Napier City Council Annual Plan 2013/2014

ISSN 1173–4477(print) ISSN 1177–9896 (online)

Adopted 19 June 2013

Prepared in accordance with the requirements of the Local Government Act 2002 Hastings Street Private Bag 6010, Napier 4142 Telephone: (06) 835 7579 Fax: (06) 835 7574

Photographs: www.abovehawkesbay.co.nz

Contents Mayor and Councillors..........................................................................................................................2 Mayor's Message...................................................................................................................................3 Consultation Process............................................................................................................................4 Annual Plan - Responding to Napier's Changing Needs.......................................................................... 5 Strategic Priorities.................................................................................................................................8 Regional Collaboration and Shared Services........................................................................................ 11 Financial Performance Measures.........................................................................................................12 Significance Policy..............................................................................................................................13

FINANCIAL INFORMATION..................................................................................................................................17 Statement of Accounting Policies........................................................................................................18 Significant Forecasting Assumptions...................................................................................................28 Prospective Statement of Comprehensive Income................................................................................ 38 Prospective Statement of Income........................................................................................................39 Prospective Statement of Changes in Equity........................................................................................ 40 Prospective Statement of Financial Position......................................................................................... 41 Prospective Statement of Cash Flows..................................................................................................42 Notes of Changes Between the 2013/14 Ten Year Plan and 2013/14 Annual Plan...............................43 Special Funds......................................................................................................................................48 Borrowing Programme........................................................................................................................52 Prospective Capital Plan......................................................................................................................53 Funding Impact Statement..................................................................................................................65

ACTIVITY GROUPS..................................................................................................................................................75 Democracy and Governance................................................................................................................76 Roading.............................................................................................................................................. 78 Solid Waste.........................................................................................................................................81 Stormwater.........................................................................................................................................84 Sewerage............................................................................................................................................ 87 Water Supply.......................................................................................................................................90 Recreation..........................................................................................................................................93 Social and Cultural..............................................................................................................................98 City Promotion..................................................................................................................................106 Planning and Regulatory...................................................................................................................110 Property Assets.................................................................................................................................115 Support Units....................................................................................................................................118 Glossary of Terms.............................................................................................................................119

Napier City Council Annual Plan 2013/14

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Mayor and Councillors Mayor

MISSION STATEMENT To provide the Facilities and Services and the Environment, Leadership, Encouragement and Economic Opportunity TO MAKE NAPIER THE BEST CITY IN NEW ZEALAND in which to live, work, raise a family, and enjoy a safe and satisfying life.

Barbara Arnott

Councillors

Maxine Boag

John Cocking

Bill Dalton JP

(Nelson Park Ward)

Tony Jeffery JP

Michelle Pyke

Kathie Furlong (Deputy Mayor)

Rob Lutter

Dave Pipe

(Taradale Ward)

(Nelson Park Ward)

Faye White

Tania Wright JP

Mark Herbert (Ahuriri Ward)

Keith Price (Onekawa - Tamatea Ward)

(Taradale Ward)

Napier City Wards: AHURIRI WARD, TARADALE WARD, NELSON PARK WARD, ONEKAWA-TAMATEA WARD

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Napier City Council Annual Plan 2013/14

Mayor's Message Our Annual Plan details what we are proposing in the 2013/14 financial year and what variations are planned to the Ten Year Plan adopted by the city in 2012.

We are pleased that we can add such value to the city over this next year and for our future and level rates at a low 1.2%. Our city’s prosperity and lifestyle, great facilities and lovely parks and gardens are only possible because we all work together. You have expectations of what you want in the city, your streets and neighbourhoods, the Council aims to achieve that with vision, sensible spending and fairness.

Insurance is the biggest cost increase and in this the Council is no different to all commercial property owners struggling with increased charges from insurance companies. We spend over $2million on insurance, a whopping amount to go out year after year.

Most new capital projects (art centre, bus depot, Marine Parade) are funded from Parklands development rather than rates. Our infrastructure construction, maintenance and operating costs are rate funded. We strike an excellent balance between funding from rates and funding from other sources – it makes our city affordable.

The consultation process has confirmed that the intercity bus depot will be sited at Clive Square West and funded by ratepayers. A one-off grant of $10,000 will be made to the Taradale Marketing Association.

Council will allocate funding up to $50,000 per annum for three years to market Pukemokimoki Marae to achieve better utilization of the facility.

Our rates increase remains at 1.2%.

My appreciation to all submitters to the Annual Plan.

Congratulations and thanks to everyone for making Napier a fabulous place to work and live.

Barbara Arnott MAYOR

Napier City Council Annual Plan 2013/14

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Consultation Process Explaining the Plan This Annual Plan 2013/14 has been prepared in accordance with the Local Government Act 2002. Its purpose is to identify any variations from the Ten Year Plan (TYP) for the coming financial year.

Information contained in the Plan includes:

The proposed Annual Budget and Funding Impact Statement for 2013/14.

Variations from the Financial Statements and Funding Impact Statement included in the TYP related to 2013/14.

Performance Targets for Council Activities for 2013/14.

This Annual Plan must be read in conjunction with the 2012/13 to 2021/22 TYP. Copies of this document are available from the Napier City Council Civic Building and Council’s website www.napier.govt.nz.

Annual Plan Consultation Process The following consultation process was carried out for the Annual Plan:

Draft Annual Plan adopted by Council on Wednesday 3 April 2013

Draft Annual Plan available for the public on Monday 8 April 2013 from Napier City Council Civic Building

Draft Annual Plan Summary Proudly Napier distributed to households on Wednesday 10 April 2013.

An invitation was extended to any groups of citizens or individual citizens who wished to meet with the members of Council to discuss issues contained in the Draft Annual Plan.

Submissions closed NOON Friday 10 May 2013

LTCCP and Annual Plan Committee Meeting heard and considered submissions Thursday 6 June 2013.

Annual Plan adopted by Council on Wednesday 19 June 2013.

Changes from the Draft Annual Plan The consultation process has resulted in one change that will increase rates revenue required

Pukemokimoki Marae. Council will allocate $50,000 pa for up to three years funded from rates to assist with the marketing of the Marae to achieve better utilisation of the facility. The aim is that the marketing programme will enable self funding within the three years.

The rates increase remains at the proposed 1.2%.

The project to convert the Old Council Chambers as an Art Centre Building included in the capital plan has been further developed. The plan also now includes anticipated grants of $350,000 to offset the costs of the building development.

Other decisions from the consultation that do not impact the Annual Plan are as follows:

Taradale Marketing Association. A one off grant of $10,000 will be made to the Taradale Marketing Association.

Surf Life Saving. A one off grant of $5,500 will be made to Surf Life Saving Hawke’s Bay for extended life guard services at Westshore and Marine Parade for the 2013/14 summer season.

Art Deco Trust. A one off grant of $25,000 will be made to the Art Deco Trust for the Ambassador Programme.

All three items above will be funded from the 2012/13 year.

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Napier City Council Annual Plan 2013/14

Annual Plan - Responding to Napier's Changing Needs The Annual Plan gives shape to the changing dynamics of our city, outlining the Napier City Council’s spending programme for the coming year and beyond.

This, the 2013/14 Annual Plan, considers “housekeeping” needs, addresses infrastructural maintenance and improvements and looks to big picture developments aimed at progressing the city and making Napier a better place for all.

Parklands development helps fund most new capital undertakings – such as an intercity bus depot and Marine Parade developments. Rates fund infrastructure construction, maintenance and operating costs.

The biggest cost increase facing the Council is insurance, which has gone up significantly following the Christchurch earthquake. Despite this, the rates increase for existing ratepayers, the coming year is a modest 1.2 percent.

As indicated in the Ten Year Plan the advanced waste water treatment levy will be discontinued from 1 July 2013. It was signalled in the Ten Year Plan that despite delays to the project funding for the household demand for this project has been fully met. The original project plan forecast funding to be a combination of advanced wastewater levy and $7 million loan for the residential share of this project. As advised in the Ten Year Plan this loan is not required. Funding for commercial and industrial use of the facility remains unchanged from the original plan.

In the Ten Year Plan, commencing in 2013/14, a sum of $508,000 per year was added to ensure funding is available for wastewater outfall replacement when it is required. This is forecast to fall outside the Ten Year Plan period.

Below is a summary of variations from the Ten Year Plan signed off by the Napier community last year. Significant new projects include:

Proposed Bus Depot The Napier City Council is working with stakeholders in considering possible solutions to meet the need for a new intercity bus depot in Napier. Developing the Council’s preferred site, on the south side of Carlyle Street between Tennyson Street and Clive Square West, would cost an estimated $460,000. The proposal encompasses covered shelter with seating, toilet facilities and capacity for five buses on site.

Council has unsuccessfully canvassed commercial bus companies for contributions to the cost of this facility. Consequently this remains a rate payer funded facility in this plan.

Marine Parade Development The initial projects in the further development of Napier’s landmark coastal strip were outlined in last year’s Annual Plan.

The extension to the May and Peter Harris Playground has been completed and tenders have been called for the landscaping project between the playground and the National Aquarium of New Zealand.

The junior cycle track has been completed and is a popular addition to the Marine Parade facilities.

Following submissions to the Draft Annual Plan development of Sk8zone has been referred back for further consideration.

The Napier City Council is seeking private sector partners to fund aspirational projects to further enhance Marine Parade.

This plan does not include any funding from private sector partners.

Arts Centre Relocated from the corner of Tennyson Street and Herschell Street, the former Borough Council Building is to be redeveloped as a community arts centre. If funding can be secured, the building – registered as a Category II historic place – will be refurbished to become a base for Creative Napier and a venue for exhibitions and community arts programmes. The plan includes funding from the creative sector for part of the cost of this project.

Napier City Council Annual Plan 2013/14

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Annual Plan - Responding to Napier's Changing Needs continued Memorial Square Building Refurbishment Constructed in 1925, the Memorial Square Building is to undergo an internal refurbishment to more fully utilise this community facility. It will continue to provide a meeting room (with kitchen and toilet facilities) for public hire. It will also include accommodation for Community Hub groups, including the Citizen’s Advice Bureau which will provide reception services to the hub. Work is scheduled to start later in 2013 after completion of earthquake strengthening.

McLean Park Lighting Tower Upgrade The three original lighting towers of the six in McLean Park are targeted for structural strengthening work and a repaint to ensure that they too meet updated engineering standards.

Sportsgrounds, Reserves and Green Spaces With Napier being considered as a host city for the 2015 Cricket World Cup, funding of $250,000 has been allocated over two years to ensure our sportsgrounds are looking their best.

While not a new item for this annual plan, our ten-year plan responds to the community’s interest in the provision of more available green spaces in the city and landscape protection for the Western Hills.

Severn Street Water Supply Extension A bigger main is to be installed in the first stage of an upgrade to increase capacity and provide greater resilience in the reticulation supplying water to the Pandora industrial area and beyond.

Once this project is fully completed, it will reduce the impact on all downstream consumers in the Pandora, Ahuriri and Westshore areas should the Pandora trunk main be out of service.

The first stage, from Prebensen Drive to the railway line, is being budgeted for now to ensure the work can be done in conjunction with any road upgrading required to provide for large format retail development that may go ahead in the adjacent area. The balance of the project will be submitted for funding through the Council’s next Ten Year Plan.

Water Supply Control System Upgrade The control system automatically controls the network's pumps, monitors resevoir levels and generates alarms when faults or other unfavourable conditions occur.

Much of the hardware and some of the software will be upgraded progressively over the next two years, ensuring the computerised system complies with current radio licence rules.

Te Awa Structure Plan Stages 1 & 2 Land south of Napier Boy’s High School has been rezoned for residential development. The Council is responding to the need to provide infrastructural services ahead of any start being made on development.

Jervoistown Footpath Improvements Jervoistown’s recent rezoning gives the area its own set of rules designed to protect its rural character and deter urban development. This District Plan change was sought by residents keen to retain the area’s lifestyle aspects. However, independent traffic consultants have identified a need to provide footpaths for safety reasons. A standard 1.5m width footpath will be constructed from the Napier-Hastings Expressway along Burness Road, Jervois Road and Meeanee Road and return to the expressway.

Also identified is a future need to widen the upper Pirimu Stream to provide additional stormwater capacity as development occurs in the area. Developers will be required to meet that cost through financial contributions.

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Napier City Council Annual Plan 2013/14

Annual Plan - Responding to Napier's Changing Needs continued Domett Street Extension Planning and Traffic Reports on future traffic requirements for Ahuriri identified the future need for improved traffic flow in the Ahuriri area. The proposed solution was to build an extension to Domett Street.

To enable Council to proceed with investigation work on this project a budget of $1.4M funded from Financial Contributions has been added to the plan. This is estimated at half the requirement for the project. The balance of the project will be included in the next Ten Year Plan.

West Quay Parking There is an identified need for additional parking at West Quay. Solutions and funding options for this project will be investigated during the next year.

Single Lane West Quay Funding options for this project will be investigated this year. However the project is dependent on the best available solution for West Quay parking issues.

Tourism One of Council’s Strategic Priorities is Napier Tourism. Council have identified a need to structure and implement a campaign for the promotion of Napier. Budget will be available from current year accounts to cover the cost of formulating the campaign and overseeing the implementation until 30 June 2013. The Council intends considering any additional costs for running the campaign after 1 July 2013 being funded from any outturn surplus from the 2012/13 year.

Land Development for Growth Provision for economic development for the future, such as an industrial park.

Napier City Council Annual Plan 2013/14

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Strategic Priorities Napier City Council’s Strategic Plan is represented by the following table. The Strategic Plan was included in the 2012 Ten Year Plan and has been reviewed as part of this budget process.

Rates

Napier citizens will have affordable services and quality infrastructure.

Napier will offer lifestyle opportunities for citizens and visitors.

Essential Services

Quality not quantity Four-laning Prebensen Drive Stormwater upgrades Completion of BTF Wastewater Treatment Plant Pathways

Security & Community

Recreation

Aquatic Centre upgrade Guppy Road Sports Village Park Island Sportsgrounds Master Plan implementation

Marine Parade family friendly upgrades Maraenui upgrade phase 2 Youth programme Support for community initiatives Memorial Square building development

Cultural

Heritage inventory Arts & Cultural policy review HB Museum & Art Gallery completion Cultural precinct Herschell Street Art in public places Community Art Centre

Environment

Tree planting Reducing solid waste to landfill Minimising carbon footprint Education Westshore/Whakarire reprofiling Urban design guide

Growth

Economic Development

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Maintaining affordability Equity Fairness Funding review Fees and charges

Commercial

Napier is a leading commercial and tourist centre.

Hastings Street upgrade - stages 2 & 3 Emerson Street revitalization Heretaunga Plains Urban Development Strategy Implementation Joint District Plan City promotion and marketing

Napier Tourism Napier Life Lagoon Farm Business Park Regional initiatives/Shared Services

Napier City Council Annual Plan 2013/14

Strategic Priorities continued How Our Strategic Plan Links to the Community Outcomes The following table shows the Community Outcomes to which each area of the Napier City Council Strategic Plan contributes (see following page for list of Community Outcomes).

Rates A strong, prosperous and thriving economy.

Strong leadership.

Napier citizens will have affordable services and quality infrastructure.

Essential Services Transport, infrastructure and services that are safe, effective and integrated.

Security and Community Safe and secure communities.

A lifetime of good health and wellbeing.

Supportive, caring and inclusive communities.

Recreation Safe and accessible recreational facilities.

An environment that is appreciated, protected and sustained for future generations.

Napier will offer lifestyle opportunities for citizens and visitors.

Cultural Communities that value and promote their unique culture and heritage.

An environment that is appreciated, protected and sustained for future generations.

Environment Communities that value and promote their unique culture and heritage.

An environment that is appreciated, protected and sustained for future generations.

Safe and accessible recreational facilities.

Commercial A strong, prosperous and thriving economy.

Communities that value and promote their unique culture and heritage.

An environment that is appreciated, protected and sustained for future generations.

Napier is a leading commercial and tourist centre.

Growth A strong, prosperous and thriving economy.

Transport, infrastructure and services that are safe, effective and integrated.

An environment that is appreciated, protected and sustained for future generations.

Economic Development A strong, prosperous and thriving economy.

Communities that value and promote their unique culture and heritage.

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Strategic Priorities continued The Community's Desired Outcomes The Community Outcomes were originally determined from an extensive consultation process with the community in 2003/04, which included telephone surveys, district meetings with key stakeholders, mail outs, media campaigns and interviews. The outcomes that have been developed represent the views of individuals and organisations on the important ingredients for the future economic, social, cultural and environmental wellbeing of the region. Council reviewed and confirmed the Community Outcomes as part of the planning process for this Annual Plan.

Napier City Community Outcomes

Indicator

••A lifetime of good health and wellbeing.

Health

••Safe and secure communities.

Safety

••An environment that is appreciated, protected and sustained for future generations.

Sustainability

••Transport infrastructure and services that are safe, effective and integrated.

Transport

••A strong, prosperous and thriving economy.

Economy

••Strong leadership.

Leadership

••Supportive, caring and inclusive communities.

Community

••Safe and accessible recreational facilities.

Recreation

••Communities that value and promote their unique culture and heritage.

Cultural

Community outcomes provide a longer-term perspective on the development of Napier City and provide the Napier City Council with a framework for contributing to these community aspirations through Council activities.

Each of Council’s activities contributes to some or all of the Community Outcomes, thus contributing to the general wellbeing of Napier. The broad scope of the outcomes and their highly integrated nature require a great emphasis on cooperative and collaborative approaches with other organisations in the City and region to address these important community issues. The Napier City Council will continue to work closely with other organisations, as appropriate, in addressing the Community Outcomes.

Where practical collaborative planning, policy, funding and service delivery initiatives are being pursued on an ongoing basis with all local Councils.

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Napier City Council Annual Plan 2013/14

Regional Collaboration and Shared Services Napier City Council and Hastings District Council have for some time been exploring “Shared Services” initiatives. A number of joint activities have already been undertaken by the two authorities with the aim of reducing the cost of performing those activities for the community at large. For example the Councils, along with other Hawke’s Bay Councils, cooperate in the areas of rating valuation services, purchase of insurance, and strategy development such as the Heretaunga Plains Urban Development Strategy (HPUDS). The Heretaunga Plains Urban Development Strategy has been completed with urban containment being a principle philosophy. The Omarunui Landfill is an example where the Councils jointly operate a facility for the benefit of the collective communities, where it is unlikely that one council on its own could achieve such benefits.

Napier City and Hastings District Council consider there is value to be gained by sharing services and for joint procurement, where a business case shows that they provide benefit to the community through improved levels of service, reduced costs, improved efficiency and/or increased value through innovation. The Councils have confirmed their intention to pursue a formal arrangement between the two authorities in a structure that enables other Councils to participate at a later date if they wish. Central Hawke’s Bay District Council, through their Long Term Plan process, have also confirmed their intention to participate. The establishment of Hawke's Bay Local Authority Shared Services, a Council Controlled Organisation is underway.

The table below sets out areas where the five Hawke’s Bay Councils have or are currently working together to provide effective and efficient services to the people of Hawke’s Bay.

Initiatives

Hawke's Bay Regional Council

Wairoa District Council

Napier

Hastings

City Council

District Council

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Hawke's Bay Museum Trust

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Settlement Support Service

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Youth Transition Service

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Central Hawke's Bay District Council

Community Services Pettigrew Green Arena Sport Hawke's Bay

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Shared Library Service Pathway Development

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Regional Cultural Archives

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Road Safety Initiatives

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Joint Property Valuation Contract

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Joint Insurance and Energy Procurement

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Corporate Support

Economic Hawke's Bay Airport Ltd Business Hawke’s Bay

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Tourism Hawke's Bay

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Essential Infrastructure Recreational Water Quality Monitoring Joint Recycling and Refuse Collection Contracts Strategy and Planning Omarunui Joint Landfill Stormwater Drainage

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Regional Transportation Strategy

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Heretaunga Plains Urban Growth

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Napier / Hastings Joint District Plan

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Solid Waste Management Plan

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Regional Community Outcomes

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Community Outcome Monitoring

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Regional Strategic Coordination Group

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Civil Defence Group

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Policy Sharing

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Joint Alcohol Strategy

Napier City Council Annual Plan 2013/14

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Financial Performance Measures Actual 2011/12 ($000) 44,840 18,744 66,898 4,028 32,750 1,375,190 47.3% 0.29% 8.3% -

Rates Revenue Net Surplus Working Capital Net Public Debt (External) Internal Debt Total Assets

Annual Plan 2013/14 ($000)

TYP 2013/14 ($000)

TYP/ AP 2012/13 ($000)

46,134 12,425 12,650 12 53,819 1,375,197

47,273 12,587 10,718 13 56,076 1,460,488

45,466 16,216 24,642 950 44,880 1,379,746

47.9% 0.0%

48.2% 0.0%

46.8% 0.1%

9.2%

10.2%

9.3%

1.2%

3.8%

0.0%

% Rates Revenue to Total Revenue Net Public Debt as a percentage of Total Assets Proportion of Rates Revenue applied to service Total Debt (%) Rates increase to existing ratepayers year on year * * Excludes expected rating revenue increase arising from growth in the rating base. Revenue from rates including growth is expected to increase 1.4% over the 2012/13 Annual Plan.

This is where your rates dollars go...

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Napier City Council Annual Plan 2013/14

Significance Policy Changes to the Local Government Act 2002, passed into law in December 2012, have required Council to amend its Significance Policy. The Act changed the definition of the purpose of local government. Council’s Significance Policy has therefore been amended to incorporate this change to comply with the new legislation, and is reproduced below. No submissions were received in regard to this policy during the consultation process. The policy below was accordingly adopted unchanged.

Napier City Council Significance Policy 1.

Introduction

Section 90 of the Local Government Act 2002 (the Act) requires Council to adopt a policy on significance. The policy outlines Council’s general approach to determining the significance of proposals and decisions in relation to issues, assets or other matters and includes thresholds, criteria or procedures Council will use in assessing which issues, proposals, decisions and other matters are significant.

The policy also provides a list of assets which Council considers to be strategic assets.

2.

Definitions

Section 5 of the Act defines ‘significant’ and ‘significance’ and strategic asset as follows: significance, in relation to any issue, proposal, decision, or other matter that concerns or is before a local authority, means the degree of importance of the issue, proposal, decision, or matter, as assessed by the local authority, in terms of its likely impact on, and likely consequences for, (a)

the district or region:

(b)

any persons who are likely to be particularly affected by, or interested in, the issue, proposal, decision or matter:

(c)

the capacity of the local authority to perform its role, and the financial and other costs of doing so.

significant, in relation to any issue, proposal, decision, or other matter, means that the issue, proposal, decision, or other matter has a high degree of significance. strategic asset, in relation to the assets held by a local authority, means an asset or group of assets that the local authority needs to retain if the local authority is to maintain the local authority’s capacity to achieve or promote any outcome that the local authority determines to be important to the current or future well-being of the community; and includes: (a)

any asset or group of assets listed in accordance with section 90(2) by the local authority; and

(b)

any land or building owned by the local authority and required to maintain the local authority’s capacity to provide affordable housing as part of its social policy; and

(c)

any equity securities held by the local authority in –

(i)

a port company within the meaning of the Port Companies Act 1988:

(ii)

an airport company within the meaning of the Airport Authorities Act 1966.

3.

Purpose

3.1 Degree of Compliance with Decision Making The significance of a decision will help determine the appropriate nature, extent and degree of compliance required with the decision-making process set out in Part 6 of the Act. Section 79 of the Act provides that it is the responsibility of the Council to make judgments about how to achieve compliance with Sections 77 and 78 that are largely in proportion to the significance of the matters affected by the decision. In making such judgments the Council must have regard to the significance of all relevant matters, and the principles relating to local authorities, the Council’s resources and the extent to which the nature of the decision and the circumstances allow consideration of a range of options or the views and preferences of other persons In essence, the more significant the issue, the higher the standard of compliance required.

Council decision-making processes must promote compliance with the requirements of Sections 77, 78, 80, 81 and 82 of the Act. For significant decisions, Council must ensure appropriate compliance.

3.2 Consultation The significance of a matter will also guide Council’s decisions concerning the extent and nature of the consultation to be undertaken with the persons likely to be affected or interested in the decision or matter.

Council must comply with the principles of consultation set out in Section 82 of the Act in such a manner that Council considers, at its discretion, to be appropriate. In determining what is appropriate Council must have regard to various matters, including the nature and significance of the decision or matter (including its likely impact from the perspective of the persons who will or may be affected by the decision).

The more significant a matter from the perspective of the persons who may be affected by the decision, the more likely Council will need to consult with them on their views.

Napier City Council Annual Plan 2013/14

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Significance Policy continued 3.3 Public Information The significance of a decision will assist in determining the extent and detail of information to be provided by Council when consulting with, or reporting to, the community.

The principles of consultation (Section 82 of the Act) include the principle that persons interested in decisions should be provided with reasonable access to relevant information, and should be given clear information concerning the purpose of the consultation. In addition, persons who present views to the Council should be provided information concerning both the relevant decisions and the reasons for those decisions. In determining how to comply with these, and the other principles of consultation, Council will take into account the nature and significance of the decision

4.

General Approach

Council will consider each proposal or decision on a case by case basis to determine whether the decision is significant.

In determining this issue, Council will apply the criteria and procedures and consider the thresholds set out in this policy and will also consider each of the following:

The likely impact/consequences of the issue, proposal, decision or other matter, on the interests of the community;

The parties who are likely to be particularly affected by or interested in the issue, proposal, decision or other matter;

The likely impact/consequences of the issue, proposal, decision or other matter from the perspective of those parties; and

The financial and non financial costs and implications of the issue, proposal, decision or other matter having regard to Council’s capacity to perform its role.

The more significant or material the impact or consequences of the issue, proposal, decision or other matter, the higher the standard of compliance required by Part 6 of the Act, and the more likely the matter will be ‘significant’.

In determining whether any issue, proposal, decision or other matter is significant, Council will consider the thresholds and apply the criteria and procedures set out in the following subsections.

4.1 Thresholds When undertaking a process to determine which issue, proposal, decision or other matter is significant, Council will recognise the following thresholds in determining significance: Issues, proposals, decisions, assets, or other matters for which Council will:

Incur operational expenditure exceeding 5% of its annual operating expenditure budget for that year

Incur capital expenditure exceeding 1% of the total value of Council’s assets, or where spent on a strategic asset or strategic asset as a whole as defined in the Act exceeds 25% of that assets value

Any transfer of ownership or control, or the disposal or abandonment, of a strategic asset as a whole as defined by the Act or listed in this policy;

The sale of Council’s shareholding in any Council Controlled Trading Organisation, or Council Controlled Organisation;

Entry into any partnership with the private sector to carry out a significant activity on behalf of Council, including where Council’s contribution to such partnerships exceeds the significant thresholds identified above.

Where any issue, proposal, decision or other matter triggers one or more of the above thresholds, it shall be considered against the criteria spelt out in Section 4.2 of this policy in determining whether it is significant. However, a matter which does not meet any particular financial threshold may still be significant if the criteria in 4.2 below suggests that it is.

4.2 Criteria In considering whether any issue, proposal, decision or other matter is significant the following criteria will be used:

The issue, proposal, decision or other matter affects all or a large portion of the community in a way that is of consequence;

The impact or consequences of the issue, proposal, decision or other matter on the affected persons will be substantial;

The financial implications of the issue, proposal, decision or other matter on Council’s overall resourcesare substantial;

A decision that will, directly or indirectly, severely affect the capacity (including financial capacity) of Council to carry out any activity identified in the Ten Year Plan;

The proposal or decision is to significantly alter the intended level of service for any significant activity –including a decision to commence or cease such activity;

The issue, proposal, decision, or other matter is not able to utilise any other consultation procedure provided for under the Act, or any other specific legislation;

The issue, proposal, decision or other matter has a history of wide public interest in the community or is likely to generate considerable public controversy;

The significant proposal has not already been the subject of extensive consultation.

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Napier City Council Annual Plan 2013/14

Significance Policy continued 4.3 Procedures In achieving this policy: Where any issue, policy, decision or other matter triggers one or more of the thresholds in Section 4.1 of this policy the principal administrative officer shall report the matter to Council.

Each report shall include a statement indicating that the issue, proposal, decision or other matter has been considered in regard to Council’s policy on significance. The report shall include an assessment of the degree of significance of the issue, proposal, decision or other matter based on the criteria outlined in Section 4.2 of this policy, and make recommendation to Council.

If the issue, proposal, decision or other matter is considered to be significant, the report to Council will also include a statement addressing the appropriate observance of such of Sections 77, 78, 80, 81 and 82 of the Act as are applicable.

Once an issue, proposal, decision or other matter is determined as significant in accordance with the application of this policy, the “Decision Making” provisions of the Act shall be applied as outlined in Sections 76 to 81 of the Act. The Council will report annually through its Annual Report on all issues, proposals, decisions or other matters determined to be significant, and subject to the procedure outlined in Section 76, 77, 78, 80 and 81 of the Act as appropriate.

5.

Strategic Assets

The Act requires that this policy shall identify all the strategic assets, as defined in Section 5 (outlined in Section 2 above).

The list of Strategic Assets outlined in 5.1 below is not an exhaustive list of Council assets but includes those which are considered to be significant in ensuring the Council’s capacity to achieve or promote any important outcome.

While the Council owns a number of assets and assets managed “as a whole” that it considers to be strategic, not all trading decisions made regarding these assets are regarded as significant nor do they affect the asset’s strategic nature.

For example, the roading network is strategic, but small parcels of land that make it up may not be, and the purchase or sale of such parcels of land are unlikely to amount to a significant decision.

Where a Special Consultative Procedure is undertaken under the Act or other legislation with regard to the transfer of ownership or control of any of these strategic assets, a separate Special Consultative Procedure will not be required under the policy on significance

5.1 Napier City Council List of Strategic Assets Asset Roading system (as a whole)

Notes Includes footpaths, off-street parking, bridges

Wastewater Reticulation System (as a whole) Wastewa ter Treatment Plant Stormwater Reticulation System (as a whole) Reservoirs and Water Reticulation System (as a whole) Refuse Transfer Station Share of Omarunui Landfill Sportsgrounds and Reserves Centennial Hall Cemeteries Napier and Taradale Library collections Napier Aquatic Centre Marine Parade Pools War Memorial Conference Centre Napier Municipal Theatre National Aquarium of New Zealand Marineland of NZ Napier i-SITE Visitor Centre Inner Harbour Retirement Housing (as a whole) Leasehold Land Portfolio Kennedy Park Top 10 Resort Council Administration Buildings Hawke's Bay Museum & Art Gallery Share of Hawke's Bay Airport

Includes pipes and pump stations.

Includes all land, buildings and plant.

Napier City Council Annual Plan 2013/14

Includes the land and structures.

Includes books and heritage.

Buildings Buildings Buildings Buildings

only. only. only. only.

Commercial and industrial only.

Land only.

Civic and Library building.

Includes 26% interest in the airport.

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Napier City Council Annual Plan 2013/14

FINANCIAL INFORMATION

Statement of Accounting Policies The principle accounting policies adopted in the preparation of the 2013/14 Annual Plan are set out below. The financial statements comprise the financial statements for Napier City Council (the Council) as an individual entity.

The main purpose of the Annual Plan is to –

Contain the proposed annual budget and funding impact statement for the year ended 30 June 2014

Identify any variation from the financial statements and funding impact statement included in year 2 of Council’s Long Term Plan 2012/22

Support the Long Term Plan in providing integrated decision making and co-ordination of the resources of Council

Contribute to the accountability of Council to its community

Extend opportunities for participation by the public in decision making processes relating to the costs and funding of activities to be undertaken by Council.

1.1 Reporting Entity Napier City Council (the Council) is a New Zealand territorial local authority and is governed by the Local Government Act 2002.The accounting policies adopted for preparation of the 2013/14 prospective financial statements comply with the New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS) and are set out below. These policies have been applied consistently to all periods presented in these financial statements, unless otherwise stated.

The primary objective of the Council is to provide goods and services for the community or social benefit rather than making a financial return. Accordingly, the Council has designated itself as a public benefit entity for the purposes of NZ IFRS. The Council holds a 26% share of Hawke’s Bay Airport Limited, which is equity accounted.

The Annual Plan was authorised for issue by the Council on 19 June 2013.

1.2 Basis of Preparation The prospective financial statements of the Council have been prepared in accordance with the requirements of the Local Government Act 2002: Part 6, Section 95 and Part 2 of Schedule 10, which include the requirement to comply with generally accepted accounting practice in New Zealand (NZ GAAP).

The prospective financial statements comply with NZ GAAP and NZ IFRS, including FRS 42 “ Prospective Financial Statements”, and other applicable financial reporting standards, as appropriate for public benefit entities.

The financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars ($000). The functional currency of the Council and its associates is New Zealand dollars.

1.3 Changes in Accounting Policies Council has adopted the following revisions to accounting standards which have had only a presentational or disclosure effect and relate to standards that have been previously adopted:

Amendments to NZ IAS 1 Presentation of Financial Statements. The amendments introduce a requirement to present, either in the statement of changes in equity or the notes, for each component of equity, an analysis or other comprehensive income by item. The Council has decided to present this analysis in Note 24.

NZ IAS 24 Related Party Disclosures (Revised 2009) replaces NZ IAS 24 Related Party Disclosures (Issued 2004).

The revised standard simplifies the definition of a related party, clarifying its intended meaning and eliminating inconsistencies from the definition. The main effect has been to disclose further information about commitments between related parties.

FRS 44 New Zealand Additional Disclosures and Amendments to NZ IFRS to harmonise with IFRS and Australian Accounting Standards (Harmonisation Amendments). The purpose of the new standard and amendments is to harmonise Australian and New Zealand accounting standards with source IFRS and to eliminate many of the differences between the accounting standards in each jurisdiction. The main effect of the amendment on the Council and group is that certain information about property valuations is no longer required to be disclosed.

Standards, amendments and interpretations issued that are not yet effective and have not been early adopted and which are relevant to the Council include: The Minister of Commerce has approved a new Accounting Standards Framework (incorporating a Tier Strategy) developed by the External Reporting Board (XRB). Under this Accounting Standards Framework, the Council is classified as a Tier 1 reporting entity and it will be required to apply full Public Benefit Entity Accounting Standards (PAS). These standards are being developed by the XRB based on current International Public Sector Accounting Standards. The effective date for the new standards for public sector entities is expected to be for reporting periods beginning on or after 1 July 2014. This means the Council expects to transition to the new standards in preparing its 30 June 2015 financial statements. As the PAS are still under development, the Council is unable to assess the implications of the new Accounting Standards Framework at this time. Due to the change in the Accounting Standards Framework for public benefit entities, it is expected that all new NZ IFRS and amendments to existing NZ IFRS will not be applicable to public benefit entities. Therefore, the XRB has effectively frozen the financial reporting requirements for public benefit entities up until the new Accounting Standard Framework is effective. Accordingly, no disclosure has been made about new or amended NZ IFRS that exclude public benefit entities from their scope.

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Napier City Council Annual Plan 2013/14

Statement of Accounting Policies continued 1.4 Historical Cost Convention These prospective financial statements have been prepared on a historical cost basis, modified by the revaluation of available for sale financial assets, financial assets and liabilities (including derivative instruments) at fair value through profit or loss, certain classes of property, plant and equipment, investment property and biological assets subject to agricultural activity.

1.5 Principles Of Consolidation Consolidated financial statements are prepared adding together like items of assets, liabilities, equity, income, and expenses on a line-by-line basis. All significant intra-group balances, transactions, income, and expenses are eliminated on consolidation.

1.5.1 Associates The Council’s associate investment is accounted for in the prospective financial statements using the equity method. An associate is an entity over which the Council has significant influence and that is neither a subsidiary nor an interest in a joint venture. The investment in an associate is initially recognised at cost and the carrying amount in the financial statements is increased or decreased to recognise the Council’s share of the surplus or deficit of the associate after the date of acquisition. Distributions received from an associate reduce the carrying amount of the investment.

If the share of deficits of an associate equals or exceeds its interest in the associate, the Council discontinues recognising its share of further deficits. After the Council’s interest is reduced to zero, additional deficits are provided for, and a liability is recognised, only to the extent that the Council has incurred legal or constructive obligations or made payments on behalf of the associate. If the associate subsequently reports surpluses, the Council will resume recognising its share of those surpluses only after its share of the surpluses equals the share of deficits not recognised.

Where the Council transacts with an associate, surplus or deficits are eliminated to the extent of the group’s interest in the associate.

Dilution gains or losses arising from investments in associates are recognised in the surplus or deficit.

Entities are required to disclose all accounting policies that are relevant to an understanding of the financial statements.

The investment in the associate is carried at cost in the Council’s financial statements.

1.5.2 Subsidiaries As at 30th June 2014 the Council has forecast to have no subsidiaries.

1.6. Joint Ventures 1.6.1 Jointly Controlled Assets The proportionate interests in the assets, liabilities, income and expenses of the jointly controlled assets have been incorporated into the financial statements under the appropriate headings, together with any liabilities incurred.

1.7 Foreign Currency Translation 1.7.1 Functional and Presentation Currency Items included in the prospective financial statements of each of the Council’s entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The prospective financial statements are presented in New Zealand dollars, which is the Council’s functional and presentation currency. All values are rounded to the nearest thousand dollars ($000).

1.7.2 Transactions and Balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income, except when deferred in equity as qualifying cash flow hedges.

1.8. Revenue Recognition Revenue comprises the fair value for the sale of goods and services, net of rebates and discounts. Revenue is recognised as follows:

Rates Rates are recognised when levied. Penalties and discounts relating to rates are included where applicable.

Residential Developments Sales of sections in residential developments are recognised when contracts for sale are unconditional.

Traffic and Parking Infringements Traffic and parking infringements are recognised when tickets are issued.

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Statement of Accounting Policies continued Licences and Permits Revenue derived from licences and permits are recognised on application.

Development and Financial Contributions Development contributions are recognised when invoiced and are no longer refundable.

Sales of Goods – Retail Sales of goods are recognised when a product is sold to the customer. Retail sales are usually in cash or by credit card.

The recorded revenue is the gross amount of sale, including credit card fees payable for the transaction. Such fees are included in distribution costs.

Sales of Services Sales of services are recognised in the accounting period in which the services are rendered, by reference to completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided.

Rental Revenue Rental revenue is recognised in the period that it relates to.

Interest Income Interest income is recognised on a time proportion basis using the effective interest method. When a receivable is impaired, the Council reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loans is recognised using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss.

Dividend Income Dividend income is recognised when the right to receive payment is established.

Donated, Subsidised or Vested Assets Where a physical asset is acquired for nil or nominal consideration, the fair value of the asset received is recognised as revenue.

Grants and Subsidies Grants and subsidies received in relation to the provision of services are recognised on a percentage of completion basis.

Other grants and subsidies are recognised when receivable. The Council receives the majority of grants and subsidies income from New Zealand Transport Agency (NZTA) which subsidises part of the Council’s costs in maintaining the local road infrastructure.

1.9 Income Tax The Council is exempt from income tax except on interest or other income received from certain trading activities.

The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

1.10 Goods and Services Tax (GST) The Statement of Comprehensive Income has been prepared so that all components are stated exclusive of GST. All items in the Statement of Financial Position are stated net of GST, with the exception of receivables and payables, which include GST invoiced.

Commitments and contingencies are disclosed exclusive of GST. 20

Napier City Council Annual Plan 2013/14

Statement of Accounting Policies continued 1.11 Leases 1.11.1 The Council is the Lessee Leases of property, plant and equipment where the Council has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the lower of the fair value of the leased property and the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in other long term payables. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The interest element of the finance cost is charged to the Statement of Comprehensive Income over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases are depreciated over the shorter of the asset’s useful life and the lease term.

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the Statement of Comprehensive Income on a straight line basis over the period of the lease.

1.11.2 The Council is the Lessor Assets leased to third parties under operating leases are included in property, plant and equipment in the Statement of Financial Position. They are depreciated over their expected useful lives on a basis consistent with similar owned property, plant and equipment. Rental income (net of any incentives given to lessees) is recognised on a straight line basis over the lease term.

1.12 Cash and Cash Equivalents Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the Statement of Financial Position.

1.13 Trade Receivables Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for doubtful debts.

Trade receivables are due for settlement no more than 150 days from the date of recognition for land development and resale debtors, and no more than 30 days for other debtors.

Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for impairment of receivables is established when there is objective evidence that the Council will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised in the Statement of Comprehensive Income.

1.14 Inventories 1.14.1 Raw Materials and Stores, Work in Progress and Finished Goods Raw materials and stores, and finished goods are stated at the lower of cost and net realisable value costs are assigned to individual items of inventory on the basis of weighted average costs. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale

1.14.2 Inventory Held for Distribution Inventories held for distribution are measured either at cost or at cost adjusted where applicable for any loss of service potential. These assets are held for distribution at no charge in the ordinary course of the Council’s operations.

1.15 Non Current Assets Held for Sale Non-current assets are classified as held for sale and stated at the lower of their carrying amount and fair value less costs to sell if their carrying amount will be recovered principally through a sale transaction rather than through continuing use.

An impairment loss is recognised for any initial or subsequent write down of the asset to fair value less costs to sell in the Council’s operating costs. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset, but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset is recognised at the date of derecognition.

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

Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are presented separately from the other assets in the Statement of Financial Position. The liabilities of a disposal group classified as held for sale are presented separately from other liabilities in the Statement of Financial Position.

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Statement of Accounting Policies continued 1.16 Investments and Other Financial Assets 1.16.1 Financial Assets at Fair Value through Profit or Loss This category has two sub categories: financial assets held for trading, and those designated at fair value through profit or loss on initial recognition. A financial asset is classified as held for trading if acquired principally for the purpose of selling in the short term or if so designated by management. The policy of management is to designate a financial asset if there exists the possibility it will be sold in the short term and the asset is subject to frequent changes in fair value. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if they are either held for trading or are expected to be realised within 12 months of the Statement of Financial Position date.

1.16.2 Loans and Receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Council provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets. Those with maturities greater than 12 months after the Statement of Financial Position date are classified as non-current assets.

1.16.3 Held to Maturity Investments Held to maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Council’s management has the positive intention and ability to hold to maturity.

1.16.4 Financial Assets at Fair Value through Comprehensive Income Available for sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the Statement of Financial Position date.

Purchases and sales of investments are recognised on trade date, the date on which the Council commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Council has transferred substantially all the risks and rewards of ownership.

1.16.5 Measurement of Investments and Other Financial Assets Available for sale financial assets and financial assets at fair value through profit and loss are subsequently carried at fair value. Loans and receivables and held to maturity investments are carried at amortised cost using the effective interest method. Realised and unrealised gains and losses arising from changes in the fair value of the financial assets at fair value through profit or loss category are included in the income statement in the period in which they arise. Unrealised gains and losses arising from changes in the fair value of non-monetary securities classified as fair value through comprehensive income are recognised in comprehensive income in the fair value investments revaluation reserve. When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments are included in the Statement of Comprehensive Income as gains and losses from investment securities.

1.16.5.1 Fair Value Changes The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Council establishes fair value by using valuation techniques. These include reference to the fair values of recent arm’s length transactions, involving the same instruments or other instruments that are substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the issuer’s specific circumstances.

1.16.5.2 Impairment of Financial Assets The Council assesses at each balance date whether there is objective evidence that a financial asset or group of financial assets is impaired. In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of a security below its cost is considered in determining whether the security is impaired. If any such evidence exists for available for sale financial assets, the cumulative loss measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit and loss is removed from equity and recognised in the Statement of Comprehensive Income. Impairment losses recognised in the Statement of Comprehensive Income on equity instruments are not reversed through the Statement of Comprehensive Income.

1.17 Derivatives Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.

The Council designates certain derivatives as either; (1) hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge); or (2) hedges of highly probable forecast transactions (cash flow hedges).

The Council documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Council also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items.

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Napier City Council Annual Plan 2013/14

Statement of Accounting Policies continued 1.17.1 Fair Value Hedge Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the Statement of Comprehensive Income, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

1.17.2 Cash Flow Hedge The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in equity in the hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in the Statement of Comprehensive Income.

Amounts accumulated in equity are recycled in the Statement of Comprehensive Income in the periods when the hedged item will affect profit or loss (for instance when the forecast sale that is hedged takes place). However, when the forecast transaction that is hedged results in the recognition of a non-financial asset (for example, plant) or a non-financial liability, the gains and losses previously deferred in equity are transferred from equity and included in the measurement of the initial cost or carrying amount of the asset or liability.

When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the Statement of Comprehensive Income. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the Statement of Comprehensive Income.

1.17.3 Derivatives that do not Qualify for Hedge Accounting Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are recognised immediately in the Statement of Comprehensive Income.

1.18 Fair Value Estimation The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.

The fair value of forward exchange contracts is determined using forward exchange market rates at the Statement of Financial Position date.

The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Council for similar financial instruments.

1.19 Property, Plant and Equipment Items of property, plant and equipment are initially recognised at cost, which includes purchase price plus directly attributable costs of bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Where a physical asset is acquired for nil or nominal consideration the fair value of the asset received is recognised as revenue.

Assets which are revalued are shown at fair value (which is based on periodic valuations by external independent valuers that are performed with sufficient regularity to ensure that the carrying value does not differ materially from fair value) less subsequent depreciation for buildings. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Roading infrastructure assets are valued at depreciated replacement cost and revalued annually. Investment properties are revalued annually and shown at fair value. All other property, plant and equipment is stated at historical cost less depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Council and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the Statement of Comprehensive Income during the financial period in which they are incurred.

Increases in the carrying amounts arising on revalued assets are credited to a revaluation reserve in public equity. To the extent that the increase reverses a decrease previously recognised in profit or loss, the increase is first recognised in profit and loss. Decreases that reverse previous increases of the same asset are first charged against revaluation reserve directly in equity to the extent of the remaining reserve attributable to the asset; all other decreases are charged to the Statement of Comprehensive Income.

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Statement of Accounting Policies continued Depreciation of property, plant and equipment other than land is calculated on a straight line basis at rates that will write off the cost or valuation, less estimated residual value, over their expected useful economic lives. The following rates have been applied:

Depreciation % 2 to 10% 5 to 20% 5 to 50% 10 to 33.33% 4 to 20% 8 to 66.67% 7 to 25%

Buildings and structural improvements Fixed plant and equipment Mobile plant and equipment Motor vehicles Furniture and fittings Office equipment Library bookstock

Depreciation of infrastructural and restricted assets is calculated on a straight line basis at rates that will write off their cost or valuation over their expected useful economic lives.

The expected lives, in years, of major classes of infrastructural and restricted assets are as follows: Useful Life (Years) Roading Base course Surfacings Concrete pavers Footpaths and pathways/walkways Drainage Bridges and structures Road lighting Traffic services and safety Water Reticulation Reservoirs Pump stations Stormwater Reticulation Pump stations Sewerage Reticulation Pump stations Milliscreen Outfall Others Grandstands, community and sports halls Sportsgrounds, parks and reserves improvements Buildings on reserves Pools Inner harbour

70 12 70 15 - 80 14 - 80 20 - 100 4 - 50 10 -25 56 - 107 100 15 - 80 80 - 100 15 - 80 80 - 100 15 - 80 10 - 80 60

10 10 10 20

-

50 50 50 50 50

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each Statement of Financial Position date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (Note 1.12).

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of Comprehensive Income. When revalued assets are sold, it is Council’s policy to transfer the amounts included in other reserves in respect of those assets to retained earnings.

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Napier City Council Annual Plan 2013/14

Statement of Accounting Policies continued 1.20 Investment Property Investment property is held for long term rental yields and capital appreciation and is not occupied by the Council or held to meet service delivery objectives.

Properties leased to third parties under operating leases will generally be classified as investment property unless:

the property is held to meet service delivery objectives, rather than to earn rentals or for capital appreciation;

the occupants provide services that are integral to the operation of the owner’s business and/or these services could not be provided efficiently and effectively by the lessee in another location;

the property is being held for future delivery of services;

the lessor uses services of the owner and those services are integral to the reasons for their occupancy of the property.

Investment property is carried at fair value, representing open market value determined annually by external valuers.

Changes in fair values are recorded in the Statement of Comprehensive Income as part of other gains/(losses).

1.21 Intangible Assets 1.21.1 Trademarks and Licences Trademarks and licences have a finite useful life and are carried at cost less accumulated amortisation and impairment losses. Amortisation is calculated using the straight line method to allocate the cost of trademarks and licences over their estimated useful lives, which vary from 3 to 5 years.

1.21.2 Computer Software Acquired computer software and software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimates useful lives of 3 to 5 years.

Cost associated with developing or maintaining computer software are recognised as an expense as incurred. Costs that are directly associated with the production of identifiable and unique software products controlled by the Council, and that will generate economic benefits exceeding costs beyond one year, are recognised as intangible assets. Direct costs include the software development employee costs and an appropriate portion of relevant overheads. Computer software development costs recognised as assets are amortised over their estimated useful lives not exceeding 3 years.

1.22 Impairment of Assets Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation or depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Where the future economic benefits of an asset are not primarily dependent on the asset’s ability to generate net cash inflows, and where the Council would, if deprived of the asset, replace its remaining future economic benefits, value in use is determined as the depreciated replacement cost of the asset. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).

1.23 Trade and Other Payables These amounts represent liabilities for goods and services provided to the Council prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

1.24 Borrowings Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the Statement of Comprehensive Income over the period of the borrowings using the effective interest method.

Borrowings are classified as current liabilities unless the Council has an unconditional right to defer settlement of the liability for at least 12 months after the Statement of Financial Position date.

1.25 Borrowing Costs The Council has elected to defer the adoption of NZ IAS 23 Borrowing Costs (revised 2007) in accordance with the transitional provisions which are applicable to public benefit entities.

Consequently, all borrowing costs are recognised as an expense in the period in which they are incurred.

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Statement of Accounting Policies continued 1.26 Provisions Provisions are recognised when the Council has a present legal or constructive obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation.

An increase in the provision due to the passage of time is recognised as an interest expense.

1.27 Grant Expenditure Non-discretionary grants are those grants that are awarded if the grant application meets the specified criteria and are recognised as expenditure when an application that meets the specified criteria for the grant has been received.

Discretionary grants are those grants where the Council has no obligation to award on receipt of the grant application and are recognised as expenditure when a successful applicant has been notified of the Council’s decision.

1.28 Employee Benefits 1.28.1 Wages and Salaries, Annual Leave and Sick Leave Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.

1.28.2 Long Service Leave and Gratuities The liability for long service leave and gratuities is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

1.28.3 Retirement Benefit Obligations Current and former employees of the Council are entitled to benefits on retirement, disability or death from the Council’s multi-employer benefit scheme. The scheme manager, National Provident Fund, have advised Council there is no consistent and reliable basis for allocating the obligation scheme assets and cost of the multi-employer defined benefit scheme to individual participating employers. As a result, the scheme is accounted for as a defined contribution plan and contributions are recognised as an expense as they become payable. Prepaid contributions are recognised as an asset if a cash refund or a reduction in the future payments is available.

1.28.4 Bonus Plans The Council recognises a liability and an expense for bonuses where contractually obliged or where there is a past practice that has created a constructive obligation.

1.29 Biological Assets 1.29.1 Livestock Livestock are measured at their fair value less estimated point-of-sale costs. The fair value of livestock is determined based on market prices of livestock of similar age, breed and genetic merit.

1.30 Equity Equity is the community’s interest in the Council and is measured as the difference between total assets and total liabilities.

Equity is disaggregated and classified into a number of reserves.

The components of equity are:

Retained Earnings

Restricted Reserves

Fair Value and Hedging Reserves

Asset Revaluation Reserves

Restricted and Council Created Reserves

Restricted reserves are a component of equity generally representing a particular use to which various parts of equity have been assigned. Reserves may be legally restricted or created by the Council.

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Napier City Council Annual Plan 2013/14

Statement of Accounting Policies continued Restricted reserves are those subject to specific conditions accepted as binding by the Council and which may not be revised by the Council without reference to the Courts or a third party. Transfers from these reserves may be made only for certain specified purposes or when certain specified conditions are met.

Also included in restricted reserves are reserves restricted by Council decision. The Council may alter them without references to any third party or the Courts. Transfers to and from these reserves are at the discretion of the Council.

The Council’s objectives, policies and processes for managing capital are described in Note 26.

1.31 Budget Figures The budget figures are those approved by the Council and adopted as a part of the Council’s Long Term Plan or as revised and approved by Council prior to the commencement of the year in the Annual Plan. The budget figures have been prepared in accordance with NZ GAAP, using accounting policies that are consistent with those adopted by the Council for the preparation of the financial statements.

1.32 Cost Allocation Direct costs are those costs directly attributable to a significant activity. Indirect costs are those costs, which cannot be identified in an economically feasible manner, with a significant activity.

Direct costs are charged directly to significant activities. Indirect costs are charged to significant activities using appropriate cost drivers such as actual usage, staff numbers and floor area.

1.33 Critical Accounting Estimates and Assumptions In preparing these financial statements the Council has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations or future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed as follows.

1.33.1 Infrastructural Assets There are a number of assumptions and estimates used when performing depreciated replacement cost valuations over infrastructural assets. These include:

The physical deterioration and condition of an asset, for example the Council could be carrying an asset at an amount that does not reflect its actual condition. This is particularly so for those assets which are underground such as stormwater, wastewater and water supply pipes. This risk is minimised by Council performing a combination of physical inspections and condition modelling assessments of underground assets;

Estimating any obsolescence or surplus capacity of an asset; and

Estimating the remaining useful lives over which the asset will be depreciated. These estimates can be impacted by the local conditions, for example weather patterns and traffic growth. If useful lives do not reflect the actual consumption of the benefits of the asset, then the Council could be over or under estimating the annual depreciation charge recognised as an expense in the Statement of Comprehensive Income. To minimise this risk, the Council’s infrastructural asset useful lives have been determined with reference to the NZ Infrastructural Asset Valuation and Depreciation Guidelines published by the National Asset Management Steering Group, and have been adjusted for local conditions based on past experience. Asset inspections and deterioration and condition modelling are also carried out regularly as part of the Council asset management planning activities, which gives the Council further assurance over its useful life estimates.

Experienced independent valuers perform the Council’s infrastructural asset revaluations except for above and below ground water, wastewater and stormwater assets where the independent valuer peer reviews Council’s valuations.

1.33.2 Critical Judgements in Applying Napier City Council's Accounting Policies Management has exercised the following critical judgement in applying the Council’s accounting policies for the period ended 30 June 2014.

1.33.2.1 Classification of Properties The Council owns a number of leasehold land and rental properties. The receipt of market-based rentals from these properties is incidental to the holding of these properties. In the case of residential leasehold properties, there are legal restrictions applying to how Council can manage these properties and in the case of rental properties, these are held as part of the Council’s social housing policy or to secure the ability to undertake long term city development projects. As these properties are held for service delivery objectives, they have been accounted for as property, plant and equipment.

Napier City Council Annual Plan 2013/14

27

Significant Forecasting Assumptions Introduction Schedule 10 (section 17) of the Local Government Act 2002, No. 84, requires that Council identifies the significant forecasting assumptions and risks underlying the financial estimates. Where there is a high level of uncertainty Council is required to state the reason for that level of uncertainty and provide an estimate of the potential effects on the financial assumptions.

Council has made a number of assumptions which apply organisation wide. These assumptions are outlined below.

Assumptions that apply only to specific activities are outlined in the Activity Management Plans for the activities concerned.

The broad basis upon which the financial summaries were prepared is as follows:

Capital costs – based on the Prospective Ten Year Capital Plan, with rates and loans funding determined in accordance with Council’s policy on Funding of Capital Expenditure in the Revenue and Financing Policy on page 37 to page 70 of Appendix A of the 2012 – 2022 Ten Year Plan. The costs for 2013/14 have been inflated by CPI as at 30 June 2012 while from 2014/15 inflation has been applied as detailed in Corporate Assumption 1.

Personnel, operating and maintenance costs The 2013/14 forecasts include forecast cost of existing services plus the cost of approved new services and/or increases in the level of existing services. The costs for 2013/14 are based either on actual costs and prices at 1 November 2012, or with the addition of CPI of 1.0%, PPI of 1.5%, or LCI of 1.7% as appropriate. The inflation rates used are based on Statistics New Zealand reported levels at June 2012.

Loan payments have been estimated on current loans and planned new loans, with calculations based on Corporate Assumption 16.

Specific Corporate Assumptions 1.

Inflation

Assumption Inflation has been assumed at 1% or CPI, at 1.5% or PPI where applicable and 1.7% for contract costs falling under NZS3910. These indices are those reported by New Zealand Statistics at 30 June 2012 and increases are added to operating and capital expenditure where applicable.

Risk Underlying Financial Estimates The inflation forecasts could be incorrect, affecting the validity of the plan costs.

Level of Uncertainty Moderate.

2.

Capital Plan - Inflation Forecasts

Capital

14/15

15/16

16/17

17/18

18/19

19/20

20/21

21/22

4.3

3.9

3.3

3.4

3.6

3.8

4.0

4.3

These factors were not applied to forecast depreciation.

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Napier City Council Annual Plan 2013/14

Significant Forecasting Assumptions continued 3.

Contracts

Assumption Apart from the general provision for inflation, as per Corporate Assumption 1, other significant variations to the terms or prices of contracts which will apply when contracts are renewed have been included in the estimates where these are known.

Risk Underlying Financial Estimates Contract terms and prices could differ, although the inclusion of inflation in the estimates will largely mitigate any unfavourable effects.

Level of Uncertainty Low.

4.

Population Growth

Assumption The following population growth projection figures are based on New Zealand Statistics subnational population projections at 30 June 2012 for the 2012 year. Population projections have been calculated using an average of the medium and high population projection data for Napier, as at February 2012.

30 June 2012

57,800 (Estimate)

30 June 2013

58,280 (Projection)

30 June 2014

58,690 (Projection)

Risk Underlying Financial Estimates Actual population growth could differ.

Level of Uncertainty Moderate to High.

5.

Household Growth

Assumption The following household growth projection figures are based on the actual Napier City Council new households consents records. The projections have been calculated based on a slower than average uptake for years 2011 to 2014 to take into consideration the downturn in the property development market Year to 30 June 2012 (Actual)

Total Households

Infill

Greenfield

Rural Residential

24,734

40%

50%

10%

2013 (Estimate)

24,906

45%

49%

6%

2014 (Estimate)

25,078

50%

44%

6%

The accumulating growth in the rating base resulting from the increase in the number of rateable properties has been transferred to the Subdivision and Urban Growth Fund. This fund is used to meet the cost of servicing new loans raised to provide additional infrastructural assets required as a result of urban growth, and to meet any shortfall from financial contributions funding.

From the excess to requirements accumulating in the Subdivision and Urban Growth Fund, transfers back to General Rates have been provided at $1.2 million for 2013/14.

Napier City Council Annual Plan 2013/14

29

Significant Forecasting Assumptions continued Risk Underlying Financial Estimates Actual physical growth could differ, although the financial implications of this are largely mitigated by the way Council funds and accounts for growth, and by altering the timing of projects in the Ten Year Capital Plan to coincide with actual trigger points or demand.

Level of Uncertainty Moderate to High.

Effects of High Level of Uncertainty Slower growth than that assumed could result in lower revenue from Development Levies/Financial Contributions and Consents.

The financial implications of this can however be managed. Council carefully monitors growth and adjusts the timing of expenditure for growth related projects based on both revised market demand and revenue timing.

Timing adjustments would be made in future annual plans.

6.

Visitor Numbers

Assumption The 2012 actual quantity is from information provided by Statistics New Zealand.

The estimated visitor numbers the 2012/13 and 2013/14 years have been used for the purposes of the plan. These are based on forecasts received from Council’s economic adviser.

Year ended 30 June

2012 (Actual)

522,506

2013 (Estimate)

525,000

2014 (Estimate)

531,000

Risk Underlying Financial Estimates Actual visitor numbers could differ, affecting the financial returns in tourism activities.

Level of Uncertainty Moderate.

7.

Levels of Service

Assumption No significant changes in levels of service are assumed, except where there are changes specifically outlined in particular Activity Management Plans or are able to be achieved without increased cost.

Risk Underlying Financial Estimates Any significant changes to the level of future services would need to be identified in a future Ten Year Plan or as an amendment to the current Annual Plan, and the cost implications outlined.

Level of Uncertainty Low.

30

Napier City Council Annual Plan 2013/14

Significant Forecasting Assumptions continued 8.

Technology

Assumption While it is recognised that advances in technology over the forecast period could change the way activity is carried out, the forecasts are based on known technology as currently applied within the Council.

Risk Underlying Financial Estimates New technology could change the way activity is carried out, affecting both financial estimates and levels of service.

Level of Uncertainty High.

Effects of High Level of Uncertainty The impact of changing technology is unknown but is reviewed on an on-going basis and would be taken into account in the Ten Year Plan. The effects are also considered in Annual Plans and have been provided for where necessary.

9.

Useful Life of Significant Assets

Assumption The assumed useful lives are outlined in the Statement of Accounting Policies.

Risk Underlying Financial Estimates Any significant change in useful life could affect the validity of the estimates, but the financial implications would not be significant.

Level of Uncertainty Low.

10. Sources of Funds for Future Replacement of Significant Assets Assumption It is assumed that significant infrastructural assets will be subject to continual renewal, and funded in the Ten Year Capital Plan at the levels reflected in the various Asset Management Plans for infrastructural assets.

The source of funding any replacement of other significant assets is determined and disclosed in the Ten Year Capital Plan.

Refer also to the Funding of Capital Expenditure section of the Revenue and Financing Policy and the Financial Strategy.

Risk Underlying Financial Estimates A future Council could change the basis and level of funding, but this should only be done through a future Ten Year Plan or an amendment to the Ten Year Plan, with the implications clearly outlined.

Level of Uncertainty Low.

Napier City Council Annual Plan 2013/14

31

Significant Forecasting Assumptions continued 11. Asset Sales Assumption It is assumed there will be no asset sales apart from: Freeholding of residential leasehold properties at the request of lessees – has been estimated at 2 for the year.

All proceeds from asset sales will be applied in accordance with Council’s policy on the use of proceeds from asset sales.

Risk Underlying Financial Estimates 1

A higher or lower level of freeholding of leasehold properties.

2

A future Council could change the use of the proceeds from future asset sales, but this should only be done through a future Ten Year Plan or an amendment to the Ten Year Plan.

Level of Uncertainty 1. High.

2. Low. Effects of High Level of Uncertainty No significant effect as the use of the proceeds has not been ascertained.

12. Asset Revaluations Assumption Comprehensive asset revaluations are undertaken every three years from 30 June 2011. Roading, Library and Investment property are revalued annually. A general revaluation is planned for the 2013/14 year. Revaluation indices used for the plan are based on the BERL revised inflation factors.

The three yearly revaluation adjustment in the Ten Year Plan was reflected in 2014/15 instead of 2013/14 as per the cycle (page 59). These are now being correctly shown in the comparative Annual Plan amounts for the Ten Year Plan.

Risk Underlying Financial Estimates The forecast valuation of assets could be incorrect, affecting the validity of the estimates.

Level of Uncertainty High.

Effects of High Level of Uncertainty Variations in asset values following a general revaluation will affect the 2013/14 value of assets and the comprehensive income statement total comprehensive income. However there would be no impact to the level of rates required to fund operations in the plan year. Impacts would be in the year following the plan with higher levels of depreciation. Note: there would be no impact on succeeding years capital plans as the same inflation factors applied to revaluations are applied to the capital plan.

13. Completion of Capital Projects Assumption Capital projects are assumed to be completed in the year budgeted, except for the following major projects, where expenditure budgeted in previous years will be incurred during 2013/14. Advanced Wastewater Treatment Development of HB Museum Building Whakarire Avenue Breakwater Westshore Beach Reprofiling Risk Underlying Financial Estimates Actual experience shows some projects are not completed in the year budgeted.

Level of Uncertainty High. Expected project timing is based on the best estimate available.

Effects of High Level of Uncertainty No significant effect as unutilised budgets are carried forward. Where projects are funded from loans, budgeted interest costs are allocated to the project to offset price changes due to inflation.

32

Napier City Council Annual Plan 2013/14

Significant Forecasting Assumptions continued 14. New Zealand Transport Agency (NZTA) Assumption It is assumed that NZTA requirements, specifications and subsidy levels will not change.

Risk Underlying Financial Estimates A change in the requirements could affect the validity of the estimates by way of funding available for subsidised work and the level of service delivered. The extent of any change would influence the significance on the estimates.

Level of Uncertainty High.

Effects of High Level of Uncertainty A 1% reduction in subsidy received from NZTA would reduce funding for maintenance operation and renewal work by $65,000. In the short to medium term it would be necessary to reprioritise work, from renewal to maintenance, to ensure there is a minimal perceivable effect on the condition of the roads. Over the longer term a backlog of renewal work would be created that would need to be caught up on in the future.

15. Vested Assets Assumption Assets vested in the Council following subdivision have been included in the forecasts at an average annual expected value over the period of the plan.

Calculation of average annual expected value is based on the Napier Urban Growth Strategy and timing of known or proposed developments over the next 2 years.

Risk Underlying Financial Estimates Subdivisions may not proceed, or costs/timing will differ. Annual value of vested assets may fluctuate significantly between plan years and in total. Impact would be to both Statement of Income and Statement of Financial Position.

Level of Uncertainty Moderate.

16. Depreciation Assumption Depreciation rates applying to existing assets are outlined in the Statement of Accounting Policies.

Depreciation on new major infrastructural assets is calculated on actual expected rates commencing from expected time of completion of the project.

The depreciation for other items is based on actual expected depreciation rates with a half year applied in the year of purchase.

Depreciation is calculated on book values projected immediately preceding 30 June, plus new capital.

Risk Underlying Financial Estimates The inflation forecasts could be incorrect, affecting the validity of the value of assets. Capital projects could take longer to complete than budgeted. To some extent these factors mitigate against each other.

Level of Uncertainty Moderate.

Napier City Council Annual Plan 2013/14

33

Significant Forecasting Assumptions continued 17. Loans Assumption Actual interest rates for existing loans for 2013/14 Loan interest at 4.35% on new loans expected to be uplifted in 2013/14 Actual principal repayments apply for 2013/14. For new loans, principal repayments are calculated on a table loan basis.

Actual interest on loans funded from special funds is allocated direct to the activity to which the loan relates for:

Interest on Rental Housing loans allocated to Retirement and Rental Housing Activity.

Interest on National Aquarium of NZ loans allocated to National Aquarium of NZ Activity.

Interest on Museum building loan allocated to Hawke’s Bay Museum and Art Gallery Activity.

Interest on Kennedy Park Cabins upgrade allocated to Kennedy Park Top 10 Resort Activity.

All other loan interest is allocated as a “capital charge” to activities based on book value of assets. To establish book value the following assumptions apply:

Support units have been excluded.

Assets funded from finance leases have been excluded.

Excludes activities funded from non-rating sources e.g. Parking, Transfer Station, Lagoon Farm, Plant, Vehicle and Settlement Support.

Book values for Omarunui Landfill, Hawke’s Bay Museum and Art Gallery, Rental Housing, National Aquarium of NZ, Kennedy Park Cabins and industries’ share of the Advanced Sewage Treatment Plant have been excluded.

Risk Underlying Financial Estimates 1.

Interest rates on borrowed funds are largely influenced by factors external to New Zealand’s environment. A significant change to interest rates would affect the validity of the estimates.

2.

The financial statements assume reserves and special funds revenues received are sufficient to provide internal funding for loan funded capital items. Significant reductions in the cash flow generated by the Parklands Residential Development would alter the ability to fund these items internally and increase Council’s external loans. A change from internal to external debt funding would have no rating impact as the interest rate used to calculate interest payable is not varied according to the source of loans.

Level of Uncertainty 1. N/A 2. Moderate Effects of High Level of Uncertainty 1.

Changes to interest rates will not impact loan charges in the 2013/14 year due to fixed interest rates for all loans

2. N/A

18. Forecast Return on Investments Assumption Interest rate on funds invested assumed to be between 3% and 4.5% pa Risk Underlying Financial Estimates Changes in market interest rates and average levels of cash on deposit or invested may differ significantly from plan.

Level of Uncertainty Moderate.

34

Napier City Council Annual Plan 2013/14

Significant Forecasting Assumptions continued 19. Resource Consents Assumption Except as may be outlined in particular Activity Management Plans, it is assumed the conditions of Resource Consents held by Council will not be altered significantly.

Risk Underlying Financial Estimates Conditions of Resource Consents may be altered significantly without Council receiving sufficient warning.

Level of Uncertainty Low.

20. Council Policy Assumption No significant changes in Council policy are assumed.

Risk Underlying Financial Estimates Council could change its policy on any matter in a way that would significantly affect the estimates. Any such change would be identified in a future Ten Year Plan or as an amendment to the Annual Plan and the financial implications outlined.

21. Local Government Reorganisation Assumption It is assumed the Napier City Council will continue as a separate local authority with no changes to its existing boundaries for the 2013/14 year.

Risk Underlying Financial Estimates A change in boundaries could result from external request/review or from Government. Napier City has been advised that the Local Government commission has accepted for assessment an application for reorganisation that affects Napier City Council. The effect on the estimates would depend on the nature and extent of any change; however it is unlikely that if change is confirmed, it would be implemented before the end of the financial year.

Level of Uncertainty Moderate to Low for the Plan period.

22. External Factors Assumption It is assumed there will be no unexpected changes in legislation or other external factors that will alter the nature of the services provided.

Risk Underlying Financial Estimates Unexpected changes, particularly unforeseen legislative changes, could arise that affect the services delivered by Council.

Level of Uncertainty Moderate for the Plan period.

Napier City Council Annual Plan 2013/14

35

Significant Forecasting Assumptions continued 23. Natural Disasters Assumption It is assumed there will be no level of major natural disaster or similar event that cannot be funded out of budgetary provisions.

Risk Underlying Financial Estimates Natural Adverse Event(s) could occur at a level where the affects could not be funded within budget. The financial effects are partly mitigated by special risk insurance related to underground infrastructural assets.

Level of Uncertainty Low.

24. Building Industry Assumption No additional provision has been made in the budgets for likely additional costs arising from the demands for resources to rebuild Christchurch following the earthquakes of September 2010 and February 2011, or from likely changes to the Building Act. Any change to the Building Act will be through legislation and the cost impacts are unknown until that time.

Risk Underlying Financial Estimates 1.

Actual cost may exceed budget.

2.

Planned capital projects may not be completed within the time frames assumed in the forecasts.

Level of Uncertainty High.

Effects of High Level of Uncertainty As Council budgets its capital requirements within a fixed level of rates funding which is increased annually by inflation, the effects will be on the timing of delivery of projects within the Capital Plan. The budgets for projects not completed would be carried forward as outlined in Corporate Assumption 12.

25. Climate Change Assumption It is assumed that any climate change arising from global warming will not impact in any significant way on the Napier community during the period covered by the plan.

This assumption is based on assessments carried out by the Works Asset Department on changes to rainfall intensity with regard to possible climate change outcomes on Local Government functions and also to the guidance document regarding sea level rise, provided by the Ministry for the Environment.

Council also commissioned and received from NIWA a report titled "Impacts of Climate Change on High Intensity Rainfall in Napier" and whilst the report is more directly specific to stormwater management, it is applicable to all services.

The Works Asset Department will periodically review the current knowledge on climate change and possible effects.

While Council recognises the increasing incidence in ‘rain bomb’ events, the forecasts do not provide for any mitigation of future events. However funding is provided for improving stormwater drainage in the CBD and Taradale, resulting from past events during the last decade.

Risk Underlying Financial Estimates Any impact in the short to medium term is likely to be by way of a natural adverse event - see Corporate Assumption 23.

Level of Uncertainty Moderate.

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Napier City Council Annual Plan 2013/14

Significant Forecasting Assumptions continued 26. Emissions Trading Scheme Assumption It is assumed that Council will not be eligible for any additional Emission Units under the NZ Emissions Trading Scheme and Council does not undertake activities that require purchase of emission units except indirectly through Council’s holdings in respect of the Omarunui Landfill joint venture (see below).

No increase in operating costs arising from emissions related changes to energy costs have been included in the plan due to the uncertainty surrounding these.

Reporting obligations under the Emissions Trading Scheme are undertaken by Hastings District Council as the administrative body for the Omarunui Regional Landfill. Emissions related landfill costs are incurred in the landfill, as a separate entity, and passed on to the landfill users through charges to users.

Risk Underlying Financial Estimates That Council could become eligible for additional Emissions Units or that energy costs may increase as a result of the pass through of emission related charges.

Level of Uncertainty Moderate.

27. Local Economy Assumption That Hawke’s Bay economy will return to a normal level during the next twelve months.

Risk Underlying Financial Estimates Hawke’s Bay is currently experiencing below average annual growth, below medium wage levels, and above average unemployment. There is a risk that the local economy will take longer to recover.

Level of Uncertainty High.

Effects of High Level of Uncertainty As this Annual Plan is based around a conservative financial strategy, which encompasses an affordable and sustainable level on rating, impacts on individual ratepayers will not be significant

28. World Economy Assumption New Zealand’s economy is directly affected by the world economy. The forecasts assume that the world economy will not deteriorate beyond its current state.

Risk Underlying Financial Estimates That the world economy could worsen, putting pressure on increasing costs.

Level of Uncertainty Moderate to high.

Effects of High Level of Uncertainty As this Annual Plan is based on a conservative financial strategy, which encompasses an affordable and sustainable level of rating, impacts on individual ratepayers will not be significant.

Napier City Council Annual Plan 2013/14

37

Prospective Statement of Comprehensive Income for the Year Ended 30 June 2014 Actual 2011/12 ($000)

38

Note

44,840 3,219 2,192 9,651 36,006 (1,103) 94,805

Income Rates revenue Finance income Development and financial contributions Subsidies and grants Other revenue Other gains/(losses) Total income

24,847 20,228 30,909 289 76,273

Expenditure Employee benefit expense Depreciation and amortisation Other expenses Finance costs Total expenditure

18,532 212 18,744 18,744

Operating surplus/(deficit) before tax Share of associate surplus/(deficit) Surplus/(deficit) before tax Income tax expense Surplus/(deficit) after tax

18,744

Other comprehensive income Valuation gains/(losses) taken to equity Total comprehensive income

2a 2b

2c

3a 3b

3c

Annual Plan 2013/14 ($000)

TYP 2013/14 ($000)

TYP/ AP 2012/13 ($000)

46,134 1,500 1,879 4,789 40,898 1,098 96,298

47,273 882 1,855 4,637 42,319 1,098 98,064

45,466 1,657 1,789 7,238 39,620 1,374 97,144

26,392 22,334 35,231 141 84,098

26,360 22,255 36,995 141 85,751

25,513 20,835 34,515 278 81,141

12,200

12,313

16,003

225 12,425 12,425

274 12,587 12,587

213 16,216 16,216

62,446 74,871

70,055 82,642

16,216

Napier City Council Annual Plan 2013/14

Prospective Statement of Income for the Year Ended 30 June 2014 Actual 2011/12 ($000)

6,676 4,729

Total operating revenue (Activity Cost of Service Statements) Roading Solid Waste

Annual Plan 2013/14 ($000)

TYP 2013/14 ($000)

TYP/ AP 2012/13 ($000)

5,876 5,274

6,097 5,659

5,852 5,149

1,729 7,771 4,303 2,598 8,873 6,453 4,242 10,763

Stormwater Sewerage Water Supply Recreation Social and Cultural City Promotion Planning and Regulatory Property Assets

847 7,549 4,484 2,487 5,898 7,640 4,963 14,875

860 7,675 4,641 2,516 6,208 7,948 4,899 15,045

811 8,419 4,435 2,404 7,954 7,673 4,841 14,618

58,137

Total operating revenue

59,893

61,548

62,156

32,688 3,219 452 309

Other income (as per Statement of Comprehensive Income) Non targeted rates Interest Income Rendering of services Other Income

33,995 1,500 596 314

34,686 882 617 331

32,417 1,657 596 318

94,805

Total income

96,298

98,064

97,144

1,910 14,743

Total operating expenditure (Activity Cost of Service Statements) Democracy and Governance Roading

2,122 14,631

2,177 15,409

2,105 14,128

4,894 3,071 6,019 3,530 10,100 12,146 8,445 5,625 5,906

Solid Waste Stormwater Sewerage Water Supply Recreation Social and Cultural City Promotion Planning and Regulatory Property Assets

5,079 3,524 6,786 4,034 10,965 14,010 9,855 6,148 7,968

5,437 3,608 6,896 4,183 10,906 14,342 10,172 6,315 8,117

5,141 3,439 6,656 3,996 10,339 12,615 9,907 6,188 7,709

76,389

Total operating expenditure

85,122

87,562

82,223

(1,844) 273

Other expenditure (as per Statement of Comprehensive Income) Internal expenditure Rates remissions

(1,980) 164

(2,624) 160

(1,952) 160

792

653

710

1,455

Other expenses

76,273

Total expenditure

84,098

85,751

81,141

18,532 212

Operating surplus/(deficit) before tax (as per Statement of Comprehensive Income) Share of associate surplus/(deficit)

12,200 225

12,313 274

16,003 213

18,744 18,744

Surplus/(deficit) before tax (as per Statement of Comprehensive Income) Income tax expense Surplus/(deficit) after tax

12,425

12,587 12,587

16,216 16,216

Napier City Council Annual Plan 2013/14

-

12,425

39

Prospective Statement of Changes in Equity for the Year Ended 30 June 2014 Actual 2011/12 ($000) 695,837 18,744 1,639 716,220

620,898 9,404 (107) 630,195

8,183 (1,639) 6,544 627,733 9,106 (100) 636,739 1,352,959 26,927

40

Retained earnings at beginning of period Surplus/(Deficit) after tax [i] Transfers to/from Restricted Reserves Retained earnings at close of period Other reserves Revaluation reserves at beginning of period Restricted reserves at beginning of period Fair value through equity reserve at beginning of period Other reserves at beginning of period Movements Valuation gains/(losses) on revaluation [ii] Transfers to/from Retained earnings Total movements in other reserves Revaluation reserves at close of period Restricted reserves at close of period Fair value through equity reserve at close of period Other reserves at close of period Total Equity Total comprehensive income includes items [i] and [ii]

Annual Plan 2013/14 ($000)

TYP 2013/14 ($000)

TYP/ AP 2012/13 ($000)

730,621 12,425 (203) 742,843

731,702 12,587 (416) 743,873

709,780 7,974 5,706 723,460

634,324 2,680

620,898 3,184

620,898 8,890

(100) 636,904

(107) 623,975

(107) 629,681

62,446 203 62,649

70,055 416 70,471

(5,706) (5,706)

696,770 2,883 (100) 699,553

690,953 3,600 (107) 694,446

620,898 3,184 (107) 623,975

1,442,396

1,438,319

1,347,435

74,871

82,642

16,216

Napier City Council Annual Plan 2013/14

Prospective Statement of Financial Position for the Year Ended 30 June 2014 Actual 2011/12 ($000)

Annual Plan 2013/14 ($000)

TYP 2013/14 ($000)

TYP/ AP 2012/13 ($000)

4a

5,829 12,654 4,677 300 5,000 28,460

6,293 12,249 4,662 300 5,000 28,504

8,074 11,874 3,683 300 20,000 43,931

4b

1,383,756 903 2,058 35,992 4,439 7,075 1,434,223

1,375,197 789 6,625 37,712 4,587 7,074 1,431,984

1,285,221 792 2,000 36,614 4,313 6,875 1,335,815

1,462,683

1,460,488

1,379,746

12,133 3,669 8 15,810

14,441 3,337 8 17,786

13,945 3,336 2,008 19,289

1,420 1,040 2,013 4 4,477

1,472 1,040 1,867 4 4,383

1,420 1,304 2,044 12 4,780

20,287

22,169

24,069

742,843 699,553

743,873 694,446

731,702 623,975

Note ASSETS

4,612 11,990 5,166 412 62,904 85,084

Current assets Cash and cash equivalents Debtors and other receivables Inventories Biological assets Other financial assets Total current assets

1,239,751 326 2,259 34,894 4,134 8,742 1,290,106

Non-current assets Property, plant and equipment Intangible assets Inventories Investment property Investment in associates Other financial assets Total non-current assets

1,375,190

Total assets

4c

LIABILITIES 10,454 3,305 2,008 15,767

Current liabilities Creditors and other payables Employee benefit liabilities Borrowings Total current liabilities

1,145 1,568 1,731 2,020 6,464

Non-current liabilities Provisions Revenue Received in Advance Employee benefit liabilities Borrowings Total non-current liabilities

22,231

716,220 636,739

4d

Total liabilities EQUITY Retained earnings Other reserves

4e 4e

1,352,959

Total public equity

1,442,396

1,438,319

1,355,677

1,375,190

Total liabilities and equity

1,462,683

1,460,488

1,379,746

Napier City Council Annual Plan 2013/14

41

Prospective Statement of Cash Flows for the Year Ended 30 June 2014 Actual 2011/12 ($000)

44,551 3,326 40,876 (51,395) (289) 37,069

1,287 111,389 (27,382) (124,960) (39,666)

(8) (8)

(2,605) 7,217 4,612

42

Cash flows from operating activities Receipts from rates revenue Interest received Receipts from other revenue Payments to suppliers and employees Interest paid Net cash from operating activities Cash flows from investing activities Proceeds from sale of property, plant and equipment Proceeds from withdrawal of investments Purchase of property, plant, equipment and intangibles Acquisition of investments Net cash from investing activities Cash flows from financing activities Proceeds from borrowings Repayment of borrowings Net cash from financing activities Net (decrease)/increase in cash, cash equivalents and bank overdrafts Cash, cash equivalents and bank overdrafts at the beginning of the period Cash, cash equivalents and bank overdrafts at the close of the period

Annual Plan 2013/14 ($000)

TYP 2013/14 ($000)

TYP/ AP 2012/13 ($000)

46,124 1,500 44,550 (61,570) (141) 30,463

47,240 882 45,643 (61,975) (141) 31,649

45,446 1,657 45,376 (61,543) (278) 30,658

172 19,925

215 20,000

186 40,004

(50,500) (5,000) (35,403)

(46,438) (5,199) (31,422)

(43,435) (15,701) (18,946)

(2,008) (2,008)

(2,008) (2,008)

(2,008) (2,008)

(7,044)

(1,781)

9,594

12,873

8,074

(1,520)

5,829

6,293

8,074

Napier City Council Annual Plan 2013/14

Notes of Changes Between the 2013/14 Ten Year Plan and 2013/14 Annual Plan Significant variances between the 2013/14 Ten Year Plan (TYP) and 2013/14 Annual Plan are outlined below. Reference numbers indicated correspond with note references in the Prospective Statement of Income, the Prospective Statement of Changes in Equity, the Prospective Statement of Financial Position and the Prospective Statement of Cash Flows in the 2013/14 Annual Plan.

1) General a)

The opening equity forecast as at 1 July 2013 shown in the Prospective Statement of Financial Changes in Equity has been updated to reflect the most recent information available. This update includes changes flowing from the reported results for the 2011/12 financial year.

b)

Inflation factors used for the forecast variance from revaluation of assets applied to the TYP for 2013/14 varies from the plan. This reflects the lower actual inflation for the 11/12 year and forecast inflation for the 12/13 year.

c)

The TYP comparatives in the Prospective Statement of Income have been adjusted to include the Municipal Theatre Activity in the City Promotion Group instead of the Social and Cultural Group.

2)

Prospective Statement of Income

The TYP 2013/14 and TYP/AP 2012/13 operating revenue and expenditure has been restated for the Social and Cultural and City Promotion Groups to correctly include the Municipal Theatre activity in City Promotion rather than in Cultural as in past plans.

3)

Prospective Statement of Comprehensive Income - Revenue

Thousands

Co ouncil Fo orecast Revenu ue 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 ‐

Finance Incom F me Other Gains L O osses Development D & Financial Contributions C Subsidies & G S rants Other Revenu O ue

Annual Plan 14 13/1

TYP 13/14 T

Rates R

a)

Rates Revenue – The level of rates revenue proposed in the Annual Plan is 2.5% lower than anticipated in the TYP. The variance is the result of forecast inflation levels for the 2013/14 year. Actual recorded inflation is substantially lower than that forecast for the 2011/12 year as is the 2013/14 year forecast. The TYP included an expected $1.2 million of inflation for the 2013/14 year. The lower actual and forecast inflation levels have impacted Council operating costs and the direct and indirect costs of the capital plan resulting in a rating level of $46.1M compared to the TYP forecast of $47.3M. This is around $48 per rateable property lower than forecast when the TYP was prepared.

b)

Finance Income – Finance Income or interest received on funds invested is expected to be +$0.6M above that forecast in the 2013/14 TYP. This is due to a cash position above the opening level assumed in the TYP for the commencement of the 2013/14 year.

c)

Other Revenue – Other revenue for 2013/14 Annual Plan is $1.4 million below that forecast in the TYP. Significant variations from the plan are:

Napier City Council Annual Plan 2013/14

43

Explanatory Notes of Changes continued Description

Increase+/Decrease – Million

Rental Income

-$0.3

Retail & Product Sales

-$0.5

User Charges & Rendering of Services

-$0.1

Sales Residential Development

-$0.4

Rental Income, Retail & Product Sales and User Charges & Rendering of Services have been reduced in line with the cumulative lower inflation rates now forecast compared to those forecast for the 2013/14 TYP and to reflect reduced demand due to weak economic conditions.

4)

Prospective Statement of Comprehensive Income - Operating Expenditure

Council Operating Expenditure $100,000

Finance costs

Thousands

$80,000 Other expenses

$60,000 $40,000

Depreciation and amortisation

$20,000 $0 Annual Plan13/14

a)

Employee benefit expenses Ten Year Plan 13/14

Employee Benefit Expense

Employee benefit expense is in line with the forecast for the 2013/14 TYP. The level forecast is 3.4% above the Annual Plan for 2012/13. The increase is due to the change in the level of Kiwisaver +1% (full year) and an anticipated increase in Kiwisaver uptake, changes in wages and salary rates and additional contract staff employed for specific capital projects b)

Other expenses – Other expenses are planned to be 4.9% or -$1.8M below the 2013/14 TYP inflated forecast level.

Significant items of contributing to this reduction:

Description

Increase+/Decrease –

Million

Inflation Variance

-$1.2

Insurance Increase

+$0.4

Omarunui Landfill Fees

-$0.2

Residential Development

-$0.2

Roading -$0.2 Cricket World Cup

+$0.1

Operating Costs

-$0.4

Inflation Variance: The inflation variance is the difference between the TYP other expenses and the uninflated TYP values 44

Napier City Council Annual Plan 2013/14

Explanatory Notes of Changes continued adjusted for inflation at 1.0%. Other variances listed above are after adjustment for inflation differences.

Insurance Increase: Insurance cost increases for 2013/14 have been advised at $0.4M above the 2012/13 level. This is around 23% above the TYP 2013/14 level and an additional 19% above the 2012/13 level. Insurance costs are now 147% above the 2010/11 annual plan level and have risen from 1.8% of rates to 4.5% over this 4 year period.

Omarunui Landfill Fees: Increases in landfill fees as a result of the expected Emissions Trading Scheme cost increases.

This scheme has not advanced to the stage forecast in the TYP consequently costs are below those expected.

Residential Development: Due to lower forecast sales (see 2)c) ) costs of development are forecast to be lower than anticipated in the 2013/14 TYP. Any actual increase in sales in the forecast year will also result in increased costs Roading: Lower levels of work in road amenities will be undertaken due to a decrease in New Zealand Transport Agency funding. The lower level of activity is not expected to impact service levels in the 2013/14 year. Lower operating costs have also been offset by higher total capital expenditure.

Cricket World Cup: During the planning process Council decided to pursue the bid to be a host city for the 2014/15 Cricket World Cup. The anticipated cost of this bid is $250,000. $100,000 of this amount is expected to be incurred for preliminary costs in the 2013/14 year.

Operating Costs: Operating costs from goods and services delivered are anticipated to be lower than forecast. This is a result of lower forecast sales in the Annual Plan for 2013/14 than forecast in the 2013/14 TYP. See 2) c) above regarding forecast decrease in retail and product sales.

Council Expenditure by Group 2013/14 Annual Plan Democracy and Governance Property Assets Planning and Regulatory City Promotion Social and Cultural Recreation Water Supply Sewerage Stormwater Solid Waste Roading

Operating Expenditure Annual Plan

Capital Expenditure Annual Plan

$0

$10,000 $20,000 Thousands

$30,000

Council Expenditure by Group 2013/14 Ten Year Plan Democracy and Governance Property Assets Planning and Regulatory City Promotion Social and Cultural Recreation Water Supply Sewerage Stormwater Solid Waste Roading

Operating Expenditure TYP Capital Expenditure TYP

$0

$10,000 $20,000 Thousands

Napier City Council Annual Plan 2013/14

$30,000

5) Prospective 45

Explanatory Notes of Changes continued 5)

Prospective Statement of Financial Position

a)

Cash and Cash Equivalents: Cash and Cash Equivalents are forecast to be $0.8M below the level forecast in the Ten Year Plan. This is due to a lower planned surplus than indicated in the TYP and lower current liabilities than previously planned.

b)

Property Plant and Equipment: Property Plant and Equipment is forecast to be $8.6M above the level forecast in the 2013/14 Ten Year Plan. The increase is mostly due to a planned increase in projects in recreation, social and cultural and property assets activity groups. In addition additional expenditure in roading and water supply assets has been proposed. Capital expenditure is planned at $5.3M above the 2013/14 TYP level. The balance of the increase level of property plant and equipment between the annual plan and the TYP is land which is intended for sale as part of the Parklands Residential Development. The TYP had forecast this land to be transferred to inventory in the 2013/14 year. It is now expected that this will occur a year later (2014/15) due to lower residential section sales than previously anticipated.

2013/14 Annual Plan - Capital Expenditure by Activity Group $000's 1,644

2,349

4,754

396

Roading

713

Solid Waste Stormwater

4,283

5,198

Sewerage Water Supply

4,033

Recreation

11,278

Social and Cultural City Promotion 488

Planning and Regulatory

2013/14 Annual Plan - Capital Expenditure by Funding $000's 13,919

Financial Contributions

11,945

Loans - Growth Loans - Rates 2,497

2,369

3,831

Rates 1,426

Reserve Funds NZTA Subsidy

805

46

Vested Assets

Napier City Council Annual Plan 2013/14

Explanatory Notes of Changes continued

2013/14 Capital Plan - Expenditure by Classification $000's 14,965 41%

7,748 21%

14,079 38%

Growth Increased Level of Service Renewal

c)

Inventories – Non Current Assets: Non-current inventories are land and land development lots which are expected to be sold in a time frame outside the year of the plan. These inventories relate only to the Parklands Residential Development. The Ten Year Plan forecast non-current inventories to be $4.6M higher than now forecast in the 2013/14 Annual Plan. Due to lower than forecast sales of residential sections, land that was expected to have been transferred to inventory in the 13/14 TYP year, is now expected to be transferred to inventory in the 14/15 plan year. This will increase inventory value in the year of transfer and decrease Property Plant and Equipment value by the same amount.

d)

Creditors and Other Payables: Creditors and other payables have been reforecast in the 2013/14 Annual Plan using the 2011/12 actual data as an opening value and as an indicative basis.

e) Equity: There are no material variances between the 2013/14 Annual Plan forecast and the 2013/14 Ten Year Plan.

Further information in regard to individual components of Equity is detailed in Note 5) below.

6)

Prospective Statement of Changes in Equity

a)

Retained Earnings: Lower surplus forecast for the plan year due to lower revenue, mostly offset by lower expenses, results in a lower retained earnings at 30 June 2014. The variance is 0.1%

b)

Revaluation Reserve: Revaluation Reserves are forecast to be $5.8M above the forecast 2013/14 TYP value. This is due to revaluations both forecast and actual, for Road assets above the level anticipated in the TYP. Note: Due to a change in accounting policy at 30 June 2012, Road assets are revalued on an annual basis. The TYP was prepared under the previous accounting policy where Road assets were revalued on a 3 yearly cycle with all other assets.

c)

Restricted Reserves: Restricted Reserves are forecast to be $0.7M below the value forecast in the 2013/14 TYP. This is in main due to the proposal to allocate $0.5M in the Annual Plan for extension of Sportsgrounds.

7)

Prospective Statement of Cash Flows Notable variances in the 2013/14 Annual Plan compared to the 2013/14 TYP are lower receipts from rates revenue, receipts from other revenue, purchase of property plant and equipment, net decrease in cash and bank overdrafts and cash and cash equivalents at the beginning of the period. Lower receipts from rates revenue, receipts from other revenue and purchase of property plant and equipment have been reviewed in items 1) and 4) above. The decrease in cash and cash equivalents is the net result forecast changes in levels of income and costs. However due to an opening cash balance higher than that forecast in the 2013/14 TYP Councils closing cash position is expected to be $0.5M below that forecast in the 2013/14 TYP. This is in effect the result of small changes to the working capital position forecast and the lower surplus in the 2013/14 Annual Plan.

Napier City Council Annual Plan 2013/14

47

Special Funds Reserve Funds As defined by the Local Government Act 2002 (the Act), a reserve fund means money set aside by a local authority for a specific purpose. Under Schedule 10 Section 16, of the Act, the Long Term Plan must identify the following in regard to each reserve: The purpose of the fund, the activities to which the fund relates, the opening balance of the fund, the closing balance of the fund, the amount expected to be deposited into the fund, and the amount expected to be withdrawn from the fund over the term of the plan. These values are shown in the table below.

The Council’s Reserve Funds are classified into three categories:

Council Created Reserves - established by Council for specific purposes.

Restricted Reserves - where there are legal obligations which restrict the use of the funds.

Bequest and Trust Funds - amounts received from Bequests, Donations or Funds held on behalf of a community organisation.

TITLE

Opening 1 July 2013

Deposits $000

Expenditure $000

Closing Balance 30 June 2014 $000

(7,347)

(166)

7,298

(215)

Dog Control

(303)

(634)

590

(346)

Roading, Stormwater, Parking

(86)

(123)

101

(108)

Hawkes Bay Museum & Art Gallery

(99)

(619)

-

(718)

Roading, Stormwater, Water, Wastewater, Reserves, Sportsgrounds, Pools, Library

(6,744)

(3,378)

4,331

(5,791)

Water Supply, Wastewater, Stormwater, Solid Waste, Reserves, Sportsgrounds, Libraries, Pools

(14,988)

(6,359)

7,313

(14,033)

Activity to which fund relates

COUNCIL CREATED RESERVES Advanced Wastewater Treatment Establishment Fund Accumulation of Advanced Wastewater Levies collected from Napier ratepayers along with interest earned on these funds.

Wastewater

Dog Control Fund This fund is a requirement under the Dog Control Act 1996. All transactions related to the dog owner's share of the costs of Animal Control, both operating and capital, flow to this account. Amounts include dog related fees received and the operating and capital costs of the dog related activity of Animal Control.

General Reserve No.1 Derived from rates arising from NZ Railway land in Munro and Station Streets. The reserve is used to fund the provision of infrastructure (including debt servicing) for any development on this site.

Hawke's Bay Museum and Art Gallery Funds collected from donations and government grants for the Museum Redevelopment Project.

Financial Contributions Collected from financial contributions from developers on the subdivision of land and various land use activities. Used to fund capital works and services.

Infrastructural Asset Renewal and Upgrade Fund Collected from the annual rate funded allocation as per the Capital Plan. Used for capital expenditure on infrastructural asset renewals and associated upgrades.

48

Napier City Council Annual Plan 2013/14

Special Funds continued

TITLE

Opening 1 July 2013

Deposits $000

Expenditure $000

Closing Balance 30 June 2014 $000

Reserves

(1)

-

-

(1)

Pools

(3)

-

-

(3)

(394)

-

210

(184)

Parking

(1,446)

(215)

564

(1,097)

Parking

(5,010)

(2,564)

1,532

(6,041)

Parking

(455)

(104)

101

(458)

190

(220)

211

180

32

(1,928)

1,156

(740)

Reserves

(1,159)

(52)

-

(1,211)

All Activities

(1,268)

(928)

566

(1,630)

(32,527)

(13,692)

19,431

(26,785)

Activity to which fund relates

Keep Napier Beautiful Originally derived from surplus revenue in Keep Napier Beautiful project. Currently credited with annual grant for garden competition and used for competition expenses and administration costs.

Marine Parade Disability Hoist Derived from fundraising carried out by Mr N Bains. Funds intended to be used to purchase a disability hoist for the Marine Parade Pool.

Pensioner Housing Upgrade Reserve Established from a contribution from rates equivalent to the annual depreciation on pensioner flats and houses owned

by Council. The reserve is available to provide capital upgrade of these facilities.

Retirement & Rental Housing

Parking Contributions Account Funds derived for the provision of parking facilities.

Parking Account Funds are derived from the surplus revenue from the Parking Business Unit and are used to provide for parking facilities generally.

Parking Equipment Reserve Account To provide funds for replacement of parking equipment on a regular basis.

Taradale Parking Meters Funds collected from Parking Meters in Taradale Town Centre to fund the upgrade of the Town Centre (including parking) 2009 - 2019 Ten Year Plan.

Parking, Roading

Regional Landfill Account Amount is derived from returns from the Joint Regional Landfill Committee for the operation of the Omarunui Regional Landfill and is used to fund capital development of the landfill and the net operating costs including loan servicing, of the Transfer Station.

Solid Waste

Reserve Subdivision of Land This account is derived from contributions on the subdivision of land towards the development of reserves and subject to Council approval as part of the annual budget process.

Subdivision and Urban Growth Fund To service all borrowing in relation to Council's share of subdivision and urban growth projects, and to meet any servicing costs on financing the developer's share of projects where expenditure requirements precede the receipt of financial contributions. A part of the surplus is also used to reduce the general rate requirement.

Total Council Created Reserves

Napier City Council Annual Plan 2013/14

49

Special Funds continued

TITLE

Opening 1 July 2013

Deposits $000

Expenditure $000

Closing Balance 30 June 2014 $000

Wastewater

-

-

-

-

Community Planning

-

(42)

42

-

(1,229)

(44)

500

(773)

118

(2,129)

2,059

48

(1,300)

(65)

-

(1,365)

(2,411)

(2,280)

2,601

(2,090)

(33)

(1)

-

(35)

(134)

(6)

-

(140)

Activity to which fund relates

RESTRICTED RESERVES Advanced Wastewater Treatment Establishment Fund (HB Regional Council Distribution) Established in 1999/2000 by a special distribution from HBRC for advanced treatment of wastewater. The funds are held in separate investments.

Creative New Zealand Derived from a grant from Creative NZ. This fund has been established to support local arts projects within the Napier area.

Endowment Land Account Derived from the sale of BCP Faraday Street land and the transfer of the Criterion Account capital sum previously advanced to the Land Development Account. This account is now used for the sale and purchase of other endowment land.

Property Holdings

Hawke's Bay Harbour Board Endowment Land Income Account This account was derived from proceeds from the sale of former Harbour Board leasehold properties up to 30 March 2002. Council resolution of 26.6.02 states "That the full uncommitted balance of the Harbour Board Land Account at 30 March 2002 be used to fund maintenance and capital improvements of the Inner Harbour and any other future capital expenditure related to Napier Harbour as defined by the Act".

Inner Harbour, Reserves

Loan Reserve Established to manage internal loan requirements.

Corporate

Total Restricted Reserves

BEQUESTS AND TRUST FUNDS Colenso Bequest The bequest is invested and the income derived used to: i) Provide a fund for the assistance of poor families. (Capital $2500) ii) Provide assistance for prisoners released from Napier jail. (Capital $500) iii) Provide a fund for the assistance of distressed seamen and strangers. (Capital $1000) iv) Provide prizes for senior scholars at Napier Boys, Napier Girls & Colenso High Schools. (Capital $1000).

Community Planning

Estate Henry Hodge For charitable purposes, with a wish that it be used for the erection of flats for the needy.

50

Retirement & Rental Housing

Napier City Council Annual Plan 2013/14

Special Funds continued

TITLE

Opening 1 July 2013

Deposits $000

Expenditure $000

Closing Balance 30 June 2014 $000

(20)

(1)

-

(21)

(4)

-

-

(5)

Community Planning

(53)

(2)

-

(56)

Sportsgrounds

(12)

(1)

-

(12)

Community Planning

(12)

(1)

-

(13)

(268)

(12)

-

(282)

Activity to which fund relates

Eskdale Cemetery Trust This Trust fund, comprising a number of bequests totalling $1,400, was taken over from the former Hawke's Bay County Council, and is available for the maintenance and upkeep of the Eskdale Cemetery.

Cemeteries

Hawke's Bay Municipal Theatre Funds held on behalf of Hawke's Bay Arts and Municipal Theatre Trust.

Napier Municipal Theatre

John Close Bequest "Bequest is invested and income used in two ways: i) Cemetery Trust - for upkeep and maintenance of the Close burial plot, with surplus income to provide ham and ale at Christmas to the poor, old and needy. ii) Coal Trust - provided wood and coal to the needy.

A scheme for arrangement for the disposition of income in terms of the Charitable Trusts Act 1957 was to have been initiated in 1993."

Morecroft Bequest To provide a Municipal gymnasium or gymnasium equipment, either as a separate building or as part of any memorial or centennial hall which Napier City Council may decide to erect.

Napier Christmas Cheer For community fundraising through the HB Today for the preparation of Christmas parcels to be distributed to disadvantaged individuals and families within the Napier District.

Total Bequests Trust Funds

Napier City Council Annual Plan 2013/14

51

Borrowing Programme Actual 2011/12 ($000)

1,300 1,300 (3,047) (1,747) 38,525 36,778 32,750 4,028

New Loans - Rate Funded - Growth Funded - Non-Rate Funded Less Repayments (Net) Opening Public Debt Gross Public Debt Internal Funding Net Public Debt

Annual Plan 2013/14 ($000)

TYP 2013/14 ($000)

TYP/ AP 2012/13 ($000)

9,672 805 10,477 (4,737) 5,740 48,091 53,831 (53,819) 12

8,758 1,267 3,709 13,734 (4,546) 9,188 46,900 56,088 (56,076) 12

12,234 715 12,949 (4,388) 8,561 38,339 46,900 (44,880) 2,020

The reduction in internal funding from the level projected in the TYP is due to increased principal repayments.

Loan Funding Loan funding measures compared to borrowing policy limits.

Actual 2011/12

Annual Plan 2013/14

TYP 2013/14

TYP/ AP 2012/13

Debt Servicing

16% 8.3%

Proportion of Rates Revenue applied to Service Debt (External & Internal Debt) Policy limit Actual

16%

16%

16%

9.2%

10.2%

9.3%

100%

100%

100%

56%

57%

47%

$1,000

$1,000

$1,000

$694

$721

$625

Debt / Income 100% 37%

Net Debt as a % of total income Policy limit Actual Rate Funded Debt per Capita

$1,000 $459

52

Net Rate-funded Debt Policy limit Actual

Napier City Council Annual Plan 2013/14

Prospective Capital Plan The Prospective Capital Plan for 2013/14 is essentially the Ten Year Capital Plan as included in the 2012/13 to 2021/22 TYP adjusted for issues arising since the TYP was adopted. Key differences arise from additional projects added to the Prospective Capital Plan for, changes to the inflation factors used to calculate the cost of the Capital Plan and variations to timing of planned projects between the two Capital Plans.

The following projects have been added: Description Jervois Road Footpath Clive Square Bus Shelter Domett Street Extension Jervoistown Stormwater Improvements Severn Street Extension Upgrade Water Supply Control System Te Awa Structure Plan Stages 1 & 2

Year 2013/14 2013/14 2016/17 2013/14 2013/14 2013/14 2017/18

Budget ($000)

Funding

120 460 1,400 140 108 360

Capital Reserve Capital Projects Fund Financial Contributions Financial Contributions Rates Rates

2,626

Financial Contributions

- Stormwater

713

Financial Contributions

- Wastewater

980

Financial Contributions

-

288

Financial Contributions Capital Reserve

- Roading

Water Supply

McLean Park Light tower upgrade

2013/14

125

Extension of Suburban Sportsgrounds Marine Parade Development Projects Memorial Square Building Development Art Centre Building (Old Council Chambers) Land development for growth

2013/14 2013/14 2013/14 2013/14

500 1,200 300 350

Endowment Land Account Capital Projects Fund Capital Reserve Capital Projects Fund

2013/14

3,500

Capital Projects Fund

The other main difference is the revised inflation factor used to calculate costs. In the TYP the assumed inflation factor for the 201/14 was 3.6%. The factor used for this Prospective Capital Plan is 1.0% (based on CPI for December 2012).

Changes for exisitng projects made in the in the 2013/14 Prospective Capital Plan are as follows: Description Omarunui Development - Valley D Omarunui Development - Plant Omarunui Development - Valleys B & C

Replace RGC Events Centre Floor

Westshore Beach Reprofiling CBD Parking Projects

Year 2013/14 2013/14 2013/14 Moved from 2013/14 to 2021/22 Moved from 2013/14 to 2021/22 2021/22

Budget ($000) 5 (339) 3

Funding Regional Landfill Income Account Regional Landfill Income Account Regional Landfill Income Account

469

Rates

428 404

Loan – Non Rate Funded Parking Account

$112,000 funding for the Western Hills Cemetery was moved to 2013/14 from 2014/15.

Napier City Council Annual Plan 2013/14

53

Prospective Capital Plan continued Major Capital Projects In addition to Council’s programme of infrastructural asset renewal and other routine capital expenditure, the major capital projects included in the remaining nine years of the Capital Plan are:

CBD Stormwater Upgrade

Hastings Street Redevelopment. The project will be undertaken in conjunction with the CBD Stormwater upgrade

Taradale Stormwater Upgrade

Ellison Street Stormwater Pump Station

Te Awa Stormwater Pond

Biological Trickling Filter (BTF) Wastewater Treatment Plant

Wastewater Outfall Replacement

Additional Water Reservoir Taradale

Awatoto Water Supply Trunk Main

Park Island sportsgrounds expansion

McLean Park Turnstiles and Returf

Napier Aquatic Centre Enclosure Building

Passive Recreation Reserves and Reserves Pathways and Linkages. Additional Reserve facilities which will cater for Napier’s population growth

Marine Parade Development Projects

Napier Library Redevelopment

Additional Parking Facilities - to cater for demand

Lagoon Farm Business Park

Land development for growth

Omarunui Landfill Development

Te Awa Structure Plan Stages 1 & 2 – Roading, Stormwater, Wastewater and Water Supply

54

Napier City Council Annual Plan 2013/14

2,675

2013/14

Napier City Council Annual Plan 2013/14

Te Awa Structure Plan Stages 1 & 2

Domett Street Extension

-

-

91

488

586 SOLID WASTE TOTAL

121

6

9

261

11,278

-

-

120

460

-

1,414

2,131

Solid Waste I.A.R.

Omarunui Development - Valleys B&C

117

90

Omarunui Development - Forestry

Omarunui Development - Plant

Omarunui Development - Valley D

Solid Waste

3

63

313

SOLID WASTE

ROADING TOTAL

Jervois Road Footpath

-

11,128

Clive Square Bus Shelter

-

Hastings Street Redevelopment

1,400

Herschell Street Precinct

Transportation Proposals

1,862

850

Roading Capital Projects (Bulk Funded)

1,882

1,901

4,101

1,151

Roading Vested Assets

4,009

1,125

1,426

Roading I.A.R.

Roading

ROADING

Description

1,395

2,614

2012/13

-

976

93

121

2

142

618

10,048

-

-

462

100

96

481

129

2

1

230

13,956

-

2,872

-

-

-

-

2,742

2,079

1,525

4,738

1,653

3,085

2017/18

125

2

12

246

11,829

1,400

-

-

-

-

-

2,522

2,013

1,364

4,530

1,579

2,951

2016/17

-

-

2,441

1,948

1,335

4,324

1,508

2,816

2015/16

1,129

103

134

2

337

553

11,532

-

-

-

-

-

-

2,839

2,152

1,578

4,963

1,733

3,230

2018/19

753

107

138

2

138

368

11,973

-

-

-

-

-

-

2,941

2,230

1,635

5,167

1,820

3,347

2019/20

593

110

143

2

-

338

12,419

-

-

-

-

-

-

3,044

2,308

1,693

5,374

1,910

3,464

2020/21

476

114

148

3

-

211

12,868

-

-

-

-

-

-

3,148

2,387

1,750

5,583

2,001

3,582

2021/22

Note: % improvement split: G – Growth, L – Increased Level of Service, R – Renewels

448

94

122

2

56

174

9,697

-

-

-

-

-

-

2,208

1,969

1,209

4,311

1,502

2,809

2014/15

5,806

908

1,181

23

695

2,999

105,600

1,400

2,872

120

460

-

1,414

24,016

18,987

13,240

43,091

15,132

27,959

Nine Year Total

Rates

Regional Landfill Income A/c

Regional Landfill Income A/c

Regional Landfill Income A/c

Regional Landfill Income A/c

Financial Contributions

Financial Contributions

Capital Reserve

Capital Projects Fund

Loans - Rates

Loans - Rates

Financial Contributions

Rates

Vested Assets

TNZ Subsidy

Rates

Funding

100%

100%

100%

100%

G

100%

100%

100%

L

100%

100%

100%

100%

100%

100%

100%

100%

100%

R

Prospective Capital Plan continued

55

56

647

2013/14

Extend Outfalls Marine Parade

Te Awa Structure Plan Stages 1 & 2

Jervoistown Stormwater Improvements

-

-

3,976 STORMWATER TOTAL

Te Awa Stormwater Pond

Taradale Stormwater Upgrade

-

50

4,033

140

-

-

51

-

2,020

CBD Stormwater Upgrade

-

2,000

-

59

-

Ellison Street Pump Station

Drain Improvements

-

-

58

-

-

-

-

200

Dalton Street Pump Replacement

54

13

-

Upgrade Taipo Stream

Georges Drive Drain

-

-

13

-

Stormwater Vested Assets

429

439

802

455

Stormwater I.A.R.

776

450

155

Upgrading Stormwater Catchments

Stormwater

STORMWATER

Description

135

641

2012/13

4,164

-

-

-

1,656

-

-

-

-

60

-

620

310

310

13

-

509

466

840

177

663

2015/16

3,767

-

-

-

1,390

-

-

-

-

62

-

-

-

-

14

-

521

912

868

183

685

2016/17

2,905

-

780

-

-

-

-

-

-

65

-

2,836

-

-

-

-

-

-

-

-

765

-

-

-

-

-

-

15

-

602

515

939

206

733

2018/19

-

14

59

582

498

907

199

708

2017/18

8,364

-

-

-

-

-

5,079

1,016

4,063

69

-

-

-

-

15

-

624

1,604

973

214

759

2019/20

4,108

-

-

-

-

-

-

-

-

72

-

-

-

-

16

-

646

2,367

1,007

221

786

2020/21

4,451

-

-

-

-

-

-

-

-

74

-

-

-

-

16

68

668

2,584

1,041

229

812

2021/22

Note: % improvement split: G – Growth, L – Increased Level of Service, R – Renewels

6,650

-

-

1,674

2,093

1,046

-

-

-

61

-

-

-

-

13

-

461

471

831

161

670

2014/15

41,278

140

780

1,674

5,190

3,066

5,079

1,016

4,063

1,287

-

620

310

310

129

181

5,052

9,872

8,208

1,745

6,463

Nine Year Total

Financial Contributions

Financial Contributions

Financial Contributions

Stormwater Catchments Upgrade

Stormwater Catchments Upgrade

Financial Contributions

Loans - Growth

Rates

Rates

Financial Contributions

Rates

Rates

Rates

Vested Assets

Rates

Financial Contributions

Rates

Funding

100%

100%

100%

100%

100%

100%

100%

G

70%

70%

100%

100%

100%

100%

100%

L

30%

30%

100%

100%

100%

R

Prospective Capital Plan continued

Napier City Council Annual Plan 2013/14

Napier City Council Annual Plan 2013/14

Awatoto Trunk Main

Te Awa Structure Plan Stages 1 & 2

Severn Street Extension

Upgrade Water Supply Control System

-

-

-

-

1,031 WATER SUPPLY TOTAL

New Reservoir Taradale

-

Water Supply Vested Assets

New Well - Awatoto

-

212

Water Meters I.A.R.

Water Supply - Capital Upgrade Associated with IAR

22

119

Water Pump Stations I.A.R.

Water Pipes I.A.R.

Water Supply

88

590

WATER SUPPLY

2,261 SEWERAGE TOTAL

Te Awa Structure Plan Stages 1 & 2

-

2,349

360

108

-

-

-

838

216

120

22

89

596

5,198

-

-

590

Wastewater Outfall Replacement

Wastewater Vested Assets

577

-

657

2,576

-

1,919

505

-

227

251

1,049

2013/14

-

Wastewater Outfall I.A.R.

BTF Wastewater Treatment Plant

-

-

Wastewater Pump Stations I.A.R.

Wastewater Treatment Plant I.A.R.

225

-

Milliscreen I.A.R.

Wastewater Pipe I.A.R.

SEWERAGE

SEWERAGE

Description

249

1,210

2012/13

57

3,872

-

-

-

-

2,773

-

251

123

23

91

611

2,704

-

-

685

-

-

-

518

-

233

257

1,011

2015/16

1,131

-

-

-

-

-

-

256

127

23

94

631

3,051

-

1,507

-

-

315

-

-

-

288

131

24

97

652

4,490

1,072

-

781

699 -

-

-

-

552

-

248

275

1,562

2017/18

-

-

-

535

-

240

266

1,311

2016/17

1,235

-

-

-

-

-

-

298

136

25

101

675

3,210

-

-

808

-

-

-

572

58

257

284

1,231

2018/19

1,279

-

-

-

-

-

-

309

141

26

104

699

3,265

-

-

838

-

-

-

592

-

266

294

1,275

2019/20

1,324

-

-

-

-

-

-

319

146

27

108

724

3,381

-

-

867

-

-

-

613

-

276

305

1,320

2020/21

1,369

-

-

-

-

17,391

360

108

315

2,242

2,773

838 -

2,494 -

1,199

221

888

5,953

40,552

1,072

8,877

6,784

2,576

657

1,919

5,044

185

2,267

2,507

11,240

Nine Year Total

330

151

28

112

748

12,499

-

8,877

896

-

-

-

634

127

285

315

1,365

2021/22

Note: % improvement split: G – Growth, L – Increased Level of Service, R – Renewels

3,325

-

-

-

2,242

-

-

227

124

23

92

617

2,754

-

-

620

-

-

-

523

-

235

260

1,116

2014/15

Rates

Rates

Financial Contributions

Financial Contributions

Financial Contributions

Financial Contributions

Vested Assets

Rates

Rates

Rates

Rates

Financial Contributions

Loans - Rates

Vested Assets

Loans - Rates

Advanced Wastewater T/ment Fund

Rates

Rates

Rates

Rates

Rates

Funding

100%

100%

100%

100%

100%

100%

100%

G

100%

100%

100%

42%

100%

100%

L

100%

100%

100%

58%

100%

100%

100%

100%

100%

R

Prospective Capital Plan continued

58

-

124

-

NAC Total

NAC Enclosure Building

NAC I.A.R.

Napier Aquatic Centre (NAC)

Sportsgrounds Total

1,682

124

Extension of Suburban Sportsgrounds

-

455

298

157

2,158

500

-

125

Light tower upgrade

-

-

-

Park Island Expansion

-

-

-

-

-

-

McLean Park Turnstiles

McLean Park Returf

-

-

Guppy Road Sports Village Stage 2

-

Replace RGC Events Centre Floor

-

50

264

1,207

1,072

Install Automatic Irrigation Systems

402

805

326

2013/14

357

Sportsgrounds I.A.R.

Sportsgrounds Development

715

Sportsgrounds

RECREATION

Description

296

2012/13

161

-

161

2,655

-

-

1,969

-

166

-

166

2,123

-

-

1,380

1,380

-

-

398

-

-

-

-

-

-

345

2016/17

172

-

172

926

-

-

-

-

-

569

-

-

-

-

-

-

-

357

2017/18

178

-

178

897

-

-

-

-

-

326

-

-

-

202

-

-

-

369

2018/19

184

-

184

591

-

-

-

-

-

-

-

-

-

209

-

-

-

382

2019/20

191

-

191

550

-

-

-

-

-

-

-

-

-

154

-

-

-

396

2020/21

197

-

197

998

-

-

-

-

-

-

-

-

589

-

-

-

-

409

2021/22

Note: % improvement split: G – Growth, L – Increased Level of Service, R – Renewels

1,171

1,008

163

2,094

-

-

1,756

710

1,969

-

1,046

20

-

332

-

-

-

-

-

334

2015/16

-

-

-

-

-

-

-

338

2014/15

2,875

1,306

1,569

12,992

500

125

5,105

2,090

3,015

895

418

332

589

565

1,207

402

805

3,256

Nine Year Total

Loans - Rates

Rates

Endowment Land Account

Capital Reserve

Financial Contributions

Loans - Growth

Rates

Rates

Rates

Rates

Loans - Rates

Financial Contributions

Loans - Growth

Rates

Funding

100%

100%

33%

100%

100%

G

100%

100%

20%

67%

L

100%

100%

100%

80%

100%

R

Prospective Capital Plan continued

Napier City Council Annual Plan 2013/14

Napier City Council Annual Plan 2013/14

Reserves Total

113

4,608 RECREATION TOTAL

Inner Harbour Facilities I.A.R.

113

Inner Harbour

Reserves Total

Marine Parade Development Projects

-

2,689

New Playground

Relocate Nursery

-

-

Hardinge Road Erosion

Marine Parade Landscaping

200

1,015

Westshore Beach Reprofiling

-

Marine Parade Playground

Reserves, Pathways and Linkages

-

739

Playground Equipment

-

Tree Planting Programme

Passive Recreation Reserves

100

68

Reserves I.A.R.

Reserves Vested Assets

100

Reserves

Description

467

2012/13

-

-

4,754

157

157

1,984

1,200

-

5,365

161

161

2,388

-

301

-

-

-

-

-

1,386

-

71

-

104

526

2015/16

6,386

166

166

3,931

-

-

-

-

-

-

-

-

-

73

3,208

107

543

2016/17

2,186

172

172

916

-

-

-

110

-

-

-

-

60

75

-

110

561

2017/18

2,355

178

178

1,102

-

-

329

-

-

-

-

-

-

78

-

114

581

2018/19

2,308

184

184

1,349

-

-

548

-

-

-

-

-

-

81

-

118

602

2019/20

1,829

191

191

897

-

-

-

-

-

-

-

-

67

84

-

123

623

2020/21

2,250

197

197

858

-

-

-

-

-

-

-

-

-

87

-

127

644

2021/22

Note: % improvement split: G – Growth, L – Increased Level of Service, R – Renewels

6,418

163

163

2,990

-

57

-

220

-

-

-

443

1,401

57

71

105

105

531

2014/15

-

-

-

-

69

101

101

513

2013/14

33,851

1,569

1,569

16,415

1,200

358

877

330

-

-

443

2,787

184

689

3,414

1,009

5,124

Nine Year Total

HB HB Endowment Land Income

Capital Projects Fund

Rates

Rates

HB HB Endowment Land Income

Capital Projects Fund

Capital Reserve

Loans - Non Rates

Loans - Rates

Rates

Rates

Financial Contributions

Vested Assets

Rates

Funding

60%

100%

100%

G

100%

40%

100%

100%

100%

100%

100%

100%

L

100%

100%

100%

100%

R

Prospective Capital Plan continued

59

60

NMT Total

29

HBMAG Total

27

Memorial Square Building Development

Halls Total

-

-

Halls

HBMAG Minor Capital

27

Hawke's Bay Museum and Art Gallery (HBMAG)

NMT Minor Capital

29

Napier Municipal Theatre (NMT)

300

300

27

27

29

29

567

Libraries Total

554

-

-

Napier Library Redevelopment

-

-

567

554

503

2013/14

64

Library Stock

Libraries

SOCIAL AND CULTURAL

Description

56

498

2012/13

-

-

28

28

30

30

589

-

-

589

73

516

2015/16

-

-

29

29

31

31

608

-

-

608

75

533

2016/17

-

-

30

30

32

32

632

-

-

632

82

550

2017/18

-

-

31

31

33

33

655

-

-

655

85

570

2018/19

-

-

32

32

34

34

678

-

-

678

88

590

2019/20

-

-

33

33

35

35

702

-

-

702

91

611

2020/21

-

-

34

34

36

36

1,233

-

507

726

94

632

2021/22

Note: % improvement split: G – Growth, L – Increased Level of Service, R – Renewels

-

-

28

28

30

30

587

-

-

587

66

521

2014/15

300

300

272

272

290

290

6,251

507

5,744

718

5,026

Nine Year Total

Capital Reserve

Rates

Rates

Rates

Financial Contributions

Rates

Funding

100%

G

L

100%

100%

100%

100%

100%

R

Prospective Capital Plan continued

Napier City Council Annual Plan 2013/14

Napier City Council Annual Plan 2013/14

Cemeteries Total

89

Public Toilets I.A.R.

Public Toilets Total

New Toilet Programme

WMC Minor Capital

WMC Total

18

18

War Memorial Conference Centre (WMC)

CITY PROMOTION

1,137 SOCIAL AND CULTURAL TOTAL

108

-

Public Toilets

Cemeteries - Beams

12

108

Cemeteries I.A.R.

77

Western Hills Extension

Cemeteries

18

18

1,644

147

38

109

256

12

85

159

318

330

-

44

41

Retirement and Rental Housing Total

23

21

20

274

21

Rental Housing Minor Capital

289

87

2013/14

187

Retirement Housing Minor Capital

Retirement and Rental Housing

Description

203

86

2012/13

18

18

969

112

-

112

99

12

87

-

111

22

-

22

89

-

89

2015/16

19

19

1,040

155

40

115

103

13

90

-

114

22

-

22

92

-

92

2016/17

20

20

1,079

161

42

119

106

13

93

-

118

23

-

23

95

-

95

2017/18

20

20

1,075

123

-

123

110

14

96

-

123

24

-

24

99

-

99

2018/19

21

21

1,158

173

45

128

114

14

22

22

1,197

178

46

132

118

15

103

-

131

25

-

25

106

-

106

2020/21

100

127

25

-

25

102

-

102

2019/20

23

23

1,697

137

-

137

122

15

107

-

135

26

-

26

109

-

109

2021/22

Note: % improvement split: G – Growth, L – Increased Level of Service, R – Renewels

19

19

1,480

152

39

113

354

12

88

254

329

47

25

22

282

192

90

2014/15

869 379

180

180

11,339

1,338

250

1,088

1,382

120

849

413

1,506

258

48

210

1,248

Nine Year Total

Rates

Rates

Rates

Rates

Rates

Rates

Pensioner Housing Upgrade Res

Rates

Pensioner Housing Upgrade Res

Rates

Funding

G

100%

100%

100%

L

100%

100%

100%

100%

100%

100%

100%

R

Prospective Capital Plan continued

61

62

-

NANZ Total

54

Napier i-SITE Visitor Centre Total

12

Par2 MiniGolf Total

6

Kennedy Park Total

118

242

-

Animal Control Total

Animal Control Minor Capital

Animal Control

PLANNING AND REGULATORY

332 CITY PROMOTION TOTAL

Kennedy Park I.A.R.

Kennedy Park Minor Capital

124

Kennedy Park Top 10 Resort

Par 2 Minor Capital

6

Par2 MiniGolf

i-SITE Minor Capital

12

Napier i-SITE Visitor Centre

NANZ Minor Capital

NANZ Plant & Equipment

20

National Aquarium of New Zealand (NANZ)

Description

34

2012/13

51

51

396

306

119

187

6

6

12

12

54

34

20

2013/14

-

-

405

314

122

192

6

6

12

12

55

35

20

2015/16

-

-

419

-

-

434

335

130

324

205

126

7

7

13

13

59

37

22

2017/18

198

6

6

13

13

57

36

21

2016/17

-

-

449

347

135

212

7

7

14

14

61

38

23

2018/19

-

-

464

359

140

219

7

7

14

14

63

40

23

2019/20

-

-

480

371

144

227

7

7

15

15

65

41

24

2020/21

-

-

498

384

149

235

8

8

15

15

68

43

25

2021/22

Note: % improvement split: G – Growth, L – Increased Level of Service, R – Renewels

-

-

410

317

123

194

6

6

12

12

56

35

21

2014/15

199

60

60

120

120

538

339

51

51

3,955

3,057

1,188

1,869

Nine Year Total

Dog Control Account

Rates

Rates

Rates

Rates

Rates

Rates

Funding

G

L

100%

100%

100%

100%

100%

100%

100%

R

Prospective Capital Plan continued

Napier City Council Annual Plan 2013/14

Suburban Parking

-

Parking Total

120

Napier City Council Annual Plan 2013/14

Art Centre Building (Old Council Chambers)

Land Development for growth

-

-

Corporate IT Network

27,250 TOTAL FUNDING

1,642 SUPPORT UNITS TOTAL

Technology Equipment Renewals

13

566

Software Replacement and Upgrades

PC and Printer Replacement

40

69

Minor Capital General Provision

Replacement of Mobile Plant and Vehicle

68

886

Support Units & General Provisions

SUPPORT UNITS

429 PROPERTY ASSETS TOTAL

Civic Building

Lagoon Farm Business Park

Property Holdings

-

429

PROPERTY ASSETS

120 PLANNING AND REGULATORY TOTAL

Parking Equipment Replacement

100

Parking Minor Capital

CBD Parking Projects

Parking

Description

-

20

2012/13

36,792

1,656

572

13

70

40

892

69

4,283

63

30,448

1,821

586

13

72

41

1,038

71

-

-

-

-

-

124

124

104

20

-

-

2015/16

30,338

2,106

606

14

74

42

1,297

73

-

-

-

-

-

128

128

107

21

-

-

2016/17

31,367

2,006

626

14

77

44

1,170

75

-

-

-

-

-

2,342

2,342

110

22

-

2,210

2017/18

26,082

2,124

648

15

79

45

1,259

78

-

-

-

-

-

137

137

114

23

-

-

2018/19

35,151

2,839

671

15

82

47

1,943

81

-

-

-

-

-

2,748

2,748

118

23

-

2,607

2019/20

27,711

2,233

695

16

85

49

1,304

84

-

-

-

-

-

147

147

123

24

-

-

2020/21

18,280

5,715

129

700

399

10,648

689

4,917

3,500

350

634

433

9,660

9,609

1,009

199

541

7,860

Nine Year Total

41,848 292,629

1,911

718

16

88

50

952

87

634

-

-

634

-

3,195

3,195

127

25

-

3,043

2021/22

Note: % improvement split: G – Growth, L – Increased Level of Service, R – Renewels

32,892

1,584

593

13

73

41

793

71

-

-

-

350

3,500

-

-

126

126

105

21

-

-

2014/15

-

433

713

662

101

20

541

-

2013/14

Technology Equipment Renewal Reserve

Rates

Rates

Rates

Plant Purchase & Renewals A/c

Rates

Capital Projects Fund

Capital Projects Fund

Capital Projects Fund

Capital Projects Fund

Parking Equipment Reserve A/c

Parking Account

Parking Contributions CBD A/c

Parking Account

Funding

100%

100%

G

100%

100%

100%

100%

L

100%

100%

100%

100%

100%

100%

100%

100%

R

Prospective Capital Plan continued

64

27,250

2,443

-

2,050

739

Total

Vested Assets

Advanced Wastewater T/ment Fund

Stormwater Catchments Upgrade

Capital Reserve

TNZ Subsidy

Regional Landfill Income A/c

Technology Equipment Renewal Reserve

496

566

1,395

Pensioner Housing Upgrade Res

Plant Purchase & Renewals A/c

223

886

Parking Contributions CBD A/c

Parking Equipment Reserve A/c

-

Parking Account

100

20

Endowment Land Account

Dog Control Account

-

Capital Projects Fund

-

1,444

HB HB Endowment Land Income

Loans - Rates

Financial Contributions

2,300

2,510

313

Loans - Growth

Loans - Non Rates

Rates

FUNDING

Description

715

-

11,050

2012/13

36,792

2,497

1,919

2,071

545

1,426

572

397

892

210

101

541

20

51

500

5,943

157

3,831

2,369

805

-

11,945

2013/14

30,448

2,884

-

1,656

-

1,508

586

883

1,038

-

104

-

20

-

-

-

161

5,774

1,386

1,969

-

12,479

2015/16

30,338

2,947

-

1,390

-

1,579

606

385

1,297

-

107

-

21

-

-

-

166

8,768

-

-

-

13,072

2016/17

31,367

3,286

-

-

-

1,653

626

362

1,170

-

110

-

2,232

-

-

-

282

8,062

-

-

-

13,584

2017/18

26,082

3,400

-

-

-

1,733

648

1,026

1,259

-

114

35,151

27,711

3,648

-

-

-

1,910

695

483

1,304

-

123

-

24

-

-

-

191

3,356

154

-

-

15,823

2020/21

3,524

-

-

1,820

671

646

1,943

-

118

-

2,630

23 -

-

-

-

184

4,259

209

4,063

-

15,084

2019/20

-

-

-

178

3,130

202

-

-

14,369

2018/19

41,848

3,771

-

-

-

2,001

718

362

952

-

127

-

3,068

-

-

634

197

3,471

8,877

-

-

17,670

2021/22

Note: % improvement split: G – Growth, L – Increased Level of Service, R – Renewels

32,892

2,622

-

3,139

-

1,502

593

354

793

217

105

-

21

-

-

-

383

7,166

2,409

1,046

443

12,099

2014/15

292,629

28,579

1,919

8,256

545

15,132

5,715

4,898

10,648

427

1,009

541

8,059

51

500

6,577

1,899

47,817

15,606

7,883

443

126,125

Nine Year Total

Funding

G

L

R

Prospective Capital Plan continued

Napier City Council Annual Plan 2013/14

Funding Impact Statement The following Funding Impact Statement is provided in accordance with Section 95 and Schedule 10 of the Local Government Act 2002 (The Act).

Financial Overview Summary of Revenue and Financing Mechanisms Actual 2011/12 $000

Annual Plan 2013/14 $000

TYP 2013/14 $000

TYP/AP 2012/13 $000

33,995 12,140 2,394 18,998 1,502

34,687 12,586 2,555 19,661 884

32,417 13,049 2,456 18,178 1,659

16,037 85,291

Sources of operating funding General rates, uniform annual general charges, rates penalties Targeted rates (other than water by meter charges) Subsidies and grants for operating purposes Fees, charges and targeted rates for water supply Interest and dividends from investments Local authorities fuel tax, fines, infringement fees, and other receipts Total operating funding (A)

19,401 88,429

20,094 90,466

18,997 86,756

55,470 289 285 56,044

Applications of operating funding Payments to staff and suppliers Finance costs Other operating funding applications Total applications of operating funding (B)

61,445 141 178 61,764

63,180 141 175 63,496

59,854 278 174 60,306

29,247

Surplus/(deficit) of operating funding (A - B)

26,665

26,970

26,450

Sources of capital funding Subsidies and grants for capital expenditure Development and financial contributions Increase/(decrease) in debt Gross proceeds from sale of assets Lump sum contributions Total sources of capital funding (C)

2,395 1,879 1,039 6,784 12,098

2,082 1,855 2,314 6,784 13,035

4,783 1,789 1,056 186 7,813

Application of capital funding Capital expenditure - to meet additional demand - to improve the level of service - to replace existing assets Increase/(decrease) in reserves Increase/(decrease) of investments Total application of capital funding (D)

7,748 14,079 14,965 1,970 38,762

7,949 8,284 15,296 8,477 40,006

5,906 6,770 14,574 7,013 34,263

(26,665)

(26,970)

(26,450)

-

-

-

32,688 12,151 4,776 16,416 3,222

4,875 2,192 1,287 8,354

8,045 11,683 10,753 7,121 37,601 (29,247) -

Surplus/(deficit) of capital funding (C - D) Funding balance ((A-B) + (C-D))

The Funding Impact Statement (FIS) is provided in accordance with Section 95 and Schedule 10 of the Local Government Act 2002. The FIS is intended to disclose the sources and applications of Council funds. This statement is not GAAP compliant.

The FIS includes only transactions involving monetary funding and therefore excludes vested assets, revaluations and depreciation. In all other respects the Council Wide Funding Impact Statement matches the Prospective Statement of Comprehensive Income.

The FIS links the Council’s Revenue and Financing Policy, the annual setting of rates, fees, development contributions and annual borrowing requirements. The FIS sets out the revenue and financing mechanisms that will be used in each year along with an indicative level of rates, together with examples of the impact of rating proposals in year 1 of the Plan over a range of different categories of property and a range of different values.

Napier City Council Annual Plan 2013/14

65

Funding Impact Statement continued Rating System The following describes in full the rating system to apply from 1 July 2013:

General Rate

Based on land value of all rating units.

Differentially applied. The differentials applying for 2013/14 are set in accordance with the Rating Policy to enable: --

66% of the total general rate together with the Uniform Annual General Charge to be collected from residential properties and 34% from non residential properties.

--

The recovery of the assessed actual costs of services supplied to rural properties, excluding those in the Bay View Differential Rating Area.

--

The standardising of the rate for properties in the Bay View Differential Rating Area with those residential properties in Napier City, but adjusted to reflect assessed actual cost of services supplied to Bay View for roading, stormwater, and reserves activities.

--

The application of the same rate for miscellaneous non residential properties as for residential properties.

Differentials

Group/Code

2013/14

City Residential

1

100%

Commercial and Industrial

2

291.11%

Miscellaneous

3

100%

Ex-City Rural

4

60.84%

Other Rural

5

60.84%

Bay View

6

60.31%

The general rate, together with the Uniform Annual General Charge, recovers the balance of the rating requirement not recovered from the targeted rates outlined below, and apply to activities where the direct user benefit is recovered by way of separate fees and charges, and where all or the remainder of the activity benefits ratepayers indirectly or the community as a whole, and also where Council has determined that some direct user benefit should be met by the community as a whole in line with particular activity funding policies.

Uniform Annual General Charge

Council’s Uniform Annual General Charge is set at a level that enables all Targeted Rates that are set on a uniform basis as a fixed amount, excluding those related to Water Supply and Sewage Disposal, to recover about 20% of total rates.

The charge is applied to each separately used or inhabited part of a rating unit.

The Uniform Annual General Charge, together with the General Rate, recovers the balance of the rating requirement not recovered from the targeted rates.

Water Rates (apply to both City & Bay View water supply systems) Fire Protection Rate

A targeted rate based on Capital Value of properties connected to the systems.

Differentially applied, in recognition that the carrying capacity of water required in the reticulation system to protect commercial and industrial properties is greater than that required for residential properties.

Differentials

%

Central Business District and Fringe Area

400%

Suburban Shopping Centres, Hotels and Motels and Industrial properties outside of the CBD

200%

Other properties connected to the water supply systems

100%

This rate recovers 13.24% of the net costs of the water supply systems before the deduction of water by meter income.

50% of the base rate applies for each property not connected but located within 100 metres of the systems.

66

Napier City Council Annual Plan 2013/14

Funding Impact Statement continued Water Rate

A targeted rate of a fixed amount set on a uniform basis, applied to each separately used or inhabited part of a rating unit connected to the systems.

This rate recovers the balance of the total net cost of the water supply systems.

50% of the rate applies for each rating unit not connected but located within 100 metres of the systems.

Refuse Collection and Disposal Rate

A targeted rate of a fixed amount set on a uniform basis, applied to each separately used or inhabited part of a rating unit for which a rubbish collection service is available.

For units for which 2 or 3 rubbish collection services per week are available, the rate is 2 or 3 times the weekly charge respectively.

This rate recovers the net cost of the Solid Waste Activity, excluding costs related to litter control and the kerbside recycling collection service.

Kerbside Recycling Rate

A targeted rate of a fixed amount set on a uniform basis, applied to each separately used or inhabited part of a rating unit for which the kerbside recycling collection service is available.

The rate recovers the net cost of the kerbside recycling collection service.

Sewerage Rate

A targeted rate of a fixed amount set on a uniform basis, applied to each separately used or inhabited part of a rating unit connected to the City Sewerage System.

50% of the rate applies to each rating unit (excluding Bay View properties) not connected but located within 30 metres of the system.

For Bay View properties located within the Stage 1 Urban Drainage Area, 50% of the rate applies to each rating unit not connected but located within 30 metres of the system.

This rate recovers the net cost of the Wastewater Activity.

Bay View Sewerage Connection Rate The Bay View Sewerage Scheme involves reticulation and pipeline connection to the City Sewerage System. Prior to 1 November 2005 property owners could elect to connect either under a lump sum payment option, or by way of a targeted rate payable over 20 years.

A targeted rate of a fixed amount set on a uniform basis, applied to each separately used or inhabited part of a rating unit connected to the Bay View Sewerage Scheme, where the lump sum payment option was not elected.

The rate applies from 1 July following the date of connection for a maximum period of 20 years, or until such time as a lump sum payment for the cost of connection is made.

The category of rateable land for setting the targeted rate is defined as the provision of a service to those properties connected to the sewerage system, but have not paid the lump sum connection fee.

The liability for the targeted rate is calculated as a fixed amount per separately used or inhabited part of a rating unit based on the provision of a service by the Council, including any conditions that apply to the provision of the service.

The rate is used to recover loan servicing costs required to finance the cost of connection to the Bay View Sewerage Scheme for properties connecting under the targeted rate payment option.

Off Street Car Parking Rates Targeted rates based on land value. The following rates apply:

CBD Off Street Car Parking Rate

Differentially applied.

Relates to all properties in the Central Business District only (except for vacant properties, not contiguous with other separately rateable commercial properties occupied by the same ratepayer, which are used solely as a carpark) and reflects the parking dispensation status of those properties.

Differentials

%

Properties with full parking dispensation

100%

Properties with half parking dispensation

50%

Properties with no parking dispensation

NIL

The rate is used to provide additional off street car parking in the Central Business District.

Napier City Council Annual Plan 2013/14

67

Funding Impact Statement continued Taradale Off Street Car Parking Rate

Uniformly applied.

Relates to properties in the Taradale Suburban Commercial area only.

The rate is used to provide additional off street car parking in the Taradale Suburban Commercial area.

Suburban Shopping Centre Off Street Car Parking Rate

Uniformly applied.

Relates to properties in suburban shopping centres and to commercial properties located in residential areas which are served by Council supplied off street car parking.

The rate is used to provide additional off street car parking at each of these areas served by Council supplied off street car parking, and to maintain the existing off street car parking areas.

Ahuriri Beautification Rate

Targeted rate based on land value.

Uniformly applied.

Applies to commercial rating units located at the Ahuriri Shopping Centre.

The rate is used to recover loan servicing costs on loans raised to meet the Ahuriri Commercial ratepayers share of beautification carried out at the Ahuriri Shopping Centre.

CBD Promotion Rate

Targeted rate based on land value.

Uniformly applied.

Applies to each commercial and industrial rating unit situated within the area bounded by the Marine Parade/ Tennyson Street intersection, along Tennyson Street to Herschell Street to Browning Street to Cathedral Lane to the Cathedral Lane/Tennyson Street intersection, then west along Tennyson Street to the intersection with Milton Road and including properties on the northern side of Tennyson Street, then along Clive Square West to Dickens Street, then from Dickens Street to Dalton Street and including properties on the southern side of Dickens Street, from Dalton Street to Station Street, Station Street to Hastings Street, Hastings Street to Faulknor Lane, Faulknor Lane to Marine Parade, and north along Marine Parade to the intersection with Tennyson Street.

This rate recovers at least 70% of the cost of the promotional activities run by Napier Inner City Marketing. The remainder is met from non targeted rates to reflect the wider community benefit of promoting the CBD to realise its full economic potential.

Taradale Promotion Rate

Targeted rate based on land value.

Uniformly applied.

Applies to all rating units in the Taradale Suburban Commercial area.

This rate recovers the full cost of the Taradale Marketing Association’s promotional activities.

Water by Meter Charges

Targeted rate based on actual water use after the first 300m3 per annum.

Applies to all non domestic water supplies in the Napier Water Supply Area, and domestic supplies outside the Napier Water Supply Area.

Targeted Rates Note: For the purposes of Schedule 10, clause 15(4)(e) or clause 20(4)(e) of the Local Government Act 2002, lump sum contributions will not be invited in respect of targeted rates, unless this is provided within the description of a particular targeted rate.

Separately Used or Inhabited Parts of a Rating Unit Definition For the purposes of the Uniform Annual General Charge and Targeted Rates outlined above, a separately used or inhabited part of a rating unit is defined as:

68

Any part of a rating unit that is, or is able to be, separately used or inhabited by the owner or by any other person or body having the right to use or inhabit that part by virtue of a tenancy, lease, licence or other agreement.

Napier City Council Annual Plan 2013/14

Funding Impact Statement continued Examples of separately used or inhabited parts of a rating unit include:

For residential rating units, each self contained area is considered a separately used or inhabited part, unless used solely as a single family residence. Each situation is assessed on its merits, but factors considered in determining whether an area is self contained would include the provision of independent facilities such as cooking / kitchen or bathroom, and its own separate entrance.

Residential properties, where a separate area is used for the purpose of operating a business, such as a medical or dental practice. The business area is considered a separately used or inhabited part.

For commercial or industrial properties, two or more different businesses operating from or making separate use of the different parts of the rating unit. Each separate business is considered a separately used or inhabited part.

A degree of common area would not necessarily negate the separate parts.

These examples are not inclusive of all situations.

Description of Differential Categories GROUP 1: City Residential Properties Every separately assessed property used exclusively as a home or residence of one or more households, and also including all vacant utilisable residential land, but excluding properties classified under Diff Groups 5 and 6, formerly within Hawke’s Bay County but which became part of Napier City with effect from 1 November 1989 following Local Government Reform.

Code 1.1.1

Improved Residential Properties – Single Unit

1.1.2

Improved Residential Properties – Multi Unit

1.2.1

Vacant Utilisable Residential Land

GROUP 2: Commercial and Industrial Properties Every separately assessed commercial and industrial property in accordance with the subgroups listed below, but excluding properties classified under Diff Groups 5 and 6, formerly within the Hawke’s Bay County but which became part of Napier City with effect from 1 November 1989 following Local Government Reform.

Sub Group 2.1: Central Business District Every separately assessed commercial and industrial property situated within the area bounded by the base of the Hill, from Marine Parade to Milton Road, south along Clive Square East and south along Munro Street to Edwardes Street south along Hastings Street, east along Sale Street, and north along Marine Parade.

Code 2.1.1 Properties Receiving 100% Parking Dispensation Every separately assessed commercial property in the commercial retail zone bounded by the corner of Clive Square East and Emerson Street, south to Dickens Street excluding Lot 1 DP 18592 then along Dickens Street east at the rear of the sites on the southern side including Pt Lot 14 DP 2015, then south at Dalton Street, then east along Station Street, excluding the corner site on Station Street (being Lot 1 DP 11954) across to Albion Street to the Marine Parade, then north along Marine Parade to Emerson Street, then north along the rear of Pt Town Sec 173, Lot 1 DP 4833, Pt Town Sec 173, then east to include the site on the corner of Tennyson Street and Herschell Street being Pt Town Sec 172 as well as the site opposite being Lot 1 DP 19183, then continuing north along the rear of properties that front Hastings Street across Browning Street to include the property on the corner of Browning Street and Shakespeare Road, then across Shakespeare Road to include the corner of the property on the western corner of Shakespeare Road and Browning Street, then south down Hastings Street ,excluding the Cathedral, along the rear of properties down Hastings Street, then west along the rear of the properties fronting Tennyson Street to Dalton Street then across Tennyson Street south to include the property on the corner of Tennyson Street and Dalton Street (Public Trust), and Pt Town Sec 162, Pt Town Sec 162, Lot 2 DP 6176 west along the rear of properties fronting Emerson Street to Clive Square East.

2.1.2

Properties Receiving 50% Parking Dispensation Every separately assessed commercial property in part of the Commercial Fringe Retail Zone bounded by the corner of Dickens and Munro Streets, south down Munro Street, east along Edwardes Street, south along Hastings Street, east along Sale Street, north along Marine Parade, west along Albion Street, south west along the rear of the property on the corner of Station Street, and Hastings Street, excluding the next three sites fronting Station Street to the corner at Dalton Street, north along Dalton Street, then west along the rear of the properties fronting Station Street.

2.1.3 Properties Receiving 0% Parking Dispensation Every separately assessed commercial and industrial property situated within Sub Group 1, excluding the properties in differential codes 2.1.1 and 2.1.2 above.

Napier City Council Annual Plan 2013/14

69

Funding Impact Statement continued Sub Group 2.2: Central Business District Fringe Area Every separately assessed commercial and industrial property situated within the area bounded by the base of the Hill, from Marine Parade to Faraday Street, south along Faraday Street to Thackeray Street, east along Thackeray Street to Wellesley Road, south along Wellesley Road to Sale Street and east along Sale Street to the Marine Parade, excluding the properties included in Sub Group 2.1 above, and also includes every separately assessed industrial property fronting the remainder of Owen Street and Faulknor Street and every separately assessed industrial property positioned immediately south of Sale Street and fronting Wellesley Road.

Code 2.2.1

Improved Fringe Commercial

2.2.2

Unimproved Fringe Commercial

2.2.3

Improved Fringe Industrial

2.2.4

Unimproved Fringe Industrial

Sub Group 2.3: Taradale Every separately assessed commercial property situated in the suburban shopping centre of Taradale which is zoned for commercial purposes.

Code 2.3.1

Taradale Suburban Commercial Properties south of Puketapu Road

2.3.2

Taradale Suburban Commercial – others not covered in 2.3.1 or 2.3.3

2.3.3

Taradale Suburban Commercial – properties owned by JH McDonald Holdings Ltd

Sub Group 2.4: Other Suburban Shopping Centres Every separately assessed commercial property situated in the following suburban shopping centres in Napier, which centres are zoned Commercial A, Special Commercial or Industrial; Greenmeadows, Trinity Crescent, Pirimai Plaza, Onekawa, Maraenui, Marewa, Wycliffe Street, League Park, Balmoral, Port Ahuriri, Westshore, Tamatea and Marewa (Latham Street).

Code 2.4.1

Suburban Commercial – privately owned

2.4.2

Suburban Commercial – no off street car parking provided

2.4.3

Suburban Commercial – served by Council supplied off street car parking except Marewa Shopping Centre, Onekawa Shopping Centre and Ahuriri Shopping Centre

2.4.4

Suburban Commercial – Marewa Shopping Centre

2.4.5

Suburban Commercial – Onekawa Shopping Centre

2.4.6

Suburban Commercial – Ahuriri Shopping Centre

Sub Group 2.5: Commercial Properties in Residential Areas All other commercial properties, including retail shops, professional offices, doctors surgeries, dental surgeries, veterinary clinics, garages, service stations and the like, not included in Sub Groups 2.1, 2.2, 2.3 and 2.4.

Code 2.5.1

Shops and Commercial Properties in Residential Areas – other than in 2.5.2

2.5.2

Shops and Commercial Properties in Residential Areas – served by Council supplied off street car parking

Sub Group 2.6: Industrial – Outer City Areas Properties used for industrial purposes and not included in Sub Groups 2.1 and 2.2.

Code 2.6.1

Improved Outer Industrial

2.6.2

Unimproved Outer Industrial

Sub Group 2.7: Hotels and Motels – Outer City Areas Hotels and Motels situated in residential and industrially zoned areas and not included in Sub Groups 2.1 and 2.2.

Code 2.7.1

70

Hotels and Motels in Residential and Industrial zoned areas

Napier City Council Annual Plan 2013/14

Funding Impact Statement continued GROUP 3: Miscellaneous Properties Every separately assessed property in accordance with the sub groups listed below used exclusively for the purposes indicated but excluding properties classified under Diff Groups 5 and 6, formerly within the Hawke’s Bay County but which became part of Napier City with effect from 1 November 1989 following Local Government Reform.

Sub Group 3.1: Vacant Substandard Sections Every separately assessed vacant residential property which, because of its zone or location, cannot be utilised for residential purposes.

Code 3.1.1

Vacant Substandard Sections

Sub Group 3.2: Other Miscellaneous Rateable Properties Every separately assessed rateable property used exclusively for the following purposes:

Code 3.2.1

Lodge Rooms, Halls and the like in Residential Areas

3.2.2

Land Occupied and/or Used for Churches and Private Schools

3.2.3

Homes for the Elderly, Private Hospitals, etc

3.2.4

Public Schools, Kindergartens and Playcentres

3.2.5

Miscellaneous Crown Properties

3.2.6

Public Utilities (not Council)

3.2.7

Pensioner Flats and Housing for the Aged

3.2.8

Sports Clubs previously eligible for rates remission under Section 179 of the Rating Powers Act 1988

3.2.9

Non Profit Making Organisations, excluding Sports Clubs, previously eligible for rates remission under Section 179 of the Rating Powers Act 1988

3.3.8

Council Properties (other than leased)

Sub Group 3.3: Miscellaneous Non Rateable Properties Every separately non rateable property used exclusively for the following purposes:

Code 3.3.1

Land Occupied and/or Used for Churches and Private Schools

3.3.2

Homes for the Elderly, Private Hospitals, etc

3.3.3

Public Schools, Kindergartens and Playcentres

3.3.4

Miscellaneous Crown Properties

3.3.5

Public Utilities (not Council)

3.3.6

Sports Clubs and Other Non Profit Making Organisations previously eligible for rates remission under Section 179 of the Rating Powers Act 1988

3.3.7

Council Properties (used for purposes outlined in subsection 4 of part 1 of schedule 1 of Local Government (Rating) Act 2002)

GROUP 4: Ex-City Rural Areas Every separately assessed rural property, which is situated in an area not provided with normal city services, and which is not capable of development because of the lack of city services, but excluding all properties formally within the Hawke’s Bay County but which became part of Napier City with effect from 1 November 1989 following Local Government Reform.

Code 4.1.1

Ex-City Rural Properties

GROUP 5: Other Rural Areas Every separately assessed property, formerly within the Hawke’s Bay County, but which became part of Napier City with effect from 1 November 1989 following Local Government Reform, except for those properties included in Group 6, or any subdivided property since reclassified to other Differential Groups.

Code 5.1.1

Other Rural Properties (not included under 5.1.2)

5.1.2

Other Rural Properties (under 1500m2) for which Special Rateable Values (SRV) for ‘Existing use’ applied under Section 26 of the Rating Valuations Act 1998, prior to 1 July 2003.

Napier City Council Annual Plan 2013/14

71

Funding Impact Statement continued GROUP 6: Bay View Differential Rating Area Every separately assessed property falling within the Bay View Differential Rating Area as defined in the following three schedules:

Schedule 1 All of those properties in the Bay View Township contained in the area west of State Highway 2, Main North Road, and on the north side of and fronting onto Hill Road from Terrace Road up to and including number 36 Hill Road to and along the rear boundaries of 25 Hill Road and the Bay View Hotel to Petane Road and along the rear boundary of number 23 Petane Road and adjacent properties to 38 Grey Street and including 6 Sheehan Street, then along the south eastern side of Sheehan Street and the eastern side of Buchanan Street to and along the northern side of Villers Street to Grey Street, then 40.23m along the south western boundary of Lot 2 DP 17781 and then easterly along the alignments of the rear boundaries of numbers 3 and 1 Villers Street to State Highway 2, Main North Road.

Schedule 2 All of those properties contained in the area north of 66 Ferguson Street south on the eastern side of State Highway 2, Main North Road, up to number 500 Main North Road and across the State Highway and along the rear boundaries of numbers 511 to 535 Main North Road, then back across the State Highway to Rogers Road and along the eastern side of the Petane Stream continuing along the rear boundaries of numbers 15 to 31 Rogers Road and along Rogers Road to and along the rear boundary of numbers 65 to 117 Rogers Road in the north and then to Rogers Road and southerly along its eastern side to number 72 Rogers Road, then along the rear boundaries of numbers 72 to 22 Rogers Road, then easterly across the Railway line to and along the northern boundary of Pt Lot 1 DP 7911 to the coast, then southerly along the coastal boundary to 66 Ferguson Street south.

Schedule 3 All of those properties in the vicinity of Le Quesne Road contained in the area north of Franklin Road including numbers 49 to 64 Franklin Road and those properties east of the Railway line up to Thurley Place, then northerly along the alignment of the rear boundaries of the properties extending from 15 Thurley Place up to 86 Le Quesne Road including the access legs to Pt Lot 5 and Pt Lot 7 DP 11888, then easterly across the boundaries of 86 and 87 Le Quesne Road, then southerly along the eastern side of Le Quesne Road to Franklin Road.

Code 6.1.1

Bay View Residential Properties

6.1.2

Bay View Non Residential Properties

Other Rating Issues Instalment Rating Rates for 2013/14 are set and assessed effective from Instalment 1 and are due and payable in four equal instalments as follows:

First Instalment

due 21 August 2013

Second Instalment

due 20 November 2013

Third Instalment

due 19 February 2014

Fourth Instalment

due 21 May 2014

Penalties In accordance with sections 57 and 58 of the Local Government (Rating) Act 2002, a penalty of 10 per cent is added to each instalment or part thereof which is unpaid 2 full working days after the due date for payment. Previous years rates which remain unpaid will have a further 10 per cent added 2 full working days after the due date for instalments one and three.

Fees and Charges Council applies a range of fees and charges to fully or partially recover the costs of various activities.

The level of fees and charges are reviewed annually and a schedule of Council Fees and Charges is prepared as a separate document.

The schedule is available upon request from the Council office.

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Napier City Council Annual Plan 2013/14

Funding Impact Statement continued Indicative Rates Indicative Rates 2013/14 (incl GST)

Rates (incl. GST) Rates and Charges (incl GST) General Rate (cents per $ LV) Diff 1

City Residential

0.56495

Diff 2

Commercial and Industrial

1.64463

Diff 3

Miscellaneous

0.56495

Diff 4

Ex-City Rural

0.34372

Diff 5

Other Rural

0.34372

Diff 6

Bay View

0.34072

Uniform Annual General Charge (UAGC)

$324.00

Targeted Rates Fire Protection Rate (cents per $ CV) Diff 1, 2.5, 3, 4, 5, 6

0.00577

Diff 2.1, 2.2

0.02308

Diff 2.3, 2.4, 2.6, 2.7

0.01154

Water Rate - City

$140.00

Water Rate - Bay View

$140.00

Refuse Collection & Disposal Rate 1 collection per week

$60.00

2 collections per week

$120.00

3 collections per week

$180.00

Kerbside Recycling Rate

$16.00

Sewerage Rate

$296.00

Bay View Sewerage Connection Rate

$941.36

Off Street Car Parking Rate (cents per $ LV) Diff 2.1.1

0.14533

Diff 2.1.2

0.07266

Diff 2.3.2, 2.4.3, 2.4.4, 2.4.5, 2.5.2

0.11020

Suburban Beautification Rate - Ahuriri (cents per $ LV)

0.25873

Promotion Rate - CBD (cents per $ LV)

0.19657

Promotion Rate - Taradale (cents per $ LV)

0.14154

Water By Meter Charges Non Domestic Supplies ($/m3)

0.39844

Metered Domestic Supplies outside Napier Water Supply Area ($/m ) 3

0.73932

Note: For Council properties under differential codes 3.3.8 and 3.3.7, a nil rate will apply.

The indicative rates and charges are provisional only, and are subject to Council setting and assessing its rates during July 2013.

Napier City Council Annual Plan 2013/14

73

74

0.73%

% Increase / -Decrease

1,440.45

593.20 324.00 11.25 140.00 60.00 16.00 296.00 0.00 0.00 0.00 0.00 0.00

10.50

324.00 0.00577 140.00 60.00 16.00 296.00 0.00 0.14533 0.11020 0.19657 0.14154

1,429.95

Change in Rates

Total Proposed

Proposed Rates 2013/14 General Rate - LV Uniform Annual Gen Charge Fire Protection Rate - CV Water Rate Refuse Rate Kerbside Recycling Rate Sewerage Rate Advanced Sew Treatment Rate Car Parking - CBD Car Parking - Tdle / Suburban Promotion Levy - CBD Promotion Levy - Taradale

Total Actual

583.81 275.00 11.13 139.00 63.00 17.00 292.00 49.00 0.00 0.00 0.00 0.00

Rates 2012/13 General Rate - LV Uniform Annual Gen Charge Fire Protection Rate - CV Water Rate Refuse Rate Kerbside Recycling Rate Sewerage Rate Advanced Sew Treatment Rate Car Parking - CBD Car Parking - Tdle / Suburban Promotion Levy - CBD Promotion Levy - Taradale

$105,000 $195,000

0.55601 0.56495 1

275.00 0.00571 139.00 63.00 17.00 292.00 49.00 0.14533 0.11020 0.19450 0.14031

%

$105,000 $195,000 0%

20%

General Rate (cents per $ LV) - 2012/13 - Actual - 2013/14 - Proposed Number of Charges

Previous Land Value Previous Capital Value

Land Value (2011 Values) Capital Value (2011 Values) LV Increase

Property Category

Napier City Council Annual Plan 2013/14

0.87%

14.60

1,701.54

847.43 324.00 18.12 140.00 60.00 16.00 296.00 0.00 0.00 0.00 0.00 0.00

1,686.94

834.02 275.00 17.93 139.00 63.00 17.00 292.00 49.00 0.00 0.00 0.00 0.00

0.55601 0.56495 1

$150,000 $314,000

$150,000 $314,000 0%

Average

0.92%

16.94

1,852.65

988.66 324.00 27.98 140.00 60.00 16.00 296.00 0.00 0.00 0.00 0.00 0.00

1,835.71

973.02 275.00 27.69 139.00 63.00 17.00 292.00 49.00 0.00 0.00 0.00 0.00

0.55601 0.56495 1

$175,000 $485,000

$175,000 $485,000 0%

80%

City Residential

0.47%

46.68

9,896.61

1,666.60 3,240.00 30.00 1,400.00 600.00 0.00 2,960.00 0.00 0.00 0.00 0.00 0.00

9,849.92

1,640.23 2,750.00 29.69 1,390.00 630.00 0.00 2,920.00 490.00 0.00 0.00 0.00 0.00

0.55601 0.56495 10

0.90%

72.78

8,140.97

5,756.21 324.00 248.11 140.00 180.00 0.00 296.00 0.00 508.66 0.00 688.00 0.00

8,068.19

5,689.25 275.00 245.53 139.00 189.00 0.00 292.00 49.00 508.66 0.00 680.75 0.00

1.62550 1.64463 1

1.14%

269.48

23,860.64

22,613.66 324.00 426.98 140.00 60.00 0.00 296.00 0.00 0.00 0.00 0.00 0.00

23,591.17

22,350.63 275.00 422.54 139.00 63.00 0.00 292.00 49.00 0.00 0.00 0.00 0.00

1.62550 1.64463 1

$295,000 $350,000 $1,375,000 $520,000 $1,075,000 $1,850,000

0.91%

50.37

5,594.92

4,358.27 324.00 64.62 140.00 120.00 0.00 296.00 0.00 0.00 292.03 0.00 0.00

5,544.56

4,307.58 275.00 63.95 139.00 126.00 0.00 292.00 49.00 0.00 292.03 0.00 0.00

1.62550 1.64463 1

1.15%

170.75

15,042.28

13,979.36 324.00 302.93 140.00 0.00 0.00 296.00 0.00 0.00 0.00 0.00 0.00

14,871.53

13,816.75 275.00 299.78 139.00 0.00 0.00 292.00 49.00 0.00 0.00 0.00 0.00

1.62550 1.64463 1

1.16%

200.08

17,477.46

16,857.46 324.00 0.00 0.00 0.00 0.00 296.00 0.00 0.00 0.00 0.00 0.00

17,277.38

16,661.38 275.00 0.00 0.00 0.00 0.00 292.00 49.00 0.00 0.00 0.00 0.00

1.62550 1.64463 1

$265,000 $850,000 $1,025,000 $560,000 $2,625,000 $2,750,000

$265,000 $850,000 $1,025,000 $560,000 $2,625,000 $2,750,000 0% 0% 0%

Commercial / Industrial CBD Suburban Industrial Industrial Fringe Retail Onekawa Awatoto

$295,000 $350,000 $1,375,000 $520,000 $1,075,000 $1,850,000 0% 0% 0%

Multi-Unit

CBD Retail

Examples of the Impact of Rating Proposals for 2013/14 Diff 511

0.41%

8.15

1,976.50

1,392.07 324.00 44.43 140.00 60.00 16.00 0.00 0.00 0.00 0.00 0.00 0.00

1,968.35

1,430.38 275.00 43.97 139.00 63.00 17.00 0.00 0.00 0.00 0.00 0.00 0.00

0.35318 0.34372 1

-0.04%

-0.88

2,067.04

1,667.04 324.00 0.00 0.00 60.00 16.00 0.00 0.00 0.00 0.00 0.00 0.00

2,067.92

1,712.92 275.00 0.00 0.00 63.00 17.00 0.00 0.00 0.00 0.00 0.00 0.00

0.35318 0.34372 1

$405,000 $485,000 $770,000 $1,025,000

$405,000 $485,000 $770,000 $1,025,000 0% 0%

Diff 4

Rural

2.46%

26.08

1,087.44

687.44 324.00 0.00 0.00 60.00 16.00 0.00 0.00 0.00 0.00 0.00 0.00

1,061.36

706.36 275.00 0.00 0.00 63.00 17.00 0.00 0.00 0.00 0.00 0.00 0.00

0.35318 0.34372 1

$200,000 $430,000

$200,000 $430,000 0%

-2.02%

-27.40

1,325.63

463.38 324.00 26.25 140.00 60.00 16.00 296.00 0.00 0.00 0.00 0.00 0.00

1,353.03

492.05 275.00 25.98 139.00 63.00 17.00 292.00 49.00 0.00 0.00 0.00 0.00

0.36180 0.34072 1

$136,000 $455,000

$136,000 $455,000 0%

-2.51%

-38.82

1,505.81

647.37 324.00 22.45 140.00 60.00 16.00 296.00 0.00 0.00 0.00 0.00 0.00

1,544.63

687.42 275.00 22.21 139.00 63.00 17.00 292.00 49.00 0.00 0.00 0.00 0.00

0.36180 0.34072 1

$190,000 $389,000

$190,000 $389,000 0%

Diff 512 Township Average

Bay View

-0.58%

-8.49

1,456.45

885.87 324.00 30.58 140.00 60.00 16.00 0.00 0.00 0.00 0.00 0.00 0.00

1,464.94

940.68 275.00 30.26 139.00 63.00 17.00 0.00 0.00 0.00 0.00 0.00 0.00

0.36180 0.34072 1

$260,000 $530,000

$260,000 $530,000 0%

Beach Front

Funding Impact Statement continued

ACTIVITY GROUPS

Democracy and Governance Scope The Democracy and Governance Group comprises

Democracy and Governance

Mayor and six Councillors elected by the City as a whole

Ahuriri Ward – 1 Councillor

Onekawa-Tamatea Ward – 1 Councillor

Nelson Park Ward – 2 Councillors

Taradale Ward – 2 Councillors

Through Democracy and Governance, Council provides a democratic and consultative system for decision making. The Council, consisting of a Mayor and twelve Councillors, is elected three yearly. Through its structure of Committees, Subcommittees, Working Parties and Forums, Council carries out the requirements of the Local Government Act 2002 and other related legislation.

Key Issues The next Council election is planned to be held in October 2013. Council conducted a review of representation arrangements and resolved that the structure of representation, being 6 members elected from four wards and 6 members elected at large plus the mayor. However there is still one objection that Council is waiting for a response from the Commission.

Changes to the Local Government Act 2002 during the past year have been incorporated into this Annual Plan as required.

This includes the legislated change to the Purpose of Local Government. Performance measures mandated by the Act will impact the next Ten Year Plan 2015 - 2025. Council is currently reviewing policies and procedures to enable efficient and effective implementation of the required changes.

Performance Targets Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

Level of Service

Measures

Council holds regular Council and Council Committee meetings that are accessible and notified to the local community.

Number of Council Meeting cycles.

7 cycles (one less in election year)

8 cycles

8 cycles

All significant issues as defined by the Policy on Significance are subject to public consultation

Report on all consultation carried out

Report on all consultation carried out

Report on all consultation carried out

80%

80%

80%

Community Perceptions Percentage of residents satisfied with the ‘Sufficiency of Public Information’ in the NRB Public Opinion Survey.

76

Napier City Council Annual Plan 2013/14

Democracy and Governance continued Funding Impact Statement Actual 2011/12 $000

Annual Plan 2013/14 $000

TYP 2013/14 $000

TYP/AP 2012/13 $000

1,910 -

Sources of operating funding General rates, uniform annual general charges, rates penalties Targeted rates (other than water by meter charges) Subsidies and grants for operating purposes Fees charges and targeted rates for water supply Internal charges and overhead recoveries Interest and dividends from investments

2,122 -

2,177 -

2,105 -

1,910

Local authorities fuel tax, fines, infringement fees, and other receipts Total operating funding (A)

2,122

2,177

2,105

1,910 1,910

Applications of operating funding Payments to staff and suppliers Finance costs Internal charges and overhead applied Other operating funding applications Total applications of operating funding (B)

2,122 2,122

2,177 2,177

2,105 2,105

-

Surplus (deficit) of operating funding (A - B)

-

-

-

-

Sources of capital funding Subsidies and grants for capital expenditure Development and financial contributions Increase (decrease) in debt Gross proceeds from sale of assets Lump sum contributions Total sources of capital funding (C)

-

-

-

-

Application of capital funding Capital expenditure - to meet additional demand - to improve the level of service - to replace existing assets Increase (decrease) in reserves Increase (decrease) of investments Total application of capital funding (D)

-

-

-

-

Surplus (deficit) of capital funding (C - D)

-

-

-

-

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

-

-

-

-

Group depreciation and amortisation

-

-

-

The Funding Impact Statement (FIS) is provided in accordance with Section 95 and Schedule 10 of the Local Government Act 2002. The FIS is intended to disclose the sources and applications of Council funds. The FIS includes only transactions involving monetary funding and therefore excludes vested assets, revaluations and depreciation. This statement is not GAAP compliant.

Napier City Council Annual Plan 2013/14

77

Roading Scope The Roading Group comprises:

363km of Roads (100% sealed)

306km Urban Standard Roads (approx. 10% not constructed to Council’s current urban standards)

57km Rural Roads (70% requiring widening to cope with current traffic volumes)

46.4km State Highways

5,441 sumps and manholes to be cleaned

480km of kerb and channel to be swept

The City’s road network provides accessibility to Napier residents and visitors within a safe, clean and aesthetic environment.

The services cover the installation and maintenance of the physical components; carriageways, footpaths, steps, ramps, traffic and pedestrian bridges and structures, road and amenity lighting, drainage, traffic services and safety (e.g. street furniture, traffic lights, signage), as well as the planning, management and amenity and safety maintenance to ensure the system is clean, safe and able to cope with future needs.

Key Issues The plan is based around the assumption that there will not be any changes to New Zealand Transport Agency (NZTA) subsidies. If subsidies were reduced by NZTA, Council would need to reevaluate the priorities as well as the impact on rates.

Growth, changing public perceptions and a desire for a better road environment are giving rise to a demand for environmental projects in the CBD and residential suburbs. A number of projects have been identified throughout the City as a result of various studies undertaken over the last few years. The Capital Plan includes the following roading projects implemented:

Roading Bulk Funded Non-Subsidised Council is currently bulk funding some of the $41 million deferred capital works. For deferred capital works it is allocating expenditure of $1.822 million per annum from rates. In addition to bulk funding, major transportation projects are funded through financial contributions from developers aimed at mitigating the direct effect of new residential and commercial developments.

Roading Transportation Proposals Miscellaneous Transportation Deficiencies The Heretaunga Plains Transportation Study 2004 (for the period 2001 to 2026) identified $51.9 million of transportation projects in the first 20 years of the plan. The Capital Plan includes funding for these works at an average of $2.668 million per annum, funded from financial contributions.

In the short to medium term Prebensen Drive requires four-laning. Several intersections, particularly through Meeanee Rd and Kennedy Road will require capacity improvements as will the West Quay/ Pandora Road intersection.

CBD Transportation and Environmental Improvements $12.4 million of transportation and environmental projects is identified in the CBD area. Council’s Capital Plan has budgeted for only some of these projects to be undertaken. These include: Herschell Street: Herschell Street is designated a cultural precinct and will be upgraded to reflect this and coincide with the reopening of the Hawke’s Bay Museum and Art Gallery mid 2013.

Hastings Street: A redevelopment over three years and in three stages will see upgrades from Vautier Street to Albion Lane in Stage 1, Albion Lane to Tennyson Street in Stage 2 and Tennyson Street to Shakespeare Road in Stage 3. The Capital Plan includes $1.44 million for the last year of the project. The redevelopment will add to the revitalisation of the CBD, and result in improved parking, while traffic calming measures will ensure a safer street environment.

Emerson Street: Within the next 10 years, Council will be undertaking a review of Emerson Street with a view to refurbishing this environment. Details will be defined in a concept plan which is yet to be prepared, and will look at the carriageway, kerb and channels, pavers and painting of hardware in the street.

Street signage: Street signs in the CBD will be replaced during the term of this plan with black and white Art Deco style signs.

78

Napier City Council Annual Plan 2013/14

Roading continued Performance Measures Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

Level of Service

Measures

Council provides a transport system that is safe and efficient and enables users to move around effectively.

Number of Injury crashes in Napier City.

Reduce by 4% on previous year (109)

Reduce by 4% on previous year (114)

Same as previous year (2011/12 = 119)

Average roughness of sealed roads.

Less than 100 NAASRA

Less than 100 NAASRA

Less than 100 NAASRA

Percentage of residents satisfied with Roads in the NRB Public Opinion Survey.

87%

87%

87%

Percentage of residents satisfied with Footpaths in the NRB Public Opinion Survey.

82%

82%

82%

$569

$616

$569

(NAASRA – National Association of Australian State Road Authorities.

Ratings: 70 considered smooth, 150 considered rough.)

Community Perceptions

Economic and Financial Performance Rating cost per rateable property

Napier City Council Annual Plan 2013/14

79

Roading continued Funding Impact Statement Actual 2011/12 $000

9,745 163 4,069 69 515 381 14,943

Sources of operating funding General rates, uniform annual general charges, rates penalties Targeted rates (other than water by meter charges) Subsidies and grants for operating purposes Fees charges and targeted rates for water supply Internal charges and overhead recoveries Interest and dividends from investments Local authorities fuel tax, fines, infringement fees, and other receipts Total operating funding (A)

Annual Plan 2013/14 $000

TYP 2013/14 $000

TYP/AP 2012/13 $000

10,350 162 1,721

11,101 163 1,888

10,430 163 1,793

38 763 -

38 790 -

37 751 -

385 13,419

385 14,366

385 13,559

7,101 1,250 5 8,356

Applications of operating funding Payments to staff and suppliers Finance costs Internal charges and overhead applied Other operating funding applications Total applications of operating funding (B)

6,680 1,326 8,006

7,227 1,585 8,811

6,763 1,479 8,242

6,586

Surplus (deficit) of operating funding (A - B)

5,412

5,555

5,317

917 113 (7) 1,023

Sources of capital funding Subsidies and grants for capital expenditure Development and financial contributions Increase (decrease) in debt Gross proceeds from sale of assets Lump sum contributions Total sources of capital funding (C)

1,426 994 1,414 3,834

1,463 978 1,450 3,891

1,395 955 2,250 4,600

1,812 2,347 4,608 (1,158) 7,610

Application of capital funding Capital expenditure - to meet additional demand - to improve the level of service - to replace existing assets Increase (decrease) in reserves Increase (decrease) of investments Total application of capital funding (D)

3,282 2,481 5,515 (2,032) 9,246

3,367 1,950 5,658 (1,528) 9,446

2,987 1,882 6,259 (1,211) 9,917

(6,586)

Surplus (deficit) of capital funding (C - D)

(5,412)

(5,555)

(5,317)

-

-

-

7,388

7,388

6,637

6,902

Funding balance ((A-B) + (C-D)) Group depreciation and amortisation

The Funding Impact Statement (FIS) is provided in accordance with Section 95 and Schedule 10 of the Local Government Act 2002. The FIS is intended to disclose the sources and applications of Council funds. The FIS includes only transactions involving monetary funding and therefore excludes vested assets, revaluations and depreciation. This statement is not GAAP compliant.

80

Napier City Council Annual Plan 2013/14

Solid Waste Scope The Solid Waste Group comprises:

Domestic refuse collection

Kerbside recycling

Litter control

Redclyffe Transfer Station

Omarunui Landfill Joint Venture

Council provides a domestic refuse collection service for both residential and commercial properties within the City as follows:

Residential Properties – once per week

Commercial (Suburban Shops) – twice per week

Commercial (Central Business District) – three times per week

A kerbside recycling service for residential properties is provided fortnightly. Litter bins and drums are located throughout the City and serviced on a daily basis. Council’s Refuse Transfer Station at Redclyffe accepts most domestic, garden and building waste, and recyclables.

Currently Napier disposes of approximately 16,000 tonnes of refuse annually at the landfill from the domestic collection, litter collection and the Transfer Station. The Omarunui Landfill is the final disposal point for waste generated by the combined populations of Hastings District and Napier City. It is jointly owned by both the Hastings District and Napier City Councils and is managed on a day to day basis by the Hastings District Council.

Key Issues The Napier City Council draft Solid Waste Bylaw 2012 included a Transitional Provision to prohibit the commingling of green waste with general refuse. The Transitional Provision was withdrawn and Council is working to divert more green waste from the landfill as this material creates leachate and greenhouse gases. Both of these are unwanted by-products which must be carefully managed and add significant costs to operating the landfill.

Several local businesses made submissions on the Green Waste Transitional Provision. They consider that green waste diversion could be increased without a Bylaw that prohibits commingling. This could be done by educating existing customers as well as residents and businesses, especially in regards to options for green waste.

At the hearing Council considered this approach to be worth pursuing. Council will work with the solid waste industry to promote the diversion of green waste, which can be carried out as part of the existing Waste Minimisation activity. Based on a solid waste survey carried out in March 2012, the amount of green waste Napier residents send to landfill is in the order of 1,600 tonnes per year.

This initiative will be considered a success if an additional 1,000 tonnes of green waste is diverted. If the diversion of green waste from landfill does not increase, Council may wish to consider future options.

Napier City Council Annual Plan 2013/14

81

Solid Waste continued Performance Targets Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

Level of Service

Measures

Council provides a kerbside refuse collection service weekly to city residents to ensure city household waste is able to be removed from kerbside. In addition this activity provides a user pays facility at the Transfer Station for disposal of non-household refuse. These services are provided to promote community health through the prevention and spread of disease.

Weekly household kerbside waste collection

100%.

100%

100%

Transfer Station open for 362 days per year

100%

100%

100%

Waste to Landfill per capita.

<306kgs

<306kgs

<306kg

31%

31%

31%

100%

100%

100%

1,000 students per annum

1,000 students per annum

1,000 students per annum

Percentage of residents satisfied with Refuse Collection in the NRB Public Opinion Survey.

92%

92%

92%

Percentage of residents satisfied with Control of Litter, Graffiti, and Vandalism in the NRB Public Opinion Survey.

87%

87%

87%

$202

$218

$207

Council provides a kerbside recycling collection service fortnightly to reduce the quantity of waste to landfill.

Council also actively promotes waste minimisation activities and responsible solid waste management decisions through education initiatives and a hazardous waste collection programme. Council also provides green waste and recycling facilities at the Redclyffe Transfer Station

Refuse Diversion Rate

Compliance with resource consent parameters.

Education and waste reduction promotion programmes in place.

Community Perception

Economic and Financial Performance Cost per rateable property.

82

Napier City Council Annual Plan 2013/14

Solid Waste continued Funding Impact Statement Actual 2011/12 $000

493 1,731 163 1,231 -

Sources of operating funding General rates, uniform annual general charges, rates penalties Targeted rates (other than water by meter charges) Subsidies and grants for operating purposes Fees charges and targeted rates for water supply Internal charges and overhead recoveries

Annual Plan 2013/14 $000

TYP 2013/14 $000

TYP/AP 2012/13 $000

435 1,722 173 1,468 -

447 1,929 173 1,576 -

429 1,786 173 1,439 -

-

-

-

1,622 5,241

Interest and dividends from investments Local authorities fuel tax, fines, infringement fees, and other receipts Total operating funding (A)

1,912 5,709

1,981 6,105

1,751 5,579

3,995 223 1 4,219

Applications of operating funding Payments to staff and suppliers Finance costs Internal charges and overhead applied Other operating funding applications Total applications of operating funding (B)

4,122 224 4,346

4,468 236 4,704

4,208 236 4,444

1,022

Surplus (deficit) of operating funding (A - B)

1,363

1,401

1,135

-

-

-

488 875 1,363

831 571 1,401

586 549 1,135

(1,363)

(1,401)

(1,135)

-

-

-

733

733

697

2 2

7 419 598 1,024 (1,022) 675

Sources of capital funding Subsidies and grants for capital expenditure Development and financial contributions Increase (decrease) in debt Gross proceeds from sale of assets Lump sum contributions Total sources of capital funding (C) Application of capital funding Capital expenditure - to meet additional demand - to improve the level of service - to replace existing assets Increase (decrease) in reserves Increase (decrease) of investments Total application of capital funding (D) Surplus (deficit) of capital funding (C - D) Funding balance ((A-B) + (C-D)) Group depreciation and amortisation

The Funding Impact Statement (FIS) is provided in accordance with Section 95 and Schedule 10 of the Local Government Act 2002. The FIS is intended to disclose the sources and applications of Council funds. The FIS includes only transactions involving monetary funding and therefore excludes vested assets, revaluations and depreciation. This statement is not GAAP compliant.

Napier City Council Annual Plan 2013/14

83

Stormwater Scope The Stormwater Group comprises:

226km Stormwater Mains

58km Open Drains

13 Pump Stations (Napier City Council and Hawke’s Bay Regional Council managed)

Council provides and maintains a stormwater disposal system for the 13 separate drainage areas or catchments in the City with the aim to minimise the effects of flooding. The system, serving approximately 97% of the City’s population, consists of open drains, stormwater mains and pump stations with about 75% of the City reliant on pumped systems for stormwater drainage.

Key Issues The continued investment in the upgrading of the City stormwater catchments ($26.3 million over the next nine years), including the CBD and Taradale, will be funded from a combination of rates and financial contributions. The construction of a new pump station to the south of the City at a cost of $5.079 million is planned for 2019/20.

Napier CBD - Tennyson Street The stormwater upgrade in Tennyson Street will be undertaken in conjunction with the redevelopment of Hastings Street.

The deep,large diameter stormwater main will be installed along Tennyson Street through to Marine Parade and end in a pier on the land side of Mean High Water Springs.

Upgrade Taipo Stream The Taipo Stream forms a major drainage channel on the western boundary of the Napier City area and provides drainage to a significant part of Taradale and the rural area from Avenue Road to Ahuriri Estuary, including Poraiti. Two of the upper tributaries are protected with flood detention dams (Halliwell’s Dam and O’Dowd Road Dam). Taipo Stream will undergo upgrade works in 2015/16 at a cost of $620,000 funded by a combination of rates and financial contributions.

Stormwater Drain Improvements Planned developments include large scale pipe upgrading in the CBD, Taradale and Greenmeadows areas. Ongoing upgrades and renewals of network and pump stations, to meet the demands of growth and development, will continue.

Ellison Stormwater Pump Station Large scale upgrading for Napier South and Marewa includes a proposed new pumping station at Ellison Street and beach outfall. This is programmed for 2019/20, funded through loan funding and financial contributions at a total cost of $5.079 million.

Te Awa Stormwater Pond Financial contributions from developers in the Te Awa Structure Plan area will fund the $1.674 million required to develop alternative flood pond storage within land north of Kenny Road. This is programmed for 2014/15. The Serpentine area is subject to a structure plan process at present. No explicit provision for infrastructure for the area, other than development of the stormwater detention pond in the Te Awa Estates development, is made in the plan until the outcome of the structure plan process is known.

84

Napier City Council Annual Plan 2013/14

Stormwater continued Performance Targets Level of Service

Measures

People, property, infrastructure and the environment are reasonably safeguarded from the adverse effects of surface water.

Reported number of properties inundated during events smaller than a 1 in a 50 year return period

Council provides this service, which collects, conveys and disposes of stormwater, with no significant adverse environmental effects to protect the environment and the health of the cityâ&#x20AC;&#x2122;s population.

Compliance with discharge consent conditions

Percentage time total pumping capacity available to prevent flooding.

Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

0

0

0

97%

97%

97%

100%

100%

100%

87%

87%

87%

$1,303

$1,336

$1,274

Community Perception Percentage of residents satisfied with Stormwater in the NRB Public Opinion Survey.

Economic and Financial Performance Cost per hectare drained

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85

Stormwater continued Funding Impact Statement Actual 2011/12 $000

Annual Plan 2013/14 $000

TYP 2013/14 $000

TYP/AP 2012/13 $000

2,933 160 -

3,044 223 -

3,023 213 -

61 3,154

63 3,330

61 3,296

59 1,703

Sources of operating funding General rates, uniform annual general charges, rates penalties Targeted rates (other than water by meter charges) Subsidies and grants for operating purposes Fees charges and targeted rates for water supply Internal charges and overhead recoveries Interest and dividends from investments Local authorities fuel tax, fines, infringement fees, and other receipts Total operating funding (A)

787 626 1,413

Applications of operating funding Payments to staff and suppliers Finance costs Internal charges and overhead applied Other operating funding applications Total applications of operating funding (B)

1,012 767 1,779

1,061 864 1,925

985 812 1,796

289

Surplus (deficit) of operating funding (A - B)

1,376

1,405

1,500

594 212 805

Sources of capital funding Subsidies and grants for capital expenditure Development and financial contributions Increase (decrease) in debt Gross proceeds from sale of assets Lump sum contributions Total sources of capital funding (C)

347 347

346 346

321 321

Application of capital funding Capital expenditure - to meet additional demand - to improve the level of service - to replace existing assets Increase (decrease) in reserves Increase (decrease) of investments Total application of capital funding (D)

439 2,945 649 (2,311) 1,722

451 3,020 521 (2,241) 1,751

429 2,897 650 (2,155) 1,821

Surplus (deficit) of capital funding (C - D)

(1,376)

(1,405)

(1,500)

-

-

-

1,906

1,906

1,855

1,483 161 -

1,807 599 193 (1,504) 1,095 (289) 1,818

Funding balance ((A-B) + (C-D)) Group depreciation and amortisation

The Funding Impact Statement (FIS) is provided in accordance with Section 95 and Schedule 10 of the Local Government Act 2002. The FIS is intended to disclose the sources and applications of Council funds. The FIS includes only transactions involving monetary funding and therefore excludes vested assets, revaluations and depreciation. This statement is not GAAP compliant.

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Napier City Council Annual Plan 2013/14

Sewerage Scope The Sewerage Group comprises:

Wastewater

42 Pump Stations

367km Wastewater Mains

Milliscreen Plant (Awatoto)

1,607m Marine Outfall

93% of Napier’s population serviced by reticulation system

Council provides and maintains a safe domestic and industrial sewage collection, screening and disposal system to maintain the community’s health. Properties are currently being connected to Stage 1 of the Bay View system.

Key Issues Wastewater Marine Outfall Replacement A condition assessment of the outfall indicates there is severe corrosion on the pipe that conveys sewage to the drain downstream of the pressure manhole on the beach of the Awatoto Marine Outfall. Replacement of the outfall is necessary to ensure reliable operation and to provide capacity into the future. Provision of $8.9 million in 2021/22 is made in this plan and will require additional funding once detailed costs have been prepared. The plan also provides for an outfall renewal budget.

Completion of Wastewater Treatment Plant A major project included in the plan is the Biological Trickling Filter Wastewater Treatment Plant funded from the Advanced Wastewater Treatment Establishment Fund and scheduled to be completed in August 2014.

Council committed to providing advanced sewage treatment following thorough investigations and a public consultation process which was initiated in 1993/94. There is no other single project with significant capital, operational and maintenance costs that has had a greater impact on Council’s finances over the past two decades. There have been many investigations and delays in the progress towards this facility being completed. Council has now gained Resource Consent and has started the many steps required in order that the plant is fully operational.

The total cost of the project is $32.7 million with much of this provided in past plans. The remaining $2.567 million is included in 2013/14.

Napier City Council Annual Plan 2013/14

87

Sewerage continued Performance Measures Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

Level of Service

Measures

Provide and maintain the city sewerage system to ensure public health and the environment are safeguarded.

Number of reticulated properties that are unable to dispose of wastewater, due to stormwater infiltration, for longer than 6 hours.

Zero

Zero

Zero

Blockage resulting in overflow

Zero

Zero

Zero

Compliance with requirements of resource consents for quality and volume.

100%

100%

100%

Number of complaints relating to odour

Zero

Zero

Zero

90%

90%

90%

$0.75

$0.76

$0.73

$18,063

$18,892

$18,236

$263

$276

$268

Ensure the sewerage system is effective and reliable.

Community Perception

Percentage of residents satisfied with Wastewater in the NRB Public Opinion Survey.

Economic and Financial Performance Cost per m3 of wastewater Cost per km of wastewater mains Cost per rateable property

88

Napier City Council Annual Plan 2013/14

Sewerage continued Funding Impact Statement Actual 2011/12 $000

Annual Plan 2013/14 $000

TYP 2013/14 $000

TYP/AP 2012/13 $000

6,444 432 80 -

6,542 447 83 -

7,330 432 79 -

6,956

7,072

7,840

1 7,188

Sources of operating funding General rates, uniform annual general charges, rates penalties Targeted rates (other than water by meter charges) Subsidies and grants for operating purposes Fees charges and targeted rates for water supply Internal charges and overhead recoveries Interest and dividends from investments Local authorities fuel tax, fines, infringement fees, and other receipts Total operating funding (A)

1,856 807 2,663

Applications of operating funding Payments to staff and suppliers Finance costs Internal charges and overhead applied Other operating funding applications Total applications of operating funding (B)

2,260 996 3,256

2,244 1,125 3,368

2,129 1,048 3,176

4,525

Surplus (deficit) of operating funding (A - B)

3,700

3,703

4,664

164 954 1,118

Sources of capital funding Subsidies and grants for capital expenditure Development and financial contributions Increase (decrease) in debt Gross proceeds from sale of assets Lump sum contributions Total sources of capital funding (C)

83 657 740

81 673 755

80 80

2,807 981 1,155 700 5,643

Application of capital funding Capital expenditure - to meet additional demand - to improve the level of service - to replace existing assets Increase (decrease) in reserves Increase (decrease) of investments Total application of capital funding (D)

590 2,576 2,032 (758) 4,440

605 2,642 2,085 (874) 4,458

577 1,684 2,483 4,744

(3,700)

(3,703)

(4,664)

-

-

-

3,610

3,610

3,559

6,703 401 83 -

(4,525) 3,439

Surplus (deficit) of capital funding (C - D) Funding balance ((A-B) + (C-D)) Group depreciation and amortisation

The Funding Impact Statement (FIS) is provided in accordance with Section 95 and Schedule 10 of the Local Government Act 2002. The FIS is intended to disclose the sources and applications of Council funds. The FIS includes only transactions involving monetary funding and therefore excludes vested assets, revaluations and depreciation. This statement is not GAAP compliant.

Napier City Council Annual Plan 2013/14

89

Water Supply Scope The Water Supply Group comprises:

9.8 million m3 water consumed annually

10 wells

10 ground water and 8 booster Pump Stations

8 reservoir sites

30 million litres storage facilities

463km mains

95.5% of Napier’s population serviced by reticulation system

Council provides a water supply system for the supply of potable water as well as for fire fighting purposes. Water is drawn from the Heretaunga Plains aquifer, is free from harmful contamination and no water treatment is required. It is reticulated to the Napier urban area and to Bay View. Council has a programme in place to manage the usage of water, a precious natural resource, to minimise wastage and shortages.

Key Issues Upgrades to the City’s Water Supply will continue with emphasis on managing demand and achieving a more stable overall pressure. Council’s focus is keep wastage of water to a minimum and is currently reviewing irrigation systems used for sportsgrounds and the city gardens to ensure that all systems are designed to meet industry best-practice.

The Capital Plan includes $17.4 million for Water Supply projects to ensure that levels of service are maintained for the city’s water supply. Projects include a new reservoir in Taradale, development of a new well in Awatoto and a new trunk main from Awatoto (to be undertaken in two stages). Three projects have been added to the plan this year; Te Awa Structure Plan Stages 1 & 2, Severn Street Extension and Upgrade Water Supply Control System.

Severn Street Extension This is the first stage of an upgrade to increase capacity of the reticulation that supplies water to the Pandora industrial area and beyond. Pandora is a high water use area and the level of service to consumers was significantly affected recently when the primary supply, the Pandora Trunk Main, was taken out of service temporarily during construction of the West Quay roundabout. Once this project has been fully completed it will reduce the impact on all downstream consumers in the Pandora, Ahuriri and Westshore areas when the Pandora Trunk Main is out of service.

This stage of the project is from Prebensen Drive to the railway line and the budget will allow the work to be done in conjunction with any road upgrading required in the adjacent area. The balance of the project will be included in the next Ten Year Plan.

Upgrade Water Supply Control System This project is an extension of a current project approved in past years. The control system automatically controls the network’s pumps, monitors reservoir levels and generates alarms when faults or other unfavourable conditions occur.

Additional funding is required to ensure that the new system complies with current radio licence rules.

90

Napier City Council Annual Plan 2013/14

Water Supply Continued Performance Targets Water Supply Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

Level of Service

Measures

Minimise the adverse effects of water supply quality on human health by providing a water supply system with adequate capacity and pressure that meets the NZ Drinking Water Standards.

Compliance with requirements of Resource Consent conditions

100%

100%

100%

Water quality adherence to Drinking Water Standards for New Zealand 2005 (Revised 2008).

100%

100%

100%

20%

20%

20%

0

0

0

90%

90%

90%

$0.41

$0.43

$0.41

$8,712

$9,035

$8,629

$167

$167

$161

Percentage of water mains > 100mm in diameter cleaned No fire hydrants reported by NZ Fire Service not meeting code of practice pressure and flow requirements

Community Perception Percentage of residents satisfied with Water Supply in the NRB Public Opinion Survey.

Economic and Financial Performance Cost per m3 of water Cost per km of water mains Operating cost per rateable property

Napier City Council Annual Plan 2013/14

91

Water Supply continued Funding Impact Statement Actual 2011/12 $000

Annual Plan 2013/14 $000

TYP 2013/14 $000

TYP/AP 2012/13 $000

3,645 488 111 -

3,780 506 115 -

3,605 488 109 -

11 4,255

12 4,412

11 4,213

15 3,936

Sources of operating funding General rates, uniform annual general charges, rates penalties Targeted rates (other than water by meter charges) Subsidies and grants for operating purposes Fees charges and targeted rates for water supply Internal charges and overhead recoveries Interest and dividends from investments Local authorities fuel tax, fines, infringement fees, and other receipts Total operating funding (A)

1,666 496 2,162

Applications of operating funding Payments to staff and suppliers Finance costs Internal charges and overhead applied Other operating funding applications Total applications of operating funding (B)

2,067 650 2,717

2,144 726 2,870

1,998 687 2,685

1,774

Surplus (deficit) of operating funding (A - B)

1,538

1,542

1,528

124 124

122 122

119 119

1,054 120 1,175 (687) 1,662

1,082 123 725 (266) 1,664

212 119 700 616 1,647

(1,538)

(1,542)

(1,528)

-

-

-

1,428

1,428

1,419

3,394 450 77 -

221 221

366 758 871 1,995 (1,774) 1,446

Sources of capital funding Subsidies and grants for capital expenditure Development and financial contributions Increase (decrease) in debt Gross proceeds from sale of assets Lump sum contributions Total sources of capital funding (C) Application of capital funding Capital expenditure - to meet additional demand - to improve the level of service - to replace existing assets Increase (decrease) in reserves Increase (decrease) of investments Total application of capital funding (D) Surplus (deficit) of capital funding (C - D) Funding balance ((A-B) + (C-D)) Group depreciation and amortisation

The Funding Impact Statement (FIS) is provided in accordance with Section 95 and Schedule 10 of the Local Government Act 2002. The FIS is intended to disclose the sources and applications of Council funds. The FIS includes only transactions involving monetary funding and therefore excludes vested assets, revaluations and depreciation. This statement is not GAAP compliant.

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Napier City Council Annual Plan 2013/14

Recreation Scope The Recreation Group comprises:

Sportgrounds

15 sports parks (211 hectares)

Major facilities – McLean Park Complex, Park Island, Nelson Park and Tareha Park.

Sportsgrounds are provided throughout the City to cater for a range of recreational and sporting needs

Napier Aquatic Centre

Indoor facilities (heated) – 5 lane 25m pool, 6 lane 25m pool, 15m learner’s pool, 2 toddler pools, 2 spa pools, 2 water slides.

A comprehensive aquatic facility providing educational and recreational programmes, and a range of non aquatic outdoor activities.

Marine Parade Pools

4 heated outdoor pools

5 spa pools

A complex with a range of heated pools and spas managed under contract.

Reserves

36 neighbourhood parks, 46 greenbelt reserves, 9 foreshore reserves and 9 public gardens

75m2 recreational reserves per residential lot

A range of passive recreation facilities providing an open space network and formal gardens of a high standard throughout the City.

Inner Harbour

95 berths

An area of wharves and catwalks in Ahuriri providing berths for commercial and recreational vessels, and popular for recreational fishing.

Key Issues Sportsgrounds Sportsgrounds Development A master plan, which will guide development of the Park Island sports complex over the next 20 plus years was adopted

by Council in early 2013. The plan, which was carefully developed over almost two years, strategically provides for the growth and change in local, regional and national outdoor sporting activity in the city and provides the city with direction to further develop Park Island as an integral part of Napier’s open space network.

The first stages of implementing the plan will be initiated during the 2013/14 Annual Plan, including implementing a District Plan change to enable future sports facility developments and undertaking detailed design and the first stages of ground works on land to the east of the existing sports grounds.

Sport and Active Recreation Strategy Council is committed to ensuring that the development of sport and active recreation facilities and the provision of sport and active recreation services for the community is undertaken in a strategic, collaborative, transparent and affordable way. Council considers that an effective Sport and Active Recreation Strategy will contribute to this goal, and to this end Council will continue to work in partnership with other Councils in the region, regional sports organisations and Sport Hawke’s Bay towards redeveloping the existing Sport and Active Recreation Strategy into a better plan for Hawke’s Bay.

Napier Aquatic Centre The need for an upgrade of the Old Lap Pool enclosure has been identified in previous plans. A detailed condition assessment report, recently carried out by a structural engineer, recommends improvements to the facility that include adequate roof insulation, a vapour barrier, new flooring to replace the deteriorated rubber studded tile, double glazed windows and ceiling replacement. The funding identified in the plan will be sufficient to cover this work. Investigation into the addition of a dedicated Learn to Swim pool (as part of a regional strategy) may lead to additional requirements not budgeted for in this plan.

Napier City Council Annual Plan 2013/14

93

Recreation continued Reserves The plan allows for additional Reserve facilities which will cater for Napier’s population growth.

The major works proposed concern the establishment and development of neighbourhood reserves (together with the provision of play equipment where appropriate), walkway reserves, and a number of greenbelt reserves in areas particularly subject to intensive infill development. The establishment and development of reserves in green-field areas is considered to be an on-site cost carried by each developer.

The Capital Plan makes provision for development of passive recreation reserves and the establishment of a new playground (location to be determined) at a total cost of $877,000. Reserve development is funded from combination of rates and financial contributions.

Tree Planting Programme A tree planting programme will continue throughout the term of this plan. Funds allocated to this are in excess of the normal Reserves budget and are in the plan as a response to the community’s desire to enhance the City’s physical environment. The planting will be funded from rates to a total of $689,000 over the nine years.

Reserves Walkway/Cycleway Linkages A network of formed and unformed walkway/cycleway tracks are located throughout the city to promote and encourage healthy exercise and to provide for the enjoyment of all residents and visitors to the city. A conscious effort has been made to establish a series of linkages between various areas in order to maximise the enjoyment of these walkways/ cycleways. Pathways extend through many of the Foreshore Reserves and linear reserves catering for the dual activities of walking and cycling. Council will continue to develop walkway linkages and has included $2.787 million for this, funded from loans.

Marine Parade Landscaping An extension to the Marine Parade playground was completed in late 2012. This will include family friendly recreational areas (seating, shade covers and barbecues) and landscaping. The plan includes a further $1.2 million funded from the Capital Project Fund to continue development along Marine Parade.

Inner Harbour Investigation into whether the Meeanee Quay jetties should be renewed, or redeveloped with a view to providing additional berthage for the future is required. An engineering survey will be undertaken during the next 3 years to establish the remaining life and estimated replacement cost of the jetties.

There is no provision for the renewal of the Meeanee Quay jetties within the current renewals programme.

94

Napier City Council Annual Plan 2013/14

Recreation continued Performance Targets Sportgrounds Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

3.5ha

3.5 Ha

3.5 ha

Number of sports grounds suitable for hosting national outdoor sports events.

Minimum of 3

Minimum of 3

Minimum of 3

Number of sports grounds suitable for hosting international outdoor sports events.

Minimum of 1

Minimum of 1

Minimum of 1

90%

90%

90%

$168

$166

$159

$19,931

$19,675

$18,675

Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

Level of Service

Measures

Council provides a sufficient number and range of sports and recreation facilities to satisfy the needs of the community.

Sportsgrounds area per 1,000 residents.

Community Perception Percentage of residents satisfied with Parks and Sportsfields in the NRB Public Opinion Survey.

Economic and Financial Performance Operating Cost per rateable property Operating cost per hectare

Napier Aquatic Centre

Level of Service

Measures

Council provides a sufficient number and range of sports and recreation facilities to satisfy the needs of the community.

Accredited as meeting Poolsafe standards.

100%

100%

100%

Water quality adherence rate to NZ Water Treatment Standards 5826:2000.

100%

100%

95%

204,000

204,000

204,000

82%

82%

82%

$89

$89

$87

Number of users.

Community Perception Percentage of residents satisfied with Pools in the NRB Public Opinion Survey.

Economic and Financial Performance Operating cost per rateable property

Napier City Council Annual Plan 2013/14

95

Recreation continued Reserves Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

75m2

75m2

75m2

Complaints per annum

<60

<60

<60

Number of playgrounds

32

32

32

Playground accidents per annum

<10

<10

<10

Annuals propagated and planted throughout the city.

195,000

195,000

195,000

95%

95%

95%

$142

$142

$133

$8,970

$8,922

$8,307

Level of Service

Measures

Council provides a sufficient number and range of sports and recreation facilities to satisfy the needs of the community.

Recreational land per residential lot.

Council sustainably manages the development and use of reserves as a natural recreational resource for both local residents and visitors.

Community Perception

Percentage of residents satisfied with Public Gardens, Street Beds and Trees in the NRB Opinion Survey Economic and Financial Performance Cost per rateable property Operating cost per hectare of Reserve

Inner Harbour Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

Level of Service

Measures

To provide and maintain Inner Harbour facilities to enable the safe berthing of commercial and recreational vessels.

Berths available for commercial and recreational vessels.

98 berths

98 berths

98 berths

Channel depth sufficient for commercial and recreational vessels. Maintain maximum time between depth soundings of inner harbour.

18 months

18 months

18 months

96

Napier City Council Annual Plan 2013/14

Recreation continued Funding Impact Statement Actual 2011/12 $000

603 8,797

Sources of operating funding General rates, uniform annual general charges, rates penalties Targeted rates (other than water by meter charges) Subsidies and grants for operating purposes Fees charges and targeted rates for water supply Internal charges and overhead recoveries Interest and dividends from investments Local authorities fuel tax, fines, infringement fees, and other receipts Total operating funding (A)

7,011 1,379 2 8,392

Applications of operating funding Payments to staff and suppliers Finance costs Internal charges and overhead applied Other operating funding applications Total applications of operating funding (B)

6,181 61 1,817 135 -

405

Surplus (deficit) of operating funding (A - B)

25 264 289

Sources of capital funding Subsidies and grants for capital expenditure Development and financial contributions Increase (decrease) in debt Gross proceeds from sale of assets Lump sum contributions Total sources of capital funding (C)

227 933 620 (1,086) 694 (405) 1,843

Application of capital funding Capital expenditure - to meet additional demand - to improve the level of service - to replace existing assets Increase (decrease) in reserves Increase (decrease) of investments Total application of capital funding (D) Surplus (deficit) of capital funding (C - D) Funding balance ((A-B) + (C-D)) Group depreciation and amortisation

Annual Plan 2013/14 $000

TYP 2013/14 $000

TYP/AP 2012/13 $000

7,328 24 1,458 199 -

7,847 24 1,466 206 -

7,183 24 1,434 196 -

611 9,620

632 10,175

569 9,406

7,103 1,880 2 8,986

7,180 1,752 2 8,934

6,856 1,648 2 8,506

634

1,241

900

293 1,103 1,396

290 1,571 1,860

276 765 1,041

1,409 1,769 1,576 (2,724) 2,030

1,445 510 1,968 (822) 3,101

1,272 1,872 1,464 (2,667) 1,941

(634)

(1,241)

(900)

-

-

-

2,179

2,179

2,029

The Funding Impact Statement (FIS) is provided in accordance with Section 95 and Schedule 10 of the Local Government Act 2002. The FIS is intended to disclose the sources and applications of Council funds. The FIS includes only transactions involving monetary funding and therefore excludes vested assets, revaluations and depreciation. This statement is not GAAP compliant.

Napier City Council Annual Plan 2013/14

97

Social and Cultural Scope The Social and Cultural Group comprises:

Libraries

2 Libraries – Napier and Taradale

39,000 members

Libraries offer free-to-all services and a stimulating and pleasant environment. Services include recreational, educational, historical, genealogical, cultural and current affairs material together with online facilities, reading and outreach programmes.

War Memorial Conference Centre The facility houses the eternal flame and roll of honour as a memorial to Napier citizens who served and died in the conflicts of the 20th century.

Napier Municipal Theatre The Art Deco heritage building in Tennyson Street provides modern theatre facilities for local, national and international live theatre, performing arts, exhibitions, and other community functions and events. The auditorium has a seating capacity of 993. Other features include the Pan Pac Foyer for exhibitions, functions and conferences, bar and catering facilities and a Ticketing Box Office.

Hawke's Bay Museum and Art Gallery Arts, cultural and museum facilities and a regional archive are provided by the Hawke’s Bay Museum and Art Gallery and Century Theatre. The regional collection of heritage, art and artefacts are managed under an agreement with the Hawke’s Bay Museums Trust. The complex is currently closed to undertake a redevelopment project due to be completed in 2013.

Community Planning Community facilitation, administration of community grants, safer community, youth development and Settlement Support are the main components of Community Planning. Community facilitation and grants support and encourage voluntary and community based organisations to address social issues in the City through self-help processes. Safer community’s purpose is to develop community based crime prevention initiatives, promote safety in the community, and provide coordination and liaison between community groups and organisations. Youth development supports and fosters the role of young people in our community, providing opportunities for young people to participate and engage in decision making. Settlement Support ensures migrants, refugees and their families access appropriate information and responsible services that are available in the wider community.

Halls

6 casual hire facilities, 2 leased facilities

Council provides a range of facilities with a good geographic spread for recreational, community or leisure activities at affordable prices.

Retirement and Rental Housing

303 retirement flats in 9 villages – all 1 bedroom

72 rental flats in 3 villages - mostly 2 bedrooms

Flats are provided for people with special housing needs, low assets, and low income, with the emphasis on providing for the welfare of the tenants. Council flats are in high demand with the average occupancy rate exceeding 97%.

Cemeteries 6 cemeteries - 4 operational and 2 historic Comprehensive areas for burials, ash interments, and ash scattering. The recently restored historic cemeteries ensure the historical and cultural significance is preserved. Records are available for genealogical enquiries. Note the crematorium for the Hawke’s Bay region, located in Hastings, is owned and operated by Hastings District Council.

Public Toilets

44 toilet facilities

Public toilets are provided in key areas generally related to tourism, recreation and shopping activities. Facilities are cleaned and inspected daily with the emphasis on hygiene, safety and mitigation of graffiti.

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Napier City Council Annual Plan 2013/14

Social and Cultural continued Emergency Management

1 Emergency Management Operations Centre

9 Civil Defence Centres

Emergency Management combines Council staff, volunteers, other organisations and agencies to facilitate a planned response to emergencies in Napier. Integration of policies and planning as a region is coordinated by the Hawke’s Bay Civil Defence Emergency Management Group.

Key issues Libraries E Books were made available to members in December 2011. It is anticipated that the take up of this service will be gradual.

Changes in technology will be reflected in the services offered by the Libraries.

In the latter part of the plan, funding has been allocated for an upgrade of the Napier Library. The impact of electronic media on library services and library facilities required for the future will be assessed during the intervening time.

Hawke's Bay Museum and Art Gallery The Hawke's Bay Museum and Art Gallery redevelopment is on target for an April handover sto staff to install exhibitions in the new building.

Community Planning Population changes present challenges in the medium to long term. Demand will come from both the ageing population and youth.

Youth unemployment is a growing concern and is exacerbated in a poor economic climate. Work is underway at a regional level to address this issue of which we are part of.

Technology has an important role to play in service provision (the use of online polling, consultation, information sharing etc) and for community organisations. It will be important for Council to utilise technology where possible and to support both the community and voluntary sector in this area.

Funding sources continue to decline for community organisations and demand for their services is on the increase. We will continue to offer support, resources and advice to organisations, both at individual levels and in group settings.

Maraenui The Maraenui Urban Renewal Plan Review and Maraenui Shopping Centre Crime Prevention Through Environmental Design (CPTED) Assessment were adopted by Council on 10 August 2011. The recommendations of these reports are being prioritised. The Maraenui CPTED assessment contained sixty-nine specific recommendations to improve the area, with the overall recommendation being to enhance the shopping centre and reserve, ensuring it is safe, secure and functional, and with a view to encourage economic development in the area.

The first stages of the upgrade project focus on the reserve by replacing and improving the playground area, skate park and toilets, and creating a larger open green space. This will be funded from existing CPTED capital and the community development project budget. Further stages to upgrade roading, walkways and parking areas will be funded from other existing Council budgets and may require additional funding through future Annual Planning processes.

Pukemokimoki Marae The Pukemokimoki Marae is now well established within Napier, although not currently reaching its original vision and potential for the facility. In order to achieve its growth aspirations, funding of $50,000 has been approved for marketing the Marae for up to three years in order to establish and build capacity and sustainability by growing tourism and service provision while continuing to serve the community of Napier.

Halls The Capital Plan includes an additional project for the refurbishment of the Memorial Square Building. In addition the Greenmeadows East Community Hall and the Taradale Community Rooms are in need of some minor refurbishment which will be achieved through the existing building maintenance programme.

Napier City Council Annual Plan 2013/14

99

Social and Cultural continued Retirement and Rental Housing Background Napier City Council has a long and proud history of providing affordable Retirement and Rental Housing for people who have low assets and low income. This fills a known gap in the rental market, as it provides both affordable housing and security of tenure with an emphasis on the social and community wellbeing of the tenants. Due to modern medicine and equipment the elderly, despite physical disabilities and illnesses, are being encouraged and supported to remain independent in their homes longer. In addition the average age of the general population is increasing. This increases demand for retirement housing, which provides functional and accessible accommodation and caters for all levels of disability. To meet the growth in demand for retirement housing, Council also allocates its general rental flats to the more fit and able elderly, and the ground floor flats to the less mobile, who are in wheelchairs or require easy access.

Current/Future In 2011 Council resolved that the funds in the Pensioner Housing Upgrade Reserve, that had been retained to finance additional flats, would be extended to include improvements to existing Retirement Flats. From a feasibility study carried out in 2008, one of the main areas identified was the improvement of retirement flats insulation and ventilation. The insulation was upgraded during the past three years, and is now to the recommended standard for ceilings R2.9 and under floor R1.3. The Pensioner Housing Upgrade Reserve will be utilised to improve kitchen and bathroom ventilation and, at the same time, renew bathroom fixtures and fittings. The total value of this work is expected to be $658,000.

Minor Capital Projects Bulk funding for minor capital projects is provided to maintain Councilâ&#x20AC;&#x2122;s flats to a reasonable standard. Funding has been included in this plan of $1.1 million funded from rental income received.

Public Toilets Investigation of vandal proof methods/means of improving public health protection may result in additional requirements not currently provided in this plan.

New Toilet Programme Council has developed a standardised precast design for new toilet facilities which can be relocated in future should the need occur. This standardised design has tiled floors and walls and improvements in natural lighting, significantly improving the overall standard of toilets in Napier. $250,000 has been included in the Capital Plan for new public toilets, funded from rates.

The toilets at Taradale Park will be replaced, and the toilets in Westshore are under review.

Emergency Management A review of the Hawkeâ&#x20AC;&#x2122;s Bay Civil Defence Emergency Management Group Plan is required to identify where regional priorities may conflict with this plan.

Current legislation particularly the Civil Defence Emergency Management Act 2002 due to significant national events will need to be reviewed. This may place additional requirements on Council which are not included in this plan.

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Napier City Council Annual Plan 2013/14

Social and Cultural continued Performance Measures Libraries Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

36%

37%

36%

New stock items per 1,000 residents - including electronic

>350

>350

>350

Percentage of residents satisfied with the Library Service in the NRB Public Opinion Survey

85%

85%

85%

Total cost per door and web entry

$6

$6

$6

Rating cost per rateable property

$122

$125

$119

Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

Level of Service

Measures

Council provides library and library membership services to meet the communityâ&#x20AC;&#x2122;s recreational, social and educational needs.

Percentage of Napier City residents who are active borrowers (two year average)

Community Perception

Economic and Financial Performance

Napier Municipal Theatre

Level of Service

Measures

Council provides a quality performing arts venue experience for local and visitor use

Visitor and local entries to facility

97,808*

173,000

173,000

Number of hire days for theatrical and cultural events.

140

163

163

Operating cost per entry

$11

$12

$12

Rating cost per rateable property

$25

$24

$23

Economic and Financial Performance

* Calculation basis for the TYP was inappropriate and has been changed for the Annual Plan.

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Social and Cultural continued Hawke's Bay Museum and Art Gallery Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

690,000

690,000

closed

12

12

closed

Number of collection items lost or damaged

0

0

closed

Number of exhibitions per annum

12

12

closed

Opening August 2013.

Museum not included in survey.

80%

closed

$6

$5

closed

$56

$52

closed

Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

50

50

50

Number of youth forums coordinated per annum

0

18

18

Minimum number of community based crime reduction strategies supported

4

4

4

20

20

20

Satisfaction rating of attendees at workshops

95%

95%

95%

Number of community organisations receiving information via email 4 times per year

120

120

120

Percentage of residents with Safety Day in the NRB Public Opinion Survey

96%

96%

96%

Percentage of residents satisfied with Safety Night in the NRB Public Opinion Survey

61%

61%

61%

$48

$57

$56

Level of Service

Measures

Provide a facility to display art, culture and heritage.

Visitor and local entries to Museum & Art Gallery Number of events per annum

Community Perception Percentage of residents satisfied with Hawkes Bay Museum and Art Gallery (including Century Theatre) in the NRB Public Opinion Survey

Economic and Financial Performance Operating cost per entry Rating cost per rateable property

Community Planning

Level of Service

Measures

Council offers financial support for community initiatives and to secure key community services through grants and service contracts.

Council promotes community safety with an emphasis on implementing crime prevention measures. Council also supports youth initiatives in Napier.

Number of local community events coordinated

Council regularly liaises with community groups, social services and key community organisations and agencies to share community information and advice

Number of community training and networking meetings facilitated per annum

Community Perception

Economic and Financial Performance Operating cost per rateable property

102

Napier City Council Annual Plan 2013/14

Social and Cultural continued Halls Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

6

6

6

95%

95%

95%

$35,883

$42,984

$41,517

Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

100%

100%

100%

100%

100%

100%

100%

100%

100%

97%

97%

97%

Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

Online cemetery records system available 90% of the time

Online cemetery records system available 90% of the time

Online cemetery records system available 90% of the time

Cemeteries are well maintained and provide a quiet environment for visitors

< 10 complaints per annum

< 10 complaints per annum

< 10 complaints per annum

Interment and Burial spaces are available on request

100%

100%

100%

80%

80%

80%

$23

$24

$23

Level of Service

Measures

Council provides a sufficient number and range of cultural and social facilities to satisfy the needs of the community.

Number of Halls

Community Perception Customer satisfaction that the service provided meets acceptable standards.

Economic and Financial Performance Average rating cost per Hall

Retirement and Rental Housing

Level of Service

Measures

Council promotes community safety by providing a safe environment for its tenants in council housing.

Village Coordinators available during normal working hours and on call for emergencies after hours Inspections per unit per year • Retirement Flats – fortnightly [welfare] • Retirement and Rental Flats – annually [maintenance)

Economic and Financial Performance Occupancy Rate

Cemeteries

Level of Service

Measures

Council provides and maintains a tranquil environment for burial, reflection and placing of memorials to deceased family members. Council also maintains both the burial records and the historical features for all cemeteries managed.

Cemeteries records are well maintained and accessible

Community Perception Percentage of residents satisfied with Cemeteries in the NRB Public Opinion Survey.

Economic and Financial Perception Operating cost per rateable property

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Social and Cultural continued Public Toilets

Level of Service

Measures

To ensure the health of the community through the appropriate disposal of human waste in high traffic community areas, Council provides adequate toilets that are accessible, available and appropriately located for use by the public throughout the community

Public toilets cleaned daily.

Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

100%

100%

100%

80%

80%

80%

$31

$32

$31

Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

80% of population receive warnings

80% of population receive warnings

80% of population receive warnings

60% of survey respondents have an emergency kit

60% of survey respondents have an emergency kit

60% of survey respondents have an emergency kit

75%

75%

75%

Community Perception Percentage of residents satisfied with Public Toilets in the NRB Public Opinion Survey.

Economic and Financial Performance Operating cost per rateable property

Emergency Management

Level of Service

Measures

Council protects communities by coordinating and integrating all activities necessary to build, sustain and improve the capability to mitigate against, prepare for, respond to, and recover from threatened or natural disasters or man-made events.

Public Warning Systems are in place

Population prepared in accordance with national guidelines for an emergency event.

Community Perception Percentage of residents satisfied with Civil Defence Organisation in the NRB Opinion Survey

104

Napier City Council Annual Plan 2013/14

Social and Cultural continued Funding Impact Statement Actual 2011/12 $000

Annual Plan 2013/14 $000

TYP 2013/14 $000

TYP/AP 2012/13 $000

7,921 356 2,651 2,319 -

7,857 353 2,836 1,923 -

7,425 349 1,926 1,687 -

2,308 12,575

Sources of operating funding General rates, uniform annual general charges, rates penalties Targeted rates (other than water by meter charges) Subsidies and grants for operating purposes Fees charges and targeted rates for water supply Internal charges and overhead recoveries Interest and dividends from investments Local authorities fuel tax, fines, infringement fees, and other receipts Total operating funding (A)

2,233 15,479

2,361 15,330

2,254 13,641

8,060 4,401 12,461

Applications of operating funding Payments to staff and suppliers Finance costs Internal charges and overhead applied Other operating funding applications Total applications of operating funding (B)

8,795 5,595 14,390

9,023 5,303 14,326

8,162 4,588 12,749

1,089

1,004

892

619 39 658

619 39 658

3,388 38 3,425

338 1,306 103 1,747

39 1,226 397 1,662

1,137 3,180 4,317

(1,089)

(1,004)

(892)

-

-

-

1,939

1,939

1,553

6,487 365 1,658 1,757 -

115

4,850 32 4,881

5,997 968 (1,970) 4,996 (115) 1,443

Surplus (deficit) of operating funding (A - B) Sources of capital funding Subsidies and grants for capital expenditure Development and financial contributions Increase (decrease) in debt Gross proceeds from sale of assets Lump sum contributions Total sources of capital funding (C) Application of capital funding Capital expenditure - to meet additional demand - to improve the level of service - to replace existing assets Increase (decrease) in reserves Increase (decrease) of investments Total application of capital funding (D) Surplus (deficit) of capital funding (C - D) Funding balance ((A-B) + (C-D)) Group depreciation and amortisation

The Funding Impact Statement (FIS) is provided in accordance with Section 95 and Schedule 10 of the Local Government Act 2002. The FIS is intended to disclose the sources and applications of Council funds. The FIS includes only transactions involving monetary funding and therefore excludes vested assets, revaluations and depreciation. This statement is not GAAP compliant.

Note: The TYP comparives have been adjusted to include the Municipal Theatre Activity in the City Promotion Group instead of the Social and Cultural Group.

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City Promotion Scope The City Promotion Group comprises:

City and Business Promotion

Business advisory and facilitation services.

Business re-focus, company rebuilding

Business start up facilitation.

Business Mentoring

The Enterprise Unit facilitates and assists existing and new businesses in the City to develop, expand and create employment.

Council promotes Napier via the “Time of Your Life” city marketing programme – an ongoing major media advertising programme aimed at informing national and international audiences about Napier to attract migrants and visitors to Hawke’s Bay.

Sister City relations – Tomakomai (Japan), Lianyungang (China), Victoria (Canada).

Grants to key local tourism organisations.

Art Deco bus service (expected to be operational)

Art Deco is an important tourism feature of the City and Council assists the Art Deco Trust in its promotion of Art Deco in Napier by way of a contract for service. Council also provides assistance for the marketing of the Central Business District.

War Memorial Conference Centre A multi-functional facility located on the beach front along Marine Parade, consisting of a ballroom, an exhibition hall, a gallery and three breakout rooms. This venue is highly suitable for conferences, exhibitions, weddings and other functions. The facility also houses an eternal flame as a memorial to Napier citizens who served and died in the conflicts of the 20th century.

National Aquarium of New Zealand The National Aquarium of New Zealand, on Marine Parade, houses sharks, stingray, live coral, tuatara, alligators, hundreds of fish species, reptiles and kiwi. There are shows and tours daily, diving and photograph facilities, a themed souvenir shop and a café. The National Aquarium regularly hosts school groups, tour groups, birthday parties, sleep overs, and many other functions.

Napier i-Site Visitor Centre Napier i-SITE Visitor Centre on Marine Parade is part of the NZ Visitor Information Network and offers information and booking services including accommodation and travel, attractions and activities, itinerary planning and advice, gifts, souvenirs, stamps and phone cards, local business events and entertainment information, maps, guides and books.

Par 2 MiniGolf Two 18 hole themed miniature golf courses and a club house situated next to the Napier i-SITE Visitor Centre on Marine Parade providing entertainment for all ages. Services include group rates and coaching for schools, Big Day Out Programme incorporating Marine Parade Heritage features, and corporate business house competitions.

Kennedy Park Top 10 Resort Kennedy Park Top 10 Resort is one of the busiest holiday parks in New Zealand set in spacious park like surroundings.

Facilities include 91 rooms, 170 powered and non powered sites, as well as a restaurant, bar, conference facility, children’s playground, commercial laundry, service buildings, shop and a pool complex.

Key Issues Marineland of New Zealand Marineland has been closed to the public by decisions of Council dated 2 July 2008 and 9 December 2010. The future of the remaining animals and birds is a key issue for Napier, along with the future use of the Marineland site.

106

Napier City Council Annual Plan 2013/14

City Promotion continued Performance Measures City and Business Promotion Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

To be reported

To be reported

To be reported

Number of visitor nights in commercial accommodation

600,000

600,000

590,000

Cruise ship visitor numbers

108,000

108,000

140,000

Percentage of residents satisfied with Councilâ&#x20AC;&#x2122;s Policies to Promote Job Opportunities in the NRB Public Opinion Survey

80%

80%

80%

Percentage of residents satisfied with Tourism Promotion in the NRB Public Opinion Survey

88%

88%

88%

To be reported

To be reported

To be reported

Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

Ratings Maintained

Rating maintained

Rating maintained

260

290

290

Rating maintained

Rating maintained

Rating maintained

$1,448

$1,267

$1,252

Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

99,000

99,000

99,000

364

364

364

$12

$10

$10

$119

$112

$111

Level of Service Council has processes in place to encourage new business enterprises to establish in the City which contribute to the economic wellbeing of the city.

Measures Growth in business numbers

Community Perception

Economic and Financial Performance City GDP per capita

War Memorial Conference Centre (WMC)

Level of Service

Measures

Provide and manage a conference and function facility.

Qualmark rating maintained.

Maintain Qualmark Venue 4 star rating.

Number of National and International hires.

Maintain Qualmark Venue 4 star rating.

Economic and Financial Performance Rates cost per hire

National Aquarium of New Zealand

Level of Service

Measures

Provide an aquarium for visitors and local citizens for recreation and education.

Number of visitors.

Days Open

Economic and Financial Performance Rating cost per visitor Operating cost per rateable property

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107

City Promotion continued Napier i-SITE Visitor Centre Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

310,000

310,000

310,000

Minimum 8 hrs / 364 days

Minimum 8 hrs / 364 days

Minimum 8 hrs / 364 days

$2

$2

$2

$1.20

$1.30

$1.20

Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

39,300

39,500

39,500

Revenue per admission

$8

$8

$8

Rating return per visitor

$1.09*

$0.15

$0.15

12%

12%

12%

2013/14 Annual Plan Targets

2013/14 TYP Targets

2012/13 TYP Targets

25,000

25,000

25,000.

6%

6%

6%

Level of Service

Measures

Council provides an i-SITE facility for visitors to Napier and Hawkeâ&#x20AC;&#x2122;s Bay to deliver tourism information and tour and accommodation services to encourage visitors to stay longer and to revisit.

Number of visitors through the centre.

Opening hours per days.

Economic and Financial Performance I-Site revenue per visitor Rating cost per visitor

Par2 MiniGolf

Level of Service

Measures

Council provides a Mini Golf facility as a visitor attraction and for local community use.

Visitor Admissions per annum.

Economic and Financial Performance

Return on Assets *Visitor baseline now reflects Par2 only

Kennedy Park Top 10 Resort

Level of Service

Measures

Council provides this facility to contribute to the promotion of Napier as a visitor destination and to provide, within a single location, a mixture of accommodation types and facilities for visitors.

Room nights per annum.

Economic and Financial Performance Return on Assets

108

Napier City Council Annual Plan 2013/14

City Promotion continued Funding Impact Statement Actual 2011/12 $000

68 7,887

Sources of operating funding General rates, uniform annual general charges, rates penalties Targeted rates (other than water by meter charges) Subsidies and grants for operating purposes Fees charges and targeted rates for water supply Internal charges and overhead recoveries Interest and dividends from investments Local authorities fuel tax, fines, infringement fees, and other receipts Total operating funding (A)

6,466 1,201 3 7,670

Applications of operating funding Payments to staff and suppliers Finance costs Internal charges and overhead applied Other operating funding applications Total applications of operating funding (B)

1,353 160 102 6,129 76 -

217

-

970 414 (1,166) 217 (217) 850

Surplus (deficit) of operating funding (A - B) Sources of capital funding Subsidies and grants for capital expenditure Development and financial contributions Increase (decrease) in debt Gross proceeds from sale of assets Lump sum contributions Total sources of capital funding (C) Application of capital funding Capital expenditure - to meet additional demand - to improve the level of service - to replace existing assets Increase (decrease) in reserves Increase (decrease) of investments Total application of capital funding (D) Surplus (deficit) of capital funding (C - D) Funding balance ((A-B) + (C-D)) Group depreciation and amortisation

Annual Plan 2013/14 $000

TYP 2013/14 $000

TYP/AP 2012/13 $000

1,504 167 121 7,322 52 -

1,524 171 117 7,609 73 -

1,458 165 117 7,341 70 -

31 9,196

51 9,545

49 9,201

7,468 1,332 8,800

7,762 1,376 9,138

7,524 1,346 8,870

396

407

332

-

-

-

396 396

407 407

332 332

(396)

(407)

(332)

-

-

-

1,107

1,107

1,108

The Funding Impact Statement (FIS) is provided in accordance with Section 95 and Schedule 10 of the Local Government Act 2002. The FIS is intended to disclose the sources and applications of Council funds. The FIS includes only transactions involving monetary funding and therefore excludes vested assets, revaluations and depreciation. This statement is not GAAP compliant.

Note: The TYP comparives have been adjusted to include the Municipal Theatre Activity in the City Promotion Group instead of the Social and Cultural Group.

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Planning and Regulatory Scope The Planning and Regulatory Group Comprises:

Planning Policy Planning Policy manages the development of the natural and built environment of Napier, via the District Plan, under the Resource Management Act 1991 (RMA) in a sustainable manner, ensuring the quality and quantity of the City’s resources are maintained and enhanced.

Regulatory Consents Council ensures that development of the City is within the RMA and the policies of the District Plan through Regulatory Consents. This includes processing non notified Resource Consents and Land Information Memorandum, preparing resource applications for land subdivisions and an annual environmental programme to gauge the effectiveness of Council’s environmental management policies. Also covered is enforcement work to ensure compliance with Resource Consent approvals and the operative District Plan.

Building Consents The Council ensures that building development within the City is in accordance with the Building Act 2004 through the process of the Building Consents. Services include counter advisory service, processing Building Consent applications, providing Codes of Compliance and Building Warrants of Fitness, and investigating complaints.

Environmental Health Council deals with the environmental problems of noise, smoke, smell and refuse pollution through its Environmental Health Services through investigation and enforcement under a range of Acts. Licences are processed and premises inspected for food premises, hairdressers, offensive trades, camping grounds, skin piercing, mobile shops, funeral directors and street occupation. Also covered is the administration of matters relating to the Sale of Liquor Act, monitoring compliance with household swimming pool regulations, and investigations and advice on environmental and any other health matters and nuisances such as vermin, pests and fire hazards.

Animal Control Animal Control ensures that all animals within the City are under proper control. Dogs are the primary animal and these must all be registered. Emphasis is placed on responsible dog ownership, education and classification of dogs and owners in line with the provisions of the Dog Control Act 1996.

Parking

Public Parking Spaces: CBD – 2,499; Taradale – 339

Parking areas are provided in the Central Business District and Taradale Shopping Centre as well as the smaller commercial areas of the city, with long and short term spaces providing parking to meet reasonable public expectations. In addition to fees from parking meters, car park ticket machines and leased spaces, parking is funded through a levy on rates on commercial and retail properties in Napier and Taradale and other smaller suburban shopping and commercial areas.

Monitoring and enforcement of parking bylaws ensures equitable use.

Key Issues Environmental Health Legislation covering the sale of liquor has recently been reviewed and substantial work will be required to institute the Sale and Supply of Alcohol Act 2012 and associated statutes. Promulgation of a Local Alcohol Policy and review of Liquor Control Bylaws are underway. A review of food safety legislation is also underway. Council officers are contributing to this review. If passed by Parliament, this legislation will have additional impact on officer service delivery.

Animal Control Council has good news for responsible dog owners: this plan does not include any increase in total dog registration fees collected during the next ten years. However, those dog owners who fail to take their dog ownership obligations seriously will be faced with increased penalties.

Council’s focus during the next years will be on communicating the importance of being a responsible dog owner within the provisions of the Dog Control Act 1996 and Council’s Dog Control Bylaws, and penalising those dog owners who fail to comply with these requirements.

Council’s ongoing focus of identifying and registering previously unregistered dogs is making it difficult to increase the proportion of licensed dog owners in the City. The addition of many previously non-compliant dog owners has driven down the overall percentage of licensed dog owners. However, the identification and registration of the dogs has been so successful that it is allowing Council to hold registration fees steady for most dog owners.

110

Napier City Council Annual Plan 2013/14

Planning and Regulatory continued Parking The evolution of technology in the field of parking services is rapid and is likely to have a large impact in future years. The Parking Department is monitoring the deployment of new forms of technology nationally and will seek to see deployment of proven technologies if they are appropriate to Napierâ&#x20AC;&#x2122;s situation.

CBD Parking Capital expenditure is in place for several inner city projects including additional CBD parking, parking for cyclists and motorcyclists, development of walkways from parking facilities to inner city areas and security for major parking facilities.

As demand for parking begins to show signs of increase, Council will seek to increase the availability of parking facilities.

An option being pursued as part of current planning is to build multi-level parking facilities to minimise the need for land purchase in the CBD. $7.860 million has been included over the period of this plan for CBD parking projects, funded from parking reserve funds.

Re-development of large sections of the City and deployment of ultra-fast broadband infrastructure is likely to put considerable stress on the stock of available parking over the next two years.

Performance Measures Planning Policy Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

Level of Service

Measures

Council monitors and enforces compliance with legislation intended to protect its citizens from threats to their safety (building quality, animal nuisance).

Ensure the integrity of the District Plan is maintained through strategic reviews.

Report on progress

Report on progress

Report on progress

Manage District Plan modifications within legal requirements.

Report on progress

Report on progress

Report on progress

$25

$26

$26

Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

100%

100%

100%

All urgent complaints are investigated within 3 days

All urgent complaints are investigated within 3 days.

All urgent complaints are investigated within 3 days.

Economic and Financial Performance Cost per rateable property

Regulatory Consents Level of Service

Measures

Council monitors and enforces compliance with legislation intended to protect its citizens from threats to their safety through the resource consent process.

Land Information Memorandums processed within the statutory time frame of 10 working days.

Planning complaints are responded to efficiently and effectively in a manner that is fair to all parties.

Response rate to complaints.

Napier City Council Annual Plan 2013/14

111

Planning and Regulatory continued Building Consents

Level of Service

Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

20%

20%

20%

Accreditation maintained

Accreditation maintained

Accreditation maintained

Process building consents within 20 working days.

100%

100%

100%

Process code of compliance certificates within 20 working days.

100%

100%

100%

$399

$401

$402

Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

Measures Audit 20% of all buildings (100% over 5 years) requiring building warrants of fitness registered from owners of buildings, subject to code of compliance schedule.

Maintain Building Consent Authority (BCA) accreditation.

Economic and Financial Performance Rates cost per building consent

Environmental Health

Level of Service

Measures

Council monitors and enforces compliance with legislation intended to protect its citizens from threats to their health (food handling, water quality) and wellbeing (noise and environmental effects).

Proportion of all food premises inspected twice per year (including re-checking) and non-food premises inspected once per year.

100%

100%

100%

Number of water samples taken compared to number of the National Standard.

165%

165%

165%

Requests for swimming pool fencing inspections initiated within 10 working days.

100%

100%

100%

80%

80%

80%

$24

$26

$25

Community Perceptions Percentage of residents satisfied with Noise Control in the NRB Public Opinion Survey.

Economic and Financial Performance Operating cost per rateable property

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Planning and Regulatory continued Animal Control Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

Level of Service

Measures

Council monitors and enforces compliance with legislation intended to protect its citizens from threats to their safety (building quality, animal nuisance).

Number of service requests/ Number of licensed dogs

42%

42%

43%

Number of licensed dog owners.

20%

20%

20%

75%

75%

75%

$6

$8

$7

Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

Community Perceptions Percentage of residents satisfied with Animal Control in the NRB Public Opinion Survey.

Economic and Financial Performance Rating cost per rateable property

Parking Services

Level of Service

Measures

Council provides on and off street parking facilities

CBD parking occupancy rate (off street and on street).

Less than 75%

Less than 75%

Less than 75%

to provide sufficient parking to meet reasonable public expectations,

Taradale parking occupancy rate (off street and on street).

Less than 75%

Less than 75%

Less than 75%

Percentage of residents satisfied with Parking in the Inner City in the NRB Public Opinion Survey.

60%

60%

60%

Percentage of residents satisfied with Parking in the Suburbs in the NRB Public Opinion Survey.

60%

80%

80%

to ensure the equitable sharing of parking resources, and to ensure safe and effective passenger vehicle flow.

Community Perceptions

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Planning and Regulatory continued Funding Impact Statement Actual 2011/12 $000

Annual Plan 2013/14 $000

TYP 2013/14 $000

TYP/AP 2012/13 $000

2,150

2,210

2,170

3,918 141 1,046

3,916 128 983

3,860 124 981

7,255

7,238

7,135

Total applications of operating funding (B)

3,513 2,368 5,881

3,576 2,460 6,035

3,477 2,406 5,882

Surplus (deficit) of operating funding (A - B)

1,374

1,202

1,253

-

-

-

541 172 661 1,374

555 176 471 1,202

120 1,133 1,253

(1,374)

(1,202)

(1,253)

-

-

-

408

408

430

Sources of operating funding 2,226 3,486 130 1,081 6,924

3,345 2,225 5,570 1,354

-

55 194 84 1,021 1,354 (1,354) 186

General rates, uniform annual general charges, rates penalties Targeted rates (other than water by meter charges) Subsidies and grants for operating purposes Fees charges and targeted rates for water supply Internal charges and overhead recoveries Interest and dividends from investments Local authorities fuel tax, fines, infringement fees, and other receipts Total operating funding (A) Applications of operating funding Payments to staff and suppliers Finance costs Internal charges and overhead applied Other operating funding applications

Sources of capital funding Subsidies and grants for capital expenditure Development and financial contributions Increase (decrease) in debt Gross proceeds from sale of assets Lump sum contributions Total sources of capital funding (C) Application of capital funding Capital expenditure - to meet additional demand - to improve the level of service - to replace existing assets Increase (decrease) in reserves Increase (decrease) of investments Total application of capital funding (D) Surplus (deficit) of capital funding (C - D) Funding balance ((A-B) + (C-D)) Group depreciation and amortisation

The Funding Impact Statement (FIS) is provided in accordance with Section 95 and Schedule 10 of the Local Government Act 2002. The FIS is intended to disclose the sources and applications of Council funds. The FIS includes only transactions involving monetary funding and therefore excludes vested assets, revaluations and depreciation. This statement is not GAAP compliant.

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Napier City Council Annual Plan 2013/14

Property Assets Scope The Property Assets Group comprises:

Lagoon Farm The 350 hectare farm is situated on the south side of the Ahuriri Estuary. It currently runs cattle, sheep, and has some Kiwi Fruit plantings and cropping leases. A quarter acts as a flood ponding area during unusual and extreme weather events.

As residential or business park development occurs, farming operations will reduce. The farming operation has already been impacted upon by construction of the Prebensen Drive extension, which bisects the farm. As these activities progressively impact on the farm operations, it is likely that Council will cease to operate Lagoon Farm as a commercial farm, and move to long term cropping leases.

Parklands Residential Development The Council’s Parklands Residential Development on 120 hectares of former Lagoon Farm land providing 440 residential sections for sale during 2012-2022. This plan includes land for sportsgrounds. The rate of development will be driven by market demand.

Property Holdings Leasehold Properties:

Commercial – 80

Residential – 30

This business unit is responsible for the management of leases and licences which have been established for parks, reserves, commercial, industrial and residential properties. The majority of leases are perpetually renewable.

It is also responsible for the management, including maintenance and renewal, of all Council buildings not specifically allocated to other activities.

Key Issues Lagoon Farm Business Park Council has approval for a District Plan change for the Business Park zone. A concept plan is currently being prepared on staged development of the area.

The land is considered a strategic asset and will remain Council owned as leasehold land.

Funding has been provided in past years and a further $433,000 is included in the Capital Plan for development of this area, funded from the Capital Projects Fund.

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Property Assets continued Performance Measures Lagoon Farm

Level of Service

Measures

Net operating position

Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

$9,500

$18,689

$13,600

Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

58

65

52

Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

Parklands Residential

Level of Service

Measures

Number of Lots created.

Property Holdings

Level of Service

Measures

Council maintains and manages both its commercial and leasehold land portfolio in accordance with legislation where applicable and in accordance with individual lease agreements.

All freeholding requests handled in accordance with Council policy.

100%

100%

100%

Buildings comply with Building Act and Health & Safety Act and hold current warrant of fitness certificates

100%

100%

100%

6%

6%

7%

Economic and Financial Performance Return on Assets

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Napier City Council Annual Plan 2013/14

Property Assets continued Funding Impact Statement Actual 2011/12 $000

519 1,575 3 9,852 11,950

Sources of operating funding General rates, uniform annual general charges, rates penalties Targeted rates (other than water by meter charges) Subsidies and grants for operating purposes Fees charges and targeted rates for water supply Internal charges and overhead recoveries Interest and dividends from investments Local authorities fuel tax, fines, infringement fees, and other receipts Total operating funding (A)

Annual Plan 2013/14 $000

TYP 2013/14 $000

TYP/AP 2012/13 $000

448 1,610 2

464 1,636 2

448 1,581 2

12,977 15,037

13,480 15,582

12,794 14,825

5,484 1,656 7,140

Applications of operating funding Payments to staff and suppliers Finance costs Internal charges and overhead applied Other operating funding applications Total applications of operating funding (B)

6,840 2,332 9,172

7,078 2,269 9,347

6,769 2,170 8,939

4,810

Surplus (deficit) of operating funding (A - B)

5,865

6,235

5,886

1,218 1,218

Sources of capital funding Subsidies and grants for capital expenditure Development and financial contributions Increase (decrease) in debt Gross proceeds from sale of assets Lump sum contributions Total sources of capital funding (C)

350 6,784 7,134

6,784 6,784

186 186

Capital expenditure - to meet additional demand - to improve the level of service - to replace existing assets Increase (decrease) in reserves Increase (decrease) of investments Total application of capital funding (D)

433 3,850 8,716 12,999

444 12,575 13,019

429 5,642 6,071

Surplus (deficit) of capital funding (C - D)

(5,865)

(6,235)

(5,886)

-

-

-

406

406

351

Application of capital funding 547 200 5,281 6,027 (4,810) 340

Funding balance ((A-B) + (C-D)) Group depreciation and amortisation

The Funding Impact Statement (FIS) is provided in accordance with Section 95 and Schedule 10 of the Local Government Act 2002. The FIS is intended to disclose the sources and applications of Council funds. The FIS includes only transactions involving monetary funding and therefore excludes vested assets, revaluations and depreciation. This statement is not GAAP compliant.

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Support Units Scope Council has a number of cost centres of a corporate and support nature. These cost centres provide the technical and support services necessary for the function of Councilâ&#x20AC;&#x2122;s activities Costs of the support services are reallocated to activities either as overheads based on the support each activity receives, or recharged direct on a usage basis.

Support Units include the Services Depot units which provide the support for the Utilities and Reserves divisions, including a store and mechanical workshop. Design Services Unit provides scientific and technical services to other Council departments ensuring the community receives engineering services of maximum quality and safety.

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Napier City Council Annual Plan 2013/14

Glossary of Terms Activities and Activity Groups The main elements of the Council’s services offered to the Napier community are divided into Activities. These Activities are described in detail in the Activity Groups section of the Plan including the performance measures and targets and the financial budgets for 2013/14

Allocation of Overheads The Council’s support units provide “internal” or “support” services to the service delivery business units. The costs of these internal services are allocated across the other business units either as “overheads” based on the support each output receives or recharged directly on a usage basis. This ensures that the true cost of providing specific services to the public is reflected in all budget figures.

Carrying Amount The net amount at which an asset or liability is recognised in the balance sheet.

Community Outcomes These are goals determined by the community that it believes are important for its present and future economic, social, cultural and environmental wellbeing.

Derecognition When an asset value is no longer recorded in the balance sheet it has been derecognized, e.g. when an asset is sold it is no longer recorded on the balance sheet as from the date of the sale.

Derivative A financial instrument that has the effect of transferring between two or more parties to the instrument one or more risks inherent in an underlying asset. The value of the derivative is determined by fluctuations in the underlying asset.

The most common underlying assets include currencies, interest rates, shares, bonds, commodities and market indexes.

Financial Contributions The share of the cost of new developments and subdivisions met by developers.

Impairment The amount by which the carrying amount of an asset exceeds its recoverable amount.

Infrastructural Assets Stationary systems forming a network and serving whole communities, where the system as a whole is intended to be maintained indefinitely at a particular level of service potential by the continuing replacement and refurbishment of its components. The network may include normally recognised ordinary assets as components. These include roads, water, sewerage and stormwater systems.

Infrastructural Asset Renewal A statutory requirement to provide for maintenance of infrastructural assets in serviceable condition in perpetuity. The amount required is calculated from asset management plans, and “smoothed” to provide a relatively even flow of funds from year to year.

Levels of Service A measure of the quality and quantity of services delivered. They are determined by customer expectations, legislative requirements and affordability.

Non Targeted Rate Rates other than targeted rates. These are general rates and Uniform Annual General Charges. These fund a wide range of activities that are considered to be of general benefit to the community.

NRB Public Opinion Survey (CommunitrakTM) A wide ranging public opinion survey prepared for the Council by the National Research Bureau Ltd. The survey is of public perceptions and interpretations of Council services and representation with comparisons to National and Peer Group averages.

Prospective Financial Statements Refers to future-oriented financial statements.

Targeted Rate A rate set under section 16 or 19 of the Local Government (Rating) Act 2002 to fund a specific function or service provided.

It may be charged as a fixed dollar amount per rating unit, a fixed charge per factor, such as property value, or a differential charge per factor.

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