Christchurch City Council
STRATEGY AND RESOURCES COMMITTEE
ANNUAL PLAN MEETING
THURSDAY 5 FEBRUARY 1998
AT 9.00 AM
IN THE NO 2 COMMITTEE ROOM, CIVIC OFFICES
|Committee:||Councillor David Close (Chairman), The Mayor, Ms Vicki Buck, Councillors Oscar Alpers, Carole Evans, Gordon Freeman, Pat Harrow, Ian Howell, Alister James, Garry Moore, Margaret Murray, Denis O'Rourke and Ron Wright.|
|Principal Adviser||Committee Secretary|
|Mike Richardson||Julie Sadler|
|Telephone: 371-1553||Telephone: 371-1438|
|Fax: 371-1811||Fax: 371-1786|
Note: A light lunch will be provided at 12 noon.
|2.||DRAFT SUB-BUDGETS FOR 1998/99||RR 6959|
|3.||APEC SENIOR OFFICIAL MEETING 1999||RR 6993|
|4.||LOCAL GOVERNMENT NEW ZEALAND CONFERENCE 2000||RR 6994|
|5.||CITY SCENE - OPTIONS FOR INCREASING FREQUENCY 1998/99||RR 7001|
2. DRAFT SUB-BUDGETS FOR 1998/99 RR 6959
|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 Strategy and Resources Committee is responsible for are:
|Public Accountability||}||Volume I|
|Management Information Services||}|
|Communications and Promotions||}|
|Legal Services||}||Volume II|
|Corporate Planning and Information||}|
|Funds and Planning||}|
|Sockburn Service Centre||}||Volume III|
|Linwood Service Centre||}|
|Fendalton Service Centre||}|
|Papanui Service Centre||}|
|Beckenham Service Centre||}|
|Shirley Service Centre||}|
|Plant and Building Services||}||Volume IV|
Where there is a mixture of projects relating to various Committees, the Strategy and Resources 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.
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 $1,025,271
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 $1.02M and cover a wide variety of Council activities. For a complete list see Schedule 1F (attached).
|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.
The capital expenditure programme can be summarised as follows:
|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 (e.g. 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:
|- 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]||($1.02M)|
*The totals for the Council as a whole.
The categories as they relate to the Strategy and Resources Committee costs/projects are:
Committed Costs - Operating Budgets ($1,458,175)
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 ($426,140)
Schedule 1B. These items reflect city growth and the consequential increased demand for goods and services.
New Operating Initiatives ($186,700)
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 ($151,000)
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.
Efficiency Gains ($298,577)
See Schedule 1E (attached). This schedule highlights the efficiency gains which relate to the Parks and Recreation budgets.
The suggested approach to the 1998/99 Draft Sub-Budgets is to:
The suggested ranking is a 1 to 5 grading:
1 - Top priority
2 - High priority
3 - Priority
4 - Low priority
5 - Lowest priority
Projects should be spread equally by dollar value between the five categories.
A copy of the Strategic Objectives from the 1997 Plan is attached (see Schedule 1H). Committee members may need to refer to these when ranking items.
The Committee should also consider whether any new initiatives can be funded by way of substitution.
It should be noted that the bids will also be prioritised by the Plan Working Party against bids from all other Committees.
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".
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 funding issues; and to
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.|
|Chairman's Recommendation:||For discussion.|
3. APEC SENIOR OFFICIAL MEETING 1999 RR 6993
|Communications and Promotions Manager||Julie Battersby|
|Corporate Plan Output: Civic and Ceremonial|
The purpose of this report is to inform Councillors of a request from the Ministry of Foreign Affairs and Trade to host a `Welcome to Christchurch' function for the official delegates attending the APEC Senior Official Meeting in Christchurch from 29 April-7 May 1999 and to identify the associated costs.
The New Zealand Government is to host the 1999 series of APEC meetings to be held at a number of locations across the country.
In July 1996, the Ministry of Foreign Affairs and Trade hosted a similar APEC meeting in Christchurch involving the Ministers in Charge of Trade. Christchurch City Council co-hosted a welcome function in association with the Canterbury Tourism Council, Christchurch Airport Company, Lincoln University, Tip Top Ice Cream Co, Canterbury Employers' Chamber of Commerce, Canterbury Manufacturers Association and the Canterbury Development Corporation, to welcome the Ministers and their delegations to Christchurch.
The Ministry of Foreign Affairs and Trade also hosted the Antarctic Treaty Consultative meeting in Christchurch in May 1997. At that time Christchurch City Council provided a reception at Nga Hau E Wha National Marae to welcome the delegates. In addition a Christchurch book was provided as a gift to the leaders of the delegations and tourism promotional packs were provided to all delegates.
At the Council meeting in June 1996, Communications and Promotions staff presented a report outlining a request from the Ministry of Foreign Affairs and Trade to the Christchurch Convention Bureau encouraging Christchurch to bid for a Senior Officials meeting in 1999. The report recommended that `the Council endorse the Convention Bureau's bid for and APEC Senior Officials meeting to be held in Christchurch in 1999 and in support, offer to host a `Welcome to Christchurch' function and provide a promotional gift for each delegate as an acknowledgment of their visit to the city'.
APEC 1999 SENIOR OFFICIALS MEETING
In September 1997, Ministry of Foreign Affairs and Trade representatives visited the Mayor and formally sought support from the Christchurch City Council in the form of a Welcome Function for 250 delegates and 250 local people and promotional gifts for each delegate.
The APEC 99 Senior Official meeting is likely to bring 400 delegates to the city from the 18 participating countries and three observing organisations. Delegates will stay in the city for the duration of the meeting, a total of approximately nine days. The Senior Official Meetings are working groups and while they will not be as formal as the 1996 APEC meeting, they will bring an important visitor group to the city. The members of this group have the responsibility for recommending policy on APEC activity. The group does not include Government Ministers from outside of New Zealand.
|Chairman's Recommendation:||That the above recommendation be adopted.|
4. LOCAL GOVERNMENT NEW ZEALAND CONFERENCE 2000 RR 6994
|Susan Selway||Julie Battersby|
|Corporate Plan Output: Civic and Ceremonial Functions|
The purpose of this report is to inform the Council of the successful bid made by Christchurch to host the year 2000 Local Government New Zealand Conference and to invite the Council to consider setting aside funding to host the conference.
The Christchurch City Council was invited to bid for the Local Government Conference 2000 prior to the 1997 Conference. A bid document was prepared aligned to a series of bid preparation notes provided by Local Government New Zealand. During the 1997 Conference the Christchurch City Council was informed their bid had been successful. The dates for the conference have been confirmed as 10-12 July 2000. In the course of discussions with the Executive Assistant of Local Government New Zealand clarification was sought as to whether this Council is willing to donate the costs of the venue for the conference, as Wellington did last year and Dunedin have agreed to do for the 1998 conference. Local Government New Zealand have indicated that conference revenue is not used to assist off-set the venue hire and other costs to be borne by the local hosts. They have confirmed that Councillors of the hosting authority are able to attend the conference at no cost, although additional activity associated with the conference (conference dinner, etc) is not inclusive of that arrangement.
The responsibilities of the Christchurch City Council in hosting the 2000 Conference are as follows:
We have been advised by Wellington City that commitment Wellington City Council made to the 1997 conference was as follows:
Dunedin City Council has also agreed with Local Government New Zealand to cover similar areas of expenses in their hosting of the 1998 Local Government New Zealand Conference.
CHRISTCHURCH BUDGET BREAKDOWN
The following provisional costings have been identified by staff for the 2000 Conference to be staged in Christchurch:
In addition $5,000 has been included in the 1998/99 budget to commence planning for the conference. Included in this is promotional material and provision for early planning by a Professional Conference Organiser.
These identified costings do not include staff time and associated costs. Staff time is difficult to estimate at this point because the level of involvement has yet to be determined. However, a preliminary estimate will be prepared for the Committee meeting.
It is envisaged that there will be a number of sponsorship opportunities available, including an opportunity to co-host the welcome reception.
|Chairman's Recommendation:||That the above recommendation be adopted.|
5. CITY SCENE - OPTIONS FOR INCREASING FREQUENCY 1998/99 RR 7001
|Communications & Promotions Manager||Sam Fisher and Susan Selway|
The purpose of this report is to recommend changes to City Scene, based on customer feedback and the communication needs of the Council. These proposed changes include:
Further work is being done on the feasibility and desirability of utilising City Scene as a vehicle for public notices. The Strategy and Resources Committee will be informed of any recommended changes as a result of this at a later meeting.
RESIDENT RESEARCH 1997
Independent qualitative research conducted in 1997 by Opinions Market Research, on behalf of the Christchurch City Council, looked at a cross-section of the community and tested their reaction to City Scene. Randomly selected residents were asked to compare City Scene to other Christchurch City Council publications as well as the weekly Auckland City Scene. The focus groups discussed City Scene and were led in a facilitated discussion to recommend changes and improvements. As with all qualitative research no percentages can be attached to the findings. Rather than finding percentages, which is the role of quantitative research, qualitative research allows understanding all the issues involved and why people feel the way they do.
The significant findings were as follows:
- General developments and issues currently being discussed by the Council.
- Developments that impact on them as individuals.
- Better promotion needed to improve awareness and recognition.
- That City Scene become more consultative and engaging.
- That City Scene become a decision-making tool for the Council.
- Distribution should ideally be monthly.
- That a regular events calendar be included.
The information has been acted on in part, with efforts to increase the number of proactive items, the addition of a limited general events calendar, promotion of City Scene, including radio and print advertising, as each issue has been released.
The inclusion of more proactive items has not been dealt with completely however recent issues have included consultative articles, and contact names are provided for residents to seek further information.
The survey content has been discussed and reviewed regularly. Many of the suggestions, particularly minor ones have been implemented, for example including contact phone numbers under articles. However before recommending making major changes to the publication staff have wanted to undertake further research to test some of the assumptions.
The results of the survey should be seen as indicative. Although the groups included residents from a variety of age groups, with a geographical spread, and with other background determinants, the budget was only sufficient for three focus groups. The research company suggested that more research may be necessary, particularly after changes are made.
City Scene is currently being produced quarterly. The view of staff is that it is still not frequent enough to cover issues in a timely way and to be a reliable consultation tool and engage residents in greater dialogue.
Recommended priorities for in 1997/8 and 1998/9 are:
Although the survey recommended 12 issues per year, the current budget allocation and staffing resource are not sufficient to allow this change. Staff are investigating other means of funding City Scene, including placing Council advertising in the publication.
A report recommending inclusion of an Events Calendar in each issue of City Scene will be submitted to the Annual Plan meeting of the Parks and Recreation Committee (4 February). The report also identifies the additional cost associated with increasing the events calendar listings and including them in every issue of City Scene.
The benefits outlined to the Parks and Recreation Committee are:
The Parks and Recreation Committee recommendations will be reported to Strategy and Resources Committee at the meeting.
Should the Parks and Recreation Committee decline to fund the increase, it is recommended City Scene be published five times in 1998/99 without a full events calendar.
The following expenditure and income figures outline the proposed six issues, two of four pages and four of 8 pages.
The budget implications regarding increased funding for the Events Calendar is being considered separately by the Parks and Recreation Committee, and the outcome of that meeting will determine whether there is sufficient funding to produce two larger events issues of City Scene.
|Expenditure||Two 4 page and four 8
(Total 6 Issues)
|Printing (including events calendar)||$122,000|
|Current City Scene Budget||$105,000|
|Addition for research||$15,000|
|Current Events Calendar Funding||$15,000|
|*Increase to events Calendar budget requested from Parks and Recreation||$63,000|
(Not commercial but Council Services,
related Council supported festivals and trading enterprises)
* Assuming the Parks and Recreation Committee approves the recommended increase to this budget.
Proposed production plan for six issues:
|July||Annual Plan #2||eight pages|
|Late November||Events Calendar #1||eight pages|
|February||Events Calendar #2||eight pages|
|April||Annual Plan #1||eight pages|
|The Chairman comments:||Several Council departments engage in frequent advertising. Consultation among units heads should determine whether "City Scene" is an appropriate vehicle for some of the communication.|
|Chairman's Recommendation:||That City Scene issues be increased to at least six issues per year, subject to savings being made on other means of communication (such as advertising) with ratepayers.|