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Finance and Strategy Committee
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OPEN AGENDA

I hereby give notice that an extraordinary Long-term Council Community Plan (LTCCP) Direction Setting meeting of the

FINANCE AND STRATEGY COMMITTEE

will be held as follows:

DATE: Tuesday, 18 November 2008
TIME: 9:30 am
VENUE: Level 2, Reception Lounge
  Town Hall
  301 Queen Street
  Auckland
Priscilla Steel
DEMOCRACY ADVISOR

Members:

(All Councillors are deemed members of the Finance and Strategy Committee for the purpose of the Long-term Council Community Plan (LTCCP) Direction Setting)

Cr Douglas Armstrong, QSO (Chairperson)
His Worship the Mayor, Hon John Banks, QSO
Deputy Mayor David Hay, JP
Cr Ken Baguley Cr John Lister, OBE
Cr Aaron Bhatnagar Cr Peseta Sam Lotu-Iiga
Cr Leila Boyle Cr Toni Millar, JP
Cr Dr Cathy Casey Cr Greg Moyle, E.D.
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
Cr Paul Goldsmith      

  1. Top APOLOGIES

    An apology has been received from Councillor John Lister.

  2. Top 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."

    OVERVIEW

  3. Top TEN-YEAR PLAN PROCESS OVERVIEW

    Robert Nelson  
    Group Manager Corporate Finance and Planning 6 November 2008

    Reporting on the outcome of the Ten-Year plan. There are many drivers impacting on rates, however council has options available to achieve a rates increase target. The proposed budgets were prepared on the basis of all expenditure being value for money and affordable progress keeping rates increases over the Ten-Year plan to less than or equal to council's rate of inflation each year. The Ten-Year budgets categorised operating activities and capital projects based on the strategic priorities agreed to at the 7 October 2008 Long-term Council Community Plan (LTCCP) Direction Setting meeting into the following categories:

    • Statutory (activity or project required by legislation);
    • Contractual (council has already committed to undertake the work and to not do so would incur a financial penalty);
    • Need to do (this includes activities that are necessary for safety or economic reasons and asset renewal projects); and
    • Discretionary (activities that do not meet any of the above criteria).

    Following adoption of the draft documents, council will undertake public consultation and seek written submissions between mid-April to mid-May 2009. Those wishing to present their submission orally to councillors will do so in early June 2009. Officers will then prepare final budgets for adoption by Council in late June 2009.

    Recommending that the Committee take the recommended approach to adopting the draft Ten-Year plan budgets.

    [ATTACHMENT 3 and 3A] Pages 1 - 18  

    BUDGETS

  4. Top TEN-YEAR PLAN BUDGETS

    Robert Nelson  
    Group Manager Corporate Finance and Planning 6 November 2008

    Reporting that the Auckland City's 2006-2016 long-term plan projected rate increases are greater than Council's forecast rate of inflation. The proposed budgets achieve the objectives of affordable progress in line with rate increases no greater than council's rate of inflation. For the average ratepayer, rates will increase at a compound rate of 3.8% for the ten years. Due to higher inflation projections the rate of increase in the first year 2009/10 is higher at 5%.

    Recommending that the Committee review the budget and consider which capital projects and operational activities should proceed for the draft Ten-Year plan budget. Further recommending that the Committee note that the addition of any capital projects to the list proposed in this budget will increase rates unless a project with a similar rating profile is removed.

    Appendix 6 Councillor and Community Board Request was unavailable at the time the agenda went to print and will be distributed under separate cover.

    Appendix 9 Service Profiles will be circulated separately to this agenda and as requested.

    [ATTACHMENT 4] Pages 1 - 50

  5. Top MAINSTREET AND BUSINESS IMPROVEMENT DISTRICT DRAFT BUDGETS 2009/2010

    Annie Inwood  
    Mainstreet Advisor 23 October 2008

    Reporting on the draft Mainstreet and Business Improvement District programme budgets to be included in the 2009/2010 draft Annual Plan. The draft budgets are estimates due to impending boundary extension poll in Newmarket which will be finalised by December and the fully ratified draft budget will be reported to the February 2009 meeting of the City Development Committee.

    An estimated total of $7,636,057 (excluding GST) is requested for Mainstreet and Business Improvement District programme operations for the 2009/2010 financial year, to be raised by way of targeted rates levied in the associated Mainstreet boundary areas.

    Recommending that the Committee include the draft Mainstreet and Business Improvement District programme budgets in the 2009/2010 draft Annual Plan and Budget. Also recommending that the boundaries remain unchanged, noting that a boundary extension may be required later this year.

    [ATTACHMENT 5] Pages 1 - 6

    POLICIES

  6. Top PROPOSED 2009-2019 LONG-TERM COUNCIL COMMUNITY PLAN (LTCCP) LTCCP POLICIES

    Greg Webb  
    Financial and Revenue Strategy Manager 30 October 2008

    Outlining that the Ten-Year plan for 2009-2019 will include the following policies:

    1. Airport Shares Policy
    2. Development Contributions Policy (including a summary of the Financial Contributions rules)
    3. Funding impact statement
    4. Partnerships with the private sector
    5. Rates Assistance Schemes
    6. Revenue and Financing Policy
    7. Significance Policy
    8. Treasury Management Policy (also outlines council's Sustainable Debt Policy)

    Recommending that policies be reviewed and included in the draft Ten-Year plan.

    [ATTACHMENT 6] Pages 1 - 16

  7. Top PROPOSED RATES-RELATED POLICIES FOR 2009/2010

    Jolene Abrahamson  
    Policy Analyst, Treasury
    Greg Webb
    Financial and Revenue Strategy Manager    		 30 October 2008

    Reporting on the review of Council's rates-related policies for the 2009/2010 financial year. The rates requirement is determined once the organisation's budget has been finalised, therefore this report provides an indicative outline of the proposed rates-related policy changes:

    1. Continuing to apply the next step of the long-term general rate differential strategy;
    2. Applying the projected five percent rates increase by increasing the UAGC;
    3. Increasing the refuse collection targeted rate to meet the higher costs of providing the existing services, waste minimisation levy, and using $2 million of the surplus to reduce the revenue;
    4. Increasing the CBD targeted rate for non-residential ratepayers in line with the reduction in the general rate by applying the next step of the differential strategy;
    5. Increasing the CBD targeted rate for residential ratepayers;
    6. Expanding the remission of rates for land covenanted under the Queen Elizabeth II National Trust Act to include Reserve Act covenants;
    7. Offering a discount for early payment of rates; and
    8. Introducing a new targeted rate for an additional recycling service.

    Recommending that the proposed rates-related policy changes be approved.

    [ATTACHMENT 7] Pages 1 - 28

  8. Top OVERVIEW DEVELOPMENT CONTRIBUTIONS POLICY 2009

    Lyn Voyde  
    Acting Team Leader Development Contributions 30 October 2008

    Outlining the review of the development contributions policy. While no significant policy changes are proposed, a number of initiatives for inclusions in the policy have been considered consisting of:

    1. changes to the way credits are given in relation to financial contributions;
    2. refinements to the cost of finance methodology;
    3. refinements to the stormwater methodology; and
    4. the use of further development contributions on the Hauraki Gulf islands.

    Recommending that the Committee note work is being carried out to refine and extend the Development Contribution Policy, noting that changes in the capital programme will have a direct impact on the level of revenue generated through this policy.

    [ATTACHMENT 8] Pages 1 - 10

  9. Top REVIEW OF TREASURY MANAGEMENT POLICY FOR 2009/2019 LTCCP

    Martin Tegg  
    Senior Financial Advisor, Treasury
    Ross Tucker
    Infrastructure Funding Manager, Treasury    		 20 October 2008

    Reporting on the findings of the review on Auckland City Council's Treasury Management Policy (TMP). The TMP incorporates the council's Sustainable Debt Policy alongside certain other policies about how the council manages its investments, borrowings and other liabilities. The Sustainable Debt Policy sets out the circumstances under which the council will use debt to fund various types of expenditure and also sets out parameters that govern the repayment of principal and interest as well as the maximum amount of debt that the council will take on relative to income and asset levels. No significant policy changes are proposed.

    Recommending that minor policy adjustments to the Sustainable Debt Policy and other parts of the TMP be approved.

    [ATTACHMENT 9] Pages 1 - 18

  10. Top REVIEW POLICY ON SIGNIFICANCE FOR 2009-2019 LONG-TERM COUNCIL COMMUNITY PLAN (LTCCP)  

    Chris Carroll  
    Evaluation Manager 3 October 2008

    Providing the Committee with an opportunity to review the Policy on Significance that was considered at the Finance and Strategy Committee meeting held on 15 October 2008, as follows:

    That it be a recommendation to the Long-term Council Community Plan (LTCCP) Direction Setting 18 November meeting:

    1. That the Committee notes that while there are a number of proposed improvements to the Policy on Significance, they are minor in nature with the key tenets of the current policy remaining.
    2. That the Committee approves the draft Policy on Significance for consultation as part of the draft 2009-2019 Ten-year plan including amendments related to the following:
      1. The council's approach to decision-making;
      2. The council's approach to determining significance;
      3. Reviewing proposals of higher significance;
      4. Consultation requirements;
      5. Exclusions;
      6. Special consultative procedure overview;
      7. Council outputs; and
      8. General editing.
    [ATTACHMENT 10] Pages 1 - 30

  11. Top REVIEW OF POLICY ON AUCKLAND AIRPORT SHARES FOR 2009-2019 LONG-TERM COUNCIL COMMUNITY PLAN (LTCCP)  

    Chris Carroll  
    Evaluation manager 1 October 2008

    Providing the Committee with an opportunity to review the Policy on Auckland Airport Shares that was considered at the Finance and Strategy Committee meeting held on 15 October 2008, as follows:

    That it be a recommendation to the Long-term Council Community Plan (LTCCP) Direction Setting 18 November meeting:

    1. That the Committee agrees there are limited number of scenarios where the purchase of additional shares in Auckland International Airport Limited (AIAL) would be prudent for council, and requests that this be included as an option in the Policy on Auckland Airport Shares to enhance the council's ability to respond to opportunities and mitigate threats as they arise.
    2. That the Committee notes that under the proposed changes to the council's Policy on Auckland Airport Shares, any proposal to buy more shares in Auckland International Airport Limited (AIAL) would be subject to Council approval following rigorous analysis against the objectives and criteria outlined in the policy.
    3. That the Committee approves the draft Policy on Auckland Airport Shares for consultation as part of the draft 2009-2019 Ten-year plan with the following amendments to the current policy:
      1. update and minor edits;
      2. inclusion of an option to buy more shares outside of a restructuring transaction.
    [ATTACHMENT 11] Pages 1 -10

  12. Top RATEPAYER DIFFERENTIALS AND DEFINITIONS

    Jolene Abrahamson  
    Policy Analyst, Treasury 30 October 2008

    Reporting on the review of Council's differential ratepayer groups and their definitions. The Finance and Strategy Committee at their meeting held on 15 October 2008 approved the recommendations as detailed in the report. A number of issues with the ratepayer groups and definitions have come to light recently and additional information has been included in the report after feedback was received for the Waiheke Community Board.

    Recommending that the Committee confirms the amended residential ratepayer group definitions and also recommending that the Committee notes that there are no budget changes from the proposed policy changes.

    [ATTACHMENT 12] Pages 1 - 24

  13. Top TARGETED RATE FOR WYNYARD QUARTER

    Gareth Stiven  
    Business Advisory Manager
    Greg Webb
    Financial and Revenue Strategy Manager    		 31 October 2008

    Outlining the implications of introducing a targeted rate to fund expenditure in relation to the Wynyard quarter redevelopment. The Wynyard Quarter community is not expected to be fully established until 2026.

    Recommending that further investigation into setting a targeted rate be delayed until:

    1. the plan change for the Wynyard Quarter precinct is formally adopted;
    2. officers have developed more comprehensive policy around the use of targeted rates to fund the costs associated with new development; and
    3. development plans and expenditure have been finalised and costed.
    [ATTACHMENT 13] Pages 1 - 10

  14. Top TOURISM AND EVENTS: RUGBY WORLD CUP 2011 - FUNDING OPTIONS

    Catherine Syme  
    Policy Analyst, Treasury 30 October 2008

    Reporting on the funding requirements of Rugby World Cup 2011 (RWC 2011). Applying the full $11 million 2007/08 operating surplus to fund the RWC 2011 operating expenditure will reduce the funding requirement to $6.9 million be approved. The new RWC 2011 funding requirement would require additional rates increase of 0.4% for 2009/2010, 1.0% for 2010/2011, and 2.6% for 2011/12, if funded entirely by rates. Options for collecting the $6.9 million include general rates and different types of targeted rates.

    Recommending that the introduction of two targeted rates for 2011/2012 only, reflecting both the high proportion of general public and the economic benefits of RWC 2011 be considered:

    1. A citywide targeted rate levied as a fixed amount for the residential sector, and as a value based rate for the non-residential sector.
    2. A targeted rate levied on the accommodation sector.
    [ATTACHMENT 14] Pages 1 - 28

    COMMUNICATION

  15. Top TEN YEAR PLAN 2009-2019 CONSULTATION AND RESEARCH

    Elaine Parr  
    Acting Team Leader Communications and Marketing 23 October 2008

    Outlining the channels of consultation and communication for the Long-term Council Community Plan (LTCCP) available and agreed to by council: website (with online submission form); summary document with submission form, public meetings across the city and a direct mail piece to a random sample of ratepayers. A key stakeholder forum has also been confirmed for 19 November 2008.

    Recommending that the Committee approves utilising the Listening Post as an additional piece of research to be carried out during the formal submission period in April-May, for the LTCCP. Also recommending that the officers compile the questions and background information for the research and prepare a report on the results for presentation to councillors.

    [ATTACHMENT 15] Pages 1 - 16