The Council’s finances are sound, which means rates this year – despite the increased focus on resilience following the earthquake – will rise 3.3 percent, not the 5.1 percent forecast in the Long-term Plan 2015–25.
We’ve managed to do this by identifying $11 million of lower priority spending. Service levels won’t be affected; instead we will focus spending on where it can do the most good.
We are also carrying less debt; $80 million less than we forecast. This means we pay less interest, we can borrow more if we need to address fresh challenges or make new investments, and our credit rating remains strong.
Changes to budgets
The changed priorities, re-phasing of capital expenditure, cost savings and efficiencies have been incorporated into the proposed budget for 2017/18. The changes to the budget are:
|
Long-term Plan
2015–25
|
Proposed for the Annual
Plan 2017/18
|
Operating expenditure
|
$473.5 million
|
$475.4 million
|
Capital expenditure
|
$206.3 million
|
$161.5 million
|
Average rates increase after growth
|
5.1%
|
3.3%
|
Forecast year-end borrowings
|
$570.2 million
|
$537.4 million
|
| Debt over operating income |
124.4% |
116.5% (the Council’s debt limit is 175%)
|
Capital projects – key changes for 2017/18
Project
|
Re-phased spending
($000s)
|
What’s changed
|
Movie museum
|
$31,591
|
Final designs are under way with partners, and won’t require funding in 2017/18. The project will not require capital funding for 2017/18.
|
Convention centre
|
$23,195
|
Civic campus property
|
$20,431
|
Improvements are awaiting remediation reports. No capital funding for 2017/18.
|
Town Hall earthquake strengthening
|
$14,346
|
We are currently negotiating and consulting on establishing a music hub. The majority of earthquake-strengthening works are to start in 2018/19.
|
Museum of conflict
|
$10,000
|
Resilience projects have taken priority. Deferred until 2018/19.
|
Johnsonville Library upgrade
|
$5,900
|
Changes in the scope of the upgrade to ensure the community benefits means delivery will occur outside 2017/18. The impact will be included in the Long-term Plan 2018–28..
|
Northern growth roading projects
|
$5,200
|
The timing of NZTA work has changed. No Council funding will be required in 2017/18.
|
Cycling improvements
|
$3,187
|
Stronger community engagement has meant a re-phasing of the programme.
|
Kumutoto public space and Frank Kitts Park
|
$3,000
|
Frank Kitts Park planning continues into 2017/18, meaning re-phasing to 2018/19.
|
| Social housing renewals |
$2,700
|
The renewal programme for the Arlington site will now be part of the overall redevelopment programme.
|
Other
|
$15,075
|
Focus on resilience has meant re-phasing of some renewal and minor work projects.
|
| Total |
$134.6 million
|
|
Impact on rates
For 2017/18, after allowing for expected growth in capital value less capital expenditure, lower costs and improved efficiency, the Council is able to reduce the Long-Term Plan rates increase from an average of 5.1 percent to 3.3 percent.
For individual ratepayers, the rates on an average residential property (valued at $579,304) are forecast to increase to $2,430 (excluding GST). For commercial properties, after including the impact of 2017/18 increases in metered water charges, forecast average rates will increase by 3.1 percent.