Napier City Council Annual Report 2005/2006

Annual Report for the year ended 30 June 2006

Adopted by the Napier City Council on 27 October 2006

Prepared in accordance with the requirements of the Local Government Act 2002 S283 Hastings Street Private Bag 6010, Napier Telephone: (06) 835-7579 Fax: (06) 835-7574

Contents Message from the Mayor and Chief Executive ...................................................................................................................................3 Mayor and Councillors as at 30 June 2006 ........................................................................................................................................4 Financial Summary .........................................................................................................................................................................5 Key Statistics .................................................................................................................................................................................6 Community Outcomes ....................................................................................................................................................................7 Statement of Compliance and Responsibility ................................................................................................................................... 11 Audit Report ................................................................................................................................................................................ 12 Financial Statements .................................................................................................................................................................................. 15 Statement of Accounting Policies ......................................................................................................................................................... 16 Statement of Financial Performance .................................................................................................................................................... 19 Statement of Movements in Equity ...................................................................................................................................................... 19 Statement of Financial Position............................................................................................................................................................ 20 Statement of Cash Flows ..................................................................................................................................................................... 21 Statement of Commitments.................................................................................................................................................................. 22 Notes to the Financial Statements ....................................................................................................................................................... 23 Council Controlled Organisations ................................................................................................................................................... 36 Maori Contribution to Decision-Making Process ............................................................................................................................... 37 Statement of Services and Performance for Activity Groups...................................................................................................................... 38 Governance and Community Leadership............................................................................................................................................. 39 Community Services and Facilities ...................................................................................................................................................... 40 Environmental and Regulatory Controls .............................................................................................................................................. 49 Property Assets .................................................................................................................................................................................... 55 Roading ................................................................................................................................................................................................ 58 Solid Waste .......................................................................................................................................................................................... 60 Tourism and City Business Development............................................................................................................................................. 62 Water and Wastewater Services .......................................................................................................................................................... 66 Support Services .................................................................................................................................................................................. 70 Glossary of Terms......................................................................................................................................................................... 71

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Napier City Council Annual Report 2005/06

Message from the Mayor and Chief Executive This year Napier City commemorated the 1931 Earthquake and celebrated the courage and fortitude of those people who survived and had the faith to build a new city. Seventy five years after the catastrophic event, over 500 survivors and many thousands of visitors and residents attended events ranging from the huge commemoration service at the Sound Shell to the Gatsby Marine Parade picnic. No other city in New Zealand has had its history and background shaped so profoundly by a tragic event. Today we reap the benefit of this history as Napier builds on its national and international fame as an Art Deco city. Local pride in our fabulous environment, means a welcoming city that knows and understands where we came from, a community that works together to achieve and maintain our lifestyle, and enthusiastically has a say and a stake in our future.

The year has seen some good results for Napier, not the least being another sound financial year, which has meant for the people of Napier, one of the lowest rate rises in New Zealand. Good planning is crucial in achieving this satisfactory result. Thank you to our dedicated council staff who go the extra mile to deliver services in our streets and neighbourhoods, and to the Council who have delivered good decisions for today and the future, within an affordable framework for our city.

Less noticeable important changes that will impact on Napier's vitality and growth were: •

the opening of the Community House, a facility to bring ‘not for profit’ groups together, to share resource and keep them viable for the future.

•

Maraenui was once again the focus of a majority of funding with the urban renewal plan continuing to develop.

•

Library users had their say and clearly voted for library facilities within their community.

•

At the same time, the Taradale community was involved in a consultation process for the upgrade of their town centre which continues today.

•

Realty restricted to maintenance and renewal, especially piped infrastructure;

•

The Environment Court’s decision on the long outstanding dispute between the Council and development companies Foreworld Developments Ltd and Bayside Villas Ltd regarding foreshore fronting land in Bay View. In the Court’s decision it was noted “…… we are satisfied that the Plan provisions challenged in the appeals do achieve the purpose of the Act – the sustainable management of natural and physical resources …… we are satisfied that the alternative provisions put forward by Foreworld …… would not achieve that purpose…” . Costs have been awarded in favour of the Council.

•

Tourism facilities continue to provide important infrastructure to both the international and domestic tourist market, which adds significantly to the diversity of Napier’s local economy.

You have seen many changes around the city as development has built momentum over the last three years: •

the Prebensen Drive extension and Puketitiri Road hill section have been completed;

•

Jull wharf and the Ahuriri shopping centre upgrade have also been completed;

•

residential growth at Parklands (30 hectares) and at Ahuriri, under staged development;

•

a new roundabout at Severn Street to accommodate the Mitre 10 Megacentre commenced;

•

development of Munro Street is underway;

•

work on the cross country drain began in conjunction with Transit New Zealand, which resulted in the material dug out for the drain being used in the preloading for the overpass at the Meeanee Road Expressway intersection.

“Without vision the people perish” - this quote from the Memorial Arch is a tribute to our forebears and what they achieved from the ashes of the earthquake. It is also a legacy to those that follow to build upon. We have a rich and unique heritage, we have a great city, and the community’s vision predicts an exciting future - our people continue to make that vision a reality.

Barbara Arnott MAYOR

Napier City Council Annual Report 2005/06

Neil Taylor CHIEF EXECUTIVE

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Mayor and Councillors as at 30 June 2006

Left to right: Councillors Tania Wright, Deane Jessep, John Cocking, Faye White, Tony Reid, Harry Lawson, Kathie Furlong, Mark Herbert, Robin Gwynn, Mayor Barbara Arnott, Councillors Tony Jeffery, Dave Pipe, Rob Lutter

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Napier City Council Annual Report 2005/06

Financial Summary Financial Performance Measures Actual 2004/05 ($000)

Actual 2005/06 ($000)

Budget 2005/06 ($000)

34,150 Rates Revenue

36,300

35,654

16,159 Net Surplus

15,924

12,224

20,742

(1,628)

26,754 Public Debt

23,150

63,540

1,114,018 Total Assets

1,125,540

741,372

46.44%

52.95%

2.06%

8.50%

9.73%

13.12%

9,491 Working Capital

49.47% % rates revenue to total revenue 2.40% Public Debt as a percentage of total assets 10.60% Proportion of rates revenue applied to service debt (%)

The financial performance measures reflect positively on Council's overall performance and financial position at 30 June 2006.

The major factor influencing the Actual versus Budget comparisons is the revaluation of Council's assets as at 30 June 2005, particularly in relation to land and infrastructural assets. The revaluation was carried out after the completion of the 2005/06 budget.

In addition public debt and working capital both show favourable variances due to timing variations and the carry forward of capital projects, and the application of internal borrowing instead of raising public debt.

Explanations of major budget variations are outlined in note 25 of the financial statements shown on page 35.

How Rates Were Spent The chart shows the split of rates expenditure between the Activity Groups. The Property Assets group contributed $985,868 to rates.

Tourism & Business Development 3%

Water and Wastewater 25%

Roading 28%

Solid Waste 4% Governance 4% Environment & Regulatory 6% Community Services & Facilities 30%

Napier City Council Annual Report 2005/06

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Key Statistics 30 June 2006

30 June 2005

10,364 57,200

10,364 56,300

23,117 347 9,004,293,200 8,549,933,200 4,404,135,800 4,210,327,600 2005

22,615 489 4,914,542,700 4,400,766,050 1,655,051,600 1,570,685,850 2002

39,919,818 Land Value

37,714,404 Land Value

Public Debt outstanding (Excluding Finance Leases) Loan Redemption Reserves

22,840,398 4,211,688

26,368,581 4,586,688

Unexercised Loan Authorities

39,700,000

32,560,000

159,283,365 59,415,423

129,823,143 57,973,501

1989

1989

AREA AND POPULATION Area (ha) Population (estimated) VALUATION Rateable properties, no. of Non-rateable properties, no. of Gross Capital Value Nett Capital Value (i.e. Capital Value of rateable property) Gross Land Value Nett Land Value (i.e. Land Value of rateable property) Date of last revision of values RATES AND RATING Total rates struck (incl. GST) System of rating PUBLIC DEBT

BUILDING CONSENTS Value of Consents for year Value of Consents for residential Properties DATE OF CONSTITUTION OF CITY AVERAGE RESIDENTIAL RATES The average residential rate for Napier was calculated by determining the average land value of residential properties and then calculating the rates based on that average land value.

1,454 1,463

Wanganui

1,413

Tauranga

1,294

Hastings

1,366 1,333

Napier

1,358 1,310 1,344 1,278

Rotorua

1,338

Invercargill

1,204 1,332 1,274

Palmerston North Hamilton

1,300 1,240

Whangarei

1,291 1,200 1,106 1,044

Timaru

1,330 1,264

AVERAGE 2005/06

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2004/05

Napier City Council Annual Report 2005/06

Community Outcomes The five Hawke’s Bay Councils - Hastings District Council, Napier City Council, Central Hawke’s Bay District Council, Wairoa District Council and the Hawke’s Bay Regional Council worked together to identify a long term vision for the future and community outcomes for the Hawke's Bay region for inclusion in the 2004 LTCCP. National Research Bureau was commissioned in February 2005 to undertake a survey of residents in the region to obtain the views of residents on economic wellbeing, social and cultural wellbeing, and environmental wellbeing. This information gives a baseline for reporting on Council's progress towards achievement of the community outcomes. Results from this survey were reported in Council's 2004/05 Annual Report. Work is continuing on monitoring and reporting on the community outcomes collaboratively with the other Councils.

Property Holdings Provides leasehold land for commercial and industrial use.

Provides letable space in commercial buildings.

Business Facilitation The Council’s economic development work is directly concerned with increasing the overall economic well-being of the Napier community. The Council does this in association with community agencies and central government.

Marineland of New Zealand Assists in Napier being a leading commercial and tourist centre.

National Aquarium of New Zealand Attracts visitors to Napier.

Napier i-SITE

The Council considers that meeting its service level targets constitutes its major role as a contributor to the progress of Community Outcomes for the 2005/06 year. The contributions of Council's activities to the community outcomes are as follows:

Provides increased information about Napier to visitors to promote visitor spend.

Kennedy Park Provides access for a wide range of visitors and contributes to local employment opportunities.

Economic Wellbeing Outcome - A strong prosperous and thriving economy Governance Through Governance Council provides the infrastructure and services that promote economic growth.

Sportsgrounds Sports events bring competitors and supporters to the city.

Marine Parade Pool Complex The complex provides well presented and modern aquatic facilities and local business opportunities.

Provides support to national and regional sports events.

Outcome - Transport, infrastructure and services that are safe, effective and integrated War Memorial Conference Centre A quality facility is maintained.

Retirement and Rental Housing The use of rental properties is maximised and tenants have affordable rents.

Public Toilets

Par 2 Golf Courses

Provides and maintains suitably located and adequate number of public toilets throughout the city.

Promotes tourism.

City Development Planning

Inner Harbour

Actively supports the adopted retail strategy and strategic plan ensuring the district plan and bylaws are effective in managing planning issues and changes such as: Port noise, Businesses of prostitution, Business Parks, Retail Strategy, Non-complying activities, Financial Contributions.

Facilitates the fishing industry by maximising berth facilities.

War Memorial Conference Centre The facility and Napier are promoted as a conference destination and it maintains the Marine Parade Precinct.

Animal Control

Municipal Theatre

Services that are effective in reducing registration costs.

Provides a facility to accommodate large conferences and events.

Consistent application of the principles of equity and fairness.

Provides ticketing services to a range of venues for local, national and international events.

Provide accessible quality transportation amenities.

Parking Services

Emergency Management

Roading

Identifies hazards and risks and plans for the management and response to a civil defence emergency.

Roads and footpaths are provided to satisfy public expectations.

Regulatory Consents District Plan provisions which allow a flexible approach to a range of development opportunities.

Ease of access through improved facilities (eg. an increased number of recycling stations and entranceway improvements at the Redclyffe Transfer Station).

Building Consents

Stormwater

Provides for a range of development opportunities.

Maintains pumping stations and the open drains to a standard that will maximise the pumping capacity.

Parking Services Facilitates economic development in CBD and contributes to active marketing of CBD.

Napier City Council Annual Report 2005/06

Solid Waste

Wastewater Provides and maintains a wastewater system with adequate wastewater capacity.

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Community Outcomes ...

Water

groups, social service organisations and agencies in the city.

The system is flushed and cleaned. Capacity and storage improvements are made.

Monitor and report on social and related conditions in Napier.

Social and Cultural Wellbeing Outcome - Strong regional leadership and a sense of belonging Governance Governance contributes to co-ordinated regional leadership to achieve economic, social, cultural and environmental wellbeing of our communities, a democratic environment where all people are able to participate in the life of their communities and achieve a sense of belonging.

Community Development Provides appropriate training, advice and information services to the various community groups, organisations and agencies.

Youth Development The coordination of 6 youth forums per year provides an opportunity for youth participation and partnerships with local government and the community.

Safer Napier Board Provides and encourages coordination, facilitation and liaison between the community groups that contribute to crime prevention, mitigation and safety.

Youth Development Access to resources for young people to pursue cultural and sporting opportunities within their community provided.

Ensure community services and young people are connected through access to information and partnerships.

Safer Napier Board Provides and encourages coordination, facilitation and liaison between the community groups that contribute to crime prevention, mitigation and safety.

Emergency Management Formulates community networks and communication systems to respond effectively to a civil defence emergency.

Environmental Health Services Improved quality of suburban environment is provided through services such as noise control.

Animal Control A more co-ordinated approach to social service delivery to provide, secure and more satisfying social environment.

Property Holdings Provides leasehold land for residential use and enabling residential leaseholders to own their own properties.

Kennedy Park Provides support to local sports organisations.

Business Facilitation The Council’s economic development work, in particular, its small business facilitation and employment services, also has important social impacts that contribute to the overall social and cultural well-being of the Napier community. An important part of the Council’s economic development work continues to involve working with local community and Maori groups and interests, to improve business and employment outcomes for these sectors.

Outcome - Supportive, caring and inclusive communities Library Services The library service maintains a community information database listing a minimum of 350 community organisations which is electronically available.

The libraries provide a Books-on-Wheels Service for the housebound.

Outcome - Safe and accessible recreational facilities Library Services The libraries are open to the public 100 hours per week.

There are a variety of resources available, including books, magazines, audio visual materials and electronic resources.

Staff members are available at multiple service points to assist the public with obtaining the material they need.

The library is used by a wide variety of people.

Sportsgrounds A full range of attractive facilities for organised outdoor sports is provided for use by citizens and visitors.

The multiple uses of facilities is promoted in order use grounds and buildings to capacity.

Onekawa Aquatic Centre

The libraries provide reading programmes for children and teens.

A safe and well presented aquatic centre is provided whilst the standards are recognised to the highest national standards.

Onekawa Aquatic Centre

Pool water quality is provided that is safe for users and meets or exceeds national standards.

Opportunities are provided to exercise, learn, relax and have fun in a healthy and supportive environment which assists in the health and rehabilitation of individuals and groups.

Pride is installed in the centre by its users and users are assisted in a positive recreational experience.

Retirement and Rental Housing

Passive Recreation Facilities

Applies the principles of equity and fairness to ratepayers.

Public gardens are provided for the pleasure and quiet relaxation of citizens and visitors.

Halls Provides communities with a place to come together for meetings and activities.

Community Development Administrative support and liaison services provided to community based groups and committees.

Agreed financial assistance and resources provided to community Page 8

A network of open space reserves is provided which subdivides the city into manageable suburban areas.

Local community areas are provided for general outdoor recreation for the use of the local residents, especially children.

Par 2 Golf Courses Provides an attractive and relaxed leisure environment.

Napier City Council Annual Report 2005/06

Community Outcomes ...

Inner Harbour

National Aquarium of NZ

Safe accessible water-based recreational opportunities are provided.

Provides cultural experience which adds to the intrinsic value of the community.

Halls

Napier i-SITE

Provides communities with a place to come together for meetings and activities.

Increases knowledge of the local area and what it has to offer.

Municipal Theatre Allows residents to enjoy a range of theatrical, cultural and artistic experiences.

War Memorial Conference Centre Provides a facility for community and commercial hire.

Municipal Theatre Allows residents to enjoy a range of theatrical, cultural and artistic experiences.

Environmental Wellbeing Outcome - A lifetime of good health and wellbeing Onekawa Aquatic Centre Swimming and other programmes are presented as life skills for individuals to develop to their full potential.

Provides opportunity for a range of visitor experiences.

Affordable access to high quality activities and educational programmes are provided. This access is for individuals, as well as groups and school users.

Kennedy Park

Marine Parade Pool Complex

National Aquarium of New Zealand

Provides facilities for young people and families.

An alternative recreation facility which encourages and promotes fitness of residents.

Retirement and Rental Housing

Outcome - Communities that value and promote their unique culture and heritage Library Services The library service maintains five collections of resources reflecting and enhancing the culture of the city: Art Deco, Maori, Hawke’s Bay Heritage, Robson Collection on Restorative Justice and the Irene Lister Taradale Archive.

The library service indexes all family notices and important local news stories published in the main local journal(s) of record to acceptable library standards and make them electronically accessible to all library users.

Cultural Services Actively promotes the region’s heritage and helps to preserve cultural facilities.

Par 2 Golf Courses Providing culturally themed aspects to Par 2 MiniGolf.

War Memorial Conference Centre The Centre values and protects a place of historical significance by housing and maintaining the eternal flame memorial.

Municipal Theatre Maintains the Art Deco heritage and is an integral part of the Napier Art Deco experience.

Community Development By undertaking ongoing liaison with community groups, social services, key organisations and government agencies.

City Development Planning Actively participates in preserving the heritage of the city identifying the heritage value of the city as a whole through adding to the heritage inventory and Commissioning appropriate Heritage studies.

Supports and promotes cultural diversity by encouraging all relevant stakeholders to have the opportunity to comment prior to formal notification of District Plan modifications.

Marineland of New Zealand Increases community pride in regional museums and exhibitions.

Napier City Council Annual Report 2005/06

Assistance is available to tenants and they are visited on a regular basis.

Halls Provides and maintains an appropriate number and range of community facilities.

Public Toilets The closure time of public toilets due to cleaning or repair and maintenance is minimised.

Youth Development Provides safe choices that are alcohol and drug free and promote health and wellbeing of youth in our community.

Environmental Health Services A water sampling programme is carried out in excess of the National Drinking Water Standard requirements.

Marineland of New Zealand Provides education services and opportunities.

Provides environmental enhancement.

Water Provides water suitable for human consumption.

Outcome - Safe and secure communities Inner Harbour The Inner Harbour environment allows safe access to the amenities.

Retirement and Rental Housing Provides a safe environment for the tenants and ensures tenants comply with the conditions of the Tenancy Agreement and with maintenance and improvements identified.

Safer Napier Board Develops and implements community based crime reduction activities that mitigate the effects of crime consistent with the Governments crime Reduction Strategy and its seven key goals.

Promotes safety in the community that emphasises situational crime.

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Community Outcomes ...

Community Safety

Burial and Cremation Services

Security patrols are provided in the inner city.

A well maintained and aesthetically pleasing environment for all cemetery users.

Building Consents Planning and City heritage provide for safe and secure communities.

Environmental Health Services Inspections of registered premises are carried out.

Parking Services Contributes to a safe inner city.

Property Holdings Ensuring Council buildings are well maintained and meet current standards and safety requirements.

Roading Road surfaces provide a comfortable and smooth ride.

Roads are safe - number of injury crashes are minimised in accordance with Land Transport NZ (LTNZ) Strategy to 2010.

Solid Waste Safeguards environment and community health.

Stormwater Minimising the adverse effects of surface water on human health, infrastructure, property and the environment.

Wastewater Protect Public Health by means of collection, conveyance and disposal of wastewater from urban areas.

Water Provides water for domestic use, industrial and commercial purposes, and for fire fighting and other emergencies.

City Development Planning Practices and supports sustainable urban development by developing planning frameworks for identified city growth and development areas such as Greenfield growth areas. Ensures an adequate supply of commercial and industrial zoned land.

Creates imaginative, interlinked urban public places and clearly and effectively communicates planning and resource management processes to the public.

Regulatory Consents Planning and City heritage protect and sustain the environment.

Roading Renewal work is undertaken when due.

Solid Waste Protects resources by reducing waste generated and producer pays for disposal to reflect true cost of waste.

Marineland of New Zealand Provides education services and opportunities National Aquarium of NZ Raises environmental awareness in the community through increased understanding of marine life and conservation and environmental issues.

Stormwater Compliance with requirements of resource consents for discharging stormwater.

Wastewater Protect the environment from adverse effects of wastewater.

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

Water Actively promotes water conservation to help ensure efficient use of water from the Heretaunga Plains aquifer.

Passive Recreation Facilities Reserves are sustainably managed and developed as a natural recreational resource for the enjoyment of the inhabitants of and the visitors to Napier.

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Napier City Council Annual Report 2005/06

Statement of Compliance and Responsibility Compliance The Council and management of the Napier City Council confirm that all the statutory requirements in relation with the Annual Report have been complied with in accordance with clause 20 of schedule 10 of the Local Government Act 2002.

Responsibility 1.

The Napier City Council and its management accept responsibility for the preparation of the annual Financial Statements and the judgements used in them.

Chief Executive N. B. TAYLOR 27 October 2006

Mayor B. W. ARNOTT 27 October 2006

Napier City Council Annual Report 2005/06

2.

The Napier City Council and its management accept responsibility for establishing and maintaining a system of internal control designed to provide reasonable assurance as to the integrity and reliability of financial reporting.

3.

In the opinion of the Napier City Council and its management the annual Financial Statements for the Year Ended 30 June 2006 fairly reflect the financial position and operations of Napier City Council.

Corporate Services Manager W. J. BURCH 27 October 2006

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Audit Report AUDIT REPORT TO THE READERS OF NAPIER CITY COUNCIL’S ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2006 The Auditor-General is the auditor of Napier City Council (the City Council). The Auditor General has appointed me, Laurie Desborough, using the staff and resources of Audit New Zealand, to carry out an audit on his behalf. The audit covers the City Council’s compliance with the requirements of Schedule 10 of the Local Government Act 2002 that apply to the annual report of the Council for the year ended 30 June 2006, including the financial statements.

Unqualified opinion In our opinion:

▪

▪ ▪

The financial statements of the City Council on pages 16 to 70: -

comply with generally accepted accounting practice in New Zealand; and

-

fairly reflect : •

the City Council’s financial position as at 30 June 2006; and

•

the results of its operations and cash flows for the year ended on that date.

The service provision information of the City Council on pages 38 to 70 fairly reflects the levels of service provision as measured against the intended levels of service provision adopted, as well as the reasons for any significant variances, for the year ended on that date; and The Council has complied with the other requirements of Schedule 10 of the Local Government Act 2002 that apply to the annual report (the “other requirements”).

The audit was completed on 27 October 2006, and is the date at which our opinion is expressed.

The basis of our opinion is explained below. In addition, we outline the responsibilities of the Council and the Auditor, and explain our independence.

Basis of opinion We carried out the audit in accordance with the Auditor-General’s Auditing Standards, which incorporate the New Zealand Auditing Standards.

We planned and performed the audit to obtain all the information and explanations we considered necessary in order to obtain reasonable assurance that the financial statements and the other requirements did not have material misstatements, whether caused by fraud or error.

Material misstatements are differences or omissions of amounts and disclosures that would affect a reader’s overall understanding of the financial statements and the other requirements. If we had found material misstatements that were not corrected, we would have referred to them in our opinion.

The audit involved performing procedures to test the information presented in the financial statements and the other requirements. We assessed the results of those procedures in forming our opinion.

Audit procedures generally include:

▪ ▪ ▪ ▪ ▪ ▪ ▪

determining whether significant financial and management controls are working and can be relied on to produce complete and accurate data; verifying samples of transactions and account balances; performing analyses to identify anomalies in the reported data; reviewing significant estimates and judgements made by the Council; confirming year-end balances; determining whether accounting policies are appropriate and consistently applied; and determining whether all required disclosures are adequate.

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Napier City Council Annual Report 2005/06

Audit Report ...

We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements and the other requirements.

We evaluated the overall adequacy of the presentation of information in the financial statements and the other requirements. We obtained all the information and explanations we required to support our opinion above.

Responsibilities of the Council and the Auditor The Council is responsible for preparing financial statements in accordance with generally accepted accounting practice in New Zealand.

Those financial statements must fairly reflect the financial position of the City Council as at 30 June 2006. They must also fairly reflect the results of its operations and cash flows and the levels of service provision for the year ended on that date. The Council is also responsible for preparing the information in the other requirements. The Council’s responsibilities arise from Section 98 and Schedule 10 of the Local Government Act 2002.

We are responsible for expressing an independent opinion on the financial statements and the other requirements and reporting that opinion to you. This responsibility arises from section 15 of the Public Audit Act 2001 and section 99 of the Local Government Act 2002.

Independence When carrying out the audit we followed the independence requirements of the Auditor General, which incorporate the independence requirements of the Institute of Chartered Accountants of New Zealand.

Other than the audit and in conducting the audit of Long Term Council Community Plan, we have no relationship with or interests in the City Council.

L H Desborough Audit New Zealand On behalf of the Auditor-General Palmerston North, New Zealand

Napier City Council Annual Report 2005/06

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Napier City Council Annual Report 2005/06

Financial Statements for the year ended 30 June 2006

Napier City Council Annual Report 2005/06

Page 15

Statement of Accounting Policies for the Year Ended 30 June 2006 Reporting Entity

5. Investments

The financial statements have been prepared in terms of the Local Government Act 2002 using generally accepted accounting principles considered appropriate by the Institute of Chartered Accountants of New Zealand.

Investments are shown at the lower of cost and market value.

The financial statements comprise the following activity groups:

The following definitions have been used for the preparation of the Statement of Cash Flows:

Napier City Council - significant activities: •

Governance and Community Leadership

•

Community Services and Facilities

•

Environment and Regulatory Controls

•

Roading

•

Solid Waste

•

Tourism and City Business Development

•

Water and Wastewater Services

•

Property Assets

Measurement Base The measurement base adopted is that of historical cost modified by revaluation of certain assets. Reliance is placed on the fact that sufficient funds are available or will be received to maintain current operations at their current level.

Specific Accounting Policies 1. Basis of Consolidation The Council’s interest in the Hawke’s Bay Airport Authority is accounted for under the equity method of accounting.

Omarunui Landfill is accounted for in the financial statements of Council on a line by line basis in proportion to Council's share of assets, liabilities, revenue and expenses.

6. Cash Flow Statement

Cash: Coins, notes, demand deposits, or highly liquid investments, for which there is a recognised ready market and which are unconditionally convertible to coins and notes at the Council's option within no more than two working days. Council regards these as part of its day-to-day cash management.

Operating Activities: Transactions and other events that are not investing or financial activities.

Investing Activities: Activities relating to the acquisition, holding and disposal of property, plant and equipment and of investments, such as securities, not falling within the definition of cash.

Financial Activities: Activities which result in changes in the size and composition of the capital structure of the Council, both equity and debt, not falling within the definition of cash.

7. Inventory Inventories are valued at the lower of cost and net realisable value.

Cost is established using the weighted average cost method.

Livestock is valued at net current value. The unrealised holding gains (losses) are credited (debited) to the Livestock Adjustment Reserve. Holding gains (losses) are recognised as income (expenditure) only when realised.

8. Expenditure Categories

Pursuant to FRS 38 the Hawke's Bay Airport Authority is equity accounted in Council's own Financial Statements.

Splitting expenditure on infrastructure assets into maintenance, renewals and capital enhancements is essential if the decline in service potential is to be correctly recognised.

2. Revenues

•

Revenue is recognised when the services are provided.

Maintenance expenditure comprises day-to-day (planned and unplanned) routine expenses, which have no effect on the decline in service potential.

Rates and levies are recognised when struck.

Interest earnings on general and loan funds are recognised on an accrual basis.

•

•

Expenses are recognised at the time the service is provided or the expenditure incurred. Where appropriate Salaries, Wages and Holiday Pay have been accrued.

Renewal Expenditure Renewal expenditure comprises works which upgrade and enhance a significant component of the asset, restoring it to its original size, capacity and condition.

Transfund roading subsidies are recognised as revenue upon entitlement which is when conditions pertaining to eligible expenditure have been fulfilled.

3. Expenses

Maintenance Expenditure

Capital Expenditure Capital expenditure comprises purchases or constructions of new assets or of improvements to the asset beyond its original design capacity/estimated life.

4. Accounts Receivable Accounts Receivable are stated at net realisable value after providing for doubtful and uncollectable debts where appropriate.

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Napier City Council Annual Report 2005/06

Statement of Accounting Policies for the Year Ended 30 June 2006...

9. Valuation of Property, Plant and Equipment As at 30 June 2006, Council's Property, Plant and Equipment are valued as follows: Description

Method of Valuation

Property Intended for Sale - Valued by independent registered valuer M. Penrose, ANZIV, SNZPI, Land Buildings AAMINZ of Telfer Young (HB) Ltd as at 30 June 2005 using fair value.

Infrastructural Assets

- Valued by independent registered valuer M. Penrose, ANZIV, SNZPI, AAMINZ of Telfer Young (HB) Ltd as at 30 June 2005 using depreciated replacement cost method.

Restricted Assets

- Valued by independent registered valuer M. Penrose, ANZIV, SNZPI, AAMINZ of Telfer Young (HB) Ltd as at 30 June 2005 using depreciated replacement cost method.

Library Books

- Valued internally by Raewyn Hendy on an annual basis using depreciated replacement cost method.

Fixed Plant & Equipment Office Equipment Furniture & Fittings

- Valued in 1994 using market value.

Additions are at cost.

Omarunui Landfill Mobile Plant Motor Vehicles

- Cost price less depreciation.

The expected lives of major classes of infrastructural and restricted assets are as follows: Roading

- Base Course - Surfacings - Concrete Pavers - Footpaths and 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 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 25 - 80 100 15 - 75 80 15 - 80 10 - 80 80 50 10 - 50

years years years years years years years years years years years years years years years years years years years

10 - 50 years 10 - 50 years 20 - 50 years

11. Overhead Allocation

Land, Buildings, Infrastructural Assets and Restricted Assets are revalued every three years, with additions in the intervening period being recorded at cost less depreciation.

Land in Roading Corridors. Land in roading corridors has been valued on the basis of 50% of the assessed current market value for the major land classes being residential, industrial, commercial and rural.

Vested Assets. Certain infrastructure assets and land have been vested in the Council as part of the subdivisional consent process. The vested reserve land has been valued at the most recent appropriately certified government valuation. Vested infrastructure assets have been valued based on the actual quantities of infrastructure components vested and the current "in the ground" cost of providing identical services.

Property Intended for Sale. This relates to the area of the Lagoon Farm designated for residential subdivision and one parcel of surplus roading land.

10. Depreciation 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: 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.

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

Napier City Council Annual Report 2005/06

The cost of all service and technical support units of the Council, and loan interest, have been reallocated in full to significant activities, either as recharges on a usage basis, or as overheads, using the step method of cost apportionment.

12. Goods and Services Tax With the exception of the Housing Business Unit, all expenditures and revenues are reflected in the financial statements net of GST. Assets and liabilities are exclusive of GST except for Accounts Payable and Accounts Receivable which are GST inclusive. The GST asset or liability is reflected in the Statement of Financial Position.

13. Taxation Expense Income tax expense is charged in the Statement of Financial Performance in respect of the current years surplus after allowing for permanent differences.

Deferred taxation is determined on a comprehensive basis using the liability method. Deferred tax assets attributable to timing differences or income tax losses are only recognised when there is virtual certainty of realisation.

14. Employee Entitlements Provision is made in respect of the liability for annual leave, long service leave and retirement gratuities. The liability for long service leave and retirement gratuities has been measured on an actuarial basis.

Page 17

Statement of Accounting Policies for the Year Ended 30 June 2006...

15. Leases

18. Equity

Finance Leases:

Equity is the community's interest in Council and is measured as the difference between total assets and total liabilities. Public equity is disaggregated and classified into a number of reserves to ensure clearer identification of the specified uses that the Council makes of its accumulated surpluses.

Leases of property, plant and equipment, where substantially all the risks and benefits incidental to the ownership of the asset are transferred to Council, are classified as finance leases. The leased assets and corresponding liabilities are disclosed. The leased assets are depreciated over the period the entity is expected to benefit from their use.

Operating Leases: Operating lease payments, where the lessors effectively retain substantially all the risks and benefits of ownership of the leased item, are charged as expenses in the periods in which they are incurred.

16. Financial Instruments The Council is party to financial instrument arrangements as part of its every day operations, including instruments which have been recognised in these financial reports. These financial instruments include Cash and Bank, Investments, Accounts Receivable, Loans and Accounts Payable. a. Revenues and expenses in relation to all financial instruments are recognised in the overall statement of financial performance. Revenue is recognised when due and expenses are recognised when incurred. b. All financial instruments are recognised in the Statement of Financial Position as the Council has not entered into any off balance sheet instruments.

The fair value of all financial instruments is equivalent to the carrying amount disclosed in the Statement of Financial Position.

17. Budget Figures The budget figures are those approved by the Council at the beginning of the year after a period of consultation with the public as part of the Annual Plan or LTCCP process. The budget figures have been prepared in accordance with generally accepted accounting practice and are consistent with the accounting policies adopted by the Council for the preparation of the financial statements.

Page 18

The components of equity are: •

Accumulated Balance - Accumulated Surplus - Council Created Reserves

•

Restricted Reserves - Sinking Funds - Loan Funds Reserves - Other Restricted Reserves - Asset Revaluation Reserves - Trusts and Bequests - Advanced Wastewater Treatment Fund (HBRC)

Reserves 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.

Restricted reserves are those reserves 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 third party.

Transfers from these reserves may be made only for certain specified purposes or when certain specified conditions are met.

Council-created reserves are reserves established by Council decision. The Council may alter them without reference to any third party or the Courts. Transfers to and from these reserves are at the discretion of the Council.

Changes in Accounting Policies There have been no changes in accounting policies since the date of the last audited financial statements. All policies have been applied on a basis consistent with prior years.

Napier City Council Annual Report 2005/06

Statement of Financial Performance for the Year Ended 30 June 2006 Budget 05/06 ($000)

Notes

Actual 05/06 ($000)

Actual 04/05 ($000)

1&2 3 4 12

30,987 36,300 10,748 128

23,480 34,150 11,332 71

78,163

69,033

60,188 2,051

50,720 2,154

REVENUE 25,391 35,654 6,294 67,339

Revenue from Activities Rates Revenue Miscellaneous Income Share of Associate's Retained Surplus Total Operating Revenue EXPENDITURE

54,292 823

Expenditure from Activities Other Expenditure

1 5

55,115

Total Operating Expenditure

62,239

52,874

12,224

NET SURPLUS/(DEFICIT)

15,924

16,159

Actual 05/06 ($000)

Actual 04/05 ($000)

1,075,653

651,989

-

1,186

1,075,653

653,175

15,924

16,159

-

406,319

15,924

422,478

1,091,577

1,075,653

Statement of Movements in Equity for the Year Ended 30 June 2006 Budget 05/06 ($000) 655,063 655,063 12,224 12,224 667,287

Notes

Equity at the start of the period Adjustment to opening equity Revised equity at the start of the period Net Surplus for the period Increases/(decreases) in revaluation reserves Total recognised revenues and expenses for the period Equity at end of the period

7

The accompanying notes and accounting policies form part of and should be read in conjunction with these financial statements.

Napier City Council Annual Report 2005/06

Page 19

Statement of Financial Position as at 30 June 2006 Budget 05/06 (000)

Notes

Actual 05/06 ($000)

Actual 04/05 ($000)

7 7 7&8

373,909 11,350 706,318

357,194 9,338 709,121

1,091,577

1,075,653

539 10,035 3,529 16,391 5,451

497 5,298 3,269 14,075 2,291

35,945

25,430

3,117 3,407 1,083,071

3,874 3,279 1,081,435

1,089,595

1,088,588

1,125,540

1,114,018

6,171 660 6,169 2,203

6,174 574 7,244 1,947

15,203

15,939

16,979 1,510 271

20,580 1,586 260

18,760

22,426

33,963

38,365

1,091,577

1,075,653

PUBLIC EQUITY 357,765 7,337 302,185

Accumulated Balance Restricted Reserves Asset Revaluation Reserve

667,287

TOTAL PUBLIC EQUITY Represented By: ASSETS Current Assets

478 4,757 8,333 13,568

Inventories Accounts Receivable and Prepayments Cash & Bank Deposits Current Investments Property Intended for Sale

9 10 11

Total Current Assets Non-Current Assets

4,187 1,163 722,454

Non-Current Investments Investment in Airport Authority Property Plant and Equipment

727,804

Total Non-Current Assets

741,372

11 12 13

TOTAL ASSETS LIABILITIES Current Liabilities

6,448 505 6,436 1,807 15,196

Current Portion of Public Debt Deposit Accounts Accounts Payable and Accruals Employee Entitlements

14 15 16

Total Current Liabilities Long Term Liabilities

57,092 1,553 244

Term Portion of Public Debt Employee Entitlements Provision for Landfill aftercare

58,889

Total Long Term Liabilities

74,085 667,287

TOTAL LIABILITIES NET ASSETS

14 16 26

The accompanying notes and accounting policies form part of and should be read in conjunction with these financial statements.

Page 20

Napier City Council Annual Report 2005/06

Statement of Cash Flows for the Year Ended 30 June 2006 Budget 05/06 ($000)

Notes

Actual 05/06 ($000)

Actual 04/05 ($000)

36,134 25,917 304 4,669 18

34,319 21,177 5,767 17

1,394

1,778

68,436

63,058

41,090 1,258 1,937

35,472 10 1,281 2,283

44,285

39,046

24,151

24,012

600 3,324

2,734

3,924

2,734

312 22,034

582 27,042

22,346

27,624

(18,422)

(24,890)

19,363

Cash Flows From Financing Activities Cash was Provided From: Proceeds of Long Term Borrowing

2,500

468

(2,067)

Cash was Disbursed To: Repayment of Long Term Borrowing

6,103

6,111

17,296

Net Cash Inflow/(Outflow) from Financing Activities

(3,603)

(5,643)

2,126 3,269 13,475

(6,521) 2,528 20,737

18,870

16,744

3,529 15,341

3,269 13,475

18,870

16,744

Cash Flows From Operating Activities 35,654 28,824 922

Cash was Received From: Non Targeted & Targeted Rates Other Receipts Goods & Services Tax Grants and Subsidies Received Dividends Received Interest Received

65,400 (39,854) (3,610)

Cash was Disbursed to: Payments to Suppliers and Employees Goods and Services Tax Grants Made Interest on Public Debt

(43,464) 21,936

Net Cash Inflow/(Outflow) from Operating Activities

17

Cash Flows From Investing Activities 1,366 1,225

Cash was Provided From: Proceeds from Withdrawals of Investments Proceeds from Sale of Assets

2,591 (1,513) (38,140)

Cash was Disbursed To: Purchase of Investments Purchases of Assets

(39,653) (37,062)

Net Cash Inflow/(Outflow) from Investing Activities

2,170 6,163 -

NET INCREASE/(DECREASE) IN CASH HELD Add Opening Cash Brought Forward Plus Short Term Investments

8,333

CLOSING CASH CARRIED FORWARD

8,333 -

TOTAL CASH RESOURCES CONSIST OF: On Call Deposit, Cash on Hand Short Term Investments

8,333

11

The accompanying notes and accounting policies form part of and should be read in conjunction with these financial statements.

Napier City Council Annual Report 2005/06

Page 21

Statement of Commitments as at 30 June 2006 Actual 05/06 ($000)

Actual 04/05 ($000)

171 13 5 10 18 11 37 72 404 467 375 760 20 175 115

127 15 19 3 40 114 20 211 2,180 1,614 234 96 680 396 771 750 2 -

2,653

7,272

276 225 107 -

151 67 74 -

608

292

3,261

7,564

CAPITAL COMMITMENTS APPROVED AND CONTRACTED Library Bookstock purchases - ordered but not yet received Upgrade Library Computer System Library Technology Services Upgrade Library Corbett Bequest Collection Purchases Library Minor Capital McLean Park Embankment Cribwall Park Island Carpark Sportsground Booking System Park Island Equipment Shed McLean Park Lighting Upgrade Centennial Hall Redevelopment Botannical Gardens Fences Parklands Residential Estate (Lagoon Farm) Prebensen Drive Construction Awatoto Cycleway Pak'n'Save Road Projects Hammond Road Reconstruction Mission Road Reconstruction Bowling Road Reconstruction Ahuriri Shopping Centre Development Prebensen Drive / Severn Street Roundabout Lagoon Farm / Prebensen Drive Advanced Sewerage Treatment Overland Stormwater Drain Municipal Theatre Backstage Mezzanine Floor Services Building

NON-CANCELLABLE OPERATING LEASE COMMITMENTS Not later than one year Later than one year and not later than two years Later than two years and not later than five years Later than five years

Total Commitments

The accompanying notes and accounting policies form part of and should be read in conjunction with these financial statements.

Page 22

Napier City Council Annual Report 2005/06

Notes to the Financial Statements Year Ended 30 June 2006 1.

Summary of Cost of Services Budget 05/06 ($000)

Actual 05/06 ($000)

Actual 04/05 ($000)

5,571 3,363 8,835 4,309 2,810 5,215 884

5,249 3,055 1,870 5,983 1,270 5,117 936

30,987

23,480

1,748 17,855 4,763 4,952 11,299 3,441 6,843 10,259

1,629 16,407 4,319 350 10,860 2,646 6,248 8,738

61,160

51,197

972

477

60,188

50,720

15,635 4,441 10,911

14,853 5,296 3,331

30,987

23,480

Revenue from Group Activities 5,037 2,759 7,437 2,747 1,811 4,805 795 25,391

Community Services & Facilities Environmental & Regulatory Controls Property Assets Roading Solid Waste Tourism & City Business Development Water & Wastewater Services Revenue from Group Activities Expenditure from Group Activities

1,749 16,810 4,312 664 11,281 3,469 6,320 9,687

Governance and Community Leadership Community Services & Facilities Environmental & Regulatory Controls Property Assets Roading Solid Waste Tourism & City Business Development Water & Wastewater Services

54,292 54,292

2.

less internal interest Expenditure from Group Activities

Summary of Group Activity Income by Type 14,524 2,832 8,035 25,391

User Charges Subsidies and Grants Other Income Total

Napier City Council Annual Report 2005/06

Page 23

Notes to the Financial Statements for the Year Ended 30 June 2006 ...

3.

Rates Revenue Budget 05/06 ($000) 26,422

Non Targeted Rates

Actual 05/06 ($000)

Actual 04/05 ($000)

26,962

25,236

4,174 2,227 399 945 283 987 15 18 149 111 30

4,167 2,029 366 776 280 971 13 4 18 149 111 30

Targeted Rates: 4,142 2,212 396 930 272 958 14 18 149 111 30

Sewerage UAC Water Supply UAC Water Fire Protection Rate Refuse Collection & Disposal UAC Kerbside Recycling UAC Advanced Sewage Levy Bay View Sewage Connection UAC Marewa Suburban Beautification Rate Onekawa Suburban Beautification Rate Car Parking Rate CBD Promotion Rate Taradale Promotion Rate

9,232

Total Targeted Rates

9,338

8,914

35,654

Total Rates Revenue

36,300

34,150

In accordance with the Local Government (Rating) Act 2002 rates remitted under the Council’s Rate Remission Policies are recorded as expenditure (note 5) and are also included under rates revenue as paid on behalf of the ratepayer.

For 2005/06 remissions totalling $0.623 Million were provided under the Council’s Rate Remission Policies as follows: Rates

Amount Remitted ($000)

Remission Policy

05/06

04/05

30 373

21 227

Non Targeted Rates General Rate UAGC

Residential land in Commercial or Industrial areas UAGC’s on Multi-Unit Residential Dwellings (Including rating units owned by the same owner)

Targeted Rates Sewerage UAC Water Supply UAC Refuse UAC Advanced Sewage Levy

UAC’s UAC’s UAC’s UAC’s

Owner Owner Owner Owner

31 17 11 7

29 15 8 7

Rates Penalties

Remission of Penalties (Including penalties on repayment arrangements)

154

119

623

426

Total Remissions

Page 24

on on on on

Rating Rating Rating Rating

Units Units Units Units

Owned Owned Owned Owned

by by by by

the the the the

Same Same Same Same

Napier City Council Annual Report 2005/06

Notes to the Financial Statements for the Year Ended 30 June 2006 ...

4.

Other Revenue Budget 05/06 ($000) 239 450 233

Actual 05/06 ($000)

Actual 04/05 ($000)

313 1,393 693

302 938 801

2,399

2,041

972

477

Total Interest Received

1,427

1,564

Dividend Received NZ LGIC Financial Contributions - Parklands Internal Revenue Gain on Revaluation of Library Bookstock Gain on Sale of Assets Petroleum Tax Reversal of Provision for Doubtful Debts Provision for Employee Entitlements Revenue from Support Units Charging Special Funds Income Vested Assets Vested Assets - Parklands Internal Revenue

18 761 46 122 407 11 28 240 3,831 2,415 1,442

17 1,058 415 129 4,231 3,918 -

10,748

11,332

Interest Received - Sinking Funds Interest Received - General Funds Interest Received - Trusts, Bequests, Special Funds

922 922 405 372 2,656 1,939 6,294

5.

less internal interest

Total

Other Expenditure

This expenditure has been shown separately as it does not relate to or would be inappropriate to include within the activities.

Budget 05/06 ($000) 372 103 348 823

Expenditure - Support Units Charging Loss on Disposal of Assets Other Unforeseen Expenditure/Prior Year Adjustment Rates Remissions (refer to note 3) Loss on revaluation of Assets Provision for Doubtful Debt Provision for Employee Entitlements Special Funds Expenditure Total

Napier City Council Annual Report 2005/06

Actual 05/06 ($000) 250 533 627 623 18

Actual 04/05 ($000) 135 1,347 426 179 11 56 -

2,051

2,154

Page 25

Notes to the Financial Statements for the Year Ended 30 June 2006 ...

6.

Taxation Budget 05/06 ($000)

Actual 05/06 ($000)

Actual 04/05 ($000

15,924

16,159

5,255

5,332

(5,298) 43

(5,355) 23

-

Total Surplus/(Deficit) before Taxation

-

Prima Facie tax expense at 33%

-

Plus (less) tax effect of: Permanent differences Share of Associates Retained Surplus

-

Tax Expense

-

-

-

Comprising Current Tax Deferred Tax

-

-

-

-

-

Deferred tax Asset: Opening balance Movement

-

-

-

Closing Balance

-

-

Unrecognised tax losses of $492,623, tax effect $162,566, are available to carry forward and offset against future taxable income.

7.

Movements in Equity

Actual 04/05 ($000)

COMPONENTS OF EQUITY Accumulated Asset Revaluation Balance Reserve Actual Actual Actual Actual 05/06 04/05 05/06 04/05 ($000) ($000) ($000) ($000)

1,075,653

651,989

357,194

341,819

709,121

-

1,186

-

30

1,075,653

653,175

357,194

Net surplus/(deficit) for period Increases/(decreases) in revaluation reserve

15,924 -

16,159 406,319

Total recognised revenues and expenses for period

15,924

-

TOTAL EQUITY Actual 05/06 ($000) Equity at start of period Adjustment to opening equity Revised equity at start of period

Transfers between reserves Appropriation of Net Surplus Transfers from reserves Equity at end of the period

Page 26

Restricted Reserves Actual 05/06 ($000)

Actual 04/05 ($000)

302,185

9,338

7,985

-

1,156

-

-

341,849

709,121

303,341

9,338

7,985

15,924 -

16,159 -

-

406,319

-

-

422,478

15,924

16,159

-

406,319

-

-

-

(604) 1,395

(603) (211)

(2,803)

(539)

604 1,408

603 750

1,091,577 1,075,653

373,909

357,194

706,318

709,121

11,350

9,338

Napier City Council Annual Report 2005/06

Notes to the Financial Statements for the Year Ended 30 June 2006 ...

Balance at 1 July 05

Appropn of Net Surplus

Transfer Movement in to/(from) Asset Revaln Reserve Reserve ($000)

Balance at 30 June 06

342,455 14,739

(2,754) 18,074

14,478 (13,083)

-

354,179 19,730

357,194

15,320

1,395

-

373,909

4,588 (69) 307 3684 828

313 21 251 19

(688) (646) (11) 2,753

-

4,213 (715) 317 3,935 3,600

9,338

604

1,408

-

11,350

709,121

-

(2,803)

-

706,318

709,121

-

(2,803)

-

706,318

1,075,653

15,924

-

-

1,091,577

Revaluation Adjustments

Accumulated Balance Accumulated Surplus Council Created Reserves

Restricted Reserves Loan Redemption Reserves Loan Funds Reserves Trusts & Bequests Advanced Wastewater Treatment Fund (HBRC) Other Restricted Reserves

Asset Revaluation Reserve Asset Revaluation Reserve

TOTAL EQUITY

8.

Asset Revaluation Reserve Balance 1 July 05 ($000)

($000)

($000)

Balance 30 June 06 ($000)

486,201 92,153 106,913 142 21,676 20

-

(333) (71) (2,394) (4) (1)

485,868 92,082 104,519 138 21,676 19

2,016

-

-

2,016

709,121

-

(2,803)

706,318

Actual 05/06 ($000)

Actual 04/05 ($000)

Inventories Livestock

298 241

304 193

Total

539

497

Infrastructural Assets Restricted Assets Land Office Furniture & Equipment Buildings Plant and Equipment HB Airport Authority

9.

Inventories

Napier City Council Annual Report 2005/06

Page 27

Notes to the Financial Statements for the Year Ended 30 June 2006 ...

10. Accounts Receivable and Prepayments Actual 05/06 ($000)

Actual 04/05 ($000)

2,304 5,753 662 91 225 766 234

2,787 532 165 193 994 627

10,035

5,298

Actual 05/06 ($000)

Actual 04/05 ($000)

15,341 250 800

13,475 600

16,391

14,075

1,901 300 774 142

250 1,589 1,100 793 142

3,117

3,874

19,508

17,949

Actual 05/06 ($000)

Actual 04/05 ($000)

Share of Surplus before taxation Taxation Expense

207 (79)

120 (49)

Share of Retained Surplus

128

71

3,279

2,349

General Debtors Parklands - unconditional contracts subdivision sales Rates Water by Meter Accrued Interest Transfund NZ Subsidy Claims Miscellaneous Receivables and Prepayments Total

11. Investments

Current Investments Bank Term Investments Corporate Bonds Local Authority Stocks Total Current Investments Non-Current Investments Corporate Bonds Sinking Fund Investments Public Trust Office Local Authority Stocks Omarunui Landfill Shares in Local Government Insurance Corporation Total Non-Current Investments Total Investments The weighted average interest rate of investments for Council was 7.167% (2005: 6.619%).

12. Investment in Airport Authority Name of Entity: Hawke's Bay Airport Authority Principal Activity: Airport Operations Ownership: 26.12% Owner: Napier City Council

Balance of Investment at 1 July 2005 Share of Retained Surplus Movement in Revaluation Reserve Balance of Investment at 30 June 2006

Page 28

128

71

-

859

3,407

3,279

Napier City Council Annual Report 2005/06

Notes to the Financial Statements for the Year Ended 30 June 2006 ...

13. Property Plant and Equipment Cost 2006 ($000)

Valuation 2006 ($000)

Accum.

Depn 2006 ($000)

Net Book Cost or Accum.

Value Valuation Depn 2006 2005 2005 ($000) ($000) ($000)

Net Book Value 2005 ($000)

6,712 2,987 5,961 6,064 1,238 3,027 892 340 445

13,672 50,055 61,283 42,451 1,774

3,742 1,521 4,488 3,643 874 1,026 -

2,970 1,466 1,473 2,421 364 16,699 50,947 61,283 41,765 2,219

27,666

169,235

15,294

181,607

11,523 1,174 1,631 1,276 176

526,821 47,266 59,241 78,754 5,845

4,209 851 1,123 2,012 116

534,135 47,589 59,749 78,018 5,905

526,835 47,572 59,434 79,269 5,844

-

526,835 47,572 59,434 79,269 5,844

15,780

717,927

8,311

725,396

718,954

-

718,954

893 18 9 526

115,498 7,668 25,811 10,200 7,722

662 114 716 307 71

115,729 7,572 25,104 9,893 8,177

115,498 7,668 25,811 10,200 7,722

-

115,498 7,668 25,811 10,200 7,722

1,446

166,899

1,870

166,475

166,899

-

166,899

Capital Work in Progress

12,806

(3,213)

-

9,593

12,806

-

12,806

TOTAL

57,698

1,050,848

25,475

1,083,071 1,094,864 13,429

1,081,435

Operational Assets Plant & Equipment Motor Vehicles Office Furniture & Equipment Omarunui Landfill Capitalised Finance Lease Office Equipment Property Intended for Sale Land Leasehold Land Buildings Library Books Total Operational Assets

6,651 2,781 5,811 4,420 1,155 18,755 50,151 61,963 42,451 2,067

3,672 1,421 4,131 3,492 713 -

2,979 1,360 1,680 928 442 18,755 50,151 61,963 42,451 2,067

196,205 13,429

182,776

Infrastructural Assets Roading Water Supply Stormwater Sewerage Milliscreen Total Infrastructural Assets Restricted Assets Sports Grounds, Parks & Reserves Grandstands, Halls Buildings on Reserves Swimming Pools Inner Harbour Total Restricted Assets

The Council considers the Net Book Value of Land and Buildings are an indication of Fair Value.

Napier City Council Annual Report 2005/06

Page 29

Notes to the Financial Statements for the Year Ended 30 June 2006 ...

14. Public Debt LOANS Public Debt, other than Lease Liabilities, is secured by a Security Trust Deed creating a charge over the special rate deemed to be made by the Council upon the value of all rateable property within the City of Napier.

The following loan monies have been raised by Council, and mature as follows :

2005/06 2006/07 2007/08 2008/09

7.80 7.53 6.96 6.57

Interest to be paid in Year of Maturity ($000) 470 316 489 297

2009/10 2010/11 2011/12 2012/13 2013/14

8.03 6.61 7.52 6.84 7.37

42 134 2 139 1

2014/15 2015/16

7.37 7.37

1 1

18 16

18 16

20016/17

7.37

1

12

-

2017-2031

7.37

2

27

39

22,840

26,369

142 120 48 -

146 160 79 -

310

385

23,150

26,754

6,029 142

6,028 146

6,171

6,174

16,811 168

20,341 239

16,979

20,580

Maturity

FINANCE LEASE LIABILITIES Payable not later than one year Later than one year and not later than two years Later than two years and not later than five years Later than five years

TOTAL PUBLIC DEBT

Interest Rate (%)

Actual 05/06 ($000)

Actual 04/05 ($000)

6,029 7,031 4,533

6,028 6,030 7,031 4,033

1,038 2,037 39 2,042 18

1,038 37 39 2,042 18

Represented by : Current liabilities Loans Lease Liabilities

Non Current Liabilities Loans Lease Liabilities

In addition to the external debt shown above, Council also utilises its cash funds and reserves to reduce the amount of external debt required. At 30 June 2006 internal borrowing from cash reserves was $16.546 million.

Page 30

Napier City Council Annual Report 2005/06

Notes to the Financial Statements for the Year Ended 30 June 2006 ...

Actual 05/06 ($000)

Actual 04/05 ($000)

4,958 299 912

5,865 430 949

6,169

7,244

2,339 1,374

2,162 1,371

3,713

3,533

2,203

1,947

1,510

1,586

3,713

3,533

15,925

16,159

Depreciation Parklands Development Other Unforeseen Expenditure / Prior Year Adjustment Other Non Cash Items Omarunui Landfill Non Cash Adjustment Share of Hawke’s Bay Airport Authority’s (Profit)/Loss Loss/(gain) on Revaluation of Assets

13,669 1,427 627 35 (129) (46)

11,327 (430) (71) 179

Loss/(gain) on Sale of Assets Revenue from Vested Assets

411 (2,415)

289 (3,918)

29,505

23,534

(Increase)/Decrease in Inventory (Increase)/Decrease in Accounts Receivable Increase/(Decrease) in Accounts Payable

(42) (4,737) (574)

(19) (540) 1,037

Net Cash Inflow/(Outflow) from Operating Activities

24,151

24,012

15. Accounts Payable and Accrual Accounts Payable Accrued Interest Rates Received in Advance

16. Employee Entitlements Accrued pay and annual leave Retirement gratuities and long service leave

Made up of: Current Non-current

17. Reconciliation of Surplus to Net Cash Flows from Operating Activities Net Surplus/(Deficit)

Add/(Less) Non-Cash Items:

Add/(Less) Movements in Working Capital Items:

Napier City Council Annual Report 2005/06

Page 31

Notes to the Financial Statements for the Year Ended 30 June 2006 ...

18. Overall Capital Expenditure Actual 05/06 ($000)

Budget 05/06 ($000)

Actual 04/05 ($000)

2,042 1,197 5,191 8,850 1,686 146 6,057

1,781 315 7,467 9,514 668 142 9,519

3,242 1,477 1,634 13,139 351 151 9,983

25,169

29,406

29,977

753 285

634 128

613 737

158 1,402

-

85 1,629

27,767

30,168

33,041

CAPITAL EXPENDITURE Activity Groups Community Services and Facilities Environmental and Regulatory Controls Property Assets Roading Solid Waste Tourism and City Business Development Water and Wastewater Services Total Capital Expenditure For Activity Groups * Non Allocated Costs: Mobile Plant and Vehicle Replacements Computer Upgrades & Replacement of Other Equipment, Furniture & Fittings, New Minor Item Purchases in Support Units Principal Repayments on Finance Leases Loan Repayments, including Sinking Fund Instalments (net of Redemption Loans raised and Sinking Funds released) Total *

For details of Capital Expenditure refer to the Statement of Services and Performance of the Activity Group.

19. Related Party Transactions Key Management Council made payments totalling $16,000 to Councillor John Cocking for his services as “Bertie”.

Council made payments totalling $1,860 to East Pier, which is owned by Councillor Mark Herbert.

Transactions relating to 2004/05 year Council made payments totalling $15,000 to Councillor John Cocking for his services as “Bertie”.

There were no outstanding balances arising from transactions at 30 June 2006 and no debts written off during the year.

20. Contingencies There are five claims against Council which have been notified to Council’s Insurers.

Because of the uncertainty associated with the claims an estimate of the financial effect cannot be made.

The above matters have not been recognised in the financial statements because of the uncertainty associated with the outcomes.

No specific budget has been provided by way of contingency for any of these claims (2005, $Nil) Included in the Council Statement of Financial Position in Accounts Payable and Accruals are deposits paid on contracts for 14 sections in the Parklands land subdivision. These contracts are conditional on receipt of consent under S222 of the Resource Management Act.

Page 32

Napier City Council Annual Report 2005/06

Notes to the Financial Statements for the Year Ended 30 June 2006 ...

21. Guarantees As at 30 June 2006, the Council had agreed to guarantee the liabilities of related authorities and locally incorporated societies to the amount of $683,000 (2005 $671,000). These organisations are as follows: Authorised 05/06 ($000)

Amount 05/06 ($000)

Amount 04/05 ($000)

200 40 400 200 28 120 57 27 150 275

7 336 14 45 13 1 267

8 290 17 57 6 5 15 273

1,497

683

671

HB Cricket Association HB Cultural Trust * HB Sports Fishing Club HB Hockey Artificial Surface Trust Maraenui Rugby & Sports Association Napier City Rovers Association Football Club Taradale Rugby Football Club Napier Judo Club Napier Sailing Club Omni Gymnastics Centre

*

Overdraft Facility - jointly guaranteed by Napier City Council and Hastings District Council.

22. Remuneration For the year ending 30 June 2006 the total cost to the Napier City Council for the following was: Amount ($000)

Vehicle Allowance ($000)

Mayor Barbara Arnott

80

11

Councillors John Cocking Kathy Furlong Robin Gwynn Mark Herbert Tony Jeffery Deane Jessep Harry Lawson Rob Lutter Dave Pipe Tony Reid Faye White Tania Wright

25 40 25 38 25 25 26 25 38 40 38 26

-

Chief Executive The Chief Executive of the Napier City Council appointed under section 42 of the Local Government Act 2002 receives a salary of $196,700 p.a. (2005, $187,300).

In terms of his contract, the Chief Executive also received an additional benefit for subscriptions of $500 p.a. (2004/05, $500).

Napier City Council Annual Report 2005/06

Page 33

Notes to the Financial Statements for the Year Ended 30 June 2006 ...

23. Additional Disclosures a. In accordance with Schedule 10 Part 3 section 19 of the Local Government Act 2002, there were no severance payments for the year ended 30 June 2006. b. Other Disclosures

Interest Paid Audit Fees Other services provided by principal auditor Rental expense on operating leases Finance Charges on leased assets Bad Debts Written Off Councillors & Directors Fees Depreciation Roading Water Supply Stormwater Wastewater Milliscreen Buildings Library Books Plant & Equipment Motor Vehicles Office Furniture & Equipment Omarunui Landfill Capitalised Finance Lease Office Equipment Sportsgrounds, Parks & Reserves Grandstands, Halls Buildings on Reserves Swimming Pools Inner Harbour Depreciation Total

Actual 05/06 ($000)

Budget 05/06 ($000)

Actual 04/05 ($000)

1,774 101 54 329 87 12 473

1,913 96 54 295 277 15 460

2,215 96 246 23 5 436

11,651

3,842 814 703 1,489 188 702 319 490 300 599 271 27 534 106 573 298 72 11,327

4,209 1,029 1,188 2,265 116 1,026 339 441 333 541 151 161 662 114 716 307 71 13,669

24. Financial Instruments Currency Risk Council has foreign exchange exposure through the purchase of foreign exchange denominated assets. Council's policy provides for commitments over NZ$100,000 to be hedged using forward foreign exchange contracts.

The foreign exchange contract amounts outstanding at 30 June are as follows:

Foreign Currency forward Exchange Contracts

05/06 ($000)

04/05 ($000)

1,374

856

Interest Rate Risk Napier City Council has an overdraft facility with a limit of $300,000. The current interest rate on Council’s bank overdraft is 9.15%. This is a floating rate set by the bank, recognised at fair value.

Credit Risk Financial instruments which potentially subject the Napier City Council to credit risk principally consist of bank balances, accounts receivable, shares in companies and joint committee.

The Napier City Council reduces counterparty risk by spreading its investments over Government and Local Authority Stock and registered New Zealand banks. To limit credit exposure, no more than $10 million of cash investments are held with any one registered New Zealand bank.

There are no major concentrations of credit risk with respect to accounts receivable.

Page 34

Napier City Council Annual Report 2005/06

Notes to the Financial Statements for the Year Ended 30 June 2006 ...

Maximum Credit Risk Exposure

Total Investments Investment in HB Airport Authority Call Deposits, Cash on Hand Accounts Receivable

05/06 ($000)

04/05 ($000)

19,508 3,407 3,529 10,035

17,949 3,279 3,269 5,298

36,479

29,795

25. Major Budget Variations Explanations for major variations from the 2005/06 Council budget are as follows : Statement of Financial Performance The net surplus of $15.9 million is $3.7 million above budget.

Major variations were due to: • • • • • • • •

Income $1.6 million above budget for Transfund roading subsidies.

Income $1.9 million above budget for infrastructure assets vested to council. This includes unbudgeted $1.4 million internal charge to Parklands Residential Development Income $0.8 unbudgeted Financial contributions from internal charges Parklands Residential Development Interest income was $0.5 million above budget mainly due to the higher than budget level of short term investment of funds set aside or carried forward for budgeted capital projects.

Revenue from Parklands subdivision was $1.3 million above budget due to higher than budget sales for the year Revenue $1.0 million above budget for Napier City Council share of Omarunui Landfill sales Expenses Parklands Residential Development $4.2 million above budget due to internal charges for Financial Contibutions and cost of development infrastructure assets vested to council and above budget development activity for year Depreciation cost was $2.0 million above budget. This was due to increased asset values after 2005 year end revaluation.

Statement of Movements in Equity The variance against budget is due to the favourable net surplus as explained above, and is also due to the higher opening balance for Public Equity resulting from the asset revaluation reserve increase of $406 million at 30 June 2005. The revaluation reserve increase arose from revaluations of land and infrastructural assets.

Statement of Financial Position Major variations were due to: • • • • •

Cash and current investments are $11.6 million above budget at year end due to deferral and carryforward of some rates and reserve funded capital projects at year end.

Accounts Receivable and Prepayments are $5.3 million above budget at year end due to unbudgeted Parklands Residential Development receivables at year end. These receivables arose from unconditional contracts for purchase of land where remaining amounts payable were due after balance date. Parklands receivables are net of deposits paid.

Investment in Airport authority is $2.2 million above budget due to revaluations to Airport Authority Assets as at 30 June 2005.

Property Intended for Sale and Property, Plant & Equipment is $366 million above the budgeted level due to the revaluation of assets at 30 June 2005. The full revaluation increase is partially offset by the defferal and carry forward of some capital projects at year end 2005 and increased depreciation on the revalued assets.

Public debt is $40.1 million below budget due to the deferral and carry forward of loan funded capital projects, and the application of an internal borrowing programe, where feasible, to fund projects.

26. Landfill Post-Closure Costs The Council, as 36.32% owner of the Omaranui Landfill, has a legal obligation under the resource consent to provide ongoing maintenance and monitoring sevices at the landfill site affer closure. Council’s 36.32% share of a provision for post-closure costs is recognised as a liability when the obligation for post-closure arises.

The provision is measured based on the present value of future cash flows expected to be incurred, taking into account future events including new legal requirements and known improvements in technology. The provision includes all costs associated with landfill post-closure.

Amounts provided for landfill post-closure are capitalised to the landfill asset where they give rise to future economic benefits to be obtained.

Components of the capitalised landfill asset are depreciated over their useful lives.

The discount rate used is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to Council.

05/06 ($000)

04/05 ($000)

Balance at 1 July 2005 Movements for the year

260 11

244 16

Balance at 30 June 2006

271

260

Napier City Council Annual Report 2005/06

Page 35

Council Controlled Organisations This part of the Annual Report reports the performance of the Council-Controlled organisations as required in Clause 16 of Schedule 10 of the Local Government Act 2002.

Hawke’s Bay Airport Authority a) Policies and Objectives Regarding Ownership and Control This is a joint venture between Government, Hastings District Council and Napier City Council, in which Napier City Council has a 26% shareholding. The Authority produces separate annual accounts. No payments are made by Napier City Council to the Authority and there is no financial provision included in Council budgets. The Napier City Council share of the Authority is included in its annual financial statements as an investment, valued using the equity method of accounting.

Council’s policies and objectives have been met in full.

Hawke’s Bay Cultural Trust a) Policies and Objectives Regarding Ownership and Control The Trust is a Council-Controlled organisation as the six person Appointments Committee, formed by the Trust to appoint trustees, includes two persons appointed by each of Napier City Council and Hastings District Council, and therefore the two local authorities have the right to appoint 50% or more of the Trustees.

Both Councils are each able to nominate one Trustee.

The Trust's constitution and rules are currently being amended to reflect a change in role to that of owner and guardian of the regional collection.

Council’s policies and objectives have been met in full. b) Nature and Scope of Activities

b) Nature and Scope of Activities

The objectives of the Trust are:

The nature and scope of the activities of the Authority is to operate the airport as a regional domestic passenger facility and maintain and enhance the rental revenue from property activities.

There has been no change between the intended and actual nature and scope of activities delivered. c) Performance Targets The key performance targets (as reflected in the Authority's Statement of Intent for 2005/06) and performance results (as reflected in the Authority's Annual Report for 2005/06) are: Target

Actual

Ratio of Consolidated Shareholders Funds to Total Assets

100%

100%

Earnings before interest, tax & depreciation percentage to Revenue

64%

61.4%

Return on funds employed

6.4%

4.3%

Ratio of landing charge to other income

55:45

56:44

Bird strikes per 000 movements

0.5

0.5

Safety & Security - no of incidents on airport

Nil

Nil

Non compliance with CAA Rule 139

Nil

Nil

• • • • • •

To establish, maintain, operate and develop Museums, Art Galleries, Theatres and Cultural Centres, for cultural purposes in Hawke's Bay. To advace and promote the Arts in New Zealand and particularly in Hawke's Bay. To promote a sense of history and an awareness of the importance of the nation's heritage in New Zealand and particularly in Hawke's Bay. To collect, conserve, display, archive, research, and deal with, property of historical or cultural significance or interest, in accordance with the policy of the Trust.

To inform and educate the public in all matters relating to the objectives of the Trust.

To provide cultural foci and resource centres for Hawke's Bay.

In meeting these objectives the Trust provides the following activities: •

•

Operates the Hawke's Bay Museum, Century Theatre, Century Cinema, Berry Historical Library, Hawke's Bay Regional Archives and Education Discovery Centre in Napier, as well as the Hawke's Bay Exhibition Centre in Hastings.

Functions as a host trust for the activities of the Faraday Centre in Napier.

Napier City Council owns the buildings that the Trust’s Napierbased activities (apart from The Faraday Centre) are delivered from.

There has been no change between the intended and actual nature and scope of activities delivered. c) Performance Targets The goals and key performance indicators reflected in the Trust's Statement of Intent for 2005/06 are at a detailed operating level suitable for the Trust's management. These measures, however, did not correctly reflect the requirement to identify this Council's key performance targets and other measures by which performance of the organisation may be judged, and it is not considered to be suitable to report against these measures. More suitable performance measures have been developed in the 2006/07 LTCCP and will be reported from 2006/07. From 1 July 2006 performance targets will be reported on through the Tourism Services Department of Napier City Council.

Note Napier City Council took over responsibility for the management and daily operation of staff and facilities, previously employed and operated by the Trust, with effect from 15 May 2006. The Trust will be restructured to hold the collection for the people of Hawke's Bay. Some of this restructuring will be ongoing.

Page 36

Napier City Council Annual Report 2005/06

Council Controlled Organisations ...

Hawke’s Bay Incorporated (HB Inc)

Inputs

a) Policies and Objectives Regarding Ownership and Control

The following are critical components for completing the organisational set up:

This is a Council-Controlled Organisation as the 3 funding Councils, Napier City Council, Hastings District Council and Hawke's Bay Regional Council, have the right to appoint 50% of the Trustees of the Trust.

• • •

HB Inc was formed during 2004/05 with the objective to foster regional economic development including tourism destination marketing for the Hawke's Bay region through improving the competitiveness of Hawke's Bay as a place to visit, live, work, invest and grow business located in the Hawke's Bay region.

It includes the previous activities of Hawke's Bay Tourism and Hawke's Bay Economic Development Agency (EDA).

•

It is still too early to determine whether Council's policies and objectives have been met.

Outputs Economic Development The following targets have been set for economic development: •

b) Nature and Scope of Activities The nature and scope of the activities of HB Inc are: •

• • • • •

To facilitate economic growth in the Hawke's Bay region through: - providing strategic direction and leadership - marketing the region effectively as a competitive place to visit, live, work, invest and grow - managing processes and relationships to attract greater tourism revenues, inward investment and favourable immigration - assisting growth businesses located in Hawke's Bay to realise their potential To promote a partnership in economic leadership between the public and private sectors of the Hawke's Bay region.

To support initiatives taken by others and take appropriate initiatives which encourage the growth of economic activity in the Hawke's Bay region.

To act as an advocate and lobbyist on behalf of the Hawke's Bay region on tourism and economic development.

To act as a facilitator or originator of regional cooperation and strategic economic development initiatives in the Hawke's Bay region.

To advocate, promote and support for the region the appropriate land use policies to ensure the sustainable use of regional resources in the Hawke's Bay region.

c) Performance Targets The key performance targets (as reflected in the organisation's 2005/06 Statement of Intent) are:

Have in place a fully staffed organisation structure.

Establish the offices of HB Inc in Tourism House.

Make the necessary adjustments to integrate the EDA and Tourism web sites into one portal.

Create a database that combines existing tourism and EDA data into a new flexible format that serves as the key information system for the organisation.

• • • • •

Build on existing relationships with important central government agencies engaged in economic development, with emphasis on New Zealand Trade and Enterprise (NZTE) and Technology New Zealand.

Look to harness at least $500,000 worth of NZTE and Technology NZ grants for regional businesses.

Maintain the existing Major Regional Initiative (MRI), Food Hawke's Bay, and look for a continuation strategy before the end of the project in March 2006.

Make an application for a new MRI and, if successful, establish the project.

Establish a visitation programme to build rapport with the local business community.

Handle any incoming inward investment inquiries and work on a plan to rekindle a more active approach to investment marketing.

Tourism The following targets have been set for tourism: • • • • •

Increasing visitor numbers from 1.04 million (Dec 03) to 1.17 million per annum by 2006 and 1.51 million by 2010.

Increasing visitor nights from 3.6 million (Dec 03) to 3.76 million by 2006 and 5 million by 2010.

Increasing direct visitor expenditure from $372 million (Dec 03) to $450 million by 2006.

Increasing off-peak visitation by 2006 so that the low season average is 66% of the peak season average compared to 62% (Dec 03).

Increasing the proportion of excellent visitor satisfaction across product, service and infrastructure from 57% (Dec 03) to 61% by 2006.

The Annual Report for HB Inc was not received at the time of preparation of this statement. The draft Annual Report does not easily identify measures against the performance targets. More suitable performance measures have been developed in the 2006/07 LTCCP and will be reported from 2006/07.

Maori Contribution to Decision-Making Process Clause 21 of Schedule 10 of the Local Government Act 2002 requires that this Annual Report includes a report on opportunities provided for Maori to contribute to the decision-making process of Council.

Liaison with the Maori community is undertaken in the first instance through the Maori Consultative Committee.

The Maori Consultative Committee makes recommendations to Council on agenda items already included on the Community Napier City Council Annual Report 2005/06

Development, Environmental Management and Corporate Business Standing Committee agendas. It also makes recommendations to the appropriate Standing Committee or Council on any other matters relevant to Council as it considers necessary. It meets six weekly, one week prior to the Council meeting.

Committee members may attend Council seminars/workshops as appropriate.

Page 37

Statement of Services and Performance for Activity Groups

Activity Reporting

NRB Customer Satisfaction Survey

The Statement of Services and Performance describes the Activities within each group, progress on Key Issues identified in the 2004 LTCCP and the financial and non-financial performance targets and results. Where applicable comparisons to budgets and last year's actuals are provided.

Customer satisfaction targets are measured by the NRB Customer Satisfaction Survey. Interviews were carried out in July 2006 with 450 residents of Napier, throughout the City. Weightings were applied to the sample data to reflect the actual male/female/age/ ethnic proportions in the area as determined by the Department of Statistics Census data. The Communitrak Survey is a scientifically prepared service based on a random probability sample. For the sample size of 450 the margin of error is plus or minus 6.5%.

Page 38

Napier City Council Annual Report 2005/06

GOVERNANCE AND COMMUNITY LEADERSHIP Activities The Governance Group comprises the following activity: Governance • • •

Meeting Cycle Standing and Specialist Committees Elections Last Held

6 weeks 6 9 October 2004

Through 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, Sub-Committees, Working Parties and Forums Council carries out the requirements of the Local Government Act and other related legislation.

Performance Measures for 2005/06 Performance Measures

Results

Governance 1. Number of meetings of Council and Standing Committees

Target:

8 meeting cycles

Council Strategic Planning Environmental Management Community Development Corporate Business Hearings Maori Consultative

2. % resident satisfaction for “Sufficiency of the Information Supplied” in the NRB Public Opinion Survey

Target:

Eight meeting cycles were achieved with the following numbers of Committee Meetings: 13 3 8 8 8 19 8

The NRB Survey carried out in July 2006 showed 68% public satisfaction for “Sufficiency of the Information Supplied”.

More than enough Enough Not Enough Nowhere near enough Don’t Know / Not Sure

60%

6% 62% 25% 3% 4%

Financial Summary Budget 05/06 Activity ($000) 1,749 Governance 1,749 Total Net Operating - Capital Expenditure 1,749 Funding Required

Actual 05/06 ($000) Operational Costs Operating Depn Interest Total

Net Cost Income of Service

Actual 04/05 ($000)

1,748

-

-

1,748

-

1,748

1,629

1,748

-

-

1,748

-

1,748

1,629

-

-

1,748

1,629

1,748

1,629

1,748

1,629

Funded By 1,749 Non Targeted Rates 1,749 Total

Napier City Council Annual Report 2005/06

Page 39

COMMUNITY SERVICES AND FACILITIES Activities The Community Services and Facilities Group comprises: Library Services •

2 Libraries - Napier and Taradale

Services provide recreational, educational, historical, genealogical, cultural and current affairs material together with on-line facilities, reading and outreach programmes.

Cultural Services Arts, cultural and museum facilities are provided by the Hawke’s Bay Cultural Trust.

Sportsgrounds • •

13 sports parks Major facilities - McLean Park Complex, Park Island, Nelson Park and Tareha Reserve

Sportsgrounds are provided throughout the City to cater for a range of recreational and sporting needs.

Onekawa Aquatic Centre • • • • •

2 outdoor pools 5 indoor pools 2 spa pools 2 hydroslides Outdoor area with sand volleyball courts

A comprehensive facility providing fun & leisure, health & fitness, learning and sports activities together with a range of non aquatic outdoor activities.

Marine Parade Pool Complex • •

4 heated outdoor pools 5 spa pools

A complex with a range of heated salt water pools and spas managed under contract.

Passive Recreation Facilities •

34 neighbourhood parks, 41 greenbelt reserves, 22km walkways, 21 playgrounds, 7 foreshore reserves and 6 public gardens

A range of passive recreation facilities providing an open space network and formal gardens of a high standard throughout the City.

Par 2 Golf Courses Two 18 hole miniature golf courses providing entertainment for all ages. Situated next to the Napier i-SITE Visitor Centre on Marine Parade.

Inner Harbour •

Retirement and Rental Housing • •

303 retirement flats 70 rental flats

Flats are provided for people with special housing needs with the emphasis on providing for the welfare of the tenants.

Halls •

9 facilities available for hireage.

Council provides a range of facilities encouraging use at affordable prices.

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 breakout rooms. This venue is highly suitable for conferences, exhibitions, weddings and other functions.

Municipal Theatre A building with Art Deco heritage, providing modern theatre facilities for performing arts, exhibitions and other functions. The auditorium has a seating capacity of 977, and ticketing agencies are situated in the front foyer.

Burial and Cremation Services •

6 cemeteries

Comprehensive areas for burials, ash interments and ash scattering. Recently restored historic cemeteries. Records are available for genealogical enquiries.

Public Toilets •

43 toilet blocks

Toilet blocks are provided throughout the City with the emphasis on high cleaning standards and minimisation of graffiti.

Community Development Support and encouragement of voluntary and community based organisations to address social issues. Napier Safer Community Council supports community solutions to reduce crime and antisocial behaviour.

Community Safety •

Inner City Patrol at least five nights per week

The Safety Watch acts as extra eyes and ears for the Police.

Emergency Management Facilitation Services • •

1 Civil Defence Emergency Management Operations Centre 9 Civil Defence Centres

Facilitating improved community resilience to disaster, through a comprehensive and integrated emergency management structure combining council staff, volunteers and other organisations and agencies.

93 berths

A recreational area of wharves and catwalks providing berthage for commercial and recreational fishing vessels.

Page 40

Napier City Council Annual Report 2005/06

Community Services and Facilities ...

Key Issues

Community House

Redevelopment of Jull Wharf Redevelopment of Jull Wharf was undertaken during 2005/06, which included the demolition of the old wharf and provision of a new floating catwalk to provide up to 10 berths. The cost of the redevelopment, $525,634, was funded from the Harbour Board Land Account.

Taradale Library Extension Consultation revealed a community preference for retaining a branch Library in Taradale and the City Library. The Napier City Council is currently reviewing the use of its capital budget to maximise the benefits at the City and Taradale Libraries.

The Community House opened on the 1 May 2006 and the following groups are currently using the facility; Anglican Care - Careforce, DEALS HB, Disability Information Trust HB, Disability Resource Centre HB, Disabled Persons Assembly, Epilepsy HB, Fairhaven School, Family Planning Assn - Health Promotions, IHC - Centre for Learning, In Work Coordination Support, Napier Budget Advisory Service, Napier South Stroke Support, Parentline Hawke's Bay, People's Advocacy Society, Students Against Drink Driving, Settlement Support HB and Volunteering Hawke's Bay Seven offices are still available.

Settlement Support Hawke's Bay From 1 April 2006 the Napier City Council became the lead agency for the provision of settlement support in Hawke's Bay. Settlement Support HB is based in the Napier Community House and also delivers services from the Maraenui Information Centre, Hastings Library and Ministry of Social Development in Flaxmere.

Performance Measures for 2005/06 Performance Measures

Results

Library Services 1. Number of Library visitors.

441,413 visitors in 2005/06.

Target:

Additionally, there were 69,960 virtual visits to the library website.

400,000

2. % of population with Library membership (open to all residents of the city and ratepayers).

Target:

55%

3. Number of transactions with the public per annum (includes issues, inquiries, reservations and interloans).

Target:

3,529 or 12% of the membership is from Hastings District.

26,246 are residents or ratepayers in Napier, representing 46% of Napier’s population.

796,748 transactions in 2005/06.

820,000

4. Number of resource items per capita provided for use by the community to the national public library standard.

Target:

Total library membership is 29,781 which is 52% of population.

205,349 = 3.6 items per capita provided in 2005/06.

3

Cultural Services The HB Cultural Trust is a Council Controlled organisation and reports to the public on its performance independent to Council. The Council took over responsibility for the management and daily operation of staff and facilities, previously employed and operated by the Trust, with effect from 15 May 2006. From 1 July 2006 the activities that were previously managed by the HB Cultural Trust will be reported through the Tourism Services department of Napier City Council.

Napier City Council Annual Report 2005/06

Page 41

Community Services and Facilities ...

Performance Measures

Results

Sportsgrounds 1. Annual number of international and national/inter-regional events

Target:

90%

3. Amount of sportsground area per person

Target:

5 79

4 international and 50 inter-regional

2. % residents satisfied with ‘Parks and Sportsfields’ in NRB opinion survey

Target:

International events Inter-regional events

The NRB Survey carried out in July 2006 showed 92% resident satisfaction with Parks and Sportsfields.

Very Satisfied Fairly Satisfied Not Very Satisfied Don’t Know Sportsground area per person

56% 36% 4% 4% 29.24m2

31.29m2

Onekawa Aquatic Centre 1. Provide a range of programmes for fitness, skills and education to individuals, groups and schools.

Target:

8 programmes

2. Achieve annual target of 280,000 users.

Target:

280,000 users

3. Adhere to NZ Water treatment Standards 5826;2000.

Target:

At least 85% of the water test results comply with NZ Standards

Learn to swim programmes 16 (121 Classes per week) Waterbabies 3 School learn to swim 7 Aqua Fitness programmes 1 Aerobics programme 1 Tiny tots (under 5’s) Programme 1 Holiday programme 2 Schools skills programmes 4 Casual users Concessions Aerobics Learn to swim Programmes Clubs Facility Hires (Groups) Non-paying users TOTAL

85,502 16,006 7,046 24,833 6,478 11,184 45,064 6,889 203,002

92% of water tests met NZ pool water treatment standards for 2005/06.

Marine Parade Pool The complex includes heated salt water pools and spas and is managed under contract.

Page 42

Napier City Council Annual Report 2005/06

Community Services and Facilities ...

Performance Measures

Results

Passive Recreational Facilities 1. Number of annuals propagated and planted annually throughout the city

Target:

180,000

2. Amount of recreational land per residential lot

Target:

75m2

3. % residents satisfied with “Public Gardens and Street Beds” in NRB opinion survey

Target:

Annuals propagated and planted this year - 180,940.

90%

As at 30 June 2006 - 70.8m2. The target is a long term average and the result is dependent on the timing and development of greenfield reserves and the acquisition of suitable reserve areas to counter infill development.

The NRB Survey carried out in July 2006 showed 98% resident satisfaction with Public Gardens and Street Beds.

Very Satisfied Fairly Satisfied Not Very Satisfied Don’t Know

68% 30% 2% 0%

Par 2 Golf 1. Improve admission numbers

Target:

41,000

2. Improve customer satisfaction ratings

Target:

51,154 admissions for 2005/06

Customer satisfaction 100%.

85%

Inner Harbour 1. Occupancy rates for permanent berths

Target:

70%

2. Complete maintenance and dredging in the Inner Harbour in accordance with the maintenance programme and within budget

Target:

93 berths available with 97 vessels berthing on a full time basis.

(104%) Maintenance programme completed at a cost of $108,683.

No dredging undertaken during 2005/06. ($70,000 budget for 2005/06 will be carried forward to 2006/07).

$95,000

Retirement and Rental Housing 1. Maintain occupancy level of 96.5%

Target:

96.5%

2. Maintain total rental arrears at a level below $2,500 (0.16% of rentals)

Target:

Rental Retirement

99% 97%

Arrears as at 30 June 2006 - $1,250 (0.074% of rentals)

Arrears below 0.16% of rentals

3. Inspect all rental units annually with the focus to ensure tenants comply with conditions of the tenancy agreement and to identify required maintenance

Target:

Occupancy levels for 2005/06:

Inspections of all rental units were completed in 2005/06 with maintenance requirements identified and tenancy conditions compliance checked.

All units inspected

Napier City Council Annual Report 2005/06

Page 43

Community Services and Facilities ...

Performance Measures

Results

Halls Economic Hours hired 2005/06:

1. Total hours hired.

Target:

Greenmeadows East Hall Memorial Square Hall Library Seminar Room

1,250 1,600 700

2. Percent of customer satisfaction in the annual customer survey for Council halls - that the service provided meets acceptable standards and the users are satisfied with the services provided.

Target:

Greenmeadows East Hall Memorial Square Hall Library Seminar Room

1,670 2,154 746

94% customer satisfaction was achieved in the annual customer survey for 2005/06.

80%

War Memorial Centre 1. Provide facilities and associated services for community and commercial hires.

Target:

345 hires

2. Maintain the eternal flame memorial

Target:

Flame memorial maintained for 365 days in 2005/06

365 days

3. Maintain Customer Satisfaction Ratings

Target:

543 community and commercial hires.

Customer satisfaction 92%

90%

Municipal Theatre 1. Provide services for community and commercial hires

Target:

115 hires

2. Provide services for other hires e.g. conferences, cocktail functions

Target:

68,137 sales for 2005/06

74,000

4. Improve Customer Satisfaction Levels

Target:

74 hires for 2005/06

25 hires

3. Provide ticket sales to local and national events

Target:

128 community and commercial hires for 2005/06

Customer satisfaction 90%

85%

Burial and Cremation Services As the subject of death and burials is a sensitive issue, it is not practical to survey users directly. Thus the council will attempt to ascertain a suitable methodology which will provide pertinent results to the performance of the cemeteries activity. In particular the opinions of funeral directors and monumentalists may be sought. The number of burials is recorded and included in this Annual Report.

1. Record the number of burials and ash interments for the year.

Page 44

Burials for 2005/06 Ash Interments for 2005/06

168 157

Napier City Council Annual Report 2005/06

Community Services and Facilities ...

Performance Measures

Results

1. % residents satisfied with “Public Toilets” in NRB opinion survey

The NRB Survey carried out in July 2006 showed 75% resident satisfaction with Public Toilets.

Public Toilets

Target:

2. % daily inspection and cleaning of all public toilets

Target:

Very Satisfied Fairly Satisfied Not Very Satisfied Don’t Know

80%

28% 47% 11% 14%

100% of public toilets were cleaned and inspected daily.

100%

Community Development, Community Grants and Napier Safer Community Council 1. Community Services Grants allocated by the designated process and time frame

Target:

Completion by end of September

2. Community Services Property Grants allocated by the designated process and time frame

Target:

90%

5. Number of Napier Community Network meetings coordinated each year

Target:

6

6. Number of Napier Youth Forum meetings coordinated each year

Target:

9 organisations were approved a total of $12,725 as property grants, approved at Council meeting on 14 September 2005.

•

Due to a change in Council policy, a further $959 was approved to 2 organisations for multi-unit dwellings, approved at Council meeting on 7 December 2005.

100% of funding has been distributed or allocated to support community development initiatives.

The following organisations have either a service agreement or purchase contract with Council. The percentage figure indicates the level of reporting requirements met to date.

Creative Napier HB Surf Life Saving Napier Citizens Advice Bureau Neighbourhood Support Sport Hawke’s Bay Active Living HB (Sport Hawke’s Bay)

90% 100% 100% 100% 90% 90%

Six community network meetings coordinated.

(9 June 2005, 8 September 2005, 27 October 2005, 8 December 2005, 2 February 2006, 4 May 2006)

Total of 15 youth forum meetings coordinated.

4

7. Number of community organisations receiving information mailouts four times per year

Target:

•

100%

4. Percent of Service Agreements and Purchase Contracts meeting reporting requirements

Target:

Total of $13,684 allocated as Community Property grants.

Completion by end of October

3. Percent of Community Development Funding distributed to support community development initiatives each year

Target:

A total of $56,100 allocated to 31 community organisations, approved at Council meeting on 3 August 2005.

90

Napier City Council Annual Report 2005/06

120 community organisations have received information via community network meetings, newsletters, email groups, community projects and on the Council website.

Page 45

Community Services and Facilities ...

Performance Measures

Results

Community Development, Community Grants and Napier Safer Community Council ...

8. Support community based crime prevention strategies in line with Central Governments 7 crime reduction strategies

Target:

3

9. Six Monthly reports of the Safer Community Council activities submitted to and adopted by the Napier City Council

Target:

Programmes supported in 2005/06: • General violence • Youth offending • Theft ex cars • Crime Prevention Through Environmental Design • Maraenui Urban Renewal Plan • Ka Hao Te Rangatahi (youth Offending programme) • Inner City Security Plan Reports presented to Council at the Community Development Committee meeting 15 February 2006 and 26 July 2006.

2

Community Safety (Safety Watch) 1. Security Patrols operate in the inner city at least 5 days a week

Target:

Patrols operated 98% of the time in 2005/06 (253 days worked out of 259).

90% 2005/06 2004/05

2. Total number of events recorded by the inner city security patrols declines each year

Number of Events

Target:

The number of events is 43% less than the previous year.

2% less than previous year

Less than 5% increase

1,096

2005/06 2004/05

3. Recorded crime in the CBD does not increase

Target:

629

Crimes recorded

1,092

1,397

Recorded crime is 22% lower than the previous year.

Emergency Management (Civil Defence) 1. Number of on going advertising campaigns and test of the public alerting sirens conducted per year

Target:

2 major activities

Advertising campaigns for 2005/06: • • •

Local - 5 major activities Regional - 1 major activity National - 2 major activities

There has been no full siren test but each siren has been ‘flick’ tested 4 times this year.

2. Number of training sessions to promote better community resilience and understanding of procedures to respond to events

Target:

Conduct one training activity each month

Training activities for 2005/06: • • • •

18 Community Volunteer Training Sessions 16 EOC Workshops/Training Sessions 9 Community/Educational Training Sessions 1 Regional Exercise

Total Average Training sessions per month = 3.6 3. Number of volunteers and representatives of appropriate agencies available to staff the Civil Defence Emergency Management Operations Centre and Community Civil Defence Centres

Target:

Page 46

200 persons appointed to Civil Defence positions

Total persons appointed to Civil Defence Positions = 225 • • • •

65 65 10 85

Community Volunteers EOC Staff Technical Advisors Advisory/Support Staff

Napier City Council Annual Report 2005/06

Community Services and Facilities ...

Financial Summary Budget 05/06 Activity ($000)

Actual 05/06 ($000) Operational Costs Operating Depn Interest Total

Income Net Cost [1] of Service

Actual 04/05 ($000)

2,210 Library Services

2,105

441

13

2,559

(187)

2,372

2,265

730 Cultural Services 2,285 Sportsgrounds

745 2,074

533

109

745 2,716

(374)

745 2,342

737 2,066

1,022 Onekawa Aquatic Centre

1,477

204

14

1,695

(611)

1,084

1,075

114 2,479 (59) 183 (197) 213 324 285 245 511 846 341 241

17 2,471 230 244 939 188 563 1,183 405 524 1,205 227 211

148 197 8 71 462 42 258 106 27 36 1 37

14 115 1 18 137 8 21 11 7 6 1 1

179 2,783 239 333 1,538 238 842 1,300 439 566 1,206 228 249

(19) (94) (306) (149) (1,690) (42) (442) (1,134) (207) (13) (291) (12)

160 2,689 (67) 184 (152) 196 400 166 232 553 915 228 237

173 2,337 (75) 146 (275) 185 338 147 198 551 830 230 230

14,808

2,571

476

17,855

(5,571)

12,284

11,158

2,042

3,242

14,326

14,400

12,055 199 1,309 763

10,071 413 3,291 625

14,326

14,400

Marine Parade Pool Complex Passive Recreation Facilities Par 2 Golf Courses Inner Harbour Retirement and Rental Housing Halls Municipal Theatre War Memorial Centre Burial and Cremation Services Public Toilets Community Development Community Safety Emergency Management

11,773 Total Net Operating 1,781 Capital Expenditure [2] 13,554 Funding Required Funded By 10,490 194 2,198 672

Non Targeted Rates Loans Special Funds Depreciation (non funded)

13,554 Total

[1]

Summary of Income User Charges

231

Other Income

406

Total Income

[2]

4,934

Subsidies and Grants

5,571

Capital Expenditure Budget 05/06 ($000)

Actual 05/06 ($000) Library Services

471 194 15 10 -

Library Bookstock Extend Taradale Library Redesign Library Asset Team Work Area (Health and Safety) Verna Corbett Bequest Minor Capital Items

Napier City Council Annual Report 2005/06

435 10 38

Page 47

Community Services and Facilities ...

Budget 05/06 ($000)

Actual 05/06 ($000) Sportsgrounds

135 -

Installation of Automatic Irrigation Systems Park Island Equipment Storage Shed Park Island Hockey Carpark McLean Park Redevelopment Embankment Crib Wall

186 108 81 64

- Centennial Hall Redevelopment

49

- Refurbish Sportsgrounds Infrastructure

33

- Minor Capital Items 78 Renewals

4 15

Passive Recreation Facilities 400 Botanical Gardens Improvements 52 -

Tree Planting Programme Marine Pde Walkway/Cycleway Playground Equipment Minor Capital Items

137 Renewals

23 70 46 7 173

Par 2 Golf Courses 5 Minor Capital Items

3

Inner Harbour - Redevelop Jull Wharf

526

Retirement and Rental Housing 100 Minor Capital Projects

80

War Memorial Centre 15 Minor Capital Provision

8

Municipal Theatre 24 Minor Capital Provision

17

Burial and Cremation Services 32 Eskdale Cemetery Development 30 Renewals

1 31

Public Toilets 27 Toilet Replacement Programme 56 Renewals

6 15

Community Development - Minor Capital Items

3

Safety Watch - Minor Capital Items

4

Emergency Management - Minor Capital Items 1,781 Total

Page 48

6 2,042

Napier City Council Annual Report 2005/06

ENVIRONMENTAL AND REGULATORY CONTROLS Activities

Key Issues

The Environmental and Regulatory Controls Group comprises:

Development and Financial Contributions

City Development Planning

The Financial Contributions in the District Plan have been altered to remove the subsidy element relating to roading. Development Contributions have been changed accordingly.

City Development Planning plans and manages the development of the natural and built environment of Napier in a sustainable manner, ensuring the quality and quantity of the City’s resources are maintained and enhanced.

Regulatory Consents The Council ensures that development of the City is within the Resource Management Act and the policies of the District Plan through Regulatory Consents. Resource Consents, Project Information Memorandum and Land Information Memorandum are processed and an environmental programme to gauge the effectiveness of Council’s environmental management policies is carried out.

Building Consents The Council ensures that building development within the City is in accordance with the Building Act through the process of the Building Consents. Warrants of Fitness are processed to ensure compliance of existing registered buildings.

Building Consents There has been a major increase in the number of residential dwellings and units building consents: more than 200% increase in five years.

Dog Legislation The new legislation requires an emphasis on identifying dogs and the whereabouts through micro-chipping.

Parking A review of parking fees was undertaken during the 2005/06 year, The last review was nine years previous. This review resulted in a significant increase in the fees and income. This money is used for the acquisition and development of additional parking in the CBD. Demand for more parking is likely to increase significantly in the next three to five years.

Environmental Health Services The Council deals with the environmental problems of pollution to air, water and land including noise, smoke, smell and refuse through its Environmental Health Services. Licences are processed for food premises, hairdressers, matters relating to the Sale of Liquor Act and other environmental and health related activities.

Investigations and advice is given for other 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. Parking Services • •

CBD Public Parking Spaces Taradale Public Parking Spaces

3,159 685

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.

Napier City Council Annual Report 2005/06

Page 49

Environmental and Regulatory Controls ...

Performance Measures for 2005/06 Performance Measures

Results

City Development Planning 1. Strong thriving economy

Target:

Establish zoning patterns that provide for a range of development options with a minimum of regulation

2. Transport Infrastructure and Services

Target:

Ensure that new roading and infrastructure are included with the District Plan as and when required

3. Communities that value culture and heritage

Target:

Review the Heritage Section of the Plan to ensure greater recognition is given to the Heritage values of the city as required by recent amendment for the RMA

4. Regional leadership and sense of belonging

Target:

All Plan changes are publicly notified and allow for community participation

Decisions have been released on the Proposed District Plan. 29 appeals have been received, of which 25 have been resolved.

An alteration to designation to SH2 north of Napier has been processed and approved.

Preliminary work has begun on reviewing the heritage section of the Plan.

NCC is working with the NZ Architectuarl Association on a project updating all known archaeological sites within Napier.

Plan changes and variations are notified as and when required.

Variations and plan changes in the 2005/06 year were regarding port noise and businesses of prostitution.

Submissions on plan modifications relating to businesses of prostitution are currently being summarised.

Port noise hearing was held in June 2006 where evidence was heard and the substantive decision made. The hearing is to be reconvened in August to finalise specific recommendations.

5. Recreational Facilities

Target:

Ensure appropriate zoning is in place to protect and facilitate the long term development of recreational facilities

6. State of the Environment report for Napier City

Target:

Positive outcomes for Napier indicated by the state of the environment report

7. Monitoring of Performance of the District Plan

Target:

Reduction in the number of resource consent applications

8. Number of resource consent applications

Target:

Settling of appeals on the proposed new Napier District Plan

9. Consistency with other regional/territorial plans

Target:

Page 50

Reduction in the number of cross jurisdiction boundary disputes

All decisions on the Proposed Plan related to recreational facilities have been released with no appeals lodged.

There have been no new proposals for additional recreational facilities recently.

The State of the Environment monitoring report was not undertaken this year. A new monitoring officer has been appointed and is receiving initial training.

The number of resource consent applications for 2005/06 was 311. This is a reduction on the 377 for 2004/05.

Decisions have been released on the Proposed District Plan. 29 appeals have been received, of which 25 have been resolved.

Four Plan Changes to the Hastings district plan have been reviewed during the year and a submission lodged on one of them.

The draft Regional Coastal Plan has been reviewed and a submission lodged.

Napier City Council Annual Report 2005/06

Environmental and Regulatory Controls ...

Performance Measures

Results

City Development Planning ...

10. Community and User satisfaction levels for City Development Planning

Target:

Improved levels of community and user satisfaction with City Development Planning

11. Environment that is appreciated, protected and sustained.

Target:

Ensure appropriate Plan provisions avoid, remedy and mitigate the adverse effects of land use activities while providing opportunities for people to better their social and economic wellbeing

The Wasley Knell review of the department indicated the department is generally meeting customer expectations but can improve.

64% of city residents were very/fairly satisfied with town planning in the 2006 NRB Communitrak survey compared with 70% in 2005.

The review of the department suggested establishing a monitoring role to measure the plans effectiveness. A new monitoring officer has been appointed and is receiving initial training.

Regulatory Consents 1. Time of monitoring of resource consents to be within specified time frames

Target:

100% within the specified time frames

2. % residents satisfied with “Town Planning� in the NRB Public Opinion Survey.

Target:

above level of peer group

3. Time for processing of Non-notified resource and sub-division consent applications

Target:

The NRB Survey carried out in July 2006 showed 64% resident satisfaction with Town Planning with 51% for peer group.

NCC Very Satisfied Fairly Satisfied Not Very Satisfied Don’t Know

14% 50% 12% 24%

Peer Group 8% 43% 26% 23%

65% (303) processed within 20 working days.

20 working days

4. Time for processing Land Information Memorandums

Target:

100% (3) of notified resource consents monitored within specified timeframes

10 working days

100% 301 processed within 10 working days, with an average of 5 working days.

Building Consents 1. Processing time for complying building consents in accordance with the statutory requirements

Target:

20 working days

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

Target:

None considered in 2005/06.

Where possible, within the legislative framework, openly consider alternative building solutions for heritage structures

3. Audit of the building warrants of fitness registered from owners of buildings, subject to code of compliance schedule

Target:

Year to date 98.5% of building consents were processed within 20 working days.

11.6% of all buildings audited year to date, subject to code of compliance schedule.

20% of all buildings

Napier City Council Annual Report 2005/06

Page 51

Environmental and Regulatory Controls ...

Performance Measures

Results

Environmental Health Services 1. Time taken to inspect and issue licences to complying registered premises from receipt of application.

Target:

One month

2. % residents satisfied with “Noise Control” in the NRB Public Opinion Survey.

Target:

75%

3. Number of visits to licensed and registered premises (in terms of meeting objectives). a. Liquor licences (200 approx.) and Food Premises (250 approx.) b. Registered premises: hairdressers, industrial, tattooists etc.

(250 approx.)

Target:

The NRB Survey carried out in July 2006 showed 73% satisfaction for Noise Control.

Very Satisfied 25% Fairly Satisfied 48% Not Very Satisfied 12% Don’t Know 15% Number of licensed premises visited: a. Food and Liquor licence visits b. Registered premise visits

596 160

a. twice a year b. once a year

4. Monitor the reticulated water supply in accordance with National Drinking Water Standards.

Target:

567 licences were issued to complying registered premises all within one month.

664

600 (minimum requirement 384)

Animal Control 1. Promotion of the Dog Owner Licence Scheme

Target:

60 new owners

2. Spaying and neutering of dogs

Target:

60%

5. Provision of an education programme for children

Target:

Page 52

The NRB Survey carried out in July 2006 showed 78% satisfaction for Dog Control.

Very Satisfied 21% Fairly Satisfied 57% Not Very Satisfied 18% Don’t Know 4% 4 school visits (23 talks) were provided in the 2005/06 year.

visit 6 schools - 20 talks

6. Time taken to action complaints (estimated 1,800 complaints per year)

Target:

39 impounded dogs sold in the 2005/06 year.

65

4. % resident satisfaction for Dog Control in the NRB public opinion survey

Target:

305 dogs spayed or neutered in the 2005/06 year.

300

3. Selling of unclaimed impounded dogs

Target:

93 new owners for the 2005/06 year.

85% of complaints were actioned by the end of the following working day.

100% by end following working day

Napier City Council Annual Report 2005/06

Environmental and Regulatory Controls ...

Performance Measures

Results

Animal Control ...

7. Promotion of the ‘Pooper Scooper’ scheme: a. Number of free bags issued b. Advertising campaign

Target:

a. 20,000 free bags b. 6 newspaper ads, 6,000 registration forms

Promotion of the scheme in 2005/06 included: a. issue of 20,000 free bags b. 2 newspaper ads 6,000 registration forms

Parking Services 1. % resident satisfaction for “Parking in City Centre” in the NRB Public Opinion Survey

Target:

60%

2. % resident satisfaction for “Parking in the Suburbs” in the NRB Public Opinion Survey

Target:

75%

3. CBD and Taradale Shopping Centre off street parking areas occupancy rates

Target:

The NRB Survey carried out in July 2006 showed 83% satisfaction for Parking in the Suburbs.

Very Satisfied 30% Fairly Satisfied 53% Not Very Satisfied 10% Don’t Know 7% Achieved but exceeds 80% regularly on Friday/Saturday.

between 50% and 80%

4. CBD and Taradale Shopping Centre on street parking areas occupancy rates

Target:

The NRB Survey carried out in July 2006 showed 55% satisfaction for Parking in the City Centre.

Very Satisfied 8% Fairly Satisfied 47% Not Very Satisfied 41% Don’t Know 4%

Occupancy rates of 50% to 80% were achieved.

between 50% and 80%

Napier City Council Annual Report 2005/06

Page 53

Environmental and Regulatory Controls ...

Financial Summary Budget 05/06 Activity ($000) 625 581 348 290 171 (462)

Actual 05/06 ($000) Operational Costs Operating Depn Interest Total

City Development Planning Regulatory Consents Building Consents Environmental Health Services Animal Control Parking Services

1,553 Total Net Operating

Income Net Cost [1] of Service

Actual 04/05 ($000)

923 808 1,045 433 498 907

26 1 22 1 2 62

1 1 33

950 809 1,067 434 501 1,002

(1) (205) (794) (188) (340) (1,835)

949 604 273 246 161 (833)

821 563 217 238 142 (717)

4,614

114

35

4,763

(3,363)

1,400

1,264

1,197

1,478

2,597

2,742

2,253

2,151

93 186 65

591 -

2,597

2,742

315 Capital Expenditure [2] 1,868 Funding Required Funded By 1,940 Non Targeted Rates 150 Loans (333) Special Funds 111 Depreciation (non funded) 1,868 Total

[1]

Summary of Income User Charges

3,350

Other Income

13

Total Income [2]

3,363

Capital Expenditure City Development Planning - Develop Geographic Information System

18

Animal Control 150 Animal Shelter

93

Parking Services 100 45 20 -

Parking Equipment Replacement Develop Carpark 184 Dickens St Minor Capital Items - Parking Services Property Purchases (for future car parking development) Develop Carpark HB Regional Council Property

315 Total

Page 54

79 32 20 926 29 1,197

Napier City Council Annual Report 2005/06

PROPERTY ASSETS Activities

Key Issues

The Property Assets Group comprises:

Parklands Residential Development

Lagoon Farm

About 30 hectares of Lagoon Farm has been taken out of production for the first area of residential development and associated works. Staff will continue to monitor the resulting impact on the performance of the farm. As development occurs there will be a scaling down of farm operations and a move to larger farm leases.

The 475 hectare Lagoon Farm is situated south of the Hawke’s Bay Airport. It is run as a commercial enterprise. The Lagoon Farm is managed in accordance with Council’s policies. Specifically the terms of reference are that the farm is managed as a successful business.

108.5 hectare of the farm has been rezoned for residential development with up to 28.3 Ha earmarked for sportsgrounds and resource consent has been obtained for 23.2 Ha of residential development.

Property Holdings •

Council's capital plan includes $5 million in the years 2005/06 to 2007/08 for the proposed project to expand and refurbish the present Hawke’s Bay Museum to provide greater public accessibility and care of the Trust’s collections through improved storage facilities and presentation facilities.

Only limited progress has been made with respect to the redevelopment in the year to 30 June 2006.

Leasehold Properties (30 June 2006): Commercial Residential

Redevelopment of Hawke’s Bay Cultural Trust Buildings

83 71

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 major portion 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.

Napier City Council Annual Report 2005/06

Page 55

Property Assets ...

Performance Targets for 2005/06 Performance Measures

Results

Lagoon Farm Performance measures not set as this activity is not providing a public service.

Property Holdings 1. Management of leases and licences: All leases to be renewed within the statutory time frame as specified in the individual registered lease documents

Target:

100% renewed

2. Building Asset Management: Maintain full occupancy of Council owned commercial buildings subject to availability of letable space and market demand and conditions.

Target:

Page 56

16 freehold enquiries received and 5 freeholding transactions completed during this period all in accordance with Council policy.

All freeholding requests handled in accordance with the Council policy

4. Building Asset Management: Ensure all buildings are maintained to a satisfactory level and comply with the Building Act and Health and Safety Act.

Target:

Buildings 100% occupied.

100% occupancy

3. Management of leases and licences: Facilitate the freeholding of leasehold properties in accordance with Council’s freeholding policy

Target:

No registered leases were due for renewal during 2005/06.

Maintenance continuing. All buildings comply with regulatory requirements.

100% compliance

Napier City Council Annual Report 2005/06

Property Assets ...

Financial Summary Budget 05/06 Activity ($000)

Actual 05/06 ($000) Operational Costs Operating Depn Interest Total

(15) Lagoon Farm (5,537) Lagoon Farm Residential Development (1,221) Property Holdings (6,773) Total Net Operating

Income Net Cost [1] of Service

Actual 04/05 ($000)

397 4,180 (119)

40 340

114

437 4,180 335

(356) (7,078) (1,401)

81 (2,898) (1,066)

(63) (1,457)

4,458

380

114

4,952

(8,835)

(3,883)

(1,520)

5,191

1,634

1,308

114

(986) 442 1,723

(1,069) 1,127

129

56

1,308

114

7,467 Capital Expenditure [2] 694 Funding Required Funded By (737) Non Targeted Rates 2,000 Loans (661) Special Funds 92 Depreciation (non funded) 694 Total

[1]

[2]

Summary of Income User Charges

1,437

Other Income

7,398

Total Income

8,835

Capital Expenditure Lagoon Farm - Minor Capital Items

25

Lagoon Farm Residential Development 5,367 Lagoon Farm Residential Development

4,722

Property Holdings 100 Building Air Conditioning 2,000 Redevelop Cultural Trust Buildings - Property Purchases 7,467 Total

Napier City Council Annual Report 2005/06

444 5,191

Page 57

ROADING Activities

Key Issues

The Roading Group comprises:

Prebensen Drive Extension

Roading • • • • • • • • •

Kilometres of roads Percentage of roads sealed Urban Standard Roads Percentage not constructed to Council’s current urban standards Rural Roads Percentage requiring widening to cope with current traffic volumes State Highways Stormwater sumps - plains area - hill area Kerb and Channel Sweeping

338 km 100% 282 kilometres 10% (approx.)

56 kilometres 72% 37 kilometres 3,599 510 3,080 kilometres

The extension of Prebensen Drive between the Expressway and Church Road, including the Puketitiri Road hill section, is now completed.

CBD Council identified the upgrade of Napier's CBD as a priority and an initial $2 million was provided in 2005/06. The estimated cost of the total programme is over $7 million.

Design work is under way and work on the programme is expected to commence after Easter 2007.

The city’s roading system provides accessibility to Napier citizens and visitors within a safe, clean and aesthetic environment. The services cover the provision and maintenance of the physical components; roads, footpaths, bridges and other structures (e.g. street furniture), lighting, drainage, traffic services and safety (e.g. traffic lights, signage) and street gardens, as well as the planning and management to ensure the system is clean, safe and able to cope with future needs.

Performance Targets for 2005/06 Performance Measures

Results

Roading 1. % Residents satisfied (very satisfied and fairly satisfied) with “footpaths” in the NRB Public Opinion Survey

Target:

80%

2. % Resident satisfied (very satisfied and fairly satisfied) with ‘roads’ in the NRB Public Opinion Survey

Target:

80%

3. A continuing reduction in the number of injury crashes occurring in the city and in accident contributing behaviour

Target:

Page 58

In the 2005/06 134 crashes were reported.

Average roughness 99 NAASRA counts.

less than 150 (NAASRA counts)

5. Value of deferred capital works at end of year.

Target:

The NRB Survey carried out in July 2006 showed 90% satisfaction for Roads.

Very Satisfied 24% Fairly Satisfied 66% Not Very Satisfied 10% Don’t Know 0%

less than 150

4. Average roughness of sealed urban roads

Target:

The NRB Survey carried out in July 2006 showed 81% satisfaction for Footpaths.

Very Satisfied 26% Fairly Satisfied 55% Not Very Satisfied 17% Don’t Know 2%

$38 million

The vale of deferred capital works at 30 June 2006 stands below $41.7 million (projects revalued December 2005).

Napier City Council Annual Report 2005/06

Roading ...

Financial Summary Budget 05/06 Activity ($000) 8,534 Roading 8,534 Total Net Operating

Actual 05/06 ($000) Operational Costs Operating Depn Interest Total

Income Net Cost [1] of Service

Actual 04/05 ($000)

5,823

4,220

1,256

11,299

(4,309)

6,990

4,877

5,823

4,220

1,256

11,299

(4,309)

6,990

4,877

8,850

13,139

15,840

18,016

11,245 632 993 1,612 1,358

6,360 34 8,762 1,684 1,176

15,840

18,016

9,514 Capital Expenditure [2] 18,048 Funding Required Funded By 7,400 2,268 6,086 1,050 1,244

Non Targeted Rates Loans Special Funds Vested Assets Depreciation (non funded)

18,048 Total

[1]

Summary of Income User Charges Subsidies and Grants Other Income Total Income

[2]

42 4,148 119 4,309

Capital Expenditure Roading 500 273 1,369 75 24 200 250 2,000 500 150 -

Urban Growth - Prebensen Drive Transportation Proposals Roading Capital Projects (Bulk Funded) Puketitiri Rd Reconstruction Stock Effluent Dump Site Bay View Awatoto to Expressway Link Prebensen Drive Four Laning and Hyderabad Overbridge CBD Development Foodstuffs Pak 'n Save Development Ahuriri Shopping Centre Upgrade Urban Growth - Northwest Development Minor Capital Items

1,863 344 1,250 75 106 206 64 114 73

3,123 Renewals

3,143

1,050 Vested Assets

1,612

9,514 Total

Napier City Council Annual Report 2005/06

8,850

Page 59

SOLID WASTE Activities

Key Issue

The Solid Waste Group comprises:

Omarunui Regional Landfill

Refuse, Transfer Station and Composting

Development of the Landfill site is an ongoing project of four stages. The second stage (Valley ‘D’) is due to open in 2006, in line with the closure of the first stage known as Valley ‘A’.

Council provides a domestic refuse collection service for both residential and commercial properties within the city: •

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, including the composting operation, at Redclyffe accepts most domestic, garden and building waste.

Currently Napier disposes of about 33,000 tonnes of refuse annually at the landfill from domestic collection, kerbside recycling, litter collection and the transfer station.

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 Council and is managed on a day to day basis by the Hastings District Council.

Performance Targets for 2005/06 Performance Measures

Results

Refuse, Transfer Station and Composting 1. % Residents satisfied with ‘Refuse Collection’ in NRB opinion survey.

Target:

90%

2. % Residents satisfied with “control of litter, graffiti and vandalism” in the NRB opinion survey.

Target:

75%

3. Comply with all conditions of resource consents for closed landfills.

Target:

Page 60

The NRB Survey carried out in July 2006 showed 78% satisfaction for Control of Litter, Graffiti and Vandalism.

Very Satisfied 25% Fairly Satisfied 53% Not Very Satisfied 19% Don’t Know 3% 100% of conditions of resource consents for closed landfills were complied with in 2005/06

100%

4. Quantity of waste going to land fill.

Target:

The NRB Survey carried out in July 2006 showed 95% satisfaction for Refuse Collection.

Very Satisfied 61% Fairly Satisfied 34% Not Very Satisfied 3% Don’t Know 2%

28,000 tonnes

Total refuse for 2005/06 = 30,678 tonnes (33,000 for 2004/05).

Comprised of: Domestic Refuse Redclyffe Transfer Station Other (Depot, Litter Bins etc)

8,000 tonnes 20,354 tonnes 2,324 tonnes

Napier City Council Annual Report 2005/06

Solid Waste ...

Financial Summary Budget 05/06 Activity ($000) 1,322 Refuse 336 Transfer Station and Composting 1,658 Total Net Operating

Actual 05/06 ($000) Operational Costs Operating Depn Interest Total

Income Net Cost [1] of Service

Actual 04/05 ($000)

1,927 1,426

44

12 32

1,939 1,502

(1,556) (1,254)

383 248

1,147 229

3,353

44

44

3,441

(2,810)

631

1,376

1,686

351

2,317

1,727

319 1,228 727 43

336 1,056 142 193

2,317

1,727

668 Capital Expenditure 2,326 Funding Required Funded By 400 1,202 668 16 40

Non Targeted Rates Targeted Rates [2] Loans Special Funds Depreciation (non-funded)

2,326 Total

[1]

[2]

Summary of Income User Charges Other Income

1,232 1,578

Total Income

2,810

Capital Expenditure Refuse Management 668 Omarunui Regional Landfill Site Development Minor Capital Items Transfer Station and Composting - Minor Capital Items 668 Total

[3]

1,639 6 41 1,686

Targeted Rates Refuse UAC Recycling UAC Total

Napier City Council Annual Report 2005/06

945 283 1,228

Page 61

TOURISM AND CITY BUSINESS DEVELOPMENT Activities The Tourism and City Business Development Group comprises: Business Facilitation The Enterprise Unit facilitates and assists existing and new businesses in the City and Region to develop, expand and create employment. Council also assists with the economic development of the region via its grant to Hawke’s Bay Inc. This is backed up

by Council’s Rates Relief Policy which provides rates remission or postponement to assist business developments in the City.

Napier City Promotion Council promotes Napier externally to attract further movements of population, business and visitors to the area. The “Time of Your Life” city marketing programme, an ongoing major media advertising programme, aims to inform New Zealand about Napier.

Council also provides assistance for the marketing of the Central Business district.

Tourism Facilitation Council assists with the external marketing of Napier as a tourism destination through a grant to Hawke’s Bay Inc. 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 grant.

National Aquarium of NZ Located on Marine Parade and houses sharks, stingray, hundreds of fish species, reptiles and the kiwi. There are shows and tours daily, a themed souvenir shop and a café. The aquarium hosts school groups, tour groups, birthday parties, sleepovers and has function facilities.

Napier i-Site Napier i-Site Visitor Centre is part of NZ’s Visitor Information Network and offers information and booking services to both visitors and locals, including accommodation and travel; attractions and activities; itinerary planning and advice; gifts, souvenirs, stamps and phone cards; events and entertainment information; maps, guides and books.

Kennedy Park Set in spacious park-like surroundings, Kennedy Park offers a variety of accommodation types, including 90 rooms of various configurations and 165 powered and non-powered sites. The facilities include a children's playground, a pool, a restaurant and conference facilities.

Note: Conferences and Events HB is no longer operating.

Key Issue

Marineland of NZ

Marineland

New Zealand's only marine zoo houses a dolphin, seals, sealions, otters, penguins and other birds. Marineland runs shows and tours daily and has bicycles and wet suits for hire. Education programmes and a penguin recovery workshop are available for schools and the public. Volunteers welcome.

Dolphins have a limited life expectancy. One of the two last dolphins died this year and the one remaining dolphin at Marineland is in the later stages of its life span. The loss of this dolphin will have an immediate and significant detrimental impact on revenue. It is estimated that revenue would drop to one third of current levels. Council is investigating options available beyond the death of the last remaining dolphin.

Page 62

Napier City Council Annual Report 2005/06

Tourism and City Business Development ...

Performance Measures for 2005/06 Performance Measures

Results

Business Facilitation 1. Number of Economic Monitoring Reports on the performance of the Napier and Hawke’s Bay economies.

Target:

4

2. Number of downloads of the Economic Monitoring Reports from the Council Website.

Target:

185 clients for 2005/06.

100

4. Existing business support - number of businesses assisted in Napier

Target:

Number of downloads of Monitoring reports recorded in 2005/06 = 1,341

New Measure

3. New business programme - number of training and one to one facilitation services

Target:

Six economic reports were produced in 2005/06: • Economic Monitor reports - September 2005, December 2005, March 2006 • Business Survey reports - September 2005, March 2006 • Napier Business and Employment Profile 2000-2005

59 businesses assisted in 2005/06.

50

Tourism Facilitation There are no non financial performance measures.

Napier City Promotion There are no non financial performance measures.

Marineland of New Zealand 1. Maintain attendance levels

62,540 attendances for 2005/06

Target: 68,000 Social and Cultural 2. Provide a range of visitor experience options

7 visitor experience options for 2005/06

Target: 7 3. Rehabilitation of animals/birds/mammals

36 rehabilitated animals in 2005/06

Target: 30 4. Provide environmental awareness through education program

5,461 education visits for 2005/06

Target: 4,500 5. Provide work experience and skill enhancement for volunteers

Target:

32 volunteers in 2005/06

20

Napier City Council Annual Report 2005/06

Page 63

Tourism and City Business Development ...

Performance Measures

Results

National Aquarium of New Zealand 1. Maintain attendance levels.

Target:

114,000

2. Maintain a register of friends of the Aquarium.

Target:

7,901 education visits achieved

5,800

8. Provide work experience and skill enhancement for volunteers.

Target:

5 environmentally themed exhibitions achieved

1

7. Provide educational awareness through education program

Target:

9 visitor options achieved

9

6. Provide environmentally themed exhibition(s)

Target:

3 cultural exhibitions for 2005/06

1

5. Provide a range of visitor experience options

Target:

1,392 function/activity attendees for 2005/06

1,200

4. Provide cultural exhibition(s)

Target:

788 friends of the Aquarium for 2005/06

500

3. Build levels of number of people attending functions and/or activities

Target:

103,132 attendances in 2005/06

26 volunteers for 2005/06

15

Napier i-Site 1. Achieve growth in visitor numbers through the Centre

Target:

330,000

2. Achieve new and renewed paid operator displays

Target:

4,090 information packs distributed in 2005/06

4,500

4. Provide advisory services to tertiary education

Target:

392 new and renewed paid operator displays for 2005/06

300

3. Distribute information packs

Target:

354,015 visitors for 2005/06

3 tertiary education services provided in 2005/05

1

Kennedy Park 1. To achieve growth in room nights booked for tour groups, conference groups, school groups, sports teams and free independent travellers

Target:

Page 64

35,636 room nights achieved for 2005/06

35,350

Napier City Council Annual Report 2005/06

Tourism and City Business Development ...

Financial Summary Budget 05/06 Activity ($000) 444 405 269 171 491

Business Facilitation Napier City Promotion Tourism Facilitation Marineland of NZ National Aquarium of NZ

264

Napier i-Site

(528) 1,516 142 1,658

Kennedy Park Total Net Operating Capital Expenditure [2] Funding Required

Actual 05/06 ($000) Operational Costs Operating Depn Interest Total 499 396 269 731 1,421

1 44 351

4 227

500 396 269 779 1,999

Income Net Cost [1] of Service (11) (581) (1,320)

489 396 269 198 679

Actual 04/05 ($000) 402 405 269 131 400

823

28

2

853

(589)

264

230

1,837

197

13

2,047

(2,714)

(667)

(706)

5,976

621

246

6,843

(5,215)

1,628

1,131

146

151

1,774

1,282

1,013 141 620

633 292 357

1,774

1,282

Funded By 868 283 507 1,658

[1]

Non Targeted Rates Special Funds Depreciation (non funded) Total

Summary of Income User Charges

3,766

Subsidies and Grants Other Income

62 1,387

Total Income [2]

5,215

Capital Expenditure Marineland 3 Minor Capital Provision

2

National Aquarium 12 Minor Capital Provision 27 Capital Provision

23 -

Napier i-Site 5 Minor Capital Provision

28

Kennedy Park 95 Minor Capital Provision 142 Total

Napier City Council Annual Report 2005/06

93 146

Page 65

WATER AND WASTEWATER SERVICES Activities

Key Issues

The Water and Wastewater Services Group comprises:

Cross Country Drain

Stormwater Management

The Cross Country Drain, which began construction in 2006, will run from the Napier Hastings expressway adjacent to Ulyatt Road to Te Awa Avenue, where the stormwater will be pumped to the foreshore discharging to the sea.

• • •

Stormwater Mains Open Drains Pump Stations (NCC and HBRC managed)

226 km 58 km 11

Council provides and maintains a stormwater disposal system for the City with the aim to minimise the effects of flooding. The system consists of open drains, stormwater mains and pump stations with about three quarters of the City reliant on pumped systems for stormwater drainage.

Wastewater Management • • • • •

Pump Stations 42 Sewer Mains 362 km Milliscreen Plant 1 (Awatoto) Marine Outfall 1,600 m % of Population Serviced By Reticulation System 93%

Council provides a safe domestic and industrial sewage collection, screening and disposal system to maintain the community’s health.

The system services the main City area but does not include Meeanee, Jervoistown, residential Awatoto, most of the Bay View and Poraiti. Properties are currently connecting to Stage 1 of the Bay View system.

Works completed to end of June 2006 include the resolution of land purchases, construction of road culverts in Ulyatt and Riverbend Roads and substantial completion of drain excavation between the expressway and Willowbank Avenue.

Advanced Primary Sewage Treatment Construction of an Advanced Primary Treatment Plant, industrial effluent pipeline and biosolids facility, at a cost of $25 million, has been put on hold to consider the biological trickling filter treatment process that will be used in Hastings. This is a new treatment process and it will take some time to assess its suitability for Napier.

Bay View Sewerage Stage I (the village) of sewerage reticulation and disposal for Bay View was completed in 2003/04. Council indicated it would consider extending the scheme to stages II and III as opportunities arose or circumstances changed.

Water Management • • • • • • •

Annual Water Consumption Number of Wells Ground Water Pump Stations Booster Pump Stations Reservoir Sites Storage Facilities Mains (40mm - 450 mm diameter)

9.8 million m3 10 10 8 8 28 million litres 439 km

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 artesian aquifer and reticulated to the Napier urban area and to Bay View. The Heretaunga Plains aquifer is free from harmful contamination and no water treatment is required.

Council has a programme in place to manage the usage of water, a precious natural resource, to minimise wastage and shortages.

Page 66

Napier City Council Annual Report 2005/06

Water and Wastewater Services ...

Performance Measures for 2005/06 Performance Measures

Results

Stormwater Management 1. % residents satisfied with “Stormwater” in NRB opinion survey

Target:

85%

2. Compliance with requirements of resource consents

Target:

Very Satisfied Fairly Satisfied Not Very Satisfied Don’t Know

35% 48% 12% 5%

100% of requirements were complied with in the 2005/06 year.

100%

3. % time total pumping capacity available

Target:

The NRB Survey carried out in July 2006 showed 83% resident satisfaction with Stormwater.

95%

Total pumping capacity was available for 100% of the time in 2005/06.

Wastewater Management 1. % residents satisfied with ‘Wastewater’ in NRB opinion survey

Target:

75%

2. Compliance with Resource Consent Requirements for wastewater outfall

Target:

Very Satisfied Fairly Satisfied Not Very Satisfied Don’t Know

41% 45% 7% 7%

100% of requirements were complied with in the 2005/06 year.

100%

3. Number of reticulated properties that are unable to dispose of wastewater, due to stormwater infiltration, for longer than 6 hours

Target:

The NRB Survey carried out in July 2006 showed 86% resident satisfaction with Wastewater.

Zero properties for 2005/06.

Zero

Water Management 1. % of distribution mains (≥100mm diameter) cleaned.

Target:

20%

2. % residents satisfied with ‘Water Supply’ in NRB opinion survey

Target:

90%

3. Compliance with Resource Consent Requirements

Target:

100%

4. Compliance with monitoring and bacteriological requirements of NZ Drinking Water Standards 2000

Target:

21.9% of mains cleaned in 2005/06.

The NRB Survey carried out in July 2006 showed 94% resident satisfaction with Water Supply.

Very Satisfied Fairly Satisfied Not Very Satisfied Don’t Know

61% 33% 4% 2%

100% compliance with overall water take. Marginally exceeded volume that is allowed to be taken at one of the smaller bores (Riverside Park).

100% compliance.

100%

Napier City Council Annual Report 2005/06

Page 67

Water and Wastewater Services ...

Financial Summary Actual 05/06 ($000) Operational Costs Operating Depn Interest Total

Budget 05/06 Activity ($000) 2,133 Stormwater 4,151 Wastewater 2,608 Water

Income Net Cost [1] of Service

Actual 04/05 ($000)

1,009 2,056 1,991

1,188 2,386 1,046

211 243 129

2,408 4,685 3,166

(16) (431) (437)

2,392 4,254 2,729

1,860 3,561 2,381

5,056

4,620

583

10,259

(884)

9,375

7,802

6,057

9,983

15,432

17,785

2,113 Non Targeted Rates

3,483

1,551

6,750 Targeted Rates [3]

6,401

6,196

3,873 Loans 4,786 Special Funds 889 Vested Assets

951 2,352 2,245

861 6,943 2,234

15,432

17,785

8,892 Total Net Operating 9,519 Capital Expenditure [2] 18,411 Funding Required Funded By

18,411 Total

[1]

[2]

Summary of Income User Charges Other Income

872 12

Total Income

884

Capital Expenditure Budget 05/06 ($000)

Actual 05/06 ($000) Stormwater

5,405 301 105 660 10 -

Cross Country Drain & Pumping Station Saltwater Creek Bank Improvements Upgrade Stormwater Bay View Upgrading Stormwater Catchments Georges Drive Drain Minor Capital Items

236 Renewals

1,237 1 37 498 16 17 38

332 Vested Assets

965

Wastewater - Advanced Sewage Treatment 22 Western Sewage Pumping Main 51 Taradale Rd Pump Station and Main 721 Renewals 170 170 395 Vested Assets

Page 68

Pipes Pumping Equipment Milliscreen Replacement Programme

1,047 398 47 111 899

Napier City Council Annual Report 2005/06

Water and Wastewater Services ...

Budget 05/06 ($000)

Actual 05/06 ($000) Water

172 New Reservoir Bay View - Minor Capital Items 52 Renewals 16 449 90

Pump Stations Meters Pipes Capital Associated with I.A.R.

162 Vested Assets 9,519 Total

[3]

30 14 6 309 7 380 6,057

Targeted Rates Sewerage UAC Water Supply UAC Total

Napier City Council Annual Report 2005/06

4,174 2,227 6,401

Page 69

SUPPORT SERVICES Council has a number of Business Units of a corporate or support nature. These units provide the technical and support services necessary for the function of Council’s activities and business units.

Costs of the support units are reallocated to activities either as overheads based on the support each activity receives, or recharged direct on a usage basis.

Support Units includes the Works Depot units which provide the support for the Utilities and Reserves divisions including a store and mechanical workshop. Design Services provides scientific and technical services to other Council departments ensuring the community receives engineering services of maximum quality and safety.

Allocation of Costs: The costs of the following support units are reallocated on an overhead basis: Budget 05/06 ($000) 523 61 493 20 180 177 848 1,124 302 195 401 77 541

Asset Administration Cafeteria Chief Executive Cleaning Services Community Development Administration Corporate Services Management Council Finance Human Resources Information Services Planning Support Services Property Support Secretarial Services

4,942 TOTAL

Actual 05/06 ($000)

Actual 04/05 ($000)

698 61 530 29 248 236 819 1,475 412 183 566 37 611

496 61 372 18 177 186 833 1,117 300 167 408 44 527

5,905

4,706

568 594 943 776 4,318 1,834 641 189 5,778

561 557 987 694 4,132 1,575 651 184 6,925

15,641

16,266

The costs of the following support units have been recharged direct to delivery business units on a usage basis: 574 594 1,022 614 3,926 1,432 640 145 6,206

Asset Information Technology Corporate Information Technology Design Services Mechanical Services Parks Operations Plant and Vehicles Services Administration Stores Utilities Operations

13,985 TOTAL

Capital Expenditure General Provision 61 Minor New and Replacement Capital Items Plant and Vehicle 634 Replacement of Mobile Plant and Vehicle 59 42 12 15 -

Corporate I.T. PC and Printer Replacement Software Replacement and Upgrades Corporate I.T. Network Reporting for the LTCCP Microsoft Exchange

823 Total

Page 70

192 753 36 7 14 4 32 1,038

Napier City Council Annual Report 2005/06

Glossary of Terms Activities and Activity Groups

Infrastructural Assets

The main elements of the Council's services offered to the Napier community are divided into Activities. For ease of readability in the overview summaries the Activities are combined into eight groups.

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.

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 the goals determined by the community that it believes are important for its present and future economic, social, cultural and environmental well-being.

Council Controlled Organisations Organisations in which one or more local authorities control 50 per cent or more of the voting rights or have the right to appoint 50 per cent or more of the directors.

Depreciation Depreciation in accordance with the Statement of Accounting Policies is included in the cost of significant activities.

Financial Contributions The share of the cost of new developments and subdivisions met by developers.

Napier City Council Annual Report 2005/06

Infrastructural Assets 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.

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 Customer Satisfaction Survey (CommunitrakTM) A wide ranging customer satisfaction survey prepared by NRB (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.

Restricted Assets Those assets which cannot be disposed of because of legal or other restrictions and that provide a benefit or service to the community. These include reserves vested under the Reserves Act and endowments or other property held in trust for specific purposes.

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.

Page 71