Gisborne District Council 2016/17 Annual Plan · Gisborne District Council 39 Gladstone Road...

TAIRĀWHITI FIRST! 2016/17 ANNUAL PLAN

ISSN 1174-19253 2016/17 MAHERE-A-TAU

Contact DetailsGisborne District Council

39 Gladstone RoadGisborne 4010

PO Box 747Gisborne 4040

PHONE 06 867 2049 • 0800 653 800 • EMAIL [email protected] • www.gdc.govt.nz

Tairāwhiti First!Tairāwhiti TangataTairāwhiti Taonga

Tairāwhiti Wawata

First to see the lightFirst choice for people and lifestylesFirst choice for enterprise and innovationFirst place for the environment, culture and heritage.

Tairāwhiti Piritahikia māramakia ngāwarikia ū

Together Tairāwhitimake it smartmake it easymake it happen.

OUR VALUES

Tairāwhiti Tairāwhiti TangataTairāwhiti TaongaTairāwhiti Wawata

Tairāwhiti FirstFirst to see the lightFirst choice for people and lifestyleFirst choice for enterprise and innovationFirst place for the environment,culture and heritage.

OUR VISION

What's happening in 2016/17 4About this Plan 4Improving our Community Facilities 5Caring for our Environment 7Keeping us Safe and Connected 9

Financial Overview 11

Our Finances 16Contents Page 16Introduction 17Prospective Statement of Comprehensive Revenue and Expenses for the year ended 30 June 2017 18Prospective Statement of Financial Position as at 30 June 2017 18Prospective Statement of Changes in Equity for the year ended 30 June 2017 19Prospective Statement of Cash Flow for the year ended 30 June 2017 19Prospective Statement Concerning Balanced Budget for the year ended 30 June 2017 20Notes to the Prospective Financial Statements 21Significant Assumptions 35

Funding Impact Statement 38Schedule 1 41Schedule 2 41Schedule 3 41Schedule 4 42

Rates Information 45

Changes to our Performance Measures 50

Appendices 55Our Council - Governance and Structure 55Schedule of Councillors & Schedule of Agents 56

Contents

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OUR PLANNGĀ MĀHERE

About this Plan

Naumai haeremai ki teMahere-a-Tau 2016/17o te Kaunihera o Te Tairāwhiti.

Through the preparation of the 2015-2025 Long Term Plan(LTP), we worked with you to set our course of action forthe next ten years. We’re on-track for delivering our plansfor 2016/17 (Year 2 of the LTP) within agreed budgets.Total rates will be $53.3m and our debt levels will be keptbelow the limits of $55m external debt and $80m totaldebt, as set in our Financial Strategy.

DECREASE 0% to 1.99%

2% to 2.99%

3% to 4.99%

5% to 9.99%

10% to 19.99%

20% to 29.99%

30%+

12931

621831

14051865

729

5386

INDICATIVE RATES CHANGES FOR 2016/17Number of Properties

This graph of indicative rates changes is based on data prior tothe rate resetting process that occurred in May and June 2016.

Following the 2014 changes to the Local GovernmentAct (LGA), Annual Plans now focus only on proposeddifferences to the Long Term Plan.

This year wedid not havea formal submissions or hearingsprocess becausewewere not proposingmajor changesto the cost, scope or timing of projects and services inthe LTP – but we did want to let you know what you canexpect this year and we still wanted your feedback. Aspecial Annual Plan edition of Tairāwhiti First waspublished online and in the Gisborne Herald on 26 April2016.

This 2016/17 Annual Plan highlights what you can expectto see over the next financial year. It also identifies anyminor changes or additions to the projects, activities andfinancial information included in the 2015-2025 Long TermPlan for 2016/17.

The 2015-2025 Long Term Plan is available online at:www.gdc.govt.nz/long-term-plan-2015-2025

What's happening in 2016/17

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Improving our Community Facilities

Te whakapai ake i nga whakaurunga hāpori

TAIRĀWHITI NAVIGATIONS$2.85m

2016/17BUDGET

8.98% COUNCIL FUNDED

We are developing and upgrading the inner harbourarea and surrounding walkways to create a vibrantdestination that celebrates our uniqueculture and history.The scope and timing of the project has changed fromour LTP because a walkway along the training wall is notachievable. Instead, EastlandCommunity Trust (ECT) hasgranted $3.4m towards newplans for a heritage trail thatinvolves walkways, a modern footbridge spanning theTuranganui River and the slipway - as destinations forstory-telling. EastlandGroup Ltd will reshape the slipway.Council funded work on landscaping, parking and roadlayout in the inner harbour will start in 2017, subject toconsent.

Key Steps

May - August 2016 - Engagement with communityon concept designs for the inner harbour.

December 2016 - Concept designs for heritage trail.Inner harbour detailed designs approved.

2017 - Construction of inner harbour begins. DistrictPlan change notified.

In partnership, Ngati Oneone and Council are workingtogether to restore Titirangi (Kaiti Hill). To date therestoration project has seen the harvesting of pine forestand the planting of more than 45,000 coastal native

plants. This year wewill continue planting,mostly focusingon the Inner Harbour side of Titirangi. As part of thecommunity practising kaitiakitanga or becomingguardians of Titirangi, there will be a Community Day on31 July and a series of school group and holidayprogramme visits throughout July and August. These willgive volunteers the opportunity to learn more about thehistory of Titirangi as well as plant up to 1,000 nativeplants.

Ngati Oneone andCouncil will also beworking togetherto finalise the revised Titirangi ReserveManagement Planin September 2016. The plan considers new walkingtracks, further native planting, historical interpretationpanels, as well as making Queens Drive safer forpedestrians through a one-way road. Public submissionsto the plan closed on 24 June 2016.

Key Steps

April - June 2016 - Weed and track maintenance.

May - June 2016 - Community engagement on therevised Titirangi Reserve Management Plan.

July – August 2016 - Community Day and schoolvisit planting days.

September 2016 - Management Plan approvedand ready for implementation.

$4.98m2016/17

BUDGETLIBRARY EXPANSION

26% COUNCIL FUNDED

We’re expanding the library to allow for more space,services and activities for the thousands of library userseach year. The scope and timing of the project havechanged from the LTP. We delayed work slightly so thatwe could secure extra funding for a bigger, betterupgrade. Council is contributing $1.75m along withgenerous funding from the JN Williams Memorial Trust,ECT and the Estates of Stanley Green, Hannah Dunlopand Jessie Iris Jefferys for a total extension and upgradeof $5.6m.

Key Steps

May 2016 - Detailed designs complete.

August 2016 - Construction starts.

May 2017 - Project completed.


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WALKING AND CYCLING

$1m2016/17BUDGET

38% COUNCIL FUNDED

We’re focusing on creating safe walking and cyclingroutes to school. With funding announced fromNZTA lastyear we’re moving forward with designs for Kaiticycleway links to the city, and connecting routes toschools. We’re also scoping the route options for theTaruheru cycleway. We have also provided fundingtowards the first delivery of the Bikes in Schoolsprogramme. The programme provides bike tracks,equipment and education in schools. Roll out to up totwo more schools is planned this year.

Key Steps

July 2016 - September 2017 - Scoping route options,consultation anddesignwork for urban cycleways.

August 2016 - Beacon Street link - constructionbetween Oneroa and Alfred Cox cycleways.

October 2017 - Construction on cycleways in Kaitibegins.

COUNCIL REBUILD

Our administration building is earthquake prone and it’llbe rebuilt over the next year-and-a-half. Rebuilding amore energy efficient and longer lasting building is themost cost-effective option. We have transferred theownership of the building to our commercial tradingcompanyGHL, so there’s no impact on rates or any otherservices we provide.

Staff have been temporarily relocated to offices inGladstone Road for the next 18 months or so. You cannow visit Customer Services at 39 Gladstone Road.

A final decision is yet to be made on the extent of thework at the Lawson Field Theatre.

Key Steps

May 2016 - Customer Services opens at 39Gladstone Road.

July 2016 - Demolition and construction begins.

September 2017 - Project completed.

Museum Restorations

Wyllie Cottage is currently being refurbished in traditionalarchitectural features and décor as well as upgradesmade to the sprinkler system, electrics, UV protectionanddrainage. TheMuseumalso haveagrant to upgradethe exhibits inside the cottage when it reopens later thisyear. In 2017 we’ll be spending $276k on repairs andrefurbishments to theMuseum. This includes a $165k grantfrom the Lottery World War One Commemorations,Environment and Heritage Committee. The focus of theupgrades will be fixing the leaking roof.

Toilet Work

A number of outdated long-drops along the coast willbe replaced with flushing toilets like the ones we'veinstalled at Kaiauaand Loisels. We’re also looking atwaysto tackle vandalism of public toilets. One option couldbe closing the worst affected toilets overnight. A trialperiod of one month will be used to assess if closing thetoilets makes a difference. A re-design of the Peel Streettoilets could be considered to combat vandalism andmake them much nicer for users.

Commercial Assets Transfer

We’re looking at moving our commercial assets over toGHL, which means they’ll manage these properties andany future development. Moving some of the assetswould be a significant change to the LTP so we areconsulting the community about them in two stages. Weengaged with you on the transfer of the WaikanaeHoliday Park and Vehicle Testing Station in May. Adecision is expected 30 June 2016. Consultation on theairport and community housing and any othercommercial operations will begin in early 2017.

Strategy for Facilities

We’ll be developing a strategy to determine how weimprove and invest in our community facilities in thefuture. We want users to help identify what's importantfor public toilets, parks and open spaces, cemeteries,street trees and art in public places as well as sports andcommunity centres, pools, theatres and libraries. We’llget underway with engaging the community later thisyear.


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Township Upgrades

An upgrade of the streetscape in Te Karaka is lookinggreat and will be finished soon. Planting, roading andwater supply improvements are also happening inWhatatutu.We’ve started planning for the next townshipupgrade in Tokomaru Bay. This year we’re meeting withthe community and narrowing down ideas for spending$500k, with work likely to start in early 2017. Somescheduled maintenance for the seawall and theentrance at Hatea-A-Rangi Domain will also getunderway later this year.

Parks And Reserves

Maintenance of plants, trees, weeds, play equipment,seating, facilities, tracks and paths in all our parks andopen spaces makes up a big portion of our work overthe year. We’re also continuing turf and grassimprovements as part of the sports park managementplan this year, with ground and mobile irrigation atChilders Road Reserve,Waikirikiri Reserve, Barry Park andthe Oval.

Enhancing Alfred Cox Park

Planting along the Waikanae Stream at Alfred Coxreservewill begin this winter with the help of key volunteergroups. It’s the start of a wider redevelopment of thepark and the continuation of theWaikanae streamwaterquality improvement project. We’re also supporting abusiness case to upgrade the Skate Park and will beconsulting with park users and support groups to get agood idea of what’s needed.

Caring for our Environment

Te tiaki i te taiao

WASTEWATER DISCHARGE REDUCTION

$3m2016/17BUDGET

100% COUNCIL FUNDED

We recently completedacase study to lookmore closelyat the causes of wastewater overflows, so we can putthe most effort into solutions that will have the biggestimpact. We have found that rainwater is getting into thewastewater network fromprivate homes and drains. Justfour houses with roof water draining into the gully trapcan overload the system and cause an emergencydischarge. We found only half of the houses in the studyhad proper stormwater drainage. Nowwe’reworking onhow we can help home owners to stop the problem.We’re also continuing renewals and upgrades of Councilowned wastewater pipes and pump stations to stoprainwater getting in and prevent the risk of overflows.

Key Steps

January - April 2016 - Workshopping solutions tostormwater inflow and reviewing the case studyfindings.

April - June 2016 - Wastewater pipe renewals.

April - July 2016 - Education with plumbers andresidents.

August 2016 - Decision on draft DischargesReduction Project Plan.

August 2016 onwards - Focus on drainage solutionsand private property investigations.


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MANAGED AQUIFER RECHARGE TRIAL$369k4 2

6%COUNCIL FUNDED2016/17 BUDGET

.

Water in the Makauri Aquifer is declining. It suppliesimportant irrigation to the growers on the Poverty Bayflats. Funding fromMinistry of Primary Industries, matchedby the Eastland Community Trust, has supported theresearch in developing a Managed Aquifer Recharge(MAR) trial for the Makauri Aquifer. We have beenworking with stakeholders and conducting research onusing water from the Waipaoa River in the trial, to injectinto the aquifer through a bore. The trial will tell us if thisprocess could be used to replenish the aquifer's waterlevels.

Key Steps

May 2016 - Lodge resource consent.

June - July 2016 - Formal consultation.

Winter 2017 - If approved, start trials.

Freshwater Plan

The Freshwater Plan becameoperational in October lastyear. Submissions to the plan will be heard in July andwe’ll make any final changes to the plan. In themeantime we will be helping people to follow the newguides and rules in the plan.

Improving Water Quality at Rere

Farmers at Rere are working together with Council andBeef and Lamb NZ to improve water quality at therockslide and falls. The Ministry for the Environment hasalso contributed funding for E.coli reduction research

with a number of farmers volunteering to be case studies.A further six monitoring sites on the Wharekopae Riverabove the Rere Falls are also planned. This will help us tobetter understand the water quality in the catchment.

Pest Management

A draft Regional Pest Management Plan is beingdeveloped for consultation later in the year. It outlineshowwewill deal with plant andanimal pests, like possumsand the spread of weeds in rural areas and road sides.It is planned to be in place and operating early next year.

Waingake Bush

Over the next financial year we’re scoping a project torestoreWaingake Bush, at the back of Wharerata whereour drinking water dams are, to native forest. It’ll involvepest management, replanting and collaboration withiwi, stakeholders and community.

Increasing Inanga Numbers

With funding fromMinistry for the Environment (MfE)we’vestarted a research project formapping Inanga spawninghabitats. We'll then look at ways we can promote morespawning and more fish numbers. The project is a pilotto identify a programme for the whole region. Membersof the community and landowners are keen to getinvolved in identifying and protecting these areas.

Removing Fish Barriers

We’re working on improving the spawning habitats andfish passage of our rivers for native fish. Pykes weir is thelowest of many barriers on the Te Arai River. Installingbaffles andmussel ropes to break up the flow on theweirwill allow native fish to swim upstream. There is also workbeing done to improve fish passage on the barriersupstream.

Urban Stream Projects

We’ve started a project to reduce contaminants fromgetting into stormwater drains which flow into urbanstreams. More water quality monitoring will determinepollutant hot spots. We will also be working withlandowners and communities on reducing stormwatervolumes and stopping contaminants entering thewaterways.


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Water Quality Research

This coming year a long-term project to improve waterquality in the Taruheru River will start with gatheringwaterquality data and scopingwhat’s needed for the project.An investigation into the hydrology of the Awapunimoana system will get underway, with a report on theissues and solutions due in November.

Science for the Motu

We’re working on a study that will inform the MotuCatchment Plan. The first stage has been a fish andecosystem survey of theMotu River.Wemappedhabitatsduring the summer months so we can work out aminimum flow requirement for the river. We’ll also carryout additional water qualitymonitoring in the headwatersand below Motu township to help inform how wepreserve the river.

Keeping us Safe and Connected

Te haumaru me te hononga i a tātou

WETLANDS TRIAL

$200k

100% COUNCIL FUNDED

2016/17 BUDGET

We have started a trial of small scale ponds, wetlandsand drying beds to test out a further stage of treatmentfor our wastewater. We’re testing how efficiently thesystem removes bacteria and solids, and how solidproducts could be re-used. If it works we could spreadourwastewater on towetlands insteadof it going throughthe outfall pipe into the bay. The results of the trial willhelp us determine options for wetlands as away to furthertreat our wastewater.

The options will be consulted on and if it goes ahead anew system could be in place by 2020.

Key Steps

September 2016 - Trial results analysed.

October 2016 - Engagement with community onwhat we would need to create a wetland.

December 2016 - Recommendations and costs toCouncil for decision.

January 2017 - Development of wetlands options.

WAIPAOA FLOOD PROTECTION$500k

2016/17BUDGET

100% COUNCIL FUNDED

The stop banks along the Waipaoa River will bereinforced and built up to protect the Poverty Bay flatsin high rain events. The work will include earthworks toincrease the height and width of the banks in areas andplantings for stability. We are planning out the phases ofwork this year. We'll start construction in places that aremost vulnerable first, building up the banks along the riverover time. We will carry out construction in stages eachyear. We have allocated $9.4m to the project in ourcurrent LTP, but estimate the project will take until 2031to complete.

June - October 2016 - Develop projectmanagement plan, draft resource consentapplication and send notification.

November 2016 - February 2017 - Consultation andengagement. Land purchase negotiation.

March - June 2017 - Site investigation and design.

Education On Dogs

Animal Control has a focus on improving educationinitiatives this year, including increasing school visits andeducation to other high risk groups such asmeter readersand census collectors. We also want to increase thenumber of dogs being rehomed. Council’s Facebookpage has information for all the dogs available foradoption.


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Food Act Changes

Changes to the Food Act came into effect on 1 March2016. There are new rules for people who sell food tobecome registered and accredited as food safe andthere’ll be new fees set from the beginning of July. We’llbe transitioning businesses into the new regime over thenext 12 months and continuing to work on food safetyguidance and compliance.

Roads, Bridges and Streets

We have got a full work programme of safetyimprovements, seal upgrades, strengthening andwidening on our roading network throughout the district.A few highlights this year include resilience road work onTauwhareparae, Waima and Beach roads. The Nuhitirock revetments and Mata Road realignment will alsobe completed. Upgrades and replacement of existingbridges, bridge widening and strengthening are beingcompleted. Later this year work will commence to regainaccess toMatahiia Road. Improvements in Childers Roadand Ballance Street village will also be progressed overthe next year. Streetlights are being replaced in 13 ruraltownships and the CBD. The new LED lights makestreet-lightingmore efficient, reducingmaintenanceandpower costs.


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The financial information presented here is only intendedto give a high level overview. For more detailedinformation, please refer to Page 17.

Financial Estimates for 2016/17

The Financial Strategy for the 2015-2025 Long Term Plan(LTP) proposed a 2% overall increase in rates for years 1-3and the debt thresholds of $55m for external debt and$80m for total debt. The estimates proposed for 2016/17Annual Plan are within these financial limits. There arevery few variations to the financial estimates for year 2of the 2015-2025 LTP. Themain variations are the changesto the timing and scope of the Library and TairāwhitiNavigations projects.

Council has refined operational and capital budgetswith a focus on:

keeping rates affordablekeeping debt lowincreasing non rates income over the long term

maintaining our core asset infrastructurefocusing on some key major projects.

We have a general requirement to manage financialmatters prudently, and in a manner that promotes thecurrent and future interests of the community. Councilmust consider the balanced budget requirement underthe Local Government Act (LGA) where its forecastoperating revenuedoes notmatch its forecast operatingexpenses.Weareproposing to budget for anaccountingsurplus. This is the result of capital grants/subsidies, theunfunding of depreciation on specific Council assets andthe use of activity surpluses to partially fund someoperations as opposed to fully rates fund.

What we spend rates on - our activities andservices 2016/17

Ka whakapau nga reiti i ēnei nā - nga nekehanga menga ratonga

Through the LTPwe set out plans for the activities Councilprovides. They included; why we do it, our plans for thenext ten years, how much they will cost, levels of serviceand performance measures to check we are on trackto delivering them. There are no significant changes tothe plans or costs of activities for year 2 of the LTP. Hereis a summary for the 2016/17 financial year of how weplan to spend on the activities and services we provideand where the money comes from (rates or otherincome).

Financial Overview

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CAPITAL SPEND$2,937,000

OPERATING SPEND$8,667,000

8.7% 10.1%



6.7% 7.2%

RATES VALUEper $100

RATES VALUEper $100 $4

GOVERNANCE AND SUPPORT SERVICES

PARKS AND OPEN SPACES

$11

0.2% 4.6%

RATES VALUEper $100

CAPITAL SPEND$72,000




9.6% 8.6%

RATES VALUEper $100

WASTEWATER

$12

SOLID WASTE MANAGEMENT

$8

RATES

OTHERincluding fees and charges

OPERATIONS FUNDED FROM:



6.0%

RATES



4.8%

RATES



3.7%

RATES

78.4%

21.6% 94.0% 46.5% 96.3%

35.9% 30.1%

RATES VALUEper $100





3.9% 6.1%

CAPITAL SPEND$0


0.0% 8.4%



4.5% 3.4%

RATES VALUEper $100

RATES VALUEper $100

RATES VALUEper $100

WATER SUPPLY URBAN STORMWATER SERVICES

$5$4

LAND TRANSPORT Ā

REGULATION AND ENFORCEMENT

$7$21



RATES



RATES



RATES



0%

RATES

60.2%

39.8% 46.5%

53.5%

49.9%

50.1%

100%

Financial Overview

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Where does the money come from?

Council's income

Other$13.9m

Grants$21.7m

Rates $53.3m

59.0%

15.4%

1.6%

24.0%

Dividends$1.5m

Council is proposing to keep total rates to $53.3m. Thishas been achieved through use of activity surpluses topartially fund some activities, unfunding somedepreciation, savings throughout Council and thereprioritisation of some projects/activities.

$49.3

m

$50.5

m

$51.3

m

$52.3

m

$53.3

m

$53.3

m

47.048.049.050.051.052.053.054.0

Actual2012/13

Actual2013/14

Actual2014/15

Budget 2015/16

LTPBudget

2016/17

APBudget

2016/17

TOTAL RATES $m

How will the money be spent?

Council's operational expenditure

Infrastructure Services - $48.2m

55.9%

4.5%

19.5%

15.6%

4.5%

Planning and Development

- $16.8m

Environment &Regulatory

- $48.2m

Commercial Operations - $3.8m

Governance andSupport Services - $3.9m

Council's projects

As a result of the review of major project costs, fundingand timing, the capital expenditure has increased from$26m to $33.6 in the draft estimates. The main changesand additions are included below. There have beenminor variations to the operational projects also noted.

VarianceFavourable

/(adverse)

$m

APBudget2016/17$m

LTPBudget2016/17$m

Capital

(5)5.00Library - Building Expansion

0.200.2Pool redevelopment

0.11.01.1Lawson Field Theatre

(2)2.80.8Tairāwhiti Navigations

0.10.20.3Streetlight to LED

0.10.20.3Wetlands

0.10.40.5Parks and Reserves - Tītīrangi

(1)1.00Douglas Street Stormwater Improvement

(0.3)0.30Finance CIA

(7.7)10.93.2

Operational

(0.2)0.20Special Project - Cost of Election

(0.3)0.40Managed Aquifer Recharge Fresh andgroundwater

(0.5)0.60.0

Financial Overview

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Core and Major Projects $m

19

1417

2018 19

1 8

1413

8

14

0

5

10

15

20

25

30

35

Actual2012/13

Actual2013/14

Actual2014/15

Budget 2015/16

LTP(amended)

Budget2016/17

APBudget2016/17

Core Capital Major Projects

Council's Debts

Council reviewed the assumptions surrounding ourforecast debt, resulting in an increase in debt projections.The forecast opening total debt level is $71m, down $2mcompared to the LTP (amended) forecast of $73m. Also,updated costings for capital projects have impacted onour debt.

25 29 32 38 42 42

61 6571 73 74

78

01020304050607080

Actual2012/13

Actual2013/14

Actual2014/15

Budget 2015/16

LTP(amended)

Budget2016/17

APBudget2016/17

$m

External Internal

Significant Forecasting Assumptions

The estimates contain prospective financial information.Actual results are likely to vary from the informationpresentedand the variationsmay bematerial. See Page35 for details.

Fees and Charges

The Council fees and charges are used to fund theoperation and maintenance of a variety of servicesprovided to the community.

Some fees and charges have been increased by 2% to2.5% for 2016/17. This is in line with the expectation in the2015-2025 Long Term Plan. Most changes are as a resultof inflation.

Fees have needed to increase further in some activitiesto meet Council’s Revenue and Finance policies orincreased costs. These include:

War Memorial TheatreResource consentsEnvironmental Health – Food Act regulationsWater and Coastal resources – water meteringregulations.

Full details of the fees and charges can be found on theCouncil's website:

www.gdc.govt.nz

Rating Policy ChangesThis plan also includes information on a Rating Policy change.We have clarified our “Separately Used or InhabitedPart(SUIP)” definition. This is important because if you havemultiple parts on your property then you pay additional ratesfor example if you have three shops, or two flats, or similar.

There will be no change to the rating basis for plants andpests, rural fires and soil conservation activities. A continuationof the rates relief will automatically be applied to affectedproperties.

See Rates Information ( Page 45 ) for details.

Financial Overview

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http://www.gdc.govt.nz

OUR FINANCES

TE TOHATOHA PŪTEA

Contents Page

Page 17Introduction

Prospective Statement of Comprehensive Revenue and Expenses

Page 18Prospective Statement of Financial Position

Page 19Prospective Statement of Changes in Equity

Page 19Prospective Statement of Cash Flow

Page 20Prospective Statement Concerning Balanced Budget

Notes to the Financial Statements

Page 21Note 1 Statement of Accounting Policies

Page 29Note 2 Prospective Summary Cost of Services by Activity

Page 30Note 3 Rates Revenue

Page 30Note 4 Revenue from Grants and Subsidies

Page 30Note 5 Revenue from Operating Activities

Page 30Note 6 Revenue from Other Gains/(Losses)

Page 30Note 7 Employee Benefit Expense

Page 31Note 8 Depreciation and Amortisation Expense

Page 31Note 9 Expenditure on Operating Activities

Page 31Note 10 Finance Costs

Page 32Note 11 Development Contributions Revenue

Page 32Note 12 Movements in Reserves

Page 33Note 13 Reconciliation of Funding Impact Statement with Prospective Statement of ComprehensiveRevenue and Expenses

Page 34Note 14 Capital Expenditure 2016/17

Page 35Significant Assumptions

Our Finances

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IntroductionTheAnnual Plan sets out Council’s priorities and identifieshow Council intends to fund its operations and capitalprojects.

The forecasts prepared for Council have beenpreparedbased on agreed levels of service for each activity. Thelevels of service are set out in detail in the 2015-2025 LongTerm Plan (LTP).

The finances include:

Prospective Statement of Comprehensive Revenueand ExpensesProspective Statement of Financial PositionProspective Statement of Changes in EquityProspective Statement of CashflowsProspective Statement Concerning BalancedBudget.

Further detailed information is provided in the Notes tothe Prospective Financial Statements which identifiesrevenue and expenditure for each group of activities(Note 2) and a full list of capital projects planned for2016/17 with comparison figures to Year 2 of the2015-2025 Long Term Plan (Note 14).

The operational and capital costs within the Annual Planinclude:

Existing CostsCosts to continue to deliver the current level ofservice.Growth CostsCosts to deliver current level of service to a largercommunity due to growth.Level of Service ChangesCosts to deliver an increase in level of service.Project CostsCosts such as depreciation and interest that occurfrom Council financing capital projects.InflationIncreases in revenue and costs due to pricechanges.

The Nature of the Prospective FinancialInformation - cautionary note

The prospective financial information contained in theAnnual Plan is a forecast. It has been prepared on thebasis of assumptions as to future events that the Councilreasonably expects to occur, associatedwith the actionsit reasonably expects to take at the date the forecastwas prepared. The forecast relates to events and actionswhich have not yet occurred and may not occur.

The actual results achieved for the period covered arelikely to vary from the financial information presentedand the variations may be material. The uncertaintyincreases as the number of years of prospective financialinformation increases. Uncontrollable external events willsignificantly affect the forecast.

The Prospective Statement of Financial Position has beenreviewed to incorporate the audited Statement ofFinancial Position for the year ended 30 June 2016 andthe movements per the second year of the 2015-2025Long Term Plan (2016/17). This has been adjusted for anymaterial events during the current financial year.

A number of assumptions need to be made about theeconomic and financial conditions whichwill apply overthe lifetime of the model. The major assumptionsunderpinning the Plan are set out in the SignificantAssumptions Page 35.

Please Note

Revenue from the Grants, Subsidies and Contributions -Capital includes grants received where the associatedexpenditure will be capitalised. Expenditure relating tothese projects will be recognised (primarily asdepreciation) over the life of the capitalised assets.

Council has budgeted for a net surplus in the 2016/17Annual Plan. This is mainly the result of the capital grantsand subsidies. Further information is available in theProspective Statement Concerning Balanced Budgetlater in this section.

The financial information contained within the 2016/17Annual Plan may not be appropriate for purposes otherthan those described.

They may be rounding differences throughout thefinancial statements and notes included in this section.They do not impact the overall usefulness of theinformation presented.

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Prospective Statement of ComprehensiveRevenue and Expenses for the year ended30 June 2017

AP2016/17$000s

LTP2016/17$000sNotes

AP2015/16$000s

REVENUE FROM NON-EXCHANGETRANSACTIONS

9,4389,1464Grants and Subsidies - Operational9,037

12,2328,0864Grants, Donations, Subsidies andContributions - Capital

11,113

1,6081,5532Other Non Exchange Revenue1,515

16,48517,1353General Rates And Uniform AnnualGeneral Charge

16,720

36,85736,1983Targeted Rates (other than a targetedrate for water supply)

35,559

REVENUE FROM EXCHANGETRANSACTIONS

69969911Development and FinancialContributions

815

11,62811,7662/5Other Revenue11,785

1,4591,4592/5Dividends1,000

14142/5Interest Received14

12126Other Gains/(Losses) - Profit on Sale ofAssets

12

90,43386,067Total Revenue87,568

EXPENSES

18,06817,8917Employee Benefit Expenses17,857

45,52544,7419Expenditure on Operating Activities43,509

20,52220,5838Depreciation and Amortisation20,394

1,9992,42710Financing Costs2,085

00Internal Transfers0

86,11585,6422Total Expenses83,845

4,318425Net Surplus/(Deficit) before Taxation3,723

00Subvention Payment from GHL0

00Income Tax Expense0

4,318425Net Surplus/(Deficit) after Taxation3,723

378378Gains/(Losses) on Property Revaluation388

4,694803TOTAL COMPREHENSIVE REVENUE ANDEXPENSES

4,111

Prospective Statement of Financial Positionas at 30 June 2017

AP2016/17$000s

LTP2016/17$000s

AP2015/16$000s

CURRENT ASSETS

2934,589Cash and Bank4,589

4,2995,529Non Exchange Trade and OtherReceivables

5,473

5,7855,679Exchange Trade and OtherReceivables

5,615

105184Inventories184

80Investments1,272

5050Non Current Assets Held for Resale50

10,54016,031Total Current Assets17,183

CURRENT LIABILITIES

463380Deposits Held380

14,23513,997Trade and Other Payables13,989

1,9282,735Employee Benefits and Suspense2,683

14,83011,222Borrowings11,222

7878Provisions for Other Liabilities78

535489Derivative Financial Instruments489

32,06928,901Total Current Liabilities28,841

(21,530)(12,870)Total Net Working Capital(11,658)

NON CURRENT ASSETS

00Trade and Other Receivables0

1,956,1721,943,251Property Plant and Equipment1,946,763

2,0801,668Intangible Assets1,668

2,3682,186Biological Assets2,186

29,89129,771Investments20,561

1,990,5111,976,876Total Non Current Assets1,971,178

NON CURRENT LIABILITIES

27,28330,958Borrowings27,269

303255Employee Benefit Liabilities255

1,4751,483Provisions for Other Liabilities1,484

2,0311,137Derivative Financial Instruments1,137

31,09233,833Total Non Current Liabilities30,145

1,937,8951,930,173Total Net Funds Employed1,929,371

EQUITY

414,920418,484Accumulated Surplus417,525

33,61131,102Special Funds31,635

1,489,3641,480,588Revaluation Reserves1,480,211

1,937,8951,930,174Total Equity1,929,371

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Prospective Statement of Changes in Equityfor the year ended 30 June 2017

AP2016/17$000s

LTP2016/17$000s

AP2015/16$000s

EQUITY OPENING BALANCES

407,993417,525Accumulated Funds and Retained Earnings412,253

36,28031,635Special Funds and Reserves33,184


1,933,2601,929,371Total Equity Opening Balance1,925,260

CHANGES IN EQUITY

Accumulated Surplus (Retained Earnings)/Revaluation Reserves

4,694803Total Comprehensive Income for the Year4,111

2,669533Transfer to/(from) Special Funds and Reserves1,549

00Transfer to/(from) Restricted Funds LiabilityMovement

0

Special Funds and Reserves

(2,669)(533)Transfer to/(from) Retained Earnings(1,549)

4,694803Total Changes in Equity4,111

EQUITY CLOSING BALANCES

414,920418,484Accumulated Funds and Retained Earnings417,525

33,61131,102Special Funds and Reserves31,635


1,937,8951,930,174Total Equity Closing Balance1,929,371

Attributable to :

1,937,8951,930,174Gisborne District Council1,929,371

Explanation of Terms used in the ProspectiveStatement of Cash Flows

Cash and Cash Equivalents is considered to be cash onhand and current accounts in banks, net of bankoverdrafts.

Investing Activities are those activities relating to theacquisition, holding and disposal of fixed assets andinvestments. Investments can include securities not fallingwithin the definition of cash.

Financing Activities are those activities which result inchanges in the size and composition of the capitalstructure of the Group. This includes both equity anddebt not falling within the definition of cash.

Operating Activities include all transactions and otherevents that are not investing or financing activities.

The GST (net) component of operating activities reflectsthe net GST paid and received with the Inland RevenueDepartment. The GST component has been presentedon a net basis, as the gross amounts do not providemeaningful information for financial statement purposes.The GST rate assumed in these estimates is 15%.

Prospective Statement of Cash Flow for theyear ended 30 June 2017

AP2016/17$000s

LTP2016/17$000s

AP2015/16$000s

Cash Flow from Operating Activities

Cash provided from:

51,92051,909Rates Receipts50,795

21,67017,233Government Grants and Subsidies20,150

13,88213,760Receipts from Activities13,926

1414Interest Received14

1,4591,459Dividends Received1,000

00Subvention0

88,94584,37585,885

Cash provided to:

60,00360,077Payments to Suppliers and Employees59,049

906906Grants890

00GST (Refund)0

00Income Tax0

2,0302,457Interest Paid2,116

62,93963,44162,055

26,00620,933Net Cash Inflow/(Outflow) OperatingActivities

23,830

Cash Flow from Investing Activities

Cash provided from:

1212Sale of Property Plant and Equipment12

121212

Cash provided to:

33,37825,905Purchase of Property Plant and Equipment30,191

0(1,272)Purchase (w/down or sale) of Investments0

33,37824,63330,191

(33,390)(24,622)Net Cash Inflow/(Outflow) Investing Activities(30,179)

Cash Flow from Financing Activities

Cash provided from:

7,3843,689Increase/(Decrease) in Borrowings6,349

7,3843,6896,349

7,3843,689NetCash Inflow/(Outflow) FinancingActivities6,349

00Net Increase/(Decrease) in Cash0

2934,589Cash at beginning of the year4,589

2934,589Cash and Cash Equivalents at Year End4,589

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Prospective Statement ConcerningBalanced Budget for the year ended 30June 2017

AP2016/17$000s

LTP2016/17$000s

AP2015/16$000s

90,43386,067Operating Revenue87,568

86,11585,642Operating Expenditure83,845

00Subvention Payment0

00Income Tax Expense0

4,318425Net Operating Surplus/(Deficit) After Taxation3,723

LESS

543543Capital Rates Income510

12,2328,086Capital Grants and Subsidies11,113

699699Other Capital Grants, Donations andContributions

815

101135Operations Funded by Reserve Funds279

PLUS

7,5367,541Depreciation not Funded7,325

1,7221,497Increase/(Decrease) in Deficit1,668

00Balanced Budget - operating incomeagreesto operating expenditure0

Balancing the budget

Council sets operating income at a level to meet eachyear’s operating expenditure. This is to ensure that thereis access to enough funding to enable the services tocontinue to be provided long term. However, there areactivities where this approach may not be practical orprudent due to the activity’s long term nature such asinfrastructure assets, forestry and soil conservationnurseries. Council is forecasting an accounting surplusfor 2016/17.

Council intends to:

Smooth the rates increase by running activitydeficits/surpluses in some activities (e.g. forestry,conservation nurseries, contestable fund).

Not fund a portion of depreciation on specificassets or components of assets funded throughcapital rates or subsidies (i.e. wastewater treatmentplant and some roading assets).

Use operational reserves and/or activity balancesto fund some operational expenditure whereappropriate. The main activities that are partiallyfundedby activity surpluses/deficit are theOlympicpool, planning anddevelopment andwater supplyactivities.

When preparing and reviewing the budget Council hashad regard to the following specific matters in relationto all activities of Council, as per the LGA section 100:

1. Maintaining levels of service

2. Maintaining the service capacity and integrity ofassets

3. Intergenerational equity

4. Compliance with Council’s funding and financialpolicies established under LGA section 102.

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Notes to the Prospective FinancialStatements

Note 1 : Statement of Accounting Policies

Reporting Entity

Gisborne District Council (“Council”) is a Unitary Authoritygoverned by the Local Government Act (LGA) 2002.

The Gisborne District Council Group (the “economicentity") consists of Gisborne District Council and itscontrolled entities, Gisborne Holdings Ltd (100% owned),Tauwhareparae Farms Ltd (100% owned) andTauwhareparae Forests Ltd (100% owned). All Councilcontrolled entities are incorporated in New Zealand.

Council has not presented economic entity prospectivefinancial statements because we believe that thecontrolling entities prospective statements are morerelevant to users. The main purpose of prospectivefinancial statements in the Annual Plan is to provide userswith information about the core services that Councilintends to provide ratepayers, the expectedcost of thoseservices and, as a consequence, how much Councilrequires by way of rates to fund the intended levels ofservices. The level of rates funding required is not affectedby controlled entities, except to the extent that theCouncil obtains distributions from, or further invests in,those controlled entities. Such effects are included in theprospective financial statements presented.

TheCouncil is a Public Benefit Entity (PBE) for the purposesof Financial Reporting. The Financial Bill enacted inDecember 2013 defines a PBE as "entities whose primaryobjective is to provide goods or services for communityor social benefit, and where equity has been providedwith a view to supporting that primary objective, ratherthat for a financial return to equity". Gisborne DistrictCouncil is defined as a Tier 1 entity with expenditure inexcess of $30m.

Basis of Preparation

The Council’s prospective financial statements havebeen prepared in accordance with the requirements ofthe LGA 2002, which includes the requirement to complywith New Zealand Generally Accepted AccountingPractice (NZ GAAP). They comply with Public BenefitEntity (PBE) Standards and other applicable FinancialReporting Standards, as appropriate for public benefitentities. This includes compliance with PBE FinancialReporting Standard No. 42 (PBE FRS-42) ‘ProspectiveFinancial Statements’.

The prospective financial statements have beenprepared on a historical cost basis, modified by therevaluation of certain fixed assets, forestry assets, livestockassets and certain financial instruments to reflect fairvalue.

The prospective financial statements are presented inNew Zealand dollars and all values are rounded to thenearest thousanddollars ($'000). The functional currencyof Council is New Zealand dollars.

The Nature of the Prospective FinancialInformation - Cautionary Note

The prospective financial information contained in theAnnual Plan is a forecast. It has been prepared on thebasis of assumptions as to future events that the Councilreasonably expects to take at the date the forecast wasprepared. The forecast relates to events and actionswhich have not yet occurred and may not occur. Theactual results achieved for the period covered are likelyto vary from the financial information presented and thevariations may be material.

A number of assumptions need to be made about theeconomic and financial conditions whichwill apply overthe life-time of the model. The major assumptionsunderpinning the Plan are set out in the SignificantAssumptions section.

The financial information contained within the AnnualPlan may not be appropriate for purposes other thanthose described.

Specific Accounting Policies

The following specific Accounting Policies whichmaterially affect the measurement of financialperformance and the financial position have beenapplied.

Revenue Recognition

Revenuehas been split into Exchangeandnon Exchangeas per the requirements of the new Public Benefit Entity(PBE) accounting standards. Non Exchange revenue iscategorised as receiving value without givingapproximately equal value in exchange e.g. Generalrates, government grants.

Revenue is measured at the fair value of considerationreceived. The following specific recognition criteriamustbe met before revenue is recognised.

Rates Revenue

Rates are set annually by a resolution from Council andrelate to a financial year. All ratepayers are invoicedwithin the financial year to which the rates have beenset. Rates revenue is recognisedwhen invoices are raised.

Government Grants and Subsidies

Government grants are initially recognised as income attheir fair value where there is reasonable assurance thatthe grant will be received and all attaching conditionswill be complied with.

Council receives government subsidies fromNewZealandTransport Agency, which subsidises part of Council’s costsin maintaining the local roading infrastructure.

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The subsidies are recognisedas revenueuponentitlementas conditions pertaining to eligible expenditure havebeen fulfilled.

Other Revenue

Revenue from the rendering of services is recognised,based on the actual service provided on an accrualbasis.

Sales of goods are recognised when a product is sold tothe customer. Sales are usually in cash or by electronicpayment. The recorded revenue is the gross amount ofthe sale, excluding GST. Interest income is recognisedusing the effective interest method.

Dividends are recognised when the right to receivepayment has been established.

Where a physical asset is acquired for nil or nominalconsideration the fair value of the asset received isrecognised as revenue. Assets vested in Council arerecognised as revenue when control over the asset isobtained.

Borrowing Costs

Borrowing costs (except borrowing costs incurred as aresult of capital work) are recognised as an expense inthe period in which they are incurred.

When the construction of assets are loan funded, allborrowing costs incurred as a result of the capital workare capitalised as part of the total cost of the asset upuntil the point where the asset enters service.

Grant Expenditure

Non-discretionary grants are those grants that areawarded if the grant application meets the specifiedcriteria. They are recognised as expenditure when anapplication thatmeets the specified criteria for the granthas been received.

Discretionary grants are those grants where Council hasno obligation to award on receipt of the grantapplication and are recognised as expenditure when asuccessful applicant has been notified of Council’sdecision.

Income Tax

Income tax expense in relation to the surplus or deficitfor the period comprises current tax and deferred tax.

Current tax is the amount of income tax payable basedon the taxable profit for the current year, plus anyadjustments to income tax payable in respect of prioryears. Current tax is calculated using rates that havebeenenactedor substantially enactedbybalancedate.

Deferred tax is the amount of income tax payable orrecoverable in future periods in respect of temporarydifferences and unused tax losses.

Temporary differences are differences between thecarrying amount of assets and liabilities in the financialstatements and the corresponding tax basis used in thecomputation of taxable profit.

Deferred tax liabilities are generally recognised for alltaxable temporary differences. Deferred tax assets arerecognised to the extent that it is probable that taxableprofits will be available against which the deductibletemporary differences or tax losses can be utilised.

Deferred tax is not recognised if the temporary differencearises from the initial recognition of goodwill or from theinitial recognition of an asset and liability in a transactionthat is not a business combination, and at the time of thetransaction, affects neither accounting profit nor taxableprofit.

Deferred tax is recognised on taxable temporarydifferences arising on investments in subsidiaries andassociates, and interests in joint ventures, except whereCouncil can control the reversal of the temporarydifference and it is probable that the temporarydifference will not reverse in the foreseeable future.

Deferred tax is calculated at the tax rates that areexpected to apply in the period when the liability issettled or the asset is realised, using tax rates that havebeenenactedor substantially enactedbybalancedate.

Current tax and deferred tax is charged or credited tothe Prospective Statement of Comprehensive Revenueand Expenses, except when it relates to items chargedor credited directly to equity, in which case the tax isdealt within equity.

Leases

Operating Leases

An operating lease is a lease that does not transfersubstantially all the risks and rewards incidental toownership of an asset. Lease payments under anoperating lease are recognised as an expense on astraight-line basis over the lease term.

Finance Leases

A finance lease is a lease that transfers to the lesseesubstantially all the risks and rewards incidental toownership of an asset, whether or not title is eventuallytransferred.

At the commencement of the lease term, the Councilrecognises finance leases as assets and liabilities in theStatement of Financial Position at the lower of the fairvalue of the leased item or the present value of theminimum lease payments.

The amount recognised as an asset is depreciated overits useful life.

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Trade and Other Receivables

Trade and other receivables are recognised at fair valueand subsequently measured at amortised cost using theeffective interest method, less any allowance foruncollectible amounts.

A provision for impairment of receivables [doubtful debts]is established when there is objective evidence that theCouncil will not be able to collect all amounts dueaccording to the original terms of the receivables. Theamount of the provision is the difference between theasset’s carrying amount and the present value ofestimated future cash flows, discounted using theeffective interest method. Non-current receivables arerecognised at the present value of their expected futurecash flows, discounted at the current market rate ofreturn for a similar asset.

Inventories

Inventories are recognised at the lower of cost and netrealisable value. Net realisable value is the estimatedselling price in the ordinary course of business, less theestimated costs of completion and selling expenses. Thecost of inventories is based on the first-in first-out (FIFO)principle and includes expenditure in acquiring theinventories and bringing them to their existing locationand condition.

Financial Assets

Council classifies its financial assets in the following twocategories:

Available-for-sale financial assets; andLoans and receivables.

The classification depends on the purpose for which theassets are held. Management determines theclassification of its investments at initial recognition andre-evaluates the designation at every reporting date.

Financial assets and liabilities are initially measured at fairvalue plus transaction costs unless they are carried at fairvalue through the Prospective Statement ofComprehensive Revenue and Expenses in which casethe transaction costs are recognised in the ProspectiveStatement of Comprehensive Revenue and Expenses.

Purchases and sales of investments are recognised ontrade-date, the date on which the Council commits topurchase or sell the asset.

The fair value of financial instruments traded in activemarkets is based onquotedmarket prices at the balancesheet date. The quoted market price is the current bidprice. The fair value of financial instruments not tradedin an active market is determined using valuationtechniques. Council uses a variety ofmethods andmakesassumptions that are based onmarket conditions existingat each balance date.

Quoted market prices or dealer quotes for similarinstruments are used for long-termdebt instruments held.

Other techniques, such as estimated discounted cashflows are used to determine fair value for the remainingfinancial instruments.

Derecognition of Financial Assets

Financial assets are derecognised when the rights toreceive cash flows from the financial assets have expiredor have been transferred and theCouncil has transferredsubstantially all the risks and rewards of ownership.

Council presently has the following categories of financialassets:

a. Loans and Receivables

Loans and receivables are non-derivative financial assetswith fixed or determinable payments that are not quotedin an active market. Council’s general and communityloans are designated as loans and receivables. They arerecognised initially at fair value, and subsequently carriedat amortised cost less impairment losses.

Loans to community organisations made by Council atnil, or below-market interest rates are initially recognisedat the present value of their expected future cash flows,discounted at the current market rate of return for asimilar asset/investment. Theyare subsequentlymeasuredat amortised cost using the effective interest method.

The difference between the face value and presentvalue of the expected future cash flows of the loan isrecognised in the Prospective Statement ofComprehensive Revenueand Expenses as a grant. Loansto other parties at market rates are measured atamortised cost using the effective interest method.Non-current loans are discounted at the current marketrate of return for a similar asset.

b. Available-for-Sale Financial Assets

Available-for-sale financial assets are non-derivativesthat are either designated in this category or notclassified in any of the other categories.

TheCouncil’s investments in equity securities are classifiedas available for sale and are stated at fair value. Gainsand losses are recognised directly in equity except forimpairment losses, which are recognised in theProspective Statement of Comprehensive Revenue andExpenses.

In the event of impairment any cumulative lossespreviously recognised in equity will be removed andrecognised in the Prospective Statement ofComprehensive Revenue and Expenses even thoughthe asset has not been derecognised.

Impairment of Financial Assets

At each balance sheet date Council assesses whetherthere is any objective evidence that a financial asset orgroup of financial assets is impaired. Any impairmentlosses are recognised in the Prospective Statement ofComprehensive Revenue and Expenses.

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Accounting for Derivative Financial Instrumentsand Hedging Activities

Council uses derivative financial instruments such asinterest rate swaps (“hedges”) and forward rateagreements to manage its cash flow and interest raterisk. In accordance with its treasury policy, the Councildoes not hold or issue derivative financial instruments fortrading purposes.

Derivatives are initially recognised at fair value on thedate a derivative contract is entered into and aresubsequently re-measured at their fair value at eachbalance date.

Council does not satisfy all the conditions for hedgeaccounting and therefore all gains or losses in fair valueof instruments used to manage cashflow and interestrate risk are recognised through the ProspectiveStatement of Comprehensive Revenue and Expenses.

Financial Liabilities - Borrowings

Borrowings are initially recognised at their fair value. Afterinitial recognition, all borrowings are measured atamortised cost using the effective interest method.

Non-Current Assets Held for Sale

Non-current assets held for sale are classified as held forsale if their carrying amount will be recovered principallythrough a sale transaction, not through continuing use.Assets held for sale are measured at the lower of theircarrying amount and fair value less costs to sell.

Any impairment losses for write-downs of assets held forsale are recognised in the Prospective Statement ofComprehensive Revenue and Expenses.

Any increases in fair value (less costs to sell) arerecognised up to the level of any impairment losses thathave been previously recognised.

Non-current assets (including those that are part of adisposal group) are not depreciated or amortised whilethey are classified as held for sale. Interest and otherexpenses attributable to the liabilities of a disposal groupclassified as held for sale continue to be recognised.

Property, Plant and Equipment

Property, Plant and Equipment consists of:

Operational Assets

These include land, buildings, improvements, librarybooks, wharves, floating plant, plant equipment, andmotor vehicles.

Infrastructural Assets

Infrastructural assets are the fixed utility systems ownedby Council and comprise the sewer, water, stormwater,roading, flood control, and the waste disposalinfrastructures.

Each asset type includes all items that are required forthe network to function, for example, sewer reticulationpiping and sewer pump stations.

Biological Assets

Forestry Assets

Forestry Assets consist of the Council’s forestry holdings.Forestry assets are valued on the basis of fair value lessestimated point of sale costs. Fair value is determinedbased on the present value of expected net cash flowsdiscounted at a currentmarket determined pre-tax rate.Forestry Assets are revalued annually. Valuationmovements pass through the Prospective Statement ofComprehensive Revenue and Expenses. The costs tomaintain the forestry assets are included in theProspective Statement of Comprehensive Revenue andExpenses.

Pamoa Forest Joint Venture

Council has transferred forestry rights to Juken NewZealand Limited in respect of a total of 1,608 hectares ofland associated with the Pamoa Forest.

The transfer relates to one harvest cycle. Under theagreement Council has contributed the land and isentitled to 16.75% of stumpage. All costs of developmentare borne by Juken New Zealand Limited. The value ofthe land (excluding the trees) and Council’s right to ashare of the stumpage is reflected in the Statement ofFinancial Position.

Intangible Assets

Intangible assets predominately comprise computersoftware and carbon credits.

Software Acquisition and Development

Acquired computer software licenses are capitalised onthe basis of the costs incurred to acquire and bring touse the specific software.

Costs associated with maintaining computer softwareare recognised as an expensewhen incurred. Costs thatare directly associatedwith the development of softwarefor internal use or with the acquisition of software licencesby Council, are recognised as an intangible asset.

Amortisation

The carrying value of an intangible asset with a finite lifeis amortised on a straight line basis over its useful life.Amortisation begins when the asset is available for useand ceases at the date that the asset is derecognised.The amortisation is charged to the Prospective Statementof Comprehensive Revenue and Expenses on a straightline basis over the useful life of the asset.

Typically, the estimated useful lives of these assets are asfollows:

Computer software 3 to 6 years.

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Emissions Trading Scheme

Council’s forestry holdings incorporates forestry assetsheld byCouncil and its subsidiary, Tauwhareparae FarmsLtd.

Tauwhareparae Farms Ltd (TFL) has voluntarily enteredthe New Zealand Emissions Trading Scheme (ETS) inrespect of 1,138.2 hectares of forest land located in theTauwhareparaearea. This entitles TFL to receive emissionsunits (units) for carbon stored in the specified area froma 1 January 2008 baseline.

Units received are recognised at fair value on the datethey are received and subsequently measured at costsubject to impairment. While there are no specificconditions attached to units received, should carbonstored in the specified area fall below the amountcompensated for, a portion of the units received mustbe returned.

Units received are recorded on the ProspectiveStatement of Financial Position as an intangible assetuntil it is clear that theywill not be required tomeet futureemissions obligations. The value of units is then recognisedin the Prospective Statement ofComprehensive Revenueand Expenses.

Where there is an obligation to return units this liability isrecognised on the Prospective Statement of FinancialPosition, measured with reference to the carrying valueof units on hand. Where there is insufficient units on handto meet the emissions obligation, this is measured byreference to the current market value for units held.

Future cash flows associated with unitsreceivable/payable are taken into consideration indetermining the valuation of the specified area.

Council’s forestry holdings separate from the subsidiariesholdings, consist of approximately 92.7 hectares of smallwoodlots and 1124 hectares held by the Pamoa ForestJoint Venture. These forestry blocks were registered withETS in November 2011.

At the time of the Long Term Plan there was noconfirmation of the number of issued units to Council andas such no units have been recognised and recordedon the Prospective Statement of Financial Position for thisAnnual Plan.

Property, Plant and Equipment Valuation

Council has elected to use the Public Benefit Entitiesexemption to revalue property, plant and equipment onan asset class basis. The results of revaluing are creditedor debited to an asset revaluation reserve for that classof asset. Where this results in a debit balance in the assetrevaluation reserve, this balance is expensed in theProspective Statement of Comprehensive Revenue andExpenses. Any subsequent increase on revaluation thatoff-sets a previous decrease in value recognised in theProspective Statement of Comprehensive Revenue andExpenses will be recognised first in the ProspectiveStatement of Comprehensive Revenueand Expenses up

to the amount previously expensed, and then creditedto the revaluation reserve for that class of asset.

Additions

Additions between valuations are recorded at cost,except for vested assets. Certain infrastructural assetsand land have been vested in Council as part of thesubdivision consent process. Vestedassets are recognisedas revenue when control over the asset is obtained.Vested assets are valued at fair value when received.

Disposals

Gains and losses on disposals are determined bycomparing the proceeds with the carrying amount ofthe asset. Gains and losses on disposals are included inthe Prospective Statement of Comprehensive Revenueand Expenses.

When revalued assets are sold, the amounts included inasset revaluation reserves in respect of those assets aretransferred to retained earnings.

Subsequent Costs

Costs incurred subsequent to the initial acquisition arecapitalised only when it is probable that future economicbenefits or service potential associated with the itemwillflow to Council and the cost of the item can be reliablymeasured.

Operational Assets Valuations

All Operational Assets are carried at cost lessaccumulateddepreciationand impairment losses exceptfor:

Operational Land

Operational land is valued at fair value and is notdepreciated.

Operational Buildings

Operational Buildings are revalued to optimiseddepreciated replacement cost and depreciatedbetween valuations. These assets are independentlyrevalued every 3 years, or more frequently when thereare indications that the values may have changedsubstantially from carrying value.

Library Books - General Collection

All new and replacement books are capitalised in theyear they are purchased and subsequently depreciatedbased on useful lives. The valuations are performed bythe Head Librarian and are not subject to independentreviewbecause there are readily availablemarket pricesto determine fair value.

Library Books Permanent Collection

The permanent collection is carried at deemed cost.

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Infrastructure Assets Valuations


Infrastructural Assets are initially recordedat depreciatedreplacement cost. Infrastructureassets other than roadingare independently valued every 3 years at depreciatedreplacement costs, unless conditions indicate thatcarrying value is materially different to fair value, in whichcase assets are revalued more frequently.

Roading Assets

Roading assets are independently revalued annually.

Airport Assets

Airport assets include land, buildings, runway aprons,roading and below ground infrastructure. Airport assetsare independently valued every 3 years or morefrequently when there are indicators that the fair valuesmay have changed substantially from carrying value.

Depreciation

Depreciation is provided on a straight-line basis on allfixed assets other than land and land under roads.

The depreciation rates used will write off the cost (orvaluation) of the assets to their estimated residual valuesover their useful lives. The useful lives and associateddepreciation rates of major classes of assets have beenestimated as follows:


Roads1 – 20 yearsPavement Surface (seal)

5 yearsPavement Surface (unsealed)Wearing Course

75 – 100 yearsPavement Layers (basecourse)(not depreciated)Formation

25 – 50 yearsCulverts20 – 75 yearsFootpaths

50 yearsSurface Water Channels12 yearsSigns

15 – 25 yearsStreet Lights25 – 80 yearsBridges

80 yearsRetaining Structures15 yearsTraffic Signals25 yearsParking Meters

10 – 15 yearsRailings10 – 13 yearsSafety Projects

Water Reticulation30 – 165 yearsPipes

25 yearsValves, Hydrants15 – 100 yearsPump Stations

400 yearsDams16 – 200 yearsStructures

Sewerage Reticulation60 – 100 yearsPipes

100 yearsManholes15 – 100 yearsPump Stations15 – 50 yearsTreatment Plant

100 yearsLateralsStormwater Systems

62 – 100 yearsPipes25 – 100 yearsIn-drain structures25 – 100 yearsFlood Control Systems

4 – 25 yearsSolid WasteOperational Assets

(not depreciated)Land3 – 100 yearsBuildings/Land Improvements2 – 20 yearsPlant/Machinery/Motor Vehicles3 – 50 yearsOffice Equipment/Furniture5 – 25 yearsOther Equipment1 - 50 yearsLibrary Books

50 yearsWharves

25 yearsFloating Plant3 – 8 yearsLeased Assets

Capital work in progress is not depreciated. The totalcost of a project is transferred to freehold buildings, plantand equipment or infrastructural assets on its completionand then depreciated.

Assets Under Construction

Assets under construction are valued at cost but theyare not depreciated. The total cost of a project istransferred to freehold buildings, plant and equipmentor infrastructural assets on its completion and thendepreciated.

Impairment of Non Financial Assets

Assets that have a finite useful life are reviewed forimpairment whenever events or changes incircumstances indicate that the carrying amount maynot be recoverable.

If the recoverable amount of a non-financial asset is lessthan its carrying amount, the item is written down to itsrecoverableamount. Thewrite downof an item recordedat cost is recognised as an expense in the ProspectiveStatement of Comprehensive Income.Whena re-valueditem is written down to recoverable amount, the writedown is recognised as a downward revaluation to theextent of the corresponding revaluation reserve, and anybalance recognised in the Prospective Statement ofComprehensive Revenue and Expenses.

The carrying amount of a non-financial asset that haspreviously been written down to a recoverable amountis increased to its current recoverable amount if therehas been a change in the estimates used to determinethe amount of the write down. The increased carryingamount of the itemwill not exceed the carrying amountthat would have been determined if the write down torecoverable amount had not occurred.

Trade and Other Payables

Trade and other payables are non-interest bearing andare normally settled on 30 day terms. Therefore, thecarrying value of trade and other payables used in theProspective Statement of Financial Position approximatestheir fair value.

Financial Liabilities: Borrowings

Borrowings are initially recognised at their fair value. Afterinitial recognition, all borrowings are measured atamortised cost using the effective interest method.

Employee Entitlements

The provision for annual leave employeeentitlement andother employee benefits expected to be settled within12 months of balance date has been calculated on anactual entitlement basis at current rates of pay while theother provisions have been calculated on future rates ofpay, discounted using an appropriate discount rate.

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Provision for accumulated sick leave is made only to theextent that it is expected to be used in future periods.The expected usage is assessed using historical averagerates of use.

Long Service Leave and Retirement Leave

For retiring leave and long-service leave not expectedto be takenwithin 12months of balancedate, the liabilityis equal to the present value of the estimated future cashoutflows, calculated on an actuarial basis, as a result ofemployee services provided at balance date.

Superannuation Schemes

Defined Benefit Scheme

Council belongs to the Defined Benefit Plan ContributorsScheme (the scheme), which is managed by the Boardof Trustees of the National Provident Fund. The schemeis a multi-employer defined benefit scheme.

Insufficient information is available to use defined benefitaccounting, as it is not possible to determine from theterms of the scheme, the extent to which thesurplus/deficit will affect future contributions by individualemployers, as there is no prescribed basis for allocation.The scheme is therefore accounted for as a definedcontribution scheme.

Provisions

Provisions are recognised for future expenditure ofuncertain amount or timing when the Council has apresent obligation (legal or constructive) as a result of apast event, and it is probable that an outflowof resourcesembodying economic benefits will be required to settlethe obligation and a reasonable estimate can bemadeof the amount of the obligation.

If the time value of money is material, provisions aredetermined by discounting the expected future cashflows at a rate that reflects current market assessmentsof the time value of money and, where appropriate, therisks specific to the liability.

Where the Group expects some or all of a provision tobe reimbursed, for example under an insurancecontract,the reimbursement is recognised as a separate asset butonly when the reimbursement is virtually certain. Theexpense relating to any provision is presented in theProspective Statement of Comprehensive Revenue andExpenses net of any reimbursement.

Public Equity

This represents the ratepayer’s net ownership of Council.It is made up of the following components:

Accumulated Comprehensive Revenue andExpensesSpecial Funds and ReservesAsset Revaluation Reserves

Accumulated Funds

Comprise accumulated surpluses over the years.

Special Funds and Reserves

Reserves are acomponent of public equity and representa particular use to which parts of equity have beenassigned. Reserves may be legally restricted or createdby Council.

Special funds are recorded at cost plus accumulatedinterest. These funds are restricted in nature and can onlybe used for the special purpose for which they were setup.

Also included are reserves restricted byCouncil decision.These funds are subject to specific conditions acceptedas binding by Council which may not be revised byCouncil without reference to a third party or the Courts.

Asset Revaluation Reserve

Comprise accumulated revaluation increments ordecrements.

Detail on themovement of reserves held byCouncil (withexception of revaluation reserve) can be found in Note12 ( Page 32 ).

Prospective Statement of Cash Flows

Cash flows from operating activities are presented usingthe direct method.

Definitions of terms used in the Prospective Statement ofCash Flows:

Operating Activities

These activities include all transactions and events thatare not investing or financing activities.

Investing Activities

These comprise those activities relating to the acquisition,holding and disposal of fixed assets and investments.Investments can include securities not falling within thedefinition of cash.

Financing Activities

These are activities which result in changes in the sizeand composition of the capital structure of Council;inclusive of both equity and debt not falling within thedefinition of cash.

Changes to Accounting Policies

There has been no changes in accountingpolicies duringthe Annual Plan. All accounting policies have beenapplied on a consistent basis throughout the yearspresented.

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Critical Accounting Estimates andAssumptions

In preparing these prospective financial statementsCouncil hasmadeestimatesandassumptions concerningthe future. These estimates and assumptions may differfrom the subsequent actual results. Estimates andjudgments are continually evaluated and are based onhistorical experience and other factors, includingexpectations of future events that are believed to bereasonable under the circumstances. The estimates andassumptions that have a significant risk of causing amaterial adjustment to the carrying amounts of assetsand liabilities within the next financial year are discussedbelow.

Landfill Post Closure Costs

Paokahu

As former operator of the Paokahu landfill site, Councilhas an obligation to ensure the ongoing maintenanceand monitoring services at this landfill site after closure.

A landfill aftercare provision has been recognised as aliability in the Prospective Statement of Financial Position.Provision is made for the present value of post closurecosts expected to be incurred in restoring the area to itsformer status. The calculated cost is based on estimatesof future site maintenance, supervision and monitoringcosts. The estimated length of time needed for postclosure care for the Paokahu site is 35 years from 31December 2002.

The calculations assume no change in the legislativerequirements or technological changes for closure andpost closure treatment.

Waiapu

As operator of the Waiapu landfill site, Council has anobligation to ensure the ongoing maintenance andmonitoring services at this landfill site after closure.

A landfill aftercare provision has been recognised as aliability in the Prospective Statement of Financial Position.

Provision is made for the present value of post closurecosts expected to be incurred in restoring the area to itsformer status. The calculated cost is based on estimatesof future site maintenance, supervision and monitoringcosts. The estimated length of time needed for postclosure care for the Waiapu site is 35 years, from 30 June2046.


There are a number of assumptions and estimates usedwhen performing the depreciated replacement costvaluations in respect of infrastructural assets. Theseinclude:

The physical deterioration and condition of asset,for example, Council could be carrying an asset atan amount that does not reflect its actualcondition.

This is particularly so for those assets which are notvisible, for example stormwater, wastewater andwater supply pipes that are underground. This riskis minimised by Council performing a combinationof physical inspections and condition-modelingassessments of underground assets.

Estimating any obsolescence or surplus capacityof an asset.

Estimates are made when determining theremaining useful lives over which the asset will bedepreciated. These estimates can be impactedby the local conditions, for example, weatherpatterns and traffic growth.

If useful lives do not reflect the actual consumption ofthe benefits of the asset, then Council could be over orunder-estimating the annual depreciation chargerecognised as an expense in the Prospective Statementof Comprehensive Revenue and Expenses. To minimisethis risk, Council’s infrastructural asset’s useful lives havebeendeterminedwith reference to theNZ InfrastructuralAsset Valuation and Depreciation Guidelines publishedby theNational AssetManagement SteeringGroup, andhave been adjusted for local conditions based on pastexperience.

Asset inspections, deterioration and conditionmodellingare also carried out regularly as part of Council’s assetmanagement planningactivities, which providesCouncilwith further assurance over its useful life estimates.

Experienced independent valuers perform Council’sinfrastructural asset revaluations.

GST

The financial statements have been prepared exclusiveof GST with the exception of receivables and payables,which are stated with GST included.

Budget Figures

The budget figures are those approved by Council andpublished in the 2015-2025 Long TermPlanand this AnnualPlan.

The Annual Plan 2016/17 figures have been produced inaccordance with the requirements of the Public BenefitEntity (PBE) accounting standards.

Cost Allocation

Expenditure has been reported by the nature of theexpense.

Capital Management

Council’s capital is its equity (or ratepayers’ funds) whichcomprise accumulated funds and reserves. Equity isrepresented by net assets.

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The Local Government Act 2002 (the Act) requiresCouncil to manage its revenues, expenses, assets,liabilities, investments and general financial dealingsprudently and in a manner that promotes the currentand future interests of the community. Ratepayers’ fundsare largely managed as a by-product of managingrevenues, expenses, assets, liabilities, investments andgeneral financial dealings.

The objective of managing these items is to achieveintergenerational equity, which is a principle promotedin the Act and applied by Council. Intergenerationalequity requires today’s ratepayers to meet the costs ofutilising the Council’s assets and not expecting them tomeet the full cost of long-term assets that will benefitratepayers in future generations. Additionally, Councilhas in place asset management plans for major classesof assets detailing renewal and maintenanceprogrammes, to ensure that ratepayers in futuregenerations are not required to meet the costs ofdeferred renewals and maintenance.

The Act requires Council to make adequate andeffective provision in its Annual Plan to meet theexpenditure needs identified by those plans. The Act setsout the factors that the Council is required to considerwhen determining the most appropriate sources offunding for each of its activities. The sources and levelsof funding are set out in the funding and financial policiesin the Council’s LTP.

Note 2 : Prospective Summary Cost ofServices by Activity for the year ended 30June 2017

AP2016/17$000s

LTP2016/17$000s

AP2015/16$000s

Expenses1,1561,099Animal Control1,0941,8681,870Arts & Culture1,6371,7351,737Building Services1,6651,1761,171Civil Defence & Emergency

Management1,133

3,8343,853Commercial Operations3,8454,8564,620Community Planning & Development4,6121,8231,820Environmental Health1,7445,0684,793Environmental Services4,7242,8722,873Flood Protection2,6742,3432,144Governance2,2852,0782,131Libraries1,990987927Parking896

6,1616,127Parks & Open Spaces5,9091,8421,839Pools1,8241,5241,526Resource Consents1,478

25,89326,029Roading25,8273,9233,915Solid Waste3,8622,8862,860Stormwater2,7851,5151,831Support Services1,6327,3707,253Wastewater6,9715,2085,224Water Supply5,258

86,11585,642Total Expenses83,845

Revenue From Exchange Transactions800744Animal Control727120120Arts & Culture117907907Building Services8849495Civil Defence & Emergency

Management83

3,3453,345Commercial Operations3,588158215Community Planning & Development214312312Environmental Health304757593Environmental Services624179179Flood Protection1751414Governance13

137137Libraries1331,3611,306Parking1,274367375Parks & Open Spaces366526527Pools512197197Resource Consents192

8,8458,846Roading8,683165165Solid Waste165

00Stormwater02,8902,890Support Services2,397331331Wastewater323

2,6542,654Water Supply2,59024,15923,952Total Revenue From Exchange

Transactions23,364

61,75661,69160,481

Each significant activity is stated gross of internal costsand revenues, and excludes general and targeted ratesattributable to that activity (refer Note 3 - Page 30).

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Note 3 : Rates Revenue

AP2016/17$000s

LTP2016/17$000s

AP2015/16$000s

53,34253,332Rates Revenue52,279

Rate revenue consists of:

3,6133,091General Rates2,936

12,87314,044Uniform Annual General Charge13,783

36,85736,198Targeted Rates35,559

53,34253,332Rates Revenue52,279

Less

820820Remissions800

52,52252,512Net Rates Revenue51,479

1 Council grants rates remissions to certain ratepayers.Council has a number of rates remission policies whichinclude: Remission of Rates for Permanent Crops,Whenua Rahui and Community, Sporting and OtherOrganisations.

Note 4 : Revenue fromGrants and Subsidies

AP2016/17$000s

LTP2016/17$000s

AP2015/16$000s

Revenue fromGrants and Subsidies

43783Central Government Grants139

16,11616,192NZ Transport Agency RoadingSubsidies16,007

5,117958Other Grants and Subsidies4,004

21,67017,233Total Revenue from Grants andSubsidies20,150

Revenue from grants and subsidies are classified ascapital grants where the associated expenditure hasbeen capitalised. Expenditure relating to these projectswill be recognised (primarily as depreciation) over thelife of the assets. The amount of capital grants over theAnnual Plan is as follows:

Note 5 : Revenue fromOperating ActivitiesRevenue

AP2016/17$000s

LTP2016/17$000s

AP2015/16$000s

Revenue from Operating Activities

00Reserves Contribution0

699699Development Contributions815

00Capital Contributions0

871871Rates Penalties850

12,00512,088Activity Revenue12,099

1414Interest14

1,4591,459Dividends1,000

361361Petroleum Tax352

00Gains on Derivatives (Interest RateSwaps)0

15,40815,491Total Revenue fromOperating Activities15,129

Note 6 : Revenue fromOtherGains/(Losses)

AP2016/17$000s

LTP2016/17$000s

AP2015/16$000s

Revenue from Other Gains

00Gain / (Loss) on Changes in FairValue of Forestry Assets and Stock0

00Gain / (Loss) on Changes in FairValue of Livestock0

1212Gain / (Loss) on Disposal ofProperty, Plant and Equipment12

00Gain / (Loss) on Changes in FairValue of Non-Current Receivables/ Investments

0

1212Total Revenue from Other Gains12

Note 7 : Employee Benefit Expense

AP2016/17$000s

LTP2016/17$000s

AP2015/16$000s

Employee Benefit Expense

19,63519,192Salary and Wages19,147

525531DefinedContribution Plans Expense529

00Increase / (Decrease) in LeaveLiabilities0

(2,092)(1,832)Less Recharged to Other ExpenseCategories**(1,819)

18,06817,891Total Employee Benefit Expense17,857

** Wages and salaries can be recharged to otherexpensecategories for example capitalisedproject costs,repairs, cleaning etc.

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Note 8 : Depreciation and AmortisationExpense

AP2016/17$000s

LTP2016/17$000s

AP2015/16$000s

Depreciation and AmortisationExpense

00Animal Control0

496494Arts & Culture365

00Balance Sheet0

22Building Services2

4645Civil Defence & EmergencyManagement44

865880Commercial Operations1,170

11Strategic Planning & Engagement1

66Environmental Health6

4444Environmental Services44

136136Flood Protection133

22Governance2

313363Libraries296

00Parking0

604598Parks & Open Spaces584

187174Pools171

00Resource Consents0

11,04111,057Roading10,980

281281Solid Waste270

892892Stormwater859

1,1011,104Support Services1,123

2,2382,238Wastewater2,153

2,2692,268Water Supply2,191

20,52220,583Total Depreciation andAmortisationExpense20,394

Note 9 : Expenditure onOperatingActivities

AP2016/17$000s

LTP2016/17$000s

AP2015/16$000s

Expenditure on Operating Activities

2,2492,249Administration Expenses2,235

200200Audit Fees - Annual Report195

1,4131,214Consultants and Professional Services1,185

559559Elected Members549

119127Indirect Employment Costs124

1,106961Grants and Donations945

779679Insurance Costs724

1,8661,866Rental and Operating Leases660

3,7233,723Repairs and Maintenance3,607

574574Bad Debts Written Off560

884884Bad Debts - Rates write off867

32,05331,705Other Operating Expenditure*31,858

45,52544,741Total Expenditure on OperatingActivities

43,509

* Other operating expenses include such items as:electricity, operational contracts, treatment plants, pumpstations, internal interest, vegetation planting contracts,facilities contracts and cleaning contracts.

Note 10 : Finance Costs

AP2016/17$000s

LTP2016/17$000s

AP2015/16$000s

Finance Costs

1,020900Interest on Debentures and Interest RateSwaps900

8791,427Interest on Bank Borrowings andCommercial Paper1,085

100100Line Fee100

00Losses onDerivatives (Interest Rate Swaps)0

1,9992,427Total Finance Costs2,085

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Note 11 : Development ContributionsRevenue

AP2016/17$000s

LTP2016/17$000s

AP2015/16$000s

Development ContributionsRevenue

7979Reserves and Open Spaces94

117117Roading137

9191Water Supply105

280280Wastewater322

133133Stormwater157

699699Total Development ContributionsRevenue815

Note 12 : Movements in Reserves

Closing Balance30 June 2017

$000s

Transfers fromReserves$000s

Transfers toReserves$000s

Opening Balance1 July 2016

$000s

Special Funds and Other Reserves

260026Municipal Theatre Project

331,295(18)1,346Library Building

730021710Waipaoa River Flood Control Scheme

527015512Civil Defence Disaster Relief

3,3650953,270Capital Development Fund

1,1420321,110Quarry Rehab

290128Olympic Pool Development

1001Rates Postponement Fidelity

212187223Reserves Contributions

(91)0112(203)Land Transport - Urban Development Contributions

(628)4172(659)Water Supply - Urban Development Contributions

59173294370Wastewater - Urban Development Contributions

(630)144115(601)Stormwater - Urban Development Contributions

358688277Reserves - District Development Contributions

6006HMNZ Blackpool Scholarship Fund

(1,871)682(44)(1,144)GHL Forestry Reserve

360010350Land Subdivision

0000Parking

6006Roading Flood Damage Reserve

29,44321,73120,52230,652Depreciation

33,61123,99121,32236,280Total Special Funds and Other Reserves

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Note 13 : Reconciliation of Funding ImpactStatement with Prospective Statement ofComprehensive Revenue and Expenses

AP2016/17$000s

LTP2016/17$000s

AP2015/16$000s

RECONCILIATION OF REVENUE

Sources of operating funding

77,50277,282Total operating funding (A) as per FundingImpact Statement

75,640

Add Sources of capital funding

12,2328,086Subsidies and grants for capital expenditure11,113

699699Development and financial contributions815

00Lump sum contributions0

90,43386,06787,568

90,43386,067As per Prospective Statement ofComprehensive Income - Total OperatingIncome

87,568

RECONCILIATION OF EXPENDITURE

Applications of operating funding

65,59365,058Total applications of operating funding (B) asper Funding Impact Statement

63,451

20,52220,583Add depreciation and amortisation expense20,394

86,11585,64183,845

86,11585,642As per Prospective Statement ofComprehensive Income - Total OperatingExpenditure

83,845

RECONCILIATION OF TOTAL COMPREHENSIVEINCOME

12,2328,086Add subsidies and grants for capitalexpenditure

11,113

11,90912,224Surplus/(deficit) of operating funding (A-B)12,189

699699Adddevelopment and financial contributions815

(20,522)(20,583)Add depreciation and amortisation expense(20,394)

377378Add gains/(loss) of property revaluation388

4,6948044,111

4,694804As per Prospective Statement ofComprehensive Income - TotalComprehensive Income

4,111

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Note 14 : Capital Expenditure 2016/17

VariationAP

2016/17$000s

LTP2016/17$000s

Level Of ServiceDescription

Support Services2602600MAINTAINCouncil Intelligence Analytics

0898898MAINTAIN / INCREASEInformation Technology Software01,0001,000INCREASEInformation Services Strategic Plan0336336MAINTAINPlant and Vehicles

2602,4942,234TotalArts & Culture

03131MAINTAINPublic Art-1001,0151,115MAINTAINLawson Field Theatre Reconstruction2,0822,850768INCREASEInner Harbour Redevelopment1,9823,8961,914Total

Emergency Management (CDEM)055MAINTAINRural Fires Hose Packs - replace and upgrade065Total

Environmental Services08484MAINTAINTelemetry and Hydrological Equipment08484Total

Wastewater02,5302,530GROWTH / MAINTAINSewer Renewals and Upgrades0260260MAINTAINPump Stations, Equipment and Flow Logger

-60275335GROWTH / INCREASE / MAINTAINWastewater Treatment Plant0153153GROWTH MAINTAINTareheru Block Upgrades

-603,2183,278TotalUrban Stormwater

0100100GROWTH / MAINTAINStream Upgrades0317317GROWTH / MAINTAINStormwater Flooding Improvements05252GROWTH / MAINTAINRural Township Upgrades

1,0371,0370GROWTH / MAINTAINDouglas Street Stormwater Improvements1,0371,506469Total

Water Supply0184184MAINTAINWhatatutu Water Supply Upgrades01,1051,105MAINTAINManutuke - Tuaraki Road Reticulation Extension03232MAINTAINWaingake Watermain Upgrades01,3211,321Total

Solid Waste07272MAINTAIN / INCREASEStation and Landfill Transfer07272Total

Land Transport (Tairāwhiti Roads)05,9305,930MAINTAINRenewal of Local Roads - Rural01,4821,482INCREASERenewal of Local Roads - Urban0950950INCREASERoadside Drainage Renewals0950950INCREASE / GROWTHBridge Renewals and Replacements01,0001,000INCREASEWalking and Cycling (Intersection and Route Safety Improvements)0700700INCREASEPreventative Maintenance - River Protection work

-120270390INCREASESuburban and Township Upgrades0350350INCREASE / GROWTHTauwhareparae Link Road0300300MAINTAINStreetlight Upgrades to LED01515MAINTAINBus Shelter Replacements0120120GROWTHMatahiia Road Realignment

-12012,06712,187TotalFlood Protection

0679679MAINTAINWaipaoa River Flood Control Scheme0193193MAINTAINOnepoto Bay Wooden Stormwater Flumes Renewal0156156MAINTAINRuatoria Flood Protection01010MAINTAINWainui Beach Management Strategy01,0381,038Total

Commercial Operations0197197MAINTAIN / INCREASECommercial Property Renewals and Improvements0241241MAINTAINCommunity/Staff housing Upgrades0438438Total

Parks & Open Spaces0374374MAINTAINPublic Conveniences

-100554654MAINTAINTītīrangi Recreation Reserve Upgrades and Improvements0224224MAINTAINParks - Waikirikiri Reserve0512512GROWTH / INCREASE / MAINTAINSports Parks and Recreation0139139MAINTAIN / INCREASEParks and Reserves Improvements09797MAINTAIN / INCREASECommunity Monuments and Signage03232GROWTH / INCREASE / MAINTAINNeighbourhood Parks & Public Gardens0290290MAINTAINTownship Plans03333MAINTAINCultural Heritage

-1002,2552,355TotalPools

-2500250MAINTAIN / INCREASEPools-2500250Total

HB Williams Memorial Library4,9805,241261MAINTAIN / INCREASELibrary Expansion and Equipment4,9805,241261Total7,72933,63625,906Grand Total

Cautionary Note: The actual project cost, timing and funding may vary significantly.

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Significant AssumptionsThe following section details the assumptions Council hasmade in preparing this Annual Plan. These assumptionsare necessary as they ensure that readers are aware ofthe basis for the estimates and forecast. The Annual Planprovides forecast financial information in accordancewith New Zealand Financial Reporting Standard 42(FRS42), Prospective Financial Statements. Actual resultsare likely to vary from the information presented and thevariations may be material.

Significant Forecasting Assumptions and Risks

Schedule 10 (Section 11) of the Local Government Act2002 contains provisions relating to ‘significant forecastingassumptions’. The Act requires that Council identifies thesignificant forecasting assumptions and risks underlyingthe financial estimates. Where there is a high level ofuncertainty Council is required to state the reason forthat level of uncertainty and provide an estimate of thepotential effects on the financial assumptions.

General

It is assumed there will be no changes in the nature ofthe Gisborne District Council’s business.

Population Growth

The 2013 Census provided the following projections forthe district:

usually resident populationage and sex of usually resident populationdwelling unitsfloor area of non-residential activities.

Population in Gisborne is projected to increase by anaverage of 67 persons per year from 2011 until 2025(46,600 - 47,600) and reduce by 1.5% between 2026 and2046.

The most notable projected changes to the populationbetween 2011 and 2046 by age include:

increase in the population aged 65 years and overof 46%decrease during the same period, in populationunder 15 years of 12%decrease in working population aged 15 to 64 of19%

With household size decreasing, the number ofhouseholds in theGisborne area is projected to increaseby around 100 households per year from 2006 to 2031,(an increase of 14%).

Development Contributions Funding

The income and expenditure forecast related todevelopment contributions assume that growth occursas projected and growth-related capital projects areimplemented as planned.

GST

The Annual Plan assumes a GST rate of 15%.

Interest Rates

The interest rate on Council external debt is estimatedto be 6% in this Annual Plan. Council covers its interestrate exposure using interest rate swaps. The interest ratesare based on estimates of the 90-day bank bill rate andinclude bank margins and the effect of continuing useof interest rate swaps.

Inflation

The forecast financial information includes provision forinflation. Council has used forecasts of price levelchanges prepared by Business and Economic ResearchLimited (BERL) to calculate the inflation rate for eachyear of the Long Term Plan. Council has left the inflationat levels used in the 2015-2025 LTP. Council has notincluded any inflation on Roading operation costs for the2016/17 financial year. This is based on firm indicationsfrom National Roading bodies.

Debt Levels

The re-forecast debt levels assume that:

Some capital projects cost estimates have revisedcosts and timing based on current estimates as atDecember 2015.

NZTA subsidy is assumed at 62% of roadingexpenditure. Theyare someSuburbanand TownshipUpgrades capital project 100% Council funded.

Rates cashflows are forecast to remain at 2016/17levels - A 2% increase in rates offsets any increasein level of rates bad debts.

Fees and Charges

Some fees and charges have been increased by 2% to2.5% for 2016/17. This is in line with the expectation in the2015-2025 Long Term Plan. Most changes are as a resultof inflation.

Renewability of Funding

Bank facilities are arranged with multiple banks andstructured to ensure there is a range of maturity dates.Bank facilities are reviewed annually. The Annual Planassumes that the necessary level of fundingwill continueto be available through a mixture of bank facilities anddebentures.

Income Tax

It is anticipated no tax will be payable by Council duringthe term of the Annual Plan.

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Forecast Return on Investments

Council has forecast the following returns for significantinvestments:

Tauwhareparae Farms Ltd

Gisborne Holdings Ltd (GHL) is a Council ControlledOrganisation (CCO) set up to hold the District’s strategiccommercial business assets on behalf of theCouncil, andto provide the management expertise needed for theircommercial operation. It is 100% owned by GisborneDistrict Council.

GHL directs and monitors the activities of its subsidiary,Tauwhareparae Farms Ltd. GHL wholly ownsTauwhareparae Farms Ltd and Tauwhareparae ForestsLtd.

Tauwhareparae Farms Ltd is the only trading operationand is involved in the ownership of farming activities.

The 2016/17 Annual Plan includes a dividend fromGisborne Holdings Ltd. The payment of dividends issubject to the Directors' approval after their taking intoaccount the financial position of GHL.

Forestry

The Council owns 92.7ha of commercial forestrycomprising a relatively large number of small blockscontaining a variety of age-classes. Council is alsoinvolved in a joint venture with Juken NZ Ltd on Council’sPamoa Lands.

External Funding

Included in the forecast financial statements are anumber of operational and capital projects that areassumed to be either significantly or 100% funded byanother agency or grant. There are also a number ofmajor projects to be fundedby a combination of Counciland external funding.

Council has $33.6m of capital projects planned for theterm of the Annual Plan (after project prioritisation). Ofthis, $12m is budgeted to be funded fromgrants, subsidiesor donations. There is a risk that sources of funds for somecapital projects may not eventuate. It is assumed that ifthe external funds budgeted are not available then theprojects will be reviewed and the availability of otherfunding sources will be assessed.

Depreciation

All assets, excluding those listed below, are assumed tobe replaced at the end of their useful life. The followingassets are assumed not to be replaced at the end oftheir useful life:

Tolaga Bay WharfPatutahi Hall.

Council does not fund depreciation on these assets.Council does not fully fund the depreciation on itsroading assets in the Forecast Financial Statements. It is

assumed that a set proportion of the Land Transportcapital expenditure will continue to be funded throughNZTA financial assistance subsidies. It is thereforeconsidered appropriate to only collect rates revenue onthe portion of roading depreciation funded fromCouncilreserves.

Council does not fund depreciation on the Airport assetsas it is assumed that theCouncil lease of theAirport assetsand operations to Eastland Infrastructure Ltd will result inthe assets being returned to Council at the end of thelease in the same condition as when the lease beganon 1 April 2005.

Useful lives of assets are as recorded in AssetManagement Plans or based upon professional advice.There is a risk that some assets may wear out and failsooner or later than calculated. There is no certainty thatasset components will last exactly their design lives.However, replacement is budgeted at the expectedend of useful life and earlier replacement will result in aloss on disposal of any residual value.

Earlier replacement may result in deferring otherdiscretionary capital projects in order to remain withinthe total Annual Plan capital budget and Council’sborrowing limits as set out in the Council LiabilityManagement Policy.

The depreciation rates used for plannedasset acquisitionare in line with current policies.

Depreciation on Planned Assets Acquisitions

Thedepreciation rates used for plannedasset acquisitionsare in line with current policies.

Asset Sales

The forecast financial information does not make anyprovision for income from the sale of Council assets.

Resource Consents

All of Council’s works projects require resource consentsto be granted beforeworks can commence. It has beenassumed that resource consents can be obtained for allcapital works, and that obtaining those resourceconsentswill not significantly impact on the timing of capital worksshown in the Annual Plan.

It is also assumed that the currency and conditions ofexisting resource consents held by Council will not bealtered significantly during the term of the Annual Plan.

Revaluation of Assets

The forecast financial information includes an annualestimate to reflect the change in asset valuations anddepreciation. The effect of the revaluations is a bestestimate basedon historical asset values, forecast capitalexpenditure, the BERL inflation indices and recentrevaluation information.

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Themost recent revaluation ofCouncil’s assets (excludingflood assets) was at 30 June 2014. Roading infrastructureassets are revalued annually. It is assumed revaluationswill result in an increase in the asset values, revaluationreserves and the depreciation expense.

Efficiency Gain Targets

Council has identified the need to reduce the ratesdemand by making efficiency gains. These gains will bemade through improved systems and managementwithin the organisation.

Emissions Trading Scheme

Council has made no provisions for the effects of theEmissions Trading Scheme in this year's Annual Plan. Theeffects of the scheme are difficult to predict. It isanticipated that any increase in costs will bemostly offsetby increased efficiency gains.

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Funding Impact Statement

This statement sets out the information required bySchedule 10 of the Local Government Act 2002, togetherwith additional information provided to assist ratepayersin understanding the indicative impact of the AnnualPlan.

Revenue and Financing Mechanisms

General Rates

Rates directly related to the value of the property,charged on capital value.

Targeted Rates

Rates which apply in certain areas or to certainratepayers.

Uniform Annual General Charges (UAGC)

A fixed amount charged to each separately used orinhabited part of a rating unit.

Definition of a Separately Used or Inhabited part of aRating Unit - This defintion has been updated to providemore clarity to both Council and Ratepayers as part ofthis 2016/17 Annual Plan.

A separately used or inhabited part of a rating unitincludes any portion inhabited or used by the owner/ aperson other than the owner, and who has the right touse or inhabit that portion by virtue of a tenancy, lease,licence, or other agreement.

This definition includes separately used parts,whether or not actually occupiedat any particulartime, which are provided by the owner for rental(or other form of occupation) on an occasionalor long term basis by someone other than theowner.

a. Each separate shop or business activity on a ratingunit is a separate use, for which a separate UAGCis payable. (See Guidance Note 1.)

b. Each dwelling, flat, or additional rentable unit(attached or not attached) on a residentialproperty which is let for a substantial part of theyear to persons other than immediate familymembers is a separately inhabited part of aproperty, and separate UAGCs are payable. (SeeGuidance Note 2.)

c. Each residential rating unit which has, in additionto a family dwelling unit, one ormore non residentialuses (ie home occupation units) will be chargedan extra UAGC for each additional use. (SeeGuidance Note 3.)

d. Each non-residential activity which has, in additionto its business or commercial function, co-sitedresidential units which are not a prerequisite partof the business or commercial function, will payadditional UAGCs for each residential unit. (SeeGuidance Note 4.)

e. Individually tenanted flats, including retirementunits, apartments and town houses (attached ornot attached) or multiple dwellings on Māorifreehold land are separately inhabited parts, andwill each pay a separate UAGC. (See Note 5.)

f. Each title on a multiple-managed forestry holding(that is, where the forest is broken into severalindividual small titles) is a separately used partexcept when one or more titles are adjacent andunder the same ownership, in which case the rulesof contiguity apply.

g. Each block of land for which a separate title hasbeen issued is liable to pay a UAGC, even if thatland is vacant. NOTE: for the purpose of thisdefinition, vacant land and vacant premisesoffered or intended for use or habitation by aperson other than the owner and usually used assuch are defined as úsed’.Two or more adjacentblocks of vacant land are not eligible for Remissionunder "Contiguity" (S.20 of LG(R)A 02) because theyare not "used for the same purpose" (i.e. they arenot used at all).

h. Each dwelling, flat, or additional rentable unit(attached or not attached) on a pastoral,horticultural or forestry property which is let for asubstantial part of the year to persons other thanimmediate family members is a separatelyinhabited part of a property, and separate UAGCsare payable.

i. For the avoidance of doubt, a rating unit that hasa single use or occupation is treated as having oneseparately used or inhabited part.

j. A substantial part of the year is considered to bethree months or more (this total period may befragmented, and may occur at any part of therating year).

Guidance Notes

The following Notes are not rules, but are intended to aidOfficers in the interpretation of the Rules.

1) Commercial Properties

A single building on one title with 24 separate shopswould pay 24 UAGCs.

Amotel with an attached dwelling would pay onlyone UAGC, because the attached dwelling isessential to the running of the motel. (See rule dabove).

A motel with an attached restaurant which isavailable to the wider public has two separatelyused parts, and would pay two UAGCs. Likewise,a motel with an attached Conference Facilitywould pay an additional UAGC.

A business which makes part of its income throughthe leasing of part of its space to semi-passive usessuch as billboards, or money machines, is notregardedas having a separately used or inhabitedpart, andwould not be chargeda separate UAGC.


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For the avoidance of doubt, an apartment blockinwhich eachapartment is on a separately ownedtitle is merely a series of co-sited Rating Units, andeach will pay a UAGC.

If, however, in the above example amanagementcompany leases the individual titles for 10 years ormore, and those leases are registered on the titles,and the leases stipulate that the managementcompany is responsible for paying the rates, and ifthe management company then operates theapartments as a single business operation, thatbusiness operation may be considered for aremission under Council’s remission policies andhave all but one UAGC remitted.

An apartment block with separate laundry, orrestaurant, which are available to the generalpopulation as a separate business enterprise, wouldpayanadditional UAGC for eachof these functionsas separately used parts.

2) Residential Properties

The rule will apply to properties identified as “flats”on the valuation record, administered byCouncil’sValuer. Sleep-outs and granny flats will generallybe identified as “sleep-out” on the valuation recordand will not normally qualify for additional UAGCs.

If a property is identified on the valuation recordas having flats, but these in fact are used only forfamily members or for others for very short periods,then the additional UAGCs may be remitted onCouncil receiving proof of their use, including asigned declaration from the property owner (seeremission policies). A property owner who activelyadvertises the flats for accommodation will notqualify for the remission.

A property such as a large housewhich is identifiedas being split into, say, three internal flats at thetime the valuation records were established, butwhich is not actually used as such, will need toapply for remission under Council’s remission policy.(Note: This property should be referred to Council’sValuer for correction on the next valuation cycle.)

3) Residential with Non-Residential Part

A residence with a separately accessible “office”such as may be used for surveyor, architect, ormedical services, will pay an additional UAGC forthe office, because it is a separately used partwhich generates additional use of roads, services,planning resources, and democratic processes.

A residencewitha “HomeOccupation” (commonlycalled a “hobby business”) will not generally becharged a separate UAGC unless the intensity ofoperation is high. For example, a resident whooccasionally manufactures boat trailers in hisgarage on the weekends would not incur an

additional UAGC, but someonewhoworks formostof the week panel beating or painting, particularlyif the activity is accompaniedby advertising, clearlyhas a separately used or inhabitedpart of the ratingunit, and would incur an additional UAGC.

A residential property, part of which is usedcontinually for storage of large industrial machinery,has a separately used part, and would incur anadditional UAGC.

4) Non-Residential Activity with Co-sited Dwelling

A fish and chip shop, with a flat above which canbe accessed without passing through the shop,does have a separately used part, and wouldnormally incur an additional UAGC charge.

A dairy which has an integral dwelling attached,would not incur an additional UAGC, because thehome is an integral part of the operation of thedairy.

A boarding house containing a caretaker’sapartment and several separately let rooms (withor without facilities) all within the structure of theone building, is a single (commercial) use andwould not incur an additional UAGC. (The sameapplies to home-stays and bed and breakfasthomes).

Certain government agencies, churches, marae,and the like are automatically rate exempt (exceptfor service charges suchaswater andwastewater)but if these organisations undertakeaccommodation or business activities which arenot related to their core function, they may becharged rates and additional UAGCs for eachseparately used or inhabited part of the rating unit.

5) Individually Tenanted Flats

Each flat, apartment, or retirement or disabilityhome, and each property under a “licence tooccupy”, is a separately used or inhabited part ofa rating unit, no matter what number of peoplemay be living in the unit, and each does pay anadditional UAGC charge.

If, because of construction work, poor condition,public health, or specific conditions pertaining tothe property owner, one or more flats cannot belet on the open market, then the unit may begranted a remission under Council’s remissionpolicy. (A specific condition pertaining to theproperty ownermight include the use of one of theunits for a live-in caregiver). (Note: This propertyshould be referred toCouncil’s Valuer for correctionon the next valuation cycle.)


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Council’s Other Funding Sources

Subsidies and Grants

Fromgovernment and non-government organisations tofund maintenance or capital projects.

Fees and Charges

Council charges for services provided, for examplebuilding consents and dog licences.

Interest Received and Dividends Income

From funds invested or Council investments.

Loans

Council borrows money to fund Capital Expenditure.

Capital Rates

Rates used to repay Loans and Capital Expenditure, forexample solid waste loan.

Development Contributions

Money received to fund capital expenditure for newdevelopment.

Asset Sales

Money received from the sale of assets.

Reserves

Money set aside for specific purpose, to fund capitalexpenditure. For further details of Council’s revenuefunding mechanisms, please refer to the Revenue andFinancing Policy in 2015-2025 Long Term Plan.


The following information is presented solely and for thepurpose of clauses 5 and 20 of Schedule 10 of the LocalGovernment Act 2002 and the Local Government(Financial Reporting and Prudence) Regulation 2014.

These statements are not NZ GAAP compliant. Theinformation presented is incomplete, (in particular it doesnot include depreciation and internal overheads).

This statement should not be relied upon for any otherpurpose than compliance with the Local Government(Financial Reporting and Prudence) Regulation 2014.

On page 34 (Note 13) we have provided a reconciliationbetween Council’s Prospective Statement ofComprehensive Revenue and Expenses (page 19) andCouncil’s Funding Impact Statement.

Council

AP2016/17$000s

LTP2016/17$000s

AP2015/16$000s

Sources of operating funding

17,35718,006General rates, uniform annual generalcharges, rates

17,568

36,85736,198Targeted rates35,559

9,4389,146Subsidies and grants for operating purposes9,037

10,89611,034Fees and charges11,072

1,4721,472Interest and Dividends from Investments1,014

1,4811,426Local authorities fuel Tax, fines, infringementfees and other receipts

1,390

77,50277,282Total Operating Funding (A)75,640

Applications of operating funding

63,60262,638Payments to staff and suppliers61,375

1,9912,420Finance costs2,077

00Other operating funding applications0

65,59365,058Total applications of operating funding (B)63,452

11,90912,224Surplus/(deficit) of operating funding (A-B)12,189

Sources of capital funding

12,2328,086Subsidies and grants for capital expenditure11,113

699699Development and financial contributions815

4,1462,868Increase/(decrease) in debt2,857

00Gross proceeds from sale of assets0

00Lump sum contributions0

17,07711,653Total sources of capital funding (C)14,785

Applications of capital funding

0Capital expenditure0

702603- to meet additional demand949

11,7045,043- to improve level of service10,783

20,97120,259- to replace existing assets18,459

(4,390)(2,029)Increase/(decrease) in reserves(3,218)

00Increase/(decrease) of investments0

28,98623,876Total applications of capital funding (D)26,973

(11,908)(12,223)Surplus/(deficit) of capital funding (C-D)(12,189)

00Funding balance ((A-B)+(C-D))0


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Schedule 1The following rates will be set by Council for the financialyear commencing 1 July 2016 and ending 30 June 2017.All figures in the Funding Impact Statement exclude GST.

General Rates

Ageneral rate in accordancewith the LocalGovernment(rating) Act 2002 13(2)a based on the Capital value ofeach rating unit in the district is assessed by multiplyingthe capital value of a property by the rate per dollar thatapplies to that ratepayer group. The general rate is usedto fund council activities that are deemed to generallyand equally benefit all ratepayers in theGisborneDistrictand are on activities which user pays are not applied.

The general rate funds rivers control, stormwater, treasury,andeconomicdevelopment and strategic planningandperformance (previously community services).

Uniform Annual General Charge

Council will use a Uniform Annual General Charge inaccordancewith section 15(1)bof the LocalGovernment(Rating)act 2002

Targeted Rates

Lump sum contributions will not be invited in respect ofthe targeted rates.

The following matters and categories may be used todefine categories of rateable land and calculate liabilityfor targeted rates. These are set out in the LocalGovernment (Rating) Act 2002.

Schedule 2Matters that may be used to Define Categories ofRateable Land :

1. The use to which the land is put.

2. The activities that are permitted, controlled, ordiscretionary for the area in which the land issituated, and the rules to which the land is subjectunder an operative District Plan or Regional Planunder the Resource Management Act 1991.

3. The activities that are proposed to be permitted,controlled, or discretionary activities, and theproposed rules for the area in which the land issituated under a proposedDistrict Plan or proposedRegional Plan under the Resource ManagementAct 1991, but only if:

a. No submissions in opposition have beenmade under Clause 6 of the First Scheduleof the Act on those proposed activities or

rules, and the time for making submissionshas expired; or

b. All submissions in opposition, and anyappeals, havebeendetermined,withdrawn,or dismissed.

4. The area of land within each rating unit.

5. The provision or availability to the land of a serviceprovided by, or on behalf of the local authority.

6. Where the land is situated.

7. The annual value of the land.

8. The capital value of the land.

9. The land value of the land.

Schedule 3Factors that may be used to calculate Liability forTargeted Rates:

1. The annual value of the rating unit.

2. The capital value of the rating unit.

3. The land value of the rating unit.

4. The value of improvements to the rating unit.

5. The area of land within the rating unit.

6. The area of landwithin the rating unit that is sealed,paved, or built on.

7. The number of separately used or inhabited partsof a rating unit.

8. The extent of provision of any service to the ratingunit by the local authority, including any limits orconditions that apply to the provision of the service.

9. The number or nature of connections from the landwithin each rating unit to any local authorityreticulation system.

10. The area of land within the rating unit that isprotectedby any amenity or facility that is providedby the local authority.

11. The area of floor space of buildings within the ratingunit.

12. The number of water closets and urinals within therating unit (Note : A rating unit used primarily as aresidence for one (1) household must not betreated as havingmore than one (1) water closet).


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Schedule 4Due Date

Instalment 1 - 22 August 2016Instalment 2 - 21 November 2016Instalment 3 - 20 February 2017Instalment 4 - 22 May 2017

Penalty Date

Instalment 1 - 23 August 2016 Penalty 10%Instalment 2 - 22 November 2016 Penalty 10%Instalment 3 - 21 February 2017 Penalty 10%Instalment 4 - 23 May 2017 Penalty 10%

Additional Charges

P2 PENALTY

A further penalty of 10% will be added to any ratesremaining unpaid on 8 July 2016.

PENALTIES ON WATER CHARGES

Under Sections 57 & 58 of the Local Government (Rating)Act 2002, Council will charge a penalty of 10% on anyportion of the charge for the supply of water, asseparately invoiced that is not paid on or by the duedate for payment as set out on the invoice.

DUE DATES FOR WATER CHARGES

Watermeters are read on amonthly, quarterly or annualcycle and are payable on the 20th of the monthfollowing the issue of the invoice. If the 20th is aweekendor public holiday then it is due the next working day. Ifthe dates change the due date will always be the 20thof the month following the invoice date.

Note: In the rating definitions below, differential ratingareas such as DRA1,DRA1A, DRA2, DRA3, DRA4, DRA5and Inner and Outer Zones are defined. In accordancewith the system of Differential Rating established by

Special Order on 27 June 1991. The District was split intosix (6) differential areas. Except for DRA5 these areaswereestablished on 27 June 1991 and maps detailing theboundaries are available on Council's website and alsoavailable at Council's Administrative Offices, 39Gladstone Road,Gisborne. DRA4was split into twoareas,a newDRA5and residual DRA4byway of a Special Orderon 16 May 2001. They are as follows:

Sub typesAreas coveredShort title

Residential,Commercial andother

Former Gisborne City Councilboundaries, excluding Rural FarmLand.

DRA1

Residential andotherCommercial andindustrial

All Rural Farm Land within theprevious Gisborne CityBoundaries and the areasurrounding the City.City including Wainui andMakaraka.

DRA1A

Poverty Bay Flats including fringehill properties.

DRA2

All other propertiesRural Townships

That area which is withinreasonable and currently

DRA3

exercised commuting distanceto Gisborne, including partWaerenga-o-kuri and Ngatapa,Whatatutu and Te Karaka.


The inland rural areas beyondDRA3, up to the boundary ofDRA5Tolaga Bay and Matawai.

DRA4


The whole of the East Cape areafrom a line running inland from a

DRA5

point in the vicinity ofMangatunanorth of Tolaga Bay Township, tothe tip of the East Coast.Hicks Bay, Te Araroa, Tikitiki,Ruatoria, Waipiro Bay, Te PuiaSprings and Tokomaru Bay.

Urban and ruralThe total land area of DRA1,DRA1A and DRA2.

Inner Zone

All other propertiesThe total land area of DRA3,DRA4 and DRA5.

Outer Zone

Revenuesought exclGST 2016/17 $Factor used

Factors(Sch 3)LocalGovt

(Rating)Act2002

Category(Sch 2)s14, 17LocalGovt

(Rating)Act 2002Categories of Rateable LandRates Funding Source

3,612,653Capital value2Capital value on all Rateable land for planning,Rivers Control, Stormwater, Treasury,EconomicDevelopment and Tourism.

General Rate

12,872,571Separately Used or Inhabited Part of a RatingUnit (SUIP) see definition of SUIP on page 38

7All Rateable land. A uniformAnnualGeneral Chargeset under section 15 of the Local Government

Uniform Annual General Charge

(Rating)Act 2002 per Separately Used or InhabitedPart of a Rating Unit (SUIP) see definition of SUIP onpage 38

Targeted Rates29,100Capital Value26Differential targeted rate on Inner Zone and Rural

Towns 30% of revenue soughtLegacy Loans (District Loans) andStock Control

67,900Area:Hectare56Differential targeted rate on Outer Zone (excludingRural Towns) 70% of revenue sought

1,578,345Capital value26Differential targeted rate on Inner Zone 1.0weightingAquatic and Recreational Facilitiesand Theatres 243,518Capital value26Differential targeted rate on Outer Zone 0.3

weighting


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832,067Capital Value26Differential targeted rate onInner Zone 85% ofRevenue Sought

Building Services and Non SubsidisedLocal Roads

146,836Capital Value26Differential targeted rateOuter Zone 15% of revenuesought

1,244,354Land Value3an undifferentiated targeted rate on all rateableland.

Resource Consents

51,250Separately Used or Inhabited Part of a RatingUnit

75 & 6A uniform targeted rate onDRA1, DRA1A Residentialand DRA2

Noise Control


75 & 6A uniform targeted rate on Residential DRA1, DRA1Aand DRA 3, DRA4 & DRA5 (Residential RuralTownships)

Dog Control


75 & 6DRA1 ResidentialPassenger Transport

177,904Land Value36A differential targeted rate on DRA1, DRA1A, DRA2Pests & Plants1,008,119Land Value36A differential targeted rate on DRA3, DRA4, DRA5

61,286Land Value36A differential targeted rate on DRA1 & DRA1ARural Fires122,572Land Value36A differential targeted rates on DRA2429,003Land Value36A differential targeted rate on DRA3, DRA4 & DRA5

232409Land Value36Adifferential targeted rate onDRA1, DRA1A&DRA2(Inner Zone)

Soil Conservation – Advocacy andLand Use

348,614Land Value36A differential targeted rate on DRA3 & DRA4581,023Land Value34A differential targeted rate on DRA5

1,097,787Land Value36A differential targeted rate on the Inner Zone 70% ofrevenue sought

Water Conservation

470,481Land Value36A differential targeted rate on the Outer Zone 30%of revenue sought

3,916,619Per rating Unit6a differential targeted rate on the Inner Zone 85% ofrevenue sought

Parks & Reserves

596,655Per rating Unit6A differential targeted rate on the Outer Zone 15%of revenue sought

264,287Separately Used or Inhabited Part of a ratingunit

75 & 6Within 15 km radius scheme area as defined on amap available fromCustomer Services and CouncilWebsite

Rural Transfer Stations

1,792,461Separately Used or Inhabited Part of a RatingUnit

75 & 6Within scheme refuse collection areas - CurrentlyGisborne City and environs and Ruatoria. Map

UniformWasteManagementCharge– Gisborne District

available from Customer Services and CouncilWebsite.

1,284Separately Used or Inhabited Part of a ratingunit

75 & 6Within scheme recycling collection area being nonresidential area within the CBD who have electedto receive the service.

Commercial Recycling Charge

88,684Capital Value21, 2 & 6Commercial Properties within the CBD Area:Non-residential properties on both sides of the roads

Business Area Patrols

boundedbyCarnarvon Street, Childers Road, ReadsQuay and Palmerston Road and all roads inside thisarea and also that part of Grey Street as far as theskateboard park and Customhouse Street as far asthe Waikanae Cut.

185,580Capital Value21, 2 & 6Commercial Properties within the CBD Area:Non-residential properties on both sides of the roads

City Centre Management andPromotion

bounded by Cobden Street, Childers Road, ReadsQuay and Palmerston Road and all roads inside thisarea and also that part of Grey Street as far as theSkateboard Park and Customhouse Street as far asthe Waikanae Cut and also all non residentialproperties within the blocks bounded by CarnarvonStreet, Childers Road, Palmerston RoadandCobdenStreet.

306,208Capital Value21 & 2All Industrial and Commercial, Retail andAccommodation Properties.

Economic Development

Provision of Roads and Footpaths3,653,323Capital Value21 & 2Residential/Lifestyle Blocks. Weighting of 1Subsidised Local Roads and Flood

Damage and EmergencyReinstatement

1,017,739Capital Value21 & 2Industrial and Commercial. Weighting of 22,628,487Capital Value21 & 2Horticulture & Pastoral Farming. Weighting of 1.51,130,584Capital Value21 & 2Forestry weighting of 5

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1,783,993Per Rating Unit6DRA1 & DRA1A Residential properties includesSponge Bay,Wainui & Okitu

Stormwater

178,243Per Rating Unit6All Rural Townships includingManutuke and Patutahi346,277Capital Value26DRA1 & DRA1A All Commercial and industrial

properties.

Wastewater Sewerage and the treatment and disposal of sewage3,317,036Per rating unit5 & 6Within scheme areas connectedGisborne City Wastewater

49,437Per rating unit5 & 6Per rating unit3,113,871water closet or urinal connected125 & 6Pan charges per water closet or urinal connected

(in addition to the above charges for connections)

64,834Per rating unit5 & 6Within scheme area connectedTe Karaka Wastewater7,136Per rating unit5 & 6Within scheme area, service available but not

connected

Water2,271,634Per Separately Used or Inhabited Part of a

rating unit75 & 6Within scheme areas connectedUniform Water Charge

36,506Per Separately Used or Inhabited Part of arating unit

75 & 6Within scheme areas where service is available butnot connectednot connected

Flood Protection And Control Works31,389Capital value25 & 6Rateable Properties within the defined area band

A within the Hazard Area based on Capital value. .Coastal Property Protection Scheme

6,033Capital value25 & 6Rateable Properties within the defined area - bandB within the Hazard Area based on Capital Value.Map available at customer services and councilwebsite.

1,763Land Value36Rateable Landwithin thedefinedareabandCwithinthe Hazard Area based on Land Value, Mapavailable at customer services and council website.

10,374Per hectare105Rateable Land within the Hazard Area on areaWainui Foredune Capital Works

6,166Capital value25 & 6Adifferential targeted rate onNon Residential basedon Capital Value

Te Karaka Flood Control

27,436Capital Value25 & 6A differential targeted rate on Residential based onCapital value

20,778Capital Value25 & 6Direct Beneficiaries within the defined area onCapital value

Waiapu River Erosion ProtectionScheme

5,191Capital Value25 & 6Indirect Beneficiaries within the defined area oncapital value

5,191Per hectare56Contributors within the defined area on area

150,567Capital Value25 & 6Waipaoa River Flood Control Scheme classes A - FWaipaoa River FloodControl Scheme

600,408Per hectare55 & 61 - Ormond2 - Eastern Taruheru3 - Western Taruheru4 - Willows5 - Waikanae Creek6 - City/Wainui7 - Taruheru Class A7 - Taruheru Class B7 - Taruheru Class C7 - Taruheru Class DA - WaipaoaB - PatutahiC - NgatapaD - ManutukeE - Muriwai

Drainage Rate – Direct Beneficiaries

14,260per hectare55 & 68 - Eastern Hill Catchment andF - Western Hill Catchment based on area

Drainage Rate - Contributors

$53,342,546TOTAL RATES REVENUE871,250Rates Penalties

OTHER FUNDING SOURCES10,182,327Activity Revenue2,533,152Per cubic metre$1.24Extraordinary and Rural Domestic users*Water by Meter360,535Reduces Uniform Annual General ChargePetroleum Tax

1,458,760Dividends13,725Interest

21,670,310Grants, Donations & Subsidies$90,432,605TOTAL FUNDING

* Water by meter has 300 cubic metre no charge domestic allowance


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Rates Information

This year Council will collect $53.3m in rates. The rateresetting process in June 2016 decreased the 2015/16rates by $638,000. The reduction was $30 plus GST foreach UniformAnnual General Charge. This reduction hascaused a slight variation to the ratesmodelled data. Therates for 2016/17 have remained at $53.3m.

Rates affordability continues to be a significant issue forour district. Council's commitment to minimising ratesincreases is set out in our Financial Strategy in the LTP.

Estimated 2016/17 Rates Increase

$49.3

m

$50.5

m

$51.3

m

$52.3

m

$53.3

m

$53.3

m

47.048.049.050.051.052.053.054.0

Actual2012/13

Actual2013/14

Actual2014/15

Budget 2015/16

LTPBudget

2016/17

APBudget

2016/17

TOTAL RATES $m

Types of Rates - Targeted Rates, General Rates on CapitalValue and Uniform Annual General Charge

The majority of the income Council receives is throughrates. There are approximately 22,446 rating units in theGisborne district.

Council collects a significant portion of its rates incomeby targeted rates (64%). Targeted rates are based onwhat services you receive or have access to, such asdrainage, public transport, water, stormwater,wastewater, roads, and rubbish collection. If you haveaccess to them then you pay.

Council also collects General Rates on Capital Value(CV) and Uniform Annual General Charge (UAGC). TheGeneral Rates on CV are directly related to the value ofthe property and are charged as a "rate in the dollar" ofCV. These rates vary from property to property as theyare based on the property's CV.

The capital value of theGisborne district is approximately$8,631,671,300. The land value of the Gisborne district isapproximately $4,746,920,400.

Some of Council's services are more related to theexistence of a property or a household than to land,capital value or land area. In these cases Council appliesa UAGC which is a fixed charge per property across thedistrict unless a specific remission applies. This year theUAGC will be $591.66 (GST excl) compared to $606.57

(GST excl) in 2015/16. TheUniformAnnualGeneral Chargeis made up of the following rates excluding GST:

$10.73Cemeteries

$21.58Civil defence

$70.29Strategic Planning and Engagement (prevCommunity Services)

$2.81Economic development incl Tourism

$65.70Environmental and public health protection

$55.34Managing solid waste and transfer stations

$100.09Governance- Mayor and Councillor representationcosts

$88.84HB Williams Memorial and rural libraries

$20.94Litter bins and cleaning public areas

$49.40Public Toilets (Conveniences)

$64.51Roading – portion of maintenance costs

$34.48Tairāwhiti Museum

$6.95District Civil and Corporate expenses

Uniform Charges Cap

The total of uniform or fixed charges that Council canrate cannot exceed 30% of the total rates collected. Ifthe 30% cap is in threat of being exceeded, Council mustmove the uniform rates to another rate as specified inthe Revenue and Financing Policy. The Revenue andFinancing Policy states which activities will move toGeneral Rates in these circumstances. These arePlanning, Performance and Strategic Planning andEngagement, Civil Defence and EmergencyManagement, Economic Development and Civic andCorporate Expenses of the District.

Council's Indicative Rates for 2016/17

Other

64%

29%

7%

Uniform Basis

General Rate

The large amount of targeted rates adds complexity toour rates and Council has commenced reviewing the

Rates Information

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rating system to make rates simpler, more predictableand consistent. How much you pay depends on:

changes to rating policy and Council budgets

changes to the property (i.e. subdivision, ratingvalue changes, new builds, new connections etc)

how your land is used

where your property is located and what targetedrates/ services apply.

Key changes that have occurred in this year’s rates are:

Water by Meter FeeCouncil has increased the cost of water meteringper cubic meter to $1.24 (GST excl) from July 2016.

Wainui Coastal Protection rates have beensmoothedThese rates have been smoothed to avoid largeincreases and decreases over the 2015-2025 LongTerm Plan for this targeted rate at Wainui.

General RateThe General Rate has increased this year byapproximately $1.4m to guard the uniform charge30% cap from being exceeded and the funding ofspecific activities has beenmoved from the UAGCto General Rate (capital value).This resulted in $1.14m of funding for StrategicPlanningand Engagementmoving into theGeneralRate.

Pests and Plants, Rural Fires, and Soil ConservationCouncil is not making any changes to the way itrates the three targeted rates, Pests and Plants, SoilConservation, and Rural Fires. These three rateshave caused significant rates increases for pocketsof ratepayers in the last 3 years. The change to theRevenue and Financing Policy in 2013/14 didimpact negatively on properties that had a smallland area and a high land value.Council will continue rates relief at the same levelas 2015/16 for those ratepayers most affected bythe changes to these three targeted rates. SeeChanges to Remission Policies for details.

Plants and Pests: The pest managementstrategy is currently under review and will befinalised in the 2016/17 financial year.

Rural Fires: The Rural Fires sector is to beamalgamated with the New Zealand FireServices as of 1 July 2017. This will be alegislative procedure. Prior to that date therural fires activity will be reviewed tore-consider Council’s contribution to NZ FireServices cost.

Soil Conservation: It makes sense to reviewthis activity at the same time as the plantsand pest’s activity as they are interrelated

Separately Used or Inhabited Part (SUIP) Definition:This definition has been updated to provide moreclarity to both Council and Ratepayers. Refer topage 38 for the full definition.

Examples of Indicative Rates Changes forProperties

The graph below shows that 82% of properties have anincrease less than 2% or a decrease. That is 18,317properties in total and includes 5,386 properties whoserates decrease. There are 2,245 properties throughoutthe district that increase over 2%. These increases are fora variety of reasons including the provision of newservices, significant changes in capital value for newdevelopment. The graph below is based on data thatwas modelled prior to the rate resetting process in June2016 which decreased the 2015/16 baseline by $638k(excl. gst). This reductionwas $30 plus gst for each UniformAnnual General Charge (UAGC). The rates changes willvary due to this reduction.

Rates Movement for the 2016/17 Year, as at April 2016(prior to resetting process)

DECREASE 0% to 1.99%

2% to 2.99%

3% to 4.99%

5% to 9.99%

10% to 19.99%

20% to 29.99%

30%+

12931

621831

14051865

729

5386

INDICATIVE RATES CHANGES FOR 2016/17Number of Properties

Changes to Remission Policies

2.22 Remission of Rates –Targeted Plants and Pests; RuralFires; and Soil Conservation Rates (2016/17 year only)

Introduction

The rates setting for 2012/13 and 2013/14 created somelarge swings in the rates incidence across the district forthe three rates. Council approved a change to theRevenue and Financing Policy in 2013 which changedthe basis of rating from land area to land value for thesethree rates (Pests and Plants, Rural Fires and SoilConservation). This changed the incidence of rates forsomeproperties with high land value. The propertiesmostaffected were properties with smaller land area buthigher land values when compared to like properties inthe same DRA (differential rating area) especially so inTolaga Bay and Tokomaru Bay.

Rates Information

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Objective

Council will be carrying out a reviewof the three activitiesduring the course of the Long Term Plan when the ratingstructure will also be reviewed. The basis for rating thethree activities has not changed from 2013/14.

This remission policy will continue to provide the samelevel of rates relief for those properties most affected bythe policy change in 2013/14, in the 2016/17 year.

The policy is very specific and will not give rates relief toratepayers whose rates go up for any other reason.

Conditions and Criteria

The calculations for the thresholds will be based on ratesincreases from 2012/13 to 2013/14.

The assessment criteria will have two components foreligibility: a rate increase for each of the Pest and Plants,Rural Fires, and Soil Conservation rates of 30% and aminimum of $100. This approach gives continued reliefto the most severely affected by changes to the threerates.

1. The policy only applies to a rating unit wherechanges to the basis for calculation of the targetedrates for Plants and Pests; Rural Fires; and SoilConservation adopted in the 2013/14 rating yearcause significant and unwelcome rates increasesfor a rating unit.

2. Each relevant targeted rate (Plants and Pests; RuralFires; and Soil Conservation) will be assessed forremission individually.

3. To qualify for automatic remission each targetedrate must have a minimum increase of $100 and30% of the total for that targeted rate in 2013/14when compared to the 2012/13 rating year.

4. The effect of qualifying for remission will be to remitthe increase in the targeted rate above thethreshold of 30% (calculated using 2013/14 ratesinformation). The rate remission will be applied asa lump sum amount to each property againstinstalment one of the rating year for which theremission is granted.

5. No remission will granted where the total remissionfor all the relevant targeted rates combined (Plantsand Pests; Rural Fires; and Soil Conservation) doesnot exceed $25 (GST inclusive).

6. Notwithstanding the above each individual casethat does not meet the criteria above, will, onapplication be considered on its merits at thediscretion of Council.

7. Remission under this policy will not be consideredfor rating units that havechanged since the 2013/14year. For the avoidance of doubt this includessubdivision of lots or part sale of lots held in a singlerating unit.

Any qualifying property will have the remission appliedautomatically to Instalment 1of the rating year for whichthe remission is granted.

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Rates Examples for 2016/17

The top 100 increases are all self-generated changes forexample increases in capital value, new dwellings, newservice connections such as water sewerage and refuse,sales or changes to lease arrangements.

These indicative examples show slightly higherpercentage increases than would be expected for2016/17. The reason for this is the rates resetting processin June 2016 for 2015/16 rating year decreased the ratesfor the 2015/16 base year by the fixed amount of $30 peruniform annual general charge assessment.

Capital ValueLowMediumHigh

Tokomaru BayTolaga BayTolaga BayRURAL TOWNSHIP$210,000$187,000$235,0002014 Valuation

$1,478$1,316$1,404Proposed Rates 2016/17$1,448$1,299$1,382Actual 2015/16

$30$17$22Change2%1%2%%

Makauri$192,000$370,000$975,0002014 Valuation


$11$30$106Change0.8%1.6%2.6%%

ResidentialLifestyleHorticultural FarmMuriwai

$51,000$336,000$2,115,0002014 Valuation$1,101.22$1,374.01$7,319.01Proposed Rates 2016/17

$1,099$1,347$7,096Actual 2015/16$2$27$223Change

0.2%2.0%3.1%%ResidentialLifestyleArable Farm

Patutahi$115,000$305,000$3,895,0002014 Valuation


$10$24$414Change0.8%1.4%3.3%%

ResidentialLifestyleArable FarmTe Karaka/ Whatatutu

$47,000$415,000$3,770,0002014 Valuation$1,664$1,844$11,466Proposed Rates 2016/17$1,643$1,801$10,936Actual 2015/16

$20$43$530Change1.2%2.4%4.8%%

ResidentialLifestylePastoral FarmHicks Bay

$82,000$158,000$1,088,0002014 Valuation$1,174$1,130$4,793Proposed Rates 2016/17$1,164$1,120$4,565Actual 2015/16

$10$10$228Change0.9%0.9%5.0%%

ResidentialLifestylePastoral FarmTolaga / Anaura Bay

$24,000$100,000$14,000,0002014 Valuation$780$1,161$42,344Proposed Rates 2016/17$787$1,153$40,316Actual 2015/16-$7$8$2,028Change

-0.9%0.7%5.0%%Pastoral FarmResidentialPastoral Farm

Tiniroto$116,000$800,000$3,275,0002014 Valuation

$946$2,760$9,893Proposed Rates 2016/17$943$2,664$9,437Actual 2015/16

$3$96$456Change0.3%3.6%4.8%%

LifestylePastoral FarmPastoral FarmRESIDENTIALLytton West

$138,000$329,000$960,0002014 Valuation$2,126$2,477$3,570Proposed Rates 2016/17$2,070$2,409$3,468Actual 2015/16

$56$68$102Change2.7%2.8%2.9%%

Mangapapa$100,000$193,000$1,180,0002014 Valuation

206022594070Proposed Rates 2016/17

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Capital ValueLowMediumHigh

200621983955Actual 2015/165461115Change

2.7%2.8%2.9%%

Kaiti & Elgin$91,000$217,000$382,0002014 Valuation$2,023$2,288$2,617Proposed Rates 2016/17$1,970$2,226$2,544Actual 2015/16

$53$62$73Change2.7%2.8%2.9%%

Whataupoko$171,000$330,000$820,0002014 Valuation


$59$68$105Change2.7%2.8%3.0%%

Wainui$320,000$485,000$1,475,0002014 Valuation


$39$52$137Change2.1%2.4%3.1%%

COMMERCIALGisborne City

$78,000$335,000$10,930,0002014 Valuation$2,778$2,887$60,118Proposed Rates 2016/17$1,793$2,808$58,429Actual 2015/16$984$79$1,689Change-5%3%3%%

Rural$60,000$183,000$905,0002014 Valuation

$989$1,544$3,439Proposed Rates 2016/17$987$1,524$3,317Actual 2015/16

$1$20$122Change0%1%4%%

FORESTRY$27,000$75,000$10,145,0002014 Valuation

$864$1,130$57,298Proposed Rates 2016/17$868$1,123$54,926Actual 2015/16-$4$7$2,371Change-0%1%4%%

Te AraroaWaingakeMuriwai$3,610,000$1,241,000$1,490,0002014 Valuation

$23,152$7,706$8,991Proposed Rates 2016/17$22,060$7,422$8,652Actual 2015/16$1,092$284$339Change

5%4%4%%

Rates Information

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We are making minor changes to some of the activity performance measures in the LTP. The changes are beingmade to:

make the measures more practical to measure,make the measures more relevant to the activity orto correct minor errors in the LTP.

The changes and the reasons for them are listed below.

Reasons for changeTarget Years4-10

Target Years1-3

Results2013/14Performance measureLevel of Service

Environmental Health

Was "Exceedances of NationalWaterQualityGuidelines for safe

Target to beestablished

Year 1:Establish

Newmeasure

Our response to exceedancesof National Water Quality

We regulate commercialoperations and respond to

contact recreation bathingbaseline andtargets

Guidelines for safe contactrecreation bathing standards

environmental health issuesin the interest of protecting standards at monitored

at monitored recreationalpublic and environmentalhealth.

recreational bathing sites."Changed to be specific to thisbathing sites, meets the

guidelines. activity. Water quality measurealready covered inEnvironmental Services.

LTP had this as an "amendedmeasure", but it is the same as

97%95%98%Percentage of noisecomplaints assessedwithin half

We regulate commercialoperations and respond to

previous years, so we can list aresult for 2013/14.

an hour of receiving acomplaint.

environmental health issuesin the interest of protectingpublic and environmentalhealth.

Environmental Services

Was "All 3 random sample linesin the Hawkes Bay buffer zone

11AmendedMeasure

The possum control targets inthe Regional PestManagement

We manage animal andplant pests for human

assessedpost possumpoisoning,Plan are achieved (residualhealth and to reducetrapping or night shootingtrap catch of 10% or less in theimpacts on indigenousachieves 5% residual trap, catchHawkes Bay buffer zone andfauna and flora and

primary production. or less." The RPMP has. been15% or less for the rest of thedistrict). updated and we no longer

measure possum control in thisway.

Target was 5 - this was a newmeasure and this target is toolow.

20Year 1: 12Year 2: 15Year 3: 18

Newmeasure

Number of ProtectionManagement Areas subject tospecific animal and pestcontrol operations per year.

We manage animal andplant pests for humanhealth and to reduceimpacts on indigenousfauna and flora andprimary production.

Was "Total untreatedOverlay 3Aseverely erodible land covered

Yr 4: 46,500 haYr 5: 48,500 haYr 6-10: 50,169

ha

Yr 1: 40,000 haYr 2: 42,500 haYr 3: 44,500 ha

Newmeasure

Total Overlay 3A severelyerodible land covered by adraft or final Overlay 3A workplan or anOverlay 3A resourceconsent.

Wemanage land resourcesto conserve natural values,prevent ormitigateadverseeffects and sustainproductive capability.

by a draft or final Overlay 3Awork plan or an Overlay 3Aresource consent." We cannotmeasure the untreated OA3land, but canmeasure the totalOA3 land. Targets wereamended to reflect this change.

Newmeasure - targets were settoo low.

Year 4: 88%Year 5: 90%

Year 1: 82%Year 2: 84%Year 3: 86%

Newmeasure

Percentageof total Overlay 3Aseverely erodible land treated.

Wemanage land resourcesto conserve natural values,prevent ormitigateadverse Year 6: 92%effects and sustainproductive capability.

Year 7: 94%Year 8: 96%Year 9: 98%Year 10: 100%

Was "Percentage of monitoredcoastal and freshwater sites


Year 1:Establish

Newmeasure

Percentage of monitored siteswhere water quality is being

We manage natural waterresources, river and lake

below action guidelines forbaseline andtargets

maintained or is showing atrend of improvement for: -

beds and coastal areas toconserve natural values Enterococci of 280MPN/100mL".

Coastal Enterococci -Freshwater E.coli

and sustain consumptiveusage.

Enterococci is only relevant forcoastal sites. Trend data is moremeaningful for water quality.

Changes to our Performance Measures

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Was "Percentage of monitoredgroundwater wells in shallow


Nitrate: 71%Salinity: 66%E.coli: 100%

Newmeasure

Percentage of monitoredgroundwater wells in shallowunconfined aquifers where

We manage natural waterresources, river and lakebeds and coastal areas to unconfined aquifers where

water quality is beingwater quality is beingconserve natural valuesmaintained or showing a trendmaintained or showing a trendand sustain consumptive

usage. of improvement for nitrate levels,salinity and E coli." Measure

of improvement for: - nitratelevels - salinity - E coli.

needed to be split out tomeasure, targets established.

Resource Consents

Specifies "district consents" -Provides more clarity tomeasure.

75%60% - 70%AmendedMeasure

Percentage of district consentsdue for monitoring where themonitoring has beencompleted.

We promote thesustainable managementof natural and physicalresources throughprocessing and monitoringresource consentapplications.

Support Services

Was "percentage of customerswho rate helpfulness of staff as

90%90%AmendedMeasure

Percentage of customerssatisfied with the helpfulness of

We support theorganisation to deliver

excellent/good". Changedstaff as found in the ResidentSatisfaction Survey.

Council services and toprovide good qualityinformation to the public.

wording of measure to beconsistent with our ResidentSatisfaction Survey.

Land Transport

Changed to satisfaction with"the condition" of Council roads.

70% Urban60% Rural

60% Urban50% Rural

Amendedmeasure

Percentage of residentssatisfied with the condition of

We operate and maintaina reliable roading network

This is to make measure moreCouncil roads (excluding statethat is up to date, in goodspecific, in line with our revisedResident Satisfaction Survey.

highways) as found in ResidentSatisfaction Survey (urban andrural roads)

condition and fit forpurpose.

Changed to satisfaction with"the condition" of footpaths. This

60%50%Amendedmeasure

Percentage of residentssatisfied with the condition of

We operate and maintaina reliable roading network

is to make measure morefootpaths as found in ResidentSatisfaction Survey.

that is up to date, in goodcondition and fit forpurpose.

specific, in line with our revisedResident Satisfaction Survey

Incorrect target in LTP5%5%NewMandatoryMeasure

Road maintenance - Thepercentageof the sealed localroad network that isresurfaced.

We operate and maintaina reliable roading networkthat is up to date, in goodcondition and fit forpurpose.

Condition standard will bespecified in the Pathways Asset

70%60%NewMandatoryMeasure

Footpaths - The percentage offootpaths that fall within theservice standard for the

We operate and maintaina reliable roading networkthat is up to date, in good Management Plan - this is

currently being developed.condition of footpaths that iscondition and fit forpurpose. set out in the Pathways Asset

Management Plan.

Was "number of users of walkingand cycling network". Wording

5% increase onbaseline by

2020

Increase frombaseline set in

Year 1

Newmeasure

Percentage of residents usingthe walking and cyclingnetwork as found in theResident Satisfaction Survey

We provide and maintainaffordable and accessibletransportation services thatbalance the needs of allusers.

changed for practicality ofmeasurement - so we will usethe Resident Satisfaction Survey.

Solid Waste Management

Wording change to betteridentify services - in line with our

85%Year 1: 80%Year 2: 80%Year 3: 83%

83%Resident satisfaction withCouncil's recycling services asfound in the ResidentSatisfaction Survey.

We provide communityrecycling facilities andregular kerbside collectionsto encourage recyclingand waste reduction.

revised Resident SatisfactionSurvey.

Wording change to betteridentify services - in line with our

85%Year 1: 80%Year 2: 82%Year 3: 83%

74%Resident satisfaction withkerbside rubbish bag andrecycling collections as found

We provide communityrecycling facilities andregular kerbside collections revised Resident Satisfaction

Survey.in the Resident SatisfactionSurvey.

to encourage recyclingand waste reduction.


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Target Years1-3


Urban Stormwater

Only the target for emergencyflooding required, as the

30 minute30 minuteNewMandatoryMeasure

Response Times - The medianresponse time to attend aflooding event,measured from

We provide high qualityinfrastructure and ensure ahealthycommunity through definition of flooding in the

the time that Council receivesthe removal of stormwater mandatory measure is that of ahouse/business.notification to the time thatand contaminants to

service personnel reach thesite.

protect dwellings, theenvironment and people

Wastewater

Listed "new mandatorymeasure" in LTP - but is notmandatory.

AchieveAchieveNewMeasure

Council will have adequateinformationbyDecember 2016to make decisions on any

We provide a wellmanaged wastewaterreticulation and treatment

future wastewater treatmentoptions.

system which protectspublic health and thephysical environment.

Incorrect targets listed in the LTP.a) 1hrb) 24hr

a) 1hrB) 24hr

NewMandatoryMeasure

Fault Response Times - WhereCouncil attends towastewateroverflows resulting from a

We provide a wellmanaged wastewaterreticulation and treatment

blockage or other fault in thesystem which protectswastewater system, thepublic health and the

physical environment. following median responsetimes measured: a)attendance time: from the timethat Council receivesnotification to the time thatservice personnel reach thesite, and b) resolution time:from the time that Councilreceives notification to the timethat service personnel confirmresolution of the blockage orother fault.

Arts and Culture

Measure moved into this LOS.Was previously under the

Establishtargets

Year 1:Establish

NewPercentage of residentssatisfied with the quality of art

We provide facilities andservices that help create a

Museum LOS which wasincorrect.

baseline andtargets

in public places and the way itis maintained as found in theResident Satisfaction Survey.

strong sense of communitymanna, pride and identity,reflecting the heritage andculture of the region.

Library

Changed wording to "onsiteand online" instead of "onsite,

265,000230,000on-site, on-line

232,770Number of visitors to HBWilliams Memorial Library perannum (on site and on-line).

We provide a range ofaccessible, quality libraryservices tailored to meet online and website" which is

repetitive.targets to beestablished in

year 1the needs of Gisbornedistrict residents.

Parks and Community Property

Changedwording from "numberof visitors to parks" for


Year 1:Establish

Newmeasure

Percentage of residents thathave visited a Council park or

We provide a parks andopen spaces network that

practicality of measurement -baseline andtargets

reserve in the last 12months asfound in the ResidentSatisfaction Survey.

protects landscapeamenity values andbiodiversitywhile promoting

we will use the ResidentSatisfaction Survey.

leisure and recreationalopportunities thatmeet theneeds of the district.

Changed the wording to bemore specific - in line with our

86%86%83%Percentage of residentssatisfied with the quality of our

We provide a parks andopen spaces network that

revised Resident SatisfactionSurvey.

parks as found in the ResidentSatisfaction Survey.

protects landscapeamenity values andbiodiversitywhile promotingleisure and recreationalopportunities thatmeet theneeds of the district.


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Target Years1-3


Changed the wording to bemore specific -for practicality ofmeasurement in a user survey


Year 1:Establish

baseline andtargets

Newmeasure

Percentage of users satisfiedwith themaintenance of parks.

We provide a parks andopen spaces network thatprotects landscapeamenity values andbiodiversitywhile promotingleisure and recreationalopportunities thatmeet theneeds of the district.

Strategic Planning and Engagement

Target changed from65%as thismeasure also appears under

70%60%59%Percentage of residentssatisfied with the way Council

We support communities toparticipate in decisionmaking processes. "Governance" activity and has

target of 60%.involves the public in thedecisions it makes as found inthe Resident SatisfactionSurvey.

Removed "opportunities to payfor services" as this was leading

Targets to beconfirmed

Year 1:Baseline to be

Newmeasure

Percentage of residents, asfound in the Resident

We support theorganisation to provide

andmade themeasure doubleestablishedSatisfaction Survey, satisfiedgoodquality information tothe public. barrelled and therefore difficult

to measure.and targetsconfirmed

with Council's provision ofinformation to the publicincluding:

- content on the Councilwebsite.- Council updates/notices viasocial media (Facebookand/or Twitter)- Council newsletters,brochures and consultationdocuments.


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OUR APPENDICES

HE KUPU ĀPITI

Our Council - Governance and Structure

Our Role

As one of only five Unitary Authorities, theGisborneDistrictCouncil (Council) combines the functions, duties andpowers of a territorial council with those of a regionalcouncil. In most other parts of the country, the functionsof regional councils and territorial councils are split asfollows:

Regional Councils

resource management (quality of water, soil,coastal planning etc)

biosecurity control of regional plant and animalpests

river management, flood control andmitigation oferosion

regional land transport planning and contractingof passenger services

civil defence (natural disasters, marine oil spills).

Territorial Councils

community wellbeing and development

environmental health and safety (includingbuildingcontrol, and environmental health matters)

infrastructure (roading and transport, sewerage,water/stormwater)

recreation and culture

resourcemanagement including landuse planningand development control.

Our Governance Structure

The elected Council consists of the Mayor and 13Councillors (including theDeputyMayor). TheCouncillorscover five areas of the district (referred to as wards).These are Waipaoa, Taruheru-Pātūtahi,Gisborne,Tawhiti-Ūawa, and Matakaoa-Waiapu. While theCouncillors have been elected from their respectivewards, they have an obligation and a duty to representthe interests of the district as a whole.

TheCouncil is electedevery three years and is responsiblefor setting the overall direction of the district and thebudget through Long Term Plans and Annual Plans,setting policies, setting and reviewing bylaws, monitoringCouncil’s performance, adopting a Code of Conductfor elected members, employing the Chief Executive,and adopting (or otherwise) reports as required undervarious legislation.

Councillors also have a key role in engaging with theirlocal communities, advocating on behalf of others andraising any issues that need to be addressed.

Our Committees

ElectedCouncils cancreate subordinatedecisionmakingstructures such as committees. Committees can beestablished or disestablished by way of a resolution ofCouncil. Council has nine committees. These are:

Performance, Audit and RiskInfrastructure ServicesEnvironmental Planning and RegulationsCommunity Development and ServicesRegional TransportWastewater ManagementFuture TairāwhitiHearingsCivil Defenceand EmergencyManagementGroup

Appendices

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Schedule of Councillors & Schedule ofAgents

Schedule of Councillors

(Please note this schedule is subject to change after the September 2016 elections)

TAWHITI-UAWAGISBORNEGISBORNEGISBORNE

Cr Patricia A Seymour (Pat) OBEP 862 2697M 0274 725 997F 862 2703

Cr Larry FosterP 868 8927M 027 450 8814

Deputy Mayor Rehette StoltzP 868 5382M 021 279 7948F 868 5382

Mayor Meng FoonP 867 1870M 027 44 84 084F 867 9265

WAIAPUGISBORNEGISBORNEGISBORNE

Cr William S Burdett (Bill)P 06 864 8966(H) 864 8341(W)F 06 864 8967

Cr Brian I WilsonP 868 8118(H) 867 4672(W)M 027 237 8080F 867 4675

Cr Andy W CranstonP 868 1160M 027 27 33 192F 868 1161

Cr Amber DunnP 867 3131M 021 475 470

Appendices

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ualPlan

WAIPAOAPATUTAHI - TARUHERUGISBORNEGISBORNE

Cr Graeme S ThomsonP 862 8737F 862 8197

Cr Roger J HaismanP 867 0922M 027 332 8601F 867 0918

Cr Alan G DavidsonP 867 9474F 867 9473

Cr Meredith Akuhata-BrownP: 867 7496M: 027 200 5605

GISBORNEGISBORNE

Cr John (Craig) BauldP 862 9550F 862 9551

Cr Josh WharehingaP 027 512 5195

Schedule of Senior Management

HUMAN RESOURCESDIRECTOR

ENVIRONMENTAL ANDREGULATORY GROUPMANAGER

PLANNING ANDDEVELOPMENT GROUPMANAGER

OPERATIONS GROUPMANAGER

CHIEF EXECUTIVE

Karen AspeyBSc Hons

Kevin StrongmanBEng Tech (Civil), Dip Mgt,Dip P Mgt

Nedine Thatcher SwannMBA, MA, BA(Ed).

Barry VryenhoekMA (Hons), MBA, ACA

Judy CampbellBA, PAD, MA (Applied)

Schedule of Agents

AUDITORSINSURANCE CONSULTANTSSOLICITORSBANKERS

Ernst & YoungPO Box 490Wellington(on behalf of the AuditorGeneral)

Aon New Zealand16th FloorAMP Centre29 Customs Street WestPO Box 1184Auckland 1010

Cooney Lees Morgan247 Cameron Road,Tauranga

Simpson Grierson195 Lambton Quay,Wellington

Westpac Banking Corporation101 Gladstone Road, Gisborne

ANZ National Bank LtdCnr Karamu Road & Heretaunga Street,Hastings

Band of New Zealand125 Queen Street, PO Box 2139Auckland 1140

Buddle Findlay1 Willis Street, Wellington

Appendices

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Gisborne

DistrictC


15 Fitzherbert Street, Gisborne phone 06 867 2049

fax 06 867 8076email [email protected]

web www.gdc.govt.nz

Gisborne District Council 2016/17 Annual Plan · Gisborne District Council 39 Gladstone Road...

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