Napier City Council Annual Report 2008/2009

ISSN 1770-9847

Napier City Council Annual Report 1 July 2008 to 30 June 2009

Adopted 21 October 2009

Welcome to the Napier City Council's Annual Report for 2008/09 This Annual Report is our way of being accountable to you. It sets out what we have achieved in the last year and looks at the progress we have made in providing the sort of city that you have told us is important to you.

This Annual Report compares our achievements and progress to what was planned to be achieved in our Annual Plan 2008/09, which was part of our 2006-16 Long Term Council Community Plan. The recently adopted 2009/19 Ten Year Plan is our City business plan and the Council's key strategic document.

This applies from 1 July 2009 and builds on the 2006-16 LTCCP. It outlines the Council's policies and programmes and the financial implications of these.

Under the Local Government Act all Councils are required to produce an Annual Report and for certain information to be audited, such as the financial statements. The audit has been completed successfully by Audit New Zealand and their audit opinion can be found on page 15.

Map of Napier City Council Funded Community Assets 1 Regional Museum 13 Sports Parks 4 Sports Complexes 1 Inner Harbour with Berths 1 Civil Defence 1 Community House 50 Greenbelt Reserves 7 Community Halls 1 National Aquarium 2 Libraries 2 Pool Facilities 1 Visitor Information Centre 1 Municipal Theatre 1 Conference Centre 35 Neighbourhood Parks 22km Pathways 43 Public Toilets

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Napier City Council Annual Report 2008/09

How the Annual Report fits into the planning process Community Outcomes What the community values now and wants in the future.

Ten Year Plan A forward-thinking plan with a 10 year outlook that sets out the future direction and costs of running the kind of city the community wants.

Annual Plan Sets out how much we will spend, what the rates will be for the year ahead and our work programme for the 12 month period from 1 July to 30 June.

Annual Report

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Ten Year Plan Annual Plan Annual Report

Napier City Council Annual Report 2008/09

Page 3

What you will find in the Annual Report Introduction This part includes the Mayor and Chief Executive's message along with a financial summary and key statistics. The auditor's report and the statement of compliance and responsibility finish off this part.

Financial Statements This part presents detailed financial statements and accounting policies for the Council. The financial statements provide information about the Council's assets, liabilities, income and expenditure.

Activity Statements This part explains the activities that the Council is engaged in and reports on achievements and progress in delivering these services to the community over the last year. It details the costs and resources applied to these activities together with non-financial performance targets and results and key issues. Where applicable comparisons to budgets and last year's actuals are provided.

Appendices This final part has some extra information that may be of interest to the reader in relation to Council Controlled Organisations, Maori Contributions to Decision Making Processes and a Glossary of Terms.

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Napier City Council Annual Report 2008/09

Contents Map of Napier City

2

How the Annual Report fits into the planning process

3

What you will find in the Annual Report

4

PART 1 Introduction

6

Mayor and Chief Executive’s Message

7

Mayor and Councillors as at 30 June 2009

8

Financial Summary

9

Key Statistics

10

Community Outcomes

11

Statement of Compliance and Responsibility

14

PART 2 Financial Statements

18

Statement of Financial Performance

19

Statement of Changes in Equity

19

Statement of Financial Position

20

Statement of Cash Flows

21

Notes to the Financial Statements

22

PART 3 Activity Statements

61

Democracy and Governance

62

Recreation

64

Social and Cultural

69

City Promotion

79

Planning and Regulatory

85

Roading

92

Water and Wastes

96

Property Assets

102

Support Services

105

PART 4 Appendices

106

Council Controlled Organisations

107

Maori Contribution to Decision-Making Process

108

Glossary of Terms

109

Napier City Council Annual Report 2008/09

Page 5

PART 1 Introduction

Mayor and Chief Executive’s Message A successful year for Napier City means we’ve responded to your needs and balanced our spending well with services, facilities and improvements to the environment of our city.

This year the Council took a cautionary approach to expenditure because of the 2007/08 downturn.

The significant surplus shown has at its core, careful restrained financial decisions.

We’ve continued the initiative to step up on capital work which has been appreciated and helpful to the private sector and contractors in Napier. This has flowed on to providing some employment in the highest risk areas of construction and building.

What have we completed or nearly finished: • Taradale Library redevelopment • Cross Country Drain and Pumping Station • McLean Park redevelopment • Pathways around the Port of Napier and Ahuriri • Working drawings for the Hawke's Bay Museum and Art Gallery • Dickens Street upgrade • Dalton Street stormwater replacement project The Annual Report is just one measure of how we’ve delivered on our work programme for the year.

You have, in surveys, compared Napier very favourably with other city councils in terms of Council’s effort with stand outs being our environment, (parks, sportsgrounds, gardens, trees) library services, water supply, tourism promotion, refuse, sewage and our cemeteries.

We’ve continued to work closely with Hastings and the Regional Council on many issues. The successful corporatisation of the Airport was completed and the important work of the regional growth study continued.

Thanks to all our residents, councillors and staff for making Napier a city that has a heart and a great place to live.

Barbara Arnott MAYOR

Napier City Council Annual Report 2008/09

Neil Taylor CHIEF EXECUTIVE

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Mayor and Councillors as at 30 June 2009

Back Row (L-R): Cr Rob Lutter (Taradale Ward), Cr Bill Dalton, Cr Mark Herbert (Ahuriri Ward), Cr Keith Price (Onekawa–Tamatea Ward), Cr Tony Jeffery, Cr Dave Pipe (Nelson Park Ward), Cr Harry Lawson Middle Row (L-R): Cr John Cocking, Cr Faye White, Cr Kathie Furlong, Cr Tania Wright (Taradale Ward), Cr Maxine Boag (Nelson Park Ward) Front: Mayor Barbara Arnott

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

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Napier City Council Annual Report 2008/09

Financial Summary Financial Condition Indicators

Rates revenue Net surplus Working capital Public debt

Actual 2008/09 $000

Budget 2008/09 $000

Actual 2007/08 $000

41,724

41,145

39,708

4,441

16,720

18,491

27,703

22,875

32,248

7,069

24,739

11,627

1,288,722

1,259,649

1,287,915

55.56%

43.40%

43.94%

Public debt as a percentage of total assets

0.55%

1.96%

0.90%

Proportion of rates revenue applied to service debt (%)

7.44%

13.63%

8.71%

Total assets Proportion of rates revenue to total revenue (%)

The financial performance measures reflect positively on Council's overall performance and financial position at 30 June 2009. 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 2 of the Financial Statements.

How Rates Were Spent The chart shows the split of rates expenditure between Council's activities. A negative percentage indicates a contribution to rates.

Roading Wastewater (Sewerage) Libraries Water Supply Reserves Stormwater Sportsgrounds Solid Waste (Refuse) Democracy & Governance Napier Aquatic Centre HB Museum and Art Gallery Community Development Public Toilets Development Control Planning Policy City Promotion Grants City & Business Promotion Marineland Building Consents Aquarium Cemeteries Environmental Health Civil Defence Napier i-Site Municipal Theatre War Memorial Centre Halls Safety Watch Animal Control Safer Community Inner Harbour Marine Parade Pools Par 2 Golf Retirement & Rental Housing Property Holdings Kennedy Park

27.9% 9.4% 7.8% 6.6% 6.5% 6.1% 5.7% 5.2% 4.6% 2.5% 2.3% 1.9% 1.9% 1.8% 1.7% 1.5% 1.4% 1.3% 1.3% 1.1% 0.9% 0.9% 0.8% 0.8% 0.6% 0.6% 0.5% 0.5% 0.5% 0.3% 0.2% -0.1% -0.1% -1.1% -1.5% -2.3%

Napier City Council Annual Report 2008/09

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Key Statistics 30 June 2009

30 June 2008

Area (ha)

10,364

10,364

Population (2006 Census)

57,100

57,100

24,236

24,061

358

352

10,113,764,650

9,459,156,200

Net capital value (i.e. capital value of rateable property)

9,649,485,200

9,011,393,450

Gross land value

4,826,394,800

4,514,224,550

Net land value (i.e. land value of rateable property)

4,634,509,350

4,329,006,600

2008

2008

46,507,307

43,319,540

Land Value

Land Value

Public debt outstanding (excluding finance leases)

7,054,500

11,562,300

Loan redemption reserves

1,142,749

2,223,612

67,362,000

58,625,000

134,040,333

142,092,037

53,379,436

71,162,583

1989

1989

Area and Population

Valuation Rateable properties (no. of) Non-rateable properties (no. of) Gross capital value

Date of last revision of values Rates and Rating Total rates struck (incl. GST) System of rating Public Debt

Unexercised loan authorities Building Consents Value of consents for year Value of consents for residential properties Date of Constitution of City

Average Residential Rates 1,428 1,337 1,520 1,467 1,533 1,455 1,536 1,476 1,623 1,529 1,636 1,566 1,640 1,569 1,645 1,484 1,679 1,570 1,689 1,612 1,593 1,506

Timaru Napier Hamilton Invercargill Hastings Wanganui Tauranga Palmerston North Rotorua Whangarei AVERAGE 2008/09 Page 10

2007/08 Napier City Council Annual Report 2008/09

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 Long Term Council Community Plan (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.

A Regional Strategic Coordination Group (RSCG) has been formed comprising 14 member organisation, Councils and non Government organisations. This group coordinates monitoring and reporting of the Community Outcomes. The group has produced its first monitoring report in May 2009 which is a report at the region wide level. Copies of the report are available on the Napier City Council website. District level information is to be investigated and developed and included in future reports.

The Council considers that meeting its service level targets constitutes its major role as a contributor to the progress of Community Outcomes for the 2008/09 year. The contributions of Council's activities to the community outcomes are as follows:

Economic Wellbeing Outcome - A strong prosperous and thriving economy.

Democracy and 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 Pools: The complex provides well presented and modern aquatic facilities and local business opportunities.

Par 2 MiniGolf: Promotes tourism.

Inner Harbour: Facilitates the fishing industry by maximising berth facilities.

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

Municipal Theatre: Provides a facility to accommodate large conferences and events and ticketing services to a range of venues for local, national and international events.

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

Napier City Council Annual Report 2008/09

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

Building Consents: Provides for a range of development opportunities.

Parking Services: Facilitates economic development in CBD and contributes to active marketing of CBD. Property Holdings: Provides leasehold land for commercial and industrial use and letable space in commercial buildings.

City and Business Promotion: 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 Visitor Centre: 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 and support to national and regional sports events.

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

War Memorial Centre: A quality facility is maintained.

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

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

City Development Planning: 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.

Animal Control: Services that are effective in reducing registration costs. Consistent application of the principles of equity and fairness.

Parking Services: Provide accessible quality transportation amenities.

Roading: Roads and footpaths are provided to satisfy public expectations.

Solid Waste: Ease of access through improved facilities (e.g. an increased number of recycling stations and entranceway improvements at the Redclyffe Transfer Station).

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Community Outcomes Stormwater: Maintains pumping stations and the open drains to a standard that will maximise the pumping capacity.

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

Water Supply: The system is flushed and cleaned.

Capacity and storage improvements are made.

Social and Cultural Wellbeing Outcome - Strong regional leadership and a sense of belonging.

Youth Development: Access to resources for young people to pursue cultural and sporting opportunities within their community are provided. Ensure community services and young people are connected through access to information and partnerships.

Safer Community: 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.

Democracy and 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.

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

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

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

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

Kennedy Park: Provides support to local sports organisations.

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

City and Business Promotion: 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.

Libraries: The library service maintains a community information database listing a minimum of 350 community organisations which is electronically available, a Books-on-Wheels Service for the housebound and reading programmes for children and teens.

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

Outcome - Safe and accessible recreational facilities.

Libraries: 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 to use grounds and buildings to capacity.

Napier Aquatic Centre: A safe and well presented aquatic centre is provided whilst the standards are recognised to the highest national standards. Pool water quality is safe for users and meets or exceeds national standards. Pride is installed in the centre by its users and users are assisted in a positive recreational experience.

Napier Aquatic Centre: 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.

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

Retirement and Rental Housing: Applies the principles of equity and fairness to ratepayers.

Par 2 MiniGolf: Provides an attractive and relaxed leisure environment.

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

Inner Harbour: Safe accessible water-based recreational opportunities are provided.

Community Development: Administrative support and liaison services provided to community based groups and committees. Agreed financial assistance and resources provided to community groups, social service organisations and agencies in the city. Monitor and report on social and related conditions in Napier.

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

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

Napier City Council Annual Report 2008/09

Community Outcomes War Memorial Centre: Provides a facility for community and commercial hire.

Retirement and Rental Housing: Assistance is available to tenants and they are visited on a regular basis.

National Aquarium of New Zealand: Provides opportunity for a range of visitor experiences.

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

Kennedy Park: Provides facilities for young people and families.

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

Outcome - Communities that value and promote their unique culture and heritage.

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

Libraries: 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.

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 and environmental enhancement.

Water Supply: Provides water suitable for human consumption.

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

Outcome - Safe and secure communities.

Par 2 MiniGolf: Providing culturally themed aspects to Par 2 MiniGolf.

Inner Harbour: The Inner Harbour environment allows safe access to the amenities.

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

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.

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

Community Development: Undertakes 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.

National Aquarium of New Zealand: Provides cultural experience which adds to the intrinsic value of the community.

Napier i-SITE Visitor Centre: Increases knowledge of the local area and what it has to offer.

Environmental Wellbeing Outcome - A lifetime of good health and wellbeing.

Safer Community: 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.

Community Safety: Security patrols are provided in the inner city.

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

Solid Waste: Safeguards environment and community health.

Napier Aquatic Centre: Swimming and other programmes are presented as life skills for individuals to develop to their full potential. Affordable access to high quality activities and educational programmes are provided. This access is for individuals, as well as groups and school users.

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

Marine Parade Pools: An alternative recreation facility which encourages and promotes fitness of residents.

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

Napier City Council Annual Report 2008/09

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

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

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

Burial and Cremation Services: A well maintained and aesthetically pleasing environment for all cemetery users.

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.

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 New Zealand: 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.

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

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

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.

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 2009 fairly reflect the financial position and operations of Napier City Council.

Neil Taylor CHIEF EXECUTIVE 21 October 2009

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Barbara Arnott MAYOR 21 October 2009

Napier City Council Annual Report 2008/09

Audit Report To the readers of Napier City Council’s financial statements and performance information for the year ended 30 June 2009 The Auditor-General is the auditor of Napier City Council (the City Council). The Auditor-General has appointed me, Mark Maloney, using the staff and resources of Audit New Zealand, to carry out an audit. 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 City Council for the year ended 30 June 2009, including the financial statements.

Unqualified Opinion In our opinion: 

The financial statements of the City Council on pages 19 to 60: 

comply with generally accepted accounting practice in New Zealand; and



fairly reflect : 



the City Council’s financial position as at 30 June 2009; 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 62 to 105 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 City 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 21 October 2009, 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,

Napier City Council Annual Report 2008/09

Page 15

Audit Report

performance information 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, performance information 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, performance information 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.

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

We evaluated the overall adequacy of the presentation of information in the financial statements, performance information 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. The financial statements must fairly reflect the financial position of the City Council as at 30 June 2009. 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 meeting the other requirements of Schedule 10 and including that information in the annual report. 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, performance information 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.

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Napier City Council Annual Report 2008/09

Audit Report

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.

Mark Maloney Audit New Zealand On behalf of the Auditor-General Palmerston North, New Zealand

Matters Relating to the Electronic Presentation of the Audited Financial Statements, Performance Information and the Other Requirements This audit report relates to the financial statements, performance information and the other requirements of Napier City Council for the year ended 30 June 2009 included on Napier City Council’s website. The Napier City Council is responsible for the maintenance and integrity of Napier City Council’s website. We have not been engaged to report on the integrity of Napier City Council’s website. We accept no responsibility for any changes that may have occurred to the financial statements, performance information and the other requirements since they were initially presented on the website.

The audit report refers only to the financial statements, performance information and the other requirements named above. It does not provide an opinion on any other information which may have been hyperlinked to or from the financial statements, performance information and the other requirements. If readers of this report are concerned with the inherent risks arising from electronic data communication they should refer to the published hard copy of the audited financial statements, performance information and the other requirements as well as the related audit report dated 21 October 2009 to confirm the information included in the audited summary annual presented on this website.

Legislation in New Zealand governing the preparation and dissemination of financial information may differ from legislation in other jurisdictions.

Napier City Council Annual Report 2008/09

Page 17

PART 2 Financial Statements for the year ended 30 June 2009

Statement of Financial Performance for the year ended 30 June 2009

Note

Actual 2009 $000

Budget 2009 $000

Actual 2008 $000

Income Rates revenue

4

41,724

41,145

39,708

Finance income

9

3,034

2,132

3,661

Other revenue

5

38,557

50,338

46,023

Other gains/(losses)

6

(8,222)

1,200

982

75,093

94,815

90,374

7

23,402

22,070

22,005

Total Income Expenditure Employee benefit expenses

17, 18

17,577

17,680

16,131

Other expenses

Depreciation and amortisation

8

29,133

36,864

32,678

Finance costs

9

747

1,621

1,236

70,859

78,235

72,050

4,234

16,580

18,324

207

140

167

4,441

16,720

18,491

-

-

-

4,441

16,720

18,491

Actual 2009 $000

Budget 2009 $000

Actual 2008 $000

1,260,549

1,204,922

1,113,013

Total Operating Expenditure Operating surplus/(deficit) before tax Share of associate surplus/(deficit)

20

Surplus/(Deficit) before tax Income tax expense

10

Surplus/(Deficit) after tax

Statement of Changes in Equity for the year ended 30 June 2009

Note

Balance at 1 July 2008 Property, plant and equipment Revaluation gains/(losses) taken to equity

25

-

-

-

Gain/(loss) on property valuations

25

(1,200)

-

129,013

25

-

-

32

Financial assets at fair value through equity Valuation gains/(losses) taken to equity

(1,200)

-

129,045

Surplus/(Deficit) for the year

Net income/(expense) recognised directly in equity

4,441

16,720

18,491

Total recognised income/(expense) for the year ended 30 June

3,241

16,720

147,536

1,263,790

1,221,642

1,260,549

Balance at 30 June 2009

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

Napier City Council Annual Report 2008/09

Page 19

Statement of Financial Position as at 30 June 2009

Note

Actual 2009 $000

Budget 2009 $000

Actual 2008 $000

Cash and cash equivalents

11

5,805

6,672

3,468

Debtors and other receivables

12

9,918

7,500

9,921

Inventories

13

5,144

5,284

5,410

Biological assets

14

240

200

189

Other financial assets

15

21,213

14,000

30,203

Non-current assets held for sale

16

-

-

-

42,320

34,196

49,191

Assets Current assets

Total current assets Non-current assets Property, plant and equipment

17

1,195,699

1,163,874

1,180,461

Intangible assets

18

286

318

172

-

3,705

-

Inventories Investment property

19

37,400

45,626

44,928

Investment in associates

20

3,124

3,875

3,771

Other financial assets

15

9,893

8,055

9,392

Total non-current assets

1,246,402

1,225,453

1,238,724

Total assets

1,288,722

1,259,649

1,287,915

Liabilities Current liabilities Creditors and other payables

21

10,756

7,818

9,764

Employee benefit liabilities

22

2,838

2,500

2,620

Borrowings

23

1,023

1,003

4,559

14,617

11,321

16,943

Total current liabilities Non-current liabilities Provisions

24

2,386

950

1,548

Employee benefit liabilities

22

1,883

2,000

1,807

Borrowings

23

6,046

23,736

7,068

Total non-current liabilities

10,315

26,686

10,423

Total liabilities

24,932

38,007

27,366

Equity Retained earnings

25

659,565

659,648

653,319

Other reserves

25

604,225

561,994

607,230

Total public equity

1,263,790

1,221,642

1,260,549

Total liabilities and equity

1,288,722

1,259,649

1,287,915

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

Page 20

Napier City Council Annual Report 2008/09

Statement of Cash Flows

for the year ended 30 June 2009 Note

Actual 2009 $000

Budget 2009 $000

Actual 2008 $000

41,440

41,145

39,590

3,655

1,882

2,917

24

-

19

Receipts from other revenue

36,690

50,588

41,996

Goods and services tax (net)

(814)

-

(339)

(50,001)

(56,629)

(50,042)

(798)

(1,621)

(1,289)

30,196

35,365

32,852

934

1,320

1,320

-

-

1,325

57,754

1,458

43,953

(32,743)

(40,814)

(19,482)

Cash flows from operating activities Receipts from rates revenue Interest received Dividends received

Payments to suppliers and employees Interest paid Net cash from operating activities

29

Cash flows from investing activities Proceeds from sale of property, plant and equipment Proceeds from sale of non-current assets held for sale Proceeds from withdrawal of investments Purchase of property, plant and equipment Purchase intangible assets

-

-

(98)

Acquisition of investments

(49,245)

(30)

(58,519)

Net cash from investing activities

(23,300)

(38,066)

(31,501)

-

2,749

-

(4,508)

(4,516)

(7,008)

(51)

-

(180)

(4,559)

(1,767)

(7,188)

Net (decrease)/increase in cash, cash equivalents and bank overdrafts

2,337

(4,468)

(5,837)

Cash, cash equivalents and bank overdrafts at 1 July 2008

3,468

11,140

9,305

Cash, cash equivalents and bank overdrafts at 30 June 2009

5,805

6,672

3,468

Cash flows from financing activities Proceeds from borrowings Repayment of borrowings Payment of finance lease liabilities Net cash from financing activities

The GST (net) component of operating activities reflects the net GST paid and received with the Inland Revenue Department.

The GST (net) component has been presented on a net basis, as the gross amounts do not provide meaningful information for financial statement purposes.

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

Napier City Council Annual Report 2008/09

Page 21

Notes to the Financial Statements for the year ended 30 June 2009

1. Statement of Accounting Policies for the year ended 30 June 2009 1.1

Reporting Entity

Napier City Council is a New Zealand Council and is governed by the Local Authorities Act 2002.

The accounting policies adopted for preparation of the 2008/09 financial statements comply with the New Zealand equivalents to International Reporting Standards (NZ IFRS) and are set out below. These policies have been consistently applied to the year presented, unless otherwise stated. The financial statements include separate financial statements for Napier City Council (the Council) as an individual entity and its 26% equity share of its associate Hawke’s Bay Airport Authority which is equity accounted.

The primary objective of the Council is to provide goods and services for the community or social benefit rather than making a financial return. Accordingly, the Council has designated itself as a public benefit entity for the purposes of New Zealand equivalents to NZ IFRS. Although the Council’s associate company (Hawke’s Bay Airport Authority) is not classified as a public benefit entity, the Council is considered a public benefit entity for the purposes of New Zealand equivalents to NZ IFRS. The financial statements of the Council are for the year ended 30 June 2009. The financial statements were authorised for issue by the Council on 21 October 2009.

1.2

Basis of Preparation

The financial statements have been prepared in accordance with New Zealand generally accepted accounting practice (NZ GAAP). They comply with New Zealand equivalents to NZ IFRS, and other applicable Financial Reporting Standards, as appropriate for public benefit entities.

These financial statements have been prepared in accordance with the requirements of the Local Government Act 2002: Part 6, Section 98 and Part 3 of Schedule 10, which includes the requirement to comply with New Zealand generally accepted accounting practice (NZ GAAP).

The accounting policies set out below have been applied consistently to all periods presented in these financial statements.

1.3

Changes in Accounting Policies

There have been no changes in accounting policy during the period.

Existing policies have also been detailed in the accounting policies to provide additional clarification for readers of the financial statements.

Standards, amendments and interpretations issued that are not yet effective and have not been early adopted and which are relevant to the Council include: • NZ IAS 1 Presentation of Financial Statements (revised 2007) replaces NZ IAS 1 Presentation of Financial Statements (issued 2004) and is effective for reporting periods beginning on or after 1 January Page 22

2009. The revised standard requires information in financial statements to be aggregated on the basis of shared characteristics and introduces a statement of comprehensive income. The statement of comprehensive income will enable readers to analyse changes in equity resulting from non-owner changes separately from transactions with owners.

The revised standard gives the Council the option of presenting items of income and expense and components of other comprehensive income either in a single statement of comprehensive income with subtotals or in two separate statements (a separate income statement followed by a statement of comprehensive income). The Council is required to adopt this standard for the year ending 30 June 2010, and has chosen to prepare a separate income statement followed by a statement of comprehensive income for the year ending 30 June 2010.

• NZ IAS 23 Borrowing Costs (revised 2007) replaces NZ IAS 23 Borrowing Costs (issued 2004) and is effective for reporting periods beginning on or after 1 January 2009. The revised standard requires all borrowing costs to be capitalised if they are directly attributable to the acquisition, construction or production of a qualifying asset. The revised standard will also require borrowing costs to be considered when revaluing property, plant and equipment to fair value based on depreciated replacement cost. Any necessary adjustments to depreciated replacement carrying cost values will have flow on effects to depreciation expense.

The Council has elected to take advantage of the public benefit entity exemption and will not apply NZ IAS 23.

• NZ IFRS 3 Business Combinations (revised 2008) and the amended NZ IAS 27 Consolidated and Separate Financial Statements are effective for reporting periods beginning on or after 1 July 2009 and must be applied prospectively from that date.

The main changes the revised NZ IFRS 3 and the amended IAS 27 will make to existing requirements or practice are: -- Partial acquisitions – Non-controlling interests are measured either as their proportionate interest in the net identifiable assets (which is the original IFRS 3 requirement) or at fair value.

-- Step acquisitions – The requirement to measure at fair value every asset and liability at each step for the purposes of calculating a portion of goodwill has been removed. Instead, goodwill is measured as the difference at acquisition date between the fair value of any investment in the business held before the acquisition, the consideration transferred and the net assets acquired.

-- Acquisition-related costs – Acquisition related costs are generally recognised as expenses (rather than included in the cost of acquisition).

Napier City Council Annual Report 2008/09

Notes to the Financial Statements for the Year Ended 30 June 2009 -- Contingent consideration – Contingent consideration must be recognised and measured at fair value at the acquisition date.

Subsequent changes in fair value are recognised in accordance with other NZ IFRSs, usually in profit or loss (rather than by adjusting the cost of acquisition).

The Council is required to adopt and comply with, the revised NZ IFRS 3 and the amended NZ IAS 27, for the year ended 30 June 2010 if the Council enters into any business combinations on or after 1 July 2009.

1.4

Historical Cost Convention

These financial statements have been prepared under the historical cost convention, as modified by the revaluation of available for sale financial assets, financial assets and liabilities (including derivative instruments) at fair value through profit or loss, certain classes of property, plant and equipment, investment property and biological assets subject to agricultural activity.

1.5

Principles of Consolidation

1.8

Revenue Recognition

Revenue comprises the fair value for the sale of goods and services, net of rebates and discounts. Revenue is recognised as follows: • Rates Rates are recognised when levied. Penalties and discounts relating to rates are included where applicable.

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

• Traffic and parking infringements Traffic and parking infringements are recognised when tickets are issued.

• Licences and permits Revenue derived from licences and permits are recognised on application.

• Development and financial contributions Development contributions are recognised when invoiced and are no longer refundable.

Associates Associates are all entities over which the Council has significant influence but not control, generally evidenced by holding of between 20% and 50% of the voting rights. Investments in associates are accounted for in the Council financial statements using the equity method of accounting.

• Sales of goods – retail Sales of goods are recognised when a product is sold to the customer. Retail sales are usually in cash or by credit card. The recorded revenue is the gross amount of sale, including credit card fees payable for the transaction. Such fees are included in distribution costs.

Dividends receivable from associates are recognised in the Council’s Statement of Financial Performance.

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

1.6

Joint Ventures

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

1.7

Foreign Currency Translation

Functional and Presentation Currency Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The financial statements are presented in New Zealand dollars, which is the Council’s functional and presentation currency.

All values are rounded to the nearest thousand dollars ($’000).

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

Napier City Council Annual Report 2008/09

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

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

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

• Donated, subsidised or vested assets Where a physical asset is acquired for nil or nominal consideration the fair value of the asset received is recognised as revenue.

• Grants and subsidies Grants and subsidies received in relation to the provision of services are recognised on a percentage of completion basis. Other grants and subsidies Page 23

Notes to the Financial Statements for the Year Ended 30 June 2009 are recognised when receivable. The Council receives the majority of grants and subsidies income from Land Transport New Zealand (LTNZ) which subsidises part of Napier City Council's costs in maintaining the local road infrastructure.

1.9

Income Tax

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

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

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

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

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

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

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

Commitments and contingencies are disclosed exclusive of GST. 1.11 Leases The Council is the Lessee Leases of property, plant and equipment where the Council has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the Page 24

lower of the fair value of the leased property and the present value of the minimum lease payments.

The corresponding rental obligations, net of finance charges, are included in other long term payables. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The interest element of the finance cost is charged to the Statement of Financial Performance over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases are depreciated over the shorter of the asset’s useful life and the lease term.

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

The Council is the Lessor Assets leased to third parties under operating leases are included in property, plant and equipment in the Statement of Financial Position. They are depreciated over their expected useful lives on a basis consistent with similar owned property, plant and equipment.

Rental income (net of any incentives given to lessees) is recognised on a straight line basis over the lease term.

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

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

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

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

Napier City Council Annual Report 2008/09

Notes to the Financial Statements for the Year Ended 30 June 2009 1.14 Inventories

Position date.

Raw materials and stores, work in progress and finished goods Raw materials and stores, and finished goods are stated at the lower of cost and net realisable value costs are assigned to individual items of inventory on the basis of weighted average costs. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

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

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

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

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

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

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

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

1.16 Investments and Other Financial Assets Financial assets at fair value through profit or loss This category has two sub categories: financial assets held for trading, and those designated at fair value through profit or loss on initial recognition. A financial asset is classified as held for trading if acquired principally for the purpose of selling in the short term or if so designated by management. The policy of management is to designate a financial asset if there exists the possibility it will be sold in the short term and the asset is subject to frequent changes in fair value. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if they are either held for trading or are expected to be realised within 12 months of the Statement of Financial Napier City Council Annual Report 2008/09

Available for sale financial assets and fair value through equity Available for sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in noncurrent assets unless management intends to dispose of the investment within 12 months of the Statement of Financial Position date.

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

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

Fair value changes The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Council establishes fair value by using valuation techniques.

These include reference to the fair values of recent arm’s length transactions, involving the same instruments or other instruments that are substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the issuer’s specific Page 25

Notes to the Financial Statements for the Year Ended 30 June 2009 circumstances.

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

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

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

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

Fair value hedge Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the Statement of Financial Performance, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

Cash flow hedge The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in equity in the hedging reserve.

The gain or loss relating to the ineffective portion is recognised immediately in the Statement of Financial Performance.

Amounts accumulated in equity are recycled in the Statement of Financial Performance in the periods when the hedged item will affect profit or loss (for instance when the forecast sale that is hedged takes place).

However, when the forecast transaction that is hedged results in the recognition of a non-financial asset (for example, plant) or a non-financial liability, the gains and Page 26

losses previously deferred in equity are transferred from equity and included in the measurement of the initial cost or carrying amount of the asset or liability.

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

Derivatives that do not qualify for hedge accounting Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are recognised immediately in the Statement of Financial Performance.

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

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

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

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

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

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

Subsequent costs are included in the asset’s carrying Napier City Council Annual Report 2008/09

Notes to the Financial Statements for the Year Ended 30 June 2009 amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Council and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the Statement of Financial Performance during the financial period in which they are incurred.

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

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 2 to 10% Fixed plant and equipment 5 to 20% Mobile plant and equipment 5 to 50% Motor vehicles 10 to 33.33% Furniture and fittings 4 to 20% Office equipment 8 to 66.67% Library bookstock 7 to 25%

Others Grandstands, community and sports halls Sportsgrounds, parks and reserves improvements Buildings on reserves Pools Inner harbour

Roading Base course Surfacings Concrete pavers Footpaths and pathways/walkways Drainage Bridges and structures Road lighting Traffic services and safety

Years

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

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of Financial Performance.

When revalued assets are sold, it is Council’s policy to transfer the amounts included in other reserves in respect of those assets to retained earnings.

Valuation of property plant and equipment As at 30 June 2009, Council’s Property and Equipment are valued as follows: Description

Method of valuation

Investment property

Valued by independent registered valuer M. Penrose, ANZIV, SNZPI, AAMINZ of Telfer Young (HB) Ltd as at 30 June 2009 using fair value. Valuation of this class of asset is performed on an annual basis (see also note 1.21).

Library collections

Valued at depreciated replacement cost in accordance with the guidelines released by the New Zealand Library Association and the National Library in May 2002 for general collections and replacement cost for the Heritage Collection. Library valuations are performed by Dr Robin Watt MA (Hons.) PhD of R J Watt & Associates on an annual basis.

The last valuation was performed in June 2009.

Land under roads

Land under roads were valued based on fair value of adjacent land determined by M. Penrose, ANZIV, SNZPI, AAMINZ of Telfer Young (HB) Ltd as at 30 June 2005. Under NZ IFRS Napier City Council has elected to use fair value of land under roads at 30 June 2005 as deemed cost.

Land under roads are no longer revalued.

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

Water Reticulation Reservoirs Pump stations

56-107 100 25-80

Stormwater Reticulation Pump stations

100 15-75

Sewerage Reticulation Pump stations Milliscreen Outfall

80 15-80 10-80 80

Napier City Council Annual Report 2008/09

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

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

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

The expected lives, in years, of major classes of infrastructural and restricted assets are as follows:

50

Page 27

Notes to the Financial Statements for the Year Ended 30 June 2009 Land and buildings

Infrastructural assets

Restricted assets

Valued by independent registered valuer M. Penrose, ANZIV, SNZPI, AAMINZ of Telfer Young (HB) Ltd as at 30 June 2008 using fair value. Land and buildings are revalued on a three yearly valuation cycle. The carrying values are also reviewed at each balance date to ensure that those values are not materially different to fair value.

Valued by independent registered valuer M. Penrose, ANZIV, SNZPI, AAMINZ of Telfer Young (HB) Ltd as at 30 June 2008 at fair value using depreciated replacement cost method. Infrastructural assets are revalued on a three yearly valuation cycle. The carrying values are also reviewed at each balance date to ensure that those values are not materially different to fair value. If there is a material difference, then the offcycle asset classes are revalued.

All infrastructural asset classes carried at valuation were valued.

Valued by independent registered valuer M. Penrose, ANZIV, SNZPI, AAMINZ of Telfer Young (HB) Ltd as at 30 June 2008 using depreciated replacement cost method. Restricted assets are revalued on a three yearly valuation cycle. The carrying values are also reviewed at each balance date to ensure that those values are not materially different to fair value. If there is a material difference, then the off-cycle asset classes are revalued. All restricted asset classes carried at valuation were valued.

Plant and equipment

Valued in 1994 using market value. Additions are at cost.

Omarunui Landfill

Landfill assets comprise of land, plant and equipment and motor vehicles. All assets are valued at cost less depreciation.

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

Properties leased to third parties under operating leases will generally be classified as investment property unless: • the property is held to meet service delivery objectives, rather than to earn rentals or for capital appreciation;

to the operation of the owner’s business and/or these services could not be provided efficiently and effectively by the lessee in another location; • the property is being held for future delivery of services; • the lessor uses services of the owner and those services are integral to the reasons for their occupancy of the property.

Investment property is carried at fair value, representing open market value determined annually by external valuers. Changes in fair values are recorded in the Statement of Financial Performance as part of other gains/(losses).

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

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

Cost associated with developing or maintaining computer software are recognised as an expense as incurred. Costs that are directly associated with the production of identifiable and unique software products controlled by the Council, and that will generate economic benefits exceeding costs beyond one year, are recognised as intangible assets. Direct costs include the software development employee costs and an appropriate portion of relevant overheads.

Computer software development costs recognised as assets are amortised over their estimated useful lives not exceeding 3 years.

1.22 Impairment of Assets Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment.

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

• the occupants provide services that are integral Page 28

Napier City Council Annual Report 2008/09

Notes to the Financial Statements for the Year Ended 30 June 2009 1.23 Trade and Other Payables These amounts represent liabilities for goods and services provided to the Council prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

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

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

1.25 Borrowing Costs Borrowing costs are recognised as an expense in the period in which they are incurred.

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

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

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. An increase in the provision due to the passage of time is recognised as an interest expense.

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

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

1.28 Employee Benefits Wages and salaries, annual leave and sick leave Liabilities for wages and salaries, including nonmonetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in other payables Napier City Council Annual Report 2008/09

in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for nonaccumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.

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

Retirement benefit obligations Current and former employees of the Council are entitled to benefits on retirement, disability or death from the Council’s multi-employer benefit scheme.

The scheme manager, National Provident Fund, have advised council there is no consistent and reliable basis for allocating the obligation scheme assets and cost of the multi-employer defined benefit scheme to individual participating employers. As a result, the scheme is accounted for as a defined contribution plan and contributions are recognised as an expense as they become payable. Prepaid contributions are recognised as an asset if a cash refund or a reduction in the future payments is available.

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

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

1.30 Equity Equity is the community’s interest in the Council and is measured as the difference between total assets and total liabilities. Equity is disaggregated and classified into a number of reserves.

The components of equity are: -- Retained earnings -- Restricted reserves -- Fair value and hedging reserves -- Asset revaluation reserves Restricted and Council created reserves Restricted reserves are a component of equity generally representing a particular use to which various parts of equity have been assigned. Reserves may be legally restricted or created by the Council.

Restricted reserves are those subject to specific conditions accepted as binding by the Council and which may not be revised by the Council without Page 29

Notes to the Financial Statements for the Year Ended 30 June 2009 reference to the Courts or a third party. Transfers from these reserves may be made only for certain specified purposes or when certain specified conditions are met.

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

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

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

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

Direct costs are charged directly to significant activities.

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

1.33 C r i t i c a l A c c o u n t i n g E s t i m a t e s a n d Assumptions In preparing these financial statements the Council has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations or future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed as follows:

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

Experienced independent valuers perform the Council’s infrastructural asset revaluations.

Critical Judgements in Applying Napier City Council’s Accounting Policies Management has exercised the following critical judgements in applying the Council’s accounting policies for the period ended 30 June 2009: Classification of property The Council owns a number of leasehold land and rental properties. The receipt of market-based rentals from these properties is incidental to the holding of these properties. In the case of residential leasehold properties, there are legal restrictions applying to how council can manage these properties and in the case of rental properties, these are held as part of the Council’s social housing policy or to secure the ability to undertake long term city development projects. As these properties are held for service delivery objectives, they have been accounted for as property, plant and equipment.

Landfill aftercare provision Note 24 discloses an analysis of the exposure of the Council in relation to the estimates and uncertainties surrounding the landfill aftercare provision.

Infrastructural assets There are a number of assumptions and estimates used when performing depreciated replacement cost valuations over infrastructural assets. These include: • the physical deterioration and condition of an asset, for example the Council could be carrying an asset at an amount that does not reflect its actual condition. This is particularly so for those assets which are underground such as stormwater, wastewater and water supply pipes. This risk is minimised by Council performing a combination of physical inspections and condition modelling assessments of underground assets; Page 30

Napier City Council Annual Report 2008/09

Notes to the Financial Statements for the Year Ended 30 June 2009

2. Explanation of Major Variances Against Budget Explanations for major variations from Napier City Council's estimated figures in the 2008/09 Annual Plan are as follows: Statement of Financial Performance Income Income is $19.7m below 2008/09 budget and $15.3m below 2007/08 year in total. Significant items of variance to budget are contained in other revenue and other gains/(losses): a) Other revenue - Parklands residential section sales $7.7m below budget. This is a direct result of the current financial crisis which has significantly impacted property transactions (see also note b) of expenditure variances). b) Other revenue - subsidies from New Zealand Transport Agency are $3.3m below budget for the year. This is a result of the delay in works related to the Prebensen Drive four–laning project. c) Other gains/(losses) are $9.4m below budget. The main item in this income classification is the loss on revaluation of investment property. This non-current asset is assessed to have fallen $7.5m in value during the last financial year. It had been projected, for budget purposes, that these assets would gain in value $1.2m. This diminution in value is a direct result of the current financial crisis' impacts on property values.

Expenditure Total expenditure is $7.4m below budget and $1.2m below 2007/08 actual outcome. Significant items of variance are as follows: a) Employee benefit expenses were $1.3m or 6% above budget and $1.4m above 2007/08. This change is due to increases in Full Time Equivalents 'FTE's' hours worked 4% and an increase in the average hourly cost per FTE of 2%. FTE hours have increased for two main reasons. These are, a management decision on the basis of total lower cost to Council, to employ staff in some specialist areas rather than employ contractors. In addition FTE's were required as a result of changes to the Holidays Act. 2008/09 is the first full financial year following the increase in Annual Leave from 3 to 4 weeks. Some additional staff were required to fill positions while staff were on leave. b) Other expenses are $7.7m below budget. $4.7m due to lower costs related to residential sections at Parklands.

Costs have fallen in line with reduced sales and the rate of development of the subdivision has also been reduced in line with market demand. Additionally, $2.7m of internal finance charges were included for budget. These are eliminated in the Annual Report for financial reporting.

Statement of Financial Position Current Assets Significant variances in current assets are: a) Other financial assets are $7.2m above budget. This is a result of an actual opening cash and financial assets position for 2008/09 at $7.1m above the budget opening position.

Non-Current Assets Significant variances in non-current assets are: a) Property, plant and equipment are $31.8m above budget. This is attributable to an opening property, plant and equipment value $38.4 above the opening value used in the preparation of the 2008/09 budget. This opening variance is a combination of the actual revaluation of assets undertaken in 2007/08 at $54m higher than expected at the time the budget was prepared and lower capital expenditure during 2007/08 than forecast. The budget assumption for capital additions in the 2007/08 year was $14.4m above the actual additions for the period. b) Inventory variance in non-current assets relates to Parklands subdivision. With the level of activity experienced in 2007/08 the 2008/09 budget anticipated the commencement of a second area of development opening up.

The budget anticipated transfer of land and commencement of development of this new area. However, with the slow down in the market, development of sections at the Parklands subdivision has been slowed and is managed to meet market demand for residential sections. c) Investment properties are revalued annually and the 30 June 2009 valuation of these is lower than budget expectations. This reflects current economic conditions and the associated decreases in both residential and commercial property values. d) Other financial assets (current and non-current) were above budget due to higher cash reserves than anticipated and other financial assets classified as cash and cash equivalents for budget.

Napier City Council Annual Report 2008/09

Page 31

Notes to the Financial Statements for the Year Ended 30 June 2009

Current Liabilities Significant variances in current liabilities are: a) Creditors and other payables are above that anticipated in the 2008/09 budget. This is a result of a difference in timing of capital expenditure between that expected in the budget and when the expenditure actually occurred.

Three significant capital projects (the Graeme Lowe Stand in McLean Park, Taradale Library and Cross Country Drain) had significant work undertaken in June 2009.

Non-Current Liabilities Significant variances in non-current liabilities are: a) Provisions were above budget due to support to sports clubs by financial guarantees extended in 2008/09 and additional accruals for the Council's share of Omarunui Landfill post closure costs. These items were not anticipated in the budget process. b) Borrowings are $17m lower than budget for the period. This arises from loan funds budgeted but not yet drawn for projects planned to be in progress or completed either in 2008/09 or earlier. Funding of projects by internal loan, when cashflow requirements permit, have also reduced actual external borrowings required compared to the position forecast when the budget was prepared.

Equity Significant variances in equity are: a) Other reserves are $41.1m above budget at 30 June 2009. As for property, plant and equipment above, this variance is a result of 2007/08 asset valuations above what was forecast in the 2008/09 budget process.

Statement of Movements in Equity The major variation in statement of movements in equity is the below budget after tax surplus of $13m. This variance is the result of lower than budget income $20m and lower than budget expenditure $7m as outlined above for statement of financial performance.

Page 32

Napier City Council Annual Report 2008/09

Notes to the Financial Statements for the Year Ended 30 June 2009

3. Summary Cost of Services Actual 2009 $000

Budget* 2009 $000

Actual 2008 $000

2,000

2,367

1,752

Income Recreation Social and Cultural

6,490

5,790

5,849

City Promotion

5,735

6,125

6,335

Planning and Regulatory

4,009

3,952

3,909

Roading

3,744

7,418

4,026

Water and Wastes

14,881

14,832

14,407

Property Assets

(1,586)

13,828

11,781

Total activity income

35,273

54,312

48,059

Non-targeted rates

30,076

29,606

28,685

Other income

8,891

10,897

13,630

Total Income

74,240

94,815

90,374

1,784

1,920

1,907

Expenditure Democracy and Governance Recreation Social and Cultural City Promotion Planning and Regulatory

9,330

8,780

8,035

13,253

13,276

12,880

7,653

8,030

7,593

5,488

4,950

5,127

Roading

14,286

14,442

12,607

Water and Wastes

16,635

17,521

16,355

3,375

8,203

8,098

71,840

77,122

72,602

(2,267)

-

(1,924)

Other internal expenditure

(256)

-

(489)

Other expenses

1,578

1,113

1,861

70,859

78,235

72,050

Property Assets

Interest on internal borrowings

Total Operating Expenditure

Total interest expense as per Note 9 Finance Income and Finance Costs is included in the cost of services expenditure above and in the Statement of Service Performance for Activity Groups.

The 2007/08 values have been restated in line with the 2008/09 classifications for interest on internal borrowings, other internal expenditure and other expenses. *The 2009 budget values have been restated to include UAC budget revenue as attributable to each activity in line with actual results.

Napier City Council Annual Report 2008/09

Page 33

Notes to the Financial Statements for the Year Ended 30 June 2009

4. Rates Revenue Actual 2009 $000

Actual 2008 $000

30,076

28,685

Water

3,233

2,973

Sewerage

6,638

6,387

Refuse and Sanitation

Non-targeted rates Targeted rates attributable to activities

1,461

1,336

Roading

164

175

Marketing

152

152

41,724

39,708

Total revenue from rates Rates remissions Rates revenue net of remissions

(386)

(460)

41,338

39,248

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

5. Other Revenue Actual 2009 $000

Actual 2008 $000

User charges

4,680

4,514

Land Transport NZ and other government grants

3,831

4,103

Regulatory revenue

2,306

2,402

924

1,008

3,713

3,689

Rental income from investment properties Other rental income Infringements and fines

768

711

Rendering of services

1,489

2,060

Retail and product sales

8,146

8,233

Omarunui Landfill joint venture

1,410

1,407

Sales residential development

3,516

8,782

Other income

637

199

Grants and donations

519

765

Petrol tax

384

422

Vested assets – Parklands Residential Development

2,424

2,274

Vested assets – other

2,207

2,082

Financial and development contributions – other

1,579

3,353

24

19

38,557

46,023

Dividend income Total other revenue Interest Revenue is included in Note 9 for 2008/09 in accordance with NZ IFRS 7.20(b).

Page 34

Napier City Council Annual Report 2008/09

Notes to the Financial Statements for the Year Ended 30 June 2009

6. Gains/(Losses) Actual 2009 $000

Actual 2008 $000

(176)

173

(7,528)

502

Non-financial instruments Gain/(loss) on revaluation of library bookstock Gain/(loss) on revaluation of investment properties Gain/(loss) on sale of assets

75

423

(708)

(231)

115

75

Total non-financial instruments gains/(losses)

(8,222)

982

Total gains/(losses)

(8,222)

982

Actual 2009 $000

Actual 2008 $000

22,987

21,819

121

96

Gain/(loss) on disposal of assets Fair value gain/(loss) on livestock

7. Employee Benefit Expenses

Salaries and wages Employer contributions to multi-employer defined benefit plans Increase/(decrease) in employee benefit liabilities

294

90

23,402

22,005

Actual 2009 $000

Actual 2008 $000

114

102

79

1

-

-

26

21

5

3

178

182

Other operating expenses

28,731

32,369

Total other expenses

29,133

32,678

Total employee benefit expenses

8. Other Expenses

Audit fees – financial statement audit Audit fees – Ten Year Plan audit Audit fees – IFRS audit Donations Bad debts written off Rental expense on operating leases

Napier City Council Annual Report 2008/09

Page 35

Notes to the Financial Statements for the Year Ended 30 June 2009

9. Finance Income and Finance Costs Actual 2009 $000

Actual 2008 $000

2,313

2,912

709

685

Finance income Interest income: – term deposits and call accounts – local authority stock – sinking fund

12

64

3,034

3,661

– interest on external borrowings

746

1,231

– interest on internal borrowings

2,267

1,924

Total interest expense

3,013

3,155

Total finance income

Finance costs Interest expense:

– discount unwind on provisions

-

-

1

5

(2,267)

(1,924)

Total finance costs

747

1,236

Net finance income

2,287

2,425

Actual 2009 $000

Actual 2008 $000

Surplus/(deficit) before tax

4,441

18,324

Tax at 30% (2008: 33%)

1,332

6,047

(1,332)

(6,047)

Current tax

-

-

Deferred tax

-

-

Tax expense

-

-

– finance charges on leased assets Internal interest income

10. Tax Relationship between tax expense and accounting profit:

Non-taxable income

Additional disclosures: A deferred tax asset has not been recognised in relation to unused tax losses of $1,032,491 (2008: $666,218).

Page 36

Napier City Council Annual Report 2008/09

Notes to the Financial Statements for the Year Ended 30 June 2009

11. Cash and Cash Equivalents Actual 2009 $000

Actual 2008 $000

Cash at bank and in hand

4,036

2,931

Short term deposits maturing three months or less from date of acquisition

1,000

-

769

537

5,805

3,468

Omarunui Landfill Total cash and cash equivalents

The carrying value of short-term deposits with maturity dates of three months or less approximates their fair value.

There are no restrictions on the use of part or all of the cash.

Cash include the following for the purposes of the cash flow statement: Actual 2009 $000

Actual 2008 $000

Cash at bank and in hand

4,036

2,931

Short term deposits maturing within three months

1,000

-

Omarunui Landfill

769

537

5,805

3,468

Actual 2009 $000

Actual 2008 $000

Rates receivables

996

814

Other receivables

3,989

4,010

Parklands - unconditional contracts subdivision sales

3,656

3,844

Transfund NZ subsidy claims

1,152

1,177

125

76

9,918

9,921

Total cash and cash equivalents

12. Debtors and Other Receivables

Prepayments Total debtors and other receivables

There is no concentration of credit risk with respect to receivables outside Napier City Council, as the Council has a large number of customers.

The Council does not provide for any impairment on rates receivable as it has various powers under the Local Government (Rating) Act 2002 to recover any outstanding debts. Ratepayers can apply for payment plan options in special circumstances. Where such payment plans are in place, debts are discounted to the present value of future repayments.

These powers allow the Council to commence legal proceedings to recover any rates that remain unpaid after the due date for payment. If payment has not been made after the Court's judgement, then the Council can apply to the Registrar of the High Court to have the judgement enforced by sale or lease of the rating unit.

The age of rates receivable overdue, whose payment terms have been renegotiated is $170,300 (2008: $106,200).

Napier City Council Annual Report 2008/09

Page 37

Notes to the Financial Statements for the Year Ended 30 June 2009

The Council holds no collateral as security or other credit enhancements over receivables that are past due. Other receivables have been assessed for impairment by taking into consideration collectability on an individual basis and no additional provision is required.

The status of receivables as at 30 June 2009 and 2008 are detailed below: Actual 2009 $000

Actual 2008 $000

6,268

8,264

Past due 30 days

581

544

Past due 60 days

218

66

Past due 90 days

2,851

1,047

9,918

9,921

Actual 2009 $000

Actual 2008 $000

Inventory held for distribution

171

154

Inventory held for resale

133

205

Parklands - work in progress

4,840

5,051

Total inventories

5,144

5,410

Current

13. Inventories

Inventory held for distribution increased by $17,000 (2008: $1,000) due to stocktake adjustments.

The carrying amount of inventories pledged as security for liabilities is $nil (2008: $nil).

14. Biological Assets Actual 2009 $000

Actual 2008 $000

Opening value 1 July

189

229

Change in value arising from changes in fair value

115

75

67

59

Biological assets changes in value

Increase in value due to natural increase / (decrease) Increase in value due to purchases Change in value due to sales Closing value 30 June

130

102

(261)

(276)

240

189

Biological assets comprise 777 (2008: 1,403) sheep largely held for breeding and 235 (2008: 208) cattle largely held for trading.

Page 38

Napier City Council Annual Report 2008/09

Notes to the Financial Statements for the Year Ended 30 June 2009

15. Other Financial Assets Actual 2009 $000

Actual 2008 $000

17,000

30,203

213

-

4,000

-

21,213

30,203

4,669

-

Current portion Short-term deposits with maturities of 4-12 months Sinking fund investments Local authority stock Total current portion

Non-current portion Term deposits with maturities of over 12 months Sinking fund investments Unlisted shares Local authority stock Corporate bonds Total non-current portion

-

186

454

454

4,270

8,252

500

500

9,893

9,392

There are no impairment provisions for other financial assets.

The carrying amount of term deposits approximates their fair value.

Local authority stock is classified as held to maturity. The fair value of local authority stock is $8,822,000 (2008: $8,452,000). Fair value has been determined by discounting cash flows from the instruments using a discount rate derived from relevant market inputs. The discount rates are 3.60% to 6.50% (2008: 8.40%).

The fair value of sinking funds are determined by reference to published price quotations in an active market.

Sinking fund investments are restricted in use to the repayment of associated borrowings and are administered by Public Trust Office.

Unlisted shares and corporate bonds have been examined on an individual basis and reviewed for impairment at year end. No additional impairment provision is required.

Unlisted shares – valuation The fair value of the unlisted shares were determined as follows: • If an active market is present for unlisted shares, the fair value of such shares is determined by their market value. • If an active market is absent for unlisted shares, the fair value of such shares is determined by their redemption value.

16. Non-Current Assets Held for Sale There are no non-current assets held for sale as at 30 June 2009 (2008: $nil).

Napier City Council Annual Report 2008/09

Page 39

Page 40

Plant and equipment

-

-

-

1,195,982

10,510

195,637

-

13,462

(15,521) 1,180,461

(124)

-

30,301

8,847

132,517

816,204

16,440

419,125

138,200

77,201

60,506

104,732

168,620

301

-

1,383

9,341

2,339

47,558

20,763

86,935

Carrying amount 1 July 2008 $000

-

34,853

10,205

7,816

-

23

1,825

-

541

18,620

5,785

-

9,084

1,907

1,077

767

6,028

565

-

381

2,571

544

1,711

(2,743)

(44)

-

-

-

(44)

-

-

(1,171)

-

-

-

(746)

(160)

(265)

(1,528)

-

-

(176)

(265)

-

(303)

(784)

-

$000

$000

256

Current year disposals cost

Current year additions

992

(16)

-

-

-

-

-

(16)

756

-

-

-

463

71

222

252

-

-

161

114

-

(23)

-

-

Current year disposals accumulated depreciation

(165)

(378)

-

-

-

71

-

(449)

-

-

-

-

-

-

-

213

170

-

-

-

-

216

(88)

(85)

$000

(17,523)

(2,274)

-

(96)

(365)

(843)

(135)

(835)

(11,879)

-

-

(6,106)

(1,375)

(1,317)

(3,081)

(3,370)

-

-

(356)

(1,637)

(232)

(1,145

-

-

$000

Current year transfers and Current year corrections depreciation

(176)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(176)

-

-

-

-

(176)

-

-

-

$000

Revaluation surplus

Items added to work in progress $16,460,000 (2008: $4,993,000).

Completed assets transferred from work in progress $2,124,000 (2008: $3,588,000).

The net carrying amount of plant and equipment held under finance leases is $7,000 (2008: $128,000).

In accordance with Accounting Policies the revaluation loss for Library Books has been taken to profit and loss.

There are no restrictions over the title of the Council's Property, Plant and Equipment nor are any pledged as security for liabilities.

Total group property, plant and equipment

195,761

-

Total restricted assets

Work in progress

-

10,510

13,462

Swimming pools

Inner harbour

(4)

30,305

Buildings on reserves

-

(120)

8,847

132,637

(225)

Grandstands and halls

Sportsgrounds

Council restricted assets

816,429

16,440

Total infrastructural assets

Work in progress

-

419,125

Land under roads

-

(119)

77,320

138,200

Drainage network

(10)

(96)

Roading network

60,516

104,828

Water system

Sewerage system

Council infrastructural assets

(15,172)

301

183,792

Work in progress

Total operational assets

(225)

(1,974)

(12,946)

225

3,357

22,287

-

(27)

-

-

Accumulated depn and impairment charges 1 July 2008 $000

Landfill post closure

Motor vehicles

2,339

20,763

47,585

Leasehold land

Buildings

Library books

86,935

Cost/ revaluation 1 July 2008 $000

Land

Council operational assets

2009

1,227,519

205,544

7,816

13,462

10,533

32,157

8,847

132,729

833,878

22,225

419,125

147,284

78,481

61,433

105,330

188,097

1,036

225

3,562

24,593

2,475

49,209

19,891

87,106

Cost/ revaluation 30 June 2009 $000

(31,820

(2,414)

-

(96)

(365)

(847)

(135)

(971)

(11,348)

-

-

(6,106)

(1,031)

(1,256)

(2,955)

(18,058)

-

(225)

(2,169)

(14,469)

-

(1,195)

-

-

Accumulated depn and impairment charges 30 June 2009 $000

1,195,699

203,130

7,816

13,366

10,168

31,310

8,712

131,758

822,530

22,225

419,125

141,178

77,450

60,177

102,375

170,039

1,036

-

1,393

10,124

2,475

48,014

19,891

87,106

Carrying amount 30 June 2009 $000

Notes to the Financial Statements for the Year Ended 30 June 2009

17. Property Plant and Equipment

Napier City Council Annual Report 2008/09

-

-

Napier City Council Annual Report 2008/09 -

419,097

15,149

Land under roads

(153)

8,248

1,083,400

165,957

(37,179) 1,046,221

(3,769)

8,095

9,586

24,449

7,458

116,369

742,070

15,149

419,097

117,668

60,066

47,565

82,525

138,194

187

-

1,428

7,954

2,274

41,435

19,576

65,340

Carrying amount 1 July 2007 $000

22,241

615

-

6

173

-

436

15,019

1,291

28

7,670

1,947

1,569

2,514

6,607

114

-

363

3,047

507

349

-

(2,856)

-

-

-

-

-

-

(1,209)

-

-

-

(266)

(91)

(852)

(1,647)

-

-

(149)

(628)

-

(9)

(831)

(30)

$000

$000

2,227

Current year disposals cost

Current year additions

37,088

5,609

235

921

2,145

342

1,966

27,825

-

-

14,420

3,254

2,813

7,338

3,654

-

-

104

493

-

3,057

-

-

$000

Current year disposals accumulated

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

$000

Current year impairment charges

(16,046)

(1,965)

(82)

(307)

(718)

(114)

(744)

(10,557)

-

-

(5,367)

(1,062)

(1,064)

(3,064)

(3,524)

-

-

(363)

(1,525)

(615)

(1,021)

-

-

$000

Current year depreciation

93,812

25,420

5,214

304

4,251

1,161

14,490

43,056

-

-

3,809

13,262

9,714

16,271

25,336

-

-

-

-

173

3,747

2,018

19,398

$000

Revaluation surplus

1,195,982

195,761

13,462

10,510

30,305

8,847

132,637

816,429

16,440

419,125

138,200

77,320

60,516

104,828

183,792

301

225

3,357

22,287

2,339

47,585

20,763

86,935

Cost/ revaluation 30 June 2008 $000

(15,521)

(124)

-

-

(4)

-

(120)

(225)

-

-

-

(119)

(10)

(96)

(15,172)

-

(225)

(1,974)

(12,946)

-

(27)

-

-

Accumulated depn and impairment charges 30 June 2008 $000

Items added to work in progress $4,993,000 (2007 $6,792,000).

Completed assets transferred from work in progress $3,588,000 (2007 $3,781,000).

The net carrying amount of plant and equipment held under finance leases is $128,000 (2007 $292,000).

In accordance with Accounting Policies the revaluation surplus for Library Books has been taken to profit and loss as an offset of losses previously expensed.

There are no restrictions over the title of the Council's Property, Plant and Equipment nor are any pledged as security for liabilities.

Total group property, plant and equipment

Total restricted assets

169,726

(614)

10,200

Swimming pools

Inner harbour

(1,432)

25,881

Buildings on reserves

(228)

(1,342)

7,686

117,711

(17,493)

(9,053)

(2,311)

Grandstands and halls

Sportsgrounds

Council restricted assets

Total infrastructural assets

759,563

126,721

Roading network

Work in progress

-

62,377

Drainage network

(4,370) (1,759)

86,895

49,324

Sewerage system

Water system

Council infrastructural assets

(15,917)

187

154,111

Work in progress

Total operational assets

(225)

(1,715)

(11,914)

225

3,143

19,868

(2,063)

-

-

Accumulated depn and impairment charges 1 July 2007 $000

Landfill post closure

Motor vehicles

Plant and equipment

2,274

43,498

Buildings

Library books

65,340

19,576

Land

Cost/ revaluation 1 July 2007 $000

Leasehold land

Council operational assets

2008

1,180,461

195,637

13,462

10,510

30,301

8,847

132,517

816,204

16,440

419,125

138,200

77,201

60,506

104,732

168,620

301

-

1,383

9,341

2,339

47,558

20,763

89,935

Carrying amount 30 June 2008 $000

Notes to the Financial Statements for the Year Ended 30 June 2009

Page 41

Page 42

1 July 2008 $000

1 July 2007 $000

(1,732)

1 July 2007 $000

Cost/ revaluation

1,891

Accumulated depreciation and impairment charges

(1,817)

1 July 2008 $000

Cost/ revaluation

1,989

Accumulated depreciation and impairment charges

159

1 July 2007 $000

Carrying amount

172

1 July 2008 $000

Carrying amount

98

$000

Current year additions

168

$000

Current year additions

-

$000

Current year disposals

-

$000

Current year disposals

-

$000

Current year impairment charges

-

$000

Current year impairment charges

(85)

$000

Current year ammortisation

(54)

$000

Current year ammortisation

-

$000

Revaluation surplus

-

$000

Revaluation surplus

1,989

30 June 2008 $000

Cost/ revaluation

2,157

30 June 2009 $000

Cost/ revaluation

Carrying amount

Carrying amount

286

(1,817)

172

30 June 2008 30 June 2008 $000 $000

Accumulated depreciation and impairment charges

(1,871)

30 June 2009 30 June 2009 $000 $000

Accumulated depreciation and impairment charges

Computer software includes the cost of licenses to use software. Licences are usually rights of use of software only and may contain restrictions as to resale or transfer of the licences. There are no restrictions over the title to Napier City Council's intangible assets providing these are used within the Council and within the conditions granted in the software licence. No intangible assets have been pledged as security for liabilities.

Computer software

2008

Computer software

2009

Notes to the Financial Statements for the Year Ended 30 June 2009

18. Intangible Assets

Napier City Council Annual Report 2008/09

Notes to the Financial Statements for the Year Ended 30 June 2009

19. Investment Property Actual 2009 $000

Actual 2008 $000

44,928

44,426

Additions from acquisitions

-

-

Disposals

-

-

Balance at 1 July

Fair value gains/(losses) on valuation

(7,528)

502

Balance at 30 June

37,400

44,928

The Council's investment properties are valued annually at fair value effective 30 June. All investment properties were valued based on open market evidence. The valuation was performed by M. Penrose ANZIV, SNZPI, AAMINZ an independent valuer from Telfer Young (HB) Ltd. Telfer Young are experienced valuers with extensive market knowledge of the types of investment properties owned by the Council.

Actual 2009 $000

Actual 2008 $000

924

1,008

Expenses from investment property generating income

-

-

Contractual obligations for capital expenditure

-

-

Contractual obligations for operating expenditure

-

-

Rental income from investment property

20. Investments in Associates The Council has a 26.12% interest in Hawke's Bay Airport Authority and its reporting date is 30 June.

Hawke's Bay Airport Authority was an unlisted entity until 30 June 2009 and, accordingly, there was no published price quotations to determine the fair value of this investment.

With effect from 1 July 2009, Hawke's Bay Airport Authority will be corporatised. A new company, Hawke's Bay Airport Limited will take over the business, assets and liabilities from that date.

Actual 2009 $000

Actual 2008 $000

3,771

3,565

Movements in the carrying amount of investments in associates Balance at 1 July New investments during year

-

-

(853)

-

Adjustment due to adoption of IFRS by Hawke's Bay Airport Authority

-

39

Disposal of investments during the year

-

-

Adjustment due to revaluation of property, plant and equipment

Share of total recognised revenues and expenses

228

192

Interest adjustment on appropriation account

(22)

(25)

-

-

3,124

3,771

Share of dividend Balance at 30 June

Napier City Council Annual Report 2008/09

Page 43

Notes to the Financial Statements for the Year Ended 30 June 2009

Summarised financial information of associate entities Actual 2009 $000

Actual 2008 $000

15,354

18,415

Liabilities

1,565

2,229

Revenues

Assets

2,444

2,444

Surplus/(deficit)

874

736

Group's interest

26.12%

26.12%

Actual 2009 $000

Actual 2008 $000

Associated contingencies: There are no contingent liabilities arising from the Council's involvement in the associate.

21. Creditors and Other Payables

9,253

7,879

Deposits and bonds

Trade payables

680

911

Accrued interest

143

194

Rates in advance

680

780

10,756

9,764

Total creditors and other payables

Creditors and other payables are non-interest bearing and are normally settled on 30-day terms, therefore the carrying value of creditors and other payables approximates their fair value.

Page 44

Napier City Council Annual Report 2008/09

Notes to the Financial Statements for the Year Ended 30 June 2009

22. Employee Benefit Liabilities Actual 2009 $000

Actual 2008 $000

Accrued pay

502

582

Annual leave

2,336

2,038

Current portion

Sick leave Total current portion

-

-

2,838

2,620

Non-current portion Retirement and long service leave

1,883

1,807

Total non-current portion

1,883

1,807

Total employee entitlement

4,721

4,427

Actual 2009 $000

Actual 2008 $000

1,011

4,508

12

51

1,023

4,559

6,044

7,054

2

14

6,046

7,068

23. Borrowings

Current portion Secured loans Lease liabilities Total current portion Non-current portion Secured loans Lease liabilities Total non-current portion

Fixed-rate debt The Council's secured debt of $7,054,500 (2008: $11,562,300) is issued at fixed rates of interest.

The Council has established sinking funds in respect of loans, with a carrying amount of $212,850, maturing in 2009/10. The sinking fund investments, together with accumulated interest, will be sufficient to repay the principal of the associated loans on the due date. The amount held in the sinking funds is shown in note 15 Other Financial Assets.

The Council's loans are secured by a Secured 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.

Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default.

Refinancing The Council manages its borrowings in accordance with its funding and financial policies, which include a Liability Management policy. These policies have been adopted as part of the Council's Long-Term Council Community Plan.

Napier City Council Annual Report 2008/09

Page 45

Notes to the Financial Statements for the Year Ended 30 June 2009

Maturity analysis and effective interest rates The following is a maturity analysis of the Council's borrowings (excluding finance leases, which are shown separately below). Depending on the conditions attached to the secured loans, there may be early repayment options.

Actual 2009 $000

Actual 2008 $000

Secured Loans Less than one year

1,011

4,508

Weighted average effective interest rate

8.04%

6.56%

Later than one year but not more than five years

6,031

5,034

Weighted average effective interest rate

7.02%

6.98%

Later than five years Weighted average effective interest rate

13

2,020

-

7.62%

7,055

11,562

Actual 2009 $000

Actual 2008 $000

12

52

2

14

14

66

-

(1)

14

65

12

51

Analysis of finance lease liabilities

Total minimum lease payments are payable Not later than one year Later than one year and not later than five years Total minimum lease payments Future finance charges Present value of minimum lease payments Present value of minimum lease payments are payable Not later than one year Later than one year and not later than five years

2

14

Total

14

65

Current

12

51

2

14

14

65

Non-current Total

Description of material leasing arrangements The Council has entered into finance leases for various items of office equipment.

The finance leases can be renewed at the Council's option, with rents set by reference to current market rates for items of equivalent age and condition. The Council has the option to purchase the asset at the end of the lease.

There are no restrictions placed on the Council by any of the finance leasing arrangements.

Page 46

Napier City Council Annual Report 2008/09

Notes to the Financial Statements for the Year Ended 30 June 2009

24. Provisions

Financial Guarantees $000

Landfill aftercare provision $000

Total $000

2008 Balance at 1 July 2007

645

269

914

-

684

684

Unused amounts reversed

(50)

-

(50)

Balance as at 30 June 2008

595

953

1,548

Balance at 1 July 2008

595

953

1,548

Additional provisions made

799

39

838

Additional provisions made

2009

Unused amounts reversed Balance as at 30 June 2009

-

-

-

1,394

992

2,386

Provision for financial guarantees The Council is listed as sole guarantor to a number of related authorities and locally incorporated societies for bank facilities.

The Council is obligated under the guarantees to make payments in the event the authority or society defaults on a financial arrangement. The exercising of guarantees will be dependent on the financial stability of the authorities and societies, which will vary over time.

Provision for landfill aftercare The Omarunui Landfill is owned jointly by the Hastings District Council (63.68%) and Napier City Council (36.32%).

The landfill is operated by the Hastings District Council on behalf of a joint committee (comprising elected representatives from the two councils). The joint Landfill Committee gained a resource consent in 1985 to operate the Omarunui Landfill. The Councils have responsibility under the resource consent to provide ongoing maintenance and monitoring of the landfill after the site is closed. There are closure and post-closure responsibilities such as the following: Closure responsibilities: • Final cover application and vegetation • Incremental drainage control features • Completing facilities for leachate collection and monitoring • Completing facilities for monitoring and recovery of gas Post-closure responsibilities: • Treatment and monitoring of leachate • Ground water and surface monitoring • Gas monitoring and recovery • Implementation of remedial measures such as needed for cover, and control systems • Ongoing site maintenance for drainage systems, final cover and vegetation The management of the landfill will influence the timing of recognition of some liabilities – for example, the current landfill will operate in four stages. A liability relating to stages three and four will only be created when the stage is commissioned and when refuse begins to accumulate in these stages.

Capacity of the Site: • The remaining capacity of the site is 4 million cubic metres (refuse, cleanfill and cover).

• The estimated remaining life is 40 years.

Estimates of the life have been made by Hastings District Council’s engineers based on historical volume information.

The cash outflows for landfill post-closure are expected to occur in 2017 for Valley D and began in 2007 for Valley A. The long term nature of the liability means that there are inherent uncertainties in estimating costs that will be incurred. The provision has been estimated taking into account existing technology and is discounted using a discount rate of 7%.

Napier City Council Annual Report 2008/09

Page 47

Notes to the Financial Statements for the Year Ended 30 June 2009

The following major assumptions have been made in the calculation of the provision: • Aftercare will be required for 30 years after the closure of each stage.

• The annual cost of aftercare for Valley A and D is $308,189.

• The provision reported is for Napier City Council's share only (36.62%).

25. Equity Actual 2009 $000

Actual 2008 $000

653,319

630,253

(903)

(1,642)

-

(1,986)

Asset revaluation reserve on disposal of property, plant and equipment

1,031

(70)

Restricted reserves

1,677

8,273

Surplus/(deficit) for the year

4,441

18,491

659,565

653,319

8,285

14,916

(1,677)

(8,273)

903

1,642

7,511

8,285

Loan redemption reserve

1,143

2,224

Loan funds reserves

(562)

(804)

Retained earnings As at 1 July 2008 Transfers to: Restricted reserves Asset revaluation reserve Hawke's Bay Airport Transfers from:

As at 30 June 2009 Restricted reserves As at 1 July 2008 Transfers to: Retained earnings Transfers from: Retained earnings As at 30 June 2009 Restricted reserves consist of:

Trusts and bequests

621

597

Advanced Waste Water Treatment Fund (HBRC)

5,013

4,630

Other restricted reserves

1,296

1,638

Total restricted reserves

7,511

8,285

598,844

467,775

(1,200)

129,013

-

1,986

(1,031)

70

596,613

598,844

Asset revaluation reserves As at 1 July 2008 Revaluation gains/(losses) Asset revaluation reserve Hawke's Bay Airport Transfer of revaluation reserve to retained earnings on disposal of property, plant and equipment As at 30 June 2009

Page 48

Napier City Council Annual Report 2008/09

Notes to the Financial Statements for the Year Ended 30 June 2009

Actual 2009 $000

Actual 2008 $000

Land

66,337

66,077

Leasehold land

18,241

18,973

Buildings

29,052

29,235

199

198

Sewerage system

90,964

90,994

Water system

43,290

43,357

Drainage network

54,165

54,355

170,059

170,059

98,545

98,980

Grandstands and halls

2,607

2,607

Buildings on reserves

8,090

8,092

Asset revaluation reserves consist of: Operational Assets

Plant & Equipment Infrastructural Assets

Roading network Restricted Reserves Sportsgrounds

Swimming pools Inner harbour Hawke's Bay Airport Authority Total asset revaluation reserves

3,637

3,637

10,294

10,294

1,133

1,986

596,613

598,844

101

69

-

32

101

101

604,225

607,230

Fair value through equity reserve As at 1 July 2008 Valuation gains/(losses) on unlisted shares taken to equity As at 30 June 2009 Total other reserves

Asset revaluations (2008: $1,986,000), being the Council's share of its associate Hawke's Bay Airport Authority revaluation reserves, have been restated in revaluation reserves from equity in accordance with New Zealand Financial Reporting Standards.

Napier City Council Annual Report 2008/09

Page 49

Notes to the Financial Statements for the Year Ended 30 June 2009

26. Capital Management The Council’s capital is its equity (or Ratepayers’ Funds), which comprise retained earnings and reserves. Equity is represented by net assets.

The Local Government Act 2002 (the Act) requires Council to manage its revenues, expenses, assets, liabilities, investments, and general financial dealings prudently and in a manner that promotes the current and future interests of the community. Ratepayers' Funds are managed largely as a by-product of managing revenues, expenses, assets, liabilities, investments, and general financial dealings.

The objective of managing these items is to achieve intergenerational equity, which is a principle promoted in the Act and applied by the Council. Intergenerational equity requires today’s ratepayers to meet the costs of utilising the Council’s assets but does not expect them to meet the full cost of long-term assets that will benefit ratepayers in future generations.

Additionally, the Council has Asset Management Plans in place for major classes of assets, detailing renewal and maintenance programmes to ensure that future generations of ratepayers are not required to meet the costs of deferred renewals and maintenance.

The Act requires the Council to make adequate and effective provision in its Long Term Council Community Plan and in its Annual Plan (where applicable) to meet the expenditure needs identified in those plans. The Act sets out the factors that the Council is required to consider when determining the most appropriate sources of funding for each of its activities. The sources and levels of funding are set out in the funding and financial policies in the Council’s Ten Year Plan.

Napier City Council has the following Council created reserves: • reserves for different areas of benefit; • self-insurance reserves; and • trust and bequest reserves.

Reserves for different areas of benefit are used where there is a discrete set of rate or levy payers as distinct from the general rate. Any surpluses or deficits relating to these separate areas of benefit are applied to the specific reserves.

Self-insurance reserves are built up annually from general rates and are made available for specific unforeseen events. The release of these funds can generally be approved only by Council.

Trust and bequest reserves are set up where the Council is donated funds that are restricted for particular purposes.

Interest is added to trust and bequest reserves where applicable, and deductions are made where funds have been used for the purposes for which they were donated.

27. Capital Commitments and Operating Leases Actual 2009 $000

Actual 2008 $000

10,975

4,519

Capital commitments Capital expenditure contracted for at balance date but not yet incurred for property, plant and equipment

Operating leases as lessee The Council leases the following properties in the normal course of its business: 1. Napier Community House The Council subleases all of the Community House building to several organisations and groups to provide community services and support to Napier, Hastings and the wider Hawke's Bay region.

2. Tourism Services Building The tourism services business unit operates from a section in this building. The Council subleases 80% of this building to Hawke's Bay Incorporated, Hawke's Bay Wine Country Tourism Association and Napier Inner City Marketing.

Page 50

Napier City Council Annual Report 2008/09

Notes to the Financial Statements for the Year Ended 30 June 2009 The future aggregate minimum lease payments to be paid by the Council under non-cancellable operating leases are as follows: Actual 2009 $000

Actual 2008 $000

Not later than one year

178

141

Later than one year and not later than five years

209

154

-

-

387

295

Non-cancellable operating leases as lessee

Later than five years Total non-cancellable operating leases

The total minimum future sublease payments expected to be received under non-cancellable subleases at balance sheet date is $624,381 (2008: $284,335).

Leases can be renewed at the Council's option, with rents set by reference to current market rates for items of equivalent age and condition.

There are no restrictions placed on the Council by any of the leasing arrangements.

Operating leases as lessor The Council leases excess building space under operating leases. The future aggregate minimum lease payments to be collected by the Council under non-cancellable operating leases are as follows: Actual 2009 $000

Actual 2008 $000

Non-cancellable operating leases as lessor Not later than one year

320

417

Later than one year and not later than five years

954

1,298

Later than five years

234

315

1,508

2,030

Actual 2009 $000

Actual 2008 $000

Financial guarantees

179

285

Total contingent liabilities

179

285

Total non-cancellable operating leases

28. Contingencies Contingent liabilities

Financial guarantees The value of guarantees disclosed as contingent liabilities reflects the Council's assessment of the undiscounted portion of financial guarantees that are not recognised in the statement of financial position. Refer to note 24 Provisions for information on recognised financial guarantees.

Unquantified claims In 2008/09, there are 8 (2008: 4) 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. These matters were not recognised in the financial statements because of the uncertainty associated with the outcomes.

Napier City Council Annual Report 2008/09

Page 51

Notes to the Financial Statements for the Year Ended 30 June 2009 Other contingencies

Contingent assets The Council reviews annual rentals payable by lessees of its leasehold property portfolio in accordance with the lease arrangements entered into with various lessees. Accordingly the Council has issued revised rentals payable for various properties as these have fallen due. The lessees of some properties, in accordance with the terms and conditions of the agreement between the parties, have chosen to dispute the new rentals advised by the Council.

Depending on the outcome of the disputed reviews the Council has a contingent asset of $379,000, which due to the uncertainty around the value of the final resolution, is not included in rental income as at 30 June 2009.

Contingent liabilities The Council obtains public liability and professional indemnity insurance cover from New Zealand Mutual Liability Risk Pool. This operates as a mutual fund where each member makes an annual contribution to obtain cover however should claims exceed contributions then calls can be made on the members of that fund year for the shortfall amount. Risk Pool have advised that calls may be required for past pool periods. As the amount and timing is uncertain no provision has been made for any future calls. In addition Council is defending a claim for compensation in respect of land taken for purposes of a road. As the amount and timing is subject to the outcome of a future hearing no provision has been made in respect of this item.

Other contingencies At 30 June 2009, the Council held 0 (2008: 7) conditional contracts for sale of residential development sections and no deposits had been received (2008: $66,000) in respect of conditional contracts. The contract terms require consent under S222 of the Resource Management Act (completion of infrastructure works) to become unconditional contracts for sale. In the event, consent is not obtained, deposits held are refundable.

The Council is a participating employer in a Defined Benefit Plan Contributors Scheme ("the scheme") which is a multi-employer defined benefit scheme. If the other participating employers ceased to participate in the scheme, the Council could be responsible for the entire deficit of the scheme. Similarly, if a number of employees ceased to participate in the scheme, the Council could be responsible for an increased share of the deficit.

29. Reconciliation of Net Surplus After Tax to Net Cash Flow from Operating Activities Actual 2009 $000

Actual 2008 $000

4,441

18,491

(207)

(167)

Depreciation and amortisation expense

17,577

16,131

Vested assets

(2,207)

(2,082)

7,528

(501)

(Gains)/losses on library bookstock

176

(173)

Other non-cash Items

(16)

(11)

633

(191)

Surplus/(deficit) after tax Add/(less) non-cash items: Share of associate surplus/(deficit)

(Gains)/losses in fair value of investment property

Add/(less) items classified as investing or financing activities: (Gains)/losses on disposal of property plant and equipment Add/(less) movements in working capital items: Accounts receivable

3

(3,040)

Inventories

266

2,344

Biological assets

(51)

40

Accounts payable

921

877

Provisions

838

634

Employee benefits

294

500

30,196

32,852

Net cash inflow/(outflow) from operating activities

Page 52

Napier City Council Annual Report 2008/09

Notes to the Financial Statements for the Year Ended 30 June 2009

30. Remuneration Chief Executive The Chief Executive of Napier City Council, appointed under section 42 of the Local Government Act 2002, received a salary of $229,667 (2008: $240,265).

In terms of his contract, the Chief Executive also received the following additional benefits: Actual 2009 $

Actual 2008 $

566

536

Cost During the Financial Year Subscriptions

For the year ended 30 June 2009, the total annual cost including Fringe Benefit Tax to the Council of the remuneration package being received by the Chief Executive is calculated at $230,233 (2008: $240,801).

Elected Representatives Total remuneration Actual 2009 $000

Actual 2008 $000

89

92

John Cocking

38

34

Kathie Furlong

Mayor Barbara Arnott Councillors 42

42

Robin Gwynn

-

9

Mark Herbert

39

40

Tony Jeffery

39

36

Deane Jessep

-

9

Harry Lawson

30

29

Rob Lutter

39

36

Dave Pipe

38

39

Tony Reid

-

7

Faye White

39

40

Tania Wright

39

36

Keith Price

30

20

Maxine Boag

30

20

Bill Dalton

30

20

The Mayor did not receive vehicle allowance (2008: $5,000).

31. Severance Payments For the year ended 30 June 2009, the Council made one (2008: three) severance payment to an employee totalling $3,411.

Napier City Council Annual Report 2008/09

Page 53

Notes to the Financial Statements for the Year Ended 30 June 2009

32. Events After the Balance Sheet Date There have been no significant events since balance date.

33. Financial Instrument Risks Financial Instrument Categories Actual 2009 $000

Actual 2008 $000

Cash and cash equivalents (see Note 1 below)

5,805

3,468

Debtors and other receivables

9,918

9,921

Term deposits

21,669

30,203

Total loans and receivables

37,392

43,592

8,270

8,252

Sinking fund investments

213

186

Corporate bonds

500

500

8,983

8,983

-

-

Unlisted shares

454

454

Total fair value through equity

454

454

10,756

9,764

Secured loans

7,055

11,562

Finance leases

14

65

17,825

21,391

Financial Assets Loans and receivables

Other financial assets

Held to maturity Other financial assets Local authority stock (see Note 2. below)

Total held to maturity Fair value through equity Local authority stock

Financial Liabilities Financial liabilities at amortised cost Creditors and other payables

Total financial liabilities at amortised cost

Financial Instrument Risks The Council has a series of policies to manage the risks associated with financial instruments. The Council is riskaverse and therefore seeks to minimise risk exposure from its treasury activities through adherence to its approved Investment Management Policy and Liability Management Policy. These policies do not allow transactions of a speculative nature.

Page 54

Napier City Council Annual Report 2008/09

Notes to the Financial Statements for the Year Ended 30 June 2009 Market Risk Price risk Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate as a result of changes in market prices. The Council is exposed to equity securities price risk on its investments, which are classified as financial assets held at fair value through equity. This price risk arises due to market movements in listed securities. This price risk is managed by diversification of the Council’s investment portfolio in accordance with the limits set out in the Council’s Investment Management Policy.

Currency risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Council purchases plant and equipment associated with the construction of certain infrastructural assets as well as library book assets, from overseas. These transactions require Council to enter into transactions denominated in foreign currencies. As a result of these activities, exposure to currency risk arises.

It is Council’s policy to manage foreign currency risks arising from contractual commitments and liabilities that are significant values by entering into forward foreign exchange contracts to hedge the foreign currency risk exposure.

This means the Council is able to fix the New Zealand dollar amount payable prior to delivery of the plant and equipment from overseas.

Fair value interest rate risk Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. Borrowings and investments issued at fixed rates of interest expose the Council to fair value interest rate risk. The Council’s Liability Management Policy is to stay within a minimum and maximum percentage of its borrowings in fixed-rate instruments. Fixed to floating interest rate swaps can be entered into to hedge the fair value interest rate risk arising where Council’s fixed rates borrowings are in excess of the target range.

Cash flow interest rate risk Cash flow interest rate risk is the risk that the cash flows from a financial instrument will fluctuate because of changes in market interest rates. Borrowings and investments issued at variable interest rates expose the Council to cash flow interest rate risk. In order to manage the cash flow interest rate risk, under its Liability Management Policy, the Council has the ability to raise long-term borrowings at floating rates, then later swap them to fixed rates using interest rate swaps.

Credit Risk Credit risk is the risk that a third party will default on its obligation to Napier City Council, causing the Council to incur a loss. Due to the timing of its cash inflows and outflows, the Council invests surplus cash into term deposits and local authority stock, which gives rise to credit risk. Council’s Investment Management Policy limits the amount of credit exposure to any one financial institution or organisation. Investments in other Local Authorities are generally secured by charges over rates. Other than other local authorities, the Council invests funds only with entities that have a Standard and Poor’s credit rating of at least A-1 for short-term investments, and at least A+ for long-term investments.

Napier City Council has no collateral or other credit enhancements for financial instruments that give rise to credit risk.

Maximum Exposure to Credit Risk The Council's maximum credit exposure for each class of financial instrument is as follows: Actual 2009 $000

Actual 2008 $000

5,789

3,453

21,669

30,203

213

186

Local authority stock

8,270

8,252

Financial guarantees

1,573

880

37,514

42,974

Cash at bank Term deposits Sinking fund investments

Total credit risk

Napier City Council Annual Report 2008/09

Page 55

Notes to the Financial Statements for the Year Ended 30 June 2009 Credit Quality of Financial Assets The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to Standard and Poor’s credit ratings (if available) or to historical information about counterparty default rates: Actual 2009 $000

Actual 2008 $000

5,789

3,453

-

-

5,789

3,453

12,000

22,703

9,669

7,500

21,669

30,203

8,270

8,252

Counterparties with credit ratings Cash at bank AA (others) AA- (Kiwibank) Total cash at bank Term deposits AA (others) AA- (Kiwibank) Total term deposits

Counterparties without credit ratings Local authority stock Sinking fund investments Financial guarantees Total

213

186

1,573

880

10,056

9,318

Debtors and other receivables mainly arise from the Council's statutory functions. Therefore, there are no procedures in place to monitor or report the credit quality of debtors and other receivables with reference to internal or external credit ratings. The Council has no significant concentrations of credit risk in relation to debtors and other receivable, as it has a large number of credit customers, mainly ratepayers, and has powers under the Local Government (Rating) Act 2002 to recover outstanding debts from ratepayers.

Liquidity Risk Management of liquidity risk Liquidity risk is the risk that the Council will encounter difficulty raising liquid funds to meet commitments as they fall due. Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. The Council aims to maintain flexibility in funding by keeping committed credit lines available.

In meeting its liquidity requirements, the Council maintains a target level of investments that must mature within the next 12 months. The Council manages its borrowings in accordance with its funding and financial policies, which include a Liability Management Policy. These policies have been adopted as part of the Council's Long Term Council Community Plan.

The Council has an overdraft facility of $300,000 (2008: $300,000), and there are no restrictions on the use of this facility. Gross overdraft facility in use at 30 June 2009 was $837,000. However, the Council has negotiated offsetting arrangements with its bank for all its bank accounts, and the net balance of current accounts was $5,789,000 in funds at 30 June 2009.

Contractual Maturity Analysis of Financial Liabilities The table below analyses the Council's financial liabilities into relevant maturity groupings based on the remaining period at the balance date to the contractual maturity date. Future interest payments on floating rate debt is based on the floating rate on the instrument at the balance date. The amounts disclosed are the contractual undiscounted cash flows.

Page 56

Napier City Council Annual Report 2008/09

Notes to the Financial Statements for the Year Ended 30 June 2009 Carrying Amount $000

Contractual Cash Flow $000

Less Than 1 year $000

1-2 years

2-5 years

$000

$000

More than 5 years $000

10,756

10,756

10,756

-

-

-

7,055

8,667

1,472

2,429

4,754

12

2009 Creditors and other payables Secured loans Finance leases

14

14

12

2

-

-

1,573

1,573

1,573

-

-

-

19,398

21,010

13,813

2,431

4,754

12

9,764

9,764

9,764

-

-

-

Secured loans

11,562

13,931

5,264

1,472

5,022

2,173

Finance leases

65

66

52

14

-

-

Financial guarantees Total 2008 Creditors and other payables

Financial guarantees Total

880

880

880

-

-

-

22,271

24,641

15,960

1,486

5,022

2,173

Contractual Maturity Analysis of Financial Assets The table below analyses the Council's financial assets into relevant maturity groupings based on the remaining period at the balance date to the contractual maturity date.

Carrying Amount $000

Contractual Cash Flow $000

Less Than 1 year $000

1-2 years

2-5 years

$000

$000

More than 5 years $000

2009 Cash and cash equivalents

5,805

5,816

5,816

-

-

-

Debtors and other receivables

9,918

9,918

9,918

-

-

-

21,669

22,682

17,246

5,436

-

-

8,270

9,285

4,694

4,144

447

-

Other financial assets Term deposits Local authority stock Sinking fund investments

213

213

213

-

-

-

Corporate bonds

500

693

48

48

597

-

46,375

48,607

37,935

9,628

1,044

-

Cash and cash equivalents

3,468

3,468

3,468

-

-

-

Debtors and other receivables

9,921

9,921

9,921

-

-

-

30,203

30,203

30,203

-

-

-

8,252

8,252

-

4,000

4,252

-

Total 2008

Other financial assets Term deposits Local authority stock Sinking fund investments

186

186

-

186

-

-

Unlisted shares

454

454

454

-

-

-

Corporate bonds

500

500

-

-

-

500

52,984

52,984

44,046

4,186

4,252

500

Total

Napier City Council Annual Report 2008/09

Page 57

Notes to the Financial Statements for the Year Ended 30 June 2009 Sensitivity Analysis The tables below illustrate the potential profit and loss impact for reasonably possible market movements, with all other variables held constant, based on the Council's financial instrument exposures at the balance date.

2009 $000 -100bps

2008 $000 100bps

-100bps

100bps

Profit

Equity

Profit

Equity

Profit

Equity

Profit

Equity

(58)

-

58

-

(35)

-

35

-

(217)

-

217

-

(302)

-

302

-

(83)

-

83

-

(83)

-

83

-

Sinking fund investments

(2)

-

2

-

(2)

-

2

-

Corporate bonds

(5)

-

5

-

(5)

-

5

-

-

-

-

-

-

-

-

-

(366)

-

366

-

(426)

-

426

-

Interest Rate Risk Financial assets Cash and cash equivalents Other financial assets Term deposits Local authority stock

Financial liabilities Term loans - floating

Cash and cash equivalents Cash and cash equivalents include offset bank balances and deposits at call totalling $5,805,000 (2008: $3,468,000) which are at a floating interest rate. A movement in that rate of plus or minus 1.0% has an effect on interest income of $58,000 (2008: $35,000).

Term deposits A total of $21,669,000 (2008: $30,203,000) of investments in term deposits are classified as other financial assets. A movement in interest rates of plus or minus 1.0% has an effect of $217,000 (2008: $302,000) on interest income.

Local authority stock A total of $8,270,000 (2008: $8,252,000) of investments in local authority stock are classified as held to maturity. A movement in interest rates of plus or minus 1.0% has an effect of $83,000 (2008: $83,000) on interest income.

Sinking fund investments Sinking Fund Investments totalling $213,000 (2008: $186,000) are invested at a floating interest rate. A movement in that rate of plus or minus 1.0% has an effect on interest income of $2,000 (2008: $2,000).

Corporate bonds A total of $500,000 (2008: $500,000) of investments in corporate bonds are classified as held to maturity. A movement in interest rates of plus or minus 1.0% has an effect of $5,000 (2008: $5,000) on interest income.

Term loans At 30 June 2009 the Council had $0 of floating rate debt (2008: $0). A movement in interest rates of plus or minus 1.0% therefore has no effect on interest income.

34. Derivative Financial Instruments As at 30 June 2009, the Council's current and non-current investments and borrowings have all been negotiated at fixed interest rates for fixed terms. Accordingly, the Council holds no derivative financial instruments (2008: $0).

Page 58

Napier City Council Annual Report 2008/09

Notes to the Financial Statements for the Year Ended 30 June 2009

35. Related Party Transactions The Council has significant influence over Hawke's Bay Cultural Trust and Hawke's Bay Incorporated. The Council also has a 36.32% share in the Omarunui Landfill joint venture and has significant influence over Hawke's Bay Airport Authority due to its 26.12% ownership.

Hawke's Bay Cultural Trust The Trust is a council-controlled organisation as three of the five member Board are Napier City Council and Hastings District Council nominees. Hawke's Bay Cultural Trust is classified as an associate entity for financial reporting purposes.

Hawke's Bay Incorporated This was a council-controlled organisation as the three funding Councils comprising Napier City Council, Hastings District Council and Hawke's Bay Regional Council, have the right to appoint 50% of the Trustees of this organisation.

Hawke's Bay Incorporated functions were transferred to the Hawke's Bay Regional Council during 2007/08 and with effect from 1 July 2008 ceased to be a Council Controlled Organisation.

Actual 2009 $000

Actual 2008 $000

431

262

Book purchases paid to HBCT

-

-

Conferences expenses paid to HBCT

-

-

Hawke's Bay Cultural Trust (HBCT) Grants paid to HBCT

Services provided to HBCT

862

536

Accounts receivable from HBCT

-

-

Accounts payable to HBCT

-

25

Advertising expenses paid to HBI

-

21

Grant paid to HBI

-

400

Services provided to HBI

-

2

8

4

1,236

1,265

Hawke's Bay Incorporated (HBI)

Hawke's Bay Airport Authority (HBAA) Services provided to HBAA Omarunui Landfill Landfill fees paid to Hasting District Council

Key Management Personnel – Council Key management personnel includes the Mayor, Councillors, the Chief Executive and other senior management personnel.

During the year, Councillors and key management, as part of normal local authority relationships, were involved in transactions of a minor and routine nature with the Council on normal commercial terms (such as payment of rates and transfer station fees). In addition, during the year: • Council purchased goods and services $0 (2008: $350) from East Pier Bar and Restaurant, in which Mark Herbert, a Councillor, has an equity interest. The Council received revenue of $505 (2008: $1,978) from East Pier Bar and Restaurant. This revenue was for advertising displays at Napier i-SITE Visitor Centre and licences related to East Pier Bar and Restaurant.

• Council received revenue of $7,168 (2008: $1,047) from Thirsty Whale Bar and Restaurant Limited, in which Keith Price, a Councillor, has an equity interest. This revenue was for licences related to Thirsty Whale Bar and Restaurant Limited and advertising in Napier Life Magazine. The Council purchased goods and services of $167 from Thirsty Whale Bar and Restaurant Limited which were supplied on normal commercial terms.

Napier City Council Annual Report 2008/09

Page 59

Notes to the Financial Statements for the Year Ended 30 June 2009 • Council received revenue of $231 from Wiseys Pies and Bakehouse Limited, in which Keith Price, a Councillor, has an equity interest. This revenue was for issuance of licences to Wiseys Pies and Bakehouse Limited. The Council also purchased goods and services from Wiseys Pies and Bakehouse Limited of $372 which were supplied on normal commercial terms. • Council purchased services $0 (2008: $7,722) from Something Different Limited, in which John Cocking, a Councillor, has an equity interest. • Council received $19,000 from Bill McWatt, a key management personnel. This revenue was the deposit for purchase of a residential section which was supplied on the same commercial terms as other residential sections at that location.

No provision has been required, nor any expense recognised for impairment of receivables for any loans or other receivables to related parties (2008: $0).

Key Management Personnel Compensation

Salaries and other short-term employee benefits Post-employment benefits Other long-term benefits Termination benefits

Actual 2009 $000

Actual 2008 $000

1,720

1,618

-

-

10

-

-

-

Key management personnel include the Mayor, Councillors, Chief Executive and other senior management.

36. Joint Venture Napier City Council's interest in the Omarunui Landfill is accounted for as a joint venture with jointly controlled assets. Napier City Council's interests in the joint venture are as follows: Actual 2009 $000

Actual 2008 $000

769

537

5,310

4,605

992

953

Income

1,820

1,866

Income (NCC sales eliminated)

(410)

(460)

Expenses

778

659

Depreciation

500

364

Current assets Non-current assets Non-current liabilities

Joint venture commitments and contingencies There are no capital commitments and contingent liabilities arising from involvement in the joint venture (2008: $0).

Page 60

Napier City Council Annual Report 2008/09

PART 3 Activity Statements for the year ended 30 June 2009

Democracy and Governance Activities Democracy and Governance • Meeting Cycle 6 weeks • Standing and Specialist Committees 8 • Elections Last Held 2 November 2007 Through Democracy and Governance Council provides a democratic and consultative system for decision making. The Council, consisting of a Mayor and twelve Councillors, is elected three yearly. Through its structure of committees, sub‑committees, working parties and forums Council carries out the requirements of the Local Government Act and other related legislation.

Democracy and Governance Performance Measures 1. Number of Council meeting cycles.

2008/09 Targets 8 cycles

2008/09 Results 8 meeting cycles were held in 2008/09 with the following number of Council and Standing Committee Meetings: Council (incl. Extraordinary)

13

Strategic Planning

5

Environmental Management

8

Community Development

5

Corporate Business

6

Maori Consultative

7

Tourism & Economic Development 5 LTCCP & Annual Plan 2. Percentage of residents satisfied with 'Sufficiency of Public Information Supplied' in the NRB Customer Satisfaction Survey.

65%

The NRB Survey carried out in July 2009 showed 75% resident satisfaction with Sufficiency of Public Information Supplied: More than enough

Page 62

4

8%

Enough

67%

Not enough

15%

Nowhere near enough

3%

Don’t know / not sure

7%

Napier City Council Annual Report 2008/09

Democracy and Governance

Performance Targets for 2008/09

Financial Summary Budget 08/09 $000

Actual 08/09 - $000 Activity

Net Cost Income of Service

Actual 07/08 $000

Operating

Depn

Interest

Total

1,920 Democracy and Governance

1,784

-

-

1,784

-

1,784

1,907

1,920 Total Net Operating

1,784

-

-

1,784

-

1,784

1,907

- Capital Expenditure

-

-

1,784

1,907

1,920 Non-targeted Rates

1,784

1,907

1,920 Total

1,784

1,907

1,920 Funding Required Funded by:

Napier City Council Annual Report 2008/09

Page 63

Recreation Activities The Recreation Group comprises: Sportsgrounds

Botanical Gardens

• 13 sports parks (168 hectares)

Council carried out a public consultation process for the restoration of the Botanical Gardens. As a result an independent archaeological assessment of the Botanical Gardens has been completed prior to commencing any on-site work. Restoration of primary Botanical Garden infrastructural items will recommence soon, starting with the installation of a reticulating water system for the stream and ponds. Currently design specifications are being finalised and an investigation is underway to determine the location of all underground pipes in the lower pond area.

• Major facilities - McLean Park Complex, Park Island, Nelson Park and Tareha Recreational Reserve.

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

Napier Aquatic Centre • Indoor facilities (heated) – 5‑lane 25m pool, 6‑lane 25m pool, 15m learner’s pool, 2 toddlers pools, 2 spa pools, 2 water slides A comprehensive aquatic facility providing educational and recreational programmes, and a range of nonaquatic outdoor activities.

Marine Parade Pools • 4 heated outdoor pools, 5 spa pools A complex with a range of heated salt water pools and spas managed under contract.

Reserves • 35 neighbourhood parks, 50 greenbelt reserves, 22km pathways, 21 playgrounds, 7 foreshore reserves and 6 public gardens • 75 m2 recreational reserves per residential lot Throughout the city, Reserves offer a range of passive recreation facilities, providing an open space network, and formal landscaped environments of a high standard.

Inner Harbour • 95 berths An area of wharves and catwalks in Ahuriri providing berths for commercial and recreational vessels and popular for recreational fishing.

Key Issues Napier Aquatic Centre The outdoor 50m Olympic Pool has been closed indefinitely awaiting either disposal or replacement.

Disposal of the asset is estimated to be $300,000.

No decision to replace the facility has been made at present. The likely cost of replacement is in the range of $8 – $12 million.

The Enclosure Building for the 25 metre lap pool built in 1972 is due for replacement by 2014/15. The budget provision in the capital plan is $767,000 funded from loan, however the current estimate is a cost of $1.95 million.

Page 64

Significant Acquisitions or Replacement of Assets • McLean Park Redevelopment The redevelopment encompassed an upgrade of the lighting, the construction of the Graeme Lowe Stand, which replaced the existing McKenzie Stand, and the upgrade of user requirements. The Council continues working with the McLean Park Regional Trust Fundraising Committee to raise funding for the project. Fundraising had a recent boost with a grant of $2.9 million from the Significant Community Based Projects Fund. This is on top of all the generous funding already received. Work completed on redevelopment in 2008/09 is as follows: -- The second stage of the lighting upgrade was completed. This completes the $1.7 million lighting upgrade for McLean Park.

-- The construction of the new Graeme Lowe Stand commenced in September 2008 and was substantially completed by 30 June 2009. It is proposed that the stand be opened on 1 August with final sitework being completed by September 2009.

Other McLean Park upgrade projects such as tip-up seats for the Rodney Green Stand and the turnstiles have been deferred until sufficient funding is available.

The budget provision of $6.922 million was included in the LTCCP in 2006/07 and 2007/08.

This provision was revised in the 2008/09 Annual Plan to a total of $8.934 million funded from Trust Revenue.

• Whakarire Ave Groyne and Westshore Beach Reprofiling The projects of re-profiling Westshore Beach and the Whakarire Avenue Breakwater were included in the LTCCP in the 2006/07 and 2007/08 years with a budget of $3.2 million funded by loan. Council has prepared a Resource Consent application for the replacement of the Whakarire Ave Breakwater which is due to be lodged shortly.

Napier City Council Annual Report 2008/09

Recreation

Performance Targets for 2008/09 Sportsgrounds Performance Measures 1. Percentage of residents satisfied with ‘Sportsgrounds/Fields’ in the NRB Customer Satisfaction Survey.

2. Sportsground area per 1,000 residents.

3. International events.

4. National/Inter-regional events.

2008/09 Targets 90%

2008/09 Results The NRB Survey carried out in July 2009 showed 91% resident satisfaction with Sportsgrounds/Fields: Very satisfied Satisfied Not very satisfied Don’t know

3.129 Ha

61% 30% 4% 5%

2.801 Ha The target (not achieved) is a long term average and the result is dependent on the timing of development of sportsgrounds.

4 75

International events = 5 National/Inter-regional events = 110

Napier Aquatic Centre Performance Measures 1. Users per year.

2008/09 Targets 230,000

2008/09 Results 198,842 users in 2008/09: Casual users Concessions Aerobics Learn to Swim Other programmes Clubs Facility hires (groups) Non-paying users

64,270 16,110 5,578 29,963 3,061 14,243 38,881 26,736

The target was not achieved due to the closure of the outdoor pool.

2. Percentage of facilities 'PoolSafe'.

3. Percentage of residents satisfied with 'Swimming Pools' in the NRB Customer Satisfaction Survey.

100%

80%

100% compliance with PoolSafe requirements.

The NRB Survey carried out in July 2009 showed 61% resident satisfaction with Swimming Pools: Very satisfied Satisfied Not very satisfied Don’t know

4. Programmes operating per year.

Napier City Council Annual Report 2008/09

8

33% 28% 16% 23%

8 programmes operated in 2008/09

Page 65

Recreation Napier Aquatic Centre continued 5. Adherence rate to water quality meeting NZ Standards.

85%

6. Number of Learn to Swim users per year.

25,000

Adherence average = 90%

Learn to Swim participants = 29,963

Marine Parade Pools There are no non-financial performance measures for the Marine Parade Pools.

Reserves Performance Measures

2008/09 Targets

1. Percentage of residents satisfied with ‘Public Gardens and Street Beds’ in the NRB Customer Satisfaction Survey.

90%

2. Number of annuals propagated and planted throughout the city.

180,000

3. Area of recreational land per residential lot.

2008/09 Results The NRB Survey carried out in July 2009 showed 98% resident satisfaction with Public Gardens and Street Beds: Very satisfied Satisfied Not very satisfied Don’t know

75m2

75% 23% 2% 0%

Annuals for 2008/09 = 190,402

71.8m2 The target, which was not achieved, is a long term average and the result is dependent on the timing of development of greenfield reserves and the acquisition of suitable reserve areas to counter infill development.

Inner Harbour Performance Measures 1. Percentage of vessels berthed that are commercial.

2. Time between dredges of the Inner Harbour. (Dredging due to be undertaken during the 2008 calendar year.)

3. Number of permanent berths.

Page 66

2008/09 Targets 30%

3 years

2008/09 Results 30% of vessels berthed were commercial.

4 years The target was not achieved. The timing of the dredging was extended to coincide with dredging by Port of Napier. The dredging was undertaken during 2008/09.

95

95 permanent berths for 2008/09.

Napier City Council Annual Report 2008/09

Recreation

Financial Summary Budget 08/09 $000

Actual 08/09 - $000 Activity

Net Cost Income of Service

Actual 07/08 $000

Operating

Depn

Interest

Total

1,772 Sportsgrounds

2,402

694

110

3,206

996

2,210

2,037

1,167 Napier Aquatic Centre

1,597

239

11

1,847

687

1,160

1,178

140 Marine Parade Pools 3,111 Reserves 223 Inner Harbour 6,413 Total net operating

20

171

10

201

50

151

180

2,706

226

167

3,099

102

2,997

2,727

864

96

17

977

165

812

161

7,589

1,426

315

9,330

2,000

7,330

6,283

2,231 Capital Expenditure [2] 8,644 Funding required

8,179

610

15,509

6,893

Funded by: 6,098 Non-targeted rates

6,720

5,700

1,583 Special funds

8,211

729

290 Vested assets

84

-

158 Loans

30

64

515 Non-funded depreciation 8,644 Total

464

400

15,509

6,893

[1] Summary of Income Actual 08/09 $000

User charges Land Transport NZ and other Government grants Rental income – other Retail and product sales Other income Grants and donations Total income

Napier City Council Annual Report 2008/09

1,112 24 402 36 420 6 2,000

Page 67

Recreation [2] Capital Expenditure Budget 08/09 $000

Actual 08/09 $000

Sportsgrounds 1,000 McLean Park redevelopment 166 Sportsgrounds I.A.R. 105 Sportsgrounds development

7,419 48 -

152 Install automatic irrigation systems

33

146 Park Island – Bond Field extension

15

- Rodney Green Centennial Events Centre - Minor capital items

93 8

Napier Aquatic Centre 39 Napier Aquatic Centre I.A.R.

34

Reserves 272 Reserves I.A.R. 290 Reserves vested assets 61 Tree planting programme

84 82

- Passive recreation reserves

50

- Upgrade skatebowl facility

32

- Botanical Gardens restoration

17

- Whakarire Ave Breakwater

30

- Minor capital items

13

2,231 Capital Expenditure

Page 68

221

8,179

Napier City Council Annual Report 2008/09

Social and Cultural Activities The Social and Cultural Group comprises: Libraries

Safety Watch

• 2 Libraries - Napier and Taradale

The Safety Watch patrol acted as extra eyes and ears for the Police in the inner city area. The aim of the programme was to reduce violence and encourage sensible social behaviour.

• 39,000 members Libraries offer free-to-all services and a stimulating and pleasant environment. Services include recreational, educational, historical, genealogical, cultural and current affairs material together with on-line facilities, reading and outreach programmes.

War Memorial Centre A multi-functional facility located on the beach front along Marine Parade, consisting of a ballroom, an exhibition hall, a gallery and three breakout rooms.

This venue is highly suitable for conferences, exhibitions, weddings and other functions. The facility also houses an eternal flame as a memorial to Napier citizens who served and died in the conflicts of the 20th century.

Municipal Theatre The Art Deco heritage building in Tennyson Street provides modern theatre facilities for local, national and international live theatre, performing arts, exhibitions, and other community functions. The auditorium has a seating capacity of 993, and a ticketing Agency situated in the front foyer sells 78,000 tickets a year.

Hawke’s Bay Museum and Art Gallery Arts, cultural and museum facilities are provided by the Hawke’s Bay Museum and Art Gallery, the Century Theatre / Cinema and the Faraday Centre - Technology Museum and Science Centre.

Community Development Community facilitation, administration of community grants, Youth Development and Settlement Support are the main components of Community Development.

Community facilitation and grants support and encourage voluntary and community based organisations to address social issues in the city through self-help processes. Youth Development supports and fosters the role of young people in our community, providing opportunities for young people to participate and engage in decision making. Settlement Support ensures migrants, refugees and their families access appropriate information and responsible services that are available in the wider community.

Safer Community The purpose of this activity is to develop community based crime prevention initiatives, promote safety in the community, and provide coordination and liaison between community groups and organisations. The Safer Napier Board, formerly the Safer Community Council, was established as a Central Government initiative – subsidised by the Ministry of Justice Crime Prevention Unit – with the aim of supporting community solutions to reduce crime and antisocial behaviour.

Napier City Council Annual Report 2008/09

Halls • 7 casual hire facilities, 2 leased facilities Council provides a range of facilities with a good geographic spread for recreational, community or leisure activities at affordable prices.

Retirement and Rental Housing • 303 retirement flats in 9 villages – all one bedroom • 70 rental flats in 3 villages – mostly 2 bedroom Flats are provided for people with special housing needs, low assets, and low income, with the emphasis on providing for the welfare of the tenants. Council flats are in high demand with the average occupancy rate exceeding 97%.

Cemeteries • 6 cemeteries – 4 operational and 2 historic Comprehensive areas are available for burials, ash interments, and ash scattering. The historical and cultural significance of some of the older Napier cemeteries has been improved and preserved through the use of the cemetery volunteers. A complete audit of all Napier City cemetery records is underway, and along with a link to the Council’s GIS system, will be loaded onto the Council website. This records audit is essential and once completed will greatly simplify genealogical enquiries. The crematorium for the Hawke’s Bay region, located in Hastings, is owned and operated by Hastings District Council.

Public Toilets • 43 toilet facilities Public toilets are provided in key areas generally related to tourism, recreation and shopping activities. Facilities are cleaned and inspected daily with the emphasis on hygiene, safety and mitigation of graffiti.

Emergency Management • 1 Emergency Management Operations Centre • 9 Civil Defence Centres Emergency Management combines Council staff, volunteers, other organisations and agencies to facilitate a planned response to emergencies in Napier. Integration of policies and planning as a region is coordinated by the Hawke's Bay Civil Defence Emergency Management Group.

Page 69

Social and Cultural

Key Issues Significant Acquisitions or Replacement of Assets • Napier and Taradale Library Facilities An investigation into enhancing the future delivery of library services was completed by OCTA Associates Ltd and adopted by Council in August 2007. The budget of $1.7 million for the Taradale Library extension of 1,275 m2 was included in past year's plans, funded by loan. This extension was completed in May 2009 and re-opened in July 2009.

Remaining budget from this project is to be used for some short-term redevelopment of the Napier Library in 2009/10. Funding for the long-term redevelopment of the Napier Library was considered through the Council’s 2009/10 to 20019/20 Ten Year Plan.

• Redevelopment of HB Museum and Art Gallery Buildings Major redevelopment of the Hawke’s Bay Museum and Art Gallery is proposed. This includes: -- Demolition/relocation of the Lilliput and Discovery Centre buildings.

-- Creation of a new HB Museum and Art Gallery building which links through to the existing Century Theatre and Museum buildings.

• Community Development Ongoing support for the Maraenui community is a priority for the Napier City Council. After consultation with the community the Maraenui Urban Renewal Trust has formulated a proposal for the redevelopment of the Maraenui Shopping Centre.

• Safety Watch The Napier City Council will no longer be providing the inner city patrol service – Safety Watch. Since its inception in 2001 the need for the service has changed. There have been a number of other initiatives that are now adding to the safety of the inner city. These include the setting up of liquor bans, the installation of close circuit television, the Napier Community Patrols, the establishment of the police tactical response team targeting alcohol related crime and the Bar-safe project. Plus a more responsible approach by licensees and the decline of Hastings Street as the predominant bar and night club area in Napier.

-- Restoration of the Louis Hay Museum building to its original Art Deco character.

Council has provided $5 million from its ten year capital plan over the years 2005 to 2008. Working drawings have been prepared and the project is intended to be commenced in the 2010/11 year subject to the raising of the required funds for the project. The redevelopment project has a total budgeted cost of $17 million.

Page 70

Napier City Council Annual Report 2008/09

Social and Cultural

Performance Targets for 2008/09 Libraries Performance Measures

2008/09 Targets

1. Number of issues of specialist collections.

2. Number of users (door and virtual).

2,500

2008/09 Results 9,306 issues for 2008/09.

The target was set too low.

500,000 (door and virtual) 415,000 (door only)

Number of users for 2008/09: • 457,464 (door and virtual) • 376,761 (door only) The target was not achieved.

3. Bookstock refreshment rate.

4. Number of items issued.

254 745,000

Refreshment rate = 254 726,673 items issued in 2008/09.

The target was not achieved.

5. Number of members.

35,000

Membership at 30 June 2009 = 38,686 (34,050 Napier residents)

6. Users of Community Information Database.

7. Books on Wheels users.

2,000

Number of users = 430 The target was not achieved. The database has been moved from the Library website to the Council website.

110

Number of users at year end = 86 The target was not achieved.

8. Number of children’s programmes.

200

173 children's programmes in 2008/09.

The target was not achieved.

Notes: 1. Targets not achieved as a result of the Taradale Library being closed for re-construction from November 2008 – mid-July 2009.

2. The measure “Number of users of indexes” included in the LTCCP was not included in the 2008/09 Annual Plan as the statistic is not able to be measured accurately with current systems.

Napier City Council Annual Report 2008/09

Page 71

Social and Cultural War Memorial Centre Performance Measures

2008/09 Targets

2008/09 Results

1. Days Eternal Flame Memorial maintained.

365 days

Eternal Flame Memorial maintained for 365 days in 2008/09.

2. Usage rate.

270 days

Usage rate = 302 days

3. Customer satisfaction.

4. Number of “Full Service” conferences.

90% Numbers for year: Total delegates 2,700 Conferences 18 Average delegates 150

Customer satisfaction = 95% Number of "Full Service" conferences: Total delegates 3,555 Conferences 19 Average delegates 187

Municipal Theatre Performance Measures 1. Number of performance days.

2008/09 Targets 154 days

2008/09 Results Number of performance days = 98 The target was not achieved due to the impact of the slower economy, the re-opening of the Hawke's Bay Opera House and the timing of expected events impacted more than projected.

2. Reviews of building maintenance and standard of Art Deco presentation.

1 per year

1 review in 2008/09

3. Number of ‘other’ hire days.

72 days

Number of 'other' hire days = 78

4. Number of tickets sold.

60,000

Number of tickets sold = 78,908

Hawke's Bay Museum and Art Gallery Performance measures for the Hawke’s Bay Museum and Art Gallery have now been developed and included in the 2009 Ten Year Plan.

This activity includes the Ten Year Plan Cultural Services activity.

Community Development Performance Measures 1. Community Services Grants allocated by the designated process and time frame.

Page 72

2008/09 Targets

2008/09 Results

100%

100% completed.

Total of $57,310 allocated to 35 community organisations, approved at Council meeting on 6 August 2008.

13 other community organisations were declined grants.

Napier City Council Annual Report 2008/09

Social and Cultural Community Development continued 2. Community Services Property Grants allocated by the designated process and time frame.

100%

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

100%

100% completed.

Total of $3,556.72 allocated to 8 community organisations by Council on 5 November 2008.

2 other organisations were ineligible for a property grant.

90% of funds allocated to initiatives in 2008/09 and 10% committed to initiatives to start in 2009.

Funding distributed to: • Maraenui Shopping Centre Revitalisation • Pukemokimoki Marae Trust • Napier Christian Love Link • Diwali Festival of Lights • Napier Christmas Festival The target was not achieved.

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

5. Number of Napier Community Network meetings coordinated each year.

90%

100% of reporting requirements met.

Reports were completed by all organisations.

6

Network meetings coordinated: • 26 August 2008 • 25 November 2008 • 17 February 2009 • 12 May 2009 The target was not achieved.

6. Number of community organisations receiving information by way of mail-out and email four times per year.

90

130 community organisations have received information via community network meetings, newsletters, email groups, community projects and on the Council website during 2008/09.

Youth Development Performance Measures 1. Number of Youth Forums coordinated per year.

2008/09 Targets 6

2008/09 Results 20 Youth Forums coordinated in 2008/09.

2. Number of scholarships awarded for the Youth Development Fund.

16

16 scholarships awarded.

3. Number of Youth Service Providers receiving information mail-outs quarterly.

25

195 Youth Service Providers received quarterly information mail-outs.

Napier City Council Annual Report 2008/09

20 different mail-outs to Youth Workers Collective completed.

Page 73

Social and Cultural Youth Development continued 4. Number of Alcohol and Drug free events and activities.

7

12 events for 2008/09: • 5 x Dance Parties • ‘Take It On’ & ‘Cultural Explosion’ – Spac Pac events • Christmas Celebration • ‘Media that Matters’ – Youth Film Festival • Live Band Concert @ Soundshell • Bay Fest 09 • Goodnight Nurse Concert

Safer Community Performance Measures 1. Crime Reduction strategies.

2008/09 Targets 3

2008/09 Results • Ministry of Justice funding for the Ka Hao Te Rangatahi (KHTR) programme 5 is secured.

• All participants of the KHTR programme 4 are still engaged with the programme and at school.

• Ahuriri survey data has been collated.

• The Maraenui Urban Renewal Plan Sponsor Group have reviewed the plan and it is currently being updated. The development of a strategy to reduce the influence of the gang in Maraenui has been added.

• Project Curbing Alcohol Related Violence (CARV) completed. The Local Steering Group has approved funding for a joint Hastings/Napier Alcohol Strategy to be developed.

Safety Watch Performance Measures 1. Nights Safety Watch patrol inner city per year.

2008/09 Targets 260

2008/09 Results Number of nights patrolled = 182 days.

The target was not achieved as the Safety Watch Team was disestablished at the end of March 2009.

Note: The measures “Total Incidents Recorded” and “Total Recorded Crime in CBD” included in the LTCCP were not included in the 2008/09 Annual Plan as they do not reflect the actual performance of the Safety Watch Patrol.

They are primarily influenced by variables beyond the control of Council.

Page 74

Napier City Council Annual Report 2008/09

Social and Cultural Halls Performance Measures

2008/09 Targets

1. Total proportion of users that are community and rehabilitation hirers.

2. Total hours hired in Greenmeadows East, Memorial Square and Library Seminar Room.

75%

Greenmeadows 1,250 Memorial Square 1,600 Library Seminar 700

3. Customer satisfaction rating.

2008/09 Results Total proportion of users = 96%

Greenmeadows Memorial Square Library Seminar

1,335 1,596 0

The targets for Memorial Square and Library Seminar Room were not achieved. The Library Seminar Room was used for storing Taradale Library bookstock during the redevelopment.

80%

Customer satisfaction rating = 90%

Retirement and Rental Housing Performance Measures

2008/09 Targets

2008/09 Results

1. Number of flats inspected.

100%

100% of flats inspected in 2008/09.

2. Occupancy rate – Rental flats.

97.0%

Occupancy rate = 98.4%

3. Occupancy rate – Retirement flats.

97.0%

Occupancy rate = 98.6%

4. Maximum rent arrears – Rental flats.

0.16% of rentals

Arrears 2008/09 = 0.09% ($523.60)

5. Maximum rent arrears – Retirement flats.

0.16% of rentals

Arrears 2008/09 = 0.02% ($214.60)

Cemeteries Performance Measures

2008/09 Targets

2008/09 Results

1. Number of burials and ash interments.

Due to sensitivity there is no target.

Burials Ash interments

Napier City Council Annual Report 2008/09

145 145

Page 75

Social and Cultural Public Toilets Performance Measures 1. Percentage of residents satisfied with 'Public Toilets' in the NRB Customer Satisfaction Survey

2008/09 Targets 80%

2008/09 Results The NRB Survey carried out in July 2009 showed 73% resident satisfaction with Public Toilets: Very satisfied Satisfied Not very satisfied Don’t know

2. Daily inspections and cleaning of all toilets.

100%

31% 42% 9% 18%

99.6% of toilets were inspected and cleaned daily.

The target was not achieved.

Emergency Management Performance Measures 1. Radio communications operative during weekly checks.

2008/09 Targets 95%

2008/09 Results 100% of radio communications for volunteer staff operative.

Checks for Council staff will be included in future years.

2. Emergency Operations Centre training activities (including volunteers).

30

Training activities = 27 The target was not achieved. Two training sessions and a community presentation / training session cancelled due to Napier Siege. These have been rescheduled.

3. Number of Civil Defence Centres.

9

4. Number of Civil Defence Community Networks (volunteers).

59

9 Civil Defence Centres.

51 Civil Defence Community Networks.

The target was not achieved.

5. Percentage of residents satisfied with Civil Defence Activity in the NRB Customer Satisfaction Survey.

60%

6. National warnings responded to within 30 minutes.

95%

The NRB Survey carried out in July 2009 showed 67% resident satisfaction with Civil Defence Activity: Very satisfied Satisfied Not very satisfied Don’t know

36% 31% 1% 32%

100% of relevant National Warnings test messages were responded to within 30 minutes.

The majority of National Warnings are not relevant to the Napier Emergency Management and were not included in the results.

Page 76

Napier City Council Annual Report 2008/09

Social and Cultural

Financial Summary Budget 08/09 $000

Actual 08/09 - $000 Activity

2,834 Libraries 252 War Memorial Centre 442 Municipal Theatre

Net Cost Income of Service [1]

Actual 07/08 $000

Operating

Depn

Interest

Total

2,470

322

12

2,804

219

2,585

2,725

1,258

112

8

1,378

1,115

263

232

709

286

17

1,012

522

490

450

1,108 HB Museum & Art Gallery

2,725

31

-

2,756

1,901

855

1,008

831 Community Development

1,125

1

-

1,126

412

714

810

232

-

-

232

153

79

131

114 Safer Community 344 Safety Watch

190

-

1

191

-

191

220

264 Halls

203

49

8

260

54

206

273

1,337

482

119

1,938

1,905

33

3

299 Cemeteries

484

31

7

522

184

338

244

623 Public Toilets

647

55

4

706

13

693

633

309 Emergency Management

292

35

-

327

12

315

302

11,672

1,404

176

13,252

6,490

6,762

7,031

3,445

1,526

10,207

8,557

7,333

7,338

909 Special funds

564

666

- Vested assets

220

-

1,612

164

478

389

10,207

8,557

66 Retirement & Rental Housing

7,486 Total net operating 899 Capital Expenditure [2] 8,385 Funding required Funded by: 6,962 Non-targeted rates

- Loans 514 Non-funded depreciation 8,385 Total

[1] Summary of Income Actual 08/09 $000

User charges Land Transport NZ and other Government grants

1,429 413

Rental income – other

2,037

Retail and product sales

2,305

Other income Grants and donations Total income

Napier City Council Annual Report 2008/09

22 284 6,490

Page 77

Social and Cultural [2] Capital Expenditure Budget 08/09 $000

Actual 08/09 $000

Libraries 588 Library bookstock - Taradale Library redevelopment

543 1,682

- Minor capital items

43

- Libraries vested assets

30

War Memorial Centre 16 Minor capital provision

56

18 Gene hoist

14

Municipal Theatre 26 Minor capital provision

11

HB Museum and Art Gallery - Redevelop HB Museum and Art Gallery buildings - Minor capital items

481 78

Community Development - Minor capital items

65

Halls - Halls vested assets

220

- Minor capital items

30

Retirement and Rental Housing 80 Retirement Flats minor capital projects

17

20 Rental Flats minor capital projects

10

- Wellesley Place recladding

17

Cemeteries 44 Cemeteries I.A.R. 10 Cemeteries new beams - Cemetery carparks

40 10

Public Toilets 97 Public Toilets I.A.R.

54

Emergency Management - Civic Building generator

31

- Emergency Management software

13

899 Capital Expenditure

Page 78

3,445

Napier City Council Annual Report 2008/09

City Promotion Activities The City Promotion Group comprises: City and Business Promotion

Napier i-SITE Visitor Centre

• Business advisory and facilitation services.

Napier i-SITE Visitor Centre on Marine Parade is part of the NZ Visitor Information Network and offers information and booking services, including accommodation and travel, attractions and activities, itinerary planning and advice, gifts, souvenirs, stamps and phone cards, local business events and entertainment information, maps, guides and books.

• Business re-focus.

• Business start up facilitation. City and Business Promotion facilitates and assists existing and new businesses in the City to develop, expand and create employment.

• Council promotes Napier via the “Time of Your Life” city marketing programme – an ongoing major media advertising programme aimed at informing national and international audiences about Napier to attract migrants and visitors to Hawke’s Bay. • Sister City relations – Tomakomai (Japan), Lianyungang (China), Victoria (Canada).

City Promotion Grants • Grants to key local tourism organisations Art Deco is an important tourism feature of the City and Council assists the Art Deco Trust in its promotion of Art Deco in Napier by way of a contract for service.

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

Par 2 MiniGolf Two 18 hole themed miniature golf courses and a club house situated next to the Napier i-SITE Visitor Centre on Marine Parade providing entertainment for all ages. Services include group rates and coaching for schools, Big Day Out Programme incorporating Marine Parade Heritage features, and corporate business house competitions.

Kennedy Park Kennedy Park Top 10 Resort is one of the busiest holiday parks in New Zealand set in spacious park like surroundings. Facilities include 91 rooms, 169 powered and non-powered sites, as well as a restaurant, bar, conference facility, children's playground, commercial laundry, service buildings, shop and a pool complex.

Marineland of New Zealand Marineland of New Zealand facilities are located on Napier's Marine Parade. The facility is currently closed to the public. Council closed Marineland on 11 September 2008 and it was re-opened for the summer season from 20 December 2008 to 26 April 2009.

Marineland is a marine zoo featuring marine mammals and birds. It acts as an education centre and an animal rehabilitation centre for sick, injured and orphaned marine animals. Activities include hire of bicycles and tandems. The Marineland Education Department also acts as the vehicle for the delivery of the Napier City Council "Waste Aware" programme.

Key Issues Marineland of NZ Council is investigating options for the future of the Marineland site.

Kennedy Park The 2008/09 Annual Plan identified that the proposed upgrade of cabins was not included in the Capital Plan.

The 2009/10 Ten Year Plan includes a project for the replacement of cabins.

National Aquarium of New Zealand The National Aquarium of New Zealand on Marine Parade houses sharks, stingray, hundreds of fish species, reptiles and kiwi. There are shows and tours daily, diving and photograph facilities, a themed souvenir shop and a café. The Aquarium regularly hosts school groups, tour groups, birthday parties, sleep overs, and many other functions.

Napier City Council Annual Report 2008/09

Page 79

City Promotion

Performance Targets for 2008/09 City and Business Promotions Performance Measures 1. Number of Economic Monitoring reports produced.

2. ‘Be Your Own Boss’ clients served.

3. Percentage of residents satisfied with 'Council's policies to promote job opportunities' in the NRB Customer Satisfaction Survey.

2008/09 Targets 4

100

70% (Excluding don't know)

2008/09 Results 5 reports for 2008/09: • Napier City Business Survey – September 2008, March 2009 • Economic Monitor Report – September 2008, January 2009, May 2009 113 clients in 2008/09.

The NRB Survey carried out in July 2009 showed 82% resident satisfaction with Council’s policies to promote job opportunities – excluding “don’t know”.

City Promotion Grants There are no non-financial performance measures for City Promotion Grants.

Marineland of New Zealand Performance Measures 1. Attendances.

2008/09 Targets 46,000

2008/09 Results Attendances = 20,400 The target was not achieved.

2. Range of visitor experience options.

3. Number of educational programme attendees.

7

4,400

N/A – Marineland closed to public.

Educational programme attendees = 2,881 The target was not achieved.

4. Number of rehabilitated animals and birds.

30

Rehabilitated animals and birds = 65

5. Work experience and skill enhancement volunteers.

25

35 volunteers in 2008/09

Note: Performance measures targets were not achieved due to the closure of Marineland to the public.

Page 80

Napier City Council Annual Report 2008/09

City Promotion National Aquarium of New Zealand Performance Measures 1. Number of schools.

2. Number of school children.

2008/09 Targets 50 7,322

2008/09 Results 135 school visits in 2008/09.

6,418 school children in 2008/09.

The target was not achieved. There was a higher number of school with lower than average class size.

3. Number of environmental exhibitions.

2

3 environmental exhibitions.

4. Number of environmental projects.

2

2 environmental projects.

5. Number of visitors.

116,377

96,351 visitors in 2008/09.

The target was not achieved due to the impact of the slower economy.

6. Number of function attendees.

1,630

1,135 function attendees in 2008/09.

The target was not achieved. Partially offset by the higher number of sleep overs plus the impact of the slower economy.

7. Number of sleep over attendees.

880

8. Number of major cultural exhibits.

1

9. Number of Friends of the Aquarium.

1,000

950 sleep over attendees in 2008/09.

1 major cultural exhibit in 2008/09.

1,160 Friends of the Aquarium.

Napier i-SITE Visitor Centre Performance Measures 1. Visitor numbers through the centre.

2. New and renewal paid operator displays.

3. Number of information packs distributed.

Napier City Council Annual Report 2008/09

2008/09 Targets

2008/09 Results

350,000

Visitors = 294,055 The target was not achieved due to the impact of the slower economy.

120

Paid operator displays = 439 Alternative revenue streams sought to offset downturn.

1,200

Information packs distributed = 2,744

Page 81

City Promotion Par 2 MiniGolf Performance Measures

2008/09 Targets

1. Admission numbers.

50,280

2008/09 Results Admissions 2008/09 = 46,409 The target was not achieved due to the impact of the slower economy.

2. Customer satisfaction rating.

80%

Customer satisfaction rating = 98%

Kennedy Park Performance Measures 1. Overall room nights booked.

2008/09 Targets 36,467

2008/09 Results Room nights booked = 31,000 The target was not achieved.

2. Room nights booked for sport groups.

3. Percentage of users who have young children in family groups.

Page 82

1,540

21%

Sport group room nights booked = 1,888 Family groups with young children = 25%

Napier City Council Annual Report 2008/09

City Promotion

Financial Summary Budget* 08/09 $000

Actual 08/09 - $000 Activity

Net Cost Income of Service [1]

Actual 07/08 $000

Operating

Depn

Interest

Total

530 City & Business Promotion

603

-

-

603

4

599

497

617 City Promotion Grants

744

-

-

744

152

592

599

375 Marineland of NZ 650 National Aquarium of NZ 330 Napier i-SITE Visitor Centre

679

20

3

702

190

512

84

1,546

399

211

2,156

1,322

834

759

953

36

1

990

648

342

302 (79)

(59) Par 2 MiniGolf

237

18

1

256

311

(55)

(538) Kennedy Park

1,982

205

15

2,202

3,108

(906)

(904)

1,905 Total net operating

6,744

678

231

7,653

5,735

1,918

1,258

244

201

2,162

1,459

1,448

1,064

36

(225)

303 Capital Expenditure [2] 2,208 Funding required Funded by: 1,098 Non-targeted rates 455 Special funds 655 Non-funded depreciation 2,208 Total

678

620

2,162

1,459

[1] Summary of Income Actual 08/09 $000

Uniform annual charges User charges

152 4

Land Transport NZ and other Government grants

53

Rental income – other

36

Retail and product sales

5,432

Other income

19

Grants and donations

39

Total income

5,735

*The 2009 budget values have been restated to include UAC budget revenue as attributable to each activity in line with actual results.

Napier City Council Annual Report 2008/09

Page 83

City Promotion [2] Capital Expenditure

Budget 08/09 $000

Actual 08/09 $000

Marineland of NZ 6 Minor capital provision

-

National Aquarium of NZ 31 Aquarium capital provision

-

13 Minor capital provision

-

- Other minor capital items

2

Napier i-SITE Visitor centre 20 Napier i-SITE new front counter 11 Minor capital provision - i-SITE upgrade/refurbishment

1 7

Par 2 MiniGolf 20 Par 2 MiniGolf upgrade continuation 6 Minor capital provision

14 3

Kennedy Park 106 Minor capital provision

23

90 Kennedy Park renewals

11

- Facilities renewals

62

- Furniture and fittings

92

- Replace cabins

9

- Plant and equipment

20

303 Capital Expenditure

244

Page 84

Napier City Council Annual Report 2008/09

Planning and Regulatory Activities The following activities, except Parking, are legislative requirements.

City Development Planning City Development Planning manages the development of the natural and built environment of Napier, via the District Plan, under the Resource Management Act 1991 in a sustainable manner, ensuring the quality and quantity of the City’s resources are maintained and enhanced.

Regulatory Consents Council ensures that development of the City is within the Resource Management Act 1991 and the policies of the District Plan through Regulatory Consents. This includes processing non-notified Resource Consents and Land Information Memorandum, preparing resource applications for land sub-divisions and an annual environmental programme to gauge the effectiveness of Council’s environmental management policies. Also covered is enforcement work to ensure compliance with Resource Consent approvals and the operative District Plans.

Building Consents The Council ensures that building development within the City is in accordance with the Building Act 2004 through the process of the Building Consents. Services include counter advisory service, processing building consent applications, providing codes of compliance and building warrants of fitness, and investigating complaints.

Environmental Health Service

Parking Services • Public Parking Spaces: CBD - 2,405; Taradale 366 Parking areas are provided in the Central Business District and Taradale Shopping Centre as well as the smaller commercial areas of the City with long and short term spaces providing parking to meet reasonable public expectations. In addition to fees from parking meters, car park ticket machines and leased spaces, parking is funded through a levy on rates on commercial and retail properties in Napier and Taradale and other smaller suburban shopping and commercial areas. Monitoring and enforcement of parking bylaws ensures equitable use.

Key Issues World Heritage Site Napier City Council is currently seeking World Heritage status for the Napier Art Deco Historic Precinct. In the first instance the Council has established a partnership with the Department of Conservation who are undertaking a research project into the relative international value of Art Deco as a cultural style and the importance of Napier as an historic site that reflects this.

Parking Preliminary work has begun on parking developments for Napier CBD and Taradale to cater to future parking needs.

Council deals with the environmental problems of noise, smoke, smell and refuse pollution through its Environmental Health Services through investigation and enforcement under a range of Acts. Licences are processed and premises inspected for food premises, hairdressers, offensive trades, camping grounds, skin piercing, mobile shops, funeral directors and street occupation. Also covered is the administration of matters relating to the Sale of Liquor Act, monitoring compliance with household swimming pool regulations, and investigations and advice on environmental and any other health matters and nuisances such as vermin, pests and fire hazards.

Animal Control Animal Control ensures that all animals within the city are under proper control. Dogs are the primary animal and these must all be registered. Emphasis is placed on responsible dog ownership, education and classification of dogs and owners in line with the provisions of the Dog Control Act 1996.

Napier City Council Annual Report 2008/09

Page 85

Planning and Regulatory

Performance Targets for 2008/09 City Development Planning Performance Measures 1. Review of Council’s Strategic Policy Documents.

2. Process any District Plan modifications within legislative requirements.

3. Percentage of residents satisfied with Town Planning in the NRB Customer Satisfaction Survey.

2008/09 Targets

2008/09 Results

Report as required.

Draft plan change and preferred structure plan for Te Awa have now been advertised for public comment.

New design guides for Inner City signage have been completed.

Consultation with retailers has been deferred until Council's Street Use Policy, including fees and charges, is finalised.

A review of multi-unit developments and subdivision standards on the Napier Hill is currently being undertaken.

A joint Heretaunga Plains Urban Growth Study is currently being undertaken with NCC, HDC and HBRC all involved.

100% within 2 years.

The plan modifications for mobile footpath signs and residential activities in industrial zones were both completed within the legislative requirements.

60%

The NRB Survey carried out in July 2009 showed 62% resident satisfaction with Town Planning: Very satisfied Satisfied Not very satisfied Don’t know

18% 44% 8% 30%

4. Report any additions to heritage inventory of heritage studies completed.

Report as required.

Napier Soldiers Club (former), 39 Marine Parade, has been registered as a Category I Historic Place and will be added to the District Plan when the Heritage Section is next reviewed.

5. Report on consultation for District Plan modifications who was consulted and on what issues prior to formal notification.

Report as required.

Consultation is currently occurring with landowners, stakeholders and potentially affected parties in relation to the Te Awa Structure Plan and Draft Plan Changes.

Consultation is also occurring in relation to the Taradale Town Centre upgrade project.

6. Positive outcomes in the State of the Environment (SOE) report for Napier City.

Report as required.

No SOE reporting has occurred this year.

Page 86

Napier City Council Annual Report 2008/09

Planning and Regulatory City Development Planning continued 7. Consistency with other regional/ territorial plans.

Report as required.

Mediation on Council’s appeal on the HBRC Coastal Environment Plan continues with Court assisted mediation having recently been completed.

The decision on the Notice of Requirement (for designation) plan change to the HDC District Plan, for a southern extension of the HB Expressway has been approved.

Plan changes to the Hastings District Plan are monitored regularly to ensure no cross boundary issues arise.

Note: The measure “Reduce the number of resource consent applications" included in the LTCCP was not included in the 2008/09 Annual Plan as it does not reflect the actual performance of Council. The number of consents is primarily influenced by variables beyond the control of Council.

Regulatory Consents Performance Measures

2008/09 Targets

1. Percentage of Non-notified and Subdivision Consents processed within 20 working days.

100%

2. Percentage of Notified Consents processed within 70 working days.

100%

3. Percentage of Land Information Memoranda processed within 10 working days.

100%

4. Percentage of residents satisfied in the Planning Customer Satisfaction Survey.

60%

2008/09 Results 94% (202 out of 214) processed within 20 working days.

The target was not achieved.

75% (4 out of 5) processed within 70 working days.

The target was not achieved.

100% (225 out of 225) processed within 10 working days.

The Planning Customer Satisfaction Survey has not been carried out. NRB Survey results are included above in City Development Planning.

Building Consents Performance Measures 1. Percentage of Building Consents processed within 20 working days.

2. Number of Building Warrant of Fitnesses (WOFs) audited.

2008/09 Targets 100%

2008/09 Results 98% (1,103 out of 1,125) processed within 20 working days.

The target was not achieved.

20%

7% of Building WOFs audited.

The target was not achieved.

Note: The measure “Percentage of Building Consents processed within 10 working days” included in the LTCCP was not included in the 2008/09 Annual Plan as it is no longer applicable.

Napier City Council Annual Report 2008/09

Page 87

Planning and Regulatory Environmental Health Services Performance Measures

2008/09 Targets

2008/09 Results

1. Food and Non-Food premises inspected.

100%

100% requisite inspections.

2. Water samples taken (national standard 100%).

165%

Number of samples taken = 163.3% of national standard.

The target was not achieved.

3. Percentage of residents satisfied with 'Noise Control' in the NRB Customer Satisfaction Survey.

77%

The NRB Survey carried out in July 2009 showed 77% resident satisfaction with Noise Control: Very satisfied Satisfied Not very satisfied Don’t know

33% 44% 11% 12%

Animal Control Performance Measures

2008/09 Targets

2008/09 Results

1. Number of registered dogs.

6,000

6,358 registered dogs.

2. Complaints actioned within 5 working days.

100%

99.7% complaints actioned within 5 working days.

The target was not achieved.

3. Percentage of residents satisfied with 'Animal Control' in the NRB Customer Satisfaction Survey.

65%

The NRB Survey carried out in July 2009 showed 78% resident satisfaction with Animal Control: Very satisfied Satisfied Not very satisfied Don’t know

33% 45% 18% 4%

Parking Services Performance Measures

2008/09 Targets

2008/09 Results

1. Occupancy of CBD off-street parking areas.

85%

Occupancy rate = 47.6%

2. Occupancy of Taradale off-street parking areas.

85%

Occupancy rate = 76.9%

3. Occupancy of CBD on-street parking areas.

85%

Occupancy rate = 71.1%

Page 88

Napier City Council Annual Report 2008/09

Planning and Regulatory Parking Services continued 4. Occupancy of Taradale on-street parking areas.

85%

Occupancy rate = 76.9%

Notes: 1. An occupancy rate lower than target is an improvement on the target.

2. The targets for the above measures are the upper limit of acceptable occupancy rates.

5. Percentage of residents satisfied with 'Parking in the Inner City' in the NRB Customer Satisfaction Survey.

60%

6. Percentage of residents satisfied with 'Parking in the Suburbs' in the NRB Customer Satisfaction Survey.

75%

Napier City Council Annual Report 2008/09

The NRB Survey carried out in July 2009 showed 65% resident satisfaction with Parking in the Inner City: Very satisfied Satisfied Not very satisfied Don’t know

17% 48% 30% 5%

The NRB Survey carried out in July 2009 showed 80% resident satisfaction with Parking in the Suburbs: Very satisfied Satisfied Not very satisfied Don’t know

38% 42% 11% 9%

Page 89

Planning and Regulatory

Financial Summary Budget 08/09 $000

Actual 08/09 - $000 Activity

Net Cost Income of Service [1]

Actual 07/08 $000

Operating

Depn

Interest

Total

582 Planning Policy

969

3

-

972

1

971

865

574 Regulatory Consents

915

-

-

915

198

717

554

1,313

1

-

1,314

874

440

260

289 Environmental Health

346 Building Consents

558

1

-

559

224

335

268

155 Animal Control

579

3

12

594

503

91

155

1,015

100

19

1,134

2,209

(1,075)

(884)

5,349

108

31

5,488

4,009

1,479

1,218

1,007

374

2,486

1,592

1,959 Non-targeted rates

2,550

2,078

(529) Special funds

(167)

(588)

-

-

(948) Parking 998 Total net operating 656 Capital Expenditure [2] 1,654 Funding required Funded by:

75 Loans 149 Non-funded depreciation 1,654 Total

103

102

2,486

1,592

[1] Summary of Income Actual 08/09 $000

User charges Regulatory revenue Rental income – other

46

Infringements and fines

768

Rendering of services

901

Retail and product sales

3

Other income

4

Grants and donations Total income

Page 90

5 2,264

18 4,009

Napier City Council Annual Report 2008/09

Planning and Regulatory [2] Capital Expenditure Budget 08/09 $000

Actual 08/09 $000

City Development Planning 61 Electronic document management for property information

-

Animal Control 75 Dog pound compliance requirements

70

Parking 400 Develop Napier Senior Citizens site

-

100 Parking equipment replacement

-

20 Minor capital items

-

- Additional CBD parking

640

- Upper Dickens Street

201

- CBD Parking building

64

- Other minor capital items

32

656 Capital Expenditure

Napier City Council Annual Report 2008/09

1,007

Page 91

Roading Activities

Key Issues

The Roading Group comprises:

Significant Acquisitions or Replacement of Assets

Roading

Future developments for Roading have been identified in the recommendations of the Napier Road Network Study 1999, Heretaunga Plains Transportation Study 2004 and other reviews. Major projects identified and included in the Capital Plan:

• 363 km of roads (100% sealed).

• 306 km urban standard roads (approx. 10% not constructed to Council’s current urban standards).

• 57 km rural roads (70% requiring widening to cope with current traffic volumes).

• 46.4 km state highways.

• 5,441 sumps and manholes to be cleaned.

• 480 km of kerb and channel to be swept.

The city’s road network provides accessibility to Napier residents and visitors within a safe, clean and aesthetic environment. The services cover the installation and maintenance of the physical components; carriageways, footpaths, steps, ramps, traffic and pedestrian bridges and structures, road and amenity lighting, drainage, traffic services and safety (e.g. street furniture, traffic lights, signage) as well as the planning, management, and amenity and safety maintenance to ensure the system is clean, safe and able to cope with future needs.

• The Hyderabad Road overbridge and four-laning of Prebensen Drive including side connections ($6.7 million – loan and NZ Transport Agency subsidy in years 2006/07 to 2008/09). This project is still in the planning phase.

• The creation of a link between Awatoto and the Expressway ($7.5 million – rates, loan and NZ Transport Agency subsidy in years 2010/11 to 2013/14). $39 million of deferred capital works have been identified throughout the City. While some projects have been completed, the cost of construction has inflated the remainder. These are road upgrading projects in the existing network not constructed to the required standards, or when links in the network are operating over their traffic carrying capacity, or in need of upgrading for other reasons such as safety, environmental or commercial improvements.

The capital plan allows for an annual expenditure on deferred capital works of $1,630,000 funded from rates.

A ten year programme to upgrade Napier CBD is identified in a comprehensive report. In total, funding for this project has been identified as $10 million. Ongoing redevelopments for this project have been funded as the Council has identified need and include: • Improvements in the roading network around the CBD. Resulting from public submissions to a past Annual Plan the Bay View Footpath project has been included in the 2008/09 and 2009/10 years at a cost to Council of $180,000. The footpath alongside State Highway 2 between Rogers Rd and Petane Rd will be installed in conjunction with NZ Transport Agency.

Due to funding constraints the following major projects identified in the LTCCP are still not included in the Capital Plan: • Cycle Strategy Projects ($3.2 million). Although the Rotary Pathway links project is included, funding for the full 20 year programme to implement the Cycle Strategy Recommendations has not been included in the plan. Where possible cycle strategy projects will continue to be funded as part of new roads and roading upgrades.

• Emerson St Pavement Renewal ($1.5 million).

Replacing the concrete pavers with clay pavers.

Assets vested in Council in 2008/09 were in new development areas such as Te Awa and Parklands.

Page 92

Napier City Council Annual Report 2008/09

Roading

Performance Targets for 2008/09 Roading Performance Measures

2008/09 Targets

1. Percentage of residents satisfied with 'Footpaths' in the NRB Customer Satisfaction Survey.

75%

2008/09 Results The NRB Survey carried out in July 2009 showed 85% resident satisfaction with Footpaths: Very satisfied Satisfied Not very satisfied Don’t know

2. Percentage of residents satisfied with 'Roads' in the NRB Customer Satisfaction Survey.

85%

The NRB Survey carried out in July 2009 showed 90% resident satisfaction with Roads: Very satisfied Satisfied Not very satisfied Don’t know

3. Number of injury crashes in Napier City.

Reduce by 4% on previous year.

4. Average roughness of sealed Urban roads.

100 NAASRA counts per km.

(National Association of Australian State Road Authorities)

5. Maximum deferred capital works.

Napier City Council Annual Report 2008/09

$42 million

38% 47% 14% 1%

39% 51% 8% 2%

151 injury crashes, 9% below 2007/08 level of 166.

108 NAASRA counts per km.

The target was not achieved.

$39 million

Page 93

Roading

Financial Summary Budget* 08/09 $000

Actual 08/09 - $000 Activity

Net Cost Income of Service [1]

Actual 07/08 $000

Operating

Depn

Interest

Total

7,024 Roading

6,814

6,112

1,360

14,286

3,744

10,542

8,581

7,024 Total net operating

6,814

6,112

1,360

14,286

3,744

10,542

8,581

16,717 Capital Expenditure [2] 23,741 Funding required

9,651

8,950

20,193

17,531

Funded by: 9,420 Non-targeted rates

15,362

12,495

5,967 Special funds

1,150

1,074

3,892 Vested assets

2,128

1,789

92

758

2,924 Loans 1,538 Non-funded depreciation 23,741 Total

1,461

1,415

20,193

17,531

[1] Summary of Income Actual 08/09 $000

Uniform annual charges User charges Land Transport NZ and other Government grants Regulatory revenue

164 22 3,340 14

Rendering of services

38

Grants and donations

166

Total income

3,744

*The 2009 budget values have been restated to include UAC budget revenue as attributable to each activity in line with actual results.

Page 94

Napier City Council Annual Report 2008/09

Roading [2] Capital Expenditure Budget 08/09 $000

Actual 08/09 $000

Roading 6,963 Prebensen Drive project

15

3,691 Roading I.A.R.

3,657

3,892 Roading vested assets

2,128

1,630 Roading capital projects

2,403

90 Bay View footpath 451 Transportation proposals

81

- CBD development

981

- Cycleway projects

177

- Taradale Shopping Centre upgrade

91

- Pandora developments

35

- Ahuriri developments

36

- Minor capital items

47

16,717 Capital Expenditure

Napier City Council Annual Report 2008/09

9,651

Page 95

Water and Wastes Activities The Water and Wastes Group comprises: Solid Waste

Wastewater

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

• 41 Pump Stations

• 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 regular basis. Council’s Refuse Transfer Station, including the greenwaste operation, at Redclyffe accepts most domestic, garden and building waste.

In 2008/09 Napier disposed of 24,000 tonnes of refuse at the landfill from domestic collection, litter bins and the Transfer Station. This amount is currently decreasing each year.

Omarunui Landfill is the final disposal point for waste generated by the combined populations of Hastings District and Napier City. It is jointly owned by both the Hastings District and Napier City Councils and is managed on a day to day basis by the Hastings District Council.

Stormwater • 214.6km Stormwater Mains • 58km Open Drains • 11 Pump Stations (Napier City Council and Hawke’s Bay Regional Council managed) Council provides and maintains a stormwater disposal system for the 13 separate drainage areas or catchments in the city with the aim to minimise the effects of flooding. The system, serving approximately 97% of the city population, consists of open drains, stormwater mains and pump stations with about 75% of the city reliant on pumped systems for stormwater drainage.

Page 96

• 363.7km Wastewater Mains • Milliscreen Plant (Awatoto) • 1,607m Marine Outfall • 93% of Napier’s population serviced by Reticulation System Council provides a safe domestic and industrial sewage collection, screening and disposal system to maintain the community’s health. Properties are currently connecting to Stage 1 of the Bay View system.

Water Supply • 9.8 million m3 Water consumed annually • 10 Wells • 10 Ground Water and 8 Booster Pump Stations • 8 Reservoir sites • 28 million litres Storage Facilities • 459.7km Mains • 95.5% of Napier’s population serviced by Reticulation System Council provides a Water Supply system for the supply of potable water as well as for fire fighting purposes.

Water is drawn from the Heretaunga Plains aquifer, is free from harmful contamination and no water treatment is required, and reticulated to the Napier urban area and to Bay View. Council has a programme in place to manage the usage of water, a precious natural resource, to minimise wastage and shortages.

Napier City Council Annual Report 2008/09

Water and Waste

Key Issues Significant Acquisitions or Replacement of Assets • Solid Waste Omarunui Regional Landfill Site Development: Stage 1 of Valley D is operational and Stage 2 is under construction. The work includes the installation of a gas collection system. This system needs to be commissioned before a final feasibility study on a gas to energy scheme can be undertaken.

• Cross Country Drain Funding of $16.1 million was included in previous years, from loan and financial contributions.

-- Excavation of the drain is complete, as is the construction of the discharge pipelines and low flow outfall.

-- Construction has commenced on the motor control building and the generator compound with the total project due for completion October 2009.

• Dalton Street Pump Replacement The Dalton Street Stormwater Replacement Project was completed during the year. Total project $400,000 funded from rates.

• Stormwater Vested Assets Assets vested in Council in 2008/09 were in new development areas such as Te Awa and Parklands.

Napier City Council Annual Report 2008/09

• Wastewater Treatment Funding in the amount of $26.3 million for this major project has been provided in previous years. Investigations for a new Biological Trickling Filter Treatment (BTF) process are under way and commissioning of a wastewater treatment plant is programmed for December 2011.

• Sewerage Infrastructural Asset Renewal In 2008/09 works emphasis has been on asset renewal for water and stormwater and major projects such as the Overland Drain and McLean Park development rather than sewerage asset renewal. Unspent budget will be carried forward for future works.

• Other Wastewater Projects -- Detailed design and planning for the Taradale Pumping station and main ($5.4 million) funded from loan and financial contributions was completed during the year with physical works planned for the 2009/10 construction season.

-- The detailed design and planning for the Western pumping main ($0.9 million) funded from financial contributions is underway.

• Water Supply The construction of the new Reservoir at Bay View is underway and due for completion by October 2009 at a total cost of $373,000, funded from rates, financial contributions and Bay View Capital Contributions.

Page 97

Water and Waste

Performance Targets for 2008/09 Solid Waste Performance Measures 1. Total waste to landfill.

2. Waste to landfill per capita.

2008/09 Targets 30,000 tonnes 524kg

2008/09 Results 23,761 tonnes for 2008/09 414kg per capita

Note: A lower result for Waste is an improvement on target.

3. Refuse diversion rate.

19%

4. Compliance with requirements of resource consent.

100%

5. Number of recycling stations.

2

Diversion rate = 23.85% 100% compliance for 2008/09.

2 recycling stations.

Stormwater Performance Measures 1. Percentage of residents satisfied with 'Stormwater' in the NRB Customer Satisfaction Survey.

2008/09 Targets 85%

2008/09 Results The NRB Survey carried out in July 2009 showed 87% resident satisfaction with Stormwater: Very satisfied Satisfied Not very satisfied Don’t know

2. Compliance with requirements of resource consents.

3. Pumping capacity available.

100%

95%

39% 48% 10% 3%

100% compliance for 2008/09.

99.93% pumping capacity available.

Wastewater Performance Measures 1. Percentage of urban main residential and rural settlement population served by reticulated system.

Page 98

2008/09 Targets Reticulated system 93.3% Main Residential & Rural 96.9%

2008/09 Results Reticulated system = 93.3% Main Residential & Rural = 96.9%

Napier City Council Annual Report 2008/09

Water and Wastes Wastewater continued 2. Percentage of residents satisfied with 'Wastewater' in the NRB Customer Satisfaction Survey.

75%

The NRB Survey carried out in July 2009 showed 91% resident satisfaction with Wastewater: Very satisfied Satisfied Not very satisfied Don’t know

3. Compliance with requirements of resource consents.

100%

48% 43% 5% 4%

Consent complied with the exception of infrequent failure of one part of one condition.

Water Supply Performance Measures 1. Percentage of residents satisfied with 'Water Supply' in the NRB Customer Satisfaction Survey

2008/09 Targets 90%

2008/09 Results The NRB Survey carried out in July 2009 showed 94% resident satisfaction with Water Supply: Very satisfied Satisfied Not very satisfied Don’t know

2. Compliance with requirements of resource consents.

100%

62% 32% 3% 3%

100% compliance with Water Take for drinking water.

For Water Take for irrigation two bores were in non-compliance. Action was taken against the lessee.

Council is currently working with the HBRC on water conservation requirements. A Water Conservation Strategy was required to be submitted to HBRC by January 2009. This part of the consent was not complied with.

3. Compliance with drinking water standards.

4. Percentage distribution mains cleaned.

Napier City Council Annual Report 2008/09

100%

100% compliance.

Two transgressions occurred in the Bay View and Taradale distribution zone but this was within the parameters of the drinking water standards which require 95% compliance 95% of the time.

20%

16.8% of mains cleaned.

The target was not achieved.

Page 99

Water and Wastes

Financial Summary Budget* 08/09 $000

Actual 08/09 - $000 Activity

Net Cost Income of Service [1]

Actual 07/08 $000

Operating

Depn

Interest

Total

740 Solid Waste

3,805

530

100

4,435

4,046

389

863

2,974 Stormwater

1,057

1,385

209

2,651

28

2,623

2,393

(1,025) Wastewater - Water Supply 2,689 Total net operating 9,033 Capital Expenditure [2] 11,722 Funding required

2,567

3,085

242

5,894

7,072

(1,178)

(1,029)

2,200

1,344

111

3,655

3,735

(80)

(279)

9,629

6,344

662

16,635

14,881

1,754

1,948

10,976

9,480

12,730

11,428

5,135

2,112

Funded by: 2,295 Non-targeted rates 5,520 Special funds

3,980

6,707

1,335 Vested assets

2,669

2,567

916

-

30

42

12,730

11,428

2,096 Loans 476 Non-funded depreciation 11,722 Total

[1] Summary of Income Actual 08/09 $000

Uniform annual charges User charges

11,332 1,978

Rental income – other

35

Retail and product sales

65

Omarunui Landfill joint venture

1,410

Other income

61

Total income

14,881

*The 2009 budget values have been restated to include UAC budget revenue as attributable to each activity in line with actual results.

Page 100

Napier City Council Annual Report 2008/09

Water and Wastes [2] Capital Expenditure Budget 08/09 $000

Actual 08/09 $000

Solid Waste 577 Omarunui development – Valley D 344 Omarunui development – Plant 5 Omarunui development – Forestry - Omarunui development – Valleys A, B and C 72 Solid Waste I.A.R. - Minor capital items

1,049 39 113 61 24

Stormwater 1,200 Cross country drain and pumping station

5,150

762 Upgrade stormwater catchments

317

372 Stormwater I.A.R.

367

480 Stormwater vested assets 100 Dalton St pump replacement

1,159 120

12 Georges Drive drain

11

- Minor capital items

58

Wastewater 2,000 Taradale Rd pump station and main

33

897 Sewerage I.A.R.

80

223 Milliscreen renewal programme

33

202 Sewage pumping equipment I.A.R.

104

620 Wastewater vested assets

421

- Advanced sewage treatment - Minor capital items

124 11

Water Supply 530 Water pipes I.A.R. 75 Water pump stations I.A.R. 19 Water meters I.A.R. 107 Capital upgrade associated with I.A.R. 235 Water Supply vested assets - Thompson Stage 2 No 2 round tank 201 Bay View reservoir 9,033 Capital Expenditure

Napier City Council Annual Report 2008/09

705 231 1 27 589 19 130 10,976

Page 101

Property Assets Activities

Key Issues

The Property Assets Group comprises:

Parklands Residential Development

Lagoon Farm

• The development of Parklands Residential Estate is staged to meet current demand. Should a future significant reduction in demand for new sections result from an economic downturn, future stages of development will be deferred. In this way risk to ratepayers is minimised.

The 350 hectare farm is situated on the south side of the Ahuriri Estuary. It currently runs cattle, sheep, and has some Kiwifruit plantings and cropping leases. A quarter acts as a flood ponding area during unusual and extreme weather events. The area of farm has been reduced for the development of Parklands and the extension of Prebensen Drive.

Parklands Residential Development The Council’s Parklands Residential Development on 120 hectares of former Lagoon Farm land will provide up to 800 residential sections and includes land for sportsgrounds.

Property Holdings Leasehold Properties: • Commercial

83

• Residential

72

This business unit is responsible for the management of leases and licences which have been established for parks, reserves, commercial, industrial and residential properties. The majority of leases are perpetually renewable.

• Council is proceeding with the next development areas and a Resource Consent has been approved for the next 250 lots.

Significant Acquisitions or Replacement of Assets • Parklands Residential Development Parklands Residential Development was treated in the LTCCP as a capital addition. After transition to IFRS accounting standards, residential development activities are included in inventory.

• HB Museum and Art Gallery The redevelopment of the HB Museum and Art Gallery buildings is reported in the Social and Cultural Group.

It is also responsible for the management, including maintenance and renewal, of all Council buildings not specifically allocated to other activities.

Page 102

Napier City Council Annual Report 2008/09

Property Assets

Performance Targets for 2008/09 Lagoon Farm There are no non-financial performance measure for Lagoon Farm. This activity is not providing a public service.

Parklands Residential Development Performance Measures 1. Number of lots created.

2008/09 Targets 67

2008/09 Results 30 lots created.

The target was not achieved. The development is staged to meet demand which has been impacted by the slowing economy.

Property Holdings Performance Measures

2008/09 Targets

2008/09 Results

1. Leases renewed within the statutory time frame as specified in the individual registered lease documents.

100%

Of the four leases due for renewal during this 12 month period one has been renewed the other three are still under action.

2. Occupancy rate of Council owned commercial buildings subject to availability of letable space and market demand and conditions.

100%

80% occupancy.

3. Buildings maintained to a satisfactory level and complying with the Building Act and Health and Safety Act.

100%

Maintenance continuing. Buildings comply with regulatory requirements.

4. Freeholding of leasehold properties facilitated in accordance with Council’s freeholding policy.

100%

Three freeholdings completed and eight enquiries received during this 12 month period.

Napier City Council Annual Report 2008/09

The target was not achieved. Half of one floor of the Library Building is currently vacant.

Page 103

Property Assets

Financial Summary Budget 08/09 $000

Actual 08/09 - $000 Activity

Net Cost Income of Service [1]

Actual 07/08 $000

Operating

Depn

Interest

Total

510

37

-

547

590

(43)

(22)

2,783

1

-

2,784

3,537

(753)

(1,089)

50 Lagoon Farm (2,594) Parklands Residential Development (3,081) Property Holdings

(594)

398

240

44

(5,713)

5,757

(2,571)

(5,625) Total net operating

2,699

436

240

3,375

(1,586)

4,961

(3,682)

242

32

5,203

(3,650)

(1,035) Non-targeted rates

(326)

(1,190)

(4,713) Special funds

5,132

(2,613)

100 Capital Expenditure [2] (5,525) Funding required Funded by:

- Loans 223 Non-funded depreciation (5,525) Total

235

-

162

153

5,203

(3,650)

[1] Summary of Income Actual 08/09 $000

User charges Rental income – investment property Rental income – other Retail and product sales Sales residential development Other income Dividend income Gain/(loss) on revaluation of investment properties Fair value gain/loss on livestock Total income

13 924 1,028 276 3,516 67 4 (7,529) 115 (1,586)

[2] Capital Expenditure Budget 08/09 $000

Actual 08/09 $000

Property Holdings 100 Civic building and Library air conditioning - Property purchases 100 Capital Expenditure

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242 242

Napier City Council Annual Report 2008/09

Support Services Council has a number of Cost Centres of a corporate or support nature. These cost centres provide the technical and support services necessary for the function of Council’s activities.

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

Support Units includes the Services 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.

Key Issues Significant Acquisitions or Replacement of Assets • Replacement of Mobile Plant and Vehicle Council's annual plant and vehicle renewal and replacement programme. Renewals are based on the condition of the plant as assessed at the time of replacements and where possible delayed to maximise useful life. Funding for plant and vehicle renewals is by special fund so it is not necessary to carry forward unspent budget.

Capital Expenditure Budget 08/09 $000

Actual 08/09 $000

702 Replacement of mobile plant and vehicle

547

500 Technology equipment renewals

392

63 General Provision – minor capital items 36 Software replacement and upgrades

95 -

62 PC and Printer replacement

61

12 Corporate IT network

32

- LTCCP software

97

- Develop Geographic Info System

52

1,375 Capital Expenditure

Napier City Council Annual Report 2008/09

1,276

Page 105

PART 4 Appendices

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

Hawke’s Bay Cultural Trust

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 the Council to the Authority and there is no financial provision included in Council budgets. The 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.

b. Nature and Scope of Activities The nature and scope of the activities of the Authority is to operate the airport facilities appropriate for Hawke’s Bay that fully comply with Civil Aviation Authority and other regulatory requirements, and the management of other related commercial activities on airport land.

There has been no change between the intended and actual nature and scope of activities delivered.

a. Policies and Objectives Regarding Ownership and Control The Trust is a Council Controlled Organisation as three of the five-member Board are Council nominees.

Hawke's Bay Cultural Trust is classified as an associate entity for financial reporting purposes.

b. Nature and Scope of Activities The Objectives of the Trust are: • To hold and protect the regional collection for the people of Hawke’s Bay and to provide storage and protection for the collection.

• To advance 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 provide an exhibition policy and to oversee the maintenance, risk management and quality of the regional collection through a contract for services with the Council.

• To regulate and approve the disposal of collection items.

c. Performance Targets The key performance targets and performance results (as reflected in the Authority’s Annual Report for 2008/09) are:

Earnings before Interest, tax and depreciation % to Revenue.

Return on Funds Employed.

Corporatisation has little impact on the Council in terms of control over the Airport, strategic ownership, investment profile or financial position. The Airport will continue to be a Council Controlled Organisation in terms of the Local Government Act 2002.

• To administer the bequests held by the Hawke’s Bay Cultural Trust.

Target

Actual

The Nature and Scope of Activities to be undertaken for the regional collection are:

61.7%

58.4%

The provision of: • Care – To ensure conservation standards are met and conservation practice is ongoing.

4.4%

Profit for period as % of total 4.1% equity.

Landing Charges to Other 52:48 Income.

Bird Strikes - per 000 aircraft 0.5 movements.

Safety & Security - accidents on Nil airport.

CAA Rule 139 - nonNil compliance with rule.

7.9% 6.3%

• Development – To grow in accordance with Collection Policies.

49:51

• Housing – To ensure proper storage/protection of collection items.

0.3 Nil Nil

Up to 30 June 2009 the Airport operated as an unincorporated Airport Authority under the Airport Authorities Act 1966.

In order to allow the Airport to better meet current and future regional demand for its growth and development, the Airport has been corporatised with effect from 1 July 2009, still owned in the same proportions by the Crown and the two Councils.

Napier City Council Annual Report 2008/09

• Exhibition/Display – To present the collection in line with the Management agreement with Hawke’s Bay Museum & Art Gallery and other associated entities.

• Access to the collection – To ensure appropriate access to the collection is maintained at all times.

• A collection that reflects the history of Hawke’s Bay. There has been no change between the intended and actual nature and scope of activities delivered.

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Council Controlled Organisations c. Performance Targets The key performance targets and performance results (as reflected in the Trust’s Annual Report for 2008/09) are: Key Result Area

Performance Indicator

Care of Collection

Number of objects 33 having conservation performed.

Number of insurance 0 claims against collection damage (expressed in number of items and number of claims).

Annual Storage Action 20% Plan – %percentage of action plan achieved.

Revised Review of Storage Facilities annually.

Identifying action plan for required improvements.

500 Number of acquisitions made annually within collection policies (Archives).

Number of acquisitions 100 made annually within collection policies (Collection).

Number of de5 accessions made annually within collection policies.

Number of proffered 67% items for potential acquisition to the collection declined.

Number of exhibitions 11 held compared to target annually.

Number of items on 20 outward loans to other exhibiting institutions.

Housing

Development

Exhibition / Display

Target

Actual 14

0

0%

Access

Percentage of collection items on Vernon Database.

50%

95%

Focus of Collection

Percentage of items that come from Hawke's Bay sources.

90%

80%

Hawke’s Bay Incorporated (HB Inc.) This was a Council Controlled Organisation as the 3 funding Councils, Napier City Council, Hastings District Council and Hawke’s Bay Regional Council, had the right to appoint 50% of the Trustees of the Trust.

Hawke's Bay Inc functions transferred to the Hawke's Bay Regional Council during 2007/08, and with effect from 1 July 2008 ceased to be a Council Controlled Organisation.

Revised

536

97

5

36%

12

11

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 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.

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Napier City Council Annual Report 2008/09

Glossary of Terms Activities and Activity Groups

Infrastructural Asset Renewal

The main elements of the Council’s services offered to the Napier community are divided into Activities. These Activities are described in detail in the Activity Groups section of the Plan including the performance measures and targets and the financial budgets for 2008/09.

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.

Allocation of Overheads

Levels of Service

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.

A measure of the quality and quantity of services delivered. They are determined by customer expectations, legislative requirements and affordability.

Carrying Amount The net amount at which an asset or liability is recognised in the balance sheet.

Community Outcomes These are goals determined by the community that it believes are important for its present and future economic, social, cultural and environmental wellbeing.

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.

Derecognition When an asset value is no longer recorded in the balance sheet it has been derecognised, e.g. when an asset is sold it is no longer recorded on the balance sheet as from the date of the sale.

Non-targeted Rates 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 for the Napier City Council by the National Research Bureau Ltd. The survey is of public perceptions and interpretations of Council services and representation with comparisons to National and Peer Group averages.

Interviews were carried out in July 2009 with 455 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 455 the margin of error is plus or minus 6.5%.

Prospective Financial Statements Refers to future-oriented financial statements.

Derivative

Restricted Assets

A financial instrument that has the effect of transferring between two or more parties to the instrument one or more risks inherent in an underlying asset. The value of the derivative is determined by fluctuations in the underlying asset. The most common underlying assets include currencies, interest rates, shares, bonds, commodities and market indexes.

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.

Financial Contributions

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.

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

Impairment The amount by which the carrying amount of an asset exceeds its recoverable amount.

Targeted Rate

Infrastructural Assets Stationary systems forming a network and serving whole communities, where the system as a whole is intended to be maintained indefinitely at a particular level of service potential by the continuing replacement and refurbishment of its components. The network may include normally recognised ordinary assets as components. These include roads, water, sewerage and stormwater systems.

Napier City Council Annual Report 2008/09

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