STRATEGY AND RESOURCES ANNUAL PLAN WORKING PARTY

15-19 JULY 1996

Meetings of the Strategy and Resources Annual Plan Working Party

were held on 15, 16, 17, 18 and 19 July 1996

PRESENT: Councillor David Close (Chairman),

The Mayor,

Councillors Oscar Alpers, Carole Evans,

Pat Harrow, Ian Howell, Alister James,

Garry Moore, Margaret Murray,

Denis O'Rourke and Ron Wright.

APOLOGIES: Apologies for absence were received and

accepted from the Mayor (15 and 16 July)

and Councillor Alpers (17 July).

ANNUAL PLAN FOR 1996/97

1. INTRODUCTION

The draft Annual Plan for the 1996/97 financial year was released on 21 May 1996 and was available for public comment for a period of one month from 21 May to 24 June 1996.

This year's Annual Plan attracted 179 submissions with 218 separate topics being raised by submitters. Last year 285 submissions were received addressing 185 different issues. While at first glance this year's response appears to represent a significant drop on last year's, a closer scrutiny of the statistics shows that in 1995 149 or 52% of the submissions related to just two issues - offensive signage (108) and the Linwood Creche (41). This year's consultation, in fact, attracted submissions on a wider range of topics and, if the high profile 1994/95 Annual Plan is excluded, compares more than favourably with earlier years. Clearly, there is a small nucleus of organisations and individuals who are interested in this process and appreciate the opportunity to "have their say" on the draft Annual Plan.

A breakdown by activity of the Community Board and public submissions is set out below:

Art Gallery	1
Car Parking	7
Children's Strategy	1
City Streets	94
Communications and Promotions	4
Community Grants	17
Economic Development and Employment	3
Enhancement Projects	2
Environmental Policy	9
Environmental Services	6
Finance	45
Housing	5
Leisure and Community Services	12
Library Services	6

Operations Directorate	1
Parks	49
Policy Directorate	27
Refuse	7
Sewerage	1
Water Services	11

The Community Board submissions were heard by the Working Party on the morning of Monday 15 July and the public submissions on Tuesday 16 July and the morning of Wednesday 17 July. Forty individuals and organisations addressed the Working Party in support of their submissions.

2. SUMMARY OF COMMUNITY BOARD

AND PUBLIC SUBMISSIONS

A report listing the issues raised in the Community Board and public submissions, together with officer comment, has been separately circulated to Councillors.

The Working Party's recommendations on the submissions are contained in clause 8 of this report.

3. CONSIDERATION OF SUBMISSIONS

AND OTHER ANNUAL PLAN RELATED ITEMS

The Working Party reconvened on the afternoon of Wednesday 17 July, Thursday 18 July and the afternoon of Friday 19 July to consider the following business:

(a) The Community Board and public submissions.

(b) Unit Managers' requests to carry forward project funds from the 1995/96 financial year.

(c) A report from the Director of Finance reviewing the impact of recent rises in interest rates and recommending changes to the provision for short term borrowing and long term stock issues.

(d) In-house requests for adjustments to the Annual Plan. Full details of these requests were included in the agenda for the Working Party's July meetings which was circulated to all Councillors. Most of these changes are of a minor nature, some arose from recent organisational changes while others are required because new information was received after the draft Plan had been prepared.

The Works Operations Manager sought an addition to the text of the Annual Plan to comply with a recent amendment to the Transit New Zealand Act 1989. The requested change is detailed in clause 8 of this report.

A number of amendments/substitutions were sought to the City Streets budget and were the subject of a separate report from the City Streets Unit. The most significant of these was the Woolston/Burwood expressway project.

While doubt continues as to when this project will be financially supported by Transfund the Working Party considered that a start on the physical work should be made in 1997/98 and that additional funding be negotiated with Transfund. This approach is acceptable to Transfund. Funds for planning and design are allocated in 1996/97.

There were two other significant in-house requests from the Community Services Committee for funding for new initiatives. The first was for funding of $80,000 for the 4YP youth entertainment project while the second was for additional funding to extend the Library's pre-school outreach programme.

The Working Party's recommendations on these last three requests can be found in clause 8 of this report.

4. SUBSEQUENT AMENDMENTS

At the Working Party meeting on Friday 19 July the Director of Finance was authorised to make any necessary minor adjustments and take into account any savings to be made on the loan servicing provisions. He undertook to report directly to the Council.

The Director of Finance advises:

"Savings have been identified through rescheduling the timing of loan raising within the 1996/97 year and exact knowledge of the loans raised in 1995/96. These savings have enabled the 1996/97 rate rise to be held at 2.77% (excluding the effect of the Riccarton Road study noted below) and the projections for subsequent years are lower than the projections made in the 1995/96 Annual Plan at:

1997/98 3.92%

1998/99 2.90%

1999/2000 3.03%

Since the meeting on 19 July three further items have come to hand. They are:

* Transport Study Riccarton Road $50,000

This item which was approved by the Council on Wednesday 24 July has been added to the schedule of operating changes. It has the effect of increasing the rates from 2.77% to 2.82%.

* Selwyn Plantation Board Ltd (SPBL)

The SPBL Statement of Corporate Intent was received last week with revised earning projections. An adjustment has been made to the dividend projections. The 1996/97 dividend has been reduced by $28,000, the 1997/98 and 1998/99 have been increased by $280,000 and $300,000 respectively. These changes are incorporated in the rate projections noted above.

* Extensions to the Wigram Plant Buildings $85,000

The Establishment Unit has recommended that this item be included in the commercial property capital budget. In addition to this capital item provision has also been made for revenue of $24,500 for the lease of the buildings. This will cover the maintenance of the buildings together with the interest costs of the building extension."

Recommendation: That the adjustments referred to in the Director of Finance's comments be approved and incorporated in the 1996/97 Annual Plan.

5. SCHEDULE OF ANNUAL PLAN CHANGES

A schedule listing the adjustments to the Annual Plan supported by the Working Party is attached (green paper).

Recommendation: That the attached schedule be approved and the 1996/97 Annual Plan be amended accordingly.

6. SCHEDULE OF CARRY FORWARDS

A schedule itemising unit requests to carry forward project funds to the 1996/97 financial year is attached (white paper). These requests are supported by the Working Party.

Included on the list of carry forward projects is an item relating to the Ferrymead land purchase. This item was approved by the Council in December 1995 and unfortunately was overlooked when the schedule was first prepared for review by the Working Party.

The Working Party noted, with concern, that the requests to carry forward project funds are significant. However, assurances were given that from now on carry forwards would start to trend down as a result of the capital expenditure smoothing and within two or three years would be at a more acceptable level. The Working Party was also advised that it was possible three or four months into the financial year to predict with a reasonable degree of certainty which projects would not be completed/commenced in that year. In light of this advice, it was agreed that a review of all projects should be undertaken after the end of October each year to identify those which will not be commenced in year 1 with a view to making substitutions from the year 2 capital works programme. It is considered this review should replace the six monthly review.

During discussion on the Parks Unit's carry forward requests, reference was made to the increasing demand for sports fields for organised sports competitions. The Working Party resolved that the Parks Manager be requested to report to the Parks and Recreation Committee on the forward planning/purchasing strategies which have been put in place to cater for this demand.

Recommendation: 1. That a review of uncompleted capital projects be undertaken after the end of October for the purpose outlined above.

2. That the schedule of carry forwards as attached (white paper) be approved subject to the Director of Finance being authorised to vary the amounts actually carried forward for internal reporting purposes, provided the total is less overall.

3. That the net operating carry forwards be funded in part by adjusting the operating deficit.

7. SUMMARY OF LONG TERM FINANCIAL PROJECTIONS

This paper (attached - pink paper) summarises the long term operating and capital projections for future years.

It was noted that a 2% provision for inflation has been built in to the financial model. To be consistent, the Working Party considered that similar provision for inflation should be made when deferring capital works.

Recommendation: 1. That staff be requested to follow the principle of adding 2% to all deferred capital works.

2. That the long term financial projections be adopted as part of the 1996/97 Annual Plan.

8. RESPONSE TO INTERNAL REQUESTS FOR

ANNUAL PLAN ADJUSTMENTS AND

COMMUNITY BOARD AND PUBLIC SUBMISSIONS

In terms of in-house requests for Annual Plan adjustments and the major issues raised in the submissions, the Working Party makes the following recommendations:

1. (a) That interest rates be amended to 9.9% for short term borrowing and 9.4% for long term stock issues and that the Annual Plan be amended accordingly to provide the additional revenue required from rates.

(b) That the cost of capital rate in the Annual Plan be amended to 8%. (The recommended rate is based on the New Zealand Institute of Economic Research's projections for the 10 year Government stock rate.)

2. (a) That negotiations be entered into with Transfund for the completion of the section of the Woolston/Burwood expressway between Travis Road and Birch Street.

(b) That funding for the Woolston/Burwood expressway project be reduced from $400,000 to $50,000 in 1996/97 and the balance of $350,000, inflation adjusted, be transferred to 1997/98.

(c) That the residents affected by the expressway be informed of the latest plans.

3. That funding for Cathedral Square be reduced from $1.6 million to $1 million in 1996/97 and increased by a comparable amount, inflation adjusted, in 1997/98.

4. That provision for public transport initiatives be reduced by $140,000 in 1996/97 and increased by a similar amount, inflation adjusted, in 1997/98.

5. That additional provision of $200,000 be made in 1996/97 for Convention Centre asset purchases.

6. That consequent upon a previous Council decision, additional provision of $1.3 million (net) be made for the Centennial Pool project and that the total cost be spread over two years.

(Note: Councillor Howell abstained from the discussion and voting on the above item.)

7. (a) That consequent upon a previous Council decision, provision of $160,000 be made in 1997/98 for the purchase of 10 electric vehicles.

(b) That an annual environmental operating subsidy of $60,000 be provided from the Environmental Policy and Planning Unit's budget.

8. That the Children's Strategy output be increased by $35,000.

9. That provision of $20,000 be made in 1996/97 for research and planning for the shuttle bus project.

10. That additional provision of $50,000 be made in 1996/97 for youth safety initiatives.

11. That additional provision of $42,000 be made in 1996/97 for the 4YP youth entertainment project.

12. That additional provision of $70,000 be made in 1996/97 for playground development.

13. That additional provision of $10,000 be made in 1996/97 for Travis Wetlands for Trust weed control.

14. That provision of $20,000 be made in 1996/97 for the installation of a security camera in South City.

15. That an additional $40,000 be allocated in 1996/97 for the Library's pre-school outreach programme, the funding to be used in accordance with priorities to be determined by the Libraries Manager.

16. (a) That, to comply with the requirements of the recent Ministerial determination promulgated pursuant to the Transit New Zealand Act 1989, the following text be added to the appropriate section of the Annual Plan:

"City Design, Plant and Building Services and Works Operations Units are business units of the Christchurch City Council for the purposes of, amongst other things, competing for minor and ancillary works subject to competitive pricing procedures to which payments may be made under section 27 of the Transit New Zealand Act 1989 (as amended by the Transit New Zealand Amendment Act 1995) in accordance with the requirements of the Ministerial determination for the formation and operation of service units competing for minor and ancillary works and reporting requirements 1996."

(b) That the Council confirm that Works Operations, Design Services and Plant and Building Services Units are expected to produce return on capital employed of 8%.

17. That the Burwood/Pegasus Community Board be asked to submit a proposal to the Council, as part of the 1997/98 Annual Plan process, after the Board has concluded the needs analysis and consultation on the North New Brighton Community Centre.

18. (a) That following consultation on the draft Estuary Protection Plan, measures to protect the foreshore be expedited to enable the Council to implement the protection plan and to define the manner in which the residents should built the protective works.

(b) That officers advise on the appropriate reallocation of funds to achieve this.

19. That the Director of Operations be asked to recommend an appropriate response to the Burwood/Pegasus Community Board's request for the allocation of funding of $12,000 for the Coastcare storm research programme. The Director of Operations recommends that additional provision of $12,000 be made in 1996/97 to fund this important research. This provision has been included on the schedule of adjustments to the Annual Plan. (Details of this project are contained in the submissions report which has been separately circulated to Councillors.)

20. That the Fendalton/Waimairi Community Board be advised that provision of funding for the Bishopdale car park will be considered as part of the 1997/98 Annual Plan process.

21. That in view of the concerns raised by the Fendalton/Waimairi Community Board regarding the decision to scale down the undergrounding programme for the next three years, an information report on the current policy relating to undergrounding be provided to all Community Boards.

22. (a) That the Hagley/Ferrymead Community Board Funding Committee be granted additional funds to enable it to respond to organisations based in the central city which perform a city-wide role as well as a local role.

(b) That the Senior Facilities Adviser be asked to make a recommendation on an appropriate sum from within the allocation for 1996/97.

23. That the Hagley/Ferrymead Community Board's request for additional funding for the neighbourhood improvement works in Smith Street be referred to the City Streets Unit for investigation and report to the Board.

24. That the Spreydon/Heathcote Community Board be advised that the Leisure and Community Services Manager has been requested to prepare for the September meeting of the Parks and Recreation Committee a brief for the swimming and fitness facilities at Pioneer Sports Stadium.

25. That the Shirley/Papanui Community Board be advised that the Morrison Avenue area is one of several areas in the city which has been identified as having a shortage of neighbourhood reserves. Unfortunately it is competing with other high priority areas such as Merivale and Charleston/Phillipstown for the allocation of funding.

26. (a) That the Burwood/Pegasus Community Board and the New Brighton District Business Association be advised that following adoption of an approved plan, consideration will be given to providing additional funding for the upgrading of the Brighton Mall from the 1997/98 unspecified capital allocation.

(b) That the Beresford redevelopment funding be redesignated "New Brighton Commercial Area Redevelopment".

27. That the submissions from the Fendalton/Waimairi Community Board and the Merivale Precinct Society seeking the allocation of funding for the development of a neighbourhood reserve in Merivale be referred to the Parks Manager for report to the Parks and Recreation Committee.

28. That in view of the significant levels of funding provided in the five year capital plan for strategic reserves purchases, the submissions seeking the allocation of additional funds in 1996/97 for the acquisition of additional land on the Port Hills for reserves purposes, be declined.

29. That the submitters questioning the need for the Council to be involved in the parking building business be advised that the City Manager has been requested to prepare for the Council's approval terms of reference for a study on the rationale for the Council's involvement in this activity.

30. That the Riccarton/Wigram Community Board be requested to give priority to preparing a local area traffic management scheme for Piko Crescent and Shand Crescent.

31. That the Shirley Residents' Association's request for the Shirley/Marshland Road intersection improvements to be brought forward be referred to the City Streets Unit for report to the City Services Committee.

32. That the submissions from the Mount Pleasant Community Centre and Ratepayers' Association and R M Moore on roading issues in the Mount Pleasant area be referred to the City Streets Manager for report and that the requests be considered in conjunction with the 1997/98 Annual Plan process.

33. That the submissions on the upgrading of Effingham Street be referred to the Burwood/Pegasus Community Board to consider whether some prioritising of this work is justified.

34. That the submission seeking the upgrading of Knowles Street, Chapter Street, Weston Road and part of Mays Road be referred to the City Streets Manager to determine if any reprioritising of this work is justified.

35. (a) That the Peer Street/Waimairi Road street lighting project be brought forward in substitution for a project currently in the 1996/97 upgrading programme.

(b) That the City Streets Unit report to the City Services Committee on the adequacy of the ring road system between Harewood Road and Yaldhurst Road.

36. That the submissions seeking the installation of a footpath at the eastern end of Ferry Road be referred to the Hagley/Ferrymead Community Board and the City Services Committee for attention.

37. That the submission seeking the redevelopment of a comprehensive street tree planting programme for the inner city be supported, and a planning study be undertaken to identify and prioritise the streets in the inner city which would benefit from such a programme.

38. That the Libraries Manager be requested to report to the City Services Committee on the implications of reintroducing reminder notices for overdue items.

39. That a cash grant of $100,000 be made to the Disabled Persons' Trust to assist the Trust in purchasing the property it occupies at 314 Worcester Street.

40. (a) That the interest on the Council's loan to the Music Centre of Christchurch Trust and the Ngaio Marsh House and Heritage Trust be waived, subject to capital being repaid at a rate equivalent to the interest payable on the original amount of the loan.

(b) That to achieve the above the following action be taken:

1. That $40,000 be added to the Heritage Output (Environmental Policy and Planning) to meet interest payments due to the Council from the Music Centre of Christchurch Trust and the Ngaio Marsh House and Heritage Trust.

2. That the term of the Ngaio Marsh House and Heritage Trust second mortgage of $100,000 be extended to 30 September 1997 (from 30 September 1996) subject to:

(i) Interest on this loan remaining at 8% and being paid from the Heritage Output within the Environmental Policy and Planning Unit.

(ii) Principal of at least $8,000 being repaid by 30 September 1996.

3. (i) That for 1996/97 the Music Centre of Christchurch Trust Board loan (current balance $395,690) continue to be charged on a table basis with interest at 7.5% with a total charge of $47,113.60 p.a.

(ii) That the Heritage Output (Environmental Policy and Planning) meet the interest cost of up to $29,676.

41. That a grant of $10,000 be made to the Gansu Friendly Relations Committee towards the cost of a feasibility study on the production of a documentary on Rewi Alley.

42. That the grant to the Turning Point 2000 Executive Committee be increased by $50,000 in 1996/97 and 1997/98 and by $100,000 in 1998/99.

43. That the grant to the Aurora Centre Trust be reinstated to the level recommended by the Grants Committee ie add $200,000 in 1997/98 and $200,000 in 1998/99.

44. That the Canterbury Opera Trust and The Court Theatre Trust be advised that consideration will be given to their requests for additional funding in the 1997/98 grants round.

45. That in response to the submission from R L Leonard the following objectives be included in the 1996/97 Statement of Strategic Objectives:

Air, Water and Soil Quality

B1. "Conservation of the precious artesian water resource."

"Safeguarding the excellent quality of Christchurch drinking water.

Transport and Communications

C11. "Promotion of public transport to reduce congestion and pollution."

46. That performance indicators for cycleway projects be included in the 1996/97 Annual Plan.

47. That the submissions raising issues associated with city growth and other resource management issues be referred to the Environmental Policy and Planning Unit.

48. That the submissions seeking modifications to the format and content of the draft Annual Plan be supported.

49. That the submissions from the Building Owners and Managers Association, Canterbury Employers Chamber of Commerce, Canterbury Manufacturers Association and the New Zealand Business Round Table be referred to the Director of Finance for reply in line with the comments contained in the submissions report circulated with this agenda.

50. That the submitters raising issues which come within the province of Community Boards be advised that their submissions have been referred to the relevant Community Board for consideration.

51. That the submissions seeking the allocation of additional funding be dealt with (after appropriate reports have been received and consultation has taken place) in the 1997/98 Annual Plan process or, in the case of priority items, when the capital works programme is reviewed in November.

52. That responses be forwarded to the remaining individuals/organisations in accordance with the comments provided by staff, as set out in the submissions report circulated with this agenda.

Recommendation: That the foregoing recommendations be adopted, and where appropriate incorporated in the 1996/97 Annual Plan.

9. NET REQUIREMENT FROM RATES

The net rate requirement, after the changes recommended by the Working Party and the addition of $50,000 for the Riccarton Road Transport study have been accounted for, is 2.82%

This represents a rate requirement of $109,447,348 (GST inclusive) and is 2.82% more than last year's requirement after allowing for increased rating revenue of $1.6M (gross) accruing from new developments.

Recommendation: 1. That the Council adopt a 2.82% rate increase and approve the borrowing of $45.20M to finance the 1996/97 capital programme.

Note: Special Order proceedings will be commenced at the Council meeting on 28 August to raise Works Development Loan No 2 1996 for the above amount.

2. That the 1996/97 Annual Plan, as amended, be adopted.

3. That the 1996/97 Corporate Plan, as amended, be adopted.

4. That public notice be given that, at its meeting on 28 August 1996, the Council will consider a resolution to make and levy rates in accordance with the approved 1996/97 Annual Plan. CONSIDERED THIS 31ST DAY OF JULY 1996 MAYOR

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