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Finance and Strategy Committee
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OPEN AGENDA

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

FINANCE AND STRATEGY COMMITTEE

will be held as follows:

DATE: Tuesday, 10 November 2009
TIME: 9:30 am
VENUE: Level 2, Reception Lounge
Town Hall
301 Queen Street
Auckland

Soo Jean Kok
DEMOCRACY ADVISOR

Members:

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

Cr Douglas 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 John Lister, OBE
Cr Leila Boyle Cr Toni Millar, JP
Cr Dr Cathy Casey Cr Greg Moyle, ED
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. Top APOLOGIES

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

  2. Top CONFIRMATION OF MINUTES

    The minutes of the extraordinary Annual Plan Direction Setting meeting of the Finance and Strategy Committee held on Tuesday, 29 September 2009 to be confirmed as a true and correct record.

  3. 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."

  4. Top ANNUAL PLAN 2010/2011 HIGH-LEVEL BUDGET UPDATE

    Grant Smith  
    Corporate Planning Manager 27 October 2009

    Updating on budget shortfall and risks to operating costs. Some additional changes to the high-level budgets have been identified as follows:

    • based on latest broker forecasts there has been a $350,000 reduction in the forecast 2010/2011 dividend council will receive on its shareholding in Auckland International Airport Limited;
    • the Finance and Strategy Committee approved an additional $100,000 to Environment & Utility Management (EUM) budget to service the expanded Small Local Improvement Projects (SLIPS);
    • at the 29 September, APDS meeting officers signalled there was a risk of $4.1 million to new budgeted parking revenues in 2010/2011 identified when the 10-year plan was prepared. Officers now believe $2.5 million of this risk should be crystallised as reduced revenue. The remaining $1.6 million is still identified as a potential risk; and
    • officers reported to the City Development Committee on 8 October 2009 advising that reduction in development contribution revenue has created a funding shortfall of approximately $3 million per annum.

    These changes resulted in the $3.4 million budget shortfall increasing to $9.5 million. A number of initiatives were carried out looking at how the budget shortfall could be resolved and these initiatives have delivered additional savings and resolved the earlier budget shortfall. The savings identified will also contribute positively to 2011/2012 and the years beyond.

    Recommending that the Committee notes that council will be able to deliver balanced 2010/2011 budget while maintaining the average rate increase at the council's rate of inflation (currently projected to be 3.0 per cent) and that the Committee agrees not to re-establish long-term funding for the Heart of the City Ambassadors programme, given budget constraints and priorities.

    Also recommending that the Committee approves the preparation of the detailed budgets for the draft Annual Plan 2010/2011 in accordance with the guidelines and parameters agreed at the 29 September 2009 and 10 November 2009 Annual Plan Direction Setting meetings.

    [ATTACHMENT 4, 4A and 4B]  

  5. Top MAINSTREET AND BUSINESS IMPROVEMENT DISTRICT ESTIMATED DRAFT BUDGETS 2010/2011

    Annie Inwood  
    Mainstreet Advisor 16 October 2009

    Outlining the draft Mainstreet and Business District Improvement (BID) programme budgets to be included in the draft Annual Plan 2010/2011. The draft budgets are estimates due to the impending establishment poll for the Kingsland area which will be finalised by December and the fully ratified draft budget will be reported to the February 2010 City Development Committee meeting.

    An estimated total of $8,471,883.00 (excluding GST) is requested for Mainstreet and BID programme operations for the 2010/2011 financial year, to be raised by way of targeted rates levied in the associated Mainstreet and BID boundary areas.

    Recommending that the Committee includes the estimated draft Mainstreet and BID budgets in the draft Annual Plan 2010/2011. Also recommending that the boundaries remain unchanged, subject to the outcome of the Kingsland BID poll.

    [ATTACHMENT 5]  

  6. Top ANNUAL PLAN 2010/2011 CAPEX REVIEW

    Ross Tucker  
    Capital Planning Manager 29 October 2009

    Reporting on the result of a deliverability review of the capital expenditure (CAPEX) programme and an update on key CAPEX issues and risk.

    Recommending that the Committee notes that the currently projected CAPEX programme for 2010/2011 is $493.5 million and officers to report back to the February 2010 Combined Committees on the final CAPEX programme for the targeted feedback process on the Annual Plan 2010/2011.

    [ATTACHMENT 6, 6A – 6G]  

  7. Top PROPOSED RATES POLICY FOR 2010/2011

    Jolene Manford  
    Policy Analyst 20 October 2009

    Reporting on the estimated level of the different rates and rates impact analysis for 2010/2011. This report also provides an update on the Hauraki Gulf Island rating issues and the refuse collection targeted rate surplus.

    Recommending that the Committee notes:

    • that after considering the refuse collection targeted rate, the uniform annual general charge is projected to increase from $250 to around $317 per separately used or inhabited part, based on a 3 per cent rates increase, which is equal to council's projected rate of inflation;
    • that the refuse collection targeted rate is projected to increase from $183 to $186 per service and the additional recycling targeted rate would increase from $63 to $64 per additional service to fully fund the cost of these services, based on the updated budget;
    • that all single-unit residential properties would have the same $70 increase ($67 for the UAGC and $3 for the refuse collection targeted rate) irrespective of property value;
    • that in line with the policy, the level of remission for an approved refuse and/or recycling service is projected to be $116 and $64 respectively for 2010/2011, based on the updated cost of these services;
    • that the discount for early payment of rates is projected to be 1.50 per cent for 2010/2011, based on council's estimated short-term borrowing rate of 4 per cent for 2010/2011; and
    • that the council already spends significantly more on Great Barrier Island (GBI) than it collects in revenue from GBI and that the ecological significance designations under the Hauraki Gulf Islands Proposed District Plan do not affect existing development or use.

    Further recommending that the Committee confirms:

    • that the council utilises the $5.4 million of unallocated surplus revenue from the refuse collection targeted rate in 2008/2009 to fund the $5.4 million of unbudgeted refuse expenditure ($600,000 for 2010/2011 and $4.8 million unbudgeted waste levy at a net cost of $600,000 per annum over eight years from 2011/2012 to 2018/2019).
    • that the council will retain its rating differential definitions and remission policies without change for 2010/2011, as the changing the differentials or introducing a remission policy for Great Barrier Island properties that have an ecological significance designation would increase the subsidisation from other ratepayers. In addition, the next revaluation should reflect any impact, or perceived impact, on property values from the designations.
    [ATTACHMENT 7, 7A – 7D]  

  8. Top OVERVIEW DEVELOPMENT CONTRIBUTIONS POLICY 2010

    Andrew Simon Pickering  
    Development Contributions Manager 15 October 2009

    Outlining the review of the development contributions policy. A work programme is underway to review issues relating to growth and growth funding. The detailed work programme will be reported to the appropriate Committee in December 2009.

    The City Development Committee have endorsed the council carrying out a special consultative procedure early in 2010 to allow the development contributions policy to be amended, with the revised policy adopted alongside the Annual Plan 2010/2011. This will require one month of public consultation, and submission hearings (for all councillors) in March 2010.

    Recommending that the Committee notes the recent legislative changes associated with changes to Auckland governance allow the council to adopt the Annual Plan 2010/2011 by way of resolution. However, changes to the development contributions policy must still undergo the special consultative procedure.

    Further recommending that the Finance and Strategy Committee agrees that the City Development Committee reviews the options of retaining the current development contributions policy, or seeking to put a revised development contributions policy in place through the special consultative procedure early in 2010, to allow a revised policy to be considered and adopted alongside the Annual Plan 2010/2011 and that the Committee make an appropriate recommendation to Council after considering those options.

    [ATTACHMENT 8]

  9. Top ANNUAL PLAN 2010/2011 – COMMUNICATIONS AND CONSULTATION

    Elaine Parr  
    Senior Communications Specialist 19 October 2009

    Outlining the communications and consultation plans for Annual Plan 2010/2011. The planning and adoption process for Annual Plan 2010/2011 is heavily linked with the transition arrangements into the new Auckland Council.

    Recommending that the Committee agrees to the approach for gathering feedback and approves the communications strategy.

    [ATTACHMENT 9, 9A and 9B]