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AGENDA ATTACHMENTS

I hereby give notice that an extraordinary Annual Plan Direction Setting meeting of the

FINANCE AND STRATEGY COMMITTEE

will be held as follows:

DATE:	Wednesday, 12 December 2007
TIME:	9.30 am
VENUE:	Level 2, Reception Lounge Town Hall 301 Queen Street Auckland

Adam Milina
DEMOCRACY ADVISOR

Members:

(All Councillors are deemed members of the Finance and Strategy Committee for Annual Plan purposes)

Cr Doug Armstrong, QSO (Chairperson)
His Worship the Mayor, Hon John Banks, QSO
Deputy Mayor David Hay, JP
Cr	Ken	Baguley	Cr	Paul	Goldsmith
Cr	Aaron	Bhatnagar	Cr	Peseta Sam	Lotu-Iiga
Cr	Leila	Boyle	Cr	Toni	Millar, JP
Cr	Dr Cathy	Casey	Cr	Greg	Moyle
Cr	Bill	Christian, JP	Cr	Graeme	Mulholland, JP
Cr	Mark	Donnelly	Cr	Richard	Northey, ONZM
Cr	Graeme	Easte	Cr	Noelene	Raffills
Cr	Glenda	Fryer	Cr	Denise	Roche

1. APOLOGIES

   At the close of the agenda no apologies had been received.

2. EXTRAORDINARY BUSINESS

   Section 46A(7) of the Local Government Official Information and Meetings Act 1987 (as amended) states:
   “An item that is not on the agenda for a meeting may be dealt with at that meeting if-
   (a)	The local authority by resolution so decides; and
   (b)	The presiding member explains at the meeting at a time when it is open to the public,-
   	(i)	The reason why the item is not on the agenda; and
   	(ii)	The reason why the discussion of the item cannot be delayed until a subsequent meeting.”
   Section 46A(7A) of the Local Government Official Information and Meetings Act 1987 (as amended) states:
   “Where an item is not on the agenda for a meeting,-
   (a)	That item may be discussed at that meeting if-
   	(i)	That item is a minor matter relating to the general business of the local authority; and
   	(ii)	The presiding member explains at the beginning of the meeting, at a time when it is open to the public, that the item will be discussed at the meeting; but
   (b)	no resolution, decision, or recommendation may be made in respect of that item except to refer that item to a subsequent meeting of the local authority for further discussion.”

3. CHIEF EXECUTIVE'S OVERVIEW OF DIRECTION SETTING FOR THE 2008/2009 ANNUAL PLAN

   D Rankin
   Chief Executive	30 November 2007

   Reporting on the strategic and funding context for the development of the 2008/2009 annual plan.

   Recommending that the Annual Plan Direction Setting meeting notes that the Annual Plan 2008/2009 contains the proposed annual budget and funding statements for year three of the Long-term Council Community Plan (LTCCP) as amended by deferral of various new projects and initiatives to produce a draft rates increase equal to the council rate of inflation of 4.8%. 

   Further noting the range of issues that need to be considered in the development of the annual plan including: 

   • issues regarding rates, targeted rates, grants and subsidies, development contributions, borrowings and Metrowater charitable payments;
   • investigation of additional funding sources;
   • challenges the organisation faces in delivery of the long-term visions and the long-term plan;
   • ther current developments: Auckland International Airport shareholding, the government rating inquiry of the Royal Commission of inquiry into Auckland Governance;
   • issues regarding economy, community, lifestyle, transport, natural environment, built environment and organisational capability.

   [ATTACHMENT 3]

   Pages 1-32

4. BACKGROUND ON ISSUES AND BUDGET ITEMS

   4.1.OPTIONS FOR INCREASING COUNCILS REVENUE

   G Webb
   Financial and revenue strategy manager	30 November 2007

   This report was unavailable at the time the agenda went to print and will be circulated under separate cover.

   4.2.OVERVIEW DEVELOPMENT CONTRIBUTIONS POLICY

   A Pickering
   Team leader contributions - policy	27 November 2007

   Providing an overview of Auckland City Council’s Development Contributions Policy and advising that there are a number of issues to resolve in the policy. 

   Recommending that officers be requested to continue to refine and extend Auckland City Council’s Development Contributions Policy, including:

   1. revising 2007 development contribution charges to account for the programmed cost of finance increase (initial estimate is an increase of five per cent) excluding any changes as a result of adjustments to the capital programme, census data and methodology refinements;
   2. an update of the current Development Contributions policy;
   3. extending the application of the Development Contributions policy to the Hauraki Gulf islands in relation to community amenities.

   [ATTACHMENT 4.2]

   Pages 33-40

   4.3.EFFICIENCY AND EFFECTIVENESS

   B Ashby
   Operational reporting manager	30 November 2007

   This report was unavailable at the time the agenda went to print and will be circulated under separate cover.

   4.4.ASSET MANAGEMENT PLAN PROCESS

   D Jeffrey
   Asset planning manager	30 November 2007

   Reporting to councillors on the asset management planning process and the way in which Councillors can engage in the process to determine service levels for the next long term council community plan (LTCCP).

   Asset management plans are the key drivers for the LTCCP, and are the documents that provide an understanding of councils’ levels of service and performance standards, growth forecasts, asset conditions, and management strategy relating to our infrastructure assets.

   Recommending that the report of the Asset planning manager regarding the Asset Management Plan Process dated 30 November be received.

   [ATTACHMENT 4.4]

   Pages 41-42A

   4.5.ASSET PERFORMANCE AND FUNDING

   N Lucas
   Treasury manager	30 November 2007

   This report was unavailable at the time the agenda went to print and will be circulated under separate cover.

   4.6.METROWATER AND WATER ISSUES

   R Simpson Policy Analyst
   E Wen Policy Analyst	30 November 2007

   Reporting on major water and wastewater related issues that councillors expressed interest in at Combined Committees June 2007.  This report provides an overview of officer responses to these issues and an attached supplementary report lists these issues and explores them in greater detail.

   These include Metrowater’s charitable payments; the tax status of Metrowater and potential outcomes of and responses to a binding ruling application to the Inland Revenue Department.

   Recommending that it be noted that:

   • Revenue projections provide for charitable payments of $260 million over the next 8 years to fund stormwater network upgrades;
   • Any reduction in charitable payments will require either rates increase, an increase in borrowing or a planned reduction in expenditure;
   • The continuation of Metrowater charitable payments is recommended to ensure water prices encourage efficient water use;
   • The introduction of a progressive pricing system for water charges has practical issues and inequities.

   Also recommending that the continued funding of wastewater services through user charges rather than rates based funding be endorsed and the current division of responsibilities with regard to the management of the stormwater network, subject to further analysis by officers should the Royal Commission on Regional Governance or other circumstances warrant it, be endorsed. Further recommending that officers explore tax scenarios and solutions should the Internal Revenue Department binding ruling declare that Metrowater is a tax paying entity.

   [ATTACHMENT 4.6]

   Pages 43-104

5. RATING AND REVENUE POLICY

   5.1.ANALYSIS OF INDEPENDENT RATES INQUIRY RECOMMENDATIONS

   J Abrahamson
   Policy analyst	22 November 2007

   Reporting on findings of the central government commissioned Independent Rates Inquiry.  The purpose of the inquiry was to provide an independent assessment of New Zealand’s local authorities rating system and make recommendations to enhance rates as a funding tool for local authorities.

   Recommending that it be noted that the rates inquiry recommendations do not provide funding assistance for councils in the short term, as they require central government to introduce new legislation. Further noting the rates inquiry recommendations that are consistent and those that are not consistent with Council’s current policies.

   [ATTACHMENT 5.1]

   Pages 105-128

   5.2.FINANCIAL, REVENUE AND RATES-RELATED POLICIES FOR 2008/2009

   G Webb
   Financial and revenue strategy manager	30 November 2007

   This report was unavailable at the time the agenda went to print and will be circulated under separate cover.

6. UPDATES ON BUDGETS FOR 2008/2009

   6.1.UPDATE ON BUDGETS FOR 2008/2009 - OPEX

   S Ross
   Corporate planning manager	30 November 2007

   This report was unavailable at the time the agenda went to print and will be circulated under separate cover.

   6.2.2008/2009 BUDGET - CAPEX

   D Jeffrey
   Asset planning manager	30 November 2007

   This report was unavailable at the time the agenda went to print and will be circulated under separate cover.

7. 2008/2009 ANNUAL PLAN POLITICAL PROCESS

   L Manaia
   Democracy advisor	16 November 2007

   Reporting on the proposed consultation, submission and hearings processes for the 2008/2009 draft annual plan.

   Recommending that the consultation, submission and hearings processes for the 2008/2009 draft annual plan be adopted and that status quo of one month for the consultation period remain.

   [ATTACHMENT 7]

   Pages 129-144