. The replacement of these assets is based on age and condition. This is typically co-funded at 51%.

· New capital: for example, cycleways, new roundabouts, safety enhancements and interventions and new crossings. This category is subject to much more fluctuation in co-funding from the NZ Transport Agency Waka Kotahi (NZTA) through the Government Policy Statement on Land Transport (GPS).

48 Renewals are funded based on asset management principles, the first of which is age, the second is condition. Overall fiscal constraints in previous years have meant that the DCC has not met its asset management driven targets for renewals.

49 Dunedin continues to have a poor transport corridor safety record, particularly around intersections. Older users, pedestrians and cyclists account for the highest proportion of people hurt across the network. The response to this is to continue to invest in the low cost low risk work programme (100% DCC funded) which delivers a series of interventions that support better safety outcomes for pedestrians, cyclists and vehicle drivers alike.

50 The DCC is responding to the demand of increased travel options across the city. The DCC will continue to invest in infrastructure to support and enable all transport modes across the city, where funding allows, and where co-investment is supported through alignment with the GPS. By providing transport choice across the city (walking and cycling) the draft Infrastructure Strategy responds to public health and environmental outcomes (through the provision of low carbon transport options).

51 Equally, the draft Infrastructure Strategy responds (where funding allows) to a reduction of carbon emissions through the provision networks that support walking and cycling. In order to manage fiscal challenges planning for these networks will continue in the coming years until the co-funding environment is more favourable.

52 As weather events become more frequent the DCC Transport team will continue to examine design assumptions around infrastructure (culvert size, road height as examples) and will take advantage of addressing them where funding allows.

53 DCC will continue to apply to the Crown Resilience Programme Fund through the NZ Transport Agency Waka Kotahi. This fund provides a higher co-funding rate and enables small scale interventions across the network to support areas in the transport network prone to flooding and increased erosion.

54 The focus is on renewing transport network infrastructure to reduce the risk of declining service levels but does not plan to invest for changes to service levels.

The DCC’s strategic priorities for transport network infrastructure

55 The key strategic priorities are:

a) Maintaining and renewing existing assets.

b) Safety – improving Dunedin’s transport corridor safety record.

c) Provision of Transport Choice

d) Growth – planning for and responding to growth.

56 There are ongoing responses to managing resilience in the transport corridor across the city, but significant investment is required. Lifelines agencies work together to plan alternative routes and develop strategies respond to weather events and other natural disasters.

57 The National Policy Statement on Urban Development (NPS-UD) 2020 sets out the objectives and policies for planning for well-functioning urban environments under the Resource Management Act 1991. To support growth, a transport assessment of required infrastructure for the identified growth areas has been completed which has been considered in the development of the transport part of the draft Infrastructure Strategy.

58 The DCC plans to maintain internal capacity and reduce external (consultant) capacity (for at least the next three years) to deliver the capital programme, focussing on:

· Using existing staff to project manage new capital projects and reducing external consultant assistance.

· Continuing to deliver the renewals programme internally including continuing to grow the capability of internal delivery. This include having engineers’ representative and engineers to the Contract.

· Continuing to seek opportunities to package works with other large organisations such as the NZ Transport Agency Waka Kotahi and the Otago Regional Council to maximise economies of scale and minimise community impact.

OPTIONS

59 Council is required to prepare and adopt an Infrastructure Strategy as part of the 9 year plan 2025-34. This report does not present options.

NEXT STEPS

60 Subject to Council approval of the draft Infrastructure Strategy, next steps include:

a) If approved, the draft Infrastructure Strategy, with any amendments, will be finalised for public consultation as part of the supporting documents for the 9 year plan 2025-34. Amendments may be required to respond to audit recommendations and/or Council decisions on budgets.

b) If Council wishes to make significant changes and/or amendments to the draft Infrastructure Strategy, staff will seek Council direction and prepare a revised draft for Council approval before public consultation.

c) Finalising the draft Infrastructure Strategy to include the following amendments:

i. Populate the financial fables and associated information.

ii. Applying inflation factors to the 3 Waters budget.

61 A summary of the draft Infrastructure Strategy will be incorporated into the 9 year plan 2025-34 Consultation Document.

Signatories

Author:

Jeanine Benson - Group Manager Transport

John McAndrew - Acting Group Manager, 3 Waters

Authoriser:

Scott MacLean - General Manager, Climate and City Growth

David Ward - General Manager, 3 Waters and Transition

Attachments

	Title	Page
⇩a	Draft Infrastructure Strategy 2025-55	87

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 wellbeing of the Dunedin 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	✔	☐	☐
Future Development Strategy	✔	☐	☐
Integrated Transport Strategy	✔	☐	☐
Parks and Recreation Strategy	✔	☐	☐
Other strategic projects/policies/plans	✔	☐	☐

The draft Infrastructure Strategy contributes specifically to the priorities of the 3 Waters Strategy and Integrated Transport Strategy.

Māori Impact Statement

The adoption of Te Taki Haruru, the DCC’s Māori Strategic Framework signals Council’s commitment to mana whenua and to its obligations under the Treaty of Waitangi. Mana whenua and Māori will be involved in engagement with the 9 year plan 2025-34 consultation process.

Sustainability

As part of the 9 year plan 2025-34, several pieces of work are underway to give effect to Council’s commitment to sustainability. The draft Infrastructure Strategy sets out a strategy for the sustainable management of DCC’s three waters and transport infrastructure assets.

Zero carbon

The draft Infrastructure Strategy has been prepared with reference to the Zero Carbon Plan. Zero carbon considerations are discussed in the body of this report.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

The draft Infrastructure Strategy is a required component of the 9 year plan 2025-34 and is a companion to the Financial Strategy.

Financial considerations

Financial considerations (including financial sustainability) are key considerations in the development of the 9 year plan 2025-34.

Significance

Development of the 9 year plan 2025-34, which includes the Infrastructure Strategy, will include community engagement and public consultation.

Engagement – external

Development of the 9 year plan 2025-34, which includes the Infrastructure Strategy, will include community engagement and public consultation.

Engagement - internal

Staff and managers from across council are involved in the development of the 9 year plan 2025-34, including the draft Infrastructure Strategy.

Risks: Legal / Health and Safety etc.

There are no known risks.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

Community Boards will be engaged and consulted with as part of the development of the 9 year plan 2025-34.

Council

28 January 2025

Zero Carbon Investment Packages

Department: Sustainability Group

EXECUTIVE SUMMARY

1 This report provides Zero Carbon High and Medium investment packages (‘the packages’) for consideration in the 9 year plan, as requested by Council. A summary of the packages is presented in Attachment A. Detail of each investment option is provided in Attachment B, with notable exclusions in Attachment C.

2 This report also provides a summary of projects within draft 9 year plan budgets that will provide some emissions reduction benefits. Each draft capital budget line has been assessed for contribution to emissions reduction.

3 As the national context has shifted significantly in the 15 months since initial advice was provided to Council, this report also provides an update on the national context for emissions reduction and implications for Zero Carbon Plan implementation (Attachment D).

4 The packages were developed taking into account guidance from the councillor-led Zero Carbon Plan Advisory Panel. Investment options were prioritised primarily based on emissions reduction potential per dollar spend, with secondary considerations including building on other DCC investment underway, seeking opportunities to catalyse by building on or maintaining momentum, and aligning with DCC strategic priorities.

5 Package development considered the different roles of the DCC, from providing infrastructure, to supporting and enabling communities to change behaviour, and decarbonising the DCC’s own assets. The full breadth of the Zero Carbon Plan was considered, with a particular focus on action areas that were identified as having higher emissions reduction potential. Transport is a particular focus due it being a high proportion of total city emissions (34% in 2021/22).

6 The High package includes a total of $101.17 million capital expenditure and $9.00 million operating expenditure plus ongoing interest and depreciation costs. The Medium package includes a total of $35.54 million capital expenditure and $5.54 million operating expenditure plus ongoing interest and depreciation costs. The Medium package excludes several transport projects and DCC emissions reduction projects. In addition, several projects in the Medium package have scaled back investment (with scaled back emissions reduction outcomes). A summary of the High and Medium investment packages is at Attachment A.

7 The level of DCC investment in emissions-reducing 9 year plan projects has implications for emissions at both DCC and city-wide scales.

a) At the city scale, the High and Medium packages would support emissions reduction and provide other benefits for the community. However, preliminary indications from modelling are that, in the updated context, it is unlikely either package will bring about the degree of change at the pace required to achieve the city’s 2030 target.

b) At the DCC scale, based on modelling completed in 2023/24, it’s possible that the DCC’s organisational target can be achieved with projects that are in draft budgets alone. Investment in High and Medium packages would increase the probability of this target being achieved.

8 Decisions about Zero Carbon packages will have implications for other parts of the draft 9 Year Plan, including the Significant Forecasting Assumptions and Levels of Service. Amendments to some other draft plan content may also be required to ensure the broader 9 Year Plan accurately reflects decisions about Zero Carbon packages.

RECOMMENDATIONS

That the Council:

a) Decides on a preferred option for Zero Carbon investment packages, for consultation purposes, as part of the 9 year plan 2025-34.

b) Approves inclusion of the additional Zero Carbon city-wide Level of Service appropriate to the chosen investment option.

c) Delegates authority to the Chief Executive Officer to make changes to the Significant Forecasting Assumptions, Finance Strategy, Infrastructure Strategy, and other relevant 9 Year Plan documents to reflect decisions about Zero Carbon investment options.

BACKGROUND

Emissions reduction targets and the Zero Carbon Plan

9 The DCC is seeking to manage and reduce emissions at two scales – DCC at the organisational level, and the city. Decisions on the 9 year plan have implications for emissions at both scales.

10 At the DCC scale, the target is to reduce emissions 42% from a 2018/19 baseline by 2030/31. The organisation is so far tracking well towards this target, having achieved a 29.7% reduction from the baseline year in 2023/24.

11 At the city scale, the DCC has adopted a ‘Zero Carbon 2030’ city emissions reduction target, which is in two parts:

· net zero emissions of all greenhouse gases other than biogenic methane by 2030, and

· 24% to 47% reduction below 2017 biogenic methane emissions by 2050, including 10% reduction below 2017 biogenic methane emissions by 2030.

12 In September 2023, Council adopted an emissions reduction plan for Dunedin: the Zero Carbon Plan 2030. The Zero Carbon Plan set out a pathway to achieve the city’s target, building on trends already underway. At last count, Dunedin’s emissions were tracking down – between 2018/19 and 2021/22, Dunedin’s gross emissions decreased by 9%.

13 The modelling that underpinned the Zero Carbon Plan built in emissions reduction targets and commitments made by government and other entities, as well as DCC actions. It concluded that achieving the city’s targets would require a wide range of government, community, and business stakeholders to pull all available levers as hard as credibly possible.

The Zero Carbon Plan identified that upfront investment would be required to achieve targets

14 The Zero Carbon Plan sets out the overall shifts Dunedin will need to make as a city to become a Zero Carbon city.

15 The Plan also identifies the DCC’s roles to support the transition to zero carbon, setting out ‘action areas’ for the DCC prioritised by emissions reduction potential. In doing so, it recognises that many actions required to reduce emissions will reduce costs in the medium term, but there will be upfront costs especially for owners of assets/infrastructure.

16 While no equivalent figures are available for Dunedin, a report by Deloitte estimates that inadequate climate action could cost the New Zealand economy $4.4 billion by 2050, with losses becoming exponentially worse after that. On the other hand, decisive climate action could deliver $64 billion to New Zealand’s economy by 2050.

17 Many actions also have co-benefits for the community and city, such as reducing the costs of living or doing business, health benefits, and community cohesion.

Zero Carbon investment packages were considered in September 2023

18 In September 2023, an indicative implementation plan was presented alongside the Plan.

19 The accompanying report also included indicative ‘high’, ‘medium’ and ‘low’ investment scenarios for Zero Carbon investment over the 2024-34 10 year plan period. Each scenario identified additional funding on top of each department’s early draft 10 year plan capital and operating budget.

20 At that time:

a) high investment scenario included undertaking all DCC actions at the highest level deemed feasible and deliverable over the period to 2030.

b) medium investment scenario retained a high level of investment in decarbonisation of DCC-owned infrastructure and transport-related actions, but most other actions were to be progressed to a lesser degree than under the high investment scenario.

c) low investment scenario retained a high level of investment in decarbonisation of DCC owned infrastructure, but the level of investment in transport-related actions was reduced. Most other actions were retained at the minimum level that staff considered would have any degree of efficacy. Some actions that were considered to represent longer-term investments in emissions reduction (e.g. amenity aspects of urban form actions) were not progressed.

21 For the purposes of costing each scenario, New Zealand Transport Agency (NZTA) co-funding was assumed for projects that would qualify under policy settings at the time.

22 At that meeting, Council resolved:

Moved (Cr Steve Walker/Cr Christine Garey):

That the Council:

f) Requests further development of the high investment option for the Zero Carbon Implementation plan (as the preferred option) in time for consideration as part of the Draft Long Term Plan 2024-34, with medium investment as the alternative option.

Division

The Council voted by division

For: Crs Sophie Barker, David Benson-Pope, Christine Garey, Kevin Gilbert, Carmen Houlahan, Marie Laufiso, Mandy Mayhem, Jim O'Malley and Steve Walker (9).

Against: Crs Bill Acklin, Cherry Lucas, Lee Vandervis, Brent Weatherall and Mayor Jules Radich (5).

Abstained: Cr Andrew Whiley (1).

The division was declared CARRIED by 9 votes to 5

Motion carried (CNL/2023/214)

Establishment of the Zero Carbon Plan Advisory Group

23 On 27 August 2024, Council resolved to establish a Zero Carbon Plan Advisory Group, as follows:

Moved (Cr Cherry Lucas/Cr Sophie Barker):

That the Council:

a) Adopts the Zero Carbon Plan Advisory Panel Terms of Reference with agreed amendments to the frequency of reporting and meetings and membership.

Motion carried (CNL/2024/156) with Cr David Benson-Pope recording his vote against

24 The Zero Carbon Panel Advisory Group Terms of Reference and full minute extract from the meeting are included as Attachment E.

The context has changed since September 2023

25 Under the Climate Change Response Act, the government is required to formalise a planned approach to reduce emissions in line with targets by publishing a national emissions reduction plan. The Zero Carbon Plan was developed and adopted in the context of New Zealand’s first emissions reduction plan (ERP1).

26 Since the October 2023 central government election, changes in central government policy and co-funding have had a material impact on the DCC’s emissions reduction activity. A number of projects included in the Zero Carbon 2023/24 implementation plan because of their potential to reduce transport emissions, have been either discontinued or put on hold.

27 In December 2024 the Government released ‘Our journey towards net zero: New Zealand’s second emissions reduction plan 2026-30’ (ERP2).

28 Key changes between ERP1 and ERP2 include:

a) Significantly reduced policy support and co-funding for active and public transport;

b) Mode shift, speed, and vehicle kilometre travelled (VKT) reduction plans discontinued or scope amended;

c) Government incentives and funding for electric vehicles discontinued;

d) EECA’s ‘Government Investment in Decarbonising Industry’ and commercial funding discontinued;

e) Climate Emergency Response Fund discontinued;

f) Mandates to standardise recycling/organics collections in urban areas discontinued, along with related reporting initiatives;

g) Equitable transition and circular economies not included as priorities;

h) On-farm emissions no longer being priced from 2025 (now 2030); and

i) An increased emphasis on removing regulatory barriers, for example to enable faster investment in renewable energy projects.

29 Other Government policy programmes also have implications for the potential scope of DCC’s emissions reduction efforts. Examples include local government reform, water services reform and resource management reform.

30 The DCC’s own work programmes have also progressed. For some emissions sources, work undertaken during 2023/24 and 2024/25 has resulted in better defined emissions reduction investment options.

31 These changes in the emissions reduction context have required ‘high’ and ‘medium’ investment packages to be re-worked.

32 Attachment D provides detailed information about how the changed context has been reflected in the updated investment packages and advice.

Zero Carbon Levels of Service

33 On 5 November 2024, the OAG released a report auditing the performance of four councils’ climate work. The report includes five recommendations for councils, three of which relate to reporting.

34 Specifically, the OAG recommend Councils should:

a) make clear in climate strategies what their climate-related objectives are, how they intend to achieve those objectives, how they will use their strategies to set priorities, and how they will measure and report on progress in implementing their strategies;

b) strengthen the use of performance measures that reflect climate-related strategic objectives and priorities; and

c) report publicly on progress with their climate change strategies and work programmes, to support accountability and so communities are well-informed, engaged, and supportive.

35 The DCC now has a well-developed emissions reduction framework, which can support reporting in line with OAG expectations:

a) A Zero Carbon Policy and associated guidance that is built into procurement processes, project management processes, and Council report templates.

b) Organisational emissions reduction targets for 2026/27 and 30/31, a DCC Emissions Management and Reduction Plan and associated modelling.

c) City-wide emissions reduction targets for 2030/31, a Zero Carbon Plan and associated modelling.

36 On 10 December 2024, Council adopted Levels of Service for inclusion in the draft 9 year plan, including a specific LoS for DCC emissions (CNL/2024/245).

37 As the recommended LoS for city-wide emissions was dependent on Zero Carbon investment packages, options are presented in this report for Council consideration.

DISCUSSION

Zero Carbon Plan Advisory Panel advice informed Zero Carbon investment package development

38 In November 2024, the Zero Carbon Plan Advisory Panel provided advice to inform Zero Carbon investment package development as follows:

Guidance on High and Medium investment packages

a) Original ‘High’ investment scenario definition to be retained (undertaking all DCC actions at the highest level deemed feasible and deliverable over the period to 2030), aligning as closely as possible with what is required to achieve the Zero Carbon target.

b) Any actions not included due to being deemed not feasible/deliverable, also be appended.

c) ‘Medium’ investment scenario to be a subset of high priority options, with an associated statement on likelihood of emissions reduction targets being achieved. Quantum / level of investment to be decided by Council.

Guidance on prioritisation

a) Carbon removal options to be workshopped directly with Council.

a) Prioritisation of actions should be based on emissions reduction potential. Highest priority should be actions that represent ‘greatest emissions reduction potential per dollar spend’.

b) Relative importance of other considerations as follows:

i) Seeking opportunities to build on other existing DCC investment;

ii) Seeking opportunities for DCC to act as a catalyst by building on other available resources or momentum;

iii) Alignment with DCC’s strategic framework; and

iv) Ensuring DCC is set up to scale up action quickly in the future, in response to changes or opportunities.

c) Co-benefits should also be assessed for each action, as supporting information.

Guidance on content:

a) Package development assessments to include consideration of:

i) Potential 100% local share funding for transport ‘ready to deliver’ walking and cycling projects.

ii) Potential funding for ORC-led projects that may improve public transport outcomes.

Potential Zero Carbon Plan investment options for inclusion in packages were reviewed and updated

39 The September 2023 indicative implementation plan was reviewed considering the updated context, work that had been completed since September 2023, and Zero Carbon Plan Advisory Panel advice. This resulted in some actions that were no longer feasible being discounted, and other new opportunities being added. Per the Panel’s guidance, to be included in either investment package, projects needed to be considered feasibly deliverable in the period to 2030 and meet one of the following definitions:

a) ‘Core’ emissions reduction initiatives either:

o have a key focus on reducing city-wide emissions; and/or

o were identified as a priority in the September 2023 Zero Carbon indicative implementation plan.

b) ‘Contributes’ emissions reduction initiatives will either:

o make a material contribution to city-wide emissions reduction, but emissions reduction is not a primary reason for investing; or

o contribute to the DCC’s own decarbonisation but have less impact on city-wide emissions reduction.

40 Actions deemed only complementary to emissions reduction efforts were not included. These actions are not emissions reduction focussed and would only deliver emissions reductions as a co-benefit of the project – reflecting poorer emissions reduction per dollar spend than ‘core’ and ‘contributing’ actions.

41 Scope and costings for each potential action were reviewed and updated. This is particularly relevant for transport-related investment options:

a) Given that Government policy/NZTA funding settings make it very unlikely that new walking, cycling or public transport projects would attract NZTA co-funding, these investment options have all been costed at 100% local share (DCC funding).

b) Where NZTA co-funding has been reduced for existing services, two separate investment options have been included. Investment required to ‘maintain 2024/25 status quo’ has been separately presented from ‘further expand service levels’.

42 Staff also considered opportunities to bring forward existing projects already in draft budgets, where doing so would materially contribute to the achievement of city-wide emissions reduction targets.

Zero Carbon Plan investment options were then prioritised to maximise emissions reduction per dollar spend

43 Non-transport options and transport options were separately assessed and prioritised, with the primary consideration being maximising emissions reduction per dollar spend.

44 For transport actions, a notable additional factor in determining priority was how quickly a project could be delivered. Several walking and cycling projects have been fully designed and consulted on. In some instances, projects that are ‘ready to go’ have been prioritised in investment packages over those that may ultimately deliver larger emissions reduction benefits but are yet to move through planning stages. The rationale is that emissions reduction benefits will be realised earlier and have greater effect on the achievement of targets.

45 Co-benefits of each action were also separately assessed and are reported for each action, but in line with Zero Carbon Plan Advisory Panel advice these have not been factored into the prioritisation.

Some actions were not included in the High and Medium investment packages

46 Several projects that were included in the original September 2023 indicative action list have not been included in either the High or Medium investment scenarios for a range of reasons, including:

a) actions have been assessed as relatively lower emissions reduction benefit for the investment required.

b) there is high uncertainty about costs, scope or phasing.

c) provision is already included in draft 9 year plan budgets.

d) provision is included in a separate 9 year plan investment option (Draft Festival and Events Plan and Implementation Options report only).

47 Attachment C sets out a list of more notable exclusions and the reason for their exclusion.

Public transport investment options have been considered

48 Achievement of Dunedin’s emissions reduction targets is highly dependent on significant growth in public transport mode share. Investment in public transport improvements has the potential to grow mode share faster and at lower capital cost than investment in active modes, because:

a) according to recent surveys, for the majority of Dunedin people public transport is the most viable alternative to use of private motor vehicles;

b) improvements to the key factors that determine public transport mode share (e.g. frequency, relative journey times, reliability and affordability, infrastructure quality) can be achieved more quickly and without the complex capital investment that some cycle and pedestrian infrastructure requires; and

c) public transport improvements promote travel choice for longer journeys.

49 However, investment in public transport generates fewer co-benefits than investment in active modes.

50 Public transport patronage has been increasing under current service settings. Between 2018/19 and 2023/24, patronage in Dunedin grew approximately 54%. From 2018 to 2023, despite Covid-related interruptions, the proportion of people traveling to work on public transport increased 33% (4% to 5.3%).

51 However, Government policy and reduced co-funding is likely to result in changes that will adversely affect patronage. The Otago Regional Council (ORC) has been directed to increase the percentage of public transport operating costs it recovers from ‘private share’ (sources other than rates and government funding) – from 18.7% in 2023/24 up to 40% by 2026/27. The ORC is yet to formally consider its response, but councils elsewhere have signalled the policy change is likely to result in significantly higher fares.

52 Zero Carbon and Transport staff have identified potential priority areas for direct DCC investment in public transport that may mitigate adverse impacts on patronage and have engaged with ORC staff about these. Projects focused on improving bus priority and bus network/infrastructure are included in the High and Medium investment packages. However, it has not yet been possible to jointly scope or cost other investment options that have the potential to support bus patronage.

53 Further conversations with the ORC and NZTA are required to determine whether there is an opportunity for the DCC to contribute to the maintenance of affordable fares through direct investment in bus operations. The ORC is working through the implications of the recent Government/NZTA direction on private share recovery targets. There remains some uncertainty about what constitutes ‘private share’ funding, and whether there is a way for DCC contributions to qualify as ‘private share’.

54 Subject to finalisation of priorities through the ORC’s Regional Public Transport Plan, other investment options could focus on the development/delivery of a scheme enabling employer subsidy of staff public transport costs (similar to Fareshare in Auckland). This would also need further scoping with the ORC.

55 Staff will continue to engage with the ORC and will update Council when there is clarity on investment options, noting that this may preclude their consideration until Annual Plan 2026/27.

56 It should be noted that public transport mode share is also strongly linked to other DCC projects and decisions, particularly those relating to parking management (parking pricing and availability of parking influences residents’ transport choices). In the High and Medium packages, investment options like workplace travel planning (which encourages use of public transport) would also support mode shift.

Investment options to promote carbon removals have been considered

57 The DCC has adopted a city-wide target of achieving a ‘net zero’ position for all greenhouse gas emissions other than biogenic methane, by 2030. This means balancing the amount of greenhouse gases emitted in the city, with ‘carbon removals’. Carbon removals occur when carbon that has already been emitted into the atmosphere is soaked up and stored long term, often within trees.

58 Staff have been investigating the potential role of carbon removals, and options to support these, as part of Zero Carbon Plan implementation.

59 The carbon removals field is technical and evolving. Best practice is to reduce gross emissions as far as possible and then consider carbon removals. This is because planting trees alone is not a long-term solution to climate change – ultimately, emissions need to be reduced.

60 Carbon removals can occur at different scales. The DCC measures and manages emissions at two scales – city and DCC. The DCC’s Zero Carbon Policy states that options that contribute most to city emissions reduction targets should be prioritised. However, removals that happen at one scale can also influence or help achieve outcomes at other scales.

61 There are a range of technical considerations and accounting ‘rules’ and guidelines about how carbon dioxide removals can be used and what claims can be made. For example, carbon removals must be additional (over and above existing activities) and cannot be double counted. Currently, trees are the only type of removal that ‘count’ at national scale and are included in the national Emissions Trading Scheme.

62 Council direction is required on a range of policy points relating to carbon removals. This direction is linked to updates on modelling. Once the level of investment is known, the modelling will reflect that decision. This will be brought to Council for consideration once complete.

63 In this context, the carbon removals investment options included in High and Medium packages represent ‘no regrets’ opportunities to plan for or grow local carbon removals that contribute to community wellbeing in other ways. It should be noted that the scale of planting involved in the investment options would be sufficient only to balance out a fraction of DCC-scale emissions.

Overall High and Medium package design

64 The different roles of the DCC have been considered, with various initiatives types included – from providing infrastructure, to supporting and enabling communities to change behaviour, and decarbonising the DCC’s own assets.

65 Funding for initiatives has been included until 2030/31 only, as this is the period covered by the Zero Carbon Plan.

66 The full breadth of the Zero Carbon Plan has been considered, with a particular focus on action areas that were identified as having higher emissions reduction potential:

a) Very high emissions reduction potential:

· Communities and Economies action area 3: Empower the community to respond

· Communities and Economies action area 4: Deepen partnerships and collaboration

· Communities and Economies action area 7: Support businesses to transition

b) High emissions reduction potential:

· Transport and Urban Form action area 9: Complete urban cycleway networks and improve priority pedestrian networks

· Transport and Urban Form action area 10: Support improvements in public transport frequency, operating hours and quality while maintaining affordability for users

· Transport and Urban Form action area 13: Align parking management and consider other pricing mechanisms

· Forestry, Land and Agriculture action area 2: Support growth of sequestration that aligns with mana whenua and community values

· Communities and Economies action area 6: Support development of a diverse low carbon economy

67 Amongst the actions included in the High and Medium investment packages are a number that are highly scalable. In order to provide Council with clear, costed options, staff have needed to make pragmatic decisions about the level of spend to include in the packages for these investment options. Rationale for the level of investment chosen is provided in Attachment B.

68 Council could choose to scale up or down spend on a number of the actions, noting that in most cases further scaling up of investment would also require additional staff resource to be added. Should Council wish to invest at a higher level than is set out in the High package, priority investment options could be scaled up. This is likely to better align with prioritisation criteria than inclusion of additional lower priority actions.

69 Transport is a particular focus due its high proportion of total city emissions (34% in 2021/22). Council’s decision on Zero Carbon packages determines a core programme of work for Transport over the next three years.

70 A number of cycle and pedestrian infrastructure investment options included in the packages were identified through the draft Ōtepoti Dunedin Pathways Programme Business Case. An update to this work was provided to the 26 November 2024 Council meeting. Staff are currently working on the public facing version of the business case, which is the Ōtepoti Dunedin Pathways Plan. It is anticipated that this plan will be finalised and ready for public engagement mid/late 2025. Engagement will focus on refinement of indicative routes as well as feedback on the 30 year vision and the 10 year delivery approach.

71 Changes in central government policy and co-funding, particularly with respect to public transport, place additional reliance on parking management as a key DCC tool to support the achievement of emissions reduction goals. No options have been developed for this, as options need to be considered in a holistic way as part of Parking Strategy development. This work is ongoing and will be brought to Council when complete.

Zero Carbon High investment package

72 The Zero Carbon High investment package is summarised in Attachment A, with further detail on each individual investment option set out in Attachment B.

73 The High package sets out all ‘core’ and ‘contributing’ actions that are feasibly deliverable by 2030/31, prioritised in accordance with the criteria described above.

74 The High package includes initiatives that target emissions across a wide range of emissions sources and across the spectrum of the Zero Carbon Plan: Transport and Urban Form, Forestry, Land and Agriculture, Communities and Economies, Energy and Buildings. Resource Use and Waste investment options are not included – all projects that met criteria already form part of the capital programme.

75 The High package includes projects to:

a) kickstart a collaborative agricultural innovation project modelled on the Centre of Digital Excellence (CODE) approach;

b) support and invest in communities to transition and reduce their emissions;

c) support active and public transport modes through infrastructure improvements, linking key gaps in the cycleway network, supporting workplaces to implement workplace travel interventions, and central city bike parking facilities;

d) implement car share;

e) support schools and students with cycling infrastructure and skills, including supporting schools that are currently waitlisted;

f) increase carbon removals by growing the current number of native trees DCC provides to meet volunteers’ demand, and undertake work to identify high priority areas in the city to improve biodiversity and increase sequestration; and

g) decarbonise and improve the energy efficiency of additional DCC buildings.

76 The High package includes a total of $101.17 million capital expenditure and $9.003 million operating expenditure, over the next six years plus ongoing interest and depreciation costs. The impacts for rates and debt are set out in Table 1. Funding for initiatives has been included until 2030/31 only, as this is the period covered by the Zero Carbon Plan, however there are ongoing interest and depreciation costs.

Council

28 January 2025

Table 1: Zero Carbon High package financial impact summary

$'000	2025/26	2026/27	2027/28	2028/29	2029/30	2030/31	2031/32	2032/33	2033/34	Total

Capital expenditure	11,080	22,210	33,480	23,500	7,900	3,000	0	0	0	101,170
Debt	11,080	22,210	33,480	23,500	7,900	3,000	0	0	0	101,170

Operating expenditure:
Operating costs ($9.003 million)	1,628	1,915	1,745	1,245	1,245	1,225	0	0	0
Interest	228	914	2,061	3,235	4,711	4,984	5,059	5,059	5,059
Depreciation	0	367	1,220	2,357	3,115	3,488	3,584	3,584	3,584
Total operating expenditure	1,856	3,196	5,026	6,837	9,071	9,697	8,642	8,642	8,642

Impact on rates:	1,856	3,196	5,026	6,837	9,071	9,697	8,642	8,642	8,642

Zero Carbon Medium investment package

77 The Zero Carbon Medium investment package is summarised in Attachment A, with further detail on each individual investment option set out in Attachment B.

78 The Medium package progresses many of the initiatives in the High package, but some to a lesser degree.

79 The Medium package does not include several initiatives in the High package: decarbonising DCC buildings; the Dunedin Tunnels Trail; improvements to the Shore Street/Portsmouth Drive intersection; the City to Waterfront bridge; and centres upgrades – transport investment.

80 Areas with reduced investment include: cycle skills training for schools; community-led emissions reduction initiatives; tree planting on DCC land; safer schools streets in South Dunedin; and transport improvements for the Town Belt, and between the hill suburbs and central city.

81 The Medium package includes a total of $35.54 million capital expenditure and $5.538 million operating expenditure, over the next six years plus ongoing interest and depreciation costs. The impacts for rates and debt as set out in Table 2. Funding for initiatives has been included until 2030/31 only, as this is the period covered by the Zero Carbon Plan, however there are ongoing interest and depreciation costs over the nine-year period.

Table 2: Zero Carbon Medium package financial impact summary

$'000	2025/26	2026/27	2027/28	2028/29	2029/30	2030/31	2031/32	2032/33	2033/34	Total

Capital expenditure	6,080	8,480	8,430	6,350	3,100	3,100	0	0	0	35,540
Debt	6,080	8,480	8,430	6,350	3,100	3,100	0	0	0	35,540

Operating expenditure:
Operating costs ($5.538 million)	1,106	1,203	983	753	753	743	0	0	0
Interest	125	425	774	1,078	1,545	1,700	1,777	1,777	1,777
Depreciation	0	206	493	778	993	1,098	1,203	1,203	1,203
Total operating expenditure	1,231	1,834	2,249	2,609	3,290	3,540	2,980	2,980	2,980

Impact on rates:	1,231	1,834	2,249	2,609	3,290	3,540	2,980	2,980	2,980

Draft 9 year plan budgets contribute to Zero Carbon goals

82 The Council’s Zero Carbon Policy provides that all DCC activities, including renewals, should seek to minimise emissions and contribute to achieving both city-wide and DCC emissions reduction targets.

83 Draft operating budget reports include commentary about links with Zero Carbon outcomes, and the capital expenditure report and appendices indicate the Zero Carbon impact of each project. Projects have been assessed as follows:

· ‘Core’ emissions reduction initiatives either:

o have a key focus on reducing city-wide emissions; and/or

o were identified as a priority in the September 2023 Zero Carbon indicative implementation plan.

· ‘Contributes’ emissions reduction initiatives will either:

o make a material contribution to city-wide emissions reduction, but emissions reduction is not a primary reason for investing; or

o contribute to the DCC’s own decarbonisation but have less impact on city-wide emissions reduction.

· ‘Complements’ emissions reduction initiatives are not focussed on emissions reduction, however emissions reduction is a co-benefit of the project.

· Neutral where the project is considered to neither increase nor decrease city-wide emissions, nor significantly increase or decrease DCC emissions.

84 Core emissions reduction projects identified in the draft budgets include:

· Shaping Future Dunedin – central city cycle and pedestrian improvements, Princes Street bus priority and corridor safety plan, and parking management.

· Dunedin Urban Cycleways Tunnels Trail - (part funding Year 9 only) - an off-road trail linking Dunedin with the outer suburbs and Mosgiel via two unused train tunnels in the Chain Hills area.

· City to Waterfront Connection (part funding Year 9 only) - an accessible pedestrian and cycling bridge across the railway line between Queens Gardens and the Steamer Basin.

· Low Cost, Low Risk transport improvements – small projects aimed to improve pedestrian safety, particularly around schools.

· Waste Futures - measures to reduce waste emissions, such as constructing facilities to store/process material diverted from landfill, and improvements to landfill gas capture and destruction.

· Green Island Landfill Gas Collection System – improvements to landfill gas capture and destruction.

· Bioresources Facility – a secure solution for beneficial use of sludge as a bioresource to reduce operational costs and improve resilience of sludge disposal.

· Decarbonising DCC buildings - the renewal of energy systems for multiple properties, including the Civic Centre, Dunedin City Library, Dunedin Public Art Gallery, Toitū Otago Settlers Museum, and the Town Hall and Municipal Chambers.

85 Projects that contribute to achieving city-wide emissions reduction include:

· EV Charging Facilities for the DCC

· Moana Pool Redevelopment Renewals

· Track Network Development

· Retail Quarter - Transport

· Mosgiel Park and Ride

· Tertiary Precinct Upgrade

· Mobile Waste Education Unit

· Rural Recycling Hubs

· Carbon Reduction Studies and Design for Water Supply

· Centres Upgrade Programme

· Minor Streetscapes Upgrades

86 There are a wide range of projects within the draft capital budgets that complement city-wide emissions reduction efforts. Collectively these projects will help improve energy efficiency, and help reduce emissions from stationary energy, transport and waste systems, but for any one project the near-term reduction in emissions is unlikely to be material.

87 Most renewals are in the neutral category. Growth-related expenditure has also been assessed as neutral as there are too many uncertainties at this point to determine the net emissions impact of each budget line.

88 The assessed emissions impact of draft 9 year capital expenditure is summarised in Figure 1.

Figure 1: Assessed emissions impact of draft 9 year plan capital expenditure

Progress towards DCC and city-wide targets

89 Zero Carbon modelling is currently being updated to reflect changes in Government policy (including ERP2), the change in investment timing for the long-term plan, and other relevant contextual changes.

90 At the DCC scale, based on modelling completed in 2023/24, it is possible the DCC’s organisational target can be achieved with projects that are in draft budgets alone. Investment in High and Medium packages would increase the probability of this target being achieved.

91 Emissions outcomes at the city scale can be difficult to predict. There are a wide range of external influences, which can have significant impacts on emissions at short notice. Progress is also not linear - emissions can reduce quickly when network infrastructure or community uptake reaches certain ‘tipping points’.

92 At the city scale, the High and Medium packages would support emissions reduction and provide other benefits for the community. However, preliminary indications from modelling are that, in the updated context, it is unlikely either package will bring about the degree of change at the pace required to achieve the city’s 2030 target.

93 The Zero Carbon work programme guiding principles adopted by Council in February 2022 included ‘Evidence-led’ (“We utilise data and evidence and strive to follow international best practice. We acknowledge the urgency of climate change mitigation and are committed to contributing to global efforts to limit warming to 1.5°C”).

94 Best practice at all scales is to pursue gross emissions reduction, as quickly as possible, before seeking to offset residual emissions. Gross emissions reduction delivers financial and wellbeing co-benefits, as well as supporting global efforts to limit warming and avoid irreversible climate tipping points.

95 The investment packages presented align with this approach.

96 Following Council decisions on Zero Carbon investment packages, modelling will be completed and full advice on implications for targets will be presented to Council.

Zero Carbon Levels of Service

97 To align with OAG expectations with respect to reporting on progress, it is recommended that Council adopt an additional Level of Service (LoS) relating to city-wide emissions for inclusion in the 9 year plan.

98 As city-wide emissions are measured and reported triennially, it is not possible to include this as an annual measure. The LoS options are linked to Council’s decision on Zero Carbon investment options, as set out in Table 3.

Table 3: Options for additional Zero Carbon city-wide specific Level of Service

Zero Carbon Investment Option selected	LoS	Performance measure	Target
Option One – Zero Carbon High investment package as the preferred option	LoS A: The DCC implements actions to reduce Dunedin’s emissions	Zero Carbon Plan actions progress as scheduled	80% of Zero Carbon ‘core’ and ‘contributes’ projects are on track to be delivered in line with the 9 year plan.
Option Two – Zero Carbon Medium investment package as the preferred option	LoS A: The DCC implements actions to reduce Dunedin’s emissions	Zero Carbon Plan actions progress as scheduled	80% of Zero Carbon ‘core’ and ‘contributes’ projects are on track to be delivered in line with the 9 year plan.
Option Three - No additional Zero Carbon investment	LoS B: The DCC implements actions to reduce Dunedin’s emissions	Progress on Zero Carbon Plan actions is publicly reported	An annual Zero Carbon Plan update report is published.

OPTIONS

99 Three options have been identified.

Option One – Zero Carbon High investment package as the preferred option for consultation purposes

Impact assessment

100 Under this option, the Zero Carbon High investment package will be included in consultation materials as Council’s preferred option for consultation purposes, along with any alternative option.

101 An additional Level of Service (LoS A) will be included in the draft 9 year plan.

Debt

· The High package would require borrowing of $101.17 million.

Rates

· The High package would require rates funding of $1.86 million in 2025/26, increasing each year up to $9.70 million in 2030/31. From 2031/32 onwards rate funding would be $8.64 million per year. The financial impacts are provided in table 1. There is no expected maintenance costs for the first five years after completion of footpath and cycleway projects.

Zero carbon

· This option will contribute most to city-wide and DCC emissions reduction. It includes initiatives that target emissions across a wide range of emissions sources and across the spectrum of the Zero Carbon Plan: Transport and Urban Form, Forestry, Land and Agriculture, Communities and Economies, Energy and Buildings. However, preliminary indications are that, in the changed context, it is unlikely to bring about the degree of change at the pace required to meet the city’s current target.

Best practice at all scales is to pursue gross emissions reduction, as quickly as possible, before seeking to offset residual emissions. The investment package aligns most with this approach.

Advantages

· Council would receive feedback from the public about the acceptability of investment in the Zero Carbon High package, and any alternative package, to inform final decisions on the 9 year plan.

· Responds to high community interest in the Zero Carbon Plan implementation options and progress towards emissions reduction targets at time of plan adoption in September 2023.

· If Council ultimately include the Zero Carbon High investment package in the 9 year plan, this would support both DCC and city emissions reduction, and progress towards targets to a high degree (as well as providing co-benefits for the community).

Disadvantages

· Likely to raise community expectations of Council investment in Zero Carbon packages.

· Draft 9 year plan consultation will be more complex.

· If Council ultimately include the Zero Carbon High investment package in the 9 year plan, there would be implications for debt and rates as set out above.

Option Two – Zero Carbon Medium investment package as the preferred option for consultation purposes

Impact assessment

102 Under this option, the Zero Carbon Medium investment package will be included in consultation materials as Council’s preferred option for consultation purposes, along with any alternative option.

103 An additional Level of Service (LoS A) will be included in the draft 9 year plan.

Debt

· The Medium package would require borrowing of $35.54 million.

Rates

· The Medium package would require rates funding of $1.23 million in 2025/26, increasing each year up to $3.54 million in 2030/31. From 2031/32 onwards rate funding would be $2.98 million per year. The financial impacts are provided in table 2. There is no expected maintenance costs for the first five years after completion of footpath, cycleway projects.

Zero carbon

· This option contributes to city-wide and DCC emissions reduction, though to a lesser degree than the High package. The Medium package does not include several initiatives in the High package: decarbonising DCC buildings; the City to Waterfront bridge; the Dunedin Tunnels Trail; improvements to the Shore Street/Portsmouth Drive intersection; and Centres Upgrades – transport investment. Areas with reduced investment include cycle skills training for schools; community-led emissions reduction initiatives; tree planting on DCC land; safer schools streets in South Dunedin; and transport improvements for the Town Belt, and between the hill suburbs and central city.

Preliminary indications are that, in the changed context, this package is unlikely to bring about the degree of change at the pace required to meet the city’s current target.

Advantages

· Council would receive feedback from the public about the acceptability of investment in the Zero Carbon Medium package, and any alternative package, to inform final decisions on the 9 year plan.

· Responds to high community interest in the Zero Carbon Plan implementation options and progress towards emissions reduction targets at time of plan adoption in September 2023.

· If Council ultimately include the Zero Carbon Medium investment package in the 9 year plan, this would support both DCC and city emissions reduction and progress towards targets to a greater degree than Option 3 (as well as providing co-benefits for the community).

Disadvantages

· Likely to raise community expectations of Council investment in Zero Carbon packages.

· Draft 9 year plan consultation will be more complex.

· If Council ultimately include the Zero Carbon Medium investment package in the 9 year plan, there would be implications for debt and rates as set out above.

Option Three – No additional Zero Carbon investment

Impact assessment

104 Under this option no Zero Carbon investment package would be included in consultation materials for public feedback.

105 An additional Level of Service (LoS B) would be included in the 9 year plan.

Debt

· No debt funding is required for this option.

Rates

· There are no impacts on rates.

Zero carbon

· This option delays or precludes potential DCC and city-wide emission reduction benefits from being realised. It is possible that the DCC organisational emissions reduction target may still be met, however Dunedin would almost certainly not meet its current emissions reduction target.

Advantages

· No impact on debt or rates.

Disadvantages

· Council would not receive feedback from the public about the acceptability of investment in Zero Carbon packages, to inform final decisions on the 9 year plan.

· May not align with community expectations relating to Zero Carbon Plan implementation and progress towards emissions reduction targets, particularly in the context of high community interest in Zero Carbon Plan implementation at time of adoption in September 2023.

· Would delay or preclude potential city-wide and DCC emissions reduction (and associated co-benefits) from being realised, and it is almost certain the city would not meet its current emissions reduction target.

NEXT STEPS

106 Staff will include Council’s decision on Zero Carbon investment packages and the Zero Carbon city-wide Level of Service in the draft 9 year plan and associated consultation materials.

107 Changes will also be made to the Zero Carbon Significant Forecasting Assumptions, Infrastructure Strategy, and other relevant 9 Year Plan documents to reflect decisions about Zero Carbon investment options.

108 Modelling will be completed considering Council decisions on Zero Carbon investment packages, and full advice on implications for targets will be presented to Council.

109 Staff will continue to engage with the ORC and will update Council when there is clarity on additional public transport investment options, noting that this may preclude their consideration until Annual Plan 2026/27.

Signatories

Author:

Florence Reynolds - Zero Carbon Senior Policy Analyst, Sustainability

Rory McLean - Senior Policy Analyst

Jinty MacTavish - Principal Policy Advisor Sustainability

Hamish Cameron - Senior Policy Analyst, Zero Carbon

Sarah Mitchell - Senior Policy Analyst - Zero Carbon

Authoriser:

Scott MacLean - General Manager, Climate and City Growth

Attachments

	Title	Page
⇩a	Summary of High and Medium investment packages	213
⇩b	Detailed descriptions of Zero Carbon investment options	219
⇩c	Key projects not included in investment packages	245
⇩d	Zero Carbon context update	251
⇩e	Zero Carbon Plan Advisory Panel Terms of Reference and Council minute extract	255

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

Zero Carbon investment packages presented would promote the social, economic and environmental wellbeing of communities in the present and for the future, by facilitating the transition to a low carbon economy.

Fit with strategic framework

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

Elements of the package have been assessed as directly contributing to the goals of all strategies and the DCC’s Emissions Management and Reduction Plan.

Māori Impact Statement

Wellbeing assessments for each action area have considered factors such as equity and cultural wellbeing taking into account the values and priorities of Te Taki Haruru and incorporating input from mana whenua and mātāwaka.

Sustainability

Climate change mitigation/emissions reduction efforts are considered key to sustainability. ‘Climate Action’ is one of the United Nation’s Sustainable Development Goals, reflecting the centrality of action on climate change to the achievement of sustainable development. Without significant cuts to emissions, climate change impacts will further accelerate, with commensurate negative impacts on the social, environmental, cultural and economic wellbeing of New Zealand communities. Conversely, actions to reduce emissions generally have significant co-benefits in terms of community wellbeing.

Zero carbon

The report presents High and Medium investment options to progress implementation of the Zero Carbon Plan – an emissions reduction plan for the city. At the city scale, the High and Medium packages would support emissions reduction and provide other benefits for the community. However, preliminary indications from modelling are that, in the updated context, it is unlikely either package will bring about the degree of change at the pace required to achieve the city’s 2030 target. At the DCC scale, based on modelling completed in 2023/24, it is possible that the DCC’s organisational target can be achieved with projects that are in draft budgets alone. Investment in High and Medium packages would increase the probability of this target being achieved.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

The Zero Carbon High and Medium investment packages presented in the report are unfunded in the draft 9 year plan. The implications of each package for rates and debt are set out in the report.

Decisions about Zero Carbon packages will have implications for other parts of the draft 9 Year Plan, including the Significant Forecasting Assumptions, Levels of Service and Infrastructure Strategy.

Financial considerations

Financial considerations related to each package are set out in full in the report .

Significance

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

Engagement – external

There was substantial external engagement in the development of the Zero Carbon Plan. Staff conducted a public survey that received over 1300 responses and spoke directly with over 50 community groups and organisations, and a range of subject matter experts.

There has been limited additional external engagement as part of Zero Carbon investment package development. Staff have engaged with the Zero Carbon Alliance, local government networks, and with various Government agencies. A University of Otago public health registrar independently conducted the co-benefit assessments using a mutually agreed methodology.

Engagement - internal

The Zero Carbon team have worked with teams across the organisation to develop the Zero Carbon investment packages. Transport in particular has been integrally involved in package development. Other teams that have been consulted on content related to their activity areas and/or areas of expertise include Waste and Environmental Solutions, Economic Development, Community Development and Events, Parks and Recreation Services, Property Services, Housing, 3 Waters, BIS, Finance, and City Development.

Risks: Legal / Health and Safety etc.

There may be reputational risks for the DCC associated with non-delivery on emissions reduction ambitions, given the target adopted by Council in 2019.

Conflict of Interest

No conflict of interest has been identified.

Community Boards

A workshop involving members of all community boards was held to inform Zero Carbon Plan development. Community Boards will have the opportunity to make submissions to the 9 year plan process.

Council

28 January 2025

Capital Expenditure Report 2025-34

Department: Finance

EXECUTIVE SUMMARY

1 This report seeks Council approval of the draft capital budget (the draft budget) for the purposes of developing the 9 year plan 2025-34 and consulting with the community. The detailed draft capital budget programme is at Attachment A.

2 The draft budget currently presents an investment of $1.856 billion over the 9 years and is made up of $1.101 billion for renewals, $684.305 million for new capital, and $71.381 million for growth expenditure. Of the renewals budget, $866.744 million is provided to replace key three waters and transport infrastructure, building the resilience of these essential assets.

3 The draft budget seeks to strike a balance, taking into account asset management plans, priority and timing of work, ability to fund and deliver, Zero Carbon targets and legislative requirements. As a result, a number of projects have been either excluded or rephased over the 9 years. Council may wish to consider the items excluded and decide whether they now want to include any of them in the draft budget.

4 In response to a request from Council in September 2023, zero carbon high and medium investment options have been prepared and are presented for a Council decision in a separate report on this agenda.

RECOMMENDATIONS

That the Council:

a) Approves the draft capital budget programme, with any amendments, for the purposes of developing the 9 year plan 2025-34 and consulting with the community.

b) Approves the updated Significant Forecasting Assumption reflecting the NZTA Waka Kotahi subsidy rate for capital expenditure.

BACKGROUND

Decision to prepare an Annual Plan 2024/25 followed by the completion of a 9 year plan 2025-34

5 Following the enactment of the Water Services Acts Repeal Act (the Repeal Act) on 16 February 2024, Council approved the option of preparing an enhanced Annual Plan for the 2024/25 year, followed by the completion of a 9 year plan for the 2025-34 period at its meeting on 27 February (CNL/2024/018).

6 On 25 June 2024, Council adopted the Annual Plan 2024/25, which provided an update of year 4 of the 10 year plan (10 year plan) 2021-31 (CNL/2024/121). It was prepared in accordance with the Repeal Act and included information on financial statements and statement of service performance for each group activity, in addition to the Local Government Act 2002 (LGA) requirements for an Annual Plan.

Council request for Zero Carbon – high and medium investment options

7 At its meeting on 25 September 2023, Council requested staff to develop a high investment option for the Zero Carbon Implementation Plan (as the preferred option) for consideration as part of the draft 10 year plan 2024-34, with medium investment as the alternative option (CNL/2023/214).

8 Changes in the emissions reduction context at national and DCC levels since September 2023 (described in the ‘Zero Carbon Investment Packages’ report) have required ‘high’ and ‘medium’ Zero Carbon investment options to be re-worked for the 9 year plan and are outlined in the ‘Zero Carbon Investment Packages’ report under separate cover.

Key relevant documents for preparing the draft capital budget

Future Development Strategy

9 The Future Development Strategy (FDS), jointly developed with the Otago Regional Council (ORC), sets out a high-level strategic vision over the next 30 years for how Ōtepoti Dunedin will be supported to:

· achieve well-functioning urban environments in their existing and future urban areas.

· provide at least sufficient development capacity for housing and business land needs to meet expected demand.

· assist with the integration of planning decisions under the Resource Management Act and infrastructure planning and funding decisions.

Zero Carbon Policy

10 The Council’s Zero Carbon Policy provides that all DCC activities, including renewals, should seek to minimise emissions and contribute to achieving both city-wide and DCC emissions reduction.

11 In accordance with this policy and the Zero Carbon Plan, staff have assessed proposed capital projects to determine if they contribute to emissions reduction. This report indicates the Zero Carbon impact included in the draft budget.

Key consideration for the draft capital budget

12 The draft budget has been prepared with Three Waters included throughout the 9 year period.

13 The draft budget has been prepared for all activities of Council, taking into consideration the following:

· Asset management plan - current condition assessments and risk profiling to inform the timing of any renewal

· Affordability – effect on rates and ability to pay

· Ability to fund – debt limits and other relevant ratios and our ability to service debt

· Priority of work – renewals over new capital

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

· Timing of work – achievability over the 9 years

· Climate change and Zero Carbon targets – assessment of possible impacts on emissions from capital proposals, in accordance with the Zero Carbon Policy and the Zero Carbon Plan

· Legislation – requiring works to be undertaken.

Type of capital expenditure

14 There are three types of capital expenditure. In reality, many projects are a mixture of two or three of these types. Therefore, projects are categorised into a single type, based on the primary purpose of the proposed expenditure:

· Renewals – replacement of existing assets once they reach the end of life

· New Capital – new projects to improve current levels of service

· Growth – investment in new infrastructure to meet additional demand, including growth.

15 When financial statements are presented, projects are allocated between the categories of renewals, new capital and growth, in accordance with the LGA.

Funding sources for capital expenditure

16 Capital expenditure is funded through the following sources:

· Funded depreciation – for renewals of assets and new capital

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

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

· Development contributions – for growth capital.

DISCUSSION

Overview of the Draft Capital Budget

17 Since the adoption of the 10 year plan 2021-31, Council has made a substantial investment in infrastructure, both above and below ground, to build resilience and cater for the projected population growth.

18 The challenges and impacts of climate change remain for Ōtepoti Dunedin. The recent heavy rainfall and flooding in October 2024 highlighted the importance of continuing to focus on reducing emissions and improving the resilience and reliability of our water infrastructure to extreme weather events and long-term climatic changes.

Inflation allowance

19 The draft budget for renewals has been inflated from 2026/27 (Year 2) onward. The impact of inflation is $123.318 million.

20 The draft budget for new capital and growth has not been inflated over the 9 year period. If inflated, this would increase the draft budget by a further $97.5 million. This approach underscores the DCC’s commitment to prudent financial management. This exclusion from the draft budget does not imply naivety about the existence of inflation, rather provides certainty and predictability for contractors. It drives proactive procurement and efficiency when working with contractors to deliver services.

High-level summary of the draft budget

21 The draft budget delivers on the projects that have already been started and work essential for maintaining levels of service. It reflects a programme of work that is planned for delivery over the next 9 years.

22 DCC is a high delivery Council in part because it takes a “programme of work” approach. This means that project delivery needs to be flexible – the timing of projects can change and ‘flex’ as circumstances vary between years. The regular financial reporting councillors receive provides updates on any of these changes. Project timing changes are managed as required to ensure that, in any one year, Council doesn’t breach the overall budget envelope, approvals or limits. This means that projects included within the 9 year plan can move from one year to another.

23 Staff were initially asked to prepare a draft capital budget that was unconstrained financially and could be delivered by the market. This unconstrained budget was presented to Councillors in a confidential workshop toward the end of the 2024 year. The unconstrained budget exceeded some financial limits and ratios. Council staff took direction from Councillors, and the draft capital budget presented seeks to strike a balance between affordability and aspiration.

24 To find a balance, some projects from the unconstrained budget have been either excluded from the draft budget or rephased. These projects total $272.780 million^{^[1]} over the 9 years. A full list of excluded projects is provided and further discussed in a later section of this report. It will be for Councillors to determine which, if any, of these projects should be included in the draft budget, taking into account affordability, debt and the impact on rates. There are some items that are not included in the draft budget that will be of high public interest.

25 Across the DCC’s activities, the proposal is to spend $1.856 billion on capital projects over the 9 years, with focus on renewals and core infrastructure, particularly in the Three Waters areas (Figure 1, Table 1, and Table 2). Of this total draft budget:

· $1.101 billion is for renewals, with $866.744 million provided to replace key three waters and transport infrastructure, building the resilience of these assets.

· $684.305 million is for new capital projects, with $432.179 million for three waters projects.

· $71.381 million is for new three waters and transport infrastructure needed for the growth, as identified in the FDS.

2 Figure 1. Overall proposed capital budget for 2025-34 by renewals, new capital and growth

Total spend by the type of capital expenditure

26 Table 1 provides a summary of the total spend by the type of capital expenditure. This table and Table 2 in the following section also provides a comparison with the 10 year plan 2021-31. To provide a 10-year comparison (i.e., increase or decrease), the Annual Plan 2024/25 budget is included with the 9 year plan budget and shown as “10 Year Budget 2024-34”.

27 As summarised in Table 1, nearly 60% of the draft budget is allocated for renewals. Overall, the draft budget sees an increase of $527.685 million from the 10 year plan 2021-31, and just over 40% and 52% of the increase are attributed to renewals and new capital, respectively.

3 Table 1. Total spend by type of capital expenditure for 2025-34 and a 10-year comparison of budget

Type of Expenditure	9 Year Budget 2025-34	Percentage of Budget	10 Year Budget 2024-34	10 year plan 2021-31	Increase (Decrease)
Renewals	$1,100.460 m	59.3 %	$1,208.450 m	$995.938 m	$212.512 m
New Capital	$684.305 m	36.9 %	$780.247 m	$504.102 m	$276.145 m
Growth Capital	$ 71.381 m	3.8 %	$74.332 m	$35.304 m	$39.028 m
Total Capital Expenditure	$1,856.146 m	100%	$2,063.029 m	$1,535.344m	$527.685 m

Total spend by the activity group

28 Table 2 provides a summary of the total spend by activity group. As presented in the table, about 54% of the draft budget is allocated for Three Waters. The 10-year comparison shows that five out of the 10 activity groups see a decrease in the draft budget from the 10 year plan 2021-31, ranging from $0.156 million to $69.831 million in reduction. The other half sees an increase, ranging from $2.630 million to $521.712 million.

29 The Three Waters budget increases from $561.677 million in the 10 year plan 2021-31 to $1.083 billion in the 2024-34 period. The majority of the increase is allocated to allow for rehabilitating or renewing ageing water infrastructure to meet regulatory requirements, and the needs and expectations of the community, as set out in the draft Infrastructure Strategy, presented on this agenda. This is also further discussed in the Three Waters section of this report.

30 While the Roading and Footpaths budget shows a modest increase of $15.094 million, this comprises a 54% increase in the renewals budget to $377.7 million (Table 5), with a 70% reduction in the new capital budget to $57.2 million. This reduction reflects the discontinuation or reduction of co-funding by NZTA for Urban Cycleways and Shaping Future Dunedin projects that were included in the 10 year plan 2021-31 included.

31 Budget in some areas is reduced because projects have already been completed. Some reductions are reflections of the excluded items discussed later in this report.

4 Table 2. Draft budget by the activity group for 2025-34 and a 10-year comparison of budget

Activity Group	9 Year Budget 2025-34	Percentage of Budget	10 year Budget 2024-34	10 year plan 2021-31	Increase (Decrease)
City Properties	$131.5 m	7.1 %	$169.2 m	$ 239.048 m	($69.831 m)
Community Recreation	$67.4 m	3.6 %	$83.4 m	$113.446 m	($29.981 m)
Creative & Cultural Vibrancy	$19.4 m	1.1 %	$23.0 m	$20.305 m	$2.630 m
Governance & Support Services	$29.8 m	1.6 %	$33.5 m	$47.279 m	($13.746 m)
Regulatory Services	$0.1 m	0.0 %	$0.2 m	$0.375 m	($0.194 m)
Resilient City	$5.6 m	0.3 %	$5.8 m	$4.074 m	$1.691 m
Roading & Footpaths	$414.6 m	22.3 %	$454.7 m	$439.614 m	$15.094 m
Three Waters	$1,003.3 m	54.1 %	$1,083.3 m	$561.677 m	$521.712 m
Vibrant Economy	$0.2 m	0.0 %	$0.3 m	$0.387 m	($0.156 m)
Waste Minimisation	$184.3 m	9.9 %	$209.6 m	$109.139 m	$100.466 m
Total Capital Expenditure	$1,856.2 m	100%	$2,063.0 m	$1,535.344 m	$527.685 m

Emission assessment of proposed capital projects

32 Staff have assessed proposed capital projects to determine if they contribute to reducing city-wide emissions. Projects have been assessed as follows:

· ‘Core’ city-wide emissions reduction initiatives either

§ have a key focus of the project is to reduce city-wide emissions; and/or

§ were identified as a priority area in in the September 2023 Zero Carbon indicative implementation plan

· ‘Contributes’ emissions reduction initiatives will either

§ make a material contribution to city-wide emissions reduction, but emissions reduction is not a primary reason for investing; or

§ contribute to the DCC’s own decarbonisation but have less impact on city-wide emissions reduction.

• ‘Complements’ emissions reduction initiatives are not focussed on emissions reduction, however emissions reduction is a co-benefit of the project

· ‘Neutral’ where the project is considered to neither increase nor decrease city-wide emissions, nor significantly decrease DCC emissions.

33 The assessed emissions impact of capital expenditure included in draft 9 year plan budgets is summarised in Figure 2.

6 Figure 2. Emission assessment of capital projects by type of expenditure and carbon impact category

34 Core emissions reduction projects identified in the draft budget are estimated to cost a total of $68.889 million. The key projects are mostly new capital projects and include: Shaping Future Dunedin; Dunedin Urban Cycleways Tunnels Trail; Low Cost, Low Risk Transport Improvements; Waste Futures; Green Island Landfill Gas Collection System; Bioresources Facility; Centres Upgrade Programme; and Decarbonising DCC Buildings.

35 Capital projects identified to contribute to either city-wide or DCC’s emissions reduction are estimated to cost a total of $29.456 million. The key projects include: EV Charging Facilities for the DCC; Moana Pool Redevelopment Renewals; Track Network Development; Retail Quarter – Transport; Mosgiel Park and Ride; City to Waterfront Connection; Tertiary Precinct Upgrade; Mobile Waste Education Unit; Rural Recycling Hubs; Water Treatment Plant Optimisation; and Minor Streetscapes Upgrades.

Renewals and depreciation

Renewals

36 Council has made a significant investment in asset renewals over the first three years of the 10 year plan 2021-31.

37 The draft budget provides for $1.101 billion of renewals expenditure, including an inflation adjustment of $123.318 million, over the 9 year period across 13 activity groups.

38 As shown in Table 3, the 10-year comparison shows an increase of $212.5 million in the renewals budget. Significant increases are provided in Roading and Footpaths and Three Waters. The proposed level of investment for Roading and Footpaths and Three Waters activity groups reflects the need for continued investment on ageing infrastructure networks and is based on the latest asset management plans that focus on asset condition, risk assessment, and planning and delivery opportunities.

7 Table 3. Draft renewals budget by activity group for 2025-34 and 10-year comparison of budget

Type of Expenditure and Activity Group	9 Year Budget 2025-34	10 Year Budget 2024‑34	10 year plan 2021-31	Increase (Decrease)

Renewal
City Properties	$130.5 m	$145.7 m	$172.4 m	($26.7 m)
Community Recreation	$54.3 m	$67.0 m	$77.0 m	($9.9 m)
Creative & Cultural Vibrancy	$14.8 m	$16.6 m	$15.6 m	$1.0 m
Governance & Support Services	$23.7 m	$25.5 m	$34.0 m	($8.5 m)
Regulatory Services	$0.1 m	$0.2 m	$0.4 m	($0.2 m)
Resilient City	$0.1 m	$0.1 m	$0.1 m	0.0
Roading & Footpaths	$347.2 m	$377.7 m	$245.8 m	$131.9 m
Three Waters*	$519.5 m	$564.7 m	$441.4 m	$123.3 m
Vibrant Economy	$0.1 m	$0.2 m	$0.3 m	($0.1 m)
Waste Minimisation	$10.1 m	$10.7 m	$8.9 m	$1.8 m
Total Renewals	$1,100.4 m	$1,208.4 m	$995.9 m	$212.5 m

*Three Waters consists of three separate activity groups: Stormwater, Wastewater and Water Supply

Depreciation

39 Depreciation expenditure reflects the use or consumption of the service potential of an asset over that asset’s useful life. As such, depreciation provides a fair representation of renewals expenditure over the long term.

40 There are two factors in determining the depreciation expense: the asset cost or revalued amount, and the asset’s useful life. Over the lifetime of our assets, the amount of depreciation charged, and the amount spent on renewals should be equal.

41 The relative comparison between renewals and depreciation is shown by activity group in Table 4.

8 Table 4. Comparison between renewals draft budget and depreciation by activity group over the 2025-34 period

Activity Group	Draft Renewals Budget 2025-34	Depreciation 2025-34	Renewals Over (Under)
City Properties	$130.5 m	$ 175.6 m	($45.1 m)
Community Recreation	$54.3 m	$ 100.2 m	($45.9 m)
Creative & Cultural Vibrancy	$14.8 m	$ 17.4 m	($2.6 m)
Governance & Support Services	$23.7 m	$ 28.9 m	($5.2 m)
Regulatory Services	$0.1 m	$ 0.2 m	($0.1 m)
Resilient City	$0.1 m	$ 0.5 m	($0.4 m)
Roading & Footpaths	$347.2 m	$313.0 m	$34.2 m
Three Waters – Stormwater	$59.6 m	$116.8 m	($57.2 m)
Three Waters – Wastewater	$247.3 m	$274.0 m	($26.7 m)
Three Waters – Water Supply	$212.6 m	$281.8 m	($69.2 m)
Vibrant Economy	$0.1 m	-	$0.1 m
Waste Minimisation	$10.1 m	$44.6 m	($34.5 m)
Total	$ 1,100.4 m	$1,353.2 m	($252.6 m)

42 This comparison is used to estimate the portion of assets being run down during the 9 year period. However, because assets have long life cycles, this is only one indicator of whether Council is reinvesting enough in asset renewals.

43 This comparison is an indicator only and the difference between the two should reduce over the life of the assets. Other factors influencing this comparison include revaluations, investment in growth assets and new services.

Draft Capital Expenditure by Activity Group

44 In this section, the draft budget for each of the 13 activity groups is provided alphabetically by activity group names. A draft budget for each group is organised by the Renewals, New Capital and Growth expenditure types. This section discusses by activity group the renewals and new capital expenditure budgets. The following section discusses the growth capital expenditure budget.

45 Table 5 provides a summary of the growth, new capital, and renewals expenditure budgets. A comparison with the 10 year plan 2021-31 is also shown in the table.

9 Table 5. Draft capital expenditure budget by expenditure type and activity group for 2025-34 and a 10-year comparison

Type of Expenditure and Activity Group	9 Year Budget 2025-34	10 Year Budget 2024‑34	10 Year plan 2021-31	Increase (Decrease)

Growth
Roading & Footpaths	$19.8 m	$19.8 m	-	$19.8 m
Three Waters	$51.6 m	$54.5 m	$35.3 m	$19.2 m
Total Growth Capital	$71.4 m	$74.3 m	$35.3 m	$39.0 m

New Capital
City Properties	$1.0 m	$23.5 m	$66.6 m	($43.1 m)
Community Recreation	$13.1 m	$16.4 m	$36.5 m	($20.0 m)
Creative & Cultural Vibrancy	$4.6 m	$6.4 m	$4.7 m	$1.7 m
Governance & Support Services	$6.1 m	$8.0 m	$13.3 m	($5.2 m)
Resilient City	$5.5 m	$5.7 m	$4.0 m	$1.7 m
Roading & Footpaths	$47.6 m	$57.2 m	$193.8 m	($136.7 m)
Three Waters	$432.2 m	$464.1 m	$84.9 m	$379.2 m
Vibrant Economy	$0.1 m	$0.1 m	$0.1 m	0.0
Waste Minimisation	$174.2 m	$198.9 m	$100.2 m	$98.7 m
Total New Capital	$684.3 m	$780.2 m	$504.1 m	$278.4 m

Renewal
City Properties	$130.5 m	$145.7 m	$172.4 m	($26.7 m)
Community Recreation	$54.3 m	$67.0 m	$77.0 m	($9.9 m)
Creative & Cultural Vibrancy	$14.8 m	$16.6 m	$15.6 m	$1.0 m
Governance & Support Services	$23.7 m	$25.5 m	$34.0 m	($8.5 m)
Regulatory Services	$0.1 m	$0.2 m	$0.4 m	($0.2 m)
Resilient City	$0.1 m	$0.1 m	$0.1 m	0.0
Roading & Footpaths	$347.2 m	$377.7 m	$245.8 m	$131.9 m
Three Waters	$519.5 m	$564.7 m	$441.4 m	$123.3 m
Vibrant Economy	$0.1 m	$0.2 m	$0.3 m	($0.1 m)
Waste Minimisation	$10.1 m	$10.7 m	$8.9 m	$1.8 m
Total Renewals	$1,100.4m	$1,208.5 m	$995.9 m	$212.5 m

Total Capital Expenditure	$1,856.1 m	$2,063.0 m	$1,535.3 m	$527.7 m

City Properties

46 This group includes the following activities: Community Housing; Commercial Property; Investment Property; Operational Property; and Parking Operations.

Renewals

47 The draft renewals budget for the City Properties activity group is $130.467 million. The major renewal projects include:

a) Community property – $23.245 million. The major renewal projects under this portfolio include:

· Asset Renewals – $6.639 million for a range of community asset renewals. The Asset Renewal budgets are per portfolio and for planned and unscheduled capital work (e.g., an asset fails unexpectedly and is replaced with new part). The budget allocation in the first three years is lower because the work is scheduled in these years and named as a line item in the budget. In later years, the amount increases as this work is not scheduled yet.

· Dunedin Railway Station – $4.621 million for the final stage of the restoration work, including platform canopy renewal, and electrical infrastructure and controls upgrade.

· Dunedin Ice Stadium – $3.968 million for sprinkler head replacement, and renewal of roof and the HVAC (heating, ventilation, and air conditioning) system.

· Regent Theatre – $2.937 million for replacement of roof and lift, and upgrade of lighting, electrical infrastructure and controls.

· Roof Renewal Programme – $1.897 million for roof renewal at various sites.

· Community Hall – $1.495 million for hall renewals at various sites.

b) Operational Property – $71.404 million. The major renewal projects under this portfolio are as follows. The first five projects on the list below are core city-wide emissions reduction projects.

· Town Hall and Municipal Chambers – $13.020 million, including $6.693 million for heritage restoration and seismic investigation, $2.987 million for the renewal of energy systems, and $1.824 million for a lighting upgrade programme.

· Dunedin City Library – $10.719 million including $3.045 million for fittings and fitouts replacement, $2.920 for the renewal of energy systems, $2.030 million for sprinkler system replacement, and $1.781 million for a lighting upgrade programme.

· Civic Centre – $6.886 million, including $3.400 million to complete this phase of works at the Civic Centre. The programme has included renewals of roof membrane and weathertightness, asbestos removal, fire and safety compliance improvement, accessibility improvement, interior refresh and LED lighting, and $2.920 million for the renewal of energy systems.

· Dunedin Public Art Gallery – $6.038 million, including $2.987 million for the renewal of energy systems, and $1.824 million for a lighting upgrade programme, with the remaining for upgrade of electrical infrastructure and controls, building management system renewal.

· Toitū Otago Settlers Museum – $5.487 million, including $2.846 million for the renewal of energy systems, and $1.736 million for a lighting upgrade programme, with the remaining for electrical infrastructure and controls upgrade, building management systems renewal, and emergency light replacement.

· Asset Renewals – $26.325 million for a range of asset renewals at various sites, including installation of seismic restraints on sprinkler systems. The Asset Renewal budgets are per portfolio and for planned and unscheduled capital work (e.g., an asset fails unexpectedly and is replaced with new part). The budget allocation in the first two years is lower because the work is scheduled in these years and named as a line item in the budget. In later years, the amount increases as this work is not scheduled yet.

· Public Toilets – $2.380 million for public toilet renewals at various sites over the 9 years.

c) Investment Property – $16.746 million for various asset renewal work at eight investment properties.

d) Community Housing – $13.920 million for redevelopment of housing units and for various asset renewals.

New Capital

48 The ‘City Properties’ activity group has been allocated a new capital budget of $1.005 million. The major projects include:

a) Community Housing – $1.005 million. This budget is allocated for development of new housing units. An update on the Community Housing Development programme is provided under a separate report on the agenda.

Community Recreation

49 This group includes the following activities: Aquatic Services; Botanic Garden; Cemeteries and Crematorium; and Parks and Recreation.

Renewals

50 The draft renewals budget for this group is $54.313 million. The major renewal projects for each of the four activities include:

a) Aquatic Services – $22.321 million. A budget of $17.172 million is allocated for Moana Pool Redevelopment Renewals over the first two years to address ageing and poor condition building assets at Moana Pool, including seismic upgrades as the facility is under official earthquake-prone building notice, ventilation heat recovery upgrades, replacement of windows/glazing of main pool area and dive pool, air handling unit replacements/upgrades, repair and repainting of steel structure of Leisure Pool, cosmetic upgrades to the male and female changing rooms, main pool catwalk upgrade/refurbishment and cultural embellishment. Other asset renewals at Moana Pool include plant and equipment, fixture, lift, floor, defibrillators and lane ropes. A budget of $1.046 million is allocated for various renewal projects for St Clair Pool, such as changing room upgrades and filter replacement.

b) Parks and Recreation – $28.745 million. This includes $4.672 million for greenspace renewals, $8.096 million for playground renewals at 17 sites, and $15.977 million for recreation facilities renewals.

c) Botanic Garden – $2.267 million. This provides for renewals of surfaces, fences/barriers, furniture, and plant and equipment and includes a glasshouse heating upgrade and café refurbishment.

d) Cemeteries and Crematorium – $980k. This provides for the replacement of cemeteries assets such as cremator equipment, fences, gates and certain memorials. This project complements emissions reduction efforts.

New Capital

51 The draft new capital budget of $13.077 million has been allocated to this group. The major projects include:

a) Parks and Reserves – $9.734 million:

· Destination Playgrounds – $6.60 million for three destination playgrounds over the last three years of the 9 year plan, pending a Council decision. There is a separate report on this agenda to provide options for the provision of modern destination playgrounds.

· Recreation Facilities Improvements – $1.90 million for various improvement projects, such as new seats, BBQ facilities, fencing and new drainage.

b) Cemeteries and Crematorium – $2.893 million, including $1.428 million for the provision of further burial space across the city and its associated infrastructure, and $1.465 million for cemetery development plan for seven cemetery sites.

Creative and Cultural Vibrancy

52 This group includes the following activities: Creative Partnerships; Gallery, Garden and Museum; Libraries and City of Literature; Olveston Historic Home; and Otago Museum levy.

Renewals

53 The draft renewals budget for the Creative and Cultural Vibrancy activity group is $14.803 million. The major projects include:

a) Dunedin Public Libraries – $10.598 million. This provides primarily for the acquisition of lending and reference collection materials and $1.086 million for the replacement of the existing Radio Frequency Identification (RFID) system, across the network of our libraries.

b) Toitū Otago Settlers Museum – $3.054 million. This provides for major gallery upgrades (e.g., gallery furniture and office) and a range of renewals, including minor equipment, touch screens, projectors, workshop machinery, lift and exhibition lighting.

c) Dunedin Public Art Gallery – $1.049 million. The projects include renewals of exhibition lighting, and heating and ventilation systems.

New Capital

54 The draft new capital budget for this activity group is $4.605 million. The major projects include:

a) Dunedin Public Art Gallery – $3.165 million. This includes $2.115 million for the yearly acquisition of artworks and $900k primarily for small capital works, electrical equipment and machinery, with the remaining for storage furniture and fittings.

b) Toitū Otago Settlers Museum – $810k. This provides for the acquisition of items for collection and small capital works.

c) Dunedin Public Libraries – $630k. This provides for the yearly purchase of heritage collection.

Governance and Support Services

55 This group includes the following activities: Business Information Systems (BIS); Civic and Governance; Corporate Leadership; Corporate Policy; Council Communications and Marketing; Customer Services; Finance; Fleet Operations; Investments; People, Projects and Risk; and Waipori Fund.

56 The BIS capital budget (renewals and new capital) is being realigned to create an organisation-wide pool of contestable funding. This approach will ensure the DCC can prioritise projects that align with organisational strategic goals and with available resources.

Renewals

57 The draft renewals budget for this activity group is $23.688 million. The major renewal projects include:

a) Business Information Systems – $19.587 million. This provides for projects, including hardware replacement, information management improvement and renewals of other internal IT systems.

b) Fleet Operations – $3.489 million. This provides for the general replacement of fleet vehicles over the 9 years and the Three Waters heavy vehicle replacement in 2025/26.

c) Council Communications and Marketing – $612k. This provides for DCC website renewal, street banner hardware renewal and DCC digital platform upgrade.

New Capital

58 The draft new capital budget for this activity group is $6.050 million. The major new capital projects include:

a) Business Information Systems – $5.8 million. This provides primarily for the development of a customer self-service portal and DCC mobile application that will enable ratepayers to access DCC information, log a complaint, pay for rates, do online bookings, and any other online services that the DCC can provide through a DCC web interface/portal. Some of these activities complement city wide emissions reduction efforts. $900k is budgeted for IT security improvement.

b) Fleet Operations – $250k. This provides for EV charging facilities, including planning, designing and construction. This is a core city-wide emissions reduction project.

Regulatory Services

59 This group includes the following activities: Animal Services; Alcohol Licensing; Building Services; Environmental Health; Parking Services (Enforcement); and Resource Consents.

Renewals

60 The draft renewals budget for this activity group is $131k. The larger projects include:

a) Parking Services (Enforcement) – $59k. This provides for the replacement of body-worn cameras and electronic ticket writers, including phones.

b) Animal Services – $51k. This provides for the renewal of body-worn cameras and ongoing maintenance of dog park and stock pound, such as gates, solar lights, fixtures and fencing.

c) Environmental Health – $21k. This provides for the replacement of two noise metres as due in 2031/32.

New Capital

61 There is not new capital budget allocation for this group.

Resilient City

62 This group includes the following activities: City Development; City Growth; Civil Defence; Community Partnerships; Housing Policy; Sound Dunedin Future; and Zero Carbon.

Renewals

63 The draft renewals budget for this activity group is $100k, including the following project.

a) Taskforce Green – $50k. This provides for the replacement/repair of small tools over the 9 years.

New Capital

64 The draft new capital budget for this activity group is $5.510 million. The projects are:

a) City Development – $5.460 million. This provides primarily for the upgrade of substantial streetscape upgrades within larger centres and minor streetscapes. There is a separate report on Centres Upgrade Programme.

b) Civil Defence – $50k. This provides for plant equipment needed to support community boards and community hubs during civil defence emergencies.

Roading and Footpaths

65 This activity group consists solely of Transport.

66 Overall, the Roading and Footpaths has been allocated an increase of $15.094 million. The proposed level of investment for Roading and Footpaths renewals reflects the need for continued investment on ageing infrastructure networks and is based on the latest asset management plans that focus on asset condition, risk assessment, and planning and delivery opportunities.

Renewals

67 The draft renewals budget for this activity group is $347.230 million. The major renewals projects include:

a) Pavement Renewals – $116.660 million. This includes $82.014 million for carriageway resurfacing and $34.646 million for pre-reseal preparation to address the deteriorating condition of the sealed network. 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 around 5% of the sealed network versus a target of 6%. The programme seeks to address this by increasing the average annual investment in the network.

b) Major Drainage Control – $76.806 million. This provides for the renewal of culverts and kerb and channel. The culvert and kerb and channel network are ageing, with many assets nearing or at the end of their expected useful lives. The budget allows sustained kerb and channel renewals to improve condition and avoid further deterioration and subsequent failures. Co-funded by NZTA.

c) Footpath Renewals – $64.928 million. This provides for the resurfacing of footpaths that are ageing, with some nearing, or over their expected useful lives. This project complements emissions reduction efforts. Co-funded by NZTA.

d) Pavement Rehabilitations – $34.810 million. This provides for the restoration of the pavement condition. Co-funded by NZTA.

e) Structure Component Replacement – $22.013 million. This provides for the replacement of bridge components, retaining walls and seawalls. Co-funded by NZTA.

f) Traffic Services Renewals – $14.849 million. This provides for the renewal of road markings, signs, streetlights and traffic signals. Co-funded by NZTA.

g) Gravel Road Re-Metaling – $12.767 million. This provides for the periodic renewal of unsealed roads. Co-funded by NZTA.

h) Coastal Plan – $3.067 million to fund works through the St Clair – St Kilda Coastal Transition Plan. Works include dune stabilisation and planting, a sand retention structure, and the replacement of the geobag structure.

i) St Clair Seawall Railings – $1.330 million. This provides for the replacement of seawall railings at St Clair. This is budged for 2025/26, 2029/30 and 2033/34.

New Capital

68 The draft new capital budget for this activity group is $47.579 million. The major projects include:

a) Shaping Future Dunedin – $20.334 million. This provides for all but one (i.e., Central City Bike Hubs) of the six projects developed to ensure minimal transport disruption during and after the construction of the new Dunedin Hospital. It is programmed to be spent between 2025/26 and 2028/29. The first three projects on the list below are core city-wide emissions reduction projects. Mosgiel Park and Ride contributes to emission reduction efforts.

· Princes Street Bus Priority and Corridor Safety Plan – $7.034 million for the achievement of a reduction in overall journey time through bus priority on Princes Street, and an increase in bus passengers on routes using Princes Street. Princes St aims to improve road safety, especially for pedestrians and at intersections, improve bus reliability and efficiency and improve safety and access for people who walk, cycle and have disabilities.

· Central City Cycle and Pedestrian Improvements Albany Street – $3.0 million for the provision of a safe walking and cycling connection between Te Aka Ōtākou (the Harbour Shared Path) and Dunedin's tertiary area and CBD.

· Central City Parking Management – $1.0 million for the management of parking to ensure it meets the community’s requirements.

· Mosgiel Park and Ride – $5.0 million for the provision of a parking area to allow people to park/walk/scooter and cycle to catch the bus between Mosgiel and Dunedin. Co-funded by NZTA.

· Harbour Arterial Efficiency Improvements – $4.3 million for the provision of a safe and efficient route connecting SH1 and SH88, providing an alternative route for traffic wishing to bypass the central city. It also serves as a route for Heavy vehicles to divert from traversing the state highway through the centre of town. Stage 1 is complete, and Stage 2 and 3 are part of the budget considerations above. Co-funded by NZTA.

b) Coastal Plan – $9.805 million. This provides for the implementation of options that will provide ongoing resilience and stabilisation of the St Kilda/St Clair dune system and support the St Clair sea wall.

c) Low Cost, Low Risk Improvements – $9.0 million ($1.0 million per annum). This provides for minor safety improvements over the 9 years, such as intersection improvements and school safety. These are core city wide emissions reduction projects.

d) Peninsula Connection – $3.5 million. This provides for the completion of a boardwalk connection into Portobello between 2025/26 and 2026/27. This project complements emissions reduction efforts. Co-funded by NZTA.

e) Crown Resilience Programme – $1.5 million. This provides for minor resilience upgrades in Andersons Bay Inlet, Harrington Point, and South Dunedin. Co-funded by NZTA.

Three Waters Overall

69 Three Waters activity groups (Stormwater, Wastewater and Water Supply) have been provided with a significantly increased budget of $1.003 billion (Table 6).

10 Table 6. Draft capital expenditure budget for Three Waters by expenditure type for 2025-34 and a 10-year comparison

Three Waters	9 Year Budget 2025-34	10 Year Budget 2024-34	2021-31 10 year plan	Increase (Decrease)

Renewal
Stormwater	$59.5 m	$68.7 m	$96.3 m	($27.6 m)
Wastewater	$247.3 m	$261.5 m	$177.3 m	$84.2 m
Water Supply	$212.6 m	$234.5 m	$167.8 m	$66.7 m
Total Renewals	$519.5 m	$564.7 m	$441.4 m	$123.3 m

New Capital
Stormwater	$37.9 m	$45.8 m	$34.3 m	$11.5 m
Wastewater	$263.1 m	$276.5 m	$7.7 m	$268.8 m
Water Supply	$131.2 m	$141.9 m	$43.0 m	$98.9 m
Total New Capital	$432.2 m	$464.1 m	$84.9 m	$379.2 m

Growth
Stormwater	$8.1 m	$9.0 m	$9.2 m	($0.2 m)
Wastewater	$22.5 m	$23.3 m	$17.6 m	$5.7 m
Water Supply	$20.1 m	$22.2 m	$8.5 m	$13.6 m
Total Growth Capital	$51.6 m	$54.5 m	$35.3 m	$19.2 m

Total Capital Expenditure	$1,003.3 m	$1,083.4 m	$561.7 m	$521.7 m

70 The new capital sees the largest increase by $379.2 million, from $84.9 million to $464.1 million. This increase represents a significant increase in resilience against flooding risks, environmental pollution and loss of water supply. The new capital budget also addresses expiring resource consents, growth, wastewater overflows, beneficial reuse opportunities, water supply leakage and source water investigations.

71 The renewals budget has increased by $123.3 million from $441.4 million to $519.5 million.

72 The proposed level of investment for Three Waters activity groups allows for required improvements to keep pace with increasing public health and environmental expectations. Investment is required to maintain current and future service levels, including enhanced protection of drinking water sources, improved water management practices, and new standards for drinking water, wastewater and stormwater services.

73 The DCC is increasing spending on replacing existing ageing infrastructure assets. In some circumstances, however, ‘like-for-like’ renewals may no longer be adequate to meet regulatory requirements and meet the needs and expectations of the community. The increased New Capital budget allows for upgrades that provide capacity for the projected growth and resilience to climate change impacts.

74 The renewals programme for the Three Waters activity is informed by condition assessment programmes on treatment plants and performance data, down to the individual asset level where possible. It 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, to prevent service level failure.

75 Where possible, rehabilitation work, rather than replacing assets, will be undertaken to repair assets and extend their useful lives. Rehabilitation is a cost-effective method for maintaining the Three Waters network.

76 The renewals budgets for Stormwater, Wastewater and Water Supply includes $60.592 million for “Consequential Growth Renewal” projects. These renewal projects involve upsizing existing networks to cater for growth (e.g., upsizing pipes on renewal). This is further discussed below in the Growth Capital section of this report.

Three Waters – Stormwater

Renewals

77 The draft renewals budget for this activity group is $59.548 million. The major projects include:

a) Other Stormwater Renewals – $37.021 million. This includes $25.044 million for a network term contract renewals programme (to be prioritised by defects). Relining will be prioritised over dig and lay methods to reduce costs. Funding from this budget in 2026/27 onwards will be assigned to support a Council’s preferred option for South Dunedin Future programme. $11.977 million is budgeted to provides for a range of renewals projects including outdated asset management systems, network renewal programmes (Kaikorai Valley Hills, North East Valley and Pine Hills).

b) Consequential Growth Renewal – $18.306 million. This provides for the creation of infrastructure to support growth areas under the 2GP and variation 2 of the 2GP. This is further discussed below in the Draft Growth Capital Expenditure section of this report.

New Capital

78 The draft new capital budget for this activity group is $37.888 million. The major new capital projects include:

a) South Dunedin Flood Alleviation – $32.500 million for supporting a Council's preferred option for 3W infrastructure to increase resilience to future rainfall events in South Dunedin, based on South Dunedin Future programme outputs (adaptation plan due by 2026). The costings are based on high-level estimates produced for the 2018/28 10 year plan.

b) Mosgiel Stormwater Pumpstations and Network – $3.750 million for the improvement of stormwater pumpstations and network.

Three Waters – Wastewater

Renewals

79 The draft renewals budget for this activity group is $247.345 million. The major renewals projects include:

a) Network Resilience and Efficiency Improvements – $36.242 million. The projects include a critical asset upgrade, involving decommissioning of Mosgiel wastewater treatment plant (WWTP) and upgrade to Green Island WWTP to treat wastewater from Mosgiel, manhole sealing to limit ingress of surface water into networks, and compliance with wet weather flow management.

b) Wastewater Pumpstation Renewals – $31.966 million. This is a critical asset renewal and provides for renewals of at least 42 of our nearly 80 wastewater pumpstations over the 9 years. Some pump stations will have minor components renewed while others will have whole structures replaced. Wastewater pump station renewals will take place on the Otago Peninsula, West Harbour, Brighton, Fairfield, Mosgiel, Middlemarch and Waikouaiti.

c) Other Wastewater Renewals – $103.831 million. This includes $46.922 million for a network renewals programme for term contract in support of Council’s preferred option for the South Dunedin Futures work programme, and $25.262 million for minor plant renewals related to supporting ongoing regulatory compliance.

d) Musselburgh to Tahuna Link – $24.930 million. This project is a critical asset renewal, involving upgrades and replacements of a wastewater pipe linking Musselburgh and Tahuna WWTP.

e) Consequential Growth Renewal – $19.614 million. These projects provide for the creation of infrastructure to support growth areas under the 2GP and variation 2 of the 2GP. This is further discussed below in the Growth Capital section of this report.

f) Metro Wastewater Treatment Plant Resilience – $13.629 million. This includes a range of asset renewals and upgrades to improve the resilience of WWTP, which complements emission reduction efforts.

g) Rural Wastewater Schemes – $11.827 million. This provides for the upgrades of the Middlemarch wastewater network system and the construction of a centralised wastewater treatment plant for Waikouaiti, Seacliff and Warrington communities to meet increased consent conditions.

h) Main Interceptor Sewer upgrade – $4.694 million. This entails the renewal of a critical asset or the rehabilitation of a major sewer line between Anzac Avenue and Musselburgh pump station to reduce potential for environmental/public health hazard and resolve constraints on growth in CBD and North Dunedin.

New Capital

80 $263.108 million has been provided for new wastewater capital projects. The major projects include:

a) Network Resilience and Efficiency Improvements – $85.707 million. This provides for new resource consents for wet weather discharges, decommissioning of Mosgiel WWTP and upgrade to Green Island WWTP to treat wastewater from Mosgiel, and other resilience improvement projects, such as the provision of mobile backup generators for critical sites and manhole sealing.

b) Rural Wastewater Schemes – $65.105 million. This includes the construction of a centralised WWTP to service Warrington and Waikouaiti with potential future capacity for Waitati and Seacliff, and upgrades to Middlemarch WWTP network to improve resilience and maintain level service.

c) Musselburgh to Tahuna Link – $31.992 million. This project entails the installation of a new pump station (relocated) and tunnel (by replacing) to covey wastewater from Musselburgh to Tahuna to reduce risks associated with asset failure and public health/environmental hazard.

d) Metro Wastewater Treatment Plant Resilience – $23.121 million. This includes WWTP asset upgrades based on the outcomes of plant condition assessments and other projects targeting wastewater health and safety improvements and supporting ongoing regulatory compliance.

e) Service Extension – $23.112 million. Placeholders for projects arising as a result of the 3 Waters Servicing Assessment (to be confirmed). This supports FDS implementation.

f) Bioresources Facility – $17.400 million. This project aims to identify and deliver a secure solution for beneficial use of sludge as a bioresource to reduce operational costs and improve resilience of sludge disposal. This is a core emissions reduction project.

g) Main Interceptor Sewer upgrade – $15.704 million. This entails critical asset renewal or rehabilitation of a major sewer line between Anzac Avenue and Musselburgh pump station to reduce potential for environmental/public health hazard and resolve constraints on growth in CBD and North Dunedin.

Three Waters – Water Supply

Renewals

81 The draft renewals budget for this activity group is $212.6 million. The major renewals projects include:

a) Water Network Renewals – $51.090 million. This provides for a network term contract renewals programme (to be prioritised by defects). Relining will be prioritised over dig and lay methods to reduce costs. Funding from this budget in 2026/27 onwards will be assigned to support a Council’s preferred option for South Dunedin Future programme.

b) Water Pump Stations Renewal – $25.718 million. This provides for the renewal of critical water pump stations (e.g., Taieri bores, Puddle Alley).

c) Water Minor Network Renewals – $25.396 million. This provides for minor reactive network renewals. This is to be completed as part of network maintenance contract.

d) Consequential Growth Renewal – $22.672 million. These projects provide for the creation of infrastructure to support growth areas under the 2GP and variation 2 of the 2GP. This is further discussed below in the Growth Capital section of this report.

e) Water Efficiency – $21.860 million. This project provides for smart networks and the renewal of domestic water connection infrastructure, in support of potential future universal metering.

f) Toby Replacement Campaign – $21.574 million. This provides for the continuation of existing programmed toby replacement campaign. Includes meter/dual check replacement.

g) Water Supply Resilience – $12.597 million. This provides for the renewal or upgrade of water treatment plants, based on outcomes of Plant Condition Assessment. It also includes a placeholder for dam safety assurance programme; the extent of remedial work on dams to be informed and confirmed by a Dam Safety Action Plan contractor.

h) Rotary Park Water Main – $10.202 million. This is a critical asset renewal and provides for Rotary Park water main on new Portobello Road alignment, as part of the existing programme network renewal.

i) Water Treatment Plant Optimisation – $1.781 million. This project provides for process optimisation to reduce chemical use at water treatment plants, including design, consent and construct.

New Capital

82 The draft new capital budget for this activity group is $131.183 million. The major new capital projects include:

a) Water Efficiency – $36.455 million. This includes integrated system planning projects, aimed at reducing network water leakage and loss, and network upgrades to support potential future provision of universal metering.

b) Water Plant Condition Assessment (PCA) – $33.350 million. This provides for the renewal or upgrade of asset, as deemed necessary based on outcomes of PCA.

c) Groundwater Supply – $19.807 million. This provides for the investigation and development of new/alternative groundwater supplies to feed Waikouaiti, Outram, and Dunedin City.

d) Port Chalmers Water Supply – $14.240 million. This provides for the design and construction of a water supply main to Port Chalmers. It involves the decommission of the two raw dams and water treatment plant at Port Chalmers and the installation of a new water supply pipeline from the Mount Grand treatment plant to Port Chalmers.

e) Mosgiel Alternative Water Supply – $13.976 million. This provides for alternative water supply route to Mosgiel. This costing is based on Option B (Tunnel Trails route) in the April 2024 BECA report.

Treaty Partnership

83 This activity group consists solely of Māori Partnership. There is no capital expenditure budget allocated to this activity group.

Vibrant Economy

84 This group includes the following activities: City Marketing; Dunedin i-Site Visitor Centre; Economic Development; and Events.

Renewals

85 The draft renewals budget for this activity group is $120k for the following project:

a) Dunedin i-Site Visitor Centre – $120k. This provides for the refresh of the Octagon premises, including counters and cabinetry in 2033/34.

New Capital

86 The draft new capital budget for this group is $51k. This provides for:

a) Destination Marketing – $51k. This provides for the replacement of camera and videography equipment, including drone and accessories.

Waste Minimisation

87 This activity group consists solely of Waste and Environmental Solutions.

Renewals

88 The draft renewals budget for this activity group is $10.144 million. The major renewals projects include:

a) Landfills – $7.106 million, including the following:

· Forrester Park Closed Landfill – $4.701 million for the replacement and re-route of the original 1960’s culvert pipe underneath the Forrester Park closed landfill, which has been identified that it is nearing the end of its life.

· Green Island Landfill – $2.286 million for various asset renewal activities at the Green Island Landfill, including as access roads, signage, CCTV, drainage, transfer station, litter fencing, odour suppression system, perimeter fencing and monitoring bores.

b) Refuse, Recycling and Litter – $3.038 million, including the following:

· Kerbside Bin Replacements – $2.059 million for the ongoing replacement of kerbside collection bins that are at end of life or damaged during collection, including allowance for the increased service levels (i.e., two additional bins)

· Public Place Recycling and Rubbish Bins – $979k for the replacement of end of life or damaged public place recycling and rubbish bins with improved design

New Capital

89 The draft new capital budget for this activity group is $174.249 million. The major new capital projects include:

a) Landfills – $16.267 million. This provides primarily for various projects at the Green Island landfill, including final capping, landscaping through to closure of the landfill, investment in the gas collection system, walking tracks for the community, and a new landfill leachate drainage system, to maximise landfill stability and increase future gas yield. The gas collection system is a core emission reduction project, and some of this activity works towards reducing city-wide emissions.

b) Waste Strategy – $157.172 million, including the following major projects under the banner of Waste Futures. All projects within the Waste Futures activity work towards reducing city- wide emissions.

· Smooth Hill Landfill – $92.420 million for the construction of a new waste disposal facility at the Smooth Hill site, including $15.5 million for access road upgrades in 2027/28 (Year 3). $68.1 million is allocated across 2028/29 (Year 4) and 2029/30 (Year 5) to undertake the bulk of construction of the landfill itself (including earthworks, leachate system, stormwater system, water system, lining of the first waste receival cell, plus roading and site facilities), and $7.75 million is allocated in 2032/33 (Year 8) and 2033/34 (Year 9) for continuing the development of future waste cells and gas destruction system.

· Material Recovery Facility – $27.099 million for the design and construction of a mixed recycling material sorting facility. This includes the building itself, plus automated high-speed sorting and processing equipment, manual sort area, control systems, baling equipment, safety systems, storage areas etc.

· Resource Recovery Park Precinct – $15.623 million for the provision of auxiliary buildings and civils infrastructure, such as staff facilities, access roads, upgraded 3 Waters connection, fencing, signage, landscaping, IT and other communication system, upgraded site power supply, leachate and stormwater systems etc.

· Bulk Waste System – $7.365 million for the establishment of a bulk waste transfer system at the Green Island site, including the building itself, sorting equipment, load-out area, control systems, safety systems, and storage areas.

· Organics Facility – $6.020 million for the design and construction of an organic collection processing facility consisting of a 10-bunker automated aerated static pile composting system, odour control bio-filter, compost screening and maturation areas.

· Construction and Demolition Facility – $3.570 million for the design and construction of a dedicated construction and demolition waste sorting facility alongside, and connected to, the Bulk Waste Transfer Building.

· Glass Facility – $2.855 million for the design and construction of glass collection storage bunkers.

· Second Rummage Store – $1.560 million for the development of a central city location for the collection and sale of diverted items.

Draft Growth Capital Expenditure

90 There is additional demand for Three Waters and transport infrastructure to meet following the rezoning within the 2nd Generation District Plan and in response to the projected population growth in Ōtepoti Dunedin, as provided for in the FDS.

91 The capital expenditure to meet this additional demand is funded from a combination of development contribution revenue and debt, depending on the relative timing of the expenditure and associated revenue.

92 The Development Contributions Policy has been reviewed and updated to incorporate the budgeted growth capital expenditure into the unit rates for charging purposes. This is the subject of a separate report on the agenda.

93 As discussed in paragraph 75 above, $60.592 million budgeted for upsizing the existing Three Waters networks to cater for the anticipated growth is included in the renewals capital budget as “Consequential Growth Renewals”. On the other hand, the growth capital budget is provided to create new reticulation assets for water supply, wastewater and stormwater (Table 7).

94 The growth capital budget of $19.808 million for the Roading and Footpaths activity group aligns with provisions for the projected growth in Ōtepoti Dunedin, as outlined in the FDS (Table 7).

11 Table 7. Growth Capital and Consequential Growth Renewals

Activity Group	Growth Capital Budget	Consequential Growth Renewals	Total Growth 2025-34
Roading & Footpaths	$19.8 m	–	$19.8 m
Three Water - Stormwater	$8.1 m	$18.3 m	$26.4 m
Three Water - Wastewater	$22.5 m	$19.6 m	$42.1 m
Three Water - Water supply	$21.0 m	$22.7 m	$43.7 m
Total	$71.4 m	$60.6 m	$132.0 m

NZTA Waka Kotahi Funding

95 The funding assumptions for projects included in the Roading and Footpaths draft capital expenditure budget are shown on Attachment B. Overall the Roading and Footpaths budget is subsidised 37.5% by NZTA. This combines a 42.2% subsidy on renewals and a 19.3% subsidy on new capital. There is no subsidy on growth capital expenditure.

96 With the exception of footpaths, the renewal subsidy reflects a 51% subsidy. Footpath renewals is 7.22%. Subsidised new capital expenditure is 51% except for the Crown resilience programme, which is 76%.

97 At the Council meeting on 10 December 2024, the significant forecasting assumptions were approved. The NZTA assumption was that the funding assistance rate will be 51% throughout the 9 year period. Based on the draft capital expenditure programme, there are two exceptions to this that should be reflected in the draft 9 year plan significant forecasting assumptions i.e., the Crown resilience programme (76%) and footpath renewals (7.22%).

Projects Excluded from the Draft Capital Budget

98 As discussed earlier in the report, projects previously considered for inclusion in the draft 9 year plan capital budget have been excluded from the draft budget presented in this report. These projects total $272 million over the 9 year period.

99 For completeness, timing changes in Waste Minimisation projects are included here. In total, the budget is increased by $10.406 million. The timing of Waste Futures projects is updated to allow for delays in the current year. The changes have the effect of increasing the 9 year budget. The current year budget for Waste Futures will be under spent.

100 The capital project spending will be assessed in May each year, prior to the end of financial year, and, if required, budget allocations will be carried over to the new financial year.

101 Council may wish to consider the items excluded and decide whether they wish to now include any of them in the draft budget. In addition to the exclusions, proposed timing changes have also been incorporated into the draft budget presented. Details of each of the excluded items and/or timing changes are discussed below by activity group and provided in Attachment C.

City Properties

102 Over the 9 year period, projects totalling $65.476 million have been excluded from the draft budget. The projects are:

a) Community Housing Growth – $21.700 million, including the provision of 10 new units on Thorn Street and 16 new units on Shand Street which is subject to a separate report on the agenda.

b) Performing Arts – $17.1 million, as provided for in the 10 year plan 2021-31, for the future provision of a performing arts centre.

c) Sammy’s – $4.8 million. Staff will continue to work on future options for Sammy’s which will be the subject of a report to Council in the future.

d) Public Toilets Growth – $4.775 million. A programme for 18 new public toilets (two per year) and a changing places bathroom to cater for new accessible sites, including Navy Park, North Ground Sports Ground, Doctor’s Point, Ross Creek, Green Island, Market Reserve, Brooklands Park, Okia Reserve, Pūrākaunui, Tomahawk Beach, Harbourside Molars and St Kilda Beach. There is a separate report on this agenda to provide updates on the Public Toilet Programme. $750k provides for a changing places bathroom.

e) Toitū Otago Settlers Museum Sewer Thermal Energy Project – $5.060 million for the installation of a heat recovery system to utilise the wastewater in the sewer system as a regenerative energy source for heating and cooling at the Toitū Otago Settlers Museum (Note: This project is included in the Zero Carbon ‘high’ investment package).

f) Operational Property Renewals – $8.541 million for various asset renewals and two-year delayed expenditure for public toilet renewals.

Community Recreation

103 Over the 9 year period, projects totalling $3.354 million have been excluded from the draft budget. The projects are:

a) Destination Playgrounds – a timing change. This is the subject of a separate report on the agenda.

b) Skate Parks Renewals – $3.354 million, including $1.5 million for the renewal of Mornington Skate Park in 2025/26 (Year 1) and $1.545 million in 2026/27 (Year 2), and $309k for Thomas Burns Skate Park resurfacing in 2026/27 (Year 2).

Creative and Cultural Vibrancy

104 Over the 9 year period, projects totalling $3.154 million have been excluded from the draft budget. The projects are:

a) Dunedin Public Libraries – $1.954 million is removed from the acquisition of lending and reference collection as we are not inflating this budget.

b) Arts in Public Places – $1.200 million for a DCC public art programme delivered by Dunedin Public Art Gallery, with spending planned in 2025/26 (Year 1), 2028/29 (Year 4), 2030/31 (Year 6) and 2032/34 (Year 9).

Roading and Footpaths

105 Over the 9 year period, new capital projects totalling $59.884 million have been excluded from the draft budget due to the discontinuation or reduction of co-funding by NZTA. The projects are:

a) Low Cost, Low Risk Improvements – $21.500 million for smaller projects focusing on intersection improvements, school safety, signage and roundabouts. In the 10 year plan 2021-31, the Low Cost Low Risk funding had been $2.0 million per year, based on a 51% contribution from NZTA (Note: The Zero Carbon ‘high’ and ‘medium’ investment packages include five projects with significant cycle route improvements, as well as South Dunedin Safer Schools Streets, which has some provision for cycle improvement, and the Tunnels Trail, as detailed blow).

b) Urban Cycleways – $32.111 million:

· Dunedin Urban Cycleways Arterials – $9.711 million for the city and Mosgiel end connections to the Tunnels Trail (Note: The Zero Carbon ‘high’ and ‘medium’ investment packages include a connection between Caversham and the City).

· Dunedin Urban Cycleways Tunnels Trail – $22.400 million for the provision of an off-road trail linking Dunedin with the outer suburbs and Mosgiel via two unused train tunnels in the Chain Hills area. $1.0 m is held in 2033/34 (Year 9) of the 9 year plan as the intention is to resume this project when co-funding can be secured by NZTA.

c) Shaping Future Dunedin – $6.273 million:

· Central City Cycle and Pedestrian Improvements – $4.073 million for 2030/32 (Year 6), 2031/32 (Year 7) and 2033/34 (Year 9) of the 9 year plan for improving cycling and walking facilities

· Harbour Arterial Efficiency Improvements – $2.0 million for 2033/34 (Year 9) for the start of Stage 4 of the Harbour Arterial which is the connection across the overbridge (across the rail line) and into Frederick Street (where SH88 was going to be relocated too in light of the proposed location of the outpatients building).

· Central City Bike Hubs Parking and Facilities – $200k for the provision of high-quality end of trip facilities that will support and encourage more people to travel to and from the Dunedin CBD by bike (Note: This project is included in the Zero Carbon ‘high’ and ‘medium’ investment package).

Three Waters

106 Over the 9 year period, new capital projects totalling $151.318 million have been excluded from the draft budget. The excluded projects are:

a) Wastewater Bioresources Facility – $44.600 million. This provides for the establishment of a bioresources facility for processing wastewater sludges into energy and/or bioresources (e.g., soil conditioner). Investment has been scaled back to cover Phase 1 implementation only (i.e., 2,000 tonnes per year versus total requirement of 10,000 tonnes per year). In absence of this facility, unprocessed sludges will continue to be landfilled. This will limit the reduction in 3W carbon emissions and may reduce potential operational cost savings.

b) Water Supply Service Extension – $30.600 million. This provides for the extension of water supply to the Otago Peninsula beyond Portobello and Brinns Point. This would have been a level of service increase for ratepayers in these areas.

c) Water Supply Water Efficiency – $28.045 million. This provides for the improvement of water network monitoring “smart networks” for further enhancements to leakage and pressure management, further reducing water losses in addition to other (funded) projects and also for the establishment of customer metering (with or without volumetric charging; this would involve further consultation and engagement before any decisions were made). Exclusion of this project will limit the achievable reduction in the leakage and demand. It may mean additional water sources, and water storage may be required so could result in additional capex requirements for other projects (further investigation required to confirm this).

d) Wastewater Service Extension – $23.188 million. This provides for the extension of wastewater services to Waitati, the Otago Peninsula beyond Portobello and Brinns Point. This is effectively a level of service increase for ratepayers in these areas. The reduction in allocated funding means that the area of greatest need will be prioritised. This will be informed by the 3 Waters Servicing Assessment, which is in progress and due to be completed in late 2025.

e) Stormwater Network Resilience and Efficiency Improvements – $17.300 million. This provides for the establishment of a number of monitors within the stormwater network in a high priority catchment (Lindsay Creek, Leith or Otago Harbour) to detect wastewater cross-connections into the stormwater network, identify hotspots for further investigations and inform the removal of cross-connections ($3.000 million). Installing stormwater treatment devices in high vehicle traffic areas in the CBD to capture stormwater pollutants ($14.300 million). Both projects would have supported improvements to water quality in the environment. Central government’s intervention in the ORC’s release of the proposed Land and Water Regional Plan has removed a potential driver for the project.

f) Water Supply Resilience – $3.024 million. WTP asset upgrades. This is a reduction of approximately 10% from the previous draft. Projects will be reprioritised and/or deferred to make savings. This may result in carrying some risks that would otherwise have been reduced.

g) Wastewater Network Resilience and Efficiency Improvements – $3.000 million. This provides for the establishment of a number of monitors within the wastewater network to detect stormwater cross-connections into the wastewater network, identify hotspots for further investigations and inform the removal of cross-connections. This project would have reduced the risk of wastewater overflows to the environment and private property and supported improvements to water quality in the environment. Central government’s intervention in the ORC’s release of the proposed Land and Water Regional Plan has removed a potential driver for the project.

h) Three Waters Renewals – $1.384 million. This reflects changes in priority of some renewals projects. The Pine Hill 3 Waters network (water supply, wastewater and stormwater) renewals have been deferred to later in the 9 year plan. This would result in additional inflationary costs, but these have not been included, effectively reducing the scope of the renewals work. Some assets, which should be replaced, may have to remain in service, increasing asset failure risk. Pipe rehabilitation will be used where possible to achieve the same scope within the reduced budget.

OPTIONS

107 Specific options have not been provided in this report. There are a number of projects presented in separate reports for Council to consider. Given the scale and scope of the capital budgets there will be a high level of interest from Councillors around projects that have been included and those that have not. Staff have attempted to find a balance but ultimately Councillors will have to deliver the level of capital programme they are comfortable presenting to their community.

Debt

· Any changes to the capital budget will impact the level of debt funding required.

Rates

· Any changes to the capital budget will impact the level of operational expenditure which is funded by rates.

Zero carbon

· Zero Carbon considerations are discussed in the body of the report. Attachment B includes a line-by-line Zero Carbon assessment of the capital budget. Additional Zero Carbon investment options are discussed in a separate report.

NEXT STEPS

108 The approved capital budget will form part of the supporting documentation for the 9 year plan consultation.

Signatories

Author:
Authoriser:	Sandy Graham - Chief Executive Officer

Attachments

	Title	Page
⇩a	2025-34 Capital Expenditure Programme	321
⇩b	2025-34 NZTA Waka Kotahi Capital Expenditure Funding Assumption	332
⇩c	2025-34 Capital Expenditure Programme Changes	333

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	✔	☐	☐
Future Development Strategy	✔	☐	☐
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

The adoption of Te Taki Haruru - Māori Strategic Framework signals Council’s commitment to mana whenua and to its obligations under the Treaty of Waitangi. Mana whenua and Māori have an opportunity to engage with the 9 year plan consultation process through a series of planned hui

Sustainability

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

Zero carbon

Zero Carbon considerations are discussed in the body of the report. Attachment B includes a line-by-line Zero Carbon assessment of the draft capital budget. Additional Zero Carbon investment options are discussed in a separate report.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for each activity group, for inclusion in the 9 year plan.

Financial considerations

Financial considerations are detailed in the report.

Significance

The draft budget is considered significant in terms of the Council’s Significance and Engagement Policy and will be consulted on as part of the 9 year plan 2025-34.

Engagement – external

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

Engagement - internal

Staff and managers from across the DCC have been involved in the development of the draft budget.

Risks: Legal / Health and Safety etc.

There are no identified risks.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

Community Boards will be consulted on the 9 year plan 2025-2034.

Council

28 January 2025

3 Waters - Draft Operating Budget 9 year plan 2025-34

Department: 3 Waters

EXECUTIVE SUMMARY

1 This report provides:

· a summary of the services provided by 3 Waters – Water Supply, Wastewater and Stormwater.

· an overview of the draft operating (opex) budget for year one of the 9 year plan for 3 Waters

· an overview of the variations from the year one budget for years two to nine for 3 Waters.

2 This report includes four attachments:

i) Operating budget for 2025/26 (year one) – this details the movements from the 2024/25 year

ii) Operating budget for 2025/26 to 2033/34 (nine years) – this details the projected operating budget throughout the nine-year period

iii) Funding Impact Statement for 2025/26 to 2033/34 (nine years) – this summarises the source and application of funding throughout the nine-year period

iv) Schedule of Fees and Charges.

3 The report asks the Council to adopt the draft operating budget and draft fees and charges for the purposes of developing the 9 year plan 2025-34 and consulting with the community.

RECOMMENDATIONS

That the Council:

a) Adopts for the purposes of developing the 9 year plan 2025-34 and consulting with the community:

i) The draft operating budgets and funding impact statement for 3 Waters as shown/amended at Attachments A, B and C.

ii) The draft 2025/26 fees and charges schedules for 3 Waters as shown/amended at Attachment D.

BACKGROUND

3 Waters – summary of services

4 3 Waters comprises the following activities:

Water supply

5 The water supply service ensures that customers who are connected to the network have adequate quantities of safe water. This team collects, treats, and distributes water to customers in Dunedin, to maintain the health of the community and to support the local economy. The team complies with legislation such as the Water Services Act 2021, Health and Safety at Work Act 2015, Local Government Act 2002, Resource Management Act 1991, and Fire and Emergency New Zealand Act 2017. It also carries out education and promotion programmes, proactively detects leaks, and manages network extensions to non-reticulated areas.

Wastewater (sewerage and sewage)

6 The wastewater service involves collecting, treating, and disposing of wastewater from residential and commercial customers across Dunedin to protect the health of the community and the environment. This team complies with relevant legislation. It carries out education and promotions programmes, manages network extensions to non-reticulated areas, and supplies wastewater samples to ESR for Covid-19 and narcotics testing.

Stormwater

7 The stormwater service collects rainwater from the roofs of houses and buildings, footpaths and roads, and diverts it to the ground, into waterways or the ocean to prevent flooding of properties and businesses. This team complies with relevant legislation. It manages network extensions to non-reticulated areas, and upgrades and transfers private stormwater assets into the public network.

operating budgets – 2025/26

8 The 2025/26 draft operating budget for 3 Waters is $129.008 million. This is an increase of $2.965 million from the 2024/25 year. The following sections explain the revenue and expenditure changes from the previous year.

Revenue

Rates

9 Rates revenue is $97.896 million. This is an increase of $12.767 million (or 15%) from the 2024/25 year.

External revenue

10 Total external revenue is $8.748 million. This is an increase of $1.120 million from the 2024/25 year, 15%. Water sales increase 15%, $849k, continuing a staged uplift in fees to contribute to the cost of treated water.

11 Trade and tankered waste increase $230k, based on forecasted actuals plus 5% CPI. General revenue, recoveries, connection fees and backflow charges increase by $79k, 5% in line with fees and charges uplift.

Grants and subsidies – operating

12 Total revenue from grants and subsidies (operating) is $38k. This is a decrease of $2k from the 2024/25 year due to declining revenue from stock effluent discharge revenue.

Grants and subsidies – capital

13 Total revenue from grants and subsidies (capital) is $328k. This is an increase of $88k from the 2024/25 year due to Better off Funding (BOF) programme changes.

Internal revenue

14 Total internal revenue is $1.988 million. This is an increase of $1.353 million from 2024/25 due to BOF. The BOF programmes for 2025/26 include:

a) Future Development and Planning - $1.680 million for building infrastructure resiliency via hydraulic modelling, carbon, and infrastructure assessments to enhance and facilitate growth.

b) Local Water Done Well - $123k to explore new organisational structures and to investigate financial and commercial considerations for delivery of water services.

c) Infrastructure projects - $186k for system improvements, network resilience, growth, health and safety projects.

Expenditure

Personnel costs

15 Personnel costs are $11.308 million. This is a decrease of $567k, -5% from the 2024/25 year. Explanation of changes to personnel costs are discussed in detail in the Chief Executive Overview Report that is on the agenda.

Operations and maintenance

16 Operations and maintenance expenditure is $18.268 million. This is an increase of $1.832 million from the 2024/25 year. Reasons include:

a) Network maintenance costs increase $632k to incorporate maintenance contract cost changes.

b) Establishment of infiltration and inflow reduction improvements across wastewater and stormwater networks increases costs by $500k.

c) Plant maintenance costs increase $350k to account for increases in contract costs to maintain current levels of service.

d) Increased maintenance budgets of $500k to reduce risk of equipment failure and non-compliance with regulations such as drinking water standards, wastewater discharges, health and Safety impacts, odour, and noise complaints.

e) An increase of $196k for alignment of network water compliance testing, including cyanobacteria monitoring, to meet required levels and cost escalation.

f) Grounds maintenance increases by $197k enabling cyclical safety related maintenance and contract alignment with current practice.

g) Increases relating to the annual valuation process includes an increase of $60k.

h) Reduced use and price of Co2 and coagulant in water treatment saves $246k.

i) Re-categorising some CCTV inspection costs to capital projects and to Consumables and General costs reduces this budget by $334k.

Occupancy costs

17 Occupancy costs are $15.244 million. This is an increase of $626k from the 2024/25 year. Reasons include:

a) Electricity prices across treatment plants and pumping stations are anticipated to rise by $516k due to price pressures and some new processes at the wastewater plants.

b) Fuel costs decrease by $161k due to less incinerator usage at Tahuna WWTP.

c) Insurance increases by $305k, 10.6%.

d) Rates costs decrease by $37k.

Consumables and general

18 Consumables and general costs are $3.565 million. This is an increase of $1.808 million from the 2024/25 year and reflect the following changes:

a) Consultancy costs for BOF projects increase by $937k.

b) Government levies of $701k are introduced by Taumata Arowai (Water Services Authority $533k) and Commerce Commission Levies (MBIE $168k).

c) Implementing the integrated systems planning core pathway programme increases engineering consultants by $221k.

d) Software licence fees reduce by $45k.

Internal charges

19 Internal charge costs are $5.337 million. This is an increase of $383k from the 2024/25 year due to:

a) Fleet and carpark charges increase by $226k due to increased fleet costs and a new Hiab canter crane truck for the network operations and maintenance department .

b) Internal sludge and landfill costs increase by $84k due largely to price rises and return to normal usage of the Tahuna WWTP incinerator. This includes offset budget savings at the Green Island wastewater treatment plant.

c) Administration, property, and BIS charges increase by $75k, 2.9%.

Depreciation

20 Depreciation costs are $62.354 million. This is a decrease of $1.168 million from the 2024/25 year. This decrease was the result of the 3 Waters asset valuation process.

21 A separate 3 Waters valuation of reticulation assets was undertaken for the 9 year plan, to ensure the robustness of asset values to calculate depreciation.

Interest

22 Interest costs are $12.932 million. This is an increase of $51k from the 2024/25 year. The increase is due the level of capital expenditure and debt requirement. However, this has been partially offset by the reduction in the projected interest rate.

Budget tradeoffs

23 Several potential trade-off opportunities were identified, along with several potential operational improvements that are already underway and are expected to realise cost savings. If operational cost savings continue to be sustainable then these will be used to fund items which had been identified as potential trade-offs.

a) Operational improvements which may provide cost savings include:

i. Optimisation of the Mt Grand Water Treatment Plant to increase summer production rates.

ii. Optimisation of the Tahuna sludge furnace to increase sludge destruction rates reducing diesel use and residual sludge disposal costs.

b) Items which rely on other budget savings being realised for funding include:

i. Operational improvements to SCADA and Asset Management systems beyond those currently included in SCADA maintenance budgets or the capital programme. The need for this and magnitude of operational cost is yet to be fully determined and is subject to future project decisions – estimated as approximately $700k.

ii. Smart meters – operational cost allowance associated with additional smart metering – approximately $300k.

fees and charges – 2025/26

24 Fees and charges for 3 Waters have generally increased by 5% to reflect inflationary cost increases across the 3 Waters network. There are some exceptions:

a) City-wide unit rates for trade waste have increased by between 7% - 9%, $0.01 - $0.03 to reflect increased costs.

b) Water supply backflow prevention programme fees have increased by 8% or $10.56 for the backflow preventer test fee and by 10% or $8.27 for rescheduled tests, to reflect increased costs.

c) Central water scheme tariffs have increased by 15% or $0.02 for the supply of bulk raw water per cubic meter, and $0.33 for the supply of treated water per cubic meter to reflect increased costs of distributing and treating water.

OPERATING BUDGETS – YEARS 2-9

25 The 2025/26 operating budget has been inflation adjusted for years two to nine.

26 A provision has been made for additional staff and audit costs in relation to the new regulations from Local Water Done Well. Under the current and proposed arrangements for the new water services system, there will be further regulatory requirements for 3 Waters. These include separate statutory financial reporting, external audit, billing and associated administration. An uninflated amount of $395k for year 2 (2026/27) has been included then increased to $890k per year from year 3 (2027/28) onwards.

27 The 3 Waters operating budget is projected to be fully funded by year 3 (2027/28). To fully fund operating expenditure and achieve a balanced budget (excluding development contribution revenue and vested assets), a consecutive rate increase for 3 Waters of 15% in both the 2026/27 and 2027/28 years has been included.

28 New capital and growth expenditure for 3 Waters totals $491.004 million over the 9 year period. A 2% allowance of this capital cost has been factored in for additional maintenance. This cost grows throughout the 9 year period and equates to a total cumulative cost of $8.987 million, being $0.475 million in 2026/27 (year 2) and increasing to $1.166 million in 2033/34 (year 9).

29 The BOF programme will be completed in 2026/27 (year 2). Associated expenditure and revenue has been adjusted in accordance with the current allocation, ending at 30 June 2027.

Zero Carbon

30 The 3 Waters activities account for a significant proportion of the DCC’s emissions footprint and contributes to city emissions. The 3 Waters group is leading several Zero Carbon Plan/DCC Emissions Management and Reduction Plan projects, including reducing stationary diesel use at wastewater treatment plants, exploring options for a long-term biosolids solution, and wastewater treatment emissions reduction projects.

31 The draft operating and capital budgets include provision for projects that will improve energy efficiency and emissions reduction at certain facilities. This, along with alignment with the Zero Carbon Policy, will reduce emissions from operations over the term of the 9 year plan, however these gains may be offset by network growth.

Signatories

Author:	John McAndrew - Acting Group Manager, 3 Waters
Authoriser:	David Ward - General Manager, 3 Waters and Transition

Attachments

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	✔	☐	☐
Future Development Strategy	✔	☐	☐
Integrated Transport Strategy	☐	☐	✔
Parks and Recreation Strategy	☐	☐	✔
Other strategic projects/policies/plans	✔	☐	☐

3 Waters activities contribute primarily to the objectives and priorities of the above strategies.

Māori Impact Statement

Council budgets impact broadly across all Dunedin communities including Māori. The adoption of Te Taki Haruru – Māori Strategic Framework signals Council’s commitment to mana whenua and to its obligations under the Treaty of Waitangi. Mana whenua and Mataawaka will have the opportunity to engage in the 9 year plan consultation process..

Sustainability

3 Waters activities take into account 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.

Zero carbon

The draft operating budget has implications for DCC and city emissions, as described in the body of the paper.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for 3 Waters to include in the 9 year plan.

Financial considerations

Financial considerations are detailed in this report.

Significance

The draft budgets are included in the development of the 9 year plan 2025-34 which is consulted on using the special consultative procedure.

Engagement – external

There has been no external engagement in developing the draft budgets for 3 Waters.

Engagement - internal

Councillors and staff from across council have been involved in 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. Community Boards will be consulted on the 9 year plan 2025-34.

Council

28 January 2025

South Dunedin Flood Alleviation - Short-term options

Department: Climate and City Growth

EXECUTIVE SUMMARY

1 The purpose of this report is to present options for undertaking short-term, ostensibly no-regrets actions, to support flood mitigation in South Dunedin. The options described in this report respond to requests from the Mayor and Councillors, reflect community calls to combat short term flood risk, and are complementary to long-term flood resilience and climate adaptation work being undertaken as part of the South Dunedin Future (SDF) programme.

2 Flood issues in South Dunedin are well documented, are the subject of much council investigation, and are of high public interest. In addition to day-to-day management of the 3 Waters network, council is currently tackling flood South Dunedin flooding issues through three key workstreams: (i) long-term, large-scale planning under South Dunedin Future; (ii) mid-term, mid-scale infrastructure work to explore a stormwater system reconfiguration to split the catchment in two; and (iii) a series of short-term, smaller scale options outlined in this report.

3 Concept designs have been developed for a range of short-term options that may provide a degree of flood alleviation for South Dunedin. The options presented in this report are not ‘solutions’ to South Dunedin’s flood challenges, which would require larger-scale, longer-term investments of the nature being investigated under the SDF programme. There is no budget in the 9YP for the options presented in this report.

RECOMMENDATIONS

That the Council:

a) Notes the South Dunedin Flood Alleviation – Short-Term Options report.

b) Decides which of the following options to proceed with:

i) Provide additional budget to undertake short-term capital works to mitigate flood risk in South Dunedin as a stand-alone workstream separate to, but complementary to, and ultimately integrated with the SDF programme.

ii) Wait for the SDF adaptation plan to be completed before commencing any capital works.

iii) Make an alternative decision.

BACKGROUND

4 South Dunedin is exposed to a range of natural hazards, due to its location at the base of a catchment, on a low-lying former coastal wetland. South Dunedin has a history of flooding extending back to the 1920s. Climate change will likely increase this flood hazard over time through rising sea level, rising ground water, and increased frequency and severity of storm events.

5 The current flood risk and potential future impact of climate change on South Dunedin has been the subject of specific investigation by the Dunedin City Council (DCC) and Otago Regional Council (ORC) since the late 2000s. In 2010, the DCC commissioned a report by University of Otago Emeritus Professor Blair Fitzharris to examine the Climate Change Impacts on Dunedin (the ‘Fitzharris Report’). In 2009 ORC established the first permanent groundwater monitoring network and in 2012 undertook initial groundwater rise modelling.

6 The major flood event in June 2015, which caused widespread flooding across South Dunedin, proved to be a catalyst for councils adopting a more integrated approach for responding to flooding and climate-related issues. In June 2016, incumbent Mayor Dave Cull wrote to the residents of South Dunedin outlining key challenges and describing a suite of responses from the DCC and ORC. This included research into natural processes, maintenance and optimisation of existing infrastructure, and consideration of medium-term options to reduce the risk of flooding due to rising groundwater and severe rainfall events. Specific actions included:

· Replacement of screens at Portobello Stormwater Pump Station with an improved, high-capacity screen.

· Installation of additional alarms at the Portobello SWPS to give earlier warning if pump screens are becoming blocked.

· Improved maintenance and cleaning of mud tanks and screens.

· Strengthening of the Forbury Road stormwater pipeline in areas where this has previously failed.

· Updating and improving the stormwater and wastewater hydraulic models in South Dunedin to improve accuracy and confidence in their use for option assessment and design.

· Investigating ‘medium term’ options to address wastewater flooding in South Dunedin, including diversion of wastewater flows from Kaikorai Valley to Green Island Wastewater Treatment Plant.

Large scale, long-term planning

7 This collection of research and infrastructure-focused activities, coupled with renewed communications and community engagement efforts, would subsequently become known as the ‘South Dunedin Future’ (SDF) Programme. The SDF programme is a joint initiative between the DCC and ORC to develop a climate adaptation plan for South Dunedin and includes a detailed risk assessment, development of options for mitigating risks over the long term (next 100 years), and extensive community engagement. The SDF programme will produce a climate adaptation plan for South Dunedin by December 2026.

8 It is envisaged that the South Dunedin adaptation plan will inform a range of strategic land use and infrastructure decisions from 2026 onwards, including short-, medium-, and long-term decisions about 3 Waters investments in flood alleviation. Previous SDF programme reporting has signalled that many different infrastructure investments may be required to effectively manage flood risk over the long term, the details of which will become more clear following completion of the South Dunedin adaptation plan.

Mid-scale, medium term infrastructure

9 Mid-scale investments in 3 Waters infrastructure in South Dunedin have been scheduled to commence after completion of the South Dunedin adaptation plan in 2026. This is to ensure such investments are fit for purpose, aligned to the outcomes of the SDF programme, and reflect the anticipated future land use and infrastructure needs in South Dunedin. In the interim, $32.5 million (uninflated) has been proposed for mid-scale 3 Waters infrastructure in South Dunedin in the draft 9 Year Plan 2025-34 (9YP), with capital expenditure ramping up in 2027/28. This would be an initial investment in the first decade of the South Dunedin adaptation plan, with further investments to follow as required, subject to business cases and funding availability.

10 The mid-scale infrastructure investment currently in development would likely seek to effect a system reconfiguration, whereby two large diameter pipelines would split the South Dunedin stormwater catchment area into two, smaller, more manageable areas. Preliminary assessments suggest this option is the most likely 3 Waters infrastructure option to alleviate mid-term flood risk (10-30 years) in South Dunedin. Under indicative scheduling this option would commence in 2027/28, following completion of the South Dunedin adaptation plan in 2026, and would be completed by 2033/34. These details are subject to change, based on the outcomes of the South Dunedin adaptation plan, and more detailed modelling and design work.

Shorter-term flood alleviation options

11 The South Dunedin risk assessment and potential adaptation options will be presented to Councils in March 2025. While it will be a further two years until completion of the South Dunedin adaptation plan, sufficient technical work has now been undertaken to identify some short-term actions that could support flood alleviation, irrespective of what long-term option is eventually adopted for South Dunedin. Coinciding with this, the flood event on 3-4 October 2024 that affected much of South Dunedin has triggered renewed calls from the community and other stakeholders for DCC to undertake additional flood alleviation work in South Dunedin in the short-term.

12 In response to these developments, and following requests from The Mayor and Councillors, staff have undertaken an assessment of a range of options to mitigate flood risk in South Dunedin using the 3 Waters computer hydraulic models of the stormwater network. The options developed are conceptual in nature, are broadly consistent with shorter term ‘no regrets’ actions endorsed by SDF programme work to date, and could be considered complementary to longer-term work being undertaken as part of that programme. The nine short term options investigated have an estimated total cost of $270 million and details are provided in the discussion section below and attachments to this report.

Potential central government funding

13 Preliminary conversations have been undertaken with the Ministry of Business, Innovation & Employment (MBIE) in relation to the Regional Infrastructure Fund (RIF), which is a potential source of funding for resilience-focussed activities – including flood alleviation – in South Dunedin. MBIE has however cautioned that the RIF has a range of criteria which would need to be met to secure funding. For example, the RIF requires co-investment from councils, is restricted from directly funding 3 Waters infrastructure (with some exceptions), and is predominantly for loans rather than grants. The RIF can however support flood-resilience initiatives such as stop banks, sea walls, and nature-based solutions like swales, parks, and wetlands. As such, the RIF could be a potential part-funding source for some of the options presented in this report, including water detention at Bathgate and Forbury parks.

DISCUSSION

14 Key components of South Dunedin’s stormwater network are:

· Portobello Stormwater Pump Station (SWPS) – this is the drainage system for the flat areas of South Dunedin, St Kilda and lower Tainui.

· Tainui SWPS – this is located at a low point in Tainui and pumps water from this area to a discharge point further in the stormwater network, upstream of the Portobello SWPS.

· Wilkie Road Conduit – this runs along South Rd from Caversham, picks up Glen Creek at Glen Rd and continues to the Harbour via Wilkie Rd and Kind Edwards St under the Caledonian Ground and Andersons Bay Rd and along Orari St.

· Forbury Road Aqueduct – this runs along Forbury Rd from the Forbury roundabout to the sea near St Clair Saltwater Pool. It picks up drainage from the St Clair hills west of Forbury Rd (Corstorphine, Kew and upper Caversham).

· The Wilkie Road and Forbury Road Conduits act to capture rainfall from the hills surrounding South Dunedin and divert it to the ocean rather than allowing it to flow into South Dunedin.

Additional detail can be found in Attachment A.

15 Since the stormwater system was designed and installed, significant changes have occurred that impact the performance of the system as there is more water for the system to have to deal with. These include:

· Impervious surfaces have increased from around 45% to approximately 60%. This results in more stormwater run-off entering the stormwater network when it rains.

· The system is generally around 60 years older than when most of the infrastructure was installed. The infrastructure deteriorates over time, making it more prone to increasing levels of erroneous inflow and infiltration.

· Climate change impacts have begun to take effect – increasing rainfall intensities and groundwater levels meaning the stormwater system experiences ever increasing design capacity exceedances.

OPTIONS

16 A range of infrastructure options have been evaluated, some of these are based on previous work undertaken by 3 Waters and some are new. A summary of the options is presented below in Table 1, with further detail contained in Attachment B.

Option	Option Description
1	Discharge to Orari Street SW main
2	Divert Tainui flow to outfall, bypassing Portobello SWPS
3	Hillside Road mains disconnected and pumped to Orari St outfall
4	Bathgate Park detention pond
5	Combination of Options 3 and 4
6	Bay View Road to Portobello SWPS
7	Option 6 plus upgrade to Portobello SWPS
8	Upsize Forbury Road pipeline
9	Forbury Park detention pond

Table 1: short-term options

17 The above options have been assessed using the 3 Waters computer hydraulic models of the stormwater network. The options developed are conceptual in nature and are not intended to replace or supersede work currently being undertaken as part of the SDF programme. Option performance has been evaluated in terms of future climate change for 1-in-10 year and 1-in-100 year storms with the assessment primarily focussed on:

· Reduction in total flood area

· Reduction in total flood volume

18 Each option has been costed at a high level (-50%/+100%, Estimate Class 5, AACE International Recommended Practice No.18R-97).

19 Results of the options assessment (1-in-10 year only) and costing are contained in Attachment C.

20 The most cost-effective option is Option 6, diversion of the Bayview Rd and New Rd stormwater systems to a new pipe directly to the Portobello PS, although this option has a relatively minor impact on South Dunedin flooding overall (4% flood area reduction).

21 Option 3, Hillside Road mains disconnected and pumped to Orari St outfall, and Option 8, Upsize Forbury Road pipe are the next most cost-effective options (with 11% and 8% flood reductions respectively).

22 It should be noted that options have not been tested in combination with each other and so flood reductions should not be considered to be cumulative if multiple options are implemented.

23 Option 6 and 8 involve pipeline construction only, making them less complex than Option 3 which involves a new pump station. This makes them more favourable as short-term options as they are likely to be quicker to implement.

24 Option 8, which would improve the capture of stormwater running off St Clair Hills into South Dunedin is expected to be effective in the short and long term, is considered to be “no-regrets” and is anticipated to integrate well with the SDF adaptation plan. Portobello SWPS is expected to be a key infrastructure asset for South Dunedin for at least the short to medium term and so Option 6 could also be considered a “no-regrets” option, although it’s benefit to South Dunedin as a whole is lower.

25 It is estimated that each of Options 6, 8 and 3 would take 3-5 years to investigate, design and construct with Option 3 taking the longest due to it’s additional complexity due to the need for a pumping station.

26 The discounted options are described below in Table 2.

Option Discounted	Description
1	High cost, particularly versus benefit achieved. Also, this option is physically impracticable or unfeasible as a short-term option as there is insufficient readily available space in the location to build a large pump station.
2	Relatively high cost for benefit achieved. Options with a better cost/benefit ratio are preferred.
4	Relatively high cost for benefit achieved. Spatial and community benefits unquantified. Draining detention pond likely to be impeded without a free discharge location being identified.
5	Determined by concerns relating to option 4.
7	Relatively high cost for benefit achieved. Options with a better cost/benefit ratio are preferred.
9	High cost for benefit achieved. Spatial and community benefits unquantified. Draining detention pond likely to be impeded without a free discharge location being identified.

Table 2: discounted short-term options

27 All options will require further investigation, which may indicate that benefits are less than initially thought or that costs are higher.

28 If Council wish to progress the short-term options, the next steps would be to:

· Allocate staff and financial resources to further investigating the options in more detail.

· Develop a project management plan and timeframes.

· Continue discussions with Central government, with a view to making an application for funding from the RIF, noting criteria (co-funding requirements, 3 Waters restrictions, and limits on grants) may not be well aligned to council interests.

Option One – provide additional funding to implement short-term options

29 This option would seek additional capital funding for any or all of the options proposed, and in particular:

· Total additional funding for all three options below is $29.214 million (Class 5 Cost Estimate).

· Option 6 - Diversion of the Bay View Rd and New Rd stormwater systems to a new pipe directly to the Portobello PS at a Class 5 Cost Estimate of $1.916 million.

· Option 8 - Upsize Forbury Road pipe at a Class 5 Cost Estimate of $12.000 million.

· Option 3 - Hillside Road mains disconnected and pumped to Orari St outfall at a Class 5 Cost Estimate of $15.298 million.

Impact assessment

Debt

· Would require borrowing of between $1.916 million (for Option 6) to $29.214 million (for all options) over the next 5 years. If all options are selected, debt increases as follows:

Year 1 2025/26 $0.750 million

Year 2 2026/27 $1.000 million

Year 3 2027/28 $9.768 million

Year 4 2028/29 $9.000 million

Year 5 2029/30 $8.696 million

Rates

· Rate funding would be required for this option. Cost of borrowing is estimated to be 4.12% annually from year 1 to year 4, then 5% from year 5. Cost of depreciation is estimated to be 3.19% of the capital cost. Operating costs flowing from the projects, including a project manager during the implementation are estimated in the table below. From the 2030/31 year the costs are ongoing.

Year	Interest	Depreciation	Operating Costs	Total
Year 1 2025/26	$15,000	$0	$120,000	$135,000
Year 2 2026/27	$52,000	$24,000	$135,000	$211,000
Year 3 2027/28	$273,000	$56,000	$155,000	$484,000
Year 4 2028/29	$660,000	$367,000	$350,000	$1,377,000
Year 5 2029/30	$1,243,000	$654,000	$530,000	$2,427,000
Year 6 2030/31	$1,461,000	$931,000	$250,000	$2,642,000

Zero carbon

· If funding is secured and the projects were to proceed this option is likely to temporarily increase DCC emissions due to embodied carbon from building the infrastructure. Operational carbon increases are likely to be minor.

· Efforts would be made in the design and construction to minimise embodied carbon, in alignment with the Zero Carbon policy.

Advantages

· Minor reduction of flood risk in South Dunedin, though does not eliminate it.

Disadvantages

· Potentially results in wasted effort (staff and funds).

· Potentially does not align with SDF adaptation plan, although this would be known before the construction phase and so abortive physical work could still be avoided.

· Diverts staff resource away from other 3 Waters activities.

Option Two – Status Quo – wait for SDF adaptation plan

30 No further investigation of short-term options would be undertaken until completion of the SDF programme and production of the South Dunedin adaptation plan in December 2026.

Impact assessment

Debt

· No debt funding is required for this option.

Rates

· There are no impacts on rates.

Zero carbon

· This option is unlikely to impact city or DCC emissions.

Advantages

· Ensures alignment of any short-term actions with the South Dunedin adaptation plan.

· Keeps staff resource focussed on the SDF programme and adaptation plan and other 3 Waters activities.

· No abortive costs or efforts.

Disadvantages

· Flood risk reduction in South Dunedin takes longer to implement.

NEXT STEPS

31 Staff will carry out the preferred option of the Council.

Signatories

Author:

Jonathan Rowe - Programme Manager, South Dunedin Future

Authoriser:

David Ward - General Manager, 3 Waters and Transition

Scott MacLean - General Manager, Climate and City Growth

Attachments

	Title	Page
⇩a	South Dunedin Stormwater & Wastewater Overview	367
⇩b	Options overview and maps	373
⇩c	Results including result maps for Options 3,6,8	385

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This decision enables democratic local decision making and action by, and on behalf of communities.

This decision promotes the social well-being of communities in the present and for the future.

This decision promotes the economic 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	✔	☐	☐
Future Development Strategy	✔	☐	☐
Integrated Transport Strategy	☐	☐	✔
Parks and Recreation Strategy	☐	☐	✔
Other strategic projects/policies/plans	✔	☐	☐

This paper also contributes to the South Dunedin Future programme.

Māori Impact Statement

There has been no specific consultation on this report, however the South Dunedin Future programme has engaged with mana whenua on a range of implications which has assisted the pathway to develop the medium and long-term options.

Sustainability

There is the potential for negative or positive long-term economic and social implications depending on the decision made as progressing the work may support or detract from the outcomes of the SDF adaptation plan.

Zero carbon

The proposal has the potential to temporarily increase DCC carbon emissions, mostly through embodied carbon from building infrastructure. Opportunities to reduce emissions would be explored in the design and construction phases. There is no material impact on city emissions.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

No funding for the recommended option has been allocated in the draft 9-Year Plan 2025-34 for the short-term options contained in this report. Proceeding with the recommended option would result in a minor improvement in current levels of service for stormwater in South Dunedin.

Financial considerations

The cost of the recommended options is between $1.9M to $29.2M. This is unbudgeted. Rate funding of up to $15.202 million would be required to fund this option. The growth portion of the project is expected to be approximately 9% of total costs.

Significance

The recommendations of this report are considered to be medium in terms of Council’s Significance and Engagement Policy.

Engagement – external

There has been no specific consultation on this report, however the South Dunedin Future programme has engaged with the community and specific community and interest stakeholders which has assisted the pathway to develop the medium and long-term options.

Engagement - internal

There has been internal engagement between 3 Waters and South Dunedin Future. As South Dunedin Future is also considering short-term, no-regrets options solution convergence may be compromised. Further work is therefore necessary to align the efforts on 3 Waters and South Dunedin Future on short-term, no-regrets options.

Risks: Legal / Health and Safety etc.

There are no anticipated legal or other risks associated with the recommendations of this report.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

There are no direct implications for Community Boards.

Council

28 January 2025

Roading and Footpaths - Draft Operating Budget - 9 year plan 2025-34

Department: Transport

EXECUTIVE SUMMARY

1 This report provides:

· a summary of the services provided by Roading and Footpaths

· an overview of the draft operating (opex) budget for year one of the 9 Year Plan for Roading and Footpaths

· an overview of the variations from the year one budget for years two to nine for Roading and Footpaths.

2 This report includes four attachments:

i) Operating budget for 2025/26 (year one) – this details the movements from the 2024/25 year

ii) Operating budget for 2025/26 to 2033/34 (nine years) – this details the projected operating budget throughout the nine year period

iii) Funding Impact Statement for 2025/26 to 2033/34 (nine years) – this summarises the source and application of funding throughout the nine year period

iv) Schedule of Fees and Charges.

3 The report asks the Council to adopt the draft operating budget and draft fees and charges for the purposes of developing the 9 year plan 2025-34 and consulting with the community.

RECOMMENDATIONS

That the Council:

a) Adopts for the purposes of developing the 9 year plan 2025-34 and consulting with the community

i) The draft operating budgets and funding impact statement for Roading and Footpaths as shown/amended at Attachments A, B and C.

ii) The draft 2025/26 fees and charges schedules for Roading and Footpaths as shown/amended at Attachment D.

BACKGROUND

Roading and Footpaths – summary of services

4 Roading and Footpaths includes activities and services related to transport. This team provides for the planning, construction, maintenance, renewals and upgrading of Dunedin’s roads and footpaths. This includes making sure street lighting is adequate, traffic signals and road markings are functioning and clear, and cycleways and footpaths are fit for purpose for Dunedin communities. The transport network needs to meet all relevant legislative requirements.

operating budgets – 2025/26

5 The 2025/26 draft operating budget for Roading and Footpaths is $68.050 million. This is an increase of $2.114 million from the 2024/25 year. The following sections explain the revenue and expenditure changes from the previous year.

Revenue

Rates

6 Rates revenue is $35.340 million. This is an increase of $1.343 million, 4%.

External revenue

7 External revenue is $1.969 million. This is a decrease of $187k from the 2024/25 year as NZTA Waka Kotahi now pay state highway electricity expenses directly. Previously this was paid by DCC and 100% recoverable.

Grants and subsidies – operating

8 Revenue from grants and subsidies (operating) is $10.481 million. This is an increase of $596k from the 2024/25 year and reflects increased expenditure on subsidised maintenance.

Grants and subsidies – capital

9 Revenue from grants and subsidies (capital) is $20.362 million. This is an increase of $6.630 million from the 2024/25 year reflecting co-funding from NZTA Waka Kotahi on approved projects in the capital expenditure:

a) There is an increase of $4.951 million to $6.843 million in capital expenditure subsidies from NZTA Waka Kotahi reflecting the capital expenditure programme. These projects include some Shaping Future Dunedin projects ($5.508 million), Peninsula Connection ($765k) and minor resilience upgrades ($570k).

b) There is an increase of $1.679 million to $13.519 million in renewal subsidies from NZTA Waka Kotahi for operations and pothole prevention.

Internal revenue

10 The total internal revenue is nil. This is a decrease of $262k from 2024/25 reflecting the allocation of Better Off Funding.

Expenditure

Personnel costs

11 Personnel costs are $4.924 million. This is a decrease of $372k from the 2024/25 year reflecting a decrease in staffing across most activities of the Transport group. Further explanation of changes to personnel costs are discussed in detail in the Chief Executive Overview Report that is on the agenda.

Operations and maintenance

12 Operations and maintenance expenditure is $19.212 million. This is an increase of $1.892 million from the 2024/25 year, which includes an increase of $500k for sealed pavement maintenance and $900k for vegetation management.

13 Sealed pavement maintenance has increased to address maintenance emerging faults in the road corridor. There is a Ministerial expectation to have potholes addressed within 24 hours which is reported on quarterly. Sealed pavements, as discussed in the Infrastructure Strategy, range between 60-100 years in terms of asset life. 50% of Dunedin’s sealed pavements are 60 years or older. Even though capital renewals have increased, there is still a high level of maintenance required as a result of underfunding renewals in the past.

14 Vegetation management has been rationalised to fit within budgets. This budget reinstates previous vegetation management regimes to meet Councillor and community expectations. NZTA Waka Kotahi co-funding for vegetation control is only applicable for keeping sightlines clear for safety purposes; mowing wider areas is considered amenity and is 100% DCC funded.

Occupancy costs

15 Occupancy costs are $1.215 million. This is a decrease of $325k from the 2024/25 year due to a reduction in insurance expense of $218k, reflecting a change in how insurance costs are allocated, and a change in procedure by NZTA Waka Kotahi, now paying state highway electricity costs directly $194k. These reductions are partially offset by increases in rates and electricity costs.

Consumables and general

16 Consumables and general costs are $1.567 million. This is a decrease of $125k from the 2024/25 year. This reflects reductions in consultant use across all areas of Transport.

Depreciation

17 Depreciation costs are $32.153 million. This is an increase of $1.927 million from the 2024/25 year reflecting the 30 June 2024 revaluation, an allowance for the 30 June 2025 revaluation and the capital expenditure programme. The valuations reflect assets condition and contract rates.

Interest

18 Interest costs are $6.943 million. This is a decrease of $944k from the 2024/25 year, reflecting a decreased interest rate.

Budget trade-offs

19 This budget has been impacted by increasing costs. Work to find savings in the network maintenance budget continues to offset these increases. The trade-offs relate mainly to network aesthetics. Staff will continue to consider delaying or stopping work that is focussed purely on network aesthetics in order to prioritise network safety.

20 Vegetation management has been included as per previous discussion.

fees and charges – 2025/26

21 Fees and charges for activities in the Roading and Footpaths Group have remained the same for 2025/26. The highest revenue generating charges are set on a cost recovery basis. DCC corridor access fees have been kept at 2024/25 levels to encourage compliance with this activity and to avoid reinspection.

OPERATING BUDGETS – YEARS 2-9

22 The 2025/26 operating budget has been inflation adjusted for years two to nine. New capital and growth expenditure for Roading and Footpaths totals $67.387 million over the 9 year period. A 2% allowance of this capital cost has been factored in for additional maintenance. NZTA Waka Kotahi subsidies change over the 9 year period in accordance with the capital expenditure programme.

23 The draft budget includes an allowance of $37.794 million (uninflated), commencing in the 2030/31 year, for remediation of the historical Kettle Park landfill. The timing reflects the requirement for complex detailed design to be completed and coincides with the completion of the Smooth Hill landfill, which is where the contaminated material from Kettle Park will go. The existing protective geo-bag structures at the toe of the dune face will remain in place until then and will be maintained as required.

Zero carbon

24 This draft operating budget will support DCC and city emissions reduction. Transport accounted for 34% of Dunedin’s emissions in 2021/22.

25 Addressing emissions from transport is a significant part of the Zero Carbon Plan, with completing cycleway networks and improving pedestrian networks key actions for the DCC. The Transport team is leading several Zero Carbon Plan/DCC Emissions Management and Reduction Plan projects. The draft operating and capital budgets for this group include provision for a small number of projects that will further reduce transport emissions.

26 Additional investment options to reduce emissions from the Transport sector are considered in the ‘Zero Carbon Investment Options’ report (under separate cover). Many would add operational expenditure for this group.

Signatories

Author:	Jeanine Benson - Group Manager Transport
Authoriser:	Scott MacLean - General Manager, Climate and City Growth

Attachments

	Title	Page
⇩a	Draft Operating Budget 2025/26 (year 1)	401
⇩b	Draft Operating Budget 2025-34 (9 years)	402
⇩c	Draft Funding Impact Statement 2025-34 (9 years)	403
⇩d	Draft fees and charges 2025/26	404

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	☐	☐	☐
Future Development Strategy	✔	☐	☐
Integrated Transport Strategy	✔	☐	☐
Parks and Recreation Strategy	☐	☐	☐
Other strategic projects/policies/plans	✔	☐	☐

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

Māori Impact Statement

Council budgets impact broadly across all Dunedin communities including Māori. The adoption of Te Taki Haruru – Māori Strategic Framework signals Council’s commitment to mana whenua and to its obligations under the Treaty of Waitangi. Mana whenua and Mataawaka will have the opportunity to engage in the 9 year plan consultation process.

Sustainability

Roading and Footpaths activities take into account the Council’s approach to sustainability.

Zero carbon

The Roading and Footpaths budget will support emissions reduction for the city and the DCC.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for Roading and Footpaths to include in the 9 Year Plan.

Financial considerations

Financial considerations are detailed in this report.

Significance

The draft budgets are included in the development of the 9 Year Plan 2025-34, which is consulted on using the special consultative procedure.

Engagement – external

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

Engagement - internal

Councillors and staff from across council have been involved in 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

Project identified in Community Board plans have been considered in the development of the draft budgets. Community Boards will be consulted on the 9 Year Plan 2025-34.

Council

28 January 2025

Peninsula Connection - Unfunded Sections

Department: Transport

EXECUTIVE SUMMARY

1 The purpose of this report is to present options for funding the Peninsula Connection Road Safety project (Peninsula Connection) between Portobello and Harington Point (the unfunded sections), which are currently incomplete.

2 Construction of the Peninsula Connection started in 2008. Later, due to challenges with securing New Zealand Transport Agency (NZTA) co-funding for the project as a whole, the scope of the project was revised, and the unfunded sections were removed.

3 It was intended that these sections would be completed when funding permitted.

4 In May 2023, Council requested staff prepare a report on the unfunded sections of the Peninsula Connection which was to include updated costs to complete these sections and options for funding.

5 The estimate (at today’s pricing) to complete the unfunded sections of the Peninsula Connection as it was originally envisioned is between $18.5 - $24.5M. Routing the connection on the landward side of the area near Portobello School is less complex from an engineering perspective, has less risk associated with land requirements and is more cost effective. This alignment is represented in the lower end of the costs above.

RECOMMENDATIONS

That the Council:

a) Notes the Peninsula Connection – Unfunded Sections report

b) Notes that there is no co-funding available from NZTA for the unfunded sections

c) Decides a preferred option

d) Notes that if funded, the capital upgrades will require annual operating budget for interest, depreciation, and maintenance to be added to the budget following the completion of each section.

BACKGROUND

6 For many years, concerns have been raised about the safety, resilience, and accessibility of Portobello Road. The road had a high accident rate, was prone to surface flooding through waves overtopping and had limited capacity to accommodate alternative modes of transport.

7 The road is an important road for mana whenua, leading to the Ōtākou Marae. It is also the primary access for residents of the Otago Peninsula and is a busy road for tourists and visitors to Dunedin. The narrow road presented significant challenges to all road users, including tour buses travelling to and from the Royal Albatross Colony at Pukekura – Taiaroa Head.

8 As a result, a project was initiated to enhance the safety for all road users. The DCC’s Long Term Council Community Plan 2002-2012 included $7.35M spread over the years 2003-04 to 2010-11 under the heading “Improve Peninsula Roads”.

9 The components set out in the initial project were:

· Portobello Road pedestrian and cycle facilities (a) Vauxhall to Burns Point $1.2M (b) Rosehill Road to Raynbird Street $3.2M

· Harington Point Road – minor improvements from Portobello to Gills Corner $1.5M

· Harington Point Road from Golf Course Road to Pipikaretu Road – widen for pedestrians and cyclists $1.2M

· Harington Point Road – form footpath from Pipikaretu Road to Harington Point $250,000

10 This project was refined over time to include greater safety of road users and improved resilience to the effects of climate change and became known as the Peninsula Connection Road Safety Project (Peninsula Connection).

11 The initial scope of the project covered the road between the Vauxhall Yacht Club to Pukekura -Taiaroa Head. Feedback from the Otago Peninsula Community Board at the time was that the priority area was the stretch of road between Macandrew Bay and Raynbird Street. It was estimated at the time that the whole project would cost around $20m to complete.

12 Prior to 2008 an application for co-funding was approved by NZTA. Work formally started at MacAndrew Bay in 2008. The NZTA Funding Assistance Rate (FAR) at that time was 62%.

13 In 2011-12, construction had reached the Vauxhall to Doon Street area, but was paused following the withdrawal of co-funding. The funding was eventually reinstated but NZTA had signalled that the FAR may drop below 62% and the funding would only be for part of the project. Construction recommenced in 2014.

14 To help with increasing costs and challenges with securing co-funding for the project in its entirety, the project was split into multiple discrete sections. This enabled a business case to be completed for the areas that would attract the highest benefit-cost-ratio (BCR). This approach gave the greatest chance of securing co-funding. By that time, the total cost of the Peninsula Connection project (in its entirety) was estimated to have increased to $50M.

15 In 2017, DCC ran an open-market tender process for the remaining sections. The budget estimate was $50M however the tendered prices received were significantly higher than estimated (around $80M). As a result, the works were split into separable portions to allow for construction to start, while staff worked with the contractor to “value-engineer” the project to reduce costs as much as possible. At that time, the NZTA FAR had dropped to 57%.

16 Following the value-engineering process, in 2019 DCC submitted a cost scope adjustment to the NZTA Board seeking an increase to the co-funding, reflecting the revised price estimate of $69.5M. The minutes of the NZTA meeting discussing the cost scope adjustment are at Attachment A.

17 The NZTA Board agreed to increase its share of the funding but resolved to cap their funding contribution as a proportion of the total estimated cost of $69.5M. Because of this cap, no further funding would be granted by NZTA for the Peninsula Connection project. The full minute of their meeting is at Attachment A and the minute excerpt with their resolution is shown below at Figure 1.

NZ Transport Agency Board Meeting – Monday, 17 June 2019

10.2 Dunedin City Council’s Peninsula Roading Improvement Activity: Cost Scope Increase and Scope Change

Board paper 2019/06/1401

Brett Gliddon outlined the cost scope increase and scope change details and the preferred option and noted the cap in respect of funding this activity.

Board Members sought assurance that the cap is robust. Management confirmed that it is very robust.

Resolution 14

The NZ Transport Agency Board:

a) Approved funding to Dunedin City Council (DCC) for an increase of $20,444,107 (NZ Transport Agency share $11,199,936) for the Peninsula Roading – Portobello Road/Harington Point Road approved activity, thereby increasing the approved total cost from $49,075,893 to $69,520,000 (noting that the Transport Agency share of the increased cost will be claimed in the National Land Transport Programme (NLTP) 2021-2024 period due to a lack of funding availability from the local road improvements activity class).

b) Approved the scope change and cost scope increase be front loaded by DCC in the National Land Transport Programme (NLTP) 2018-2021, and the NZ Transport Agency share of the increase in cost claimed by DCC in the NLTP 2021-2024 (that is, financial year 2021/22).

c) Approves that NZ Transport Agency’s funding contribution is capped as a proportion of the total project cost estimated at $69.5 million.

Figure 1 – NZTA Board resolution 2019

18 To ensure the project continued, but remained within the capped budget, the scope was reduced and the sections at Portobello and further along Harington Point Road to the Ōtākou Fisheries Wharf (Fisheries Wharf) were removed from the scope.

19 The removal of these sections was reflected in the Annual Plan 2019-2020 document as follows:

Peninsula connection

The updated capital expenditure programme includes an increase of $20,000 million for the peninsula connection project, of which $11,200 million is funded by New Zealand Transport Agency. The overall costs for delivering the total project have increased and a value engineering exercise was undertaken to identify potential savings. This include removing sections of the project past Portobello township, due to the relatively low benefit these sections delivered when assessed as part of the business case.

The revised project budget will deliver the peninsula connection project from the city to Portobello township. Sections still to be completed past this point will need to be funded separately using budget lines, for example the minor improvements budget.

Figure 2 Excerpt from DCC Annual Plan 2019-20

20 The remaining, unfunded sections have not since received any budget allocation and cannot be accommodated from within Transport’s business-as-usual budgets.

21 Council, at its meeting of 22 May 2023 resolved:

Moved (Cr Christine Garey/Cr Andrew Whiley):

That the Council:

a) Request staff to include the unfunded section of the peninsula connection project (from Portobello to Harington Point) into the Regional Land Transport Plan 2024-2034.

b) Request staff prepare a report in time for the 10 year plan 2024-34 on the unfunded sections of the Peninsula Connection, including

i) Updated costs for completion of these sections

ii) Funding options

Division

The Council voted by division

For: Crs Bill Acklin, Sophie Barker, David Benson-Pope, Christine Garey, Kevin

Gilbert, Carmen Houlahan, Marie Laufiso, Cherry Lucas, Mandy Mayhem,

Jim O'Malley, Steve Walker, Brent Weatherall, Andrew Whiley and Mayor

Jules Radich (14).

Against: Cr Lee Vandervis (1).

Abstained: Nil

The division was declared CARRIED by 14 votes to 1

Motion carried (CNL/2023/115)

22 The funding options report was paused following Council’s decision to prepare a 2024/25 Annual Plan and a 2025-34 9 year plan.

23 Increasing the safety for road users and making the road more resilient to the effects of climate change, align with the values of Te Taki Haruru, particularly in the key outcomes of social equity and connectivity, and respond to concerns raised by mana whenua.

24 In a letter to Council dated 29 January 2024, Te Rūnanga o Ōtākou raised concerns that the project remained unfinished. In that letter, it was noted that use of the Ōtākou Marae had increased and that there was ongoing concern about the safety of road users. It was also noted that in previous discussions with DCC, the rūnaka had agreed to a variation to the order the project was to be implemented in, but that the “Ōtākou section” was not to be abandoned.

25 Subsequently, at its meeting of 12 March 2024, Council resolved:

Moved (Cr Christine Garey/Cr Andrew Whiley):

That the Council:

a) Notes the previous resolution on the Peninsula Connection (CNL/2023/115) requesting a report in time for the 10 year plan 2024-34.

b) Requests that the report on the unfunded sections of the Peninsula Connection is now provided by December 2024 in time to be considered in the development of the 9 year plan and the Infrastructure Strategy;

c) Notes that the report would include:

i) Updated costs for the completion of these sections.

ii) An assessment of funding options.

iii) Timings that would allow the work to be progressed in stages

Division

The Council voted by division

For: Crs Bill Acklin, Sophie Barker, David Benson-Pope, Christine Garey, Kevin Gilbert, Marie Laufiso, Cherry Lucas, Mandy Mayhem, Steve Walker, Brent Weatherall, Andrew Whiley and Mayor Jules Radich (12).

Against: Crs Carmen Houlahan and Lee Vandervis (2).

Abstained: Nil

The division was declared CARRIED by 12 votes to 2

Motion carried (CNL/2024/028)

26 A further resolution was passed by Council at its meeting of 28 May 2024. Council resolved:

Moved (Cr Christine Garey/Cr Jim O'Malley):

That the Council:

a) Notes the previous Council resolution requesting a report on the unfunded section of the Peninsula Connection (CNL/2024/028)

b) Requests that the timings in resolution (CNL/2024/028, part 3:3) include consideration of the 3 unfunded stages being progressed early in the 9 year plan 2025-34.

c) Requests that in addition, staff to commence preparatory work necessary to inform the report, such as land tenure investigations and preliminary geotechnical investigations from within existing budgets.

The Council voted by division

For: Crs Bill Acklin, Sophie Barker, Christine Garey, Carmen Houlahan, Marie Laufiso, Cherry Lucas, Mandy Mayhem, Jim O'Malley, Steve Walker, Brent Weatherall and Mayor Jules Radich (11).

Against: Cr Lee Vandervis (1).

Abstained: Nil

The division was declared CARRIED by 11 votes to 1

Motion carried (CNL/2024/001)

DISCUSSION

27 Giving effect to Council’s resolution of 22 May 2023, the unfunded sections of the Peninsula Connection Road Safety Project were added to the draft Regional Land Transport Plan 2024-2034 submission, with pre-implementation costs being added to the 2024-27 period, with construction costs reflected after 2027.

28 The Peninsula Connection project does not align with the Government Policy Statement for Land Transport 2024, so will not receive any co-funding. It is also unclear whether the previously resolved NZTA Board’s cap on the estimated total project cost can or will be reviewed in the future.

29 Staff responded to Council’s resolution of 28 May 2024 and commenced preparatory work necessary to inform this report (e.g. land tenure investigations and geotechnical investigations) for each of the sections as shown in Figure 1 and at Attachment B, as follows;

Figure 1 – Unfunded Sections of the Peninsula Connection 9B, 13 and 14

i) Section 9B (Portobello to Weir Road). This section has the largest out of road corridor requirements. This section, due to its complexity, has never been fully designed. Two concepts for this section have been considered, one seaward side, and the other landward side. The landward side option has less land purchasing requirements, engineering complexity and is more cost effective. Staff have been in dialogue with the Ministry of Education over land requirements at this location. Initial geotechnical assessments suggest that standard roading fill materials to prepare the basecourse would be required. The seaward side option requires retaining structures and is a much more complex route to complete.

ii) Section 13 (Tidewater Drive to Ellison Road): This section is largely in the road corridor and requires a shoulder to be added to the existing road corridor with separators to protect shared path users’ safety. From a geotechnical perspective it is not envisaged that any changes to the existing ground or pavement are made (given the construction if for cyclists and walkers only), and standard roading materials would be used. Land purchase represents less than 0.5% of the overall cost considerations.

iii) Section 14 (Ellison Road to the Ōtākou Fisheries Wharf): The engineering complexity through this location lies with the seawall face which would use the geotextile filler fabric that has been successful from a maintainability perspective in many other sections of the Peninsula Connection. Modification for drainage would be made to existing retaining walls and supplying and placing bulk fill is about 11% of the overall cost consideration. This section does need consideration around pole replacements and seawall archaeology. However, once again the heightening and increase in size of the road width to accommodate a shared path does not present any complex geotechnical uncertainties.

30 Staff have considered how the project could be delivered in stages and propose three distinct sections.

· Ellison Road to the Ōtākou Fisheries Wharf (Section 14) - This section is in greatest need of safety and resilience improvements and is the highest priority. This section is approximately 700 meters and is estimated to cost $8M. Once constructed, it is expected to have an operational cost of $722k per annum to cover interest, depreciation and maintenance.

· Tidewater Drive to Ellison Road (Section 13) - This section is approximately 3.6km and is estimated to cost $6.9M. Once constructed, it is expected to have an operational cost of $626k per annum to cover interest, depreciation and maintenance.

· Portobello to Weir Road (Section 9B) – This is the section of road from the end of the completed section at Portobello to Weir Road. This section is approximately 2km and is estimated to cost $3.6M (landward side) and $9.6M (seaward side). It is proposed that this be the last section as there are some land tenure transactions that require completion. Discussions have commenced to resolve the land tenure matters and will be progressed in parallel to any construction of the first two stages. Once constructed, the landward side is expected to have an operational cost of $329k per annum to cover interest, depreciation and maintenance. Once constructed, the seaward side is expected to have an operational cost of $869k to cover interest, depreciation, and maintenance.

31 Typically, for large construction projects, it is more cost effective to tender a continuous package of work. However, if Council decides to fund the remaining sections, it may be preferable from a budget phasing perspective, to tender individual sections and phase the project over a number of years, though cost escalation factors will need to be taken into account.

OPTIONS

32 Council must decide whether to include funding or not, in the 2025-34 9 year plan for the remaining sections of the Peninsula Road Safety project.

33 No allowance has been made in Transport’s capital budget for any of the unfunded sections. With the focus on renewals, there is little scope to defer other projects requiring new capital to accommodate the unfunded sections. It is likely that additional capital would be required to be added to the budget.

34 If Council decides to fund an individual section or sections of the project, staff consider the stretch between Ellison Road to the Ōtākou Fisheries Wharf to be the priority (Section 14).

35 If Council funds any or all of the remaining sections, the corresponding operational budget will need to be added in relevant years of the budget. To note, this increases year-on-year as maintenance requirements increase.

36 If Council wishes to progress completion of the unfunded sections early in the 2025-34 9 year plan, staff propose undertaking the planning and detailed design for the stretch between Ellison Road to the Ōtākou Fisheries Wharf stage in Year 1, with construction starting in Year 2.

37 Staff are confident that the construction market has capacity to deliver all unfunded sections over the coming years.

38 If Council decides not to fund any of the remaining sections, none of the advantages, or disadvantages described in the report and below will be realised.

39 If Council decide to fund any, or all, of the sections discussed, staff with work with the 3W team to capitalise on any work that can be completed at the same time to reduce cost and disruption.

Option One – Fund the remaining sections of the Peninsula Road Safety Connection project

Impact assessment

40 This option has an impact on debt and ongoing operational budgets, noting that the maintenance costs are estimated at this stage.

41 It is proposed that planning and detailed design is completed in 2025/26 and construction starts on the Ellison Road to the Ōtākou Fisheries Wharf stage in 2026/27.

Debt

· This option would require an increase in debt of $18.5M (total over 9 years), $24.5M if the seaward option were preferred.

· If started early in the 9 year plan, debt ($8M) would not need to be raised until Year 2, starting with the Ellison Road to the Ōtākou Fisheries Wharf stage.

· Depending on when Council wants the remaining stages to be started, further debt would need to be raised of $6.9M for the stretch between Tidewater Drive to Ellison Road, followed by Portobello to Weir Road, which has two options, one estimated to cost $3.6M (landward option), the other $9.6M (seaward option).

Rates

· When completed, rates funding of $1.618 million annually would be required to fund this option, this includes maintenance of $6k (net of subsidy), interest of $925k and depreciation of $687k (net of renewal subsidy).

Zero carbon

· This option aligns with the Zero Carbon Plan action area of ‘develop convenient and attractive cycling and walking networks and public transport services’ and may support city emissions reduction. The project would enable active modes of transport (walking/cycling) beyond Portobello, but it does not align strongly with Zero Carbon 9 year plan investment option criteria and has not been recommended as a priority from an emissions reduction perspective (refer ‘Zero Carbon Investment Options’ report under separate cover). DCC emissions may increase temporarily with this option while works are carried out, mitigated by the Zero Carbon Policy.

Advantages

· Council fulfils its previous commitment to mana whenua and the community to complete the Peninsula Road Safety project.

· Road safety in that area is improved for all road users.

· The transport network becomes more resilient to the effects of climate change.

Disadvantages

· There is no allowance on the draft budgets to complete the Peninsula Road Safety project. If Council wishes to complete all or any of the remaining sections, additional capital funding would need to be added to the budget.

· Once constructed, incurs ongoing annual operating costs which require budget to be added.

Option Two – Fund individual sections of the Peninsula Road Safety project

Impact assessment

42 This option has an impact on debt and ongoing operational budgets. If funded individually, staff consider the stretch between Ellison Road and Ōtākou Fisheries Wharf to be the priority.

Debt

· Ellison Road to Ōtākou Fisheries Wharf (Section 14) would require an increase in debt of $8M.

· Tidewater Drive to Ellison Road (Section 13) would require an increase in debt of $6.9M.

· Portobello to Weir Road (Section 9B) would require an increase in debt of $3.6M for the landward option and $9.6M for the seaward option.

Rates

· Ellison Road to Ōtākou Fisheries Wharf (Section 14) - when completed, rates funding of $698k annually would be required to fund this option, this includes maintenance of $1k (net of subsidy), interest of $400k and depreciation of $297k (net of renewal subsidy).

· Tidewater Drive to Ellison Road (Section 13) - when completed, rates funding of $604k annually would be required to fund this option, this includes maintenance of $3k (net of subsidy), interest of $345k and depreciation of $256k (net of renewal subsidy).

· Portobello to Weir Road (Section 9B) - when completed, rates funding of $316k annually would be required to fund the landward option, this includes maintenance of $2k (net of subsidy), interest of $180k and depreciation of $134k (net of renewal subsidy). Rates funding of $838k annually would be required to fund the seaward option, this includes maintenance of $2k (net of subsidy), interest of $480k and depreciation of $384k (net of renewal subsidy).

Zero carbon

Advantages

· Council makes progress towards completing the remaining sections of the Peninsula Road Safety project.

· Road safety in that area is improved for all road users.

· The transport network becomes more resilient to the effects of climate change.

Disadvantages

· Requires Capital funding to be added to the budget.

· Once constructed, incurs ongoing annual operating costs which require budget to be added.

Option Three – Do not fund any work on the remaining sections of the Peninsula Road Safety project

Impact assessment

43 This option has no impact on debt and ongoing operational budgets.

Debt

· No debt funding is required for this option.

Rates

· There are no impacts on rates from this option.

Zero carbon

· This option is not likely to materially impact city emissions or DCC emissions, but it precludes possible emission reduction benefits from being realised.

Advantages

· No additional budget is required.

Disadvantages

· Does not progress previous commitments to completing the project.

· Road safety in that area is not improved for road users.

· The transport network is not made more resilient to the effects of climate change.

NEXT STEPS

44 If Council decides to include funding to complete the Peninsula Road Safety project in the draft budgets, it will be referenced in the 2025-34 9 year plan consultation document.

Signatories

Author:	Jeanine Benson - Group Manager Transport
Authoriser:	Scott MacLean - General Manager, Climate and City Growth

Attachments

	Title	Page
⇩a	NZTA Board Meeting Minutes June 2019 Cost Scope Adjustment Peninsula Connection	418
⇩b	Peninsula Connection Map	422

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This decision promotes the social well-being of communities in the present and for the future.

This decision promotes the economic well-being of communities in the present and for the future.

This decision promotes the 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	☐	☐	✔
Future Development Strategy	☐	☐	✔
Integrated Transport Strategy	✔	☐	☐
Parks and Recreation Strategy	☐	☐	✔
Other strategic projects/policies/plans	✔	☐	☐

The social wellbeing strategy calls for connecting people to places with safe, affordable and user-friendly transport options.

The economic development strategy has a theme of connecting destinations by providing high quality infrastructure beyond the city centre.

The environmental strategy has a goal of contributing to resilience and a reduction in carbon emissions.

The integrated transport strategy calls for a socially inclusive transport system.

Improving options for walking and cycling contributes to the aims of the Zero Carbon Plan.

Māori Impact Statement

Mana whenua have written to Council directly expressing concern over the remaining sections of the Peninsula Connection. The road is an important road for mana whenua, leading to the Ōtākou Marae. Increasing the safety for road users and making the road more resilient to the effects of climate change, align with the values of Te Taki Haruru, particularly in the key outcomes of social equity and connectivity.

Sustainability

The completion of the unfunded section of the Peninsula connection contributes to the economic prosperity of the area and provides a sustainable transport corridor.

Zero carbon

The Zero Carbon Plan sets out the importance of enabling active transport for city emissions reduction. The options section in this report identifies how each option may impact DCC and city emissions.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

If Council decides to complete any or all of the unfunded sections of the Peninsula Connection Road Safety project then it will require budget to be added to the 2025-34 9 year plan.

Financial considerations

There is currently no budget in the draft 2025-34 9 year plan to complete any of the Peninsula Connection Road Safety project. The financial considerations of each option is discussed in the body of the report.

Significance

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

Engagement – external

There has been extensive external engagement on the Peninsula Connection Road Safety project over the past few years. Recently staff have engaged with the Ministry of Education regarding land tenure matters for one of the remaining sections.

Engagement - internal

Staff have engaged with teams from right across the organisation throughout the entirety of the project to date.

Risks: Legal / Health and Safety etc.

There are no legal risks identified. Improvements to the road will result in a safer road for all road users.

Conflict of Interest

No conflicts identified.

Community Boards

The Otago Peninsula Community Board will be interested in this decision.

Council

28 January 2025

Waste Minimisation - Draft Operating Budget 9 year plan 2025-34

Department: Waste and Environmental Solutions

EXECUTIVE SUMMARY

1 This report provides:

· a summary of the services provided by Waste Minimisation

· an overview of the draft operating (opex) budget for year one of the 9 year plan for Waste Minimisation

· an overview of the variations from the year one budget for years two to nine for Waste Minimisation.

2 This report includes four attachments:

i. Operating budget for 2025/26 (year one) – this details the movements from the 2024/25 year

ii. Operating budget for 2025/26 to 2033/34 (nine years) – this details the projected operating budget throughout the nine year period

iii. Funding Impact Statement for 2025/26 to 2033/34 (nine years) – this summarises the source and application of funding throughout the nine year period

iv. Schedule of Fees and Charges.

3 The report asks the Council to adopt the draft operating budget and draft fees and charges for the purposes of developing the 9 year plan 2025-34 and consulting with the community.

RECOMMENDATIONS

That the Council:

a) Adopts for the purposes of developing the 9 year plan 2025-34 and consulting with the community

i) The draft operating budgets and funding impact statement for Waste Minimisation as shown/amended at Attachments A, B and C.

ii) The draft 2025/26 fees and charges schedules for Waste Minimisation as shown/amended at Attachment D.

b) Consider the use of the Waste Minimisation Reserve to fund the estimated $1.713 million temporary costs of transporting organic and co-mingled kerbside waste to the processing plant in Timaru until the processing facilities at Green Island begin to become operational in stages beginning late in 2025/26.

BACKGROUND

Waste Minimisation – summary of services

4 Waste Minimisation includes activities and services related to waste and environmental solutions, for example:

· Kerbside collection.

· Resource recovery.

· Landfill (one proposed, one active and five closed).

· Education and support for waste minimisation.

5 Effective waste and recycling collection services are important to protect public health, minimise impacts on the environment and promote minimisation.

operating budgets – 2025/26

6 The 2025/26 draft operating budget for Waste Minimisation is $38.136 million. This is an increase of $5.265 million from the 2024/25 year. The following sections explain the revenue the expenditure changes from the previous year.

Revenue

Rates

7 Rates revenue is $19.481 million. This is an increase of $3.527 million from the 2024/25 year due to an increase of $3.802 million in the kerbside collection rate, estimated to increase from $301 to $380, caused by an increase in the cost of providing the service.

8 An option to limit the increase in the kerbside collection rate from $301 to $343 is discussed later in this report.

9 The increase in the kerbside collection rate is partly offset by a decrease in general rates revenue of $276k.

External revenue

10 Total external revenue is $14.523 million. This is a decrease of $517k from the 2024/25 year.

11 External revenue at the Green Island landfill has decreased by $918k. This combines a reduction of $3.135 million kerbside collection revenue, now classified as internal revenue and an increase in general waste revenue of $2.217 million. The increase in general waste revenue reflects an expected increase in material arriving at the landfill following the closure of a privately owned transfer station, coupled with an increase in the disposal fee from $243.48/tonne to $278.26/tonne (excluding GST).

12 Waste strategy revenue has increased $392k due to the additional MfE waste levy collected from users of the landfill. The waste levy will increase from $60/tonne to $65/tonne (excluding GST) for 2025/26. This levy revenue is not controlled by DCC and is subject to MfE allocations, it is independent to expenditure.

Internal revenue

13 Total internal revenue is $5.518 million. This is an increase of $3.641 million from 2024/25 due to kerbside collection revenue now accounted for as internal revenue (offset by internal expenditure in the kerbside collection budget).

Expenditure

Personnel costs

14 Personnel costs are $1.253 million. This is a decrease of $181k from the 2024/25 year. Personnel costs associated with the rollout of the new kerbside collection system are not required in 2025/26.

Operations and maintenance

15 Operations and maintenance expenditure is $22.086 million. This is a decrease of $395k from the 2024/25 year.

16 Landfill disposal costs for Kerbside Recycling and Refuse Collection reduce by $3.609 million, these are now categorised as internal costs.

17 ETS costs have a projected decrease of $642k, due to the expected Unique Emissions Factor (the correction factor used in calculating ETS costs, representing the efficiency of landfill gas collection and destruction) reducing from 0.65 to 0.48, resulting in a reduction of Council ETS surrender obligation from 37,800 tonnes in 2024/25 to 29,700 tonnes.

18 It is planned to stop the provision of rural community skip days, resulting in a budgeted cost saving of $171k.

19 The Kerbside Recycling and Refuse Collection contract cost has increased $1.907 million, from $8.913 million to $10.820 million, not including the landfill disposal costs (this is now an internal cost). Kerbside collection services under the new contract began on 1 July 2023, and the annual contract cost fluctuations process for 2024/25 was not completed until after the 2024/25 operational budgets had been adopted; therefore, this increase reflects the results of the annual contract cost fluctuations process for both 2024/25 and 2025/26 between Council and the contractor and covers all service level components of the kerbside and refuse collection contract.

20 The cost of processing kerbside material has increased $1.713 million. This cost is for processing mixed recyclables and organic waste at Timaru until the Green Island Resource Recovery Park becomes operational in stages beginning late in 2025/26. An option to fund this differently is discussed later in the report.

21 The fixed component of the landfill maintenance contract increased by $200k ($1.883 million to $2.083 million) reflecting a CPI increase, estimated at 10%. The variable component of the contract is increased by $373k ($1.744 million to $2.117 million), reflecting the expected increased volume of material entering the landfill.

22 There is an additional $50k of monitoring costs for the Smooth Hill landfill site, as required by the consent. The budget also provides for pest and environmental maintenance cost increases of $20k.

Consumables and general

23 Consumables and general costs are $4.381 million. This is an increase of $100k from the 2024/25 year.

24 Waste levy costs increased $505k due mainly to the increase of the Waste Levy, from $60 to $65 per tonne coupled with a budgeted increase in tonnage from 58,198 tonnes to 64,488 tonnes.

25 Legal fees reduced $120k. Legal advice is required on contract documentation/ variations/disputes, including the Green Island Resource Recovery Park construction contracts.

26 Consultant costs reduced $290k. Budgeted expenditure is for specialist advice, including Green Island landfill flyover for remaining volume assessments, landfill consent compliance and Unique Emissions Factor audits.

Internal charges

27 Internal charge costs are $5.059 million. This is an increase of $3.812 million from the 2024/25 year.

28 As discussed above, the cost of disposing kerbside refuse to the landfill is now an internal cost, and is estimated at $3.788 million, an increase of $179k from the 2024/25 year. This is based on an average refuse bin weight of 10 kg for 52,632 households, collected every two weeks and charged the disposal fee of $278.26/tonne (excluding GST).

Depreciation

29 Depreciation costs are $1.791 million. This is an increase of $599k from the 2024/25 year reflecting capital expenditure at the Green Island landfill and Resource Recovery Park.

Interest

30 Interest costs are $3.176 million This is an increase of $1.297 million from the 2024/25 year reflecting the level of planned capital expenditure.

Budget tradeoffs

31 The 2025/26 budget removes the provision of rural community skip days resulting in a budgeted cost saving of $171k. There has been low engagement with the rural skip days over recent years, with reduced quantities of material being collected. This, coupled with the introduction of the kerbside collection programme means this service is not efficient and is no longer required.

fees and charges – 2025/26

32 Changes to fees and charges for the Waste Minimisation Group are due to an increase in the waste disposal levy from $60 to $65 (excluding GST) per tonne from 1 July 2025. In addition, the estimated unit cost for ETS carbon credits has increased from $65 to $79 (excluding GST).

33 The charge for disposal of general solid waste increases 14.3%, from $243.48 tonne to $278.26/tonne (excluding GST).

34 An error was discovered in the fees for clean fill, clay, and rubble material at the two rural Transfer Stations. These have been adjusted to align with the fees at the Green Island landfill.

35 Fees and charges for activities that do not incur waste disposal levy or Emissions Trading Scheme charges remain largely unchanged, except for cost increases in supply or administration costs for some items supplied by third parties.

OPERATING BUDGETS – YEARS 2-9

36 The 2025/26 operating budget has been inflation adjusted for years two to nine. Explanations of any further variations are explained below.

· Smooth Hill landfill - there will be a significant increase in ETS costs associated with Smooth Hill landfill in the first three years following opening as an effective gas collection and destruction system cannot be established on site until sufficient waste has been received. This will be recovered from external revenue (via fees and charges) for Smooth Hill landfill.

· In line with projections, the Smooth Hill landfill is expected to incur an operating loss from opening in 2029/30. Although this loss will continue for the remainder of the 9 year plan period, it decreases from $7.8 million in 2029/30 to $1.1 million in 2032/33 reflecting gate charge increases. Following installation of the gas collection and destruction system, ETS costs reduce, improving the operating loss in 2033/34 to $58k.

· Green Island Transfer Station – changes in the operating budget for the Green Island Transfer Station reflect the establishment and operation of the Resource Recovery Park (Organics Processing Facility, Material Recovery Facility, Bulk Waste Transfer Station, and Construction and Demolition Sorting Facility).

· The current projection includes additional tonnage from the remediation of the historical Kettle Park landfill. This includes internal revenue of $23 million, starting in 2030/31 (year 6), revenue generated is approximately $5.8 million per year.

· The projections and assumptions relating to the Smooth Hill landfill and Green Island Transfer station are still being worked through. Further analysis will be completed over the coming months and an update to the years 2-9 operating budgets will be incorporated into the budget in time for council deliberations in May 2025.

· The kerbside collection costs have been increased in line with the projected landfill gate charges over the 9 year period, as calculated under the assumptions for Smooth Hill. The current scenario assumes the kerbside rate will increase from $17.410 million in year 1 (2025/26) to $21.249 million in year 9 (2033/34).

Zero carbon

37 The draft operating budget for this group will support DCC and city emissions reduction. Waste to landfill accounts for a significant proportion of the DCC’s emissions footprint (43.7% of total DCC emissions in 2023/24) and is significant at the city scale. The Waste Minimisation team are the lead team for a range of Zero Carbon Plan/DCC Emissions Management and Reduction Plan projects.

38 The draft operating and capital budgets include provision for projects that will further reduce waste to landfill. This investment, along with alignment with the Zero Carbon Policy, will reduce emissions from operations (and city waste emissions) over the term of the 9 year plan.

waste levy – Waste minimisation reserve fund

39 The Waste Minimisation Reserve can be used to fund activity that encourages waste minimisation by increasing the amount of waste that is diverted away from Landfill. Allowable activity is defined in Council’s Waste Minimisation and Management Plan, which is aligned with the New Zealand Waste Strategy.

40 The balance of the Waste Minimisation reserve fund as at 30 June 2024 was $302k. In the 2024/25 year it is estimated the reserve fund balance will increase by a further $1.060 million, followed by a further increase in 2025/26 of $1.386 million, resulting in a forecasted reserve fund balance of $2.748 million as at June 2026.

41 During the 2023/24 financial year the fund contributed $2.222 million towards the capital cost of the new organics receivables facility at Green Island.

42 The Council may wish to consider using the reserve to fund the short-term costs of transporting organic and co-mingled kerbside waste to the processing facility in Timaru until the Green Island processing facilities begin to become operational in stages beginning late in 2025/26. As noted in paragraph 20, the projected cost of transportation is $1.713 million. The fund balance is sufficient to offset these costs. If council was to consider this option, the projected fund balance at June 2026 would be $1.035 million.

options

Option One – Use the Waste Minimisation Reserve to fund transport to Timaru

43 That Council approves the use of the Waste Minimisation Reserve to fund the estimated $1.713 million temporary cost of transporting organic and co-mingled kerbside waste to the processing plant in Timaru, until the processing facilities at Green Island begin to become operational in stages beginning late in 2025/26.

Advantages

· This option avoids a short-term increase in the targeted rate for kerbside collections.

· The budgeted targeted rate for kerbside collections reduces from $380.40 to $343.40.

· The use of the Waste Minimisation Reserve to temporarily fund transport to Timaru (as an alternative to landfilling) aligns with Objective 2 of Councils Waste Management and Minimisation Plan (WMMP) 2020, and Targets 2 and 3 of the Draft WMMP 2025.

Disadvantages

· The funding available from the Waste Minimisation Reserve for additional waste reduction initiatives or projects will be reduced.

Option Two – Do not use the Waste Minimisation Reserve to fund transport to Timaru

44 That Council does not approve the use of the Waste Minimisation Reserve to fund the temporary cost of transporting organic and co-mingled kerbside waste to the processing plant in Timaru, until the processing facilities at Green Island begin to become operational in stages beginning late in 2025/26.

Advantages

· The full Waste Levy Reserve will remain available for additional waste reduction initiatives or projects.

Disadvantages

· There will be a significant short-term increase in the targeted rate for kerbside collections.

· The budgeted targeted rate for kerbside collections increases from $301.00 to $380.00.

Signatories

Author:	Chris Henderson - Group Manager Waste and Environmental Solutions
Authoriser:	Scott MacLean - General Manager, Climate and City Growth

Attachments

	Title	Page
⇩a	Draft Operating Budget 2025/26 (year 1)	432
⇩b	Draft Operating Budget 2025-34 (9 years)	433
⇩c	Draft Funding Impact Statement 2025-34 (9 years)	434
⇩d	Draft fees and charges 2025/26	435

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	☐	☐	☐
Future Development Strategy	✔	☐	☐
Integrated Transport Strategy	☐	☐	☐
Parks and Recreation Strategy	☐	☐	☐
Other strategic projects/policies/plans	✔	☐	☐

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

Māori Impact Statement

Council budgets impact broadly across all Dunedin communities including Māori. The adoption of Te Taki Haruru – Māori Strategic Framework signals Council’s commitment to mana whenua and to its obligations under the Treaty of Waitangi. Mana whenua and Mataawaka will have the opportunity to engage in the 9 year plan consultation process.

Sustainability

Waste Minimisation activities take into account the Council’s approach to sustainability.

Zero carbon

The draft operating budget for this group will support DCC and city emissions reduction.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for Waste Minimisation to include in the 9 year plan.

Financial considerations

Financial considerations are detailed in this report.

Significance

The draft budgets are included in the development of the 9 year plan 2025-34, which is consulted on using the special consultative procedure.

Engagement – external

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

Engagement - internal

Councillors and staff from across council have been involved in 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

Project identified in Community Board plans have been considered in the development of the draft budgets. Community Boards will be consulted on the 9 year plan 2025-34.

Council

28 January 2025

City Properties - Draft Operating Budget 9 year plan 2025-34

Department: Property

EXECUTIVE SUMMARY

1 This report provides:

· a summary of the services provided by City Properties

· an overview of the draft operating (opex) budget for year one of the 9 year plan for City Properties

· an overview of the variations from the year one budget for years two to nine for City Properties.

2 This report includes four attachments:

i) Operating budget for 2025/26 (year one) – this details the movements from the 2024-25 year

ii) Operating budget for 2025/26 to 2033/34 (nine years) – this details the projected operating budget throughout the nine year period

iii) Funding Impact Statement for 2025/26 to 2033/34 (nine years) – this summarises the source and application of funding throughout the nine year period

iv) Schedule of Fees and Charges.

3 The report asks the Council to adopt the draft operating budget and draft fees and charges for the purposes of developing the 9 year plan 2025-34 and consulting with the community.

RECOMMENDATIONS

That the Council:

a) Adopts for the purposes of developing the 9 year plan 2025-34 and consulting with the community

i) The draft operating budgets and funding impact statement for City Properties as shown/amended at Attachments A, B and C.

ii) The draft 2025/26 fees and charges schedules for City Properties as shown/amended at Attachment D.

BACKGROUND

City Properties – summary of services

4 The 2025/26 draft operating budget for City Properties is $50.479 million.

5 City Properties includes activities and services related to:

· Tenancy management

· Property management

· Reactive and preventive maintenance

· Land and lease management

· Property, capital delivery

· Parking operations (meter and off-street parking)

6 City Properties supports all the Council’s activities and services and is essential to the Council’s influence in economic development, arts and culture, community housing, and libraries and museums.

operating budgets – 2025/26

7 The 2025/26 draft operating budget for City Properties is $50.478 million. This is an increase of $957k from the 2024/25 year. The following sections explain the revenue and expenditure changes from the previous year.

Revenue

Rates

8 Rates revenue is $13.133 million. This is a decrease of $1.649 million from the 2024/25 year, mainly due to an increase in surplus from Parking Operations, offsetting the rates requirements.

External revenue

9 The total external revenue is $28.438 million This is an increase of $2.616 million from the 2024/25 year.

10 Parking operations revenue has increased $1.053 million due partly to improved data about parking occupancy rates as well as increases to some parking charges. The addition of a new carpark facility in Gt King St has also increased revenue by $252k.

11 Holding property portfolio rental and opex recoveries revenue has increased $619k, including $245k recovery of waste levy costs at the Milners Road property at North Taieri which was previously unbudgeted.

12 Housing revenue has increased $380k, reflecting a proposed rent increase of 3.3%. This increase equates to weekly rent increases ranging from $5 for a single flat ($142 to $147), to $8 for a two bedroom unit ($253 to $261).

13 Investment property revenue has increased $318k because several new and renewed leases have been negotiated.

Development contributions and vested assets

14 The total revenue from development contributions and vested assets is $295k. This is the same as the 2024/25 year.

Internal revenue

15 The total internal revenue is $8.382 million. This is an increase of $327k from 2024/25 mainly due to an increase in internal property rental charges.

Expenditure

Personnel costs

16 Personnel costs are $4.165 million. This is a decrease of $7k from the 2024/25 year. An explanation of changes to personnel costs are discussed in detail in the Chief Executive Overview Report that is on the agenda.

Operations and maintenance

17 Operations and maintenance expenditure is $7.903 million. This is a decrease of $461k from the 2024/25 year.

18 Property management valuation services budget has reduced by $248k, as 2025/26 is not a valuation year.

19 In the Operational Property portfolio, public toilet maintenance is increased $134k, offset by a $100k reduction in the reactive maintenance portion of the Municipal Chambers exterior upgrade project (stone pointing work).

20 Edgar stadium roofing and ventilation improvement costs have reduced from $200k to $100k. This amount reflects the forecasted costs for the work and is in additional to $300k in the draft capital budget.

21 A Building Warrant of Fitness is required under the Building Act 2007 and ensures life safety systems (systems that protect life in the event of a fire) are maintained to a standard. The number of specified systems being maintained in DCC properties has increased because of property purchases, and the cost of remedial work to maintain these systems has also increased. The draft operating and maintenance budget has included an allowance for these increases.

Occupancy costs

22 Occupancy costs are $12.085 million This is an increase of $493k from the 2024/25 year.

23 Rates expenditure is increased $516k across all portfolios. This is partially offset by a $342k reduction in rent and electricity costs for Burns House due to the expected completion of the Civic Centre upgrade project resulting in the end of the Burns house leases.

24 Electricity and gas costs (excluding Burns House) have increased $244k.

Consumables and general

25 Consumables and general costs are $1.876 million. This is an increase of $868k from the 2024/25 year.

26 Consultants’ fees for seismic assessments and asbestos management (a legislative requirement) have increased $480k.

27 The $245k cost of the Ministry for the Environment waste levy relating the property at Milners Road, North Taieri, was previously unbudgeted. These costs are recovered from the property tenant (see revenue comment).

28 Telecommunications costs have increased $71k, mainly due to additional connection costs relating to additional CCTV sites in the central city.

29 Software licence fees have increased $60k for the new lease management software.

30 Legal fees which largely relate to contract review costs and costs associated with property sales and acquisitions have increased $40k.

Grants and subsidies

31 Grants and subsidy costs are $464k. This is an increase of $293k from the 2024/25 year due to the following changes:

a) A $100k Regent Theatre ticketing grant previously included in the Community Partnerships budget.

b) A $100k Regent Theatre property arrangement grant previously included in the Community Partnerships budget.

c) A $86k Otago Youth Wellness Trust property arrangement grant previously included in the Community Partnerships budget.

32 Note the quantum of these grants have remained for the 2024/25 year.

Internal charges

33 Internal charge costs are $3.907 million. This is an increase of $65k from the 2024/25 year and relates to increased internal corporate and fleet charges.

Depreciation

34 Depreciation costs are $15.066. This is a decrease of $14k from the 2024/25 year.

35 Depreciation costs for the non-housing portfolios has increased $1.157 million, reflecting the latest property revaluations and the proposed capital expenditure programme.

36 Offsetting this increase, Housing depreciation has reduced $1.171 million, mainly due to the latest property revaluation which saw a significant reduction in residential property values since the previous revaluation three years earlier.

Interest

37 Interest costs are $5.012 million. This is a decrease of $280k from the 2024/25 year which reflects lower interest rates and a lower expected debt draw-down requirement to fund capital expenditure.

Budget tradeoffs

38 The draft operating budget includes $480k to begin work to meet our legislated requirements for seismic assessments, and Asbestos Management plans. The work is required under Earthquake Prone Building Amendment Act 2016 (part of the Building Act 2007) and Health and Safety at Work (Asbestos) Regulations 2016. Remediation work as a result of assessments is not included in draft budgets.

39 The rising cost of energy will impact Property Service portfolios. The draft operating budget includes an allowance for forecasted cost increases, however any changes above what is currently forecast are not included in draft budgets. Staff are working with procurement to ensure energy purchasing opportunities are optimised and energy saving initiatives are implemented (e.g. LED lighting replacement and energy system renewals).

40 By increasing the level of preventative maintenance and shifting simple maintenance tasks from an outsourced model to a mixed (inhouse and outsourced) model, Property Services have decreased the amount of ‘reactive’ maintenance by $480k per. Reduced reactive maintenance expenditure is partially offsetting the anticipated cost increases in other areas.

41 As maintenance service agreements have renewed over the past twelve months, Property Services have worked to rationalise the work being carried out to minimise the impact of cost increases. This has included areas such as lawn mowing, window washing, mechanical edging and exterior cleaning.

fees and charges – 2025/26

DCC Community Housing

42 The budget for Community Housing in year one of the draft 9 Year Plan 2025-34 City Properties operating budget is based on a 3.3% ($5 - $8 per week) increase in rent.

43 The proposed 3.3% increase aligns with Council’s Revenue and Financing Policy of funding this activity 10% from rates and 90% from fees and charges. The rent increase covers all increased costs to operate the Community Housing portfolio and aligns with inflation (CPI) in the June 2024 quarter.

44 The Community Housing portfolio gets valued every three years. It was valued in 2021 at $75.46m and most recently in 2024 at $59.97m. The value of the Community Housing portfolio determines the depreciation which is an operating expense.

45 The 2024 valuation and the subsequent calculation of depreciation has resulted in the depreciation expense decreasing by 30% ($1.17m), and this has positively impacted compliance with the Revenue and Financing Policy.

Parking Operations

46 In 2023, parking zones were simplified into an Inner and Outer Zone with adjusted fees, and in 2024 the introduction of technology like License Plate Recognition (LPR) and the Parking Meter Insights Dashboard has improved overall parking management.

47 In 2025/26, the proposed parking fees reflect an ongoing effort to create consistency across zones and parking types, and to charge at an appropriate rate.

48 The on-street, Outer Zone parking, hourly rate is proposed to increase from $1.50 to $2.00. On-street, Inner Zone parking, hourly rate has remained the same.

49 Off-street parking fees, particularly for areas like Filleul Street, Railway Station North and South, and Frederick Street, are proposed to increase by $0.50 per hour.

50 The 2025/26 proposed parking fees also include adjustments to Inner Zone Leased Parking and Parking Permits. These increases reflect an increase in demand for parking spaces and costs to maintain car park buildings and surfaces.

51 Leased parking fees are proposed to rise by $5 per week.

52 Parking permits are used mostly by tradespeople to park for half/full days in CBD metered car parks. Permit rates are proposed to increase to a rate slightly below the hourly rates for the Inner Zone.

53 Saturday parking fees for Car Parking Buildings at Wall Street, Lower Moray Place and Great King Street are proposed to increase from $1.50 to $2.00 per hour.

54 The proposed fees are consistent and competitive with other cities, such as Christchurch ($4.80 per hour) and Invercargill ($5 per hour, first half hour free) and Meridian Mall ($5.00 per hour, first half hour free).

55 The new Pacific Radiology building at 34 Great King Street will add 33 bays to Council’s public parking and estimated annual revenue of $232,090 (excl. GST). The hourly rate at this site is proposed to be higher ($5 first hour, $6 per hour thereafter) to offset the cost to Council to lease the site.

OPERATING BUDGETS – YEARS 2-9

56 The 2025/26 operating budget has been inflation adjusted for years two to nine. Explanations of any further variations are explained below.

57 Staff have been working with Ministry for the Environment and Otago Regional Council to develop remediation options for the Tarwell at Hillside Road. A remediation approach has been developed and will be presented to Council for consideration soon. An allowance of $1.2m in year 9 (2033/34) for the initiation of remediation has been included in the draft operational budget.

58 Allowance has been made for tri-annual asset valuations. This includes $93k in year 2 (2026/24), $100k in year 5 (2029/30) and $107k in year 8 (2032/33).

Zero Carbon

59 The draft operating budget for this group is likely to reduce DCC emissions and marginally reduce city emissions. This group’s operational activities form part of the DCC’s emissions footprint. The City Properties team is leading several Zero Carbon Plan/ DCC Emissions Management and Reduction Plan projects, primarily focused on reducing emissions from DCC facilities.

60 The draft operational and capital budget includes provision for projects that will improve energy efficiency and emissions reduction at certain facilities. This, along with alignment with the Zero Carbon Policy, will reduce emissions from operations over the term of the 9 year plan. The ‘Zero Carbon Investment Options’ report (under separate cover) sets out additional investment options that would add operational expenditure for this group to further reduce emissions from DCC facilities.

Signatories

Author:	Anna Nilsen - Group Manager, Property Services
Authoriser:	Robert West - General Manager Corporate Services

Attachments

	Title	Page
⇩a	Draft Operating Budget 2025/26 (year 1)	482
⇩b	Draft Operating Budget 2025-34 (9 years)	483
⇩c	Draft Funding Impact Statement 2025-34 (9 years)	484
⇩d	Draft fees and charges 2025/26	485

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	☐	☐	✔
Future Development Strategy	☐	☐	✔
Integrated Transport Strategy	☐	☐	✔
Parks and Recreation Strategy	☐	☐	✔
Other strategic projects/policies/plans	☐	☐	✔

City Properties activities contribute primarily to the objectives and priorities of the above strategies.

Māori Impact Statement

Council budgets impact broadly across all Dunedin communities including Māori. The adoption of Te Taki Haruru – Māori Strategic Framework signals Council’s commitment to mana whenua and to its obligations under the Treaty of Waitangi. Mana whenua and Mataawaka will have the opportunity to engage in the 9 year plan consultation process.

Sustainability

City Properties activities take into account the Council’s approach to sustainability.

Zero carbon

The draft operating budget for this group is likely to reduce DCC emissions and marginally reduce city emissions.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for City Properties to include in the 9 year plan.

Financial considerations

Financial considerations are detailed in this report.

Significance

The draft budgets are included in the development of the 9 year plan 2025-34, which is consulted on using the special consultative procedure.

Engagement – external

There has been no external engagement in developing the draft budgets for City Properties.

Engagement - internal

Councillors and staff from across council have been involved in 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

Project identified in Community Board plans have been considered in the development of the draft budgets. Community Boards will be consulted on the 9 year plan 2025-34.

Council

28 January 2025

Public Toilets Programme - Update

Department: Property

EXECUTIVE SUMMARY

1 Dunedin City Council (DCC) owns and operates public toilets throughout Dunedin. Public toilets located within parks and recreation areas that include changing rooms are managed by Parks and Recreation, and stand-alone public toilets are managed by Property Services.

2 Council resolved a capex budget of $2.05m in the 10 year plan 2021-31 to build a Changing Places bathroom, and 18 new Public Toilets (two per year) until 2031 (the ‘Public Toilet Programme’).

3 The purpose of this report is to give Council an update on progress and costs of the Public Toilet Programme since 2021, and for Council to consider whether it wishes to include $750k in year one (2025/26) of the draft 9 year plan new capital budget for the installation of a Changing Places Bathroom.

RECOMMENDATIONS

That the Council:

a) Considers whether to include a budget of $750k in year one the 9 year plan 2025-34 new capital budget for the installation of a Changing Places Bathroom.

b) Notes the Public Toilets Programme - update report.

BACKGROUND

4 As part of deliberations for the Annual Plan 2020/21 Council requested a public toilet report to inform the development of the 10 year plan 2021-31.

5 To inform the report, staff conducted a review of public toilet facilities across the city and presented an update report to Council on 14 December 2020. The review considered the condition of each public toilet, accessibility, opening hours, cleaning frequency and level of vandalism.

6 Staff also developed a toilet matrix (‘the matrix’) similar to the one used by Southland District Council to assist the prioritisation of requests for new or upgraded public toilets.

7 On 14 December 2020 Council resolved the following:

Moved (Cr Marie Laufiso/Cr Christine Garey):

That the Council:

a) Notes that the Ten year plan 2021-31 consultation document would seek feedback on preferred locations for new public toilets to be constructed over the ten year period.

b) Notes that decisions made on the capital budget option reports and the timing of those projects will be considered alongside the total capital budget and presented to the January 2021 meeting for approval.

Motion carried (CNL/2020/126)

8 The 10 year plan 2021-31 consultation document asked the question “Where do you think the new public toilets should go?”. 1573 submitters responded to this question, including submissions from all Community Boards.

9 The new locations proposed during the consultation process were evaluated using the toilet matrix and reviewed in the context of other planned projects. Attachment A demonstrates how the matrix is used, with the proposed Navy Park location as the example.

10 New Zealand Standard 4241:1999 (‘the Standard’) is the New Zealand Standard for Public Toilets. The standard provides design information and advice for public toilets but does not specify a set ratio of toilets to population and visitor numbers.

11 On 31 May 2021 Council resolved the following:

Moved (Cr Rachel Elder/Cr Steve Walker):

That the Council:

a) Notes the Public Toilets and Changing Places consultation feedback on the 10 year plan 2021-31.

b) Approves the proposed programme of works for new public toilet facilities, including the Changing Places bathrooms.

Motion carried (CNL/2021/097)

The 10 year plan 2021-31 capital budget included $2.05m for new public toilets. This reflected $250k in year one for the development of a Changing Places bathroom, and $200k in later years for two new public toilet facilities per year. Attachment B shows the proposed locations identified at the time of the 31 May 2021 Council decision.

Discussion

Procurement Process and Design

12 The toilet ‘design and build’ contract was tendered through an open market tender process in 2021. Three contractors responded and Permacrete was selected as the preferred provider. Permacrete represented the best ‘whole of life’ solution, with a 20-year warranty on all toilet structures, and a one-year warranty on all other finishes and workmanship within their toilets. Permacrete are the preferred toilet provider for 85% of New Zealand Councils.

13 Two standardised toilet designs were selected early in the planning phase so that, where appropriate, the appearance of new toilets would be consistent throughout the city. There is one design for rural areas, and another for urban areas.

14 The toilets are robust, vandal-resistant, low-maintenance and made from high-quality pre-cast concrete. All materials are sustainable and readily available for quick, cost-effective replacement.

15 Interior features include tiled walls and anti-slip floors, stainless steel hand basins, toilet pans, soap dispensers, toilet roll holders, baby changing table, and handrail. Door counters, signage, auto LED lighting (door activated), natural ventilation, cleaners tap in each cubicle with anti-tamper handle, sloping floor to stainless steel strip drain floor waste, accessible to New Zealand Standard 4121:2001.

Figure 1 and 2 - Toilet interior fixtures

16 Exterior features include heavy duty solid core aluminium doors painted DCC Teal Blue and are clearly labelled with English, te reo Māori and braille. The signs also indicate right or left-hand accessibility. Constructed from reinforced precast concrete. Coloursteel Maxx roofing, stainless steel gutters and downpipe, external LED security light.

17 The rural design (used at the new Outram Glen and Harwood Reserve sites) features a double stall with a weatherboard-style concrete finish and a gabled roof with a veranda.

Figure 3 - Outram Glen New Public Toilet

18 The urban design features a double stall with hardwood timber slats and a mono-pitch concrete roof. It can be found in the Exchange area, Navy Park, Tunnel Beach, and Frederick Street.

Figure 4 - Navy Park Toilet in transit

New Public Toilet Programme progress

19 Since 2021 a total of six new toilets have been built (shown below in the table in paragraph 24). These do not fully align with the scheduled locations presented to Council in 2021 due to challenges establishing services (water, waste, electricity/land ownership etc) on some sites, and the re-prioritisation of three new sites – Outram Glen, Signal Hill, and Tunnel Beach.

20 New toilet locations require various services to be established before the toilet itself can be installed. These ‘enabling works’ include things like parking, water, waste, electricity, and occasionally work to establish legal occupation of the site. The challenges and costs associated with these enabling works is the key driver of higher than budgeted costs, and delays against the original schedule.

21 The negotiation of Licence to Occupy, lease agreements and Letters of Authority with landowners for non-DCC owned sites, has also taken longer than the schedule anticipated. For example, obtaining the first draft Licence to Occupy document for one new toilet site took a year, and the terms are still under negotiation. A Letter of Authority from another landowner took three months to obtain.

22 Further, some sites have required archaeological authority, and archaeological assessments and investigations. As an example, an Archaeological Authority 2024/449 was undertaken at the Navy Park site because research had indicated that at least one pre-1900 structure had been present prior to the area being made a public park.

23 Planning and design work has been developed for both the Changing Places Bathroom and West Harbour Cycleway toilets. However, these projects are behind schedule due to cost escalations and complications related to the enabling works. Changing Places is discussed in more detail below and West Harbour Cycleway toilet will be the subject of a future report to Council.

24 The table below outlines the New Public Toilet Programme, the year scheduled for construction, location, and the current status.

Scheduled Year of Construction

Planned

Location

Current

Status

Year 1 2021/22

Changing Places Facility, Dunedin Railway Station area.

Paused – Council asked to consider including in the 2025/26 budget as part of this report

Year 2 2022/23

Central city, The Exchange area

Harbour cycleway, St Leonards

Complete

Paused – due to budget availability 2024/25 and depending on 9 year plan funding decision by Council

Year 3 2023/24

Otago Peninsula, Harwood Reserve

South Dunedin, Navy Park

Tunnel Beach (installed in partnership with Department of Conservation)

Signal Hill (installed in partnership with Mountain Bike Otago)

Complete

Year 4 2024/25

Outram Glen

North Dunedin, close to North Ground sports ground

Karitane, Truby King Reserve

Complete

Scheduled for 2024/25

Paused – due to budget availability 2024/25 and depending on 9 year plan funding decision by Council

Year 5 2025/26

North Dunedin, Ross Creek area;

Waitati, Doctors Point

No work commenced

Year 6 2026/27

Green Island Memorial Park playground

Central city, Princes Street Market Reserve;

No work commenced

Year 7 2027/28

Mosgiel, Brooklands Park area

Otago Peninsula, Okia Reserve

No work commenced

Year 8 2028/29

Purakaunui Reserve

Otago Peninsula, Tomahawk beach

No work commenced

Year 9 2029/30

South Dunedin, St Kilda beach

Harbour cycleway, Harbour mouth molars area

No work commenced

Year 10 2030/31

Waldronville, Kaikorai Estuary area

North Dunedin, Māori Hill/Highgate area

No work commenced

25 In addition to the New Public Toilet Programme, Property Services maintain and renew the current public toilets. This year renewals included the complete replacement of the Frederick Street toilet.

Changing Places Bathroom

26 The New Public Toilet Programme currently includes a centrally located Changing Places Bathroom which was scheduled for completion in 2021/22 with an original budget of $250k. The Changing Places Bathroom was originally planned on Moray Place next to the Dunedin Public Library and staff progressed this work through concept design stages.

27 Because of the nature of the Moray Place site the design would need to consider accessibility, road safety and surface water. A pedestrian crossing, landscape engineering to enable an accessible park, and stormwater water management, were included in the initial concept design.

28 As a result of this work, estimates were that a Changing Places bathroom at the Moray Place site, including these enabling works, would cost in the order of $1.5 million.

29 Because the estimated cost was more than the budget allowed, staff considered two alternative central city sites that were likely to cost less. The first site was excluded early because the landowner declined to grant permission for the work. The second site involved replacing the existing Exeloo at the Dunedin Railway Station with a Changing Places bathroom, an accessible bathroom, and an ambulatory bathroom.

30 The Dunedin Railway Station site has several benefits including – is a DCC owned site, a flat site, close parking availability, existing services (water and sewerage), and the current toilets are popular with visitors and due to be upgraded.

31 Feedback from members of the Disability Information Advisory Group (DIAG) is in support of the Railway Station site. DIAG commented that the site was suitable due to its central location and ease of access.

32 While there are additional considerations for the Railway Station site, such as the heritage aspect of the area and the need for careful traffic management, staff are confident these can be addressed and worked through.

33 The estimated cost to install a Changing Places Bathroom on the Railway Station site is $750k.

Costs of Public Toilets – capital and operational

Capital costs

34 The $2.05m capital budget Council resolved to include in the 10 Year Plan 2021/31 was to build a Changing Places bathroom and 18 new Public Toilets (two per year) until 2031. The budget was predicated on each new public toilet costing $200k, and $250k for the Changing Places Bathroom.

35 The cost for an urban setting two-pan Permaloo toilet is $145,962. The cost for a rural setting Permaloo toilet is $153,860.

36 In addition to the toilet itself, the enabling works (such as establishing parking, water, waste, and electrical connections, negotiation of land usage agreements, and in some instances, road safety changes) have cost between $130k and $210k per site.

37 The high enabling work costs have therefore, pushed the total new public toilet costs to between $285k and $365k.

38 In the Annual Plan 2022/23 the budget for new public toilets was adjusted to $510k per annum to better reflect the actual cost of new toilets and enabling works.

Operational costs

39 A plumbed public toilet costs on average $9.5k per annum to clean, operate and maintain. A vaulted (not connected to services) public toilet costs an additional $3.5k – $53k per annum (dependant on the level of utilisation and location) to clean, service and empty the tanks. These costs are budgeted for in the draft 9 year plan City Properties operational budgets.

40 The estimated total annual operational costs for the Changing Places Bathroom are –

Operating and Maintenance $9.5k Based on average for plumbed public toilet

Depreciation $20.7k

Interest $30.9k Based on 4.12%

Total annual operational cost $61.1k

Current financial year 2024-2025 Public Toilet Programme

41 The 2024/25 capital budget for new toilets is $510k and the new toilet programme is forecast to spend $667k, an overspend of $157k.

42 The proposed capital spend for 2024/25 is comprised of -

Outram Glen	$362k	Completed
North Dunedin	$305k	Scheduled
Total 2024/25 Forecast	$667k

43 The last installed new public toilet, until Council consider the new Public Toilet Programme, will be the one in North Dunedin. The unit is already purchased, and the $157k over expenditure will be managed within the overall DCC capital expenditure budget for 2024/25.

Public toilet programme (including Changing Places Bathroom) – 9 year plan 2025-34

44 The draft 9 year plan 2025-34 capital budget is being considered by Council at this meeting. There is no budget included for new public toilets (including the Changing Places Bathroom) in the draft 9 year plan capital budgets.

45 The draft 9 year plan City Properties capital renewals budget includes $2.3m over 9 years for the replacement and upgrade of existing public toilets.

46 This report provides options for Council to consider if it wishes to continue to install the Changing Places Bathroom on the Railway Station site at a cost of $750k in the 2025/26 year. Staff confirm that if Council resolve to do this the facility could be installed in the 2025/26 year.

OPTIONS

Option One – Install a Changing Places Bathroom in 2025/26, and include a budget of $750k in the 9 year plan 2025-34 new capital budget

Debt

· Would require borrowing of $750k in 2025/26 (Year 1).

· The borrowing cost would be $30.9k per annum at a rate of 4.12%, increasing to $37.5k from 2029/30 (year 5) as the interest rate assumption changes to 5%.

Rates

· Rates funding of $61.1k annually to 2029/30, then $67.7k thereafter would be required to fund this option, this includes maintenance of $9.5k, interest of $30.9k (then $37.5k from 2029/30) and depreciation of $20.7k.

· Depreciation is estimated to be $20.7k annually from year 2 of the 9 year plan.

Zero Carbon

· This option does not have material implications for city or DCC emissions.

Advantages

· Aligns with community consultation feedback as part of the 10 year plan 2021-31.

· Dunedin City would provide public toilet facilities for people with severe, multiple, or complex disabilities and their carers.

Disadvantages

· Council would have a higher debt balance and there is an upward impact on rates.

Option Two – Pause the installation of a Changing Places Bathroom

Impact assessment

Debt

· No debt funding is required for this option.

Rates

· There are no impacts on rates for this option.

Zero carbon

· This option does not have implications for city or DCC emissions.

Advantages

· Council debt is not increased and there are no impacts on rates.

Disadvantages

· Does not align with community consultation feedback as part of the 10 year plan 2021-31.

· Would mean the Dunedin City cannot provide public toilet facilities for people with severe, multiple, or complex disabilities.

NEXT STEPS

47 If Council resolve to include funding for a Changing Places Bathroom, staff will recommence planning for the Bathroom to be installed.

48 Staff will continue with the work on the Public Toilet renewals programme of work.

Signatories

Author:

Rachel Scott - Assistant Project Manager, Property Services

Christian German - Capital Delivery Manager

Authoriser:

Anna Nilsen - Group Manager, Property Services

Robert West - General Manager Corporate Services

Attachments

	Title	Page
⇩a	Toilet assessment matrix example	498
⇩b	Summary of 10 year plan for Public Toilets	499

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This decision enables democratic local decision making and action by, and on behalf of communities.

Fit with strategic framework

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

This report contributes to the Parks and Recreation Strategy and the Social Wellbeing Strategy

Māori Impact Statement

Staff consult with iwi when locations for new public toilets facilities are identified.

Sustainability

There are no known implications for sustainability regarding this noting report.

Zero carbon

This report does not have material implications for city or DCC emissions

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

Consultation was undertaken as part of the development of the Long-Term Plan 2021-31, and budget was allocated for the new Public Toilet Programme in the Long Term Plan 2021-31 budget.

Financial considerations

The capital and operational costs of new toilets are discussed in the body of the report.

Significance

This matter is considered low in terms of Councils Significance and Engagement Policy.

Engagement – external

Consultation was undertaken as part of the development of the Long-Term Plan 2021-31, and staff consult with relevant community stakeholders when locations for new public toilets facilities are identified.

Engagement - internal

Staff consult with relevant Council staff when locations for new public toilets facilities are identified.

Risks: Legal / Health and Safety etc.

There are no identified legal risks.

Conflict of Interest

There are no identified conflicts of interest.

Community Boards

Consultation was undertaken with Community Boards as part of the development of the Long-Term Plan 2021-31, and staff consult with relevant Community Boards when locations for new public toilets facilities are identified. Community Boards have raised suggestions with Council about public toilet locations and capacity as part of presentations to the Civic Committee through 2024.

Council

28 January 2025

Community Housing Update

Department: Property

EXECUTIVE SUMMARY

1 Dunedin City Council (DCC) owns 936 Community Housing units. Most of the units are one-bedroom units and they are prioritised for people aged over 55, in urgent need of housing. The portfolio complements other social and community housing provision in the city which focus on families and younger people.

2 On 31 May 2021 Council resolved to include $20m of new capital and $22.6m of renewal capital in the 10 year plan 2021-2031, to build more community housing and redevelop and maintain current housing stock.

3 Since May 2021 staff have progressed detailed plans to redevelop three community housing sites and have undertaken initial work on the redevelopment of a fourth site, to increase and improve the housing stock on those sites.

4 Since 2019 there has been a 41% increase in the cost to build a home (Statistics New Zealand), and the estimated costs (which are detailed in the non-public Agenda attachment) to redevelop the first three community housing sites will exceed the 2024/25 Annual Plan community housing capital budget.

5 Due to the escalation of building costs, the programme has been paused, and most of the new capital budget for the Community Housing Development programme has not been included in the draft 9 year plan capital budget.

6 The purpose of this report is to update Council on progress and the estimated costs of the Community Housing Development programme. Council is asked to consider whether it wishes to continue with the Community Housing Development Programme.

RECOMMENDATIONS

That the Council:

a) Considers the funding allocation, if any, Council wishes to include in the 9 year plan 2025-34 for the community housing development programme, for consultation purposes.

b) Notes the Community Housing Update report.

BACKGROUND

7 In 2020 a review of the Dunedin City Council Housing Policy 1997 and the Dunedin City Social Housing Strategy 2010-2020 highlighted changes to Dunedin’s housing environment after both the policy and strategy were written.

8 Consultation was undertaken as part of the 10 year plan 2021–31 and the public was asked ‘should the DCC build more community housing units?

9 Of the 1,900 submissions received, 82% (1,558) supported DCC building more housing units. Written feedback indicated that the housing should be prioritised for those most in need. On 31 May 2021 Council resolved the following;

Moved (Mayor Aaron Hawkins/Cr David Benson-Pope):

That the Council:

c) Decides that the Council include $20 million in the 10 year plan to build more community housing, being $2 million per annum over the 10 year period.

Division

The Council voted by division:

For: Crs Sophie Barker, David Benson-Pope, Rachel Elder, Christine Garey, Doug Hall, Marie Laufiso, Jim O'Malley, Jules Radich, Chris Staynes, Steve Walker and Mayor Aaron Hawkins (11).

Against: Crs Carmen Houlahan, Mike Lord, Lee Vandervis and Andrew Whiley (4).

Abstained: Nil

The division was declared CARRIED by 11 votes to 4

Motion carried (CNL/2021/092)

10 The 10 year plan 2021 – 2031 10 included a budget of $20m new capital for housing growth and $22.6m for community housing asset renewals. The new capital budget of $20m was spread evenly at $2m per year over the 10 years from 2021. The renewals capital budget was inflation adjusted over the 10 years 2031.

11 A DCC Community Housing Development programme was planned and included the delivery of 54 community units between 2024 and 2027. The programme included the redevelopment (demolish and rebuild) of 29 existing units and building 25 additional units on four existing community housing sites.

DISCUSSION

DCC Community Housing Programme progress

12 Prior to the 10 year plan 2021-2031, work was already underway on two major community housing redevelopment projects, at the Palmyra and School Street sites. The Palmyra project (40 units) was a significant redevelopment and added two units to the portfolio. The School Street (10 units) project was a complete redevelopment of the site with the addition of one new unit. These two projects increased Council’s community housing stock by 3 to 940, with two of the new units being fully accessible and the School Street site built to Homestar 8 standards.

13 When planning the Community Housing Development Programme, staff considered multiple factors and prioritised existing DCC community housing sites for potential redevelopment. Staff considered factors such as the year of construction, condition and estimated life remaining of the improvements, the level of exposure of the property to known hazards, the current density of the site against development potential, the level of demand for the area, and the financial performance of the site.

14 Consideration was also given to how quickly progress could be made on each site and how to manage tenants that are displaced during works.

15 Four community housing sites were identified for redevelopment which would add 25 new units to the portfolio and upgrade 29 units.

Site One - Fitzroy Street Community Housing Redevelopment – South Dunedin

16 The Fitzroy Street site had 4 one-bedroom units in an early 1900s converted villa. It has issues with rising damp and a poor layout. The units were demolished in 2024 in preparation for the redevelopment. This site was prioritised for redevelopment due to the standard and age of the current units.

Site Two - Oxford Street Community Housing Development – South Dunedin

17 The Oxford Street site development involves building 4 new one-bedroom community housing units on the vacant site at 235 Oxford Street (marked in red below). This property was purchased in 2005 and the dilapidated house demolished in 2008. The land sits alongside a current DCC Community Housing site (marked in blue below) and is in the high demand area of South Dunedin.

Site Three - Thorn Street Community Housing Redevelopment – Caversham

18 The Thorn Street redevelopment involves adding 11 additional community housing units to the community housing portfolio by demolishing the existing 9 community housing units and building 20 new community housing units.

19 This site was chosen due to the age of the units, and because the site was under-utilised.

20 The redevelopment would be two stories, which is fitting with the character of the area and takes advantage of the outlook to the park. Designs include a lift to ensure that all of the units can be accessible.

Site x Redevelopment

21 Staff are unable to advise Councillors of the location for this site until ground testing and site layout drawings are complete. Staff have also not spoken to affected tenants.

22 The redevelopment will be two stories and will take a similar approach to Thorn Street. It will add 10 units and redevelop the existing ones.

23 This site was chosen due to the size and age of the units, and because the site has the potential to increase the number of units to the portfolio.

Design Standards

24 As part of planning work, staff developed a set of Community Housing Design Standards. The standards provided guidance and direction that ensured each new build is warm, dry with low running and maintenance costs. Guidance from the Council was to use Universal Design and consider sustainability.

25 The new units were designed to be between 43 – 56 square meters in size, one bedroom and including features like individual outdoor spaces, landscaping in common areas, spaces for electric scooter parking, and guest pick up and drop off areas.

26 Universal Design aspects included in the design are things like increased door widths, flush door thresholds, increased floor area to allow a turning radius, flush shower access and kitchen joinery at appropriate heights, different front door colours.

27 Sustainability features that were worked into the design include increased wall and attic insulation, foundation slab insulation, upgrade building wrap to reduce heat loss, thermally broken window frames with low E glazing and heat recovery ventilation.

28 Another important consideration in the design was reducing long-term operational costs by using durable materials.

29 Staff worked alongside the Urban Planning team to ensure design were sympathetic of the area and in line with the appropriate planning requirements.

30 The detailed design process for Fitzroy, Oxford and Thorn Street is complete. Resource and Building Consent have been granted for Fitzroy and Oxford.

Image 2. Fitzroy Street, redevelopment layout

Procurement and Costs

31 Cost estimates on for the redevelopment of the sites in 2022 was $10.3m of new capital and $8.9m of renewals.

32 After the detailed design phase and ahead of going to market for Main Contractor services, staff approached a Quantity Surveyor (QS) to provide a cost estimate. The cost estimate received back from the QS were higher than staff were comfortable with, and so staff then undertook market research to compare current building costs across the sector.

33 Due to commercial sensitivities, the cost estimate and market comparison information is shown in a separate, non-public agenda - Attachment A Commercial Information.

34 It should be noted that building one-bedroom units comes at a cost premium. Bedrooms are the lowest cost finished area in a home to construct, whereas bathrooms, kitchens and mechanical systems are the highest cost contributors to a home. Additional bedrooms bring the average cost per square metre down.

35 After receiving the estimates, staff worked to consider areas where cost efficiencies could be gained however the actual gains found were minimal. In addition to the cost premium of building one-bedroom units, the two key factors contributing to the per square metre costs are;

- 41% increase in the cost to build a home since 2019 (Statistics New Zealand).

- The cost of compliance for adjoined units, in particular the fire separation requirements ie 25mm GIB must extend from the slab all the way up to the underside of the roof, and include fire stopping of any penetration.

36 The cost to meet Universal Design and Sustainability goals is adding to the cost per square metre, in particular the higher specification of insulation. Reducing the insulation specification cannot be achieved without a complete redesign process, because the additional volume of insulation has been worked into the size of the framing.

37 The project was then paused due to higher than anticipated costs and further market research has now been carried out. That research is detailed in the non-public Agenda attachment.

Capital Budget and phasing

38 The Council resolution of May 2021 phased the $20m new capital evenly ($2m per annum) across each year of the 10 year plan 2021-2031 and did not specify the amount of new community housing units to be built for that investment.

39 The phasing of the new capital budget does not align with the reality of delivering housing development projects. If Council resolves to proceed with the Community Housing Development programme, a rephasing of the budget will be required to align with likely project delivery timelines.

40 Should Council wish to proceed with redevelopment of the three sites, the work could be commenced in Year 1 (2025/26) for Fitzroy and Oxford Street, and in Year 2 (2026/27) for Thorn Street. This is because these projects have already progressed to detailed design phase.

Operational costs

41 A Community Housing unit costs on average $5.9k per annum to operate and maintain (including rates, insurances, overheads and maintenance). These costs are budgeted for in the draft 9 year plan City Properties operational budgets.

42 Because Fitzroy Street is a redevelopment of existing units, the budget to maintain the property is already in the draft 9 year plan. However, operational budgets will be impacted by depreciation and interest costs if the redevelopment work at Fitzroy Street is approved by Council.

43 The estimated total annual operational costs for four units at Fitzroy Street would be;

Operating & Maintenance $23.6k

Depreciation $42k Based on a 50 year life

Interest $87k Based on 4.12%

Total annual cost $152.6k

44 The estimated total annual operational costs for four units at Oxford Street would be;

Operating & Maintenance $23.6k

Depreciation $42k Based on a 50 year life

Interest $87k Based on 4.12%

Total annual cost $152.6k

45 The estimated total annual operational costs for four units at Thorn Street would be;

Operating & Maintenance $118k

Depreciation $194k Based on a 50 year life

Interest $400k Based on 4.12%

Total annual cost $712k

OPTIONS

Option One – Continue with the redevelopment of Fitzroy Street, Oxford Street, and Thorn Street and include $6.95m new capital and $6.95m renewals capital in the 2025-2034 9YP capital budget for community housing.

Debt

· Would require borrowing (based on 4.12%) of $107K for Year 1, $393k for Year 2, and then $573k per annum from Year 3

Rates

· Rates funding of $107k for Year 1, increasing to $509k Year 2, and $865k per annum from Year 3.

· Depreciation is estimated to be $104k in Year 2, then increasing to $278k from Year 3.

Zero Carbon

· This option aligns with the Zero Carbon Plan action area ‘nurture low emissions urban form’ by adding additional housing units primarily in South Dunedin and Caversham. Efforts would be made in the design and construction to minimise emissions, in alignment with the Zero Carbon policy.

· Overall the programme may result in a marginal longer-term reduction in city-wide emissions, however it is not an investment priority from an emissions reduction perspective (refer ‘Zero Carbon Investment Options’ report under separate cover). It is unlikely there would be a material impact on DCC emissions.

Advantages

· Aligns with community consultation feedback as part of the 10 Year Plan 2021-2031

· Dunedin City would add its community housing portfolio.

Disadvantages

· Council debt is increased and there is an impact on rates.

Option Two – Continue with the redevelopment of Fitzroy Street only, include $2.1m renewals capital, and remove $1.005m new capital in the 2025-2034 9YP capital budget.

Impact assessment

Debt

· Would require borrowing (based on 4.12%) of $43k for Year 1 increasing to $87k per annum from Year 2

Rates

· Would be $43k for Year 1 and increasing to $129k per annum from Year 2.

· Depreciation is estimated to be $42k per year from Year 2.

Zero carbon

· This option aligns with Zero Carbon Plan action area ‘nurture low emissions urban form’ by adding additional housing units in South Dunedin. Efforts would be made in the design and construction to minimise emissions, in alignment with the Zero Carbon policy.

· Overall, the project is unlikely to materially affect city or DCC emissions.

Advantages

· Replaces the four community housing units demolished in 2024 and returns the total Community Housing portfolio to a total of 940 units.

· Partially aligns with community consultation feedback as part of the 10 Year Plan 2021-

Disadvantages

· Council debt is increased and there is an impact on rates.

47 Do not continue with the Community Housing Programme

Option Three – Do not continue with the Community Housing Programme and do not include any new capital and remove $1.005m renewal capital in the 2025-2034 9YP capital budget.

Debt

· No debt funding is required for this option

Rates

· There are no impacts on rates.

Zero Carbon

· This option is unlikely to materially impact city emissions or DCC emissions, but it precludes longer-term emission reduction benefits from being realised.

Advantages

· Council debt is not increased and there is no impact on rates.

Disadvantages

· Does not align with community consultation feedback as part of the 10 Year Plan 2021-2031.

· Dunedin City would have a reduction of four community housing units (due to the demolition of Fitzroy Street) to 936.

NEXT STEPS

48 If Council resolve to continue with Community housing Development programme, the capital budgets will be rephased to align with project delivery timelines and staff will recommence planning for procurement of a Main Contractor.

Signatories

Author:	Anna Nilsen - Group Manager, Property Services
Authoriser:	Robert West - General Manager Corporate Services

Attachments

There are no attachments for this report.

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This decision promotes the social 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 DCC Community Housing Development Programme responds to a Council resolution and aligns with the Ōtepoti Dunedin Housing Plan 2022.

Māori Impact Statement

Property Services staff have worked with Maata Waka on the Arai Te Uru housing redevelopment and will continue to work with mana whenua via the Ōtepoti Housing Action Plan.

Sustainability

Construction of additional housing units close to centres and public transport routes aligns with the Zero Carbon Plan action area ‘nurture low emissions urban form’ by contributing to densification. However, given the number of units under consideration, impacts on city and DCC emissions are likely to be marginal or immaterial under all options presented.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

The budget is included in the 2021 – 2031 LTP.

Financial considerations

The capital and operational costs of the housing development programme are outlined in the body of the report.

Significance

The 9 year plan will be consulted on using the special consultative procedure.

Engagement – external

Staff have been in contact with Community Housing tenants that will be directly impacted by the redevelopment programme.

Engagement - internal

Property Services have worked with the Principal Housing Advisor, Resource Consents and will the Building Consent team.

Risks: Legal / Health and Safety etc.

There are no known risks associated with this report.

Conflict of Interest

No conflict of interest have been identified.

Community Boards

Community Boards have expressed an interest in the community housing development programme and will be kept informed on future developments in their areas.

Council

28 January 2025

Community Recreation - Draft Operating Budget 9 year plan 2025-34

Department: Parks and Recreation

EXECUTIVE SUMMARY

1 This report provides:

· a summary of the services provided by Community Recreation.

· an overview of the draft operating (opex) budget for year one of the 9 year plan for Community Recreation.

· an overview of the variations from the year one budget for years two to nine for Community Recreation.

2 This report includes four attachments:

i) Operating budget for 2025/26 (year one) – this details the movements from the 2024/25 year.

ii) Operating budget for 2025/26 to 2033/34 (nine years) – this details the projected operating budget throughout the nine year period.

iii) Funding Impact Statement for 2025/26 to 2033/34 (nine years) – this summarises the source and application of funding throughout the nine year period.

iv) Schedule of Fees and Charges.

3 The report asks the Council to adopt the draft operating budget and draft fees and charges for the purposes of developing the 9 year plan 2025-34 and consulting with the community.

RECOMMENDATIONS

That the Council:

a) Adopts for the purposes of developing the 9 year plan 2025-34 and consulting with the community

i) The draft operating budgets and funding impact statement for Community Recreation as shown/amended at Attachments A, B and C.

ii) The draft 2025/26 fees and charges schedules for Community Recreation as shown/amended at Attachment D.

BACKGROUND

Community Recreation – summary of services

4 While the Community Recreation team is driven by various legislative requirements, education is also a key role.

5 Community Recreation includes activities and services related to:

· Aquatics – Moana Pool, Te Puna o Whakehu, Port Chalmers Community Pool and St Clair Hot Saltwater Pool.

· Biodiversity and pest control – Urban Linkage and City Sanctuary.

· Botanic Garden – 19 themed garden collections. This Garden is graded as a Garden of International Significance by the NZ Gardens Trust.

· Bylaws – Freedom Camping Bylaw and Reserves and Beaches Bylaw.

· Cemeteries and crematorium – 20 cemeteries.

· Leasing and land advisory – leases, permits, encroachments, concessions.

· Parks and reserves – including 18 beach reserves, 111 playgrounds, 47 sports fields, 72 coastal structures such as jetties and pontoons, 115 buildings and more than 400 tracks.

6 Green spaces, aquatic facilities and other activities in this group are central to the wellbeing of Dunedin’s communities enabling them to be fit, active and connected in natural spaces.

operating budgets – 2025/26

7 The 2025/26 draft operating budget for Community Recreation is $46.198 million. This is an increase of $1.051 million from the 2024/25 year. The following sections explain the revenue and expenditure changes from the previous year.

Revenue

Rates

8 Rates revenue is $38.921 million. This is an increase of $1.012 million from the 2024/25 year.

External revenue

9 The total external revenue is $7.063 million. This is an increase of $82k from the 2024/25 year incorporating the following changes:

a) Parks and Reserves revenue has increased by $231k. This combines increases in leases, recoveries, and concessions ($200k), an increase in sportsbook hire ($59k) and a reduction in freedom camping fines ($27k) in line with previous years actuals.

b) Aquatics revenue has increased by 1%, despite an increase in fees and charges of 10%. This reflects projections based on lower actual revenue received in the current (2024/25) financial year and includes a potential decline in patronage due to the proposed fee increase. Revenue from the Moana Pool gym has increased by $54k reflecting strong actuals from this year and previous financial year.

c) A $206k reduction in revenue for the Cemeteries and Crematorium to more accurately reflect the number of burials and cremations.

Grants and subsidies – operating

10 Total revenue from grants and subsidies (operating) is $213k. This is a decrease of $42k from the 2024/25 year due to a reduction in the City Sanctuary Predator Free Dunedin grant for 2025/26. The reduction is a result of the amount of funding Predator Free Dunedin received from Predator free 2050.

Expenditure

Personnel costs

11 Personnel costs are $11.029 million. This is an increase of $169k from the 2024/25 year. Further explanation of changes to personnel costs are discussed in detail in the Chief Executive Overview Report that is on the agenda.

Operations and maintenance

12 Operations and maintenance expenditure is $14.223 million. This is a decrease of $15k from the 2024/25 year and incorporates the following changes:

a) Botanic Gardens maintenance contract has increased $13k due to increase in contracted mowing charges.

b) Interments/cremations contract increased $107k due to new internment/cremations contract which came into effect December 2024 with an increased cost of providing the service and a 5% CPI increase for 2025/26.

c) Parks greenspace maintenance contract increased in total $171k because of contracted CPI increase of 2% per annum. Components are the greenspace contract for reserve works, trees, sports fields and University Oval ($157k) and Cemetery and crematoria horticultural contract ($14k).

d) Offsetting these increases is a reduction in plant and building maintenance budgets of $256k and a reduction in Aquatics plant maintenance $30k and chemicals $33k for Whakaehu Pool based on actual running costs.

Occupancy costs

13 Occupancy costs are $6.359 million. This is an increase of $652k from the 2024/25 year reflecting:

a) Increases for rates expense $261k, insurance $60k, electricity $51k, gas $207k, contract cleaning $116k and security costs $42k due to living wage increase and CPI increases.

b) Security costs related to freedom camping reduced by $110k to $26.5k due to the removal of nightly enforcement security patrols due to the high level of freedom camper bylaw compliance over successive seasons and budgetary pressures. These are now replaced with ‘ad-hoc’ patrols on a random basis and in response to complaints of non-compliance.

c) Community Ranger costs which are shared costs with Dept of Conservation has been reduced $12k, the contribution required in 2025/26 is $74k.

Consumables and general

14 Consumables and general costs are $705k. This is a decrease of $207k from the 2024/25 year due mainly to a reduction in consultants’ budget $160k for condition and valuation assessments not required in 2025/26 (however budget will be required in 2026/27), in line with the triennial valuation process.

Grants and subsidies

15 Grants and subsidy costs are $379k. This is a decrease of $121k from the 2024/25 year due to expiring grants:

a) Dunedin Wildlife Hospital $75k, and

b) Sports Hall of Fame $47k.

Internal charges

16 Internal charge costs are $3.374 million. This is an increase of $158k from the 2024/25 year.

Depreciation

17 Depreciation costs are $8.306 million. This is an increase of $473k from the 2024/25 year, Parks costs increased $176k, Cemeteries costs increased by $122k due to infrastructure upgrades and Botanic Gardens increased $158k.

Interest

18 Interest costs are $1.822 million. This is a decrease of $56k from the 2024/25 year due to reduced interest rate to 4.15%.

Budget tradeoffs

19 To offset increases in energy costs and increased contract costs the following reductions have been included in the budgets:

a) Building Maintenance $200k - Parks operations reductions in maintenance budgets of $175k for buildings, track, and monuments. Cemeteries and Crematorium reduction of $20k in buildings maintenance and Botanic Gardens reduction of $5k in buildings maintenance also.

b) Plant Maintenance $22k - Crematorium reduction in plant maintenance.

c) Freedom Camping security costs reduced $110k reduction due to nightly enforcement patrols reduced due to the high level of freedom camper bylaw compliance over successive seasons and budgetary pressures.

d) Forest harvesting replanting $50k – Forest harvesting contract expiring – not renewing.

e) Living Asset management $30k – reduction of $30k for plant purchases.

f) Other staff costs $24k – minor reductions across all activities for travel expense.

fees and charges – 2025/26

20 The fees and charges proposed in Attachment A have been adjusted by Activity to meet or close the gap against their respective Revenue and Finance Policy:

a) Aquatics – a rounded 10% increase to fees and charges is proposed. This would bring the budget closer to proposed draft 2025-34 Revenue and Finance Policy of 65% Rates Revenue: 35% Other Revenue.

b) Cemeteries and Crematoria - a 5% increase to fees and charges is proposed.

c) Parks and Recreation – a report on the review of Sports Field Fees and Charges is on the agenda. The attached fees and charges schedule has been updated to align with this report. This schedule of fees and charges will be updated if required, following consideration of that report.

OPERATING BUDGETS – YEARS 2-9

21 The 2025/26 operating budget has been inflation adjusted for years two to nine. Explanations of any further variations are explained below.

22 Allowance has been made for tri-annual asset valuations. This includes $124k in year 2 (2026/24), $133k in year 5 (2029/30) and $142k in year 8 (2032/33).

23 Energy costs for Moana Pool have been reduced from year 2 (2026/24), following the installation of a new heat recovery system. Projected savings are expected to achieve an estimate of $575k per year, represented by a 80% decrease in LPG, offset by a 44% increase in electricity.

24 An additional maintenance allowance of $15k has been provided for each year (from year 2) in relation to the playground improvements capital expenditure.

Zero Carbon

25 The draft operating budget for this group is likely to reduce DCC emissions and marginally reduce city emissions. This group’s operational activities form part of the DCC’s emissions footprint. However, providing these facilities/services close to communities helps support lower emission lifestyles. The operating and draft capital budget includes provision for projects that will improve energy efficiency and emissions reduction at certain facilities, as well as projects that will sequester carbon and improve local recreation opportunities. This, along with alignment with the Zero Carbon Policy, will reduce emissions from operations (and marginally reduce city emissions) over the term of the 9 year plan.

26 The ‘Zero Carbon Investment Options’ report (under separate cover) sets out an investment option to increase provision of trees to meet volunteer planting demands, that would add operational expenditure for this group.

Signatories

Author:

Chris Garside - Performance Delivery Manager

Heath Ellis - Acting Group Manager Parks and Recreation

Authoriser:

Jeanette Wikaira - General Manager Arts, Culture and Recreation

Attachments

	Title	Page
⇩a	Draft Operating Budget 2025/26 (year 1)	518
⇩b	Draft Operating Budget 2025-34 (9 years)	519
⇩c	Draft Funding Impact Statement 2025-34 (9 years)	520
⇩d	Draft Fees and Charges for 2025/26	521

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	☐	☐	☐
Future Development Strategy	✔	☐	☐
Integrated Transport Strategy	☐	☐	☐
Parks and Recreation Strategy	✔	☐	☐
Other strategic projects/policies/plans	✔	☐	☐

Community Recreation activities contribute primarily to the objectives and priorities of the above strategies.

Māori Impact Statement

Council budgets impact broadly across all Dunedin communities including Māori. The adoption of Te Taki Haruru – Māori Strategic Framework signals Council’s commitment to mana whenua and to its obligations under the Treaty of Waitangi. Mana whenua and Mataawaka will have the opportunity to engage in the 9 year plan consultation process.

Sustainability

Community Recreation activities take into account the Council’s approach to sustainability.

Zero carbon

The draft operating budget for this group is likely to reduce DCC emissions and marginally reduce city emissions.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for Community Recreation to include in the 9 year plan.

Financial considerations

Financial considerations are detailed in this report.

Significance

The draft budgets are included in the development of the 9 year plan 2025-34, which is considered significant and is consulted on using the special consultative procedure.

Engagement – external

There has been no external engagement in developing the draft budgets for Community Recreation.

Engagement - internal

Councillors and staff from across council have been involved in 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

Project identified in Community Board plans have been considered in the development of the draft budgets. Community Boards will be consulted on the 9 year plan 2025-34.

Council

28 January 2025

Destination Playground Options

Department: Parks and Recreation

EXECUTIVE SUMMARY

1 The purpose of this report is to provide options for the provision of modern destination playgrounds as part of the 9 year plan.

2 Feedback received during the Play Spaces Plan 2021 and the 10 year plan 2021 - 2031 community consultation indicated that many do not consider Dunedin to have a destination playground and asked for Council to invest in a playground in the style of the Margaret Mahy Playground developed in Christchurch.

3 Stage 1 of community engagement focussed on whether the community wanted to invest in the three existing destination playgrounds or create a new destination playground.

4 In February 2023 Council approved developing concept plans for the 3 existing destination playspaces (Marlow Park, Woodhaugh Gardens and Mosgiel Memorial Park) as modern destination playgrounds.

5 Concept designs were developed for the three existing playgrounds.

6 Stage 2 of community engagement focussed on asking the community what they liked about the concept designs for the 3 destination playgrounds, what was missing and what wasn’t necessary.

7 The 3 concept designs were updated based on the feedback received. Indicative costs increased from $6.6 million to $11.22 million.

RECOMMENDATIONS

That the Council:

a) Approves Scenario C to implement the updated concept design for all 3 playgrounds with an approximate total budget of $11.22 million spread across the 9 year plan, with a playground being designed and constructed in each of the 3 year cycles.

BACKGROUND

8 The Play Spaces Plan was adopted by Community and Culture Committee on 3 August 2021, replacing the 2006 Play Spaces Strategy.

9 Feedback received during the Play Spaces Plan 2021 and the 10 year plan 2021 - 2031 consultation indicated that many do not consider Dunedin to have a destination playground and asked for Council to invest in a playground in the style of the Margaret Mahy Playground developed in Christchurch.

10 A destination playground refers to a large playground that offers a variety of amenities and features alongside its play elements. This includes gathering spaces, picnic and BBQ facilities, toilets (with baby change facilities), built and natural shade areas, drinking fountains, and a variety of park furniture.

11 A destination playground is designed to cater to all ages and abilities, offering a range of play elements. The combination of these play elements and infrastructure provides a free entertainment space where families can stay for long periods of time. Ideally these play spaces should offer something unique and original to attract users.

12 In Dunedin, Marlow Park playground, Woodhaugh Gardens playground and Mosgiel Memorial Gardens playground are managed as destination play spaces.

13 Bespoke Landscape Architects (Bespoke) carried out an assessment of Dunedin’s 3 destination play spaces in October 2021, to identify how well the current facilities provide for current play trends such as inclusive play, adventure and natural play, age appropriate play, self–directed/challenging play, and accessibility.

14 These assessments were used to identify opportunities for improvement when developing the concept designs for each existing site.

15 There was no approved budget for these works in the previous long term plan.

16 Council, at its meeting of 31 May 2021, resolved that:

Moved (Mayor Aaron Hawkins/Cr David Benson-Pope):

That the Council:

a) Supports, in principle, the development of a new destination playground; and

b) Requests an options report in time for consideration as part of the Draft Annual Plan 2022-2023.

Motion carried (CNL/2021/130) with Cr Andrew Whiley recording his vote against

17 During debate at the Council meeting of 31 January 2022, it was discussed that there had been no specific engagement with the community on destination playgrounds. The following resolution was passed.

Moved (Mayor Aaron Hawkins/Cr David Benson-Pope):

That the Council:

Requests a report in time for Annual Plan 2022/23 deliberations, looking at resourcing options for the development of concept and community engagement plans for destination play spaces, including:

a) a single site development on council owned land; and

b) a distributed network of investment across three sites.

Division

The Council voted by division:

For: Crs David Benson-Pope, Sophie Barker, Rachel Elder, Christine Garey, Doug Hall, Carmen Houlahan, Marie Laufiso, Mike Lord, Jim O'Malley, Chris Staynes, Steve Walker, and Mayor Aaron Hawkins (12).

Against: Crs Jules Radich, Lee Vandervis and Andrew Whiley (3).

Abstained: Nil

The division was declared CARRIED by 12 votes to 3

Motion carried (CAPCC/2022/005)

18 Council, at its meeting of 23 May 2022, considered a staff report on the resourcing options for the development of concept and community engagement plans for destination play spaces. That report recommended a staged approach to community engagement regarding investment into destination play spaces.

19 Council, at its meeting of 23 May 2022 resolved:

Moved (Cr Lee Vandervis/Mayor Aaron Hawkins):

That the Council:

Agrees the staged community engagement approach for destination play spaces, across a range of investment and site options.

Motion carried (CAPCC/2022/035)

20 Council, at its meeting of 22 February 2023 resolved:

Moved (Cr Andrew Whiley/Cr Carmen Houlahan):

That the Council:

a) Approves developing concept plans for the three existing destination play spaces (Marlow Park, Woodhaugh Gardens and Mosgiel Memorial Park) as modern destination playgrounds.

Motion carried (CNL/2023/025)

Moved (Mayor Jules Radich/Cr Jim O'Malley):

That the Council:

b) Does not progress site investigations for the establishment of a new destination playspace on Council owned land.

Motion carried (CNL/2023/026)

21 Concept designs were developed for the three existing playgrounds as per this resolution.

22 A summary of the Stage 2 Feedback was reported to the Community Services Committee on 24 April 2024.

Moved (Cr Jim O’Malley/Cr Mandy Mayhem):

That the Council:

Notes the Destination Playgrounds – Stage Two Feedback from Community Engagement on the Design Concepts Report.

Motion carried (CSC/2024/007)

ENGAGEMENT

23 Stage 1 of community engagement focussed on asking how the community wanted to invest in the 3 existing destination playgrounds and if the community wanted Council to invest in a new destination playground:

24 Specific questions were asked:

a) At each of the three existing large playgrounds (Marlow Park, Woodhaugh Gardens and Mosgiel Memorial Gardens), would you like:

· Regular investment (replacement of equipment as required); or,

· Develop into a modern destination playground.

· Do you want a NEW modern destination playground elsewhere? (YES / NO)

25 Stage 1 of community engagement, from 10 October and 31 October 2022, resulted in 1,639 submissions.

26 The three most popular responses were to redevelop the playgrounds at Marlow Park and Woodhaugh Gardens while the Mosgiel Memorial Gardens playground should receive regular investment.

27 Concept designs were prepared for each of the 3 existing destination playgrounds.

28 Stage 2 of community engagement was held from 13November until 4 December 2023, resulted in 335 submissions. This engagement focussed on asking the community what they liked about the concept designs for the 3 destination playgrounds, what was missing and what wasn’t necessary.

29 Specific questions were asked as follows:

· What do you like about the concept plan(s) and why?

· Is there anything you would like to see in the concept plan(s) that is currently missing?

· Is there anything in the plan(s) that is unnecessary or needs to be changed?

· Do you have any other comments?

30 In addition, priorities from the feedback received from the community for each playground is identified below:

Marlow Park

Woodhaugh Gardens

Mosgiel Memorial Gardens

• Retain iconic play features, redesign the spaces in between.

• Add new play structures and surface upgrades to connect the existing equipment and improve accessibility.

• Make use of the topography to incorporate play elements for example - slides down slopes, climbing nets

• Weather protection – wind, rain, sun.

• Improve spaces for social interaction among older age groups.

• New/redevelop/retain paddling pool.

• Improve accessibility and inclusivity through surfacing and better equipment.

• Improve the range of equipment and experiences.

• Build on existing natural play opportunities in the reserve.

• Improve spaces for social interaction among older age groups.

• Investigate parking options.

• Improve preschool area – install more equipment with a range of attributes. Keep the fencing around the edge of the preschool area.

• Build skate facilities – visible from the street.

• Improve design to better connect play elements.

• Include more accessible equipment.

• Support for nature play.

DISCUSSION

31 There are several potential scenarios that provide direction for an upgrade of the city’s 3 destination playgrounds to modern destination playgrounds. These are outlined below as Scenario’s A to E.

32 The proposed indicative costs provided at the start of 2024 for the revised playground concepts in response to the community feedback process was:

· Marlow Park $4.62 million

· Woodhaugh Gardens $3.53 million

· Mosgiel Memorial Gardens $3.07 million

Scenario A

Scenario A is to implement the original concept designs for all 3 playgrounds based on the original proposed budget of $6.6 million over the first 4 years of the 9 year plan.

· Year 1 Design first play space

· Year 2 Construct first play space. Design second play space.

· Year 3 Construct second play space. Design third play space.

· Year 4 Construct third play space.

Scenario B

Scenario B is to implement the original concept designs for all 3 playgrounds based on the original proposed budget of $6.6 million spread over the 9 year plan with a playground being designed and constructed in each of the 3 year cycles.

· Year 1 Design first play space

· Year 2 Construct first play space.

· Year 4 Design second play space.

· Year 5 Construct second play space.

· Year 7 Design third play space.

· Year 8 Construct third play space.

Scenario C

Scenario C is to implement the updated concept designs for all 3 playgrounds with an approximate total budget of $11.22 million spread across the 9 year plan, with a playground being designed and constructed in each of the 3 year cycles.

· Year 1 Design first play space

· Year 2 Construct first play space.

· Year 4 Design second play space.

· Year 5 Construct second play space.

· Year 7 Design third play space.

· Year 8 Construct third play space.

Scenario D

Scenario D is to implement the updated concept design for Marlow Park with an approximate budget of $4.62 million within the first 3 year cycle of the 9 year plan and update the other 2 playgrounds as part of the playground renewals process.

Scenario E

Scenario E is to update all three playgrounds in the final 3 years of the 9 year plan which is essentially a business as usual approach.

OPTIONS

Option One. Recommended Option.

33 Scenario C: implement the updated concept designs for all 3 playgrounds with an approximate total budget of $11.22 million spread across the 9 year plan, with a playground being designed and constructed in each of the 3 year cycles.

Impact assessment

This option has an impact on debt and ongoing operational budgets.

Debt

· Would require borrowing of $11.22 million to fund this option:

Year 1 $200,000 Design Marlow

Year 2 $4,420,000 Construct Marlow

Year 4 $200,000 Design Woodhaugh

Year 5 $3,330,000 Construct Woodhaugh

Year 7 $200,000 Design Mosgiel

Year 8 $2,870,000 Construct Mosgiel

· Note, the draft capital budget already includes $6.60 million. Further details of this are presented in option 5 (status quo). If Council was to choose this option, the additional borrowing required would be $4.620 million over the 9 year period.

Rates

· Cost of borrowing is estimated to be 4.12% annually from year 1 to year 4 of the 9 year plan then 5% from year 5. Depreciation is estimated to be 8.5% annually from year 3 of the 9 year plan.

Year	Interest	Depreciation
Year 1 2025/26	$4,000
Year 2 2026/27	$99,000
Year 3 2027/28	$190,000	$393,000
Year 4 2028/29	$290,000	$393,000
Year 5 2029/30	$324,000	$393,000
Year 6 2030/31	$408,000	$693,000
Year 7 2031/32	$413,000	$693,000
Year 8 2032/33	$489,000	$693,000
Year 9 2033/34	$561,000	$954,000

· There will be no additional operating costs. The existing playgrounds are being maintained under a maintenance contract which will transfer to the redeveloped facility.

· Impact on Rates for this option compared to the draft 9 year plan budget is as follows (noting that this schedule is additional to what has been allowed for in the current draft budget):

Year 1 2025/26	4,000
Year 2 2026/27	99,000
Year 3 2027/28	583,000
Year 4 2028/29	683,000
Year 5 2029/30	717,000
Year 6 2030/31	1,100,000
Year 7 2031/32	1,045,000
Year 8 2032/33	752,000
Year 9 2033/34	750,000

Zero carbon

· City wide greenhouse emissions are likely to increase with this option. The 3 playgrounds are already well used; however, the proposed changes will improve the play experience with a new range of equipment for all age groups and be more accessible for people with mobility issues. Any increase is likely to be through increased usage and more people travelling to the playgrounds. This could be mitigated by providing covered cycle parking and ensuring that the playgrounds are well serviced with public transport options.

· DCC’s greenhouse emissions are likely to remain the same with this option. The 3 playgrounds are already maintained by DCC contractors, and the new designs are not likely to increase greenhouse emissions over the existing situation.

Advantages

· 3 modern destination playgrounds.

· Wide range of play opportunities.

· Inclusive play options.

· The feedback from the community will be incorporated into the new concept designs.

Disadvantages

· The costs will be significantly higher than the originally proposed budget of $6.6million.

Option Two.

34 Scenario D: Implement the updated concept design for Marlow Park with an approximate budget of $4.62 million within the first 3 year cycle of the 9 year plan and updating the other two playgrounds as part of the playground renewals process.

Impact assessment

This option has an impact on debt and ongoing operational budgets

Debt

· Would require borrowing of $4.62 million to fund this option in the first two years of the 9 year plan:

Year 1 2025/26 $200,000 Design Marlow

Year 2 2026/27 $4,420,000 Construct Marlow

· Note, the draft capital budget includes $6.600 million. Further details of this are presented in option 5 (status quo). This option would require less debt over the 9 year period.

Rates

· Cost of borrowing is estimated to be 4.12% annually from year 1 to year 4 of the 9 year plan then 5% from year 5. Depreciation is estimated to be 8.5% annually from year 3 of the 9.

Year	Interest	Depreciation
Year 1 2025/26	$4,000
Year 2 2026/27	$99,000
Year 3 2027/28	$190,000	$393,000
Year 4 2028/29	$190,000	$393,000
Year 5 2029/30	$231,000	$393,000
Year 6 2030/31	$231,000	$393,000
Year 7 2031/32	$231,000	$393,000
Year 8 2032/33	$231,000	$393,000
Year 9 2033/34	$231,000	$393,000

· There will be no additional operating costs. The existing playgrounds are being maintained under a maintenance contract which will transfer to the redeveloped facility.

· Impact on Rates for this option compared to draft 9 year plan (noting that this schedule is compared to what has been allowed for in the current draft budget):

Year 1 2025/26	4,000
Year 2 2026/27	99,000
Year 3 2027/28	583,000
Year 4 2028/29	583,000
Year 5 2029/30	624,000
Year 6 2030/31	624,000
Year 7 2031/32	564,000
Year 8 2032/33	194,000
Year 9 2033/34	(141,000)

Zero carbon

· City wide greenhouse emissions are likely to increase with this option. Marlow Park is a very popular playground and the design changes are likely to attract more people to visit. This could be mitigated by providing covered cycle parking and ensuring that the playground is well serviced with public transport options.

· DCC’s greenhouse emissions are likely to remain the same with this option. Marlow Park is already maintained by DCC contractors, and the new design is not likely to increase greenhouse emissions over the existing situation.

Advantages

· Will be designed within the originally proposed budget of $6.6 million.

· The community will see the development of a modern destination playground with their feedback incorporated into the design.

Disadvantages

· Only one of the 3 playgrounds consulted on will be built.

Option Three.

35 Scenario A: implement the original concept designs for all 3 playgrounds based on the original proposed budget of $6.6 million over the first 4 years of the 9 year plan.

Impact assessment

This option has an impact on debt and ongoing operational budgets

Debt

· Would require borrowing of $6.6 million to fund this option in the first two years of the 9:

Year 1 2025/26 $200,000 Design Marlow

Year 2 2026/27 $2,200,000 Construct Marlow, Design Woodhaugh

Year 3 2027/28 $2,200,000 Construct Woodhaugh, Design Mosgiel

Year 4 2028/29 $2,000,000 Construct Mosgiel

· Note, the draft capital plan includes $6.6 million in years 7, 8 and 9 as outlined in scenario 5. This option would require the same level of debt, however to be drawn down in earlier years.

Rates

· Cost of borrowing is estimated to be 4.12% annually from year 1 to year 4 of the 9 year plan then 5% from year 5. Depreciation is estimated to be 8.5% annually from year 3 of the 9:

Year	Interest	Depreciation
Year 1 2025/26	$4,000
Year 2 2026/27	$54,000
Year 3 2027/28	$144,000	$204,000
Year 4 2028/29	$231,000	$391,000
Year 5 2029/30	$330,000	$561,000
Year 6 2030/31	$330,000	$561,000
Year 7 2031/32	$330,000	$561,000
Year 8 2032/33	$330,000	$561,000
Year 9 2033/34	$330,000	$561,000

· There will be no additional operating costs. The existing playgrounds are being maintained under a maintenance contract which will transfer to the redeveloped facility.

· Impact on Rates for this option compared to draft 9 year plan (noting that this schedule is compared to what has been allowed for in the current draft budget):

Year 1 2025/26	4,000
Year 2 2026/27	54,000
Year 3 2027/28	348,000
Year 4 2028/29	622,000
Year 5 2029/30	891,000
Year 6 2030/31	891,000
Year 7 2031/32	831,000
Year 8 2032/33	461,000
Year 9 2033/34	127,000

Zero carbon

· City wide greenhouse emissions are likely to stay the same with this option. The three playgrounds are already well used; the changes will improve the play experience in each playground with a range of equipment for all age groups and be more accessible for people with mobility issues. Because all 3 playgrounds would be improved with a modest amount per playground, the pattern of use will remain as it is currently.

Advantages

· Will be designed within the originally proposed budget of $6.6million.

· The feedback from the community was generally in favour of updating the existing playgrounds.

· The concepts were designed to the $2million capital cost (2023).

Disadvantages

· Does not respond to the community feedback.

· The current costs will be higher than the original 2023 estimates and so designs will need to be scaled back to stay within budget.

Option Four.

36 Scenario B: implement the original concept designs for all 3 playgrounds based on the original proposed budget of $6.6 million spread over the 9 year plan with a playground being designed and constructed in each of the 3 year cycles.

Impact assessment

This option has an impact on debt and ongoing operational budgets

Debt

· Would require borrowing of $6.6million to fund this option:

Year 1 2025/26 $200,000 Design Marlow

Year 2 2026/27 $2,000,000 Construct Marlow

Year 4 2028/29 $200,000 Design Woodhaugh

Year 5 2029/30 $2,000,000 Construct Woodhaugh

Year 7 2031/32 $200,000 Design Mosgiel

Year 8 2032/33 $2,000,000 Construct Mosgiel

· Note, the draft capital budget includes $6.600 million. Further details of this are presented in option 5 (status quo). This option would require the same level of debt, however to be drawn down in earlier years.

Rates

· Cost of borrowing is estimated to be 4.12% annually from year 1 to year 4 of the 9 year plan then 5% from year 5. Depreciation is estimated to be 8.5% annually from year 3 of the 9:

Year	Interest	Depreciation
Year 1 2025/26	$4,000
Year 2 2026/27	$49,000
Year 3 2027/28	$91,000	$187,000
Year 4 2028/29	$191,000	$187,000
Year 5 2029/30	$170,000	$187,000
Year 6 2030/31	$210,000	$374,000
Year 7 2031/32	$225,000	$374,000
Year 8 2032/33	$280,000	$374,000
Year 9 2033/34	$330,000	$561,000

· There will be no additional operating costs. The existing playgrounds are being maintained under a maintenance contract which will transfer to the redeveloped facility.

· Impact on Rates for this option compared to draft 9 year plan (noting that this schedule is compared to what has been allowed for in the current draft budget):

Year 1 2025/26	4,000
Year 2 2026/27	49,000
Year 3 2027/28	278,000
Year 4 2028/29	378,000
Year 5 2029/30	357,000
Year 6 2030/31	584,000
Year 7 2031/32	539,000
Year 8 2032/33	224,000
Year 9 2033/34	127,000

Zero carbon

· City wide greenhouse emissions are likely to stay the same with this option. The three playgrounds are already well used; the changes will improve the play experience in each playground with a range of equipment for all age groups and be more accessible for people with mobility issues. Because all 3 playgrounds would be improved with a modest amount per playground spread over 3 cycles of the 9 year plan, the pattern of use will remain as it is currently.

Advantages

· Will be designed within the originally proposed budget of $6.6million.

· The feedback from the community was generally in favour of updating the existing playgrounds.

Disadvantages

· Does not respond to the community feedback.

· The current costs will be higher than the original 2023 estimates and so designs will need to be scaled back to stay within budget.

Option Five. Status Quo.

37 Scenario E: Business as usual with new budget allocated for the three playgrounds to occur in the last 3 years of the 9 Year Plan.

Impact assessment

This option has an impact on debt and ongoing operational budgets

Debt

· Would require borrowing of $6.6 million to fund this option:

Year 7 2031/32 $2,400,000 Design Marlow, Construct Marlow, Design Woodhaugh

Year 8 2032/33 $2,200,000 Construct Woodhaugh, Design Mosgiel

Year 9 2033/34 $2,000,000 Construct Mosgiel

Rates

· Cost of borrowing is estimated to be 5.0% from year 5:

Year 7 2031/32 $60,000

Year 8 2032/33 $175,000

Year 9 2033/34 $280,000

· Depreciation is estimated to be:

Year 8 2032/33 $255,000

Year 9 2033/34 $484,000

· There will be no additional operating costs. The existing playgrounds are being maintained under a maintenance contract which will transfer to the redeveloped facility.

· Impact on rate funding in the draft budget:

Year 7 2031/32 $60,000

Year 8 2032/33 $430,000

Year 9 2033/34 $764,000

Zero carbon

· City wide greenhouse emissions will stay the same with this option. The three playgrounds are already well used and the pattern of use will remain as it is currently.

· DCC’s greenhouse emissions are likely to remain the same with this option. The 3 playgrounds are already maintained by DCC contractors.

Advantages

· Will be designed within the originally proposed budget of $6.6million.

· The feedback from the community was generally in favour of updating the existing playgrounds.

Disadvantages

· Does not respond to the community feedback.

· The current costs will be higher than the original 2023 estimates and so designs will need to be scaled back to stay within budget.

NEXT STEPS

37 Once an option has been selected work will begin work accordingly.

Signatories

Author:	Heath Ellis - Acting Group Manager Parks and Recreation
Authoriser:	Jeanette Wikaira - General Manager Arts, Culture and Recreation

Attachments

There are no attachments for this report.

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This decision enables democratic local decision making and action by, and on behalf of communities.

This decision promotes the social 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	☐	☐	✔
Future Development Strategy	✔	☐	☐
Integrated Transport Strategy	✔	☐	☐
Parks and Recreation Strategy	✔	☐	☐
Other strategic projects/policies/plans	✔	☐	✔

Playspaces contribute to the wellbeing of the community. The development of playspaces provides opportunities for art and culture to be included within the design. The Integrated Transport Strategy and Future Development Strategy are relevant when considering locations of future playspaces and in particular destination playspaces. Playspaces are a key component of the Parks and Recreation Strategy.

Māori Impact Statement

There will be continued engagement with mana whenua throughout both the design and development of our destination playspaces. Aukaha have been involved in preliminary discussions during the development of concept designs.

Sustainability

Sustainability will be considered all stages of the project from planning to construction.

Zero carbon

As above, the level of emissions depends on the option selected. The preferred option will attract more people to visit each of the playgrounds and there will be vehicle emissions to consider. To mitigate these effects the playgrounds will promote active transport options by providing covered cycle parking and amenities. Public transport options will also be promoted as an option for visiting the playgrounds.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

Currently there is no budget allocated within the 9 year plan for developing destination playspaces.

Financial considerations

Significance

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

Engagement – external

There have been 3 separate external engagement periods. The first was the feedback received in the 2021 to 2031 LTP where there was a call for a Margaret Mahy style of Playground in Dunedin. The second was to determine whether Council should create a new destination playground or invest in upgrading the 3 existing destination playgrounds. This round of engagement also sought to establish what improvements should be made at each of the 3 existing playgrounds. The third was to receive feedback on the resulting concept designs.

Engagement - internal

Parks and Recreation Services staff will work closely with our colleagues in other departments with the development of destination playspaces.

Risks: Legal / Health and Safety etc.

There are no identified risks.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

All of the Community Boards will be interested in this topic as these playgrounds are relevant to people from all areas of the city.

Council

28 January 2025

Sports Field Fees and Charges

Department: Parks and Recreation

EXECUTIVE SUMMARY

1 Dunedin City Council maintains 54 sports grounds and manages up to 156 grass and 4 artificial playing fields for sports activities across the city.

2 At Council’s request, a review of the fees and charges for sports fields was undertaken to ensure they were accurate and to capture electricity costs for field lighting as part of the cost recovery calculations.

3 The cost recovery calculation for an artificial turf versus a grass field was reviewed to ensure accuracy. A new charge specific to artificial turfs has been included in the proposed fees and charges schedule.

4 The report outlines the sports field fees and charges review and the adjustments required to align with the Revenue and Financing policy (the policy). The policy states a funding split of 96% rates to 4% user pays.

5 The overall result of the review shows that currently 5 sports codes are paying over the 4% setting for the Revenue and Financing policy; 2 sports codes are paying at the 4% policy setting and 1 sports code is paying under the 4% policy setting.

6 Realigning all sports codes to ensure the policy setting at 4% is met by all sports codes, produces a decrease of revenue of $5,726, from the 2024/25 financial year for sports fields.

7 Increasing the sports fields fees and charges to a Revenue and Financing policy setting of 95% rates funded and 5% user pays, produces an increase of revenue of $59,563 from the 2024/25 financial year for sports fields. This assumes codes book the same number of fields as the previous season.

8 The proposed sports field fees and charges have been included at the policy setting of 95% rates and 5% user pays in the Community Recreation – Draft Operating Budget 9 year plan 2025-34 report for Council decision.

RECOMMENDATIONS

That the Council:

a) Decides to:

i) Maintain the sports fields fees and charges at the current Revenue and Financing policy setting of 96% rates funded and 4% user pays.

ii) Increase the sports fields fees and charges to a Revenue and Financing policy setting of 95% rates funded and 5% user pays.

BACKGROUND

9 At a Council meeting on 28 May 2024, Council resolved to take ownership of the hockey turfs and fund the replacement of the hockey turfs located at Logan Park.

Moved (Cr Andrew Whiley/Cr Jim O'Malley):

That the Council:

a) Agrees to take ownership of the hockey turfs located at Logan Park and fund the replacement of the hockey turfs at a capital cost of $1 million, in the Annual Plan 2024/25.

b) Requests a review of ground rental charges for sports fields and facilities in time to inform development of the 9 year plan 2025-34.

c) Request staff to work with the Otago Hockey Association (1990) on rental charges for 2024/25.

Motion carried (CNL/2024/082)

Otago Hockey Context

10 Following the Council resolution on 28 May 2024, work was progressed with the Otago Hockey Association to agree on a Memorandum of Understanding (attached as Appendix A) for the handover of the two artificial turfs located at Logan Park.

11 In conjunction, work began on replacing the artificial turfs in November 2024. It is planned that the works will be completed before the start of the next hockey season.

12 When Council takes ownership of the artificial turfs, Hockey will need to be charged a fee in line with the Revenue Policy for their use.

13 Currently there is no specific fee for artificial turf hire as existing artificial turfs are charged as grass fields. In addition, there have been inconsistencies on how lights have been charged.

14 New artificial turf fees are proposed in the schedule attached as Appendix B. These new fees will apply to hockey. A new charge for field lights per pitch has also been included in the proposed schedule.

15 Hockey have maintained ownership of the field lights and the change and clubroom facilities; therefore, they will not be charged the new fee for field lights.

16 The land and car park leases at Logan Park were also reviewed for Hockey. This resulted in an increase charge from their current fee of $10,625.85 excl. GST to $30,023.70 excl. GST. An increase of $19,397.85.

17 For 24/25, given that no current fee has been set for hockey, they have agreed to be invoiced at the conclusion of the 24/25 season at the amount set by Council in the fees and charges schedule.

Sports Field and Facilities Context

18 Dunedin City Council maintains and manages 156 grass sports fields and 4 artificial turfs across Dunedin for summer and winter sports activities across 54 sports grounds.

19 Bookings for these fields are split into winter and summer seasons.

20 The winter season traditionally runs from April until September with some preseason bookings in March. Winter codes include Football (7,800 participants), Rugby (4,800) and Hockey (2,700).

21 The summer season traditionally falls between November and March. Summer codes include Cricket (1,700 participants), Athletics (900), Softball (500) and Touch Rugby (4,700).

22 Sports fields are used more in winter than summer with Football (92 grass fields and 2 artificial fields) and Rugby (64 grass fields) being the biggest sports field user groups.

23 Of the 54 sports grounds that DCC manages, 25 have council owned pavilions and change facilities available for use.

24 Of the 54 sports grounds that DCC manages, 35 have DCC owned lighting available for use.

Revenue and Financing Policy Context

25 The revenue and financing policy for parks and reserves is currently split 96% rates and 4% from other revenue including fees and charges.

26 The total annual cost for 2024-2025 of maintaining sports fields, the artificial turfs, facilities, and lights is $5,343,364.

27 Current fees and charges differentiate between fields with facilities ($2,111.70 per season) and sports fields without facilities ($1,180.40 per season).

28 Currently DCC incurs annual costs of $161,483 for lighting sports fields. This includes energy, inspections, and maintenance costs. Electricity costs for lighting sports fields during winter had not previously been part of the cost recovery calculation, this is now included in the 2025/26 fees and charges for sports fields.

29 Budgeted revenue for the 2024/25 financial year to be received for sports fields and associated facilities totals $298,345.

30 Sports fields fees and charges are updated annually, with the last full review occurring in 2021 when the Delta greenspace contract started.

DISCUSSION

Current Fees and Charges

31 The 2024/25 charges and current position against the Revenue and Financing policy for sports codes (4% user pays) are shown in Table 1 (below).

Table 1. Current Hire Agreements for Sports Codes – 2024/25

32 Once the reviewed costs had been accurately calculated, the table above outlines some variance to the policy.

33 The review showed some charges had crept closer to 5% cost recovery than 4% policy setting. In order to align with the 4% policy setting and ensure equity across all sports codes, some charges would decrease and some would increase.

34 Hockey do not currently pay a fee as they owned the artificial turf last hockey season.

35 Touch Rugby is the only code currently being undercharged according to the policy.

36 Since the Delta greenspace contract started in 2021, Parks have been able to accumulate better data each year to have a more accurate idea of the specific costs the DCC incurs for maintaining sports fields over the duration of that contract due to improved reporting.

37 The updated fees and charges schedule for 2025/26 proposes that facilities and field lighting would be charged as a separate fee in accordance with the adopted revenue finance policy.

38 Costs included in the calculation for grass sports fields include mowing, line marking, water charges, maintenance of the fields, staff time and depreciation (where applicable).

39 Costs included for artificial turfs include brushing, maintenance, depreciation, and interest water charges and insurance premiums where applicable.

Proposed Fees and Charges

40 Table 2. (below) shows the impact on sporting codes of the proposed changes to fees and charges to align with the current Revenue and Financing policy setting at the 4% and the proposed 5% policy change compared to the current years charges.

Table 2. Proposed Hire Agreements for Sports Codes 2025/26

41 The proposed fees and charges schedule can be found in Appendix A.

42 Touch Rugby is impacted the most by percentage increase as they are currently paying 3.2% of user pays against the 4% policy setting. Under the current policy and accounting for realignment to 4%, Touch Rugby would be invoiced a total of $13,522 this season they were invoiced $10,557. Under the proposed policy of 5%, Touch Rugby would be invoiced a total of $16,879 which would be a 37% increase.

43 Football: Under the current policy and accounting for realignment to 4%, Football would be invoiced a total of $89,844, this season they were invoiced $95,968. Under the proposed policy of 5%, Football would be invoiced a total of $111,635 if the number of fields book remained the same.

44 Hockey: The annual costs incurred for the renewed hockey turf at Logan Park including depreciation, interest, water charges and insurance premiums is calculated to be $70,499 per turf.

45 Artificial turf charges are proposed at $3,243 incl. GST per turf at 4% recovery or $4,053.75 incl. GST at 5%. This fee will cover the two new hockey turfs and the other DCC owned artificial turfs at Logan Park. The main driver for the increased cost (in comparison to a grass field) is depreciation.

46 Lights and change facilities will be charged on top of this fee if they are booked for the non-hockey turfs.

47 Under the proposed charges, at 4% Hockey would be invoiced $6,616 incl. GST, or $8,108 at 5%, for two turfs due to DCC not owning the lights or the pavilion at the Logan Park Hockey Turf.

48 On top of these fees, it is Hockey’s responsibility to maintain the Hockey turf day to day and pay the costs of electricity for field lighting and cleaning and maintaining their change rooms.

49 Rugby: Under the current policy and accounting for realignment to 4%, Rugby would be invoiced at $58,840 incl. GST. In 2024/25 they were invoiced at $68,952 incl. GST. Under the proposed policy of 5%, Rugby would be invoiced at $73,548 incl. GST.

50 Cricket: Under the current policy and accounting for realignment to 4%, Cricket would be invoiced at $101,828 incl. GST. In 2024/25 they were invoiced at $99,832. Under the proposed policy of 5%, Cricket would be invoiced at $123,313 incl GST.

51 Under the current policy and accounting for realignment to 4%, the net result would see revenue for sports fields decrease from $286,298 in 2024/25 to $280,572 in 2025/26. This includes revenue received from Hockey that was not received this year.

52 Under the proposed policy of 5%, the net result would see revenue for sports fields increase from $286,298 to $345,861 incl. GST.

OPTIONS

Option One Council approves maintaining the sports fields fees and charges at the current Revenue and Financing policy setting of 96% rates funded and 4% user pays.

Impact assessment

Debt

· No debt funding is required for this option.

Rates

· If adopted, the 4% option that aligns with the current policy would leave a shortfall in revenue of $5,726 which would have to be paid via rates.

Zero carbon

· This option is unlikely to impact city or DCC emissions.

Option Two Council approves increasing the sports fields fees and charges to a Revenue and Financing policy setting of 95% rates funded and 5% user.

Impact assessment

Debt

· No debt funding is required for this option.

Rates

· If adopted, the 5% option would mean an increase of revenue by $59,563 which would mean rates could be reduced by that amount.

Zero carbon

· This option is unlikely to impact city or DCC emissions.

NEXT STEPS

53 The proposed sports field fees and charges have been included at the policy setting of 95% rates and 5% user pays in the Fees and Charges Report for Council decision.

54 Staff will inform all sporting codes of the proposed changes to the sports field fees and charges and explain how these will affect them and invite them to submit any feedback as part of the 9-year plan 2025-34 consultation.

55 Staff will continue to review fees and charges for sports fields to ensure ongoing alignment with Council’s Revenue and Financing policy.

Signatories

Author:	Heath Ellis - Acting Group Manager Parks and Recreation
Authoriser:	Jeanette Wikaira - General Manager Arts, Culture and Recreation

Attachments

	Title	Page
⇩a	MoU Otago Hockey Association and the DCC 2024	554
⇩b	Proposed Sports Field Fees and Charges Schedule 25/26	617

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	☐	☐	✔
Future Development Strategy	☐	☐	✔
Integrated Transport Strategy	☐	☐	✔
Parks and Recreation Strategy	✔	☐	☐
Other strategic projects/policies/plans	☐	☐	✔

Supporting quality sport and recreation facilities is a key part of the Parks and Recreation Strategy 2017.

Māori Impact Statement

Mana whenua and Māori have an opportunity to engage with the 9 year plan consultation process.

Sustainability

Dunedin’s sports fields are near major public transport routes and cycleways, enabling alternative modes of transport to be used for those participating and watching sports across the city.

Zero carbon

This report does not have implications for city or DCC emissions.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

Updated Sports Field fees and charges have been included in the Compliance to the Revenue and Financing Policy Report being presented at this meeting.

Financial considerations

Financial considerations are discussed in this report.

Significance

Fees and Charges information will be made available as part of the 9 year plan 2025-34 consultation document.

Engagement – external

Engagement with sports codes across Dunedin has been undertaken as part of the sports fields review.

Engagement - internal

Parks and Recreation Services and Finance staff have been consulted.

Risks: Legal / Health and Safety etc.

There are no identified risks.

Conflict of Interest

There are no identified conflicts of interest.

Community Boards

Sports Field fees and charges will be of interest to all Community Boards.

Council

28 January 2025

Creative and cultural vibrancy - Draft Operating Budget 9 year plan 2025-34

Department: Library and Arts and Culture

EXECUTIVE SUMMARY

1 This report provides:

· a summary of the services provided by Creative and Cultural Vibrancy

· an overview of the draft operating (opex) budget for year one of the 9 year plan for Creative and Cultural Vibrancy

· an overview of the variations from the year one budget for years two to nine for Creative and Cultural Vibrancy

2 This report includes four attachments:

i) Operating budget for 2025/26 (year one) – this details the movements from the 2024/25 year.

ii) Operating budget for 2025/26 to 2033/34 (nine years) – this details the projected operating budget throughout the nine year period.

iii) Funding Impact Statement for 2025/26 to 2033/34 (nine years) – this summarises the source and application of funding throughout the nine year period.

iv) Schedule of Fees and Charges.

3 The report asks the Council to adopt the draft operating budget and draft fees and charges for the purposes of developing the 9 year plan 2025-34 and consulting with the community.

RECOMMENDATIONS

That the Council:

a) Adopts for the purposes of developing the 9 year plan 2025-34 and consulting with the community

i) The draft operating budgets and funding impact statement for Creative and Cultural Vibrancy as shown/amended at Attachments A, B and C.

ii) The draft 2025/26 fees and charges schedules for Creative and Cultural Vibrancy as shown/amended at Attachment D.

BACKGROUND

Creative and Cultural Vibrancy – summary of services

4 Creative and Cultural Vibrancy includes the following activities and services:

· Creative Partnerships – creative capability, creative partnerships and creative advocacy.

· Dunedin Public Art Gallery (DPAG), Toitū Museum, Lan Yuan Chinese Garden, and Olveston – accessible collections, development of collections, community engagement, community spaces and cultural sites.

· Libraries – accessible collections and information, development of collections, community engagement and community spaces.

· City of Literature – connections, collaboration, sustainability and innovation.

5 The Creative and Cultural Vibrancy group maintains and preserves a rich heritage of stories, treasures, and knowledge through its cultural institutions, provides opportunities to access, experience and support the arts and culture within Ōtepoti Dunedin, and is one of four local authorities in Otago that contributes to the governance and funding of Tūhura Otago Museum.

6 The DCC contributes to the management and funding of the Tūhura Otago Museum under the Otago Museum Trust Board Act 1996. There are four Council representatives on the museum’s board. We contribute significantly to the museum’s operational funding through an annual levy ($4.957m in 2024). DCC staff are committed to working with Tūhura Otago Museum staff on operational matters. Over the long term plan cycle, we intend to continue to work together to develop a funding approach that will provide certainty around Council’s financial support for Tūhura Otago Museum.

operating budgets – 2025/26

7 The 2025/26 draft operating budget for Creative and Cultural Vibrancy is $32.024 million. This is an increase of $1.166 million from the 2024/25 year. The following sections explain the revenue and expenditure changes from the previous year.

Revenue

Rates

8 Rates revenue is $29.411 million. This is an increase of $1.094 million from the 2024/25 year.

External revenue

9 Total external revenue is $2.047 million. This is an increase of $134k from the 2024/25 year.

a) Merchandise sales for DPAG, Toitū and Lan Yuan have increased $75k from increased shop sales.

b) Lan Yuan general admissions has increased $26k per the fees and charges schedule.

c) New theatrette admissions revenue is estimated at $75k.

d) Reduced rental income and associated cost recovery reduction.

Grants and subsidies – operating

10 Total revenue from grants and subsidies (operating) is $362k. This is a decrease of $62k from the 2024/25 year due to one off funding in 2024/25 for Olveston (funding for Olveston book production).

Expenditure

Personnel costs

11 Personnel costs are $11.905 million. This is an increase of $230k from the 2024/25 year. The budget provides for 6.8 FTE of new staff in the library area for the new South Dunedin Library. Further explanation of changes to personnel costs are discussed in detail in the Chief Executive Overview Report that is on the agenda.

Operations and maintenance

12 Operations and maintenance expenditure is $1.477 million. This is an increase of $173k from the 2024/25 year due to the following:

a) DPAG exhibition costs increased to reflect actual costs $85k.

b) Creative Partnerships Arts Capability Workshop grant $30k was previously administered by Otago Community Trust however this will now be administered by DCC so has been recategorised to operations and maintenance.

c) New South Dunedin Library costs for security increased $60k.

Occupancy costs

13 Occupancy costs are $1.501 million. This is an increase of $92k from the 2024/25 year due to the following:

a) Energy costs have increased $134k.

b) South Dunedin rental for pop up facility reduced $45k.

Consumables and general

14 Consumables and general costs are $1.418 million. This is a decrease of $96k from the 2024/25 year due to the following:

a) Olveston costs reduced $108k due to one off cost for production of the Olveston book in 2024/25.

b) Library savings of $27k for travel, catering, and sundry expenditure.

c) DPAG savings of $20k for subscriptions, telecommunications, and sundry expenditure.

d) Retail merchandise purchases has increased for DPAG/Toitū $62k which is offset by increased external revenue.

Grants and subsidies

15 Grants and subsidy costs are $5.856 million. This is an increase of $63k from the 2024/25 year due to the following:

a) Library grant of $15.6k has been removed as St Kilda library will be closing once the new South Dunedin Library opens.

b) A recategorisation of expenditure in Creative Partnerships of $30k for Arts Capability workshops to operations and maintenance as it will no longer be administered by Otago Community Trust.

c) Otago Museum Levy $5.170 million in 2024/25 has increased $109k to $5.279 million for 2025/26. This increase is based on CPI of 2.1%.

Internal charges

16 Internal charge costs are $7.464 million. This is an increase of $333k from the 2024/25 year.

Depreciation

17 Depreciation costs are $1.758 million. This is an increase of $432k from the 2024/25 year, driven by the capital expenditure programme.

Interest

18 Interest costs are $645k. This is a decrease of $61k from the 2024/25 year due to a reduced interest rate.

Budget tradeoffs

19 Asbestos removal was originally planned to be increased to $150k for 5 years from 2025/26 to clean collection items at Toitū. This has remained at $95k (same as 2024/25) and will be spread out over a longer period to achieve this project and keep the budget fiscally neutral.

fees and charges – 2025/26

20 Library – an increase in charges for meeting room hire at libraries and a new charge for not-for-profit groups for room hire (previously not charged) has been provided for. Consultation with the South Dunedin community highlighted that providing our facilities for free has disadvantaged other organisations who rely on rental income from the hire of their meeting rooms. The introduction of the new charges will apply to all libraries that have bookable meeting rooms, along with the new South Dunedin Library.

21 Increases to Olveston retail prices are in line with market movements in the tourism sector – noting most sales are wholesale via inbound tourism operators.

22 Toitū research charges and Lan Yuan admission increases reflect increased service delivery costs.

23 Note is made that the fees and charges schedule may need to be updated, depending on the decision made by Council on the “Potential entry charges at cultural institutions” report that is on the agenda.

OPERATING BUDGETS – YEARS 2-9

24 The 2025/26 operating budget has been inflation adjusted for years two to nine.

Zero Carbon

25 The draft operating budget for this group is unlikely to materially affect city or DCC emissions. This group’s operational activities form part of the DCC’s emissions footprint. However, providing these facilities/services close to communities helps support lower emission lifestyles.

26 The draft capital budget includes provision for projects that will improve energy efficiency and reduce emissions at certain facilities. This, along with alignment with the Zero Carbon Policy, will reduce emissions from operations (and city emissions) over the term of the 9 year plan.

Signatories

Author:

Anne-Maree Wigley - Director Library Services

Cam McCracken - Director DPAG, Toitū, Lan Yuan and Olveston

Authoriser:

Jeanette Wikaira - General Manager Arts, Culture and Recreation

Attachments

	Title	Page
⇩a	Draft Operating Budget 2025/26 (year 1)	626
⇩b	Draft Operating Budgets - years 2 - 9	627
⇩c	Draft Funding Impact Statement 2025-34	628
⇩d	Draft fees and charges 2025/26	629

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	☐	☐	☐
Future Development Strategy	✔	☐	☐
Integrated Transport Strategy	☐	☐	☐
Parks and Recreation Strategy	✔	☐	☐
Other strategic projects/policies/plans	✔	☐	☐

Creative and Cultural Vibrancy activities contribute primarily to the objectives and priorities of the above strategies.

Māori Impact Statement

Council budgets impact broadly across all Dunedin communities including Māori. The adoption of Te Taki Haruru – Māori Strategic Framework signals Council’s commitment to mana whenua and to its obligations under the Treaty of Waitangi. Mana whenua and Mataawaka will have the opportunity to engage in the 9 year plan consultation process.

Sustainability

Creative and Cultural Vibrancy activities take into account the Council’s approach to sustainability.

Zero carbon

The draft operating budget for this group is unlikely to materially affect city or DCC emissions.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides draft budgets for Creative and Cultural Vibrancy to include in the 9 year plan.

Financial considerations

Financial considerations are detailed in this report.

Significance

The draft budgets are included in the development of the 9 year plan 2025-34, which is consulted on using the special consultative procedure.

Engagement – external

There has been no external engagement in developing the draft budgets for Creative and Cultural Vibrancy.

Engagement - internal

Councillors and staff from across council have been involved in 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

Project identified in Community Board plans have been considered in the development of the draft budgets. Community Boards will be consulted on the 9 year plan 2025-34.

[1] Note this combines reductions and timing changes with carry forward budgets.

	Title	Page
A ⇩	Minutes of Ordinary Council meeting held on 10 December 2024	18

Author:	Mike Cartwright - Quality Improvement Specialist
Authoriser:	Robert West - General Manager Corporate Services