Time To Take 10 For 10

TIME TO TAKE 10-YEAR PLAN 2018­-2028

CONSULTATION DOCUMENT

Have your say on Central Otago’s future by 30

April 2018

www.codc.govt.nz/10for10

1

TIMELINE

28 March Consultation Opens

SECTIONS 3

Mayor’s Introduction

4

Our Infrastructure Strategy at a glance

8

Issue

1

Clyde Wastewater

14

Issue

2

Lake Dunstan Water Supply

18

Issue

3

Clyde Heritage Precinct

4

Issue

30 April

22

Consultation Closes

24

Other Issues

29

Our Financial Strategy at a glance

36

Audit Opinion

38

We want to hear from you

28 May 7 June

Community Boards and Council Consider Submissions

27 June

Adoption of the final draft of the 10-Year Plan

Cover image: Lisa Hill Photography.

Kerbside Wheelie Bin Collection Frequency

MAYOR'S INTRODUCTION

TAKE 10 FOR 10 Every three years, councils review their 10-Year Plan. This is when the community as a whole gets to have its say on whether its council is heading in the right direction over the next 10 years.

What I, and the rest of the Councillors, really wish is for you to take 10 minutes (or longer if you want) for the next 10 years and have your say. We need to know what you think – what we’ve got right, what we’ve got wrong and what you think we could do better.

Every voice in the community is equally important, but we cannot hear those voices that do not speak. So please, take the time to look through this document and tell us what you think about one, some or all of the things it has to say. There will be an opportunity to speak to your submission in front of your Community Board or the full Council (depending on the nature of the submission), but you do not have to do that if you don't want to.

The following pages outline the key issues facing the district, with options on ways forward for those issues. Crucially, it will also tell you what the effect of these decisions will be on your rates. If you want more detail than this document provides, that can be found on the Council website www.codc.govt.nz/10for10. Alternatively pick up the phone and call me or one of the other Councillors. Our contact information is at the back of this document, along with details of how you can have your say.

The key issues that we are focussing on in this 10-Year Plan are:

1

Issue

Reticulated wastewater system for Clyde

Issue

2

Lake Dunstan Water Supply water treatment plant timing

Issue

3

Clyde Heritage Precinct upgrades

4

Kerbside recycling collection frequency changes

Issue

We’ve also included within this consultation document a few other matters - things that we think or know you will be interested in that are either in motion or are on the horizon. We are not presenting options but you can make comments on these in your submission if you wish. We will be coming back to you, our community, to talk about these matters in more detail.

These include a scoping study on future use options for Central Stories; updates on what’s happening with Cromwell Memorial Hall and the Cromwell Town Centre rejuvenation; a potential new community facility for Omakau; an affordable housing needs assessment; updates on the Omakau water supply upgrade; changes to the Development Contributions Policy; proposed new greenwaste charges; proposed kerbside collection for rural residents; and some changes in how we manage Council’s Elderly Persons’ housing units.

‘Remember, 10 minutes for the next 10 years. Have your say.’

Tim Cadogan Central Otago Mayor

INVESTING IN OUR ASSESTS

INVESTING IN OUR ASSETS | OUR INFRASTRUCTURE STRATEGY AT A GLANCE Infrastructure is a core part of what Central Otago District Council provides its communities – it makes up the majority of Council’s spending and the community owns, through the Council, almost $1 billion worth of assets.

Our Infrastructure Strategy outlines how Council will manage its assets for water, wastewater, stormwater and roading.

As well as having a 10-year plan, Council is required in its Infrastructure Strategy to look even further out and identify the investment that is required to meet the needs of our communities for the next 30 years.

DRIVERS OF DEMAND AND CHANGE In 30 years’ time our district will be different. There will be more people and a higher proportion of our population will be retired. On peak days in 2048 it is predicted that we will have 25% more people in the district than we do in 2018.

Population growth is forecast to continue in Alexandra, Clyde and Cromwell. Visitor growth is projected to increase across all areas of the district.

Our water, wastewater and transport systems will need to be expanded to meet the demands of an increase in population, visitors, and urban area.

Public expectations and legislation changes will require improvements in environmental and safety impacts from public use of infrastructure.

Our climate is predicted to be warmer, with less frost days, and hotter summers. Overall rainfall will not change, but it will fall in less frequent, higher intensity events. Less frequent rain will also affect how we manage water supply and demand in the future.

Technology will have changed the way we communicate what is happening on our networks. It will enable us to manage more of our infrastructure remotely, and warn us of upcoming issues and servicing needs. We will make greater use of green technologies and renewable energies to deliver our services.

As our infrastructure is upgraded it will be built to be more resilient of natural hazards, such as storms and earthquakes.

COUNCIL’S INFRASTRUCTURE STRATEGY Council recognises that the infrastructure that we build today will provide service well beyond the 30-year window of the strategy. Our vision is: We will deliver safe and reliable infrastructure services that support our local economy and communities, in a manner that is affordable, sustainable and equitable for current and future generations.

Our services will be integrated, consistent, and fit for purpose.

4

We will consider value for money and whole of life cost to remain affordable.

We will balance the current and future impact on the environment, and make use of sustainable practices.

We will look for new ways and innovative practices to be cost effective.

Our levels of service will meet legislative requirements.

Council’s vision for water services is “to deliver safe and wholesome water supplies which support a healthy community and environment”.

Our vision for our roads is “to ensure an efficient, fully accessible, safe roading network”.

KEY INFRASTRUCTURE ISSUES Legislation, growth, and the need to work smarter to continue to provide cost effective services underpin our programme.

Improving the safety and resilience of all networks and schemes, while meeting the additional demands of growth and affordability remains a challenge.

Three infrastructure issues have been identified as significant.

They are issues that the Central Otago community needs to tackle in the next 10 years. These are treatment of urban water supplies, treatment of urban wastewater discharges, and increased pedestrian, cycle, and traffic demand within town centres.

INVESTING IN OUR ASSESTS

TREATMENT OF URBAN WATER SUPPLIES Improving water treatment to meet the New Zealand Drinking Water Standards to deliver safe and wholesome water supplies is a key issue.

A water contamination event in Central Otago, such as occurred in Havelock North in 2016, would have a significant impact on public health, and reputation. It would damage the perception of Central Otago as a great place to live, or visit.

Public health, the economy, and public confidence would be severely damaged and take time to recover.

Council provides potable water to properties within nine water schemes.

All Council water supplies are chlorinated to mitigate the risk of bacterial contamination such as E. coli. Treatment for virus and protozoa contamination occurs for the Roxburgh supply only and this is the only Council scheme which meets the New Zealand Drinking Water Standards.

The 2018 Infrastructure Strategy revises the timeline for upgrading of treatment of our water supplies to provide compliance with the New Zealand Drinking Water Standards on all schemes by 2023. The 2015 strategy planned for this to occur by 2031.

INCREASED PEDESTRIAN, CYCLE, AND TRAFFIC DEMAND WITHIN TOWN CENTRES Growth and the effects of peak days is leading to changes in demand for parking, and use of public spaces, potentially eroding the experience for visitors and locals in our heritage and commercial precincts. The way key streets and lanes are used by people, cyclists and vehicles, and the lack of clarity of the function and purpose of these streets is confusing and potentially unsafe.

Traffic, parking, cyclist, and pedestrian volumes within a confined area have increased significantly in both Clyde and Cromwell. This is also becoming noticeable in other heritage towns such as Ophir.

A project is proposed to address these issues in the Clyde Heritage Precinct between 2018-2020. Minor upgrades are proposed in Ophir and Roxburgh in 2020. Intersection, pedestrian and cycling improvements are proposed in Cromwell in 2021, and cycling improvements in Bannockburn in 2022.

TREATMENT OF URBAN WASTEWATER DISCHARGES Increasing environmental expectations and regulation mean we need to improve the quality of our urban water discharges for wastewater.

Council manages seven public wastewater schemes across the district.

Upgrading of the Cromwell wastewater treatment site is underway to improve the quality of discharge to Lake Dunstan by 2019.

A significant project is proposed to provide a reticulated wastewater system for Clyde, with implementation staged over the next 25 years.

Further upgrading of treatment at the Cromwell and Alexandra wastewater sites will be required by 2033 to ensure that the impacts of additional loading due to population growth do not negatively impact on the quality of discharges. This is also a resource consent requirement.

Treated wastewater at Naseby, Ranfurly, and Roxburgh is discharged to land. Minor upgrades to these sites is proposed between 2036 and 2039 to improve discharge quality.

Improvements are being undertaken at Omakau in 2018 to improve the quality of discharge to the Manuherikia River.

Further improvements to treatment and discharge are proposed between 2033 and 2036.

5

MAJOR INFRASTRUCTURE PROJECTS FOR THE NEXT 30 YEARS Year

1

2

2018/19

3

2019/20

2020/21

12.8M

Water

4

2021/22 $

Lake Dunstan Water Supply pipeline to Alexandra and Water Treatment

Omakau Pressure Upgrade

Investigation and Design for Cromwell Water Upgrades

Cromwell Water Treatment and Capacity Upgrades

0.7M

$

Completion of Stage 1 Cromwell Wastewater Upgrade

11.7M

$

Clyde Wastewater Stage 1

0.2M

$

Omakau Wastewater Treatment Upgrade Stage 1

0.8M

0.7M

$

$

Upgrade Roxburgh Bridge to take increased loads

0.8M

$

Clyde Historic Precinct Streetscape Improvements

0.2M

$

Roxburgh and Ophir Streetscape Improvements

0.8M

$

Pedestrian and cycle Pedestrian and underpass across cycle path on State Highway - Bannockburn Bridge Cromwell

0.9M

$

Cromwell Town Centre Intersection Upgrades

0.4M

$

Sandflat Road Seal Extension

6

2024

New Re Alexand Pi

8.8M

Ranfurly and Patearoa Water Treatment Upgrades

7

$

$

0.9M

Roading

2023/24

$

$

Wastewater

2022/23

6

0.6M

$

0.9M

5

7

4/25

5.6M

8

2025/26

10

2026/27

0.5M

$

eservoirs dra and isa

9

2027/28

0.9M

$

$

Generators for Bores

11-15

2028-33 $

16-20

2033-38

21-25

2038-43

6.7M

12.3M

$

0.4M

0.2M

2043-48

1.5M

$

Pressure Upgrades Reticulation to Reticulation to Alexandra Dunstan Flats Area Dunstan Flats Area Stage 1 Stage 2

0.1M

26-30

Additional Reservoir Bridge Hill

1.4M

0.6M

$

$

$

$

$

Additional Naseby Reservoir

Additional Bores for Lake Dunstan Water Supply

Patearoa Pressure Upgrade

Roxburgh Pressure Upgrade

Booster Pump for Lake Dunstan Water Supply

5.3M

$

$

Alexandra and Cromwell Pumpstation Upgrades

Stage 2 Cromwell Wastewater Treatment

2.3M

3.1M

$

Naseby, Ranfurly, and Lake Roxburgh Wastewater Treatment Upgrades

6.4M

15.9M

$

$

Clyde Wastewater Stage 2

Clyde Wastewater Stage 3

1.6M

$

Omakau Wastewater Treatment Upgrade Stage 2

2.2M

$

Replace Omakau Bridge

4.9M

$

Replace Little Valley Road/Manuherikia River Bridge

0.8M

$

Alexandra intersection upgrades and contribution to Northern Access Road

1.1M

$

Maori Point Road Part Seal Extension

3M New Footpaths - $80,000/annum

$

11.5M Small Bridge Replacements - $300,000/annum

$

7

ISSUE 1 | CLYDE WASTEWATER

1

Issue

CLYDE WASTEWATER

Government, regional council and increasing environmental expectations mean we need to improve the quality of our urban water discharges, particularly in regards to wastewater in Clyde. Council believes that the day is coming when the Central Otago district will be forced to face up to the reality that our third largest town cannot continue to rely on septic tanks for dealing with wastewater.

All residential and commercial properties in Clyde are currently served by privately owned septic tanks and disposal fields. While residential septic tanks are permitted now, commercial septic systems may require a resource consent. There is considerable anecdotal evidence of occasional strong sewage odours in the Historic Precinct area, particularly during peak summer periods.

The Otago Regional Council is reviewing urban water discharges. This will cover all contaminant sources in urban areas, which will include septic tanks. The cumulative effects of discharges from septic tanks can be as damaging as discharges from agricultural activities. A recent study* indicates that unless an advanced wastewater treatment system is used, a residential section with a size of 0.3ha (3000m2) or less may not comply with environmental limits for nitrogen discharge, and neither may an area where the density exceeds 370 septic tanks per square kilometre. Currently, Clyde has 760 septic tanks per square kilometre and few, if any, sections greater than 3000m2.

Clyde is the third largest town in Central Otago, and it is inevitable that a reticulated wastewater system will be required due to increasing environmental expectations and regulation. The only uncertainty is when that requirement will become reality.

The lack of a reticulated wastewater system is a barrier to further subdivision in and around Clyde.

A number of options have been considered for treatment of Clyde’s wastewater. This has included a separate treatment facility at Muttontown, and piping wastewater from Clyde, to the Alexandra treatment site. Council has determined that a reticulated wastewater system with wastewater piped from Clyde to the Alexandra treatment facility will provide the best value for money.

The construction costs are less, and the costs of operating one treatment plant for both towns are significantly lower than operating two separate plants.

Council is constructing a water pipeline between Alexandra and Clyde in 2019. Council believes the opportunity should be taken to construct the wastewater pipeline between Clyde and Alexandra in conjunction with the water pipeline. Cost and disruption will be reduced by having both pipelines constructed together.

Construction of a Clyde wastewater system will have the following benefits: Central Otago will maintain its reputation for clean lakes and rivers. This supports community health and wellbeing, and supports recreational opportunities.

All existing commercial and residential zoned land, with provision for future growth into the Muttontown area, would be included in the design area.

Treatment would include nutrient removal and disinfection, resulting in reduced environmental impacts from discharges.

This will improve the quality of waterways in Otago.

It would address any existing odour issues in the heritage precinct.

Council and the residents of Clyde will be meeting their legal obligations under the Resource Management Act. Treatment at Alexandra would protect groundwater bores between Clyde and Alexandra.

Council-owned land that is designated for wastewater treatment near Muttontown Gully would be sold and the income used to assist with funding the project.

8

* Groundwater Contamination Risk, Septic Tank Density and Distribution within Otago, Otago Regional Council, 2015

ISSUE 1 | CLYDE WASTEWATER

Council is consulting with the community on two issues, timing of the wastewater reticulation project and funding of the project.

There are two options for timing of the work:

Option 1. Construct the project in three stages as illustrated in the map below (Council's preferred option).

Option 2. Construct the project in a single stage as illustrated by the blue line in the map below.

CLYDE WASTEWATER Indicative Wastewater Reticulation Stages

Legend CBD Stage 1 Stage 2 Stage 3

9

ISSUE 1 | CLYDE WASTEWATER

TIMING OPTIONS FOR ADDRESSING THIS ISSUE TIMING OPTION 1: COUNCIL'S PREFERRED OPTION

Staged reticulation with wastewater piped to Alexandra and treated at the Alexandra Wastewater Treatment site.

This is the preferred option as it will spread the cost of the project over a longer period. This will provide Clyde residents with more time to prepare for the upfront costs. It will enable properties in the newer areas of Clyde to benefit from the investment they have made in septic tanks before they are connected to the scheme.

Description A reticulated wastewater system would be constructed for Clyde in three stages.

Wastewater would be piped from Clyde to Alexandra, and treated at the existing Alexandra Wastewater Treatment Plant.

The proposal is to implement the project in three stages.

Stage 1: would be undertaken between 2018 and 2021 and will include the commercial and heritage precinct, and all properties between Sunderland Street and the Clutha River. It would include Dunstan Hospital and the Clyde camping ground.

This would address all existing individually consented commercial properties, and the older septic tanks.

The pipeline would be constructed between Clyde and Alexandra, ideally with the new water pipeline. It would also enable further growth to occur, subject to appropriate zoning or resource consent, in the Muttontown area from 2021.

Stage 2: would be undertaken between 2028 and 2033 and will include the remaining area between Sunderland Street, Hazlett Street and Orchard Street. This area was largely developed prior to 1997 when changes to the requirements of septic tanks were introduced.

This stage would also include upgrades to the Alexandra Wastewater Treatment Plant to accommodate the additional flow and improve discharge quality.

Stage 3: would be undertaken between 2038 and 2042 and reticulation will be extended to the remaining residential area between Hazlett Street, Orchard Drive and State Highway 8. This area was developed after 1997, when changes to the requirements of septic tanks were introduced, meaning these tanks provide a safer solution to older tanks and therefore there is less urgency to replace them.

The total cost attributed to this project is $28,300,000 in today's dollars, which is equal to $35,802,000 over the project timeline taking into account inflation.

Impact The cost of the project will be spread over a longer period, improving affordability of the scheme.

Septic tanks in recent subdivisions would continue to be used for another 20-25 years.

The full environmental benefits of the whole project would not be recognised from the outset.

There is financial benefit that may be gained through placing the pipe for sewerage at the same time as the pipe for water.

The project will be funded by a loan sourced from either internal or external borrowing dependent on cash reserves at the time. Loan repayments, less any ongoing depreciation charges, will be rate-funded.

10

For Clyde ratepayers, at the time they connect to the wastewater scheme the additional $56 rate will be replaced by the district wastewater charge (which in 2018/19 is $577.48). If residents choose to pay the connection fee over 10 years, they would pay the district wastewater charge on top of their annual connection payment.

ISSUE 1 | CLYDE WASTEWATER

TIMING OPTION 2

Reticulation constructed in a single stage with wastewater piped to Alexandra and treated at the Alexandra Wastewater Treatment site.

Description Construct a reticulated wastewater system for Clyde in the next five years. Wastewater would be piped from Clyde to Alexandra, and treated at the existing Alexandra Wastewater Treatment Plant.

All existing commercial and residential zoned land with provision for future growth into the Muttontown area would be included in a single stage.

Upgrades to the Alexandra Wastewater Treatment Plant would occur as part of the initial construction to accommodate the additional flow and improve discharge quality.

Impact Constructing the project in one stage would have a significantly higher cost impact on ratepayers than staging the project over 25 years. This is because the substantial upfront costs and loss of investment to recent developments will total a far larger sum.

Environmental benefits would be realised sooner.

Recent investment by property owners of newer houses on septic tanks would be lost.

Upgrades to treatment processes at Alexandra would be undertaken 12 years earlier. The ability to economically incorporate future technology improvements to treatment processes may be lost.

The project will be funded by a loan sourced from either internal or external borrowing dependent on cash reserves at the time. Loan repayments, less any ongoing depreciation charges, will be rate-funded.

The total cost attributed to this project is $28,300,000 in today's dollars, which is equal to $28,506,500 over the project timeline taking into account inflation.

For Clyde ratepayers, at the time they connect to the wastewater scheme the additional $39 rate will be replaced by the district wastewater charge (which in 2018/19 is $560.48). If residents choose to pay the connection fee over 10 years, they would pay the district wastewater charge on top of their annual connection payment.

11

ISSUE 1 | CLYDE WASTEWATER

FUNDING SCENARIOS FOR ADDRESSING THIS ISSUE FOR TIMING OPTION 1 (staged reticulation) below are the four corresponding funding scenarios.

Council does not propose an option of Clyde ratepayers paying the full amount of the wastewater reticulation as Council believes that the financial burden would be unsustainable for a community of that size. Council also feels that Clyde ratepayers paying the full cost of either option may not be consistent with the recent districtisation introduced by Council in the current Revenue and Financing Policy. For reference, if Clyde ratepayers were to bear the full cost of the scheme, the connection fee per household would be approximately $35,350.

Alternatively, if the cost of the scheme was borne entirely by the whole district, the increase in wastewater rate for each Central Otago residence connected to a Council wastewater scheme is estimated to be $78 annually. Council has not put this as an option for consultation as it considers that Clyde ratepayers should bear more of the cost of a Clyde wastewater scheme than other ratepayers of Central Otago.

CONNECTION CHARGE SCENARIOS AND THE EFFECTS ON DISTRICT WASTEWATER RATE Cost to connect to Clyde Scheme

Increase in wastewater rate per property across whole district in Year 1

Scenario A

$5,000

$67

Scenario B

$10,000

$56

Scenario C

$15,000

$45

Scenario D

$20,000

$35

Funding scenarios

Council’s preferred scenario is Scenario B, meaning that, for example, a Stage 1 connection would cost the Clyde ratepayers $10,000 with an additional cost to all wastewater rates in the district by $56 per annum from Year 1 (2018/19) onwards.

The additional cost to rates of $56 would also apply to all Clyde ratepayers from Year 1, hence prior to connection. Clyde ratepayers in Stages 2 and 3 would pay a connection fee adjusted for inflation dependent on when the remaining two stages begin.

FOR TIMING OPTION 2 (reticulation construction in a single stage) below are the four corresponding funding scenarios.

CONNECTION CHARGE SCENARIOS AND THE EFFECTS ON DISTRICT WASTEWATER RATE Cost to connect to Clyde Scheme

Increase in wastewater rate per property across whole district in Year 1

Scenario A

$5,000

$56

Scenario B

$10,000

$39

Scenario C

$15,000

$22

Scenario D

$20,000

$5

Funding scenarios

12

For example, under scenario B the additional cost to rates of $39 would also apply to all Clyde ratepayers from Year 1, hence prior to connection.

ISSUE 1 | CLYDE WASTEWATER

$

PAYMENT OPTIONS

The tables below provide more detail about how a Clyde ratepayer can pay off the connection fee – via a one-off lump sum or paid off over a 10-year period. These funding options apply under Timing Option 1 and 2.

CLYDE RATEPAYERS’ OPTIONS FOR CONNECTION FEE PAYMENT BASED ON A $5,000 CONNECTION FEE One-off Connection Fee Stage 1 (Year 1-3)

$5,000

Pay off via rates over 10 years, calculated on a 5% interest rate OR

$638 p.a.

CLYDE RATEPAYERS’ OPTIONS FOR CONNECTION FEE PAYMENT BASED ON COUNCIL'S PREFERRED SCENARIO OF A $10,000 CONNECTION FEE One-off Connection Fee

Stage 1 (Year 1-3)

$10,000

Pay off via rates over 10 years, calculated on a 5% interest rate

OR

$1,277 p.a.

CLYDE RATEPAYERS’ OPTIONS FOR CONNECTION FEE PAYMENT BASED ON A $15,000 CONNECTION FEE One-off Connection Fee Stage 1 (Year 1-3)

$15,000

Pay off via rates over 10 years, calculated on a 5% interest rate OR

$1,915 p.a.

CLYDE RATEPAYERS’ OPTIONS FOR CONNECTION FEE PAYMENT BASED ON A $20,000 CONNECTION FEE One-off Connection Fee Stage 1 (Year 1-3)

$20,000

Pay off via rates over 10 years, calculated on a 5% interest rate OR

$2,554 p.a.

These options above are payable on connection. It is anticipated that Clyde ratepayers in Stages 2 and 3 will be offered the ability to pay off the fee at the time of connection but as these stages are anticipated to commence outside of the scope of this 10-Year Plan, no figures are included reflecting these options.

The calculations for both options assume that 50% of residents pay the one-off connection fee and 50% take the option to pay the connection fee over 10 years. The proportion of one-off payments versus paying over 10 years has no impact on the numbers presented for each option.

13

ISSUE 2 | LAKE DUNSTAN WATER SUPPLY

2

Issue

LAKE DUNSTAN WATER SUPPLY

Contamination of our water supplies can occur in a number of ways, including when rain washes animal or bird poo into our lakes and rivers. This water is then filtered through gravels for Council water supplies. The gravels do not remove the pathogens (nasties) from the water. Chlorination is used to kill bacteria, which causes most of the risk. All Council water supplies are chlorinated to remove this risk.

The remaining risk comes from another group of pathogens, which include protozoa and virus. Chlorination has no effect on these, and they are typically treated using ultraviolet light.

The Health (Drinking Water) Amendment Act 2007 provides a legislative framework to protect communities by promoting adequate supplies of safe and wholesome drinking water. This Act is supported by the New Zealand Drinking Water Standards, which define the minimum standards for drinking water in New Zealand.

In order to meet the New Zealand Drinking Water Standard requirements, Council’s water supplies need treatment to remove the risk of protozoa and virus contamination, as well as bacteria.

A Government Inquiry has been undertaken to determine the cause of the August 2016 water supply contamination in Havelock North in which 5,500 people became ill. This number comprises just under 40% of Havelock North residents. The Inquiry has also considered the potential for similar situations to occur in other New Zealand water supplies.

There is likely to be legislative changes to the requirements for public water supplies and penalties for non-compliance with the New Zealand Drinking Water Standards as a result of the findings of the Inquiry.

Council is proposing to bring forward projects in our 10-Year Plan to ensure all Council supplies meet the requirements of the New Zealand Drinking Water Standards.

The first and most significant project is the Lake Dunstan Water Supply, which will service residents on both the current Alexandra and Clyde water supplies. This will be followed by Cromwell, Ranfurly and Patearoa. The Roxburgh scheme is already compliant.

Upgrades are already planned in Omakau and Naseby in 2018 to make these schemes compliant.

Council has been investigating water supply upgrade options for Alexandra to address community dissatisfaction with the taste, odour and hardness of the current water supply. These issues will be addressed in the Lake Dunstan Water Supply project, as well as ensuring the water scheme meets the New Zealand Drinking Water Standards.

A number of different options have been considered, including providing treatment to the existing water source in Alexandra, a new Alexandra source, or sourcing water from the same location as the Clyde water supply.

In 2015 Council confirmed its preferred option to: Extend the borefield at the Clyde water supply source.

Build a single treatment facility at Clyde to service both the Clyde and Alexandra water supplies.

Construct a pipeline between the Clyde treatment site and the Alexandra Northern Reservoir.

Treat water by chlorination for bacterial contamination only in this stage of the project (treatment for protozoa and virus. contamination would be undertaken in 2027).

Comply with the New Zealand Drinking Water Standards at stage 2 completion in 2027.

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ISSUE 2 | LAKE DUNSTAN WATER SUPPLY

The 2015 10-Year Plan provided for treatment to be implemented in two stages. This would involve constructing the chlorination part of the treatment process in Stage 1, and then the filtration and ultraviolet treatment parts in Stage 2 in 2027-29. Our proposed plan has changed.

Council is now proposing to construct the pipeline and the treatment works in one stage. The scheme will then comply with the New Zealand Drinking Water Standards in 2020.

The revised 2017 estimate for the filtration and ultraviolet treatment is $2.8 million. The estimated cost for treatment was previously $4.5 million. The new 2017 estimate is based on a greater level of design information.

The estimated cost to construct the bores, chlorination plant, and pipeline to Alexandra is $11.2 million. This funding has previously been committed by Council. Investigation and design work is underway, with construction commencing later in 2018.

Council is proposing to bring forward projects in our 10-Year Plan to ensure all Council supplies meet the requirement of the New Zealand Drinking Water Standards.

15

ISSUE 2 | LAKE DUNSTAN WATER SUPPLY

OPTIONS FOR ADDRESSING THIS ISSUE OPTION 1: PREFERRED OPTION

Bring forward full treatment.

This is the preferred option as it will provide safe drinking water at the earliest possible time. It will also be more cost effective to do all the work at once.

Description Construct the cartridge filtration and UV treatment works in one stage at the same time as the pipeline, with implementation in 2020.

Impact Alexandra will receive water that has less lime in 2020.

Improved water quality and safety of the supply for Clyde and Alexandra.

Reduced risk of protozoa and virus contamination of the water supply for Clyde and Alexandra.

The water scheme will meet the New Zealand Drinking Water Standards.

Economies of scale will be achieved in construction of the treatment process.

The project will be funded by a loan sourced from either internal or external borrowing dependent on cash reserves at the time. Loan repayments, less any ongoing depreciation charges, will be rate-funded.

16

Option 1

Estimated Capital Expenditure

Additional Total Cost Per Annum

Additional districtwide cost for all properties paying water rates

Year 2 (2019/20)

$2,800,000

$168,000

$19.45

ISSUE 2 | LAKE DUNSTAN WATER SUPPLY

OPTION 2

Delay full treatment.

Description Construct treatment works in two stages, with chlorination only in stage one in 2020 and cartridge filtration and UV treatment in stage 2 between 2027 – 2029.

Impact Alexandra will receive water that has less lime in 2020.

The risk of protozoa and virus contamination of the water supply for Clyde and Alexandra will remain until 2029.

The water will not meet the treatment requirements of the New Zealand Drinking Water Standards until 2029.

There will be loss of economies of scale with two establishments required. The treatment building will need to be extended for stage 2, and major plant installed in stage one will need to be moved during stage 2.

The project will be funded by a loan sourced from either internal or external borrowing dependent on cash reserves at the time. Loan repayments, less any ongoing depreciation charges, will be rate-funded.

Option 2

Estimated Capital Expenditure

Additional Total Cost Per Annum

Additional districtwide cost for all properties paying water rates from Year 10

Year 10 (2027/28)

$3,600,000

$215,600

$23.35

Which option do you support?

Option 1 (one stage) or Option 2 (two staged treatment upgrade)?

For supporting information visit

www.codc.govt.nz/10for10 17

ISSUE 3 | CLYDE HERITAGE PRECINCT

3

Issue

CLYDE HERITAGE PRECINCT

The 2010 Clyde Community Plan feedback, and a community survey undertaken by Council in 2015, identified community concerns regarding traffic in the Clyde Heritage Precinct. Two facilitated workshops were held in 2017 with key stakeholders to build on this work, and understand the key issues and opportunities for change.

This project is the outcome of the work undertaken by the stakeholder group.

The growth in population, business, tourism and property development is having an impact on the heritage and commercial precinct in Clyde. Traffic, parking, cyclist and pedestrian volumes within a confined area have increased significantly.

This growth is leading to increased demand for parking and use of public spaces, possibly spoiling the experience for visitors and locals.

The way some streets and lanes are used by pedestrians, cyclists and motorists is confusing and potentially unsafe.

The change that is currently occurring is ad hoc, meaning we are not planning for the future and potentially missing opportunities.

Roading projects are district funded, and receive a 51% subsidy from the New Zealand Transport Agency. Roading projects are also included in our plan for Ophir and Roxburgh in 2020, and Cromwell in 2021.

18

ISSUE 3 | CLYDE HERITAGE PRECINCT

OPTIONS FOR ADDRESSING THIS ISSUE OPTION 1: PREFERRED OPTION

This is the preferred option as it addresses many of the issues at the least possible cost.

Description

Create Clyde’s ‘heart’ by upgrading Lodge Lane to a shared public space. Parking would be removed. The road area and footpaths would be levelled and resurfaced. This would create a flexible space, which could be used for events and public gatherings. Planting, lighting and street furniture would be provided. Pedestrians and cyclists would have priority over cars.

Connect the Clyde Heritage Precinct to the river with a walkway. This would include lighting and landscaping on the path, and around the Miners Lane car park area. The river would become more accessible and an attraction.

Address parking by improving access to car parks beside the river, and reducing speed on Sunderland Street. An entry feature would be constructed at the northern entrance to the town to transition speeds from 70km/h to 30km/h.

Angle parking would be provided on Sunderland Street between Naylor Street and Fraser Street.

Impact

Clyde will maintain its charm and authenticity where visitors and locals freely mix.

Increased economic development can occur without major negative impacts on the heritage and character of Clyde.

Improved access to the heritage precinct and the Miners Lane river area will be provided to meet the growing needs of the township. Use of streets and trails will be improved by allocating space for pedestrians, cyclists and vehicles.

Car parking on Lodge Lane will be relocated one block between Naylor Street and Fraser Street.

The project will be funded by loan sourced from either internal or external borrowing dependent on cash reserves at the time.

Loan repayments, less any ongoing depreciation charges, will be rate-funded.

The estimated cost of the project for this option 1 is $829,700.

Option 1

Estimated Capital Expenditure

Additional Total Cost Per Annum

Additional average rate increase for all ratepayers

Year 2 (2019/20)

$829,700

$63,785

$4.70

OPTION 1 LODGE LANE SHARED ZONE

NAYLOR STREET INTERSECTION UPGRADES

MASONIC LODGE

SLOW SPEED ZONE (30KM/H) MINERS LANE

MINERS TERRACE CARPARK

SAUSAGE ALLEY

CLYDE HOTEL

SLOW SPEED ZONE (30KM/H) + ANGLED PARKING

CLYDE RIVER PARK FOOTPATH LINK FROM RIVERSIDE TO HERITAGE PRECINCT

MINERS TERRACE ACCESS ROAD

19

ISSUE 3 | CLYDE HERITAGE PRECINCT

OPTION 2 Description This option will consist of all the work in Option 1, along with upgrades that would extend along Holloway and Fache Streets.

This would consist of widening Fache Street between Naylor Street and Fraser Street to provide angle parking on one side.

Footpaths would be provided on both sides of Holloway Street and between Naylor Street and Lodge Lane, with parking removed from one side.

Impact This option will result in the following impacts, as well as those in Option 1.

The width of the grassed verge on Fache Street would be reduced.

Car parking on Holloway Street would be relocated one block between Naylor Street and Fraser Street.

The estimated cost of the project for this Option 2 is $972,000. This includes construction of work outlined in Option 1.

Option 2

Estimated Capital Expenditure

Additional Total Cost Per Annum

Additional average rate increase for all ratepayers

Year 2 (2019/20)

$972,000

$74,725

$5.50

OPTION 2 FACHE STREET ANGLED PARKING

HOLLOWAY STREET UPGRADE LODGE LANE SHARED ZONE

HOLLOWAY STREET FOOTPATH UPGRADES

MASONIC LODGE

SLOW SPEED ZONE (30KM/H) MINERS LANE

MINERS TERRACE CARPARK

SAUSAGE ALLEY

NAYLOR STREET INTERSECTION UPGRADES

CLYDE HOTEL

SLOW SPEED ZONE (30KM/H) + ANGLED PARKING

CLYDE RIVER PARK FOOTPATH LINK FROM RIVERSIDE TO HERITAGE PRECINCT

MINERS TERRACE ACCESS ROAD

20

ISSUE 3 | CLYDE HERITAGE PRECINCT

OPTION 3 Description This option will consist of all the work in Options 1 and 2, along with upgrades that would extend along Sunderland Street between the Masonic Lodge and Naylor Street.

This would include a transition from 30km to a 10km/h zone using signs and kerb and surfacing changes. Parking would be removed to provide pedestrian priority. Lighting, paving and street furniture would be upgraded.

Impact This option will result in the following impacts, as well as those in Options 1 and 2.

Car parking on Sunderland Street will be relocated one block between Naylor Street and Fraser Street.

More space would be provided for pedestrians and cyclists.

Reduced speed on Sunderland Street would increase travel time but improve safety.

Visibility of historic buildings would not be obstructed by parked vehicles.

The estimated cost of the project for this Option 3 is $1,228,800. This includes construction of work outlined in Options 1 and 2.

Option 3

Estimated Capital Expenditure

Additional Total Cost Per Annum

Additional average rate increase for all ratepayers

Year 2 (2019/20)

$1,228,800

$94,465

$6.90

OPTION 3 FACHE STREET ANGLED PARKING

HOLLOWAY STREET UPGRADE LODGE LANE SHARED ZONE

HOLLOWAY STREET FOOTPATH UPGRADES

MASONIC LODGE

SLOW SPEED ZONE (30KM/H) MINERS LANE

MINERS TERRACE CARPARK

SAUSAGE ALLEY

SUNDERLAND STREET UPGRADE

MAIN STREET ZONE (10KM/H)

NAYLOR STREET INTERSECTION UPGRADES

CLYDE HOTEL

SLOW SPEED ZONE (30KM/H) + ANGLED PARKING

CLYDE RIVER PARK FOOTPATH LINK FROM RIVERSIDE TO HERITAGE PRECINCT

MINERS TERRACE ACCESS ROAD

21

ISSUE 4 | KERBSIDE WHEELIE BIN COLLECTION FREQUENCY

4

Issue

KERBSIDE WHEELIE BIN COLLECTION FREQUENCY

Did you know that Council is currently sending approximately 8000 tonnes of refuse to the Victoria Flats landfill? Approximately 30% of this could have been recycled.

Residents have told us the frequency of recycling collection services is not meeting their needs, and therefore they are having to send material that could be recycled to landfill.

OPTIONS FOR ADDRESSING THIS ISSUE OPTION 1: PREFERRED OPTION Description Continue with the fortnightly rubbish collection (red bin) and change to a two-weekly collection for mixed recyclables (yellow bin) for three collections in a row and eight-weekly collection of glass recyclables (blue bin). See graphic.

= Mixed Recycling

= Glass Recycling

= Rubbish Option 1 WEEK

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

Impact Improved level of service through better meeting community needs.

Likely to result in decreased volumes of material going to landfill. Currently some recyclables are being disposed of in the red bin when residents’ yellow bins are full. With greater frequency of yellow bins we expect more recyclable material will be diverted from landfill.

Change of bin frequencies may take a period of adjustment for people, but Council would make available its annual kerbside collection calendar detailing the pick-up schedule.

Cost: no cost change.

22

ISSUE 4 | KERBSIDE WHEELIE BIN COLLECTION FREQUENCY

OPTION 2 Description No change - bin pick-up frequencies remain fortnightly for rubbish (red bin) and four-weekly for mixed recyclables (yellow bin) and four-weekly collection of glass recyclables (blue bin).

Option 2 WEEK

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

Impact No change to level of service.

Likely to result in continued increased volumes of material going to landfill.

Cost: no cost change.

Which option do you support?

Option 1 with more frequent yellow bin collection or Option 2 status quo

23

OTHER ISSUES

The following pages outline matters that are either in motion or on the horizon. We will be coming back to you to talk about these in more detail at a future date.

24

OTHER ISSUES

AFFORDABLE HOUSING NEEDS ASSESSMENT

In October 2017 an Affordable Housing Trust for Central Otago was established.

This was in response to the strong call from the public during the 2016 local body election campaign for Council to do something about the perceived lack of affordable housing in Central Otago.

Council proposes to make a grant of $50,000 to the Affordable Housing Trust in Year 1 of the 10-Year Plan to fund a Housing Needs Assessment.

This assessment would evaluate the affordability of rentals and houses in our district, particularly for low-income households; measuring this against the government’s indicator based on the proportion of households spending more than 30 percent of their disposable income on housing.

Should the assessment determine Central Otago currently has an affordability issue, or is likely to in the near future, Council will need to decide how it might address the issue and consult with its community through a future annual plan process.

CENTRAL STORIES – ALEXANDRA LIBRARY

In June 2017 the ownership of the Central Stories building was transferred to Council.

This presented an opportunity to assess options for the future development of the building. A feasibility study is being undertaken to review options for current and future use of the Central Stories building. It will also review the potential relocation of the Alexandra Library to the Central Stories building.

Such a move would not happen without further consultation with the community. Consideration is also being given to utilise some of the space in Central Stories Building to display the Eden Hore collection owned by Council.

The Central Stories building currently houses Council’s i-SITE, the Central Stories Art Gallery and Museum, Central Cinema, a meeting room and public toilets. The intention of the feasibility study is to capture the current services, and the views of customer/user groups and stakeholders. The study will then explore potential options that may form the basis for wider public consultation.

There was $300,000 budgeted in the 2016/2017 financial year for the refurbishment of the Alexandra Library. This refurbishment has been put on hold pending the outcome of the feasibility study and any subsequent consultation.

However, a portion of this budget has been reallocated to fund the feasibility study and redevelopment planning, and the remaining $250,000 has been carried forward.

Further budget requirements will become clear after the feasibility study and subsequent consultation are complete.

GREENWASTE

Council is proposing in its draft Waste Minimisation and Management Plan to reduce charges for greenwaste disposal at transfer stations.

There would be no charge for a carload of greenwaste. The cost of a trailer load or ute would be $5, regardless of the volume on the trailer. A truck-load of greenwaste would be $5/m3. This is approximately half the current cost.

25

OTHER ISSUES

DEVELOPMENT AT CROMWELL TOWN CENTRE

Work has been ongoing for a number of years on the staged redevelopment of the Cromwell Town Centre, with the completion of the Big Fruit Reserve the most recent space rejuvenated.

The 2018-28 draft 10-Year Plan includes: $130,000 in 2018/19 to fund additional concept design work and full detailed design and specifications for construction of the next stage planned for 2019/20. $1,800,000 in Year 2 and 3 of the plan (2019-21) for redevelopment construction work in the Mall centre and in front of the library. $509,000 in Year 4 and 5 of the plan (2021-23) for redevelopment of the Waenga Drive car park area beside the medical centre.

All funding estimates are based on concept plans and are indicative only. More accurate estimates will be available once detailed designs are complete.

CROMWELL MEMORIAL HALL

Following community consultation, the refurbishment of the Cromwell Memorial Hall was due for completion in 2018/19. This was included in the 2015/25 10-Year Plan and revised in the 2016/17 and 2017/18 Annual Plans. In November 2016 the Cromwell Community Board, having previously declined tenders received for the project, opted not to proceed with the refurbishment but instead investigating options for redevelopment. Once the Board identifies its preferred options, further community consultation will occur.

Due to these developments, capital expenditure and associated grant funding revenue for the refurbishment of the Cromwell Memorial Hall have been removed from this 10-Year Plan as there is currently no defined project to include in the plan timeframe.

The Memorial Hall will be routinely maintained to enable existing groups and users to continue to use the Hall. At its December 2017 meeting the Cromwell Community Board resolved to have a seismic structural assessment of the Hall carried out and is awaiting the report so it can consider any actions that may be required.

Expenditure for routine maintenance on the Hall has been allowed for within current budgets provided within this 10-Year Plan.

OMAKAU COMMUNITY FACILITY

Feedback from the Omakau community tells us that they would like to replace their aging community facilities with a newly built multi-use building in the Domain.

The existing community facilities – the Omakau Memorial Hall and Rugby Clubrooms – are in need of significant expenditure (both in redevelopment and ongoing maintenance). A new build of a single facility will be more cost effective over the life span of the facility, and will bring together community activities.

Consideration needs to be given to how a new facility may be funded.

Preliminary estimates suggest the new facility will cost up to $3 million to build. The community will need to look to funding agencies, including the Vincent Community Board, to source this funding. A feasibility study is currently investigating the costs and management structure for such a facility. Until these are confirmed, no costs have been allowed for in this 10-Year Plan.

26

OTHER ISSUES

COUNCIL’S ELDERLY PERSONS' HOUSING UNITS

Council has set new eligibility criteria for its units (listed below in priority order), which will take effect on 1 July 2018 for all new tenants. This will not affect current tenants of Council’s elderly persons’ housing units.

1. Aged over 65 with a Community Services Card.

2. Aged 60 plus with Community Services Card, where long-standing vacancies exist.

3. Aged 60 - 64 plus with no Community Services card.

4. Aged under 60 with clear social need, where there are long standing vacancies (CEO discretion).

Council has also agreed not to fund depreciation on the structure and roof of the units (approx. $90,000 per annum). Council will use the savings from this decision to allow for additional costs for upgrading projects such as double glazing. Council will continue to fund depreciation on internal replacement fit outs such as ovens, heaters, carpet and vinyl.

KERBSIDE COLLECTION AREAS FOR RURAL RESIDENTS

There has been increasing calls from rural residents for Council collection services. Council is proposing in its Draft Waste Minimisation and Management Plan to introduce a voluntary (opt in) kerbside collection service (three bins) to rural properties that are close to the current wheelie bin collection routes within the Central Otago district.

DEVELOPMENT CONTRIBUTIONS POLICY

Council has a Development and Financial Contributions Policy that is reviewed every three years. Development Contributions pay for the growth-related costs of new development. These are charged to developers and property owners undertaking work as part of Resource Consents or Building Consents, or at service connection.

The level of Developer Contributions charged is set by Council. It is calculated to fairly distribute the costs of new or upgraded assets, split between developers and ratepayers. The proposed Development Contributions Policy can be found in the supporting information available on our website or on request.

The key changes are: Replacement of financial contributions with development contributions for Patearoa water, Lowburn-Pisa Moorings sewer and Bannockburn sewer as required by the Resource Management Amendment Act. Development contributions for urban Cromwell and outer Cromwell are to be merged into a single area.

Alexandra wastewater contributing area to include the Clyde area.

Development contribution funding caps that applied to some schemes have been removed so that 100% of the growth-related costs will be funded by development. This policy change is in response to investment in renewals and improvements being funded from across the whole district.

27

OTHER ISSUES

OMAKAU WATER SUPPLY UPGRADE

Council has been investigating options for a new water source for Omakau. This has included bores beside the Manuherikia River, and groundwater bores near Thompsons Gorge and Mawhinney Road. Bore testing has been undertaken on all of these sites, and the Mawhinney Road site has been identified as the most cost-effective source. This will provide a high quality water source for Omakau and Ophir that is not affected by adverse weather events.

These investigations have taken time, and further bore testing and a resource consent will need to be obtained before construction can start.

In the interim a portable water treatment plant, which is housed in shipping containers, will be put in Omakau in April 2018 to treat the existing water supply. This will remain in place until the new supply is connected. This will clean and treat water from the Manuherikia River, which will remove the need for boil water notices when the river is dirty.

28

FUNDING OUR FUTURE

FUNDING OUR FUTURE | OUR FINANCIAL STRATEGY AT A GLANCE One of the biggest challenges a council faces is balancing its community’s ability to pay with the need to maintain infrastructure and deliver services. The desired outcome of the Financial Strategy is that Central Otago District Council’s asset base and operational expenditure are managed in a cost-effective way and continue to be funded in a manner that is sustainable for the Council and our communities.

In general, operating costs are funded by rates, user fees or subsidies. Capital expenditure for growth is funded through developers’ contributions, renewals through rate-funded depreciation and increases in the level of service provided, such as Clyde Wastewater scheme and increased water treatment, are loan funded (internally or externally).

OPERATING INCOME 2018/19

TOTAL REVENUE

$55 MILLION

Subsidies and Grants 10%

Interest 1%

Developers' Contributions 4%

in the 2018/19 Financial Year including

User fees 17%

Rates 68%

TOTAL RATES INCOME

$28 MILLION

in the 2018/19 Financial Year

Council has a number of income sources. Of Council’s total income, 85% comes from rates and user fees. Subsidies and grants mainly relate to roading subsidies where the government contributes 51% towards the majority of the costs of Council’s roading network. Developers’ contributions help pay for the growth portion of new and existing assets that require additional capacity to cater for growth. Operating income does not include property sales.

OPERATING EXPENDITURE TOTAL OPERATING EXPENDITURE

$42 MILLION

in the 2018/19 Financial Year TOTAL CAPITAL EXPENDITURE

$21 MILLION

in the 2018/19 Financial Year

0%

Stormwater Service Centres and Libraries Governance and Corporate Services Regional Identity, Tourism and Economic Development Planning, Regulatory and Community Development Property and Community Halls Environmental Services Wastewater Water Pools, Parks and Cemeteries Roading 5%

10%

15%

20%

25%

30%

Operating expenditure is predominantly spent on roading at 22% with most other activities around 7% to 13%.

29

FUNDING OUR FUTURE

FINANCIAL BENCHMARKS

Council has a number of financial benchmarks set out in the Financial Strategy. When developing this 10-Year Plan, affordability was a key consideration. The following benchmarks allow Council to assess the 10-Year Plan against what is considered sustainable for our community.

BALANCED BUDGET

A balanced budget is achieved when total revenue (less revaluations, developers’ contributions and vested assets) is greater than operating expenditure. This plan has a balanced budget for each of the 10 years of this plan.

Revenue/operating expenditure (%)

BALANCED BUDGET BENCHMARK 140 120 100

127

121

111

104

106

106

105

105

105

21/22

22/23

23/24

24/25

25/26

106

106

80 60 40 20 -

17/18

18/19

19/20

20/21

Benchmark met

Year

26/27

27/28

Benchmark not met

DEBT SERVICING LIMIT

A limit on debt servicing costs has been set at 10% of total revenue less revaluations, developers’ contributions and vested assets.

As the plan has sufficient cash reserves to internally fund any projects that need to be loan funded, this 10-Year Plan has no external debt and as such the Plan will not exceed the 10% of net revenue benchmark.

RESPONDING TO GROWTH

The district is experiencing strong growth particularly around the areas of Cromwell and Alexandra. The Central Otago District Council has a special role to work with the community to ensure we manage the shape of that growth so it meets the needs of the people that live here now and in the future.

Council’s planning and building control staff are processing unprecedented numbers of applications for resource and building consents and also receiving plan change requests and enquiries for rezoning of land. In Alexandra the Council has released reserve land back to the Crown to enable development, and the Vincent Community Board will be undertaking a subdivision development of its freehold land. To assist in meeting demand in Cromwell, the Cromwell Community Board is freeing up land for residential and industrial development. The Board is also embarking on a masterplan project for the wider Cromwell area that will address its growth. The plan will include three waters planning, transport planning and produce a spatial framework that addresses zoning and urban development.

Council is also in the process of reviewing its District Plan. The plan review will look at all matters required under the Resource Management Act, with a particular emphasis on ensuring sufficient land is zoned for residential, commercial and industrial purposes for the next 10-20 years.

30

FUNDING OUR FUTURE

RATE INCREASES

Rate increases are less than the 5% cap set in the Financial Strategy. The Plan remains under the cap but in Years 2 and 3 the rate increases reflect the large investment in the Clyde Wastewater and Lake Dunstan Water Supply projects. The projects will be loan funded, however rates will need to increase to pay for the loan repayments. The planned rate increase of the first year of the Plan is 2.7% after allowing for 0.8% of growth.

RATE INCREASE 5.0% 0.0%

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Rate Increases

Year 7

Year 8

Year 9

Year 10

Limit

RATES AFFORDABILITY The following graph compares the Council’s planned rates with a quantified limit on rates contained in the financial strategy included in this 10-Year Plan. Nationally a benchmark limit is set where rates income should not exceed 80% of total revenue. In each of the 10 years of this Plan rates are less than 80% of the benchmark limit.

RATES (INCOME) AFFORDABILITY

$000's

50,000 45,000

40,000 35,000

30,000 25,000

Year 1

Year 2

Year 3

Year 4

QUANTIFIED LIMIT ON RATES INCOME

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

PROPOSED RATES INCOME (AT OR WITHIN LIMIT)

31

FUNDING OUR FUTURE

CAPITAL PROJECTS

Council has planned for just under $160 million of capital projects over the 10-Year Plan. There are a number of drivers for this expenditure. Over the next 30 years Council has more than $285 million worth of replacement expenditure as assets reach the end of their useful life. This renewal of assets is the main reason for the capital project expenditure.

The other two components that make up the capital project expenditure is growth and increased levels of service. For certain projects additional capacity is built in to the project to accommodate future growth. An example of this is a scheme that requires a pipe with a diameter of 300mm to service current users but a 350mm pipe is required to cater for future growth. The difference in cost between installing a 300mm pipe and a 350mm pipe is termed growth.

The main projects that are contributing to improved level of service are Clyde Wastewater (new scheme), Lake Dunstan Water Supply treatment (improved treatment standards), Cromwell Wastewater Upgrade (improved discharge quality) and roading improvements (improved network).

CAPITAL PROJECTS Growth - 15% TOTAL CAPITAL EXPENDITURE

$160 MILLION Over the next 10 years

Renewal 58%

Improved Level of Service - 27%

Council faces a number of challenges over the next 10 years. We are currently experiencing strong growth, facing the likelihood of increased drinking water standards and higher compliance levels for wastewater discharge. This has meant Council has reconsidered the timing of some of our larger projects. Lake Dunstan Water Supply was part of the last 10-Year Plan. However, stage one of Clyde Wastewater ($11.7 million) has been brought forward to meet increasing concerns of the sustainability of Clyde being on septic tanks.

32

FUNDING OUR FUTURE

TOTAL CAPITAL EXPENDITURE

$Millions 30.0 25.0 20.0 15.0 10.0 5.0 -

2015/16

2016/17

2017/18

2018/19

2019/20

2020/21

2021/22

CAPEX 10-YEAR PLAN 2015-2025

2022/23 2023/24

2024/25

2025/26

2026/27 2027/28

CAPEX 10-YEAR PLAN 2018-2028

A comparison of capital expenditure projected in the 10-Year Plan 2015-2025 and this 10-Year Plan 2018-2028 shows the total forecast spend over the 10-year period is similar. In this 10-Year Plan some larger projects have been moved forward to years 1 to 3 (2018/19 – 2020/21), the most significant being the Clyde Wastewater scheme.

After taking into account the growth in the district, rates are planned to increase annually between 0.8% and 4.2%. There are several factors that are pushing rates up.

The Clyde Wastewater scheme is new for the district. If Council’s preferred option is adopted, the burden of this scheme will mainly fall on the Clyde residents by way of a one-off connection fee of $10,000 per property. Some of the cost will however be shared across the district by all properties paying wastewater charges. The plan includes an increase to wastewater rates of $56 if the Council’s preferred option is adopted.

RATES INCREASES

0.8% TO 4.2%

Improved treatment of water has been prompted by contamination of Havelock North’s water scheme where a large number became unwell through drinking unsanitary water. Improvements to water treatment will see additional expenditure of $2.8 million in today’s dollars above normal renewal and maintenance expenditure. A further $6.5 million of expenditure is planned over the next five years for improvements in Patearoa, Ranfurly and Cromwell.

Over the next 10 years

INFLATION

Inflation reflects erosion in the buying power of money. Each dollar buys less and less goods and services over time. Depreciation, staff costs and some expenditure items have inflation applied from Year 1 of the Plan. The majority of the balance of the expenditure forecasts for each activity are input in the dollars of the relevant year for the first three years (eg. water and wastewater renewals and other operational expenditure lines such as maintenance contracts). Where cost change has been applied for these years, Council has used the BERL indices shown below. For all years from 2022 to 2028 the BERL indices shown below have also been applied.

Inflation Adjustment Range

Year 1 2018/19

Year 2 2019/20

Year 3 2020/21

Year 4 2021/22

Year 5 2022/23

Year 6 2023/24

Year 7 2024/25

Year 8 2025/26

Year 9 2026/27

Year 10 2027/28

1.6% to 2.3%

1.6% to 2.5%

1.7% to 2.3%

1.8% to 2.4%

1.8% to 2.4%

1.9% to 2.5%

1.9% to 2.6%

2% to 2.6%

2% to 2.7%

2.1% to 2.8% 33

RATING EXAMPLES

RATING EXAMPLES

34

Capital Value

2017/18 Rates

2018/19 Rates

Change $

Change %

3,954.91

166.65

4%

485,000

2,080,000

5,274.51

5,556.41

281.90

5%

Alexandra Lifestyle Block

305,000

600,000

1,386.77

1,389.64

2.87

0%

Alexandra Major Motel

610,000

3,700,000

14,359.75

14,595.96

236.21

2%

Alexandra Motel

190,000

580,000

3,497.25

3,656.62

159.37

5%

Alexandra Residential

141,000

315,000

2,229.57

2,289.50

59.93

3%

Bannockburn Hotel

400,000

890,000

3,435.36

3,627.87

192.51

6%

Bannockburn Vineyard

860,000

2,080,000

2,673.25

2,770.57

97.32

4%

Clyde Commercial

240,000

1,050,000

3,269.15

3,444.24

175.09

5%

Clyde Motel

280,000

1,030,000

3,653.88

3,779.23

125.35

3%

Clyde Residence

119,000

350,000

1,714.41

1,795.63

81.22

5%

Cromwell Orchard

620,000

860,000

2,560.75

2,524.73

-36.02

-1%

Cromwell Commercial

510,000

730,000

3,356.56

3,514.58

158.02

5%

Cromwell Farm

7,950,000

9,260,000

13,554.81

13,583.77

28.96

0%

Cromwell Large Farm

6,800,000

8,300,000

11,887.76

11,940.00

52.24

0%

Cromwell Lifestyle Block

360,000

800,000

1,535.51

1,591.55

56.04

4%

Cromwell Major Hotel

1,860,000

7,750,000

23,069.31

24,798.08

1,728.77

7%

Cromwell Motel

800,000

2,240,000

8,751.27

9,302.94

551.67

6%

Cromwell Residence

200,000

405,000

2,353.35

2,437.17

83.82

4%

Cromwell Storage

970,000

3,650,000

7,385.61

8,000.25

614.64

8%

Earnscleugh Lifestyle Block

210,000

490,000

1,218.49

1,238.90

20.41

2%

Earnscleugh Orchard

340,000

1,230,000

1,719.01

1,759.12

40.11

2%

Earnscleugh Vineyard

520,000

1,710,000

2,154.65

2,189.38

34.73

2%

Maniototo Farm

1,430,000

1,750,000

3,143.81

3,216.33

72.52

2%

Maniototo Large Farm

16,100,000

18,400,000

26,594.42

26,935.78

341.36

1%

Maniototo Lifestyle Block

103,000

255,000

1,027.79

1,076.67

48.88

5%

Maniototo Rural - Hotel

109,000

600,000

1,624.34

1,760.35

136.01

8%

Manuherikia Farm

4,080,000

4,600,000

7,650.07

7,181.79

-468.28

-6%

Manuherikia Large Farm

11,200,000

12,800,000

19,784.59

18,455.51

-1,329.08

-7%

Manuherikia Lifestyle Block

80,000

190,000

925.91

953.02

27.11

3%

Millers Flat Residence

35,000

200,000

1,063.34

1,128.86

65.52

6%

Naseby Residence

68,000

210,000

2,136.83

2,223.86

87.03

4%

Omakau Hotel

160,000

700,000

5,945.75

6,243.16

297.41

5%

Omakau Residence

52,000

275,000

2,103.22

2,180.24

77.02

4%

Property Description

Land Value

Alexandra Commercial

106,000

Alexandra Hotel

410,000

3,788.26

RATING EXAMPLES

Ophir Commercial

95,000

1,380,000

3,488.46

3,833.86

345.40

10%

Ophir Residence

72,000

215,000

1,543.81

1,587.68

43.87

3%

Patearoa Residence

44,000

170,000

1,292.75

1,301.67

8.92

1%

Pisa Moorings Residential

190,000

600,000

2,081.64

2,217.53

135.89

7%

Ranfurly - Hotel

72,000

310,000

3,091.52

3,249.48

157.96

5%

Ranfurly Commercial Property

18,000

170,000

2,178.19

2,283.07

104.88

5%

Ranfurly Residence

41,000

160,000

2,082.69

2,167.80

85.11

4%

Roxburgh - Commercial

70,000

205,000

2,140.20

2,212.25

72.05

3%

Roxburgh - Hotel

76,000

275,000

2,223.57

2,307.32

83.75

4%

Teviot Valley Orchard

121,000

252,000

1,530.46

1,553.26

22.80

1%

Teviot Valley Farm

2,690,000

3,280,000

4,944.36

4,957.68

13.32

0%

Teviot Valley Large Farm

12,300,000

14,000,000

19,707.77

19,695.89

-11.88

-0%

Roxburgh Residence

52,000

215,000

2,002.00

2,054.06

52.06

3%

Teviot Valley Rural Industry

160,000

1,420,000

2,658.96

2,948.20

289.24

11%

To get an estimate for your rates for Year 1 of our 10-Year Plan, you can input your property address into our handy rates calculator tool on our website at www.codc.govt.nz/10for10.

35

Independent auditor’s report on Central Otago District Council’s Consultation Document for its proposed 2018-28 Long-Term Plan

I am the Auditor-General’s appointed auditor for Central Otago District Council (the Council). Section 93C of the Local Government Act 2002 (the Act) requires an audit report on the Council’s consultation document. We have done the work for this report using the staff and resources of Audit New Zealand. We completed our report on 23 March 2018.

Opinion In my opinion: •

the consultation document provides an effective basis for public participation in the Council’s decisions about the proposed content of its 2018-28 long-term plan, because it: 



•

fairly represents the matters proposed for inclusion in the long-term plan; and identifies and explains the main issues and choices facing the Council and district, and the consequences of those choices; and

the information and assumptions underlying the information in the consultation document are reasonable.

Basis of opinion We carried out our work in accordance with the International Standard on Assurance Engagements (New Zealand) 3000 (Revised): Assurance Engagements Other Than Audits or Reviews of Historical Financial Information. In meeting the requirements of this standard, we took into account particular elements of the Auditor-General’s Auditing Standards and the International Standard on Assurance Engagements 3400: The Examination of Prospective Financial Information that were consistent with those requirements.

We assessed the evidence the Council has to support the information and disclosures in the consultation document. To select appropriate procedures, we assessed the risk of material misstatement and the Council’s systems and processes applying to the preparation of the consultation document.

We did not evaluate the security and controls over the publication of the consultation document.

36

Responsibilities of the Council and auditor The Council is responsible for: •

meeting all legal requirements relating to its procedures, decisions, consultation, disclosures, and other actions associated with preparing and publishing the consultation document and long-term plan, whether in printed or electronic form;

•

having systems and processes in place to provide the supporting information and analysis the Council needs to be able to prepare a consultation document and long-term plan that meet the purposes set out in the Act; and

•

ensuring that any forecast financial information being presented has been prepared in accordance with generally accepted accounting practice in New Zealand.

I am responsible for reporting on the consultation document, as required by section 93C of the Act. I do not express an opinion on the merits of any policy content of the consultation document.

Independence In carrying out our work, we complied with the Auditor-General’s: •

independence and other ethical requirements, which incorporate the independence and ethical requirements of Professional and Ethical Standard 1 (Revised); and

•

quality control requirements, which incorporate the quality control requirements of Professional and Ethical Standard 3 (Amended).

Other than our work in carrying out all legally required external audits, we have no relationship with or interests in the Council.

Scott Tobin Audit New Zealand On behalf of the Auditor-General Dunedin, New Zealand

37

WE WANT TO HEAR FROM YOU

Please read this document and the relevant supporting information before giving us feedback.

Remember this is about all our futures, where we are heading and the big decisions to get us there. It’s about getting your input into the decisionmaking on some big-ticket infrastructure items we face. It isn’t about the small stuff like needing a new wheelie bin or a problem with overhanging trees. If you are experiencing any problems like these, just give us a call on 03 440 0056 or complete a “Request for Service” form on Council’s website.

To make a submission you can tick the boxes outlining which option you support for each of the big issues. Feel free to include any other comments in the spaces provided.

You can also give us feedback about any of the other topics included in the document and the supporting information. See over the page for 'How to have your say'.

WHERE TO GET MORE INFORMATION

More information (see list below) is available on our website at

www.codc.govt.nz/10for10

Copies of all information are also available from Council’s main office in Alexandra and our service centres in Cromwell, Ranfurly and Roxburgh.

If you can’t make it in to a service centre but would like copies of any supporting information please phone us to request this on 03 440 0056.

SUPPORTING INFORMATION

•Financial Strategy •Infrastructure Strategy •Community Outcomes •Development Contributions Policy •Revenue and Financing Policy •Significance and Engagement Policy •Rating Information •Financial Statements •Significant Forecasting Assumptions •Capital Expenditure for activity groups •Funding Impact Statements There will be opportunities throughout the consultation period for you to engage with staff and Elected Members about 10-Year Plan topics and ask questions. We will promote these on our website, Council's Facebook page, the CODC Noticeboard (page 5 of The News).

We need your feedback before submissions close at

5pm on Monday 30 April

38

HOW TO HAVE YOUR SAY www.codc.govt.nz/10for10

Go to and follow the link to make an online submission.

Hard copies of submission forms for those without online access are available at our service centres.

What happens to your Feedback All submissions are given due consideration and everyone has the opportunity to make their submission personally if they want to.

If you want to make your submission personally to the Council at a special meeting to consider community feedback, let us know by ticking the ‘yes’ box on the submission form. We’ll get back to you with a date and time and other details.

Please note all submissions (including personal details of submitters) are public documents.

If you have 10-Year Plan related questions you can address them to your Mayor or local Councillor. Their details are listed below.

Mayor Tim Cadogan 021 639 625

Stephen Jeffery Teviot Valley 027 220 6080

Deputy Mayor Neil Gillespie Cromwell 027 433 4856 03 445 0669

Nigel McKinlay Cromwell 027 474 1961

Victoria Bonham Earnscleugh / Manuherikia 027 509 8041

Martin McPherson Alexandra 021 879 849

Shirley Calvert Cromwell 021 252 6916

Malcolm Topliss Earnscleugh / Manuherikia 027 475 8790

Lynley Claridge Alexandra 027 289 1551 03 448 6942

Barrie Wills Alexandra 021 138 1988

Stuart Duncan Maniototo 021 224 2320

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1 Dunorling Street, PO Box 122, Alexandra 03 440 0056 | info@codc.govt.nz | www.codc.govt.nz 40