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Christchurch City Council
COMMUNITY SERVICES COMMITTEE
AGENDA
ANNUAL PLAN MEETING
TUESDAY 3 FEBRUARY 1998
AT 9.00 AM
IN THE NO 2 COMMITTEE ROOM, CIVIC OFFICES
| Committee: |
Councillor Garry Moore (Chairperson), The Mayor, Ms Vicki Buck, Councillors Carole Anderton, Graham Condon, David Cox, Anna Crighton, Carole Evans, Ishwar Ganda, Pat Harrow, Lesley Keast and Barbara Stewart. |
| Principal Adviser | Committee Secretary |
| Jonathan Fletcher | Kevin Roche |
| Telephone: 371-1548 | Telephone: 371-1536 |
| Fax: 371-1786 | Fax: 371-1786 |
INDEX
1. APOLOGIES
2. DRAFT SUB-BUDGETS FOR 1998/99 RR 6826
1. APOLOGIES
2. DRAFT SUB-BUDGETS FOR 1998/99 RR 6826
| Officer responsible | Author |
| Funds and Planning Manager | Paul Melton |
| Corporate Plan Output: Financial Planning Advice Volume I Page 5.4.4 | |
This report brings together the draft budgets for 1998/99. Work on the budgets has been in hand for the last six months and reflects input from a large number of people from throughout the organisation.
The purpose of the report is to highlight the key factors which have influenced the draft budgets. This report also provides information on the recommended approach, the budget format and budget timetable.
The sub-budgets which the Community Services Committee is responsible for are:
| Sister Cities | } | Volume I |
| Civic Receptions and Ceremonies | } | |
| City Promotion | } | |
| Turning Point 2000 | } | |
| Economic Development and Employment | } | |
| Library | } | |
| Art Gallery | } | Volume II |
| LACSU (Community Services Outputs) | } | |
| Housing | } | |
| Convention and Entertainment Facilities | } |
Where there is a mixture of projects relating to various Committees, the Community Service Committee projects have a (#) alongside.
As in previous years the pink pages summarise all the significant changes. In addition this year's pink pages also include a section which highlights efficiency gains and a section which highlights any budget restructuring. The pink pages have been printed off in a supplementary booklet.
KEY FACTORS INFLUENCING THE OPERATING BUDGET
The Financial Model which was approved as part of the 1997 Plan projected a 3.66% rate increase for 1998/99 (see page 11 of the 1997 Plan).
The draft programme now being brought forward for consideration includes $1.49M of new items and significant cost increases which were not provided for in the Model. It may be possible to achieve the 3.66% rate figure by funding these items from the unspecified operating sum. The inclusion of any additional initiatives would however put upward pressure on the rates figure.
New Committed Items and Significant Cost Increases
The $1.49M of new items and significant cost increases referred to above are summarised below:
Parklands Library Site $22,200
Although the Parklands Library is not programmed for development until 2002/03 the opportunity to purchase a site early was taken up at the end of last year. The maintenance costs associated with this site relate to ground maintenance and insurance and fire and safety costs for the existing building.
Reactive Maintenance - Water Services $30,000
An additional $30,000 has been provided for follow-up work on the Water Services Asset Management Plan. This work is being done in conjunction with leak reduction repairs.
Education Programme - Water Services $67,000
Funding from the Ministry for the Environment's sustainable management programme expires on 30 June 1998. The draft budget has been prepared on the basis that the education programme will continue at its current level and be funded fully by the Council.
Additional Resources - Art Gallery $52,000
These costs were identified subsequent to the preparation of the 1997 Plan and relate to art conservation, additional resources to meet the exhibition programme and additional framing costs.
Publication Costs $37,500
This item relates to the design and printing costs for the funding, borrowing and investment policies and the Long Term Financial Strategy. These policy statements which are a requirement of the Local Government Amendment Act will be published in a strategic statement booklet.
Housing Review Initiatives $69,500
The Housing Review Team which met during 1997 identified a number of initiatives to be implemented in 1998/99. They include an energy efficiency review, software for better managing the housing assets, a review of rent and cash collection systems and benchmarking. The initiatives which have a total cost of $69,500 were endorsed by the Community Services Committee at its December seminar meeting. The initiatives will be formally reported to the Community Services Committee meeting in February.
New Brighton Mainstreet $40,000
This provision will allow the Council to further progress specific issues raised in the 2005 Report. It will also enable specific support to be given for a Main Street Programme in New Brighton.
Tuam Street Car Park Development Studies $85,000
The above project will enable the potential development of this Council owned strategic property to be fully explored. Preliminary work on this project has already commenced.
Resource Consent Process $120,000
The Council is required to obtain a resource consent in order to apply biosolids to the forests. This provision reflects the likely cost of the consent process.
Landfill Aftercare $85,000
Relates to closed landfill sites and will allow for increased monitoring of these sites. This is to comply with the Resource Management Act.
Plant Costs $54,800
Reflects ownership costs for 10 additional light vehicles as approved in the 1997 capital budget.
Court Lodgement Fees $120,000
As at 1 January 1998 Court Lodgement Fees charged by the Department of Courts were increased from $15 to $25 per lodgement. These relate to parking fines.
Farmers Car Park (Car Parking Budget) $129,225
Reflects net operating costs for seven months of the 1998/99 year.
Canterbury Museum Trust Board $32,274
The Board has written to the Council advising that it is recommending a 5% increase to the 1998/99 levy. This represents a 3% ($32,274) increase on top of 2% allowed for in the Financial Model.
Project Plan Booklets $39,500
At the December Council meeting approval was given to publish project plan booklets for 1999/2000. These booklets will list all projects in a community area and will be map based. A pilot study will be initiated in the current year.
Library Maintenance $56,000
Most of these costs relate to cleaning of enlarged sites like the Central Library extensions.
Rural Fire Fighting Training $25,710
This additional provision has been included in the rural fire output to provide training in order to meet the Rural Fires Act Code of Practice.
Road Network Planning $25,000
There are two components to this item, both of which relate to road network planning. The first ($15,000) relates to the ongoing monitoring and assessment of existing speed limit changes and new speed limit sites and related research. The second ($10,000) relates to pedestrian crossing points and the investigation and design of miscellaneous crossing requests.
Carriageway Resurfacing Net $138,700
Reflects an increase in contract rates which have moved up significantly in 1997. The increased budget provision will meet target service levels as well as recognising more specialist work requirements.
Footpath Maintenance $40,000
Costs have continued to exceed previous budgeted amounts. This increase will ensure a more realistic provision.
Street Lighting $173,850 (Net)
This increase reflects a 2.5% increase in the asset base plus an increase in the cost of power. The new provision also allows for a one-off item of $50,000 for painting central city power poles.
Youth Advocacy $55,000
The social initiatives package which was approved last year funded a Youth Advocate position and support costs for a six monthly period. This additional provision will enable funding for a full 12 month period.
Cost Pressures due to Demand or Growth
In addition to the new committed items and cost increases detailed above there are also pressures due to increased demand or growth. These total $636,880 and are scheduled below:
New Reserves $69,285
New reserves and proposed reserves arising from subdivisions will add an estimated $69,285 to the Parks operating budget.
Halswell Quarry Park $39,765
The Quarry Park has been further developed from the initial 29.5 ha and the development now covers the whole 60.2 ha. There has been a corresponding increase in costs to maintain this asset.
Grounds Maintenance $36,945
Additional grounds maintenance on riverbank reserves arising from the plant programme.
Local Parks Additional Maintenance $25,115
Represent additional maintenance on the 22 extra parks which was not allowed for when the 1998/99 projects were prepared.
City Design - Operational Costs $92,140
Reflects a continuing growth in the unit's workload. Staff numbers are managed up or down on a continuing basis to match the required workload. Increased staffing is self-funding and is financed by fees charged for work done.
Water Supply - Power Charges $20,000
City growth and tariff changes have resulted in the need to increase the power provision for water pumping by $20,000.
Waterways and Wetlands $14,000
An increase in the rate of development and subdivision adjacent to waterways will increase the cost of maintenance associated with the management of riparian areas.
Road Maintenance
Includes the following items:
- Landscape Maintenance $69,500
Reflects the increase in the number of grassed berms being installed as well as additional landscape plots.
- Street Cleaning $26,130
Reflects the increased length of roading in the city.
- Major Pedestrian Areas Cleaning $244,000
Increases have been allowed for cleaning in the central city and suburban malls. This is due to the changing nature of inner city activities and public expectations of cleanliness.
EFFICIENCY GAINS $622,637
At the Council meeting to adopt the 1997 Plan it was resolved that an efficiency and effectiveness drive be carried out aimed at maximising efficiency gains. This process is well underway and the efficiency gains identified and achieved to date which translate directly into savings have been taken account of in the draft budget. These total $922,971 and cover a wide variety of Council activities. For a complete list see Schedule 1E (attached).
REVENUE
| Draft Budget 1998/99 |
Financial Model 1998/99 |
|
| Revenue * | $80.28M | $79.45M |
| CCHL Dividend/Interest on Subordinated Debt | $19.50M | $19.76M |
* This item does not include rates.
This year the Financial Model has proved remarkably accurate in projecting total revenue. The most significant variation to the revenue figure relates to car parking and this can be explained in terms of a fee increase of 60c to 80c per half hour in the basic casual charge for parking buildings.
CAPITAL EXPENDITURE
The capital expenditure programme can be summarised as follows:
| Draft Budget 1998/99 |
Financial Model 1998/99 |
|
| Net Capital Expenditure | $87.0M | $82.83M |
The draft 1998/99 figure includes $2.60M for unspecified capital expenditure plus an allowance of $749,100 for Community Board capital projects. All inflation adjustments to the draft 1998/99 figures have been funded from the unspecified inflation provision ($1.51M) which was included in the Model projections.
Although the capital smoothing exercise, which was carried out in October, achieved an overall reduction of $19.1M as against a budgeted reduction of $15M, most of this applied to years 2, 3 and 4.
The smoothing reduction achieved for 1998/99 was $1.4M.
The 1998/99 figure also includes the QEII scoreboard ($1M) which was brought forward at the time of the smoothing exercise and additional expenditure approved for the Cathedral Square project ($1.4M).
NEW INITIATIVES, COMMITMENTS AND BIDS
At the Standing Committee meetings last year, service add ons were separated out into:
- committed new initiatives; and
- uncommitted new initiatives
Committed new initiatives were defined as those costs which the Council was committed to and unable to avoid (eg operating costs associated with the Parklands Library site purchase). Uncommitted new initiatives were defined as initiatives which the Council/Community Board or staff requested.
The 1998/99 approach is very similar in that Units were asked to note on their pink pages, the changes and potential changes using the following headings:
| Categories | Totals* |
| - Committed Costs (operating) [included in the draft operating budget] | $5.78M |
| - Increased costs due to increased demand [included in draft operating budget] | $0.90M |
| - New operating initiatives [not included in draft operating budget] | $2.60M |
| - New capital initiatives [not included in draft operating budget] | $7.00M |
| - Efficiency gains [included in draft operating budget] | ($0.92M) |
*The totals for the Council as a whole.
The categories as they relate to the Community Services Committee costs/projects are:
Committed Costs - Operating Budgets ($1,327,800)
See Schedule 1A (attached). These items reflect the operating costs arising from capital projects, previous commitments made by the Council or cost increases.
Increased Costs due to Increased Demand - Operating Budgets (Nil)
Schedule 1B. These items reflect city growth and the consequential increased demand for goods and services.
NB: There are no costs relating to the Community Services Committee which fall into this category.
New Operating Initiatives ($755,930)
See Schedule 1C (attached). These items are not in the draft budget but have been identified by Councillors, Community Boards or staff for inclusion. They represent bids for the unspecified operating provision.
Bids for the Unspecified Capital Sums ($1,829,964)
See Schedule 1D (attached). Included within the Model projections is an unspecified amount of $5.2M which is divided equally between 1997/98 and 1998/99. These sums are available to fund some of the items on Schedule 1D.
APPROACH
The suggested approach to the 1998/99 Draft Sub-Budgets is to:
It should be noted that the bids will also be prioritised by the Plan Working Party against bids from all other Committees.
BUDGET FORMAT
Following the pattern established in previous years, the budget is presented in an output format. (Outputs represent the goods, services or products which are being `bought' for the community by the Council.) In most cases there is one output per page. Coloured paper has been used to separate the various sections of the budget.
The colours and the corresponding sections are:
| Pink | - Key Changes Section |
| Green | - Operating Budget |
| Lemon | - Holding Account Section |
| Blue | - 1998/99 Capital Section |
| Buff | - Ten Year Capital Programme |
| Violet | - Fees Schedule |
For each output there is a brief description, the objectives for 1998/99 are stated and the measures which will be used to assess whether the objectives have been met are also listed. The budgetary provisions are generally divided into direct costs, allocated costs and revenue. They are always shown on the opposite page to the budget text. All allocations from the Holding Account are cross-referenced back to the Holding Account section (lemon pages).
The budget structures for 1998/99 remain essentially the same as those for 1997/98. Where there are significant changes these have been highlighted on the pink pages under the heading "Restructuring of Budgets".
TIMETABLE
The next step in the process is for the draft budgets to be referred to the 1998 Plan Working Party in the last week of February to:
consider the overall strategy;
consider the projects and programmes at the margin;
consider funding issues; and to
recommend a Plan to the full Council.
Details of the other steps in the process are set out in Schedule 1G (attached).
| Recommendation: | That the draft operating and capital outputs be recommended to the 1998 Plan Working Party with any of the new initiatives (operating or capital) being clearly flagged. |