Notice is hereby given that an Ordinary Meeting of Southland District Council will be held on:

 

Date:

Time:

Meeting Room:

Venue:

 

Tuesday, 27 February 2018

9am

Council Chambers
15 Forth Street
Invercargill

 

Council Agenda

OPEN

 

MEMBERSHIP

 

Mayor

Mayor Gary Tong

 

Deputy Mayor

Paul Duffy

 

Councillors

Stuart Baird

 

 

Brian Dillon

 

 

John Douglas

 

 

Bruce Ford

 

 

Darren Frazer

 

 

George Harpur

 

 

Julie Keast

 

 

Ebel Kremer

 

 

Gavin Macpherson

 

 

Neil Paterson

 

 

Nick Perham

 

 

IN ATTENDANCE

 

Chief Executive

Steve Ruru

Committee Advisor

Fiona Dunlop

 

 

Contact Telephone: 0800 732 732

Postal Address: PO Box 903, Invercargill 9840

Email: emailsdc@southlanddc.govt.nz

Website: www.southlanddc.govt.nz

 

Full agendas are available on Council’s Website

www.southlanddc.govt.nz

 

 

 


 


Council

27 February 2018

 

TABLE OF CONTENTS

ITEM                                                                                                                                                                                  PAGE

Procedural

1             Apologies                                                                                                                                                                5

2             Leave of absence                                                                                                                                                5

3             Conflict of Interest                                                                                                                                             5

4             Public Forum                                                                                                                                                         5

5             Extraordinary/Urgent Items                                                                                                                        5

6             Confirmation of Council Minutes                                                                                                             5

Reports - Policy and Strategy

7.1         2018-2028 Long Term Plan - Adoption of Supporting Information                                     7

7.2         2018-2028 Long Term Plan - Adoption of Consultation Document                                747

Reports - Operational Matters

8.1         Delivery of Service Review - s17A LG Act - Community Services                                       793

Reports - Governance

Nil  

Public Excluded

Nil

 


Council

27 February 2018

 

1             Apologies

 

At the close of the agenda no apologies had been received.

 

2             Leave of absence

 

At the close of the agenda no requests for leave of absence had been received.

 

3             Conflict of Interest

 

Councillors are reminded of the need to be vigilant to stand aside from decision-making when a conflict arises between their role as a councillor and any private or other external interest they might have.

 

4             Public Forum

 

Notification to speak is required by 5pm at least two days before the meeting. Further information is available on www.southlanddc.govt.nz or phoning 0800 732 732.

 

5             Extraordinary/Urgent Items

To consider, and if thought fit, to pass a resolution to permit the Council to consider any further items which do not appear on the Agenda of this meeting and/or the meeting to be held with the public excluded.

Such resolution is required to be made pursuant to Section 46A(7) of the Local Government Official Information and Meetings Act 1987, and the Chairperson must advise:

(i)        The reason why the item was not on the Agenda, and

(ii)       The reason why the discussion of this item cannot be delayed until a subsequent meeting.

Section 46A(7A) of the Local Government Official Information and Meetings Act 1987 (as amended) states:

“Where an item is not on the agenda for a meeting,-

(a)       that item may be discussed at that meeting if-

(i)         that item is a minor matter relating to the general business of the local authority; and

(ii)       the presiding member explains at the beginning of the meeting, at a time when it is open to the public, that the item will be discussed at the meeting; but

(b)       no resolution, decision or recommendation may be made in respect of that item except to refer that item to a subsequent meeting of the local authority for further discussion.”

 

6             Confirmation of Council Minutes

There are no minutes confirm.

 


Council

27 February 2018

 

2018-2028 Long Term Plan - Adoption of Supporting Information

Record No:             R/18/2/3167

Author:                      Nicole Taylor, Project Co-ordinator Corporate Planning

Approved by:         Rex Capil, Group Manager Community and Futures

 

  Decision                                        Recommendation                                  Information

 

 

 

Purpose

1        This report recommends that Council adopts the supporting information for the 2018-2028 Long Term Plan (LTP) for consultation.

Executive Summary

2        All councils are required by legislation to adopt a Long Term Plan (LTP) and review it every three years.  The process to develop Council’s LTP 2018-2028 began in early 2016.

3        Under the Local Government Act 2002, local authorities are required to develop a consultation document for the purpose of consulting with the community as well as making publicly available the information that provides the basis for the preparation of the LTP.

4        Staff have developed a set of information which reflects the decisions and guidance that has been provided by elected members (the supporting information).

5        The supporting information contains a number of documents that support the content of the consultation document and provides the basis for the preparation of the LTP.

6        At its meeting in December, Council endorsed a number of supporting documents. The report outlines changes which have been made to these documents since and recommends these be adopted by Council.

7        A number of other documents have also now been prepared and are attached for Council’s review and adoption.

 

Recommendation

That the Council:

a)            Receives the report titled “2018-2028 Long Term Plan - Adoption of Supporting Information” dated 21 February 2018.

 

b)           Determines that this matter or decision be recognised as significant in terms of Section 76 of the Local Government Act 2002.

 

c)            Determines that it has complied with the decision-making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the Act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

 

d)           Adopts the following documents as information that provides the basis for the preparation of the Long Term Plan (LTP) and consultation document in accordance with Section 93G of the Local Government Act 2002:

 

(i)        Activity Management Plans (separate attachment A and B and as per Council meeting13 December 2017)

(ii)       Infrastructure Strategy (separate attachment C)

(iii)      Financial Strategy (included in draft LTP pages 56-64)

(iv)      Prospective Financial Statements (included in draft LTP pages 71-78)

(v)       Financial Prudence Benchmarks (included in draft LTP pages 67-70)

(vi)      Funding Impact Statement – Rates Section (included in draft LTP pages 79-104)

(vii)    Significant Forecasting Assumptions (included in draft LTP pages 153-163)

(viii)   Accounting Policies (included in draft LTP pages164-183)

(ix)      Activity Information (included in draft LTP pages 13-53)

(x)       Draft Performance Management Framework (separate attachment D)

(xi)      Draft Revenue and Financing Policy (separate attachment E)

(xii)    Draft Activity Funding Needs Analysis (separate attachment F)

(xiii)   Draft Development and Financial Contributions Policy (separate attachment G)

(xiv)   Significance and Engagement Policy (separate attachment H)

(xv)    Schedule of Projects (separate attachment I)

(xvi)   Schedule of Community Assistance Funding (included in draft LTP page 19)

(xvii)  Proposed New Rating Boundaries (included in draft LTP pages 105-109)

(xviii) Proposed Fees and Charges (included in draft LTP pages 110-142)

(xix)   Schedule of Reserves (included in draft LTP pages 143-152)

(xx)    Draft LTP (separate attachment J)

 

e)            Resolves in accordance with Section 100 of the Local Government Act 2002, that it is financially prudent for Council to project operating deficits in the first five years of the plan.  This principally reflects Council’s financial policy to move towards fully funding depreciation by 2024/25.

 

f)             Delegates responsibility to the Chief Executive to approve any final edits required to the Supporting Information in order to finalise the documents for distribution.

 

 

Background

8        All councils are required by legislation to adopt a Long Term Plan (LTP) and review it every three years. The LTP sets out Council’s activities, plans, budgets and policies and must be adopted before the beginning of the first year it relates to, having used a special consultative procedure to consult with the community.

9        The process to develop Council’s LTP 2018-2028 began in early 2016.  The LTP process provides the most significant opportunity for Council to take stock and align budgets with the direction that it wishes to go in and ensure Council is delivering the right mix of services for Southland District.

10      A number of workshops and discussions have been held over the past 18 months in preparation for the LTP.  As part of this, Council’s Financial Strategy and Infrastructure Strategy have been reviewed.  These documents set out the key challenges facing the District and the approach Council will take in addressing these issues.

11      Many of the projects and budgets forming part of the Activity Management Plans (AMPs) were discussed with the Community Boards, Community Development Area Subcommittees and Water Supply Subcommittees at their LTP budget meetings held in October 2017.  As a result of these meetings, some amendments were made to the AMPs and associated budgets.

12      In preparing the budgets for the LTP, individual departmental budgets were prepared by managers and reviewed by finance staff as well as the Executive Leadership Team. 
Council reviewed District budgets and various inputs into its plan at workshops and meetings in October, November and December 2017.

13      The Council’s draft Financial Strategy sets limits for rate increases and borrowing.

14      The draft prospective financial statements reflect the position reached following review of the budgets for the next 10 years. Rates have been calculated to increase as below:

Rate

2017/18

(excl GST)

2018/19

(excl GST

2019/20

(excl GST

2020/21

(excl GST

2021/22

(excl GST

2022/23

(excl GST

2023/24

(excl GST

2024/25

(excl GST

2025/26

(excl GST

2026/27

(excl GST

2027/28

(excl GST

District General

14,522,520

15,882,054

16,761,110

17,416,116

17,608,501

18,004,875

18,873,533

19,228,176

19,640,539

20,108,212

20,502,374

Roading

13,851,105

13,731,742

13,972,931

14,422,259

14,664,153

15,240,869

15,472,661

16,599,022

17,352,252

18,574,751

19,068,118

Waste Management

1,824,862

1,841,320

1,885,954

1,831,172

1,838,900

1,776,751

1,821,928

1,854,106

1,883,206

1,920,066

1,952,647

Regional Heritage

 477,576

 556,603

 568,831

 596,872

 610,234

 623,943

 638,009

 652,440

 667,246

 682,438

 698,024

Total District Rates $

30,676,064

32,011,719

33,188,826

34,266,419

34,721,788

35,646,438

36,806,131

38,333,744

39,543,243

41,285,467

42,221,163

Rate Increase %

3.10%

4.35%

3.68%

3.25%

1.33%

2.66%

3.25%

4.15%

3.16%

4.41%

2.27%

 

 

 

 

 

 

 

 

 

 

 

 

District Sewerage

3,729,800

3,864,731

3,963,571

4,336,312

4,374,351

4,613,248

4,869,210

5,183,338

5,309,723

5,416,914

5,542,754

District Water

3,144,563

3,255,335

3,313,634

3,412,047

3,536,028

3,632,562

3,634,920

3,785,432

3,918,946

3,903,090

3,974,370

Wheelie Bin Collection

2,535,780

2,624,654

2,677,216

2,746,278

2,809,811

2,876,084

2,956,409

3,033,922

3,094,160

3,166,373

3,310,113

Total Service Rates $

9,410,143

9,744,720

9,954,421

10,503,637

10,720,190

11,121,894

11,460,539

12,002,692

12,322,829

12,486,377

12,827,237

Rate Increase %

7.46%

3.56%

2.15%

5.52%

2.06%

3.75%

3.04%

4.73%

2.67%

1.33%

2.73%

 

 

 

 

 

 

 

 

 

 

 

 

Total Local Rates $

4,678,546

4,436,940

4,664,742

4,649,654

4,740,553

4,817,019

4,862,693

5,001,487

5,119,575

  5,171,985

5,264,741

Rate Increase %

0.67%

-5.16%

5.13%

-0.32%

1.95%

1.61%

0.95%

2.85%

2.36%

1.02%

1.79%

 

 

 

 

 

 

 

 

 

 

 

 

Total Rates $

44,764,752

46,193,379

47,807,988

49,419,710

50,182,531

51,585,351

53,129,363

55,337,923

56,985,647

58,943,798

60,313,141

Rate Increase $

 

1,428,626

1,614,610

1,611,721

762,821

1,402,820

1,544,013

2,208,559

1,647,724

1,958,152

1,369,343

Rate Increase %

3.73%

3.19%

3.50%

3.37%

1.54%

2.80%

2.99%

4.16%

2.98%

3.44%

2.32%

BERL

2.00%

2.20%

2.20%

2.20%

2.30%

2.30%

2.40%

2.50%

2.60%

2.70%

Financial Benchmark

4.00%

4.20%

4.20%

4.20%

4.30%

4.30%

4.40%

4.50%

4.60%

4.70%

 

15      Local rates have been discussed and recommended by the respective Community Boards and Community Development Subcommittees and are detailed in the funding impact statement (Rates).

16      There is minimal projected external debt over the 10 years of the plan with a forecast balance of $16.15 million at 30 June 2028.

17      Accounting surpluses (before infrastructure revaluations) are planned for five years of the plan, and operating cashflow surpluses for all 10 years.

LTP supporting information

18      Instead of a draft LTP, local authorities are required to develop a consultation document for the purpose of consulting with the community as well as making publicly available the information that provides the basis for the preparation of the LTP.

19      Staff have developed the following set of information which reflects the decisions and guidance that has been provided by elected members (the supporting information):

·      Activity Management Plans

·      Financial Strategy

·      Infrastructure Strategy

·      Draft Prospective Financial Statements and Activity Funding Impact Statements

·      Financial Prudence Benchmarks

·      Significant Forecasting Assumptions

·      Accounting Policies

·      Council Activity Statements

·      Funding Impact Statements (Rates Section)

·      Performance Management Framework

·      Development Contributions Policy

·      Revenue and Financing Policy and Activity Funding Needs Analysis

·      Significance and Engagement Policy

·      Schedule of Projects

·      Schedule of Community Assistance Funding

·      Proposed Fees and Charges

·      Proposed New Rating Boundaries and Rating Boundary Maps

·      Schedule of Reserves.

20      Council has already adopted some of the above information such as the Significance and Engagement Policy.  Other documents have been reviewed by the Council and relevant Committees. A number of the documents have been included in the draft LTP.

21      The above information has been relied on in the preparation of the consultation document.

Changes to supporting information

22      A small number of changes have been made to the supporting information to correct omissions or errors identified, to provide clarification or as a result of new information received since decisions were made.  Apart from these minor changes, further changes are set out below.

Activity Management Plan (AMPS)

·      The Activity Management Plans were reviewed by Council on 13 December 2017.

·      The Roads and Footpaths AMP has been updated to include information in relation to the local footpaths/streetworks activities (section 7.8), Around the Mountain Cycle Trail (section 7.9), and risks (section 11). An updated copy of this AMP has been included as a separate attachment A.

·      The Water Supply AMP has also been updated to include the additional projects in relation to the Havelock North inquiry report. An updated copy of this AMP has also been included as a separate attachment B.

·      Minor changes have been made to several AMPs to ensure the financial data and information has been updated. These other updated AMPs have not been included with this report but are analogous to those endorsed on 13 December 2017. This report recommends that Council adopts all of the AMPs, and those not included with this report can be made available on request.

 

Infrastructure Strategy

·      The Infrastucture Strategy was reviewed by the Finance and Audit Committee on 16 November 2017 and endorsed by the Council on 13 December 2017.

·      Adjustments have been made to the Infrastucture Strategy as a result of the audit review and to improve readability and provide clarity about a number of issues.

·      The Infrastructure Strategy is included as a separate attachment C.

 

Financial Strategy

·      The Financial Strategy was reviewed by the Finance and Audit Committee on 16 November 2017 and endorsed by the Council on 13 December 2017.

·      Since then some changes have been made to improve readability, to build on information required by legislation and as a result of audit comments.  Although the context and strategic issues section has discussion on the same issues, a number have been merged and labelled under a new heading to improve readability.  Additionally the investments section has been expanded to provide additional information around the expected returns on each type of investment.  Audit NZ also asked for staff to provide added commentary around the financial impact of population and land use changes over the period of the long term plan.

·      The updated Financial Strategy is included in the draft LTP (pages 56-64).

 

Prospective Financial Statements (including Activity Funding Impact Statements)

·      The draft prospective financial statements were endorsed by the Council on 13 December 2017.

·      The financial statements have since been updated to incorporate the following changes:

-    addition of $126,208 of capital expenditure in 2018/2019 funded by 30 year loan to carry out improvements to the Around the Mountain Cycle Trail (Option 1 - Centre Hill Road connection)

-    addition of two loan funded water projects following the recommendations contained in the government’s Stage 2 report on the Havelock North gastro outbreak. These include a project to install ultra violet light disinfection of water for Riverton ($512,500 in 2019/20) to provide an additional barrier against contamination and funding to improve data communication systems for protozoal reporting ($128,125 in 2019/20 and $131,072) in 2020/21).

-    adjustments to depreciation, funding of depreciation and external loans required to reflect the additional projects.

-    revaluation of forestry assets in each year to reflect anticipated harvesting.

·      These statements are included in the draft LTP (pages 71-78).

 

Financial Prudence benchmarks

·      The draft financial prudence benchmarks were reviewed by the Council on 13 December 2017.

·      The following benchmarks have been updated to reflect the changes discussed at paragraph 19:

-    debt affordability  and debt servicing; Council continues to meet the benchmark in all 10 years

-    balanced budget; Council now meets the benchmark in five of the 10 years, previously the benchmark was met in only two years

·      These statements are included in the draft LTP (pages 67-70).

 

Funding Impact Statement (Rates Section)

·      These statements have not been previously reviewed by Council.

·      These statements are included in the draft LTP (pages 79-104).

 

Significant Forecasting Assumptions

·      The draft significant forecasting assumptions were reviewed by the Finance and Audit Committee on 16 November 2017 and endorsed by the Council on 13 December 2017.

·      The financial forecasting assumptions have been updated during audit review to incorporate the following changes:

-    Capital works costs assumption now includes pipe replacement rates for water, wastewater and stormwater.

-    Price level changes table now includes percentages for 2017/18 and 2018/19

-    Funding of depreciation assumption has been added. This includes a description of the existing policy and the phasing in by 10% each year until 2024/25.

-    Emissions Trading Scheme assumption has been added.  This includes the number of units held and the assumed price.

·      The assumptions are included in the draft LTP (pages 153-163).

 

Accounting Policies

·      The draft significant forecasting assumptions statements were reviewed by the Finance and Audit Committee on 16 November 2017 and endorsed by the Council on 13 December 2017.

·      The accounting policies have been updated post audit review to incorporate the following change:

-    the functional and presentation currency if rounded to the nearest thousand dollars.  Prior to this the policy referred to the nearest dollar.

·      These policies are included in the draft LTP (pages 164-183).

 

Activity Information

·      These statements have not been previously reviewed by Council. Staff have prepared these as part of the process to develop the final LTP document. This information is still being checked and as a result there may be in minor adjustments or additions. The content and format of this information will also be reviewed by the communications team prior to it being adopted as part of the final LTP.

·      These statements are included in the draft LTP (pages 13-53).

·      This information will be subject to further review and finalisation prior to the final

 

 

 

Performance Management Framework

·      The Performance Management Framework was endorsed by the Council on 13 December 2017.

·      Minor wording changes have been made to explanatory notes and current performance information as a result of the audit.

·      The Performance Management Framework is included as a separate attachment D.

 

Revenue and Financing Policy and Activity Funding Needs Analysis

·      The review of the Revenue and Financing Policy and associated Activity Funding Needs Analysis was discussed by Council in November 2017. The Council endorsed the amended draft Policy and Needs Analysis as part of the Statement of Proposal presented on 13 December 2017 to go to audit and out for public consultation.

·      As part of the subsequent audit review of the financial statements and the policy, it was identified that Council had incorrectly included grants for capital projects in the analysis of funding for operating expenditure for three activities (council facilities, public toilets and roads and footpaths). As a result the funding of operational expenditure stated in the documents were incorrect for these three activities and accordingly the following changes have been made to the Revenue and Financing Policy and Activity Funding Needs Analysis:

-       Council facilities – Grants and Subsidies range changed from ‘Med’ to ‘Low’

-       Public toilets – Grants and Subsidies ‘Low’ range removed

-       Roads and footpath – Targeted rates funding range changed from ‘Med’ to ‘High’ and Grants and Subsidies range changed from ‘Med’ to ‘Low’.

·      Staff have also included a table in the Appendix of the Activity Funding Needs Analysis to show how the proposed Roading Rate Model would allocate sector rates in 2018/2019, rather than prepare a separate supporting document for this information.

·      The updated documents will be included in the Statement of Proposal that will be used for public consultation.

·      Council’s consultation on the proposed Revenue and Financial Policy and Activity Funding Needs Analysis will run in parallel with the 2018-2028 LTP consultation with feedback on both the LTP and Policies to be invited through the same process.

·      The Revenue and Financing Policy and the Activity Funding Needs Analysis are included as a separate attachment E and F.

 

Development and Financial Contributions Policy

·      Council endorsed the draft Development and Financial Contributions Policy at its meeting on 18 October 2017 and on 13 December 2017 endorsed the Statement of Proposal to go out for public consultation.

·      Council’s consultation on the proposed Development and Financial Contributions Policy will run in parallel with the 2018-2028 LTP consultation.

·      The Development Contributions Policy is included as a separate attachment G.

 

Significance and Engagement Policy

·      The Significance and Engagement Policy was adopted by Council on 21 June 2017 and has been used to guide decisions on significance since this date.

·      The policy has not changed since its adoption.

·      The Significance and Engagement Policy is included as a separate attachment H.

 

 

 

Schedule of Projects

·      The Schedule has not previously been reviewed by Council.

·      Community Boards, Community Development Area Subcommittees and Water Supply Subcommittees have considered local projects at their LTP budget meetings held in October 2017.

·      The Schedule of Projects are included as a separate attachment I.

 

Schedule of Community Assistance Funding/Grants

·      Council discussed community assistance funding (referred to as grants and donations) at its meeting on 23 November 2017.

·      The LTP budgets were then updated to reflect Council decisions in relation to what funding will be provided to various organisations.

·      The Schedule of Community Assistance Funding/Grants has since been updated to reflect these decisions and included in the draft LTP (page 19).

 

Proposed New Rating Boundaries and Maps

·      The rating boundary changes were discussed by Council as part of the review of the Revenue and Financing Policy and Activity Needs Analysis in November and December 2017. Relevant Community Boards and Community Development Area Subcommittees also considered these changes at their budget meetings in October 2017.

·      This section, included in the draft LTP, sets out proposals to:

(i)   amend hall rating boundaries for the Athol hall, Waianawa hall, Edendale-Wyndham hall, Browns hall, Tokanui-Quarry Hills hall; and

(ii)  exclude Milford Sound Township from the Te Anau Community Board rating boundary.

·      The Proposed New Rating Boundaries and associated maps are included in the draft LTP (pages 105-109).

 

Schedule of fees and charges

·      The draft Schedule has was endorsed by Council on 23 November 2017.

·      The Schedule has since been updated to include details of all proposed fees, including those proposed by local hall committees which were not available in time for the November report.

·      The majority of changes are related to the increased costs/time associated with providing the various services.  In Building Control the standard hourly fees have not changed, however the fees included are a reflection of the actual number of hours required to provide the service.  Historically the time required to complete the necessary work has required the customer to be invoiced later for additional hours incurred.

·      Council has also reviewed fees charged across multiple departments and aligned them to ensure fees are consistent across Council (ie. Copying, certificate of title search etc).

·      There are also a number of new fees and charges to regulatory activities to reflect new requirements and data information requests as well as the provision of new services at some halls and cemeteries. 

·      The detailed schedule of fees and charges are included in the draft LTP (pages 110-142).

 

Schedule of reserves

·      The Schedule has not previously been reviewed by Council.

·      The Schedule of Reserves are included in the draft LTP (pages 143-152).

 

 

 

Draft Long Term Plan 2018-2028

·      Staff have prepared a draft working version of the 2018 Long Term to support the ‘We’re just getting started, Southland” consultation document. This document contains key sections of the information that is expected to be contained in the final LTP document.  This is not a legislative requirement. It does, however, facilitate the telling of Southland District’s ‘story’ or the presentation of Council’s complete proposals in a single document.  While the draft LTP is not the consultation document, it will be made available on Council’s website and members of the public may wish to read it to access additional information about Council’s planned activities.

·      This document is very much a working draft and staff are continuing to finalise aspects of this information and include various policies and strategies in the relevant sections sections. Any significant variations will be explained at the meeting.

·      The full LTP will be finalised following Council’s deliberations in May 2017 to be audited and adopted in June 2017. The content and format of the final LTP will also be reviewed by the communications team prior to it being adopted.

·      The draft LTP supporting document is included as a separate attachment J.

 

Issues

23      Other than the balanced budget information outlined below, there are no further issues to resolve around the supporting information documents unless councillors have issues they wish to raise.

Factors to Consider

Legal and Statutory Requirements

24      Before adopting a consultation document, the local authority must prepare and adopt the information that:

·      is relied on by the content of the consultation document adopted under Section 93A; and

·      is necessary to enable the Auditor-General to give the required reports; and

·      provides the basis for the preparation of the long term plan.

 

25      Staff have been working closely with Audit New Zealand representatives over the development of the supporting information.  As a result of a series of audit visits, a number of amendments have already been made to the documentation where necessary and/or further explanations have been included.

Balanced Budget Requirement

26      Section 100 of the Local Government Act 2002 requires Council to ensure that for every year of the Long Term Plan, its projected operating revenues are set at a level sufficient to meet its projected operating expenditure.  Council may set projected operating revenues at a different level from that required, if Council resolves that it is financially prudent to do so.

27      In assessing a financially prudent position, the legislation requires Council to give consideration to:

·      The estimated expenses of achieving and maintaining the predicted levels of service set out in the 10 Year Plan, including the estimated expenses associated with maintaining the service capacity and integrity of the assets throughout their useful life

·      The projected revenue available to fund the estimated expenses associated with maintaining the service capacity and integrity of assets throughout their useful life

·      The equitable allocation of responsibility for funding the provision and maintenance of assets and facilities throughout their useful life

·      The funding and financial policies adopted under Section 102 of the Local Government Act 2002 (being the revenue and financing policy, the liability management policy, investment policy, development or financial contributions, remission and postponement of rates on Maori freehold land and either a rates remission policy, a rates postponement policy or both).

 

28      Council’s projected operating results in relation to this requirement are discussed further under “Costs and Funding” below.

Community Views

29      As part of preparing the LTP Consultation Document and compiling the supporting information, consideration of the communities’ view were included.  This was facilitated by the local budget processes. In addition, discussions occurred with Te Ao Mārama Incorporated on behalf of local iwi. 

30      The supporting information will be publicly available on Council’s website during the LTP consultation period.  As a result of submissions received, Council may decide to amend any of the supporting information documents when it adopts the LTP on 20 June 2018.

Costs and Funding

31      The LTP proposals have been budgeted for and are set out in the Activity Management Plans and LTP prospective financial statements.

Balanced Budget

32      As stated above, section 100 of the Local Government Act 2002 requires that local authorities must ensure that each year’s projected operating revenues are set at a level sufficient to meet that year’s projected operating expenses OR resolve that is it financial prudent to set projected operating revenues at a different level.

33      Council is projecting the following operating results for the next 10 years:

 

2018/19

2019/20

2020/21

2021/22

2022/23

2023/24

2024/25

2025/26

2026/27

2027/28

Surplus/(Deficit)

(4,357)

(4,069)

(3,101)

(2,734)

(1,416)

266

202

528

3,395

3,187

34      Therefore it is not operating a balanced budget in five of the ten years.

35      There are five areas contributing to Council not having a balanced budget.  These are:

·      Phasing in the funding of depreciation on key district assets.

·      Council’s decision not to fund depreciation on some buildings and all local assets.

·      Forestry Operations, which in some years are incurring costs that are funded from previous years surpluses put to reserves. This combines with the accounting entry to revalue the forest assets. During the period of the plan the first three years are devaluations, with the quantity of trees harvested is greater than any expected growth, and the remaining seven are revaluations.

·      Council’s partial use of depreciation reserves to fund interest repayments on loans borrowed to fund capital renewals in principally water and wastewater projects.

 

36      If the impact of these was to be removed Council’s surplus/(deficit) would look as follows:

Phasing in the funding of depreciation on key district assets

37      In 2015 Council agreed to start to fund depreciation to ensure that those using our assets such as roads, water and wastewater systems are contributing towards their renewal. It is important to Council that each generation contributes fairly to the cost of the assets it uses.  Previous to 2015, Council’s asset management policies meant that it was investing more into replacement and new assets than what residents were consuming in a year.  In 2015, Council changed the way it prioritises its roading expenditure (80/20 policy) and recognised that no additional water or waste schemes will be implemented with central government funding.  As such Council agreed to start to fund depreciation.

38      In deciding to fund depreciation, Council recognised that rates would increase significantly if it were to fully fund depreciation in year one.  As such it decided to phase it in over 10 years starting in 2015/16, increasing each year by 10% until it was fully funding the annual cost in 2024/25.  The Council also decided to only collect depreciation for district funded activities of roading, water, wastewater, council buildings, information technology, wheelie bins and solid waste. 

Council’s decision not to fund depreciation on some buildings and all local assets

39      Given Council’s approach not to automatically replace local halls or community housing when they reach the end of their useful lives, Council also decided it was not appropriate to collect depreciation funds for their replacement.  Instead Council has signalled that any funding decisions on replacements for these types of assets would be made at the time. 

40      Taking into account considerations around affordability of rates in some local communities, Council has also chosen not to fund the depreciation on locally rated infrastructure assets such as footpaths, stormwater and playground equipment at this time.  Council will continue to review this policy as part of its LTP decision making process.

Forestry Operations

41      Council’s Forestry operations are run as a commercial operation with surpluses available to offset rates.  In 2021/22, 2024/25, 2025/26 and 2026/27, the costs of land preparation are higher than any revenue being received from harvesting.  To fund the costs, monies are drawn down from reserves (previous years’ surpluses). However the additional costs in these years contribute to the unbalanced budgets.

42      There is an expected devaluation of the forestry assets in 2018/19, 2019/20 (both $1.5 million) and 2020/21 ($321 thousand). For the remainder of the Long Term Plan revaluations are expected between $594 thousand and $1.0 million

Council’s partial use of depreciation reserves to fund interest repayments

43      Council believes that all generations should contribute a fair and equitable share of the costs of using Council’s assets.

44      To ensure that Council does not collect for asset replacement twice, Council uses the funding collected for depreciation in any year to contribute to any capital renewal projects planned and to fund the principal and interest repayments on loans taken out to fund the balance of renewal projects in the year.

45      Because the interest expense is included in the operational expenditure, but the revenue source is from reserves, this contributes to the unbalanced budget position.

Overall

46      As such, in considering intergenerational equity, Council’s policies and ongoing consideration of affordability for its communities, it is considered financially prudent that Council operates financial deficits in the years indicated.

Policy Implications

47      The LTP is Council’s major mechanism to strategically manage and develop the District.  A number of policies inform the preparation of the LTP and have therefore been reviewed by Council.

48      Council is now asked to adopt these policies as supporting information to the LTP.

Analysis

Options Considered

49      Adopt the supporting information, with amendments as required.

50      Not adopt the supporting information.

Analysis of Options

Option 1 – Adopt the supporting information, with amendments as required.

Advantages

Disadvantages

·        The supporting information provides additional information to the public about the proposals to assist them to provide feedback on the consultation document

·        Making the supporting information available will reduce staff time in dealing with requests for additional information

·        Adoption of the supporting information formalises the material and also reduces the amount of work required to prepare the final LTP and time for Council review prior to adoption

·      Members of the public may find it difficult to understand which piece of supporting information to look at for further information

·      Members of the public may want other information which is not available

Option 2 – Not adopt the supporting information.

Advantages

Disadvantages

·        May avoid confusion from members of the public who are not sure what the information relates to

 

·      The documents would not be available to interested parties to help them find more detail about the activity and how the LTP forecasts have been prepared

·      Council will not have formally adopted much of the information in the LTP which may require additional time to prepare and review prior to adopting the final LTP.

 

Assessment of Significance

51      The LTP is a significant decision as it is the primary way that Council is held accountable for public expenditure.

Recommended Option

52      That Council adopt the supporting information, with amendments, as required.

Next Steps

53      Following Council’s adoption of the LTP consultation document, the supporting information will be made available on the Council’s website www.southland.org.nz

54      Council will consider all the feedback and any changes to the supporting information at its meeting 2 May 2018. The final LTP (incorporating any changes) will be adopted by Council on 20 June 2018.

 

Attachments

a             Roads and Footpaths AMP (February 2018)

b             Water Supply AMP (February 2018)

c             Infrastructure Strategy

d            Draft Performance Management Framework

e             Draft Revenue and Financing Policy

f             Draft Activity Funding Needs Analysis

g            Draft Development and Financial Contributions Policy 

h            Significance and Engagement Policy 2017

i              Schedule of Projects 2018-2028

j              Draft 2018 LTP Supporting Document    

 


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Council

27 February 2018

 

2018-2028 Long Term Plan - Adoption of Consultation Document

Record No:             R/18/2/3215

Author:                      Nicole Taylor, Project Co-ordinator Corporate Planning

Approved by:         Rex Capil, Group Manager Community and Futures

 

  Decision                                        Recommendation                                  Information

 

 

 

Purpose

1        This report recommends that Council adopt the consultation document for the 2018 -2028 Long Term Plan (LTP) titled “We’re just getting started, Southland” for public consultation.

Executive Summary

2        All councils are required to have a Long Term Plan (LTP) and must use the special consultative procedure in adopting the LTP.  The Local Government Act 2002 requires a consultation document to be prepared and adopted in accordance with Sections 93A(1)(a).

3        The consultation document is included as a separate attachment for Council’s review.

4        This document has been prepared based on the supporting information which Council endorsed 13 December 2017 and is asked to adopt at its meeting on 27 February 2018.

5        The consultation document sets out a number of issues and options around proposals for Council’s LTP.  It has been prepared to meet all legal requirements under the Local Government Act 2002 (LGA) and aims to capture the key challenges facing Southland District and the major proposals for moving forward.

6        It is expected that, subject to the meeting to adopt the consultation document, and any changes made by Council at that meeting, an unqualified audit opinion will be received.

7        The consultation document will be released to the public for comment on 7 March 2018. Submissions will close at 9.00 am, Monday, 9 April 2018.

 

Recommendation

That the Council:

a)            Receives the report titled “2018-2028 Long Term Plan - Adoption of Consultation Document” dated 21 February 2018.

 

b)           Determines that this matter or decision be recognised as significant in terms of Section 76 of the Local Government Act 2002.

 

c)            Determines that it has complied with the decision-making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the Act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

 

d)           Adopts the consultation document for the 2018-2028 Long Term Plan titled “We’re just getting started, Southland” to support the consultation process.

 

e)            Approves the letter of representation to Audit New Zealand for the audit of the Long Term Plan Consultation Document.

 

f)             Delegates authority to the Chief Executive to approve any final edits required to the consultation document in order to finalise the document for printing and distribution.

 

 

Background

8        All councils are required to have a Long Term Plan (LTP) and must use the special consultative procedure in adopting the LTP.

9        The Local Government Act 2002 (LGA) requires a consultation document to be prepared and adopted in accordance with Sections 93A(1)(a). 

10      The purpose of the consultation document is to provide an effective basis for public participation in local authority decision-making processes relating to the content of an LTP. It aims to enable any person to understand:

·          What important activities and projects Council is proposing to do over the next 10 years

·          How much it will cost

·          How Council is planning on paying for it

·          What changes may happen as a result of the proposals

·          Any options that Council wants feedback on.

 

11      The consultation document must include the following:

·          The key issues facing Council

·          A summary of the financial and infrastructure strategies

·          Any significant changes proposed to rating or funding systems over the next 10 years

·          The impacts of proposals in the LTP on rates, debt and levels of services

·          The impacts of rating proposals across different categories of rating units

·          A report from the Auditor General’s about whether the consultation document meets its purpose and the quality of the information and assumptions underlying the information provided.

 

Issues

12      A consultation document titled “We’re just getting started Southland” has been prepared (see attachment A) and has been discussed by Council at workshops on 14 December 2017 and
31 January 2018.

13      The consultation document has been prepared based on the supporting information which Council is asked to adopt at its meeting on 27 February 2018 including a draft of the LTP which provides a broader picture of Council’s plan for the next 10 years.

14      The consultation document is a summary of the major decisions being proposed by Council.

15      It aims to:

·          Be a fair representation of matters in the LTP

·          Make clear the effects of possible decisions and/or any choices

·          Be cohesive in that it joins everything together in a way that makes sense

·          Be easy to understand.

 

16      The consultation document sets out the key issues facing Southland District as follows:

·          Investing in community future planning

·          Improving the Around the Mountains Cycle Trail experience and funding the costs

·          Investing in open space experiences.

 

17      The consultation document also includes a summary of the financial and infrastructure strategies and changes to key policies.

18      The document highlights key issues around increased environmental standards impacting on water and stormwater discharges, drinking water quality projects as a result of the
Havelock North inquiry and the approach being taking to road pavements, replacing bridges and Council facilities.

19      The consultation document has been prepared to meet all legislative requirements.  It also tries to balance the needs of including sufficient information to inform the public about what is planned for the District while ensuring the document is quick and easy to read.

Factors to Consider

Legal and Statutory Requirements

20      The Local Government Act 2002 sets out the requirements for the consultation document to be prepared and adopted by Council as part of the special consultative procedure.  The consultation document must contain a report from the Auditor-General on –

a)   Whether the consultation document gives effect to the purpose set out in Section 93B of the Act; and

b)   The quality of the information and assumptions underlying the information provided in the consultation document.

 

21      Council staff have been working closely with Audit New Zealand representatives over the development of the consultation document.  As a result of a series of audit visits, a number of amendments have already been made to the consultation document.

22      The consultation document was also reviewed by the team from the Office of the Auditor General that are reviewing all Council LTP consultation documents.

23      This review has resulted in various adjustments being made to the consultation document to improve readability and provide greater clarity on some issues. In addition, a change to the forestry valuation has been included in the financial information since Council last reviewed the draft document. This has resulted in minor changes to the financial information, including the budgeted surplus/deficit over the 10 year period.

24      The Council’s auditors are in the process of finalising their report on the consultation document. Any further changes resulting from their review will discussed at the meeting.

25      It is expected that, subject to the meeting to adopt the consultation document, and any changes made by Council at that meeting, an unqualified audit opinion will be received.

26      A copy of the letter of representation to Audit New Zealand is also attached for approval.
Audit New Zealand will also be providing a draft management report in relation to their audit of the consultation document and supporting information.

Community Views

27      Council’s Significance and Engagement Policy outlines how Council will determine the significance of issues within the District, and how to align our engagement with the public based on the degree of significance of the issue.

28      The three step process outlines in the policy for determining significance, identifying community views and deciding on an approach to engagement has been used as a guide to assess what material should be included in the consultation document and the form of engagement.

29      It has informed both the decisions on what will be included with issues/options analysis for specific feedback and also the additional information covering other key parts of the document as detailed below.

Determining significance and community views (Step 1 and 2)

Community Futures Planning

30      While the $ amount for this planning work is not significant in overall terms, it has been included on the basis of the importance of this in relation to the programme of planning that Council is intending to complete to inform future conversations with the community and decisions that will have an impact on what the Council provides, where and to what extent. The outcome of this work is expected to lead to a number of significant decisions which could fundamentally change the way the Council delivers its services.

 

Around the Mountain Cycle Trail (improving and funding)

31      The trail has been the subject of considerable discussion in the past. While the $ amounts for Council’s preferred option for improving the trail is not significant, this issue has been included to provide transparency and ensure that those people who are interested in the issue have an opportunity to provide feedback. The funding options for the trail has also been included in order to find out whether the community has a preference for how the trail costs should be funded.

Open Space Investment

32      This investment signals a different approach for prioritising key open space upgrades where Council is looking to improve levels of service via additional investment at a district-wide level. The issue has been included on the basis of the change in approach and the expected improvement in levels of service.

Other Information (What else we’re doing)

33      The consultation document also includes information about a number of other issues where it is not specifically asking for feedback or proposing options. There are included for a number of reasons including:

·      changing regulatory requirements/national standards requiring investment and over which Council has little discretion (such as higher environmental standards)

·      updating the community on progress with key decisions which have previously been signalled or where there is a separate process of engagement underway (such as the Te Anau Wastewater Upgrade)

·      highlighting potential issues that the Council intends to carry out more work on (such as road pavements, bridge renewals, building upgrades and community facility reviews)

·      providing information of interest about projects proposed for specific areas (e.g. ward snapshot, investment in water structure facilities)

34      A number of issues have also been included in the document because of legislative requirements (e.g. summaries of the Financial and Infrastructure Strategies) or to ensure that issues which affect people, but are in relation to separate consultation processes, are also highlighted (e.g. changes to the Revenue and Financing Policy/Fees).

Decisions on how to engage (step 3)

35      Council has already been talking with communities and stakeholders about a number of issues related to the LTP.

36      A series of Community Conversations have been held for the past 18 months throughout the district. Each set of conversations attracted more than 100 people and focused on what they wanted for their community and what the future looked like.

37      Local community representatives (Community Boards, Community Development Area (CDA) subcommittees and Water Supply subcommittees) have reviewed and discussed budgets for activities in their areas.

38      The Mayor and Council staff have met with key stakeholders (including representatives from Fonterra, Federated Farmers and Farm Forestry Association) to discuss the consultation process and issues facing Southland District more broadly. Te Ao Mārama Incorporated have also been involved in discussions about key areas of interest throughout the planning process.

39      As this LTP is largely considered to be about business as usual and preparing for the hard decisions needed to made in the future for our communities, the consultation process proposed is deliberately simple, with the main focus being on the consultation document.

40      The LTP identifies that more work is needed around future planning and that Council does not hold all the information needed to make decisions on the various issues. This LTP is about doing the work to find out that information. 

41      The involvement and collaboration of the communities is essential in the next stages of the work, when Council has more information and specific options to consider and priorities to discuss.

42      Council will individually engage with communities as these issues are worked through more and key information and issues are identified. Conversations with the communities are key to this, as is timing – and spreading this out over the next three years in time for the 2021-2031 LTP will enable informed discussions.

Public Consultation

43      The consultation document will be released to the public for comment on 7 March 2018. Submissions will close at 9.00 am on 9 April 2018.

44      The consultation document will be distributed to households in the District. Availability of the consultation document will be advertised via newspaper and radio. A copy of the consultation document will be available on the Council’s website along with the supporting information.

45      Members of the public will also be able to provide their feedback on-line using the LTP and Policy feedback form. The feedback form will outline the key issues and pose questions about whether there is support for Council’s proposals or other options. Staff are also working on developing short informative videos which outline the key consultation issues as well as providing links to the consultation document and supporting information.

46      Feedback can also be given via social media on Council’s Facebook page and the comments will be collated into a report and forwarded to Council for its consideration.

47      LTP hearings will be held from 18 April to 19 April 2018. Depending on the number of submissions received, a further day of hearings may be held on 20 April 2018.

48      Feedback will be referred to relevant staff to consider ahead of issues and options papers being prepared and recommendations being made about what changes if any, should be made to the plan and relevant policies as a result.

Costs and Funding

49      There are various costs incurred in compiling the LTP including staff costs and budgets.
These are included in our annual budgets and funded accordingly. The consultation document also outlines the key financial highlights associated with the plan.

Policy Implications

50      The LTP is Council’s major mechanism to strategically manage and develop the District. 

51      As part of the LTP consultation process Council will be consulting on its draft Revenue and Financing Policy and Development Contributions Policy.  These documents will be made publicly available on Council’s website alongside the LTP consultation document.

Analysis

Options Considered

52      Adopt the consultation document.

53      Not adopt the consultation document.

Analysis of Options

Option 1 – Adopt the consultation document.

Advantages

Disadvantages

·     The consultation document and budgets/levels of service/work programme proposed in the LTP reflects Council’s deliberations over the past 18 months.

·     Adoption of the consultation document will enable the public to comment on the Council’s proposed plans.

·     Meets the legislative requirements to adopt a consultation document.

·     The consultation document focuses on the key issues that Council is looking for feedback from the community on rather than explaining all of the changes This means there is a risk that Council may be making a change to something that the community won’t be aware of or have an opportunity to comment on as it hasn’t been specifically mentioned in the consultation document.

 

Option 2 - Not adopt the consultation document.

Advantages

Disadvantages

·     If key priorities or views have changed since Council prepared the budgets/levels of service/work programme proposed in the LTP and consultation document, the Council could choose to amend these prior to release for public consultation so that the documents better reflect the Council’s current views.

·       The budgets/levels of service/work programme proposed for the LTP 2018-2028 have been carefully considered by staff and elected members over the past
18 months. Significant or material changes to the draft plan and consultation document at this stage would not be able to be as rigorously considered and debated due to time constraints required to adopt the consultation document and have the changes reviewed by audit.

Assessment of Significance

54      The LTP is a significant decision as it is the primary way that Council is held accountable for its strategic direction and expenditure proposals.

55      The ‘Community Views’ section of the report outlines more detail about the process that has been used to develop the consultation document and in particular, how the guidance in the Significance and Engagement Policy has been applied.

Recommended Option

56      That Council adopt the consultation document.

Next Steps

57      The consultation document will be finalised for print and made available online by
7 March 2018. Copies will be distributed to libraries, area offices and it will be advertised via newspaper and radio.

58      The period for feedback will close on 9 April 2018 and Council will meet 18/19 April 2018 to hear feedback from those who wish to present this to Council.

 

Attachments

a             2018-2028 LTP Consultation Document - We're just getting started Southland

b             Letter of Representation - Audit of 2018 Long Term Plan Consultation Document    

 


Council

27 February 2018

 

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27 February 2018

 

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Council

27 February 2018

 

Delivery of Service Review - s17A LG Act - Community Services

Record No:             R/18/2/2991

Author:                      Ian Marshall, Group Manager Services and Assets

Approved by:         Ian Marshall, Group Manager Services and Assets

 

  Decision                                        Recommendation                                  Information

 

 

 

Purpose

1        The purpose of this report is to present the findings of the investigations carried out by Morrison Low into the service delivery models for a number of activities in the Community Services area.

2        The further purpose is to seek Council direction and mandate to proceed with more detailed work in accordance with the recommendations of the Morrison Low report which is attached.

Executive Summary

3        This report is a covering report, for a report produced by Morrison Low, on delivery of services in the Community Services area.  Morrison Low’s review was carried out in line with the requirements of a Local Government Act, Section 17A review.

4        The Morrison Low report has recommendations on how the services in each of the five activities in the community services area should be delivered.

5        For all but Community Housing, the recommendation is for an enhanced status quo model to be used.  For Community Housing the recommendation is the Council opt out of the activity. 
This would need to be investigated in more detail and consulted on as it is a strategic asset.

 

Recommendation

That the Council:

a)            Receives the report titled “Delivery of Service Review - s17A LG Act - Community Services” dated 21 February 2018.

 

b)           Determines that this matter or decision be recognised not significant in terms of Section 76 of the Local Government Act 2002.

 

c)            Determines that it has complied with the decision-making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the Act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

 

d)           Adopt all of the Preferred Options in the Morrison Low Section 17A Community Services report and take a staged approach to implementing them including the development of a business case to further inform a final decision on the delivery model for Community Housing.

 

 

Background

6       Morrison Low were engaged to carry out a review of services in accordance with the requirements of section 17A of the Local Government Act 2002.  The services are all within the Community Services Group and those within the scope of the review are:

·              Public Toilets

·              Parks and Reserves

·              Community Housing

·              Community Facilities

·              Cemeteries.

Issues

7        The report identifies a number of issues:

Reduction in the number of contracts

8        The current delivery of the community services activity involves over 65 out-sourced contracts. This is significant, and requires a lot of time for the contract administrator to create the contracts, keep the contract register up to date, as well as the amount of time for the community engineers to manage the performance of these contracts.

Standardised contracts

9        Contracts within and across the services are not standardised. This results in inefficiencies in the drafting, administration and management of contracts.

Time management and recording

10      The real cost to Council in undertaking these administrative functions is not known, Council officers do not fill in time sheets or record time spent creating and managing contracts and procurement processes.

Contractor performance management

11      Currently there is no contractor performance management system in place. While complaints are registered as a Request for Service (RFS) in Council’s system, this is not a performance management system.

Contractors and payroll

12      Some contractors are on the Council payroll rather than submitting an invoice to Council as most contractors would in accordance with their contracts.

Governance arrangements

13      The governance structure across Community Services does not lend itself to efficiencies.
Services can be funded at the local and/or district level, and there is not consistency in how this is applied. The delegations to community boards, different levels of service, budgets, fees and charges (eg, for hall use) and target rates, all add complexity for the community engineers and contract administrator to manage.

Factors to Consider

Legal and Statutory Requirements

14      Service Delivery Reviews are a legislative requirement under Section 17A of the Local Government Act (2002) (the Act). This states:

“A local authority must review the cost-effectiveness of current arrangements for meeting the needs of communities within its district or region for good-quality local infrastructure, local public services, and performance of regulatory functions.”

Community Views

15      The community views have not been sought on the matters in this report.  The report is an investigatory report that is not intended as a consultation document.

16      The subsequent issues that may evolve later as options are investigated may lead to specific consultation on service delivery for some of the services.

Costs and Funding

17      The costs of the services delivered in these activities was not calculated as part of the report.  What is noted in the report is that “…current contracts could be combined to reduce the total number of contracts, there are two other approaches that could be considered:

     Geographic approach - grouping all Community Services into one contract by a specified geographic area

     By service approach - where one contract covers the delivery of a particular Community Service across the    district

 

This would not necessarily result in a lower total cost to council but would reduce the risk, create efficiencies for the contract administrator and would free up community engineers’ time for higher value work….”

Policy Implications

18      The various recommendations in this review have different policy implications.  Procurement of services is required to be in line with the Council’s Procurement Policy.  Rationalising contracts which is suggested in the report as “enhanced status quo” fits well and is in line with the policy.

19      Other potential changes such as suggested for Community Housing will involve consideration of other relevant policies if and when a business case for that activity is presented to Council. 

Community Housing as a whole is identified as a strategic asset in Council’s Significance and Engagement policy.

Analysis

Options Considered

20      The discussion of options in this report relate to the range of actions that Council could take in response to the attached report.

21      The table below summarises the Preferred Options and shows the second ranked Option:

Activity

Preferred Option

2nd Option

Public Toilets

(D) Enhanced Status quo

(G) Outsourced (e.g. private        sector)

Parks and Reserves

(D) Enhanced Status quo

(G) Outsourced (e.g. private        sector)

Community Housing

(I) Opting out of the service, SDC does not provide community housing services

(A) Status quo

Community Facilities

(D) Enhanced Status quo

(G) Delivery outsourced (e.g.        private sector)

Cemeteries

(D) Enhanced Status quo

(A) Status quo (outsourced)

Analysis of Options

Option 1 - Adopt all of the Preferred Options in the Morrison Low Section 17A Community Services report and take a staged approach to implementing them including the development of a business case to further inform final decisions on the delivery model for Community Housing.

22      Develop an integrated implementation plan to make sure that systems and process changes, and contract improvements through standardisation do not conflict with each other.

Advantages

Disadvantages

·        Reduction in the number of contracts

·        Improved systems and processes

·        Improvements aligned with common themes across services.

·        Greater likelihood of standardisation across the District.

·        Continuation of the primary way the service is delivered except for Community Housing.

·        Potentially less opportunity for local operators for small contracts

·        Community Housing as a whole is identified as a strategic asset in Council’s Significance and Engagement Policy.
The transfer of ownership of a significant strategic asset requires community consultation.

Option 2 – Make no changes

Advantages

Disadvantages

·        No disruption to business

·        Opportunity for making improvements missed.

·        Administration of 65 contracts still needed

·        High levels of staff input required.

·        Higher risk of inconsistent standards and performance.

Option 3 - Adopt all the Preferred Options in the Morrison Low Section 17A Community Services report except for Community Housing. Adopt the second preferred option of “status quo” for Community Housing

23      Take a staged approach to implementing changes.

24      Develop an integrated implementation plan to make sure that systems and process changes, and contract improvements through standardisation do not conflict with each other.

Advantages

Disadvantages

·        Reduction in the number of contracts

·        Improved systems and processes

·        Improvements aligned with common themes across services.

·        No consultation needed for Community Housing.

·        The potential benefits of devolving the Community Housing service will not be realised.

Assessment of Significance

25      The decisions proposed in this report are not considered significant.  They primarily relate to the way services should be bundled and procured as opposed to whether a service should be delivered or not, except for Community Housing.

26      Community Housing as a whole is identified as a strategic asset in Council’s Significance and Engagement Policy. The transfer of ownership of a significant strategic asset requires community consultation.

Recommended Option

27      Option one is recommended as it has the potential to produce the most benefits to Council as defined in the Morrison Low report.

Next Steps

28      Develop a staged implementation plan.

29      Develop a business case for the delivery of the Community Housing service for Council to make a decision on the preferred delivery model and the consequential community consultation.

 

Attachments

a             Section 17A Community Services    

 


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