napier city council annual plan 2013/2014

Adopted 19 June 2013

ISSN 1173–4477(print) ISSN 1177–9896 (online)

Prepared in accordance with the requirements of the Local Government Act 2002

Hastings Street

Private Bag 6010, Napier 4142

Telephone: (06) 835 7579

Fax: (06) 835 7574

Photographs: www.abovehawkesbay.co.nz

Napier City Council Annual Plan 2013/14 1

Prepared in accordance with the requirements of the Local Government Act 2002

Hastings Street

Private Bag 6010, Napier 4142

Telephone: (06) 835 7579

Fax: (06) 835 7574

Contents

Mayor and Councillors .........................................................................................................................2

Mayor's Message ..................................................................................................................................3

Consultation Process ...........................................................................................................................4

Annual Plan - Responding to Napier's Changing Needs .........................................................................5

Strategic Priorities ................................................................................................................................8

Regional Collaboration and Shared Services .......................................................................................11

Financial Performance Measures ........................................................................................................12

Significance Policy..............................................................................................................................13

FINANCIAL INFORMATION .................................................................................................................................17

Statement of Accounting Policies .......................................................................................................18

Significant Forecasting Assumptions ..................................................................................................28

Prospective Statement of Comprehensive Income ...............................................................................38

Prospective Statement of Income .......................................................................................................39

Prospective Statement of Changes in Equity .......................................................................................40

Prospective Statement of Financial Position ........................................................................................41

Prospective Statement of Cash Flows .................................................................................................42

Notes of Changes Between the 2013/14 Ten Year Plan and 2013/14 Annual Plan ..............................43

Special Funds .....................................................................................................................................48

Borrowing Programme .......................................................................................................................52

Prospective Capital Plan .....................................................................................................................53

Funding Impact Statement .................................................................................................................65

ACTIVITY GROUPS .................................................................................................................................................75

Democracy and Governance ...............................................................................................................76

Roading .............................................................................................................................................78

Solid Waste ........................................................................................................................................81

Stormwater ........................................................................................................................................84

Sewerage ...........................................................................................................................................87

Water Supply ......................................................................................................................................90

Recreation .........................................................................................................................................93

Social and Cultural .............................................................................................................................98

City Promotion .................................................................................................................................106

Planning and Regulatory ..................................................................................................................110

Property Assets ................................................................................................................................115

Support Units ...................................................................................................................................118

Glossary of Terms ............................................................................................................................119

2 Napier City Council Annual Plan 2013/14

Mayor and Councillors

MISSION STATEMENTTo provide the Facilities and Services and the Environment, Leadership, Encouragement and

Economic Opportunity

TO MAKE NAPIER THE BEST CITY IN NEW ZEALAND

in which to live, work, raise a family, and enjoy a safe and satisfying life.

Barbara Arnott

Mayor

Councillors

Bill Dalton JPJohn Cocking Kathie Furlong(Deputy Mayor)

Mark Herbert(Ahuriri Ward)

Maxine Boag(Nelson Park Ward)

Faye WhiteMichelle Pyke Tania Wright JP(Taradale Ward)

Dave Pipe(Nelson Park Ward)

Rob Lutter(Taradale Ward)

Tony Jeffery JP Keith Price(Onekawa - Tamatea Ward)

Napier City Wards:AHURIRI WARD, TARADALE WARD,NELSON PARK WARD, ONEKAWA-TAMATEA WARD


Mayor's Message

Barbara Arnott

MAYOR

Our Annual Plan details what we are proposing in the 2013/14 financial year and what variations are planned to the Ten Year Plan adopted by the city in 2012.

We are pleased that we can add such value to the city over this next year and for our future and level rates at a low 1.2%. Our city’s prosperity and lifestyle, great facilities and lovely parks and gardens are only possible because we all work together. You have expectations of what you want in the city, your streets and neighbourhoods, the Council aims to achieve that with vision, sensible spending and fairness.

Insurance is the biggest cost increase and in this the Council is no different to all commercial property owners struggling with increased charges from insurance companies. We spend over $2million on insurance, a whopping amount to go out year after year.

Most new capital projects (art centre, bus depot, Marine Parade) are funded from Parklands development rather than rates. Our infrastructure construction, maintenance and operating costs are rate funded. We strike an excellent balance between funding from rates and funding from other sources – it makes our city affordable.

The consultation process has confirmed that the intercity bus depot will be sited at Clive Square West and funded by ratepayers. A one-off grant of $10,000 will be made to the Taradale Marketing Association.

Council will allocate funding up to $50,000 per annum for three years to market Pukemokimoki Marae to achieve better utilization of the facility.

Our rates increase remains at 1.2%.

My appreciation to all submitters to the Annual Plan.

Congratulations and thanks to everyone for making Napier a fabulous place to work and live.


Explaining the PlanThis Annual Plan 2013/14 has been prepared in accordance with the Local Government Act 2002. Its purpose is to identify any variations from the Ten Year Plan (TYP) for the coming financial year.

Information contained in the Plan includes:

� The proposed Annual Budget and Funding Impact Statement for 2013/14.

� Variations from the Financial Statements and Funding Impact Statement included in the TYP related to 2013/14.

� Performance Targets for Council Activities for 2013/14.

This Annual Plan must be read in conjunction with the 2012/13 to 2021/22 TYP. Copies of this document are available from the Napier City Council Civic Building and Council’s website www.napier.govt.nz.

Annual Plan Consultation Process The following consultation process was carried out for the Annual Plan:

� Draft Annual Plan adopted by Council on Wednesday 3 April 2013

� Draft Annual Plan available for the public on Monday 8 April 2013 from Napier City Council Civic Building

� Draft Annual Plan Summary Proudly Napier distributed to households on Wednesday 10 April 2013.

� An invitation was extended to any groups of citizens or individual citizens who wished to meet with the members of Council to discuss issues contained in the Draft Annual Plan.

� Submissions closed NOON Friday 10 May 2013

� LTCCP and Annual Plan Committee Meeting heard and considered submissions Thursday 6 June 2013.

� Annual Plan adopted by Council on Wednesday 19 June 2013.

Changes from the Draft Annual PlanThe consultation process has resulted in one change that will increase rates revenue required

� Pukemokimoki Marae. Council will allocate $50,000 pa for up to three years funded from rates to assist with the marketing of the Marae to achieve better utilisation of the facility. The aim is that the marketing programme will enable self funding within the three years.

The rates increase remains at the proposed 1.2%.

The project to convert the Old Council Chambers as an Art Centre Building included in the capital plan has been further developed. The plan also now includes anticipated grants of $350,000 to offset the costs of the building development.

Other decisions from the consultation that do not impact the Annual Plan are as follows:

� Taradale Marketing Association. A one off grant of $10,000 will be made to the Taradale Marketing Association.

� Surf Life Saving. A one off grant of $5,500 will be made to Surf Life Saving Hawke’s Bay for extended life guard services at Westshore and Marine Parade for the 2013/14 summer season.

� Art Deco Trust. A one off grant of $25,000 will be made to the Art Deco Trust for the Ambassador Programme.

All three items above will be funded from the 2012/13 year.

Consultation Process


Annual Plan - Responding to Napier's Changing Needs

The Annual Plan gives shape to the changing dynamics of our city, outlining the Napier City Council’s spending programme for the coming year and beyond.

This, the 2013/14 Annual Plan, considers “housekeeping” needs, addresses infrastructural maintenance and improvements and looks to big picture developments aimed at progressing the city and making Napier a better place for all.

Parklands development helps fund most new capital undertakings – such as an intercity bus depot and Marine Parade developments. Rates fund infrastructure construction, maintenance and operating costs.

The biggest cost increase facing the Council is insurance, which has gone up significantly following the Christchurch earthquake. Despite this, the rates increase for existing ratepayers, the coming year is a modest 1.2 percent.

As indicated in the Ten Year Plan the advanced waste water treatment levy will be discontinued from 1 July 2013. It was signalled in the Ten Year Plan that despite delays to the project funding for the household demand for this project has been fully met. The original project plan forecast funding to be a combination of advanced wastewater levy and $7 million loan for the residential share of this project. As advised in the Ten Year Plan this loan is not required. Funding for commercial and industrial use of the facility remains unchanged from the original plan.

In the Ten Year Plan, commencing in 2013/14, a sum of $508,000 per year was added to ensure funding is available for wastewater outfall replacement when it is required. This is forecast to fall outside the Ten Year Plan period.

Below is a summary of variations from the Ten Year Plan signed off by the Napier community last year. Significant new projects include:

Proposed Bus DepotThe Napier City Council is working with stakeholders in considering possible solutions to meet the need for a new intercity bus depot in Napier. Developing the Council’s preferred site, on the south side of Carlyle Street between Tennyson Street and Clive Square West, would cost an estimated $460,000. The proposal encompasses covered shelter with seating, toilet facilities and capacity for five buses on site.

Council has unsuccessfully canvassed commercial bus companies for contributions to the cost of this facility. Consequently this remains a rate payer funded facility in this plan.

Marine Parade DevelopmentThe initial projects in the further development of Napier’s landmark coastal strip were outlined in last year’s Annual Plan. The extension to the May and Peter Harris Playground has been completed and tenders have been called for the landscaping project between the playground and the National Aquarium of New Zealand.

The junior cycle track has been completed and is a popular addition to the Marine Parade facilities.

Following submissions to the Draft Annual Plan development of Sk8zone has been referred back for further consideration.

The Napier City Council is seeking private sector partners to fund aspirational projects to further enhance Marine Parade. This plan does not include any funding from private sector partners.

Arts Centre Relocated from the corner of Tennyson Street and Herschell Street, the former Borough Council Building is to be redeveloped as a community arts centre. If funding can be secured, the building – registered as a Category II historic place – will be refurbished to become a base for Creative Napier and a venue for exhibitions and community arts programmes. The plan includes funding from the creative sector for part of the cost of this project.


Annual Plan - Responding to Napier's Changing Needs continued

Memorial Square Building RefurbishmentConstructed in 1925, the Memorial Square Building is to undergo an internal refurbishment to more fully utilise this community facility. It will continue to provide a meeting room (with kitchen and toilet facilities) for public hire. It will also include accommodation for Community Hub groups, including the Citizen’s Advice Bureau which will provide reception services to the hub. Work is scheduled to start later in 2013 after completion of earthquake strengthening.

McLean Park Lighting Tower UpgradeThe three original lighting towers of the six in McLean Park are targeted for structural strengthening work and a repaint to ensure that they too meet updated engineering standards.

Sportsgrounds, Reserves and Green SpacesWith Napier being considered as a host city for the 2015 Cricket World Cup, funding of $250,000 has been allocated over two years to ensure our sportsgrounds are looking their best.

While not a new item for this annual plan, our ten-year plan responds to the community’s interest in the provision of more available green spaces in the city and landscape protection for the Western Hills.

Severn Street Water Supply ExtensionA bigger main is to be installed in the first stage of an upgrade to increase capacity and provide greater resilience in the reticulation supplying water to the Pandora industrial area and beyond.

Once this project is fully completed, it will reduce the impact on all downstream consumers in the Pandora, Ahuriri and Westshore areas should the Pandora trunk main be out of service.

The first stage, from Prebensen Drive to the railway line, is being budgeted for now to ensure the work can be done in conjunction with any road upgrading required to provide for large format retail development that may go ahead in the adjacent area. The balance of the project will be submitted for funding through the Council’s next Ten Year Plan.

Water Supply Control System UpgradeThe control system automatically controls the network's pumps, monitors resevoir levels and generates alarms when faults or other unfavourable conditions occur.

Much of the hardware and some of the software will be upgraded progressively over the next two years, ensuring the computerised system complies with current radio licence rules.

Te Awa Structure Plan Stages 1 & 2Land south of Napier Boy’s High School has been rezoned for residential development. The Council is responding to the need to provide infrastructural services ahead of any start being made on development.

Jervoistown Footpath ImprovementsJervoistown’s recent rezoning gives the area its own set of rules designed to protect its rural character and deter urban development. This District Plan change was sought by residents keen to retain the area’s lifestyle aspects. However, independent traffic consultants have identified a need to provide footpaths for safety reasons. A standard 1.5m width footpath will be constructed from the Napier-Hastings Expressway along Burness Road, Jervois Road and Meeanee Road and return to the expressway.

Also identified is a future need to widen the upper Pirimu Stream to provide additional stormwater capacity as development occurs in the area. Developers will be required to meet that cost through financial contributions.


Annual Plan - Responding to Napier's Changing Needs continued

Domett Street ExtensionPlanning and Traffic Reports on future traffic requirements for Ahuriri identified the future need for improved traffic flow in the Ahuriri area. The proposed solution was to build an extension to Domett Street.

To enable Council to proceed with investigation work on this project a budget of $1.4M funded from Financial Contributions has been added to the plan. This is estimated at half the requirement for the project. The balance of the project will be included in the next Ten Year Plan.

West Quay ParkingThere is an identified need for additional parking at West Quay. Solutions and funding options for this project will be investigated during the next year.

Single Lane West QuayFunding options for this project will be investigated this year. However the project is dependent on the best available solution for West Quay parking issues.

TourismOne of Council’s Strategic Priorities is Napier Tourism. Council have identified a need to structure and implement a campaign for the promotion of Napier. Budget will be available from current year accounts to cover the cost of formulating the campaign and overseeing the implementation until 30 June 2013. The Council intends considering any additional costs for running the campaign after 1 July 2013 being funded from any outturn surplus from the 2012/13 year.

Land Development for GrowthProvision for economic development for the future, such as an industrial park.


Strategic Priorities

Napier City Council’s Strategic Plan is represented by the following table. The Strategic Plan was included in the 2012 Ten Year Plan and has been reviewed as part of this budget process.

Napier is a leading commercial and tourist centre.

� Hastings Street upgrade - stages 2 & 3 � Emerson Street revitalization

� Heretaunga Plains Urban Development Strategy Implementation

� Joint District Plan � City promotion and marketing

� Napier Tourism � Napier Life � Lagoon Farm Business Park � Regional initiatives/Shared Services

Economic Development

Growth

Commercial

� Tree planting � Reducing solid waste to landfill � Minimising carbon footprint � Education � Westshore/Whakarire reprofiling � Urban design guide

Recreation

Napier will offer lifestyle opportunities for citizens and visitors.

Cultural

Environment

� Aquatic Centre upgrade � Guppy Road Sports Village � Park Island Sportsgrounds Master Plan

implementation

� Heritage inventory � Arts & Cultural policy review � HB Museum & Art Gallery completion � Cultural precinct Herschell Street � Art in public places � Community Art Centre

Napier citizens will have affordable services and quality infrastructure.

Essential Services

Rates

� Quality not quantity � Four-laning Prebensen Drive � Stormwater upgrades � Completion of BTF Wastewater Treatment

Plant � Pathways

Security & Community

� Marine Parade family friendly upgrades � Maraenui upgrade phase 2 � Youth programme � Support for community initiatives � Memorial Square building development

� Maintaining affordability � Equity � Fairness � Funding review � Fees and charges


Strategic Priorities continued

How Our Strategic Plan Links to the Community OutcomesThe following table shows the Community Outcomes to which each area of the Napier City Council Strategic Plan contributes (see following page for list of Community Outcomes).

Napier citizens will have affordable services and quality infrastructure.

Napier will offer lifestyle opportunities for citizens and visitors.

Napier is a leading commercial and tourist centre.

Essential Services � Transport, infrastructure and services that are safe,

effective and integrated.

Rates � A strong, prosperous and thriving economy. � Strong leadership.

Security and Community � Safe and secure communities. � A lifetime of good health and wellbeing. � Supportive, caring and inclusive communities.

Recreation � Safe and accessible recreational facilities. � An environment that is appreciated, protected and

sustained for future generations.

Environment � Communities that value and promote their unique culture

and heritage. � An environment that is appreciated, protected and

sustained for future generations. � Safe and accessible recreational facilities.

Cultural � Communities that value and promote their unique culture



Economic Development � A strong, prosperous and thriving economy. � Communities that value and promote their unique culture

and heritage.

Growth � A strong, prosperous and thriving economy. � Transport, infrastructure and services that are safe,

effective and integrated. � An environment that is appreciated, protected and


Commercial � A strong, prosperous and thriving economy. � Communities that value and promote their unique culture




Strategic Priorities continued

The Community's Desired OutcomesThe Community Outcomes were originally determined from an extensive consultation process with the community in 2003/04, which included telephone surveys, district meetings with key stakeholders, mail outs, media campaigns and interviews. The outcomes that have been developed represent the views of individuals and organisations on the important ingredients for the future economic, social, cultural and environmental wellbeing of the region. Council reviewed and confirmed the Community Outcomes as part of the planning process for this Annual Plan.

Napier City Community Outcomes Indicator

• A lifetime of good health and wellbeing. Health

• Safe and secure communities. Safety

• An environment that is appreciated, protected and sustained for future generations. Sustainability

• Transport infrastructure and services that are safe, effective and integrated. Transport

• A strong, prosperous and thriving economy. Economy

• Strong leadership. Leadership

• Supportive, caring and inclusive communities. Community

• Safe and accessible recreational facilities. Recreation

• Communities that value and promote their unique culture and heritage. Cultural

Community outcomes provide a longer-term perspective on the development of Napier City and provide the Napier City Council with a framework for contributing to these community aspirations through Council activities.

Each of Council’s activities contributes to some or all of the Community Outcomes, thus contributing to the general wellbeing of Napier. The broad scope of the outcomes and their highly integrated nature require a great emphasis on cooperative and collaborative approaches with other organisations in the City and region to address these important community issues. The Napier City Council will continue to work closely with other organisations, as appropriate, in addressing the Community Outcomes.

Where practical collaborative planning, policy, funding and service delivery initiatives are being pursued on an ongoing basis with all local Councils.


Regional Collaboration and Shared Services

Napier City Council and Hastings District Council have for some time been exploring “Shared Services” initiatives. A number of joint activities have already been undertaken by the two authorities with the aim of reducing the cost of performing those activities for the community at large. For example the Councils, along with other Hawke’s Bay Councils, cooperate in the areas of rating valuation services, purchase of insurance, and strategy development such as the Heretaunga Plains Urban Development Strategy (HPUDS). The Heretaunga Plains Urban Development Strategy has been completed with urban containment being a principle philosophy. The Omarunui Landfill is an example where the Councils jointly operate a facility for the benefit of the collective communities, where it is unlikely that one council on its own could achieve such benefits.

Napier City and Hastings District Council consider there is value to be gained by sharing services and for joint procurement, where a business case shows that they provide benefit to the community through improved levels of service, reduced costs, improved efficiency and/or increased value through innovation. The Councils have confirmed their intention to pursue a formal arrangement between the two authorities in a structure that enables other Councils to participate at a later date if they wish. Central Hawke’s Bay District Council, through their Long Term Plan process, have also confirmed their intention to participate. The establishment of Hawke's Bay Local Authority Shared Services, a Council Controlled Organisation is underway.

The table below sets out areas where the five Hawke’s Bay Councils have or are currently working together to provide effective and efficient services to the people of Hawke’s Bay.

InitiativesHawke's Bay

Regional Council

Wairoa

District Council

Napier

City Council

Hastings

District Council

Central Hawke's

Bay District Council

Community Services

Pettigrew Green Arena

Sport Hawke's Bay

Shared Library Service

Pathway Development

Hawke's Bay Museum Trust

Settlement Support Service

Youth Transition Service

Regional Cultural Archives

Road Safety Initiatives

Corporate Support

Joint Property Valuation Contract

Joint Insurance and Energy Procurement

Economic

Hawke's Bay Airport Ltd

Business Hawke’s Bay

Tourism Hawke's Bay

Essential Infrastructure

Recreational Water Quality Monitoring

Joint Recycling and Refuse Collection Contracts

Strategy and Planning

Omarunui Joint Landfill

Stormwater Drainage

Regional Transportation Strategy

Heretaunga Plains Urban Growth

Napier / Hastings Joint District Plan

Solid Waste Management Plan

Regional Community Outcomes

Community Outcome Monitoring

Regional Strategic Coordination Group

Civil Defence Group

Policy Sharing

Joint Alcohol Strategy


Financial Performance Measures

This is where your rates dollars go...

Actual 2011/12

($000)

Annual Plan 2013/14

($000)

TYP 2013/14

($000)

TYP/ AP 2012/13

($000)

44,840 Rates Revenue 46,134 47,273 45,466

18,744 Net Surplus 12,425 12,587 16,216

66,898 Working Capital 12,650 10,718 24,642

4,028 Net Public Debt (External) 12 13 950

32,750 Internal Debt 53,819 56,076 44,880

1,375,190 Total Assets 1,375,197 1,460,488 1,379,746

47.3% % Rates Revenue to Total Revenue 47.9% 48.2% 46.8%

0.29% Net Public Debt as a percentage of Total Assets 0.0% 0.0% 0.1%

8.3%Proportion of Rates Revenue applied to service Total Debt (%)

9.2% 10.2% 9.3%

- Rates increase to existing ratepayers year on year * 1.2% 3.8% 0.0%

* Excludes expected rating revenue increase arising from growth in the rating base. Revenue from rates including growth is expected to increase 1.4% over the 2012/13 Annual Plan.


Changes to the Local Government Act 2002, passed into law in December 2012, have required Council to amend its Significance Policy. The Act changed the definition of the purpose of local government. Council’s Significance Policy has therefore been amended to incorporate this change to comply with the new legislation, and is reproduced below. No submissions were received in regard to this policy during the consultation process. The policy below was accordingly adopted unchanged.

Napier City Council Significance Policy

1. IntroductionSection 90 of the Local Government Act 2002 (the Act) requires Council to adopt a policy on significance. The policy outlines Council’s general approach to determining the significance of proposals and decisions in relation to issues, assets or other matters and includes thresholds, criteria or procedures Council will use in assessing which issues, proposals, decisions and other matters are significant.

The policy also provides a list of assets which Council considers to be strategic assets.

2. DefinitionsSection 5 of the Act defines ‘significant’ and ‘significance’ and strategic asset as follows:

significance, in relation to any issue, proposal, decision, or other matter that concerns or is before a local authority, means the degree of importance of the issue, proposal, decision, or matter, as assessed by the local authority, in terms of its likely impact on, and likely consequences for, -

(a) the district or region:

(b) any persons who are likely to be particularly affected by, or interested in, the issue, proposal, decision or matter:

(c) the capacity of the local authority to perform its role, and the financial and other costs of doing so.

significant, in relation to any issue, proposal, decision, or other matter, means that the issue, proposal, decision, or other matter has a high degree of significance.

strategic asset, in relation to the assets held by a local authority, means an asset or group of assets that the local authority needs to retain if the local authority is to maintain the local authority’s capacity to achieve or promote any outcome that the local authority determines to be important to the current or future well-being of the community; and includes:

(a) any asset or group of assets listed in accordance with section 90(2) by the local authority; and

(b) any land or building owned by the local authority and required to maintain the local authority’s capacity to provide affordable housing as part of its social policy; and

(c) any equity securities held by the local authority in –

(i) a port company within the meaning of the Port Companies Act 1988:

(ii) an airport company within the meaning of the Airport Authorities Act 1966.

3. Purpose

3.1 Degree of Compliance with Decision MakingThe significance of a decision will help determine the appropriate nature, extent and degree of compliance required with the decision-making process set out in Part 6 of the Act.

Section 79 of the Act provides that it is the responsibility of the Council to make judgments about how to achieve compliance with Sections 77 and 78 that are largely in proportion to the significance of the matters affected by the decision. In making such judgments the Council must have regard to the significance of all relevant matters, and the principles relating to local authorities, the Council’s resources and the extent to which the nature of the decision and the circumstances allow consideration of a range of options or the views and preferences of other persons

In essence, the more significant the issue, the higher the standard of compliance required.

Council decision-making processes must promote compliance with the requirements of Sections 77, 78, 80, 81 and 82 of the Act. For significant decisions, Council must ensure appropriate compliance.

3.2 ConsultationThe significance of a matter will also guide Council’s decisions concerning the extent and nature of the consultation to be undertaken with the persons likely to be affected or interested in the decision or matter.

Council must comply with the principles of consultation set out in Section 82 of the Act in such a manner that Council considers, at its discretion, to be appropriate. In determining what is appropriate Council must have regard to various matters, including the nature and significance of the decision or matter (including its likely impact from the perspective of the persons who will or may be affected by the decision).

The more significant a matter from the perspective of the persons who may be affected by the decision, the more likely Council will need to consult with them on their views.

Significance Policy


Significance Policy continued

3.3 Public InformationThe significance of a decision will assist in determining the extent and detail of information to be provided by Council when consulting with, or reporting to, the community.

The principles of consultation (Section 82 of the Act) include the principle that persons interested in decisions should be provided with reasonable access to relevant information, and should be given clear information concerning the purpose of the consultation. In addition, persons who present views to the Council should be provided information concerning both the relevant decisions and the reasons for those decisions. In determining how to comply with these, and the other principles of consultation, Council will take into account the nature and significance of the decision

4. General ApproachCouncil will consider each proposal or decision on a case by case basis to determine whether the decision is significant. In determining this issue, Council will apply the criteria and procedures and consider the thresholds set out in this policy and will also consider each of the following:

� The likely impact/consequences of the issue, proposal, decision or other matter, on the interests of the community;

� The parties who are likely to be particularly affected by or interested in the issue, proposal, decision or other matter;

� The likely impact/consequences of the issue, proposal, decision or other matter from the perspective of those parties; and

� The financial and non financial costs and implications of the issue, proposal, decision or other matter having regard to Council’s capacity to perform its role.

The more significant or material the impact or consequences of the issue, proposal, decision or other matter, the higher the standard of compliance required by Part 6 of the Act, and the more likely the matter will be ‘significant’.

In determining whether any issue, proposal, decision or other matter is significant, Council will consider the thresholds and apply the criteria and procedures set out in the following subsections.

4.1 ThresholdsWhen undertaking a process to determine which issue, proposal, decision or other matter is significant, Council will recognise the following thresholds in determining significance:

Issues, proposals, decisions, assets, or other matters for which Council will:

� Incur operational expenditure exceeding 5% of its annual operating expenditure budget for that year

� Incur capital expenditure exceeding 1% of the total value of Council’s assets, or where spent on a strategic asset or strategic asset as a whole as defined in the Act exceeds 25% of that assets value

� Any transfer of ownership or control, or the disposal or abandonment, of a strategic asset as a whole as defined by the Act or listed in this policy;

� The sale of Council’s shareholding in any Council Controlled Trading Organisation, or Council Controlled Organisation;

Entry into any partnership with the private sector to carry out a significant activity on behalf of Council, including where Council’s contribution to such partnerships exceeds the significant thresholds identified above.

Where any issue, proposal, decision or other matter triggers one or more of the above thresholds, it shall be considered against the criteria spelt out in Section 4.2 of this policy in determining whether it is significant. However, a matter which does not meet any particular financial threshold may still be significant if the criteria in 4.2 below suggests that it is.

4.2 CriteriaIn considering whether any issue, proposal, decision or other matter is significant the following criteria will be used:

� The issue, proposal, decision or other matter affects all or a large portion of the community in a way that is of consequence;

� The impact or consequences of the issue, proposal, decision or other matter on the affected persons will be substantial;

� The financial implications of the issue, proposal, decision or other matter on Council’s overall resourcesare substantial;

� A decision that will, directly or indirectly, severely affect the capacity (including financial capacity) of Council to carry out any activity identified in the Ten Year Plan;

� The proposal or decision is to significantly alter the intended level of service for any significant activity –including a decision to commence or cease such activity;

� The issue, proposal, decision, or other matter is not able to utilise any other consultation procedure provided for under the Act, or any other specific legislation;

� The issue, proposal, decision or other matter has a history of wide public interest in the community or is likely to generate considerable public controversy;

� The significant proposal has not already been the subject of extensive consultation.


Significance Policy continued

4.3 ProceduresIn achieving this policy:

Where any issue, policy, decision or other matter triggers one or more of the thresholds in Section 4.1 of this policy the principal administrative officer shall report the matter to Council.

Each report shall include a statement indicating that the issue, proposal, decision or other matter has been considered in regard to Council’s policy on significance. The report shall include an assessment of the degree of significance of the issue, proposal, decision or other matter based on the criteria outlined in Section 4.2 of this policy, and make recommendation to Council.

If the issue, proposal, decision or other matter is considered to be significant, the report to Council will also include a statement addressing the appropriate observance of such of Sections 77, 78, 80, 81 and 82 of the Act as are applicable.

Once an issue, proposal, decision or other matter is determined as significant in accordance with the application of this policy, the “Decision Making” provisions of the Act shall be applied as outlined in Sections 76 to 81 of the Act.

The Council will report annually through its Annual Report on all issues, proposals, decisions or other matters determined to be significant, and subject to the procedure outlined in Section 76, 77, 78, 80 and 81 of the Act as appropriate.

5. Strategic AssetsThe Act requires that this policy shall identify all the strategic assets, as defined in Section 5 (outlined in Section 2 above).

The list of Strategic Assets outlined in 5.1 below is not an exhaustive list of Council assets but includes those which are considered to be significant in ensuring the Council’s capacity to achieve or promote any important outcome.

While the Council owns a number of assets and assets managed “as a whole” that it considers to be strategic, not all trading decisions made regarding these assets are regarded as significant nor do they affect the asset’s strategic nature. For example, the roading network is strategic, but small parcels of land that make it up may not be, and the purchase or sale of such parcels of land are unlikely to amount to a significant decision.

Where a Special Consultative Procedure is undertaken under the Act or other legislation with regard to the transfer of ownership or control of any of these strategic assets, a separate Special Consultative Procedure will not be required under the policy on significance

5.1 Napier City Council List of Strategic Assets

Asset Notes

Roading system (as a whole) Includes footpaths, off-street parking, bridges

Wastewater Reticulation System (as a whole) Includes pipes and pump stations.

Wastewa ter Treatment Plant Includes all land, buildings and plant.

Stormwater Reticulation System (as a whole)

Reservoirs and Water Reticulation System (as a whole) Includes the land and structures.

Refuse Transfer Station

Share of Omarunui Landfill

Sportsgrounds and Reserves

Centennial Hall

Cemeteries

Napier and Taradale Library collections Includes books and heritage.

Napier Aquatic Centre

Marine Parade Pools

War Memorial Conference Centre Buildings only.

Napier Municipal Theatre Buildings only.

National Aquarium of New Zealand Buildings only.

Marineland of NZ Buildings only.

Napier i-SITE Visitor Centre

Inner Harbour

Retirement Housing (as a whole)

Leasehold Land Portfolio Commercial and industrial only.

Kennedy Park Top 10 Resort Land only.

Council Administration Buildings Civic and Library building.

Hawke's Bay Museum & Art Gallery

Share of Hawke's Bay Airport Includes 26% interest in the airport.

FINANCIAL INFORMATION


The principle accounting policies adopted in the preparation of the 2013/14 Annual Plan are set out below. The financial statements comprise the financial statements for Napier City Council (the Council) as an individual entity.

The main purpose of the Annual Plan is to –

� Contain the proposed annual budget and funding impact statement for the year ended 30 June 2014

� Identify any variation from the financial statements and funding impact statement included in year 2 of Council’s Long Term Plan 2012/22

� Support the Long Term Plan in providing integrated decision making and co-ordination of the resources of Council

� Contribute to the accountability of Council to its community

� Extend opportunities for participation by the public in decision making processes relating to the costs and funding of activities to be undertaken by Council.

1.1 Reporting Entity

Napier City Council (the Council) is a New Zealand territorial local authority and is governed by the Local Government Act 2002.The accounting policies adopted for preparation of the 2013/14 prospective financial statements comply with the New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS) and are set out below. These policies have been applied consistently to all periods presented in these financial statements, unless otherwise stated.

The primary objective of the Council is to provide goods and services for the community or social benefit rather than making a financial return. Accordingly, the Council has designated itself as a public benefit entity for the purposes of NZ IFRS.

The Council holds a 26% share of Hawke’s Bay Airport Limited, which is equity accounted.

The Annual Plan was authorised for issue by the Council on 19 June 2013.

1.2 Basis of Preparation

The prospective financial statements of the Council have been prepared in accordance with the requirements of the Local Government Act 2002: Part 6, Section 95 and Part 2 of Schedule 10, which include the requirement to comply with generally accepted accounting practice in New Zealand (NZ GAAP).

The prospective financial statements comply with NZ GAAP and NZ IFRS, including FRS 42 “ Prospective Financial Statements”, and other applicable financial reporting standards, as appropriate for public benefit entities.

The financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars ($000). The functional currency of the Council and its associates is New Zealand dollars.

1.3 Changes in Accounting Policies

Council has adopted the following revisions to accounting standards which have had only a presentational or disclosure effect and relate to standards that have been previously adopted:

� Amendments to NZ IAS 1 Presentation of Financial Statements. The amendments introduce a requirement to present, either in the statement of changes in equity or the notes, for each component of equity, an analysis or other comprehensive income by item. The Council has decided to present this analysis in Note 24.

� NZ IAS 24 Related Party Disclosures (Revised 2009) replaces NZ IAS 24 Related Party Disclosures (Issued 2004). The revised standard simplifies the definition of a related party, clarifying its intended meaning and eliminating inconsistencies from the definition. The main effect has been to disclose further information about commitments between related parties.

� FRS 44 New Zealand Additional Disclosures and Amendments to NZ IFRS to harmonise with IFRS and Australian Accounting Standards (Harmonisation Amendments). The purpose of the new standard and amendments is to harmonise Australian and New Zealand accounting standards with source IFRS and to eliminate many of the differences between the accounting standards in each jurisdiction. The main effect of the amendment on the Council and group is that certain information about property valuations is no longer required to be disclosed.

Standards, amendments and interpretations issued that are not yet effective and have not been early adopted and which are relevant to the Council include:

The Minister of Commerce has approved a new Accounting Standards Framework (incorporating a Tier Strategy) developed by the External Reporting Board (XRB). Under this Accounting Standards Framework, the Council is classified as a Tier 1 reporting entity and it will be required to apply full Public Benefit Entity Accounting Standards (PAS). These standards are being developed by the XRB based on current International Public Sector Accounting Standards. The effective date for the new standards for public sector entities is expected to be for reporting periods beginning on or after 1 July 2014. This means the Council expects to transition to the new standards in preparing its 30 June 2015 financial statements. As the PAS are still under development, the Council is unable to assess the implications of the new Accounting Standards Framework at this time. Due to the change in the Accounting Standards Framework for public benefit entities, it is expected that all new NZ IFRS and amendments to existing NZ IFRS will not be applicable to public benefit entities. Therefore, the XRB has effectively frozen the financial reporting requirements for public benefit entities up until the new Accounting Standard Framework is effective. Accordingly, no disclosure has been made about new or amended NZ IFRS that exclude public benefit entities from their scope.

Statement of Accounting Policies


1.4 Historical Cost Convention

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

1.5 Principles Of Consolidation

Consolidated financial statements are prepared adding together like items of assets, liabilities, equity, income, and expenses on a line-by-line basis. All significant intra-group balances, transactions, income, and expenses are eliminated on consolidation.

1.5.1 Associates

The Council’s associate investment is accounted for in the prospective financial statements using the equity method. An associate is an entity over which the Council has significant influence and that is neither a subsidiary nor an interest in a joint venture. The investment in an associate is initially recognised at cost and the carrying amount in the financial statements is increased or decreased to recognise the Council’s share of the surplus or deficit of the associate after the date of acquisition. Distributions received from an associate reduce the carrying amount of the investment.

If the share of deficits of an associate equals or exceeds its interest in the associate, the Council discontinues recognising its share of further deficits. After the Council’s interest is reduced to zero, additional deficits are provided for, and a liability is recognised, only to the extent that the Council has incurred legal or constructive obligations or made payments on behalf of the associate. If the associate subsequently reports surpluses, the Council will resume recognising its share of those surpluses only after its share of the surpluses equals the share of deficits not recognised.

Where the Council transacts with an associate, surplus or deficits are eliminated to the extent of the group’s interest in the associate.

Dilution gains or losses arising from investments in associates are recognised in the surplus or deficit.

Entities are required to disclose all accounting policies that are relevant to an understanding of the financial statements. The investment in the associate is carried at cost in the Council’s financial statements.

1.5.2 Subsidiaries

As at 30th June 2014 the Council has forecast to have no subsidiaries.

1.6. Joint Ventures

1.6.1 Jointly Controlled Assets

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

1.7 Foreign Currency Translation

1.7.1 Functional and Presentation Currency

Items included in the prospective financial statements of each of the Council’s entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The prospective financial statements are presented in New Zealand dollars, which is the Council’s functional and presentation currency. All values are rounded to the nearest thousand dollars ($000).

1.7.2 Transactions and Balances

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

1.8. Revenue Recognition

Revenue comprises the fair value for the sale of goods and services, net of rebates and discounts. Revenue is recognised as follows:

Rates

Rates are recognised when levied. Penalties and discounts relating to rates are included where applicable.

Residential Developments

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

Traffic and Parking Infringements

Traffic and parking infringements are recognised when tickets are issued.

Statement of Accounting Policies continued


Licences and PermitsRevenue derived from licences and permits are recognised on application.

Development and Financial ContributionsDevelopment contributions are recognised when invoiced and are no longer refundable.

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

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

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

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

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

Donated, Subsidised or Vested AssetsWhere a physical asset is acquired for nil or nominal consideration, the fair value of the asset received is recognised as revenue.

Grants and SubsidiesGrants and subsidies received in relation to the provision of services are recognised on a percentage of completion basis. Other grants and subsidies are recognised when receivable. The Council receives the majority of grants and subsidies income from New Zealand Transport Agency (NZTA) which subsidises part of the Council’s costs in maintaining the local road infrastructure.

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

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

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

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

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

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

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

Commitments and contingencies are disclosed exclusive of GST.



1.11 Leases

1.11.1 The Council is the Lessee

Leases of property, plant and equipment where the Council has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the lower of the fair value of the leased property and the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in other long term payables. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The interest element of the finance cost is charged to the Statement of Comprehensive Income over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases are depreciated over the shorter of the asset’s useful life and the lease term.

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

1.11.2 The Council is the Lessor

Assets leased to third parties under operating leases are included in property, plant and equipment in the Statement of Financial Position. They are depreciated over their expected useful lives on a basis consistent with similar owned property, plant and equipment. Rental income (net of any incentives given to lessees) is recognised on a straight line basis over the lease term.

1.12 Cash and Cash Equivalents

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

1.13 Trade Receivables

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

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

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

1.14 Inventories

1.14.1 Raw Materials and Stores, Work in Progress and Finished Goods

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

1.14.2 Inventory Held for Distribution

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

1.15 Non Current Assets Held for Sale

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

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

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

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



1.16 Investments and Other Financial Assets

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

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

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

1.16.4 Financial Assets at Fair Value through Comprehensive IncomeAvailable for sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the Statement of Financial Position date.

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

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

1.16.5.1 Fair Value ChangesThe fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Council establishes fair value by using valuation techniques. These include reference to the fair values of recent arm’s length transactions, involving the same instruments or other instruments that are substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the issuer’s specific circumstances.

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

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

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

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



1.17.1 Fair Value Hedge

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

1.17.2 Cash Flow Hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in equity in the hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in the Statement of Comprehensive Income.

Amounts accumulated in equity are recycled in the Statement of Comprehensive Income in the periods when the hedged item will affect profit or loss (for instance when the forecast sale that is hedged takes place). However, when the forecast transaction that is hedged results in the recognition of a non-financial asset (for example, plant) or a non-financial liability, the gains and losses previously deferred in equity are transferred from equity and included in the measurement of the initial cost or carrying amount of the asset or liability.

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

1.17.3 Derivatives that do not Qualify for Hedge Accounting

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

1.18 Fair Value Estimation

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

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

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

1.19 Property, Plant and Equipment

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

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

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

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Council and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the Statement of Comprehensive Income during the financial period in which they are incurred.

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



Depreciation of property, plant and equipment other than land is calculated on a straight line basis at rates that will write

off the cost or valuation, less estimated residual value, over their expected useful economic lives. The following rates

have been applied:

Depreciation %

Buildings and structural improvements 2 to 10%

Fixed plant and equipment 5 to 20%

Mobile plant and equipment 5 to 50%

Motor vehicles 10 to 33.33%

Furniture and fittings 4 to 20%

Office equipment 8 to 66.67%

Library bookstock 7 to 25%

Depreciation of infrastructural and restricted assets is calculated on a straight line basis at rates that will write off their

cost or valuation over their expected useful economic lives.

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

Useful Life (Years)

Roading

Base course 70

Surfacings 12

Concrete pavers 70

Footpaths and pathways/walkways 15 - 80

Drainage 14 - 80

Bridges and structures 20 - 100

Road lighting 4 - 50

Traffic services and safety 10 -25

Water

Reticulation 56 - 107

Reservoirs 100

Pump stations 15 - 80

Stormwater



Sewerage



Milliscreen 10 - 80

Outfall 60

Others

Grandstands, community and sports halls 50

Sportsgrounds, parks and reserves improvements 10 - 50

Buildings on reserves 10 - 50

Pools 10 - 50

Inner harbour 20 - 50

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

Position date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater

than its estimated recoverable amount (Note 1.12).

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

Statement of Comprehensive Income. When revalued assets are sold, it is Council’s policy to transfer the amounts included

in other reserves in respect of those assets to retained earnings.




1.20 Investment Property

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

Properties leased to third parties under operating leases will generally be classified as investment property unless:

� the property is held to meet service delivery objectives, rather than to earn rentals or for capital appreciation;

� the occupants provide services that are integral to the operation of the owner’s business and/or these services could not be provided efficiently and effectively by the lessee in another location;

� the property is being held for future delivery of services;

� the lessor uses services of the owner and those services are integral to the reasons for their occupancy of the property.

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

1.21 Intangible Assets

1.21.1 Trademarks and Licences

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

1.21.2 Computer Software

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

Cost associated with developing or maintaining computer software are recognised as an expense as incurred. Costs that are directly associated with the production of identifiable and unique software products controlled by the Council, and that will generate economic benefits exceeding costs beyond one year, are recognised as intangible assets. Direct costs include the software development employee costs and an appropriate portion of relevant overheads. Computer software development costs recognised as assets are amortised over their estimated useful lives not exceeding 3 years.

1.22 Impairment of Assets

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

1.23 Trade and Other Payables

These amounts represent liabilities for goods and services provided to the Council prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

1.24 Borrowings

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

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

1.25 Borrowing Costs

The Council has elected to defer the adoption of NZ IAS 23 Borrowing Costs (revised 2007) in accordance with the transitional provisions which are applicable to public benefit entities.

Consequently, all borrowing costs are recognised as an expense in the period in which they are incurred.


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

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

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

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

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

1.28 Employee Benefits

1.28.1 Wages and Salaries, Annual Leave and Sick LeaveLiabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.

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

1.28.3 Retirement Benefit ObligationsCurrent and former employees of the Council are entitled to benefits on retirement, disability or death from the Council’s multi-employer benefit scheme. The scheme manager, National Provident Fund, have advised Council there is no consistent and reliable basis for allocating the obligation scheme assets and cost of the multi-employer defined benefit scheme to individual participating employers. As a result, the scheme is accounted for as a defined contribution plan and contributions are recognised as an expense as they become payable. Prepaid contributions are recognised as an asset if a cash refund or a reduction in the future payments is available.

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

1.29 Biological Assets

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

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

The components of equity are:

� Retained Earnings

� Restricted Reserves

� Fair Value and Hedging Reserves

� Asset Revaluation Reserves

� Restricted and Council Created Reserves

Restricted reserves are a component of equity generally representing a particular use to which various parts of equity have been assigned. Reserves may be legally restricted or created by the Council.




Restricted reserves are those subject to specific conditions accepted as binding by the Council and which may not be revised by the Council without reference to the Courts or a third party. Transfers from these reserves may be made only for certain specified purposes or when certain specified conditions are met.

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

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

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

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

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

1.33 Critical Accounting Estimates and AssumptionsIn preparing these financial statements the Council has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations or future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed as follows.

1.33.1 Infrastructural AssetsThere are a number of assumptions and estimates used when performing depreciated replacement cost valuations over infrastructural assets. These include:

� The physical deterioration and condition of an asset, for example the Council could be carrying an asset at an amount that does not reflect its actual condition. This is particularly so for those assets which are underground such as stormwater, wastewater and water supply pipes. This risk is minimised by Council performing a combination of physical inspections and condition modelling assessments of underground assets;

� Estimating any obsolescence or surplus capacity of an asset; and

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

Experienced independent valuers perform the Council’s infrastructural asset revaluations except for above and below ground water, wastewater and stormwater assets where the independent valuer peer reviews Council’s valuations.

1.33.2 Critical Judgements in Applying Napier City Council's Accounting PoliciesManagement has exercised the following critical judgement in applying the Council’s accounting policies for the period ended 30 June 2014.

1.33.2.1 Classification of PropertiesThe Council owns a number of leasehold land and rental properties. The receipt of market-based rentals from these properties is incidental to the holding of these properties. In the case of residential leasehold properties, there are legal restrictions applying to how Council can manage these properties and in the case of rental properties, these are held as part of the Council’s social housing policy or to secure the ability to undertake long term city development projects. As these properties are held for service delivery objectives, they have been accounted for as property, plant and equipment.


IntroductionSchedule 10 (section 17) of the Local Government Act 2002, No. 84, requires that Council identifies the significant forecasting assumptions and risks underlying the financial estimates. Where there is a high level of uncertainty Council is required to state the reason for that level of uncertainty and provide an estimate of the potential effects on the financial assumptions.

Council has made a number of assumptions which apply organisation wide. These assumptions are outlined below. Assumptions that apply only to specific activities are outlined in the Activity Management Plans for the activities concerned.

The broad basis upon which the financial summaries were prepared is as follows:

� Capital costs – based on the Prospective Ten Year Capital Plan, with rates and loans funding determined in accordance with Council’s policy on Funding of Capital Expenditure in the Revenue and Financing Policy on page 37 to page 70 of Appendix A of the 2012 – 2022 Ten Year Plan. The costs for 2013/14 have been inflated by CPI as at 30 June 2012 while from 2014/15 inflation has been applied as detailed in Corporate Assumption 1.

� Personnel, operating and maintenance costs

The 2013/14 forecasts include forecast cost of existing services plus the cost of approved new services and/or increases in the level of existing services. The costs for 2013/14 are based either on actual costs and prices at 1 November 2012, or with the addition of CPI of 1.0%, PPI of 1.5%, or LCI of 1.7% as appropriate. The inflation rates used are based on Statistics New Zealand reported levels at June 2012.

Loan payments have been estimated on current loans and planned new loans, with calculations based on Corporate Assumption 16.

Specific Corporate Assumptions

1. Inflation

Assumption

Inflation has been assumed at 1% or CPI, at 1.5% or PPI where applicable and 1.7% for contract costs falling under NZS3910. These indices are those reported by New Zealand Statistics at 30 June 2012 and increases are added to operating and capital expenditure where applicable.

Risk Underlying Financial Estimates

The inflation forecasts could be incorrect, affecting the validity of the plan costs.

Level of Uncertainty

Moderate.

2. Capital Plan - Inflation Forecasts

14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22

Capital 4.3 3.9 3.3 3.4 3.6 3.8 4.0 4.3

These factors were not applied to forecast depreciation.

Significant Forecasting Assumptions


Significant Forecasting Assumptions continued

3. Contracts

Assumption

Apart from the general provision for inflation, as per Corporate Assumption 1, other significant variations to the terms or prices of contracts which will apply when contracts are renewed have been included in the estimates where these are known.


Contract terms and prices could differ, although the inclusion of inflation in the estimates will largely mitigate any unfavourable effects.


Low.

4. Population Growth

Assumption

The following population growth projection figures are based on New Zealand Statistics subnational population projections at 30 June 2012 for the 2012 year. Population projections have been calculated using an average of the medium and high population projection data for Napier, as at February 2012.

30 June 2012 57,800 (Estimate)

30 June 2013 58,280 (Projection)

30 June 2014 58,690 (Projection)


Actual population growth could differ.


Moderate to High.

5. Household Growth

Assumption

The following household growth projection figures are based on the actual Napier City Council new households consents records. The projections have been calculated based on a slower than average uptake for years 2011 to 2014 to take into consideration the downturn in the property development market

Year to 30 June Total Households Infill Greenfield Rural Residential

2012 (Actual) 24,734 40% 50% 10%

2013 (Estimate) 24,906 45% 49% 6%

2014 (Estimate) 25,078 50% 44% 6%

The accumulating growth in the rating base resulting from the increase in the number of rateable properties has been transferred to the Subdivision and Urban Growth Fund. This fund is used to meet the cost of servicing new loans raised to provide additional infrastructural assets required as a result of urban growth, and to meet any shortfall from financial contributions funding.

From the excess to requirements accumulating in the Subdivision and Urban Growth Fund, transfers back to General Rates have been provided at $1.2 million for 2013/14.



Actual physical growth could differ, although the financial implications of this are largely mitigated by the way Council funds and accounts for growth, and by altering the timing of projects in the Ten Year Capital Plan to coincide with actual trigger points or demand.


Moderate to High.

Effects of High Level of Uncertainty

Slower growth than that assumed could result in lower revenue from Development Levies/Financial Contributions and Consents.

The financial implications of this can however be managed. Council carefully monitors growth and adjusts the timing of expenditure for growth related projects based on both revised market demand and revenue timing.

Timing adjustments would be made in future annual plans.

6. Visitor Numbers

Assumption

The 2012 actual quantity is from information provided by Statistics New Zealand.

The estimated visitor numbers the 2012/13 and 2013/14 years have been used for the purposes of the plan. These are based on forecasts received from Council’s economic adviser.

Year ended 30 June 2012 (Actual) 522,506

2013 (Estimate) 525,000

2014 (Estimate) 531,000


Actual visitor numbers could differ, affecting the financial returns in tourism activities.


Moderate.

7. Levels of Service

Assumption

No significant changes in levels of service are assumed, except where there are changes specifically outlined in particular Activity Management Plans or are able to be achieved without increased cost.


Any significant changes to the level of future services would need to be identified in a future Ten Year Plan or as an amendment to the current Annual Plan, and the cost implications outlined.


Low.



8. Technology

Assumption

While it is recognised that advances in technology over the forecast period could change the way activity is carried out, the forecasts are based on known technology as currently applied within the Council.


New technology could change the way activity is carried out, affecting both financial estimates and levels of service.


High.


The impact of changing technology is unknown but is reviewed on an on-going basis and would be taken into account in the Ten Year Plan. The effects are also considered in Annual Plans and have been provided for where necessary.

9. Useful Life of Significant Assets

Assumption

The assumed useful lives are outlined in the Statement of Accounting Policies.


Any significant change in useful life could affect the validity of the estimates, but the financial implications would not be significant.


Low.

10. Sources of Funds for Future Replacement of Significant Assets

Assumption

It is assumed that significant infrastructural assets will be subject to continual renewal, and funded in the Ten Year Capital Plan at the levels reflected in the various Asset Management Plans for infrastructural assets.

The source of funding any replacement of other significant assets is determined and disclosed in the Ten Year Capital Plan.

Refer also to the Funding of Capital Expenditure section of the Revenue and Financing Policy and the Financial Strategy.


A future Council could change the basis and level of funding, but this should only be done through a future Ten Year Plan or an amendment to the Ten Year Plan, with the implications clearly outlined.


Low.



11. Asset Sales

Assumption

It is assumed there will be no asset sales apart from:

Freeholding of residential leasehold properties at the request of lessees – has been estimated at 2 for the year.

All proceeds from asset sales will be applied in accordance with Council’s policy on the use of proceeds from asset sales.


1 A higher or lower level of freeholding of leasehold properties.

2 A future Council could change the use of the proceeds from future asset sales, but this should only be done through a future Ten Year Plan or an amendment to the Ten Year Plan.


1. High.

2. Low.


No significant effect as the use of the proceeds has not been ascertained.

12. Asset Revaluations

Assumption

Comprehensive asset revaluations are undertaken every three years from 30 June 2011. Roading, Library and Investment property are revalued annually. A general revaluation is planned for the 2013/14 year. Revaluation indices used for the plan are based on the BERL revised inflation factors.

The three yearly revaluation adjustment in the Ten Year Plan was reflected in 2014/15 instead of 2013/14 as per the cycle (page 59). These are now being correctly shown in the comparative Annual Plan amounts for the Ten Year Plan.


The forecast valuation of assets could be incorrect, affecting the validity of the estimates.


High.


Variations in asset values following a general revaluation will affect the 2013/14 value of assets and the comprehensive income statement total comprehensive income. However there would be no impact to the level of rates required to fund operations in the plan year. Impacts would be in the year following the plan with higher levels of depreciation. Note: there would be no impact on succeeding years capital plans as the same inflation factors applied to revaluations are applied to the capital plan.

13. Completion of Capital Projects

Assumption

Capital projects are assumed to be completed in the year budgeted, except for the following major projects, where expenditure budgeted in previous years will be incurred during 2013/14. Advanced Wastewater Treatment

Development of HB Museum Building

Whakarire Avenue Breakwater

Westshore Beach Reprofiling


Actual experience shows some projects are not completed in the year budgeted.


High. Expected project timing is based on the best estimate available.


No significant effect as unutilised budgets are carried forward. Where projects are funded from loans, budgeted interest costs are allocated to the project to offset price changes due to inflation.



14. New Zealand Transport Agency (NZTA)

Assumption

It is assumed that NZTA requirements, specifications and subsidy levels will not change.


A change in the requirements could affect the validity of the estimates by way of funding available for subsidised work and the level of service delivered. The extent of any change would influence the significance on the estimates.


High.


A 1% reduction in subsidy received from NZTA would reduce funding for maintenance operation and renewal work by $65,000. In the short to medium term it would be necessary to reprioritise work, from renewal to maintenance, to ensure there is a minimal perceivable effect on the condition of the roads. Over the longer term a backlog of renewal work would be created that would need to be caught up on in the future.

15. Vested Assets

Assumption

Assets vested in the Council following subdivision have been included in the forecasts at an average annual expected value over the period of the plan.

Calculation of average annual expected value is based on the Napier Urban Growth Strategy and timing of known or proposed developments over the next 2 years.


Subdivisions may not proceed, or costs/timing will differ. Annual value of vested assets may fluctuate significantly between plan years and in total. Impact would be to both Statement of Income and Statement of Financial Position.


Moderate.

16. Depreciation

Assumption

Depreciation rates applying to existing assets are outlined in the Statement of Accounting Policies.

Depreciation on new major infrastructural assets is calculated on actual expected rates commencing from expected time of completion of the project.

The depreciation for other items is based on actual expected depreciation rates with a half year applied in the year of purchase.

Depreciation is calculated on book values projected immediately preceding 30 June, plus new capital.


The inflation forecasts could be incorrect, affecting the validity of the value of assets. Capital projects could take longer to complete than budgeted. To some extent these factors mitigate against each other.


Moderate.



17. Loans

Assumption

Actual interest rates for existing loans for 2013/14

Loan interest at 4.35% on new loans expected to be uplifted in 2013/14

Actual principal repayments apply for 2013/14. For new loans, principal repayments are calculated on a table loan basis.

Actual interest on loans funded from special funds is allocated direct to the activity to which the loan relates for:

� Interest on Rental Housing loans allocated to Retirement and Rental Housing Activity.

� Interest on National Aquarium of NZ loans allocated to National Aquarium of NZ Activity.

� Interest on Museum building loan allocated to Hawke’s Bay Museum and Art Gallery Activity.

� Interest on Kennedy Park Cabins upgrade allocated to Kennedy Park Top 10 Resort Activity.

All other loan interest is allocated as a “capital charge” to activities based on book value of assets. To establish book value the following assumptions apply:

� Support units have been excluded.

� Assets funded from finance leases have been excluded.

� Excludes activities funded from non-rating sources e.g. Parking, Transfer Station, Lagoon Farm, Plant, Vehicle and Settlement Support.

� Book values for Omarunui Landfill, Hawke’s Bay Museum and Art Gallery, Rental Housing, National Aquarium of NZ, Kennedy Park Cabins and industries’ share of the Advanced Sewage Treatment Plant have been excluded.


1. Interest rates on borrowed funds are largely influenced by factors external to New Zealand’s environment. A significant change to interest rates would affect the validity of the estimates.

2. The financial statements assume reserves and special funds revenues received are sufficient to provide internal funding for loan funded capital items. Significant reductions in the cash flow generated by the Parklands Residential Development would alter the ability to fund these items internally and increase Council’s external loans. A change from internal to external debt funding would have no rating impact as the interest rate used to calculate interest payable is not varied according to the source of loans.


1. N/A

2. Moderate


1. Changes to interest rates will not impact loan charges in the 2013/14 year due to fixed interest rates for all loans

2. N/A

18. Forecast Return on Investments

Assumption

Interest rate on funds invested assumed to be between 3% and 4.5% pa


Changes in market interest rates and average levels of cash on deposit or invested may differ significantly from plan.


Moderate.



19. Resource Consents

Assumption

Except as may be outlined in particular Activity Management Plans, it is assumed the conditions of Resource Consents held by Council will not be altered significantly.


Conditions of Resource Consents may be altered significantly without Council receiving sufficient warning.


Low.

20. Council Policy

Assumption

No significant changes in Council policy are assumed.


Council could change its policy on any matter in a way that would significantly affect the estimates. Any such change would be identified in a future Ten Year Plan or as an amendment to the Annual Plan and the financial implications outlined.

21. Local Government Reorganisation

Assumption

It is assumed the Napier City Council will continue as a separate local authority with no changes to its existing boundaries for the 2013/14 year.


A change in boundaries could result from external request/review or from Government. Napier City has been advised that the Local Government commission has accepted for assessment an application for reorganisation that affects Napier City Council. The effect on the estimates would depend on the nature and extent of any change; however it is unlikely that if change is confirmed, it would be implemented before the end of the financial year.


Moderate to Low for the Plan period.

22. External Factors

Assumption

It is assumed there will be no unexpected changes in legislation or other external factors that will alter the nature of the services provided.


Unexpected changes, particularly unforeseen legislative changes, could arise that affect the services delivered by Council.


Moderate for the Plan period.



23. Natural Disasters

Assumption

It is assumed there will be no level of major natural disaster or similar event that cannot be funded out of budgetary provisions.


Natural Adverse Event(s) could occur at a level where the affects could not be funded within budget. The financial effects are partly mitigated by special risk insurance related to underground infrastructural assets.


Low.

24. Building Industry

Assumption

No additional provision has been made in the budgets for likely additional costs arising from the demands for resources to rebuild Christchurch following the earthquakes of September 2010 and February 2011, or from likely changes to the Building Act. Any change to the Building Act will be through legislation and the cost impacts are unknown until that time.


1. Actual cost may exceed budget.

2. Planned capital projects may not be completed within the time frames assumed in the forecasts.


High.


As Council budgets its capital requirements within a fixed level of rates funding which is increased annually by inflation, the effects will be on the timing of delivery of projects within the Capital Plan. The budgets for projects not completed would be carried forward as outlined in Corporate Assumption 12.

25. Climate Change

Assumption

It is assumed that any climate change arising from global warming will not impact in any significant way on the Napier community during the period covered by the plan.

This assumption is based on assessments carried out by the Works Asset Department on changes to rainfall intensity with regard to possible climate change outcomes on Local Government functions and also to the guidance document regarding sea level rise, provided by the Ministry for the Environment.

Council also commissioned and received from NIWA a report titled "Impacts of Climate Change on High Intensity Rainfall in Napier" and whilst the report is more directly specific to stormwater management, it is applicable to all services.

The Works Asset Department will periodically review the current knowledge on climate change and possible effects.

While Council recognises the increasing incidence in ‘rain bomb’ events, the forecasts do not provide for any mitigation of future events. However funding is provided for improving stormwater drainage in the CBD and Taradale, resulting from past events during the last decade.


Any impact in the short to medium term is likely to be by way of a natural adverse event - see Corporate Assumption 23.


Moderate.



26. Emissions Trading Scheme

Assumption

It is assumed that Council will not be eligible for any additional Emission Units under the NZ Emissions Trading Scheme and Council does not undertake activities that require purchase of emission units except indirectly through Council’s holdings in respect of the Omarunui Landfill joint venture (see below).

No increase in operating costs arising from emissions related changes to energy costs have been included in the plan due to the uncertainty surrounding these.

Reporting obligations under the Emissions Trading Scheme are undertaken by Hastings District Council as the administrative body for the Omarunui Regional Landfill. Emissions related landfill costs are incurred in the landfill, as a separate entity, and passed on to the landfill users through charges to users.


That Council could become eligible for additional Emissions Units or that energy costs may increase as a result of the pass through of emission related charges.


Moderate.

27. Local Economy

Assumption

That Hawke’s Bay economy will return to a normal level during the next twelve months.


Hawke’s Bay is currently experiencing below average annual growth, below medium wage levels, and above average unemployment. There is a risk that the local economy will take longer to recover.


High.


As this Annual Plan is based around a conservative financial strategy, which encompasses an affordable and sustainable level on rating, impacts on individual ratepayers will not be significant

28. World Economy

Assumption

New Zealand’s economy is directly affected by the world economy. The forecasts assume that the world economy will not deteriorate beyond its current state.


That the world economy could worsen, putting pressure on increasing costs.


Moderate to high.


As this Annual Plan is based on a conservative financial strategy, which encompasses an affordable and sustainable level of rating, impacts on individual ratepayers will not be significant.



Prospective Statement of Comprehensive Income

Actual 2011/12

($000) Note

Annual Plan 2013/14

($000)

TYP 2013/14

($000)

TYP/ AP 2012/13

($000)

Income

44,840 Rates revenue 2a 46,134 47,273 45,466

3,219 Finance income 2b 1,500 882 1,657

2,192 Development and financial contributions 1,879 1,855 1,789

9,651 Subsidies and grants 4,789 4,637 7,238

36,006 Other revenue 2c 40,898 42,319 39,620

(1,103) Other gains/(losses) 1,098 1,098 1,374

94,805 Total income 96,298 98,064 97,144

Expenditure

24,847 Employee benefit expense 3a 26,392 26,360 25,513

20,228 Depreciation and amortisation 22,334 22,255 20,835

30,909 Other expenses 3b 35,231 36,995 34,515

289 Finance costs 141 141 278

76,273 Total expenditure 84,098 85,751 81,141

18,532 Operating surplus/(deficit) before tax 12,200 12,313 16,003

212 Share of associate surplus/(deficit) 225 274 213

18,744 Surplus/(deficit) before tax 12,425 12,587 16,216

- Income tax expense - - -

18,744 Surplus/(deficit) after tax 12,425 12,587 16,216

Other comprehensive income

- Valuation gains/(losses) taken to equity 3c 62,446 70,055 -

18,744 Total comprehensive income 74,871 82,642 16,216

for the Year Ended 30 June 2014


Actual 2011/12

($000)

Annual Plan 2013/14

($000)

TYP 2013/14

($000)

TYP/ AP 2012/13

($000)

Total operating revenue (Activity Cost of Service Statements)

6,676 Roading 5,876 6,097 5,852

4,729 Solid Waste 5,274 5,659 5,149

1,729 Stormwater 847 860 811

7,771 Sewerage 7,549 7,675 8,419

4,303 Water Supply 4,484 4,641 4,435

2,598 Recreation 2,487 2,516 2,404

8,873 Social and Cultural 5,898 6,208 7,954

6,453 City Promotion 7,640 7,948 7,673

4,242 Planning and Regulatory 4,963 4,899 4,841

10,763 Property Assets 14,875 15,045 14,618

58,137 Total operating revenue 59,893 61,548 62,156

Other income (as per Statement of Comprehensive Income)

32,688 Non targeted rates 33,995 34,686 32,417

3,219 Interest Income 1,500 882 1,657

452 Rendering of services 596 617 596

309 Other Income 314 331 318

94,805 Total income 96,298 98,064 97,144

Total operating expenditure (Activity Cost of Service Statements)

1,910 Democracy and Governance 2,122 2,177 2,105

14,743 Roading 14,631 15,409 14,128

4,894 Solid Waste 5,079 5,437 5,141

3,071 Stormwater 3,524 3,608 3,439

6,019 Sewerage 6,786 6,896 6,656

3,530 Water Supply 4,034 4,183 3,996

10,100 Recreation 10,965 10,906 10,339

12,146 Social and Cultural 14,010 14,342 12,615

8,445 City Promotion 9,855 10,172 9,907

5,625 Planning and Regulatory 6,148 6,315 6,188

5,906 Property Assets 7,968 8,117 7,709

76,389 Total operating expenditure 85,122 87,562 82,223

Other expenditure (as per Statement of Comprehensive Income)

(1,844) Internal expenditure (1,980) (2,624) (1,952)

273 Rates remissions 164 160 160

1,455 Other expenses 792 653 710

76,273 Total expenditure 84,098 85,751 81,141

18,532 Operating surplus/(deficit) before tax (as per Statement of Comprehensive Income) 12,200 12,313 16,003

212 Share of associate surplus/(deficit) 225 274 213

18,744 Surplus/(deficit) before tax (as per Statement of Comprehensive Income) 12,425 12,587 16,216

- Income tax expense - - -

18,744 Surplus/(deficit) after tax 12,425 12,587 16,216

Prospective Statement of Incomefor the Year Ended 30 June 2014


Prospective Statement of Changes in Equity

Actual 2011/12

($000)

Annual Plan 2013/14

($000)

TYP 2013/14

($000)

TYP/ AP 2012/13

($000)

695,837 Retained earnings at beginning of period 730,621 731,702 709,780

18,744 Surplus/(Deficit) after tax [i] 12,425 12,587 7,974

1,639 Transfers to/from Restricted Reserves (203) (416) 5,706

716,220 Retained earnings at close of period 742,843 743,873 723,460

Other reserves

620,898 Revaluation reserves at beginning of period 634,324 620,898 620,898

9,404 Restricted reserves at beginning of period 2,680 3,184 8,890

(107)Fair value through equity reserve at beginning of period (100) (107) (107)

630,195 Other reserves at beginning of period 636,904 623,975 629,681

Movements

8,183 Valuation gains/(losses) on revaluation [ii] 62,446 70,055 -

(1,639) Transfers to/from Retained earnings 203 416 (5,706)

6,544 Total movements in other reserves 62,649 70,471 (5,706)

627,733 Revaluation reserves at close of period 696,770 690,953 620,898

9,106 Restricted reserves at close of period 2,883 3,600 3,184

(100) Fair value through equity reserve at close of period (100) (107) (107)

636,739 Other reserves at close of period 699,553 694,446 623,975

1,352,959 Total Equity 1,442,396 1,438,319 1,347,435

26,927 Total comprehensive income includes items [i] and [ii] 74,871 82,642 16,216



Prospective Statement of Financial Position

Actual 2011/12

($000) Note

Annual Plan 2013/14

($000)

TYP 2013/14

($000)

TYP/ AP 2012/13

($000)

ASSETS

Current assets

4,612 Cash and cash equivalents 4a 5,829 6,293 8,074

11,990 Debtors and other receivables 12,654 12,249 11,874

5,166 Inventories 4,677 4,662 3,683

412 Biological assets 300 300 300

62,904 Other financial assets 5,000 5,000 20,000

85,084 Total current assets 28,460 28,504 43,931

Non-current assets

1,239,751 Property, plant and equipment 4b 1,383,756 1,375,197 1,285,221

326 Intangible assets 903 789 792

2,259 Inventories 4c 2,058 6,625 2,000

34,894 Investment property 35,992 37,712 36,614

4,134 Investment in associates 4,439 4,587 4,313

8,742 Other financial assets 7,075 7,074 6,875

1,290,106 Total non-current assets 1,434,223 1,431,984 1,335,815

1,375,190 Total assets 1,462,683 1,460,488 1,379,746

LIABILITIES

Current liabilities

10,454 Creditors and other payables 4d 12,133 14,441 13,945

3,305 Employee benefit liabilities 3,669 3,337 3,336

2,008 Borrowings 8 8 2,008

15,767 Total current liabilities 15,810 17,786 19,289

Non-current liabilities

1,145 Provisions 1,420 1,472 1,420

1,568 Revenue Received in Advance 1,040 1,040 1,304

1,731 Employee benefit liabilities 2,013 1,867 2,044

2,020 Borrowings 4 4 12

6,464 Total non-current liabilities 4,477 4,383 4,780

22,231 Total liabilities 20,287 22,169 24,069

EQUITY

716,220 Retained earnings 4e 742,843 743,873 731,702

636,739 Other reserves 4e 699,553 694,446 623,975

1,352,959 Total public equity 1,442,396 1,438,319 1,355,677

1,375,190 Total liabilities and equity 1,462,683 1,460,488 1,379,746



Prospective Statement of Cash Flows

Actual 2011/12

($000)

Annual Plan

2013/14 ($000)

TYP 2013/14

($000)

TYP/ AP 2012/13

($000)

Cash flows from operating activities

44,551 Receipts from rates revenue 46,124 47,240 45,446

3,326 Interest received 1,500 882 1,657

40,876 Receipts from other revenue 44,550 45,643 45,376

(51,395) Payments to suppliers and employees (61,570) (61,975) (61,543)

(289) Interest paid (141) (141) (278)

37,069 Net cash from operating activities 30,463 31,649 30,658

Cash flows from investing activities

1,287 Proceeds from sale of property, plant and equipment 172 215 186

111,389 Proceeds from withdrawal of investments 19,925 20,000 40,004

(27,382)Purchase of property, plant, equipment and intangibles (50,500) (46,438) (43,435)

(124,960) Acquisition of investments (5,000) (5,199) (15,701)

(39,666) Net cash from investing activities (35,403) (31,422) (18,946)

Cash flows from financing activities

- Proceeds from borrowings - - -

(8) Repayment of borrowings (2,008) (2,008) (2,008)

(8) Net cash from financing activities (2,008) (2,008) (2,008)

(2,605)Net (decrease)/increase in cash, cash equivalents and bank overdrafts (7,044) (1,781) 9,594

7,217Cash, cash equivalents and bank overdrafts at the beginning of the period 12,873 8,074 (1,520)

4,612 Cash, cash equivalents and bank overdrafts at the close of the period 5,829 6,293 8,074



Notes of Changes Between the 2013/14 Ten Year Plan and 2013/14 Annual Plan

Significant variances between the 2013/14 Ten Year Plan (TYP) and 2013/14 Annual Plan are outlined below. Reference numbers indicated correspond with note references in the Prospective Statement of Income, the Prospective Statement of Changes in Equity, the Prospective Statement of Financial Position and the Prospective Statement of Cash Flows in the 2013/14 Annual Plan.

1) Generala) The opening equity forecast as at 1 July 2013 shown in the Prospective Statement of Financial Changes in Equity

has been updated to reflect the most recent information available. This update includes changes flowing from the reported results for the 2011/12 financial year.

b) Inflation factors used for the forecast variance from revaluation of assets applied to the TYP for 2013/14 varies from the plan. This reflects the lower actual inflation for the 11/12 year and forecast inflation for the 12/13 year.

c) The TYP comparatives in the Prospective Statement of Income have been adjusted to include the Municipal Theatre Activity in the City Promotion Group instead of the Social and Cultural Group.

2) Prospective Statement of IncomeThe TYP 2013/14 and TYP/AP 2012/13 operating revenue and expenditure has been restated for the Social and Cultural and City Promotion Groups to correctly include the Municipal Theatre activity in City Promotion rather than in Cultural as in past plans.

3) Prospective Statement of Comprehensive Income - Revenue

‐ 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000

100,000

Thou

sand

s

Annual 13/1

Co

Plan14

T

ouncil Fo

TYP 13/14

orecast Revenu

F

O

DC

S

O

R

ue

Finance Incom

Other Gains L

Development Contributions

Subsidies & G

Other Revenu

Rates

me

osses

& Financial

rants

ue

a) Rates Revenue – The level of rates revenue proposed in the Annual Plan is 2.5% lower than anticipated in the TYP. The variance is the result of forecast inflation levels for the 2013/14 year. Actual recorded inflation is substantially lower than that forecast for the 2011/12 year as is the 2013/14 year forecast. The TYP included an expected $1.2 million of inflation for the 2013/14 year. The lower actual and forecast inflation levels have impacted Council operating costs and the direct and indirect costs of the capital plan resulting in a rating level of $46.1M compared to the TYP forecast of $47.3M. This is around $48 per rateable property lower than forecast when the TYP was prepared.

b) Finance Income – Finance Income or interest received on funds invested is expected to be +$0.6M above that forecast in the 2013/14 TYP. This is due to a cash position above the opening level assumed in the TYP for the commencement of the 2013/14 year.

c) Other Revenue – Other revenue for 2013/14 Annual Plan is $1.4 million below that forecast in the TYP. Significant variations from the plan are:


Explanatory Notes of Changes continued

Description Increase+/Decrease – Million

Rental Income -$0.3

Retail & Product Sales -$0.5

User Charges & Rendering of Services -$0.1

Sales Residential Development -$0.4

Rental Income, Retail & Product Sales and User Charges & Rendering of Services have been reduced in line with the cumulative lower inflation rates now forecast compared to those forecast for the 2013/14 TYP and to reflect reduced demand due to weak economic conditions.

4) Prospective Statement of Comprehensive Income - Operating Expenditure

$0

$20,000

$40,000

$60,000

$80,000

$100,000

Annual Plan13/14Ten Year Plan

13/14

Thou

sand

s

Council Operating Expenditure

Finance costs

Other expenses

Depreciation andamortisation

Employeebenefit expenses

a) Employee Benefit Expense

Employee benefit expense is in line with the forecast for the 2013/14 TYP. The level forecast is 3.4% above the Annual Plan for 2012/13. The increase is due to the change in the level of Kiwisaver +1% (full year) and an anticipated increase in Kiwisaver uptake, changes in wages and salary rates and additional contract staff employed for specific capital projects

b) Other expenses – Other expenses are planned to be 4.9% or -$1.8M below the 2013/14 TYP inflated forecast level.

Significant items of contributing to this reduction:

Description Increase+/Decrease –

Million

Inflation Variance -$1.2

Insurance Increase +$0.4

Omarunui Landfill Fees -$0.2

Residential Development -$0.2

Roading -$0.2

Cricket World Cup +$0.1

Operating Costs -$0.4

Inflation Variance: The inflation variance is the difference between the TYP other expenses and the uninflated TYP values



adjusted for inflation at 1.0%. Other variances listed above are after adjustment for inflation differences.

Insurance Increase: Insurance cost increases for 2013/14 have been advised at $0.4M above the 2012/13 level. This is around 23% above the TYP 2013/14 level and an additional 19% above the 2012/13 level. Insurance costs are now 147% above the 2010/11 annual plan level and have risen from 1.8% of rates to 4.5% over this 4 year period.

Omarunui Landfill Fees: Increases in landfill fees as a result of the expected Emissions Trading Scheme cost increases. This scheme has not advanced to the stage forecast in the TYP consequently costs are below those expected.

Residential Development: Due to lower forecast sales (see 2)c) ) costs of development are forecast to be lower than anticipated in the 2013/14 TYP. Any actual increase in sales in the forecast year will also result in increased costs

Roading: Lower levels of work in road amenities will be undertaken due to a decrease in New Zealand Transport Agency funding. The lower level of activity is not expected to impact service levels in the 2013/14 year. Lower operating costs have also been offset by higher total capital expenditure.

Cricket World Cup: During the planning process Council decided to pursue the bid to be a host city for the 2014/15 Cricket World Cup. The anticipated cost of this bid is $250,000. $100,000 of this amount is expected to be incurred for preliminary costs in the 2013/14 year.

Operating Costs: Operating costs from goods and services delivered are anticipated to be lower than forecast. This is a result of lower forecast sales in the Annual Plan for 2013/14 than forecast in the 2013/14 TYP. See 2) c) above regarding forecast decrease in retail and product sales.

$0 $10,000 $20,000 $30,000

RoadingSolid WasteStormwater

SewerageWater Supply

RecreationSocial and Cultural

City PromotionPlanning and Regulatory

Property AssetsDemocracy and Governance

Thousands

Council Expenditure by Group 2013/14 Annual Plan

OperatingExpenditureAnnual Plan

CapitalExpenditureAnnual Plan

$0 $10,000 $20,000 $30,000

RoadingSolid WasteStormwater

SewerageWater Supply

RecreationSocial and Cultural

City PromotionPlanning and Regulatory

Property AssetsDemocracy and Governance

Thousands

Council Expenditure by Group 2013/14 Ten Year Plan

OperatingExpenditureTYP

CapitalExpenditureTYP

5) Prospective



5) Prospective Statement of Financial Positiona) Cash and Cash Equivalents: Cash and Cash Equivalents are forecast to be $0.8M below the level forecast in the

Ten Year Plan. This is due to a lower planned surplus than indicated in the TYP and lower current liabilities than previously planned.

b) Property Plant and Equipment: Property Plant and Equipment is forecast to be $8.6M above the level forecast in the 2013/14 Ten Year Plan. The increase is mostly due to a planned increase in projects in recreation, social and cultural and property assets activity groups. In addition additional expenditure in roading and water supply assets has been proposed. Capital expenditure is planned at $5.3M above the 2013/14 TYP level. The balance of the increase level of property plant and equipment between the annual plan and the TYP is land which is intended for sale as part of the Parklands Residential Development. The TYP had forecast this land to be transferred to inventory in the 2013/14 year. It is now expected that this will occur a year later (2014/15) due to lower residential section sales than previously anticipated.

11,278

488

4,033

5,198

2,349 4,754 1,644 396 713

4,283

2013/14 Annual Plan - Capital Expenditure by Activity Group $000's

Roading

Solid Waste

Stormwater

Sewerage

Water Supply

Recreation

Social and Cultural

City Promotion

Planning and Regulatory

3,831

805

2,369

11,945

13,919

1,426 2,497

2013/14 Annual Plan - Capital Expenditure by Funding $000's

Financial Contributions

Loans - Growth

Loans - Rates

Rates

Reserve Funds

NZTA Subsidy

Vested Assets



7,748 21%

14,079 38%

14,965 41%

2013/14 Capital Plan - Expenditure by Classification $000's

Growth

Increased Level ofService

Renewal

c) Inventories – Non Current Assets: Non-current inventories are land and land development lots which are expected to be sold in a time frame outside the year of the plan. These inventories relate only to the Parklands Residential Development. The Ten Year Plan forecast non-current inventories to be $4.6M higher than now forecast in the 2013/14 Annual Plan. Due to lower than forecast sales of residential sections, land that was expected to have been transferred to inventory in the 13/14 TYP year, is now expected to be transferred to inventory in the 14/15 plan year. This will increase inventory value in the year of transfer and decrease Property Plant and Equipment value by the same amount.

d) Creditors and Other Payables: Creditors and other payables have been reforecast in the 2013/14 Annual Plan using the 2011/12 actual data as an opening value and as an indicative basis.

e) Equity: There are no material variances between the 2013/14 Annual Plan forecast and the 2013/14 Ten Year Plan. Further information in regard to individual components of Equity is detailed in Note 5) below.

6) Prospective Statement of Changes in Equity

a) Retained Earnings: Lower surplus forecast for the plan year due to lower revenue, mostly offset by lower expenses, results in a lower retained earnings at 30 June 2014. The variance is 0.1%

b) Revaluation Reserve: Revaluation Reserves are forecast to be $5.8M above the forecast 2013/14 TYP value. This is due to revaluations both forecast and actual, for Road assets above the level anticipated in the TYP. Note: Due to a change in accounting policy at 30 June 2012, Road assets are revalued on an annual basis. The TYP was prepared under the previous accounting policy where Road assets were revalued on a 3 yearly cycle with all other assets.

c) Restricted Reserves: Restricted Reserves are forecast to be $0.7M below the value forecast in the 2013/14 TYP. This is in main due to the proposal to allocate $0.5M in the Annual Plan for extension of Sportsgrounds.

7) Prospective Statement of Cash FlowsNotable variances in the 2013/14 Annual Plan compared to the 2013/14 TYP are lower receipts from rates revenue, receipts from other revenue, purchase of property plant and equipment, net decrease in cash and bank overdrafts and cash and cash equivalents at the beginning of the period. Lower receipts from rates revenue, receipts from other revenue and purchase of property plant and equipment have been reviewed in items 1) and 4) above. The decrease in cash and cash equivalents is the net result forecast changes in levels of income and costs. However due to an opening cash balance higher than that forecast in the 2013/14 TYP Councils closing cash position is expected to be $0.5M below that forecast in the 2013/14 TYP. This is in effect the result of small changes to the working capital position forecast and the lower surplus in the 2013/14 Annual Plan.


Special Funds

Reserve FundsAs defined by the Local Government Act 2002 (the Act), a reserve fund means money set aside by a local authority for a specific purpose. Under Schedule 10 Section 16, of the Act, the Long Term Plan must identify the following in regard to each reserve: The purpose of the fund, the activities to which the fund relates, the opening balance of the fund, the closing balance of the fund, the amount expected to be deposited into the fund, and the amount expected to be withdrawn from the fund over the term of the plan. These values are shown in the table below.

The Council’s Reserve Funds are classified into three categories:

� Council Created Reserves - established by Council for specific purposes.

� Restricted Reserves - where there are legal obligations which restrict the use of the funds.

� Bequest and Trust Funds - amounts received from Bequests, Donations or Funds held on behalf of a community organisation.

TITLEActivity to which fund relates

Opening 1 July 2013

Deposits $000

Expenditure $000

Closing Balance

30 June 2014 $000

COUNCIL CREATED RESERVES

Advanced Wastewater Treatment Establishment Fund

Accumulation of Advanced Wastewater Levies collected from Napier ratepayers along with interest earned on these funds.

Wastewater (7,347) (166) 7,298 (215)

Dog Control Fund

This fund is a requirement under the Dog Control Act 1996. All transactions related to the dog owner's share of the costs of Animal Control, both operating and capital, flow to this account. Amounts include dog related fees received and the operating and capital costs of the dog related activity of Animal Control.

Dog Control (303) (634) 590 (346)

General Reserve No.1

Derived from rates arising from NZ Railway land in Munro and Station Streets. The reserve is used to fund the provision of infrastructure (including debt servicing) for any development on this site.

Roading, Stormwater, Parking

(86) (123) 101 (108)

Hawke's Bay Museum and Art Gallery

Funds collected from donations and government grants for the Museum Redevelopment Project.

Hawkes Bay Museum & Art Gallery

(99) (619) - (718)


Collected from financial contributions from developers on the subdivision of land and various land use activities. Used to fund capital works and services.

Roading, Stormwater, Water, Wastewater, Reserves, Sportsgrounds, Pools, Library

(6,744) (3,378) 4,331 (5,791)

Infrastructural Asset Renewal and Upgrade Fund

Collected from the annual rate funded allocation as per the Capital Plan. Used for capital expenditure on infrastructural asset renewals and associated upgrades.

Water Supply, Wastewater, Stormwater, Solid Waste, Reserves, Sportsgrounds, Libraries, Pools

(14,988) (6,359) 7,313 (14,033)



Opening 1 July 2013

Deposits $000

Expenditure $000

Closing Balance

30 June 2014 $000

Keep Napier Beautiful

Originally derived from surplus revenue in Keep Napier Beautiful project. Currently credited with annual grant for garden competition and used for competition expenses and administration costs.

Reserves (1) - - (1)

Marine Parade Disability Hoist

Derived from fundraising carried out by Mr N Bains. Funds intended to be used to purchase a disability hoist for the Marine Parade Pool.

Pools (3) - - (3)

Pensioner Housing Upgrade Reserve

Established from a contribution from rates equivalent to the annual depreciation on pensioner flats and houses owned by Council. The reserve is available to provide capital upgrade of these facilities.

Retirement & Rental Housing

(394) - 210 (184)

Parking Contributions Account

Funds derived for the provision of parking facilities.

Parking (1,446) (215) 564 (1,097)

Parking Account

Funds are derived from the surplus revenue from the Parking Business Unit and are used to provide for parking facilities generally.

Parking (5,010) (2,564) 1,532 (6,041)

Parking Equipment Reserve Account

To provide funds for replacement of parking equipment on a regular basis.

Parking (455) (104) 101 (458)

Taradale Parking Meters

Funds collected from Parking Meters in Taradale Town Centre to fund the upgrade of the Town Centre (including parking) 2009 - 2019 Ten Year Plan.

Parking, Roading

190 (220) 211 180

Regional Landfill Account

Amount is derived from returns from the Joint Regional Landfill Committee for the operation of the Omarunui Regional Landfill and is used to fund capital development of the landfill and the net operating costs including loan servicing, of the Transfer Station.

Solid Waste 32 (1,928) 1,156 (740)

Reserve Subdivision of Land

This account is derived from contributions on the subdivision of land towards the development of reserves and subject to Council approval as part of the annual budget process.

Reserves (1,159) (52) - (1,211)

Subdivision and Urban Growth Fund

To service all borrowing in relation to Council's share of subdivision and urban growth projects, and to meet any servicing costs on financing the developer's share of projects where expenditure requirements precede the receipt of financial contributions. A part of the surplus is also used to reduce the general rate requirement.

All Activities (1,268) (928) 566 (1,630)

Total Council Created Reserves (32,527) (13,692) 19,431 (26,785)

Special Funds continued



Opening 1 July 2013

Deposits $000

Expenditure $000

Closing Balance

30 June 2014 $000

RESTRICTED RESERVES

Advanced Wastewater Treatment Establishment Fund (HB Regional Council Distribution)

Established in 1999/2000 by a special distribution from HBRC for advanced treatment of wastewater. The funds are held in separate investments.

Wastewater - - - -

Creative New Zealand

Derived from a grant from Creative NZ. This fund has been established to support local arts projects within the Napier area.

Community Planning

- (42) 42 -

Endowment Land Account

Derived from the sale of BCP Faraday Street land and the transfer of the Criterion Account capital sum previously advanced to the Land Development Account. This account is now used for the sale and purchase of other endowment land.

Property Holdings

(1,229) (44) 500 (773)

Hawke's Bay Harbour Board Endowment Land Income Account

This account was derived from proceeds from the sale of former Harbour Board leasehold properties up to 30 March 2002. Council resolution of 26.6.02 states "That the full uncommitted balance of the Harbour Board Land Account at 30 March 2002 be used to fund maintenance and capital improvements of the Inner Harbour and any other future capital expenditure related to Napier Harbour as defined by the Act".

Inner Harbour, Reserves

118 (2,129) 2,059 48

Loan Reserve

Established to manage internal loan requirements.

Corporate (1,300) (65) - (1,365)

Total Restricted Reserves (2,411) (2,280) 2,601 (2,090)

BEQUESTS AND TRUST FUNDS

Colenso Bequest

The bequest is invested and the income derived used to: i) Provide a fund for the assistance of poor families. (Capital $2500) ii) Provide assistance for prisoners released from Napier jail. (Capital $500) iii) Provide a fund for the assistance of distressed seamen and strangers. (Capital $1000) iv) Provide prizes for senior scholars at Napier Boys, Napier Girls & Colenso High Schools. (Capital $1000).

Community Planning

(33) (1) - (35)

Estate Henry Hodge

For charitable purposes, with a wish that it be used for the erection of flats for the needy.

Retirement & Rental Housing

(134) (6) - (140)





Opening 1 July 2013

Deposits $000

Expenditure $000

Closing Balance

30 June 2014 $000

Eskdale Cemetery Trust

This Trust fund, comprising a number of bequests totalling $1,400, was taken over from the former Hawke's Bay County Council, and is available for the maintenance and upkeep of the Eskdale Cemetery.

Cemeteries (20) (1) - (21)

Hawke's Bay Municipal Theatre

Funds held on behalf of Hawke's Bay Arts and Municipal Theatre Trust.

Napier Municipal Theatre

(4) - - (5)

John Close Bequest

"Bequest is invested and income used in two ways: i) Cemetery Trust - for upkeep and maintenance of the Close burial plot, with surplus income to provide ham and ale at Christmas to the poor, old and needy. ii) Coal Trust - provided wood and coal to the needy. A scheme for arrangement for the disposition of income in terms of the Charitable Trusts Act 1957 was to have been initiated in 1993."

Community Planning

(53) (2) - (56)

Morecroft Bequest

To provide a Municipal gymnasium or gymnasium equipment, either as a separate building or as part of any memorial or centennial hall which Napier City Council may decide to erect.

Sportsgrounds (12) (1) - (12)

Napier Christmas Cheer

For community fundraising through the HB Today for the preparation of Christmas parcels to be distributed to disadvantaged individuals and families within the Napier District.

Community Planning

(12) (1) - (13)

Total Bequests Trust Funds (268) (12) - (282)


Borrowing Programme

Actual 2011/12

($000)

Annual Plan 2013/14

($000)

TYP 2013/14

($000)

TYP/ AP 2012/13

($000)

New Loans

1,300 - Rate Funded 9,672 8,758 12,234

- - Growth Funded 805 1,267 715

- - Non-Rate Funded - 3,709 -

1,300 10,477 13,734 12,949

(3,047) Less Repayments (Net) (4,737) (4,546) (4,388)

(1,747) 5,740 9,188 8,561

38,525 Opening Public Debt 48,091 46,900 38,339

36,778 Gross Public Debt 53,831 56,088 46,900

32,750 Internal Funding (53,819) (56,076) (44,880)

4,028 Net Public Debt 12 12 2,020

The reduction in internal funding from the level projected in the TYP is due to increased principal repayments.

Loan FundingLoan funding measures compared to borrowing policy limits.

Actual 2011/12

Annual Plan 2013/14

TYP 2013/14

TYP/ AP 2012/13

Debt Servicing

Proportion of Rates Revenue applied to Service Debt (External & Internal Debt)

16% Policy limit 16% 16% 16%

8.3% Actual 9.2% 10.2% 9.3%

Debt / Income

Net Debt as a % of total income100% Policy limit 100% 100% 100%

37% Actual 56% 57% 47%

Rate Funded Debt per Capita

Net Rate-funded Debt$1,000 Policy limit $1,000 $1,000 $1,000

$459 Actual $694 $721 $625


Prospective Capital Plan

The Prospective Capital Plan for 2013/14 is essentially the Ten Year Capital Plan as included in the 2012/13 to 2021/22 TYP adjusted for issues arising since the TYP was adopted. Key differences arise from additional projects added to the Prospective Capital Plan for, changes to the inflation factors used to calculate the cost of the Capital Plan and variations to timing of planned projects between the two Capital Plans.

The following projects have been added:

Description YearBudget ($000) Funding

Jervois Road Footpath 2013/14 120 Capital Reserve

Clive Square Bus Shelter 2013/14 460 Capital Projects Fund

Domett Street Extension 2016/17 1,400 Financial Contributions

Jervoistown Stormwater Improvements 2013/14 140 Financial Contributions

Severn Street Extension 2013/14 108 Rates

Upgrade Water Supply Control System 2013/14 360 Rates

Te Awa Structure Plan Stages 1 & 2

- Roading

- Stormwater

- Wastewater

- Water Supply

2017/18

2,626

713

980

288





McLean Park Light tower upgrade 2013/14 125 Capital Reserve

Extension of Suburban Sportsgrounds 2013/14 500 Endowment Land Account

Marine Parade Development Projects 2013/14 1,200 Capital Projects Fund

Memorial Square Building Development 2013/14 300 Capital Reserve

Art Centre Building (Old Council Chambers)

2013/14 350 Capital Projects Fund

Land development for growth 2013/14 3,500 Capital Projects Fund

The other main difference is the revised inflation factor used to calculate costs. In the TYP the assumed inflation factor for the 201/14 was 3.6%. The factor used for this Prospective Capital Plan is 1.0% (based on CPI for December 2012).

Changes for exisitng projects made in the in the 2013/14 Prospective Capital Plan are as follows:

Description YearBudget ($000) Funding

Omarunui Development - Valley D 2013/14 5 Regional Landfill Income Account

Omarunui Development - Plant 2013/14 (339) Regional Landfill Income Account

Omarunui Development - Valleys B & C 2013/14 3 Regional Landfill Income Account

Replace RGC Events Centre Floor

Moved from 2013/14 to

2021/22 469 Rates

Westshore Beach Reprofiling

Moved from 2013/14 to

2021/22 428 Loan – Non Rate Funded

CBD Parking Projects 2021/22 404 Parking Account

$112,000 funding for the Western Hills Cemetery was moved to 2013/14 from 2014/15.


Prospective Capital Plan continued

Major Capital ProjectsIn addition to Council’s programme of infrastructural asset renewal and other routine capital expenditure, the major capital projects included in the remaining nine years of the Capital Plan are:

� CBD Stormwater Upgrade

� Hastings Street Redevelopment. The project will be undertaken in conjunction with the CBD Stormwater upgrade

� Taradale Stormwater Upgrade

� Ellison Street Stormwater Pump Station

� Te Awa Stormwater Pond

� Biological Trickling Filter (BTF) Wastewater Treatment Plant

� Wastewater Outfall Replacement

� Additional Water Reservoir Taradale

� Awatoto Water Supply Trunk Main

� Park Island sportsgrounds expansion

� McLean Park Turnstiles and Returf

� Napier Aquatic Centre Enclosure Building

� Passive Recreation Reserves and Reserves Pathways and Linkages. Additional Reserve facilities which will cater for Napier’s population growth

� Marine Parade Development Projects

� Napier Library Redevelopment

� Additional Parking Facilities - to cater for demand

� Lagoon Farm Business Park

� Land development for growth

� Omarunui Landfill Development

� Te Awa Structure Plan Stages 1 & 2 – Roading, Stormwater, Wastewater and Water Supply


Prospective Capital Plan continued2012/1

3D

escr

ipti

on

2013/1

4

2014/1

5

2015/1

6

2016/1

7

2017/1

8

2018/1

9

2019/2

0

2020/2

1

2021/2

2

Nin

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r T

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l

Fundin

gG

LR

RO

AD

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Ro

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2,6

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2,6

75

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6

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51

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5

3,2

30

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7

3,4

64

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2

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9

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1,3

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1,4

26

1,5

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1

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8

1,5

79

1

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1,7

33

1

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1,9

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4,0

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4,1

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4,3

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: %

im

pro

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ent

split:

G –

Gro

wth

, L

– In

crea

sed L

evel

of

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ice,

R –

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ewel

s


Prospective Capital Plan continued

Note

: %

im

pro

vem

ent

split:

G –

Gro

wth

, L

– In

crea

sed L

evel

of

Serv

ice,

R –

Ren

ewel

s

2012/1

3D

escr

ipti

on

2013/1

4

2014/1

5

2015/1

6

2016/1

7

2017/1

8

2018/1

9

2019/2

0

2020/2

1

2021/2

2

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e

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r T

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l

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gG

LR

ST

OR

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ate

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ates

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155

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ates

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3D

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on

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4

2014/1

5

2015/1

6

2016/1

7

2017/1

8

2018/1

9

2019/2

0

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1

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cial

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e A

wa

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cture

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1

Note

: %

im

pro

vem

ent

split:

G –

Gro

wth

, L

– In

crea

sed L

evel

of

Serv

ice,

R –

Ren

ewel

s



3D

escr

ipti

on

2013/1

4

2014/1

5

2015/1

6

2016/1

7

2017/1

8

2018/1

9

2019/2

0

2020/2

1

2021/2

2

Nin

e

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r T

ota

l

Fundin

gG

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ds

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326

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8

33

4

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5

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7

36

9

38

2

39

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40

9

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56

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ates

10

0%

71

5

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unds

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ent

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80

5

Loan

s -

Gro

wth

10

0%

35

7

402

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40

2

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cial

C

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72

1,2

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50

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mat

ic Irr

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ms

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54

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56

5

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67

%

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4

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lace

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58

9

58

9

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80

%

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ge

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e 2

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2

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33

2

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00

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n P

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98

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rk Isl

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91

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Note

: %

im

pro

vem

ent

split:

G –

Gro

wth

, L

– In

crea

sed L

evel

of

Serv

ice,

R –

Ren

ewel

s



3D

escr

ipti

on

2013/1

4

2014/1

5

2015/1

6

2016/1

7

2017/1

8

2018/1

9

2019/2

0

2020/2

1

2021/2

2

Nin

e

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r T

ota

l

Fundin

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7

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Note

: %

im

pro

vem

ent

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wth

, L

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sed L

evel

of

Serv

ice,

R –

Ren

ewel

s



3D

escr

ipti

on

2013/1

4

2014/1

5

2015/1

6

2016/1

7

2017/1

8

2018/1

9

2019/2

0

2020/2

1

2021/2

2

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pro

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of

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R –

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s



3D

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on

2013/1

4

2014/1

5

2015/1

6

2016/1

7

2017/1

8

2018/1

9

2019/2

0

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1

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2

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e

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r T

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l

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of

Serv

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R –

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s



3D

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on

2013/1

4

2014/1

5

2015/1

6

2016/1

7

2017/1

8

2018/1

9

2019/2

0

2020/2

1

2021/2

2

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pro

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sed L

evel

of

Serv

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R –

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s



3D

escr

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on

2013/1

4

2014/1

5

2015/1

6

2016/1

7

2017/1

8

2018/1

9

2019/2

0

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1

2021/2

2

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e

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1

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sed L

evel

of

Serv

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R –

Ren

ewel

s



3D

escr

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on

2013/1

4

2014/1

5

2015/1

6

2016/1

7

2017/1

8

2018/1

9

2019/2

0

2020/2

1

2021/2

2

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e

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The following Funding Impact Statement is provided in accordance with Section 95 and Schedule 10 of the Local Government Act 2002 (The Act).

Financial Overview

Summary of Revenue and Financing Mechanisms

Actual 2011/12

$000

Annual Plan 2013/14

$000

TYP 2013/14

$000

TYP/AP 2012/13

$000

Sources of operating funding

32,688 General rates, uniform annual general charges, rates penalties 33,995 34,687 32,417

12,151 Targeted rates (other than water by meter charges) 12,140 12,586 13,049

4,776 Subsidies and grants for operating purposes 2,394 2,555 2,456

16,416 Fees, charges and targeted rates for water supply 18,998 19,661 18,178

3,222 Interest and dividends from investments 1,502 884 1,659

16,037 Local authorities fuel tax, fines, infringement fees, and other receipts 19,401 20,094 18,997

85,291 Total operating funding (A) 88,429 90,466 86,756

Applications of operating funding

55,470 Payments to staff and suppliers 61,445 63,180 59,854

289 Finance costs 141 141 278

285 Other operating funding applications 178 175 174

56,044 Total applications of operating funding (B) 61,764 63,496 60,306

29,247 Surplus/(deficit) of operating funding (A - B) 26,665 26,970 26,450

Sources of capital funding

4,875 Subsidies and grants for capital expenditure 2,395 2,082 4,783

2,192 Development and financial contributions 1,879 1,855 1,789

- Increase/(decrease) in debt 1,039 2,314 1,056

1,287 Gross proceeds from sale of assets 6,784 6,784 186

- Lump sum contributions - - -

8,354 Total sources of capital funding (C) 12,098 13,035 7,813

Application of capital funding

Capital expenditure

8,045 - to meet additional demand 7,748 7,949 5,906

11,683 - to improve the level of service 14,079 8,284 6,770

10,753 - to replace existing assets 14,965 15,296 14,574

7,121 Increase/(decrease) in reserves 1,970 8,477 7,013

- Increase/(decrease) of investments - - -

37,601 Total application of capital funding (D) 38,762 40,006 34,263

(29,247) Surplus/(deficit) of capital funding (C - D) (26,665) (26,970) (26,450)

- Funding balance ((A-B) + (C-D)) - - -

The Funding Impact Statement (FIS) is provided in accordance with Section 95 and Schedule 10 of the Local Government Act 2002. The FIS is intended to disclose the sources and applications of Council funds. This statement is not GAAP compliant.

The FIS includes only transactions involving monetary funding and therefore excludes vested assets, revaluations and depreciation. In all other respects the Council Wide Funding Impact Statement matches the Prospective Statement of Comprehensive Income.

The FIS links the Council’s Revenue and Financing Policy, the annual setting of rates, fees, development contributions and annual borrowing requirements. The FIS sets out the revenue and financing mechanisms that will be used in each year along with an indicative level of rates, together with examples of the impact of rating proposals in year 1 of the Plan over a range of different categories of property and a range of different values.

Funding Impact Statement


Funding Impact Statement continued

Rating SystemThe following describes in full the rating system to apply from 1 July 2013:

General Rate � Based on land value of all rating units.

� Differentially applied. The differentials applying for 2013/14 are set in accordance with the Rating Policy to enable:

- 66% of the total general rate together with the Uniform Annual General Charge to be collected from residential

properties and 34% from non residential properties.

- The recovery of the assessed actual costs of services supplied to rural properties, excluding those in the Bay View

Differential Rating Area.

- The standardising of the rate for properties in the Bay View Differential Rating Area with those residential properties

in Napier City, but adjusted to reflect assessed actual cost of services supplied to Bay View for roading, stormwater,

and reserves activities.

- The application of the same rate for miscellaneous non residential properties as for residential properties.

Differentials Group/Code 2013/14

City Residential 1 100%

Commercial and Industrial 2 291.11%

Miscellaneous 3 100%

Ex-City Rural 4 60.84%

Other Rural 5 60.84%

Bay View 6 60.31%

� The general rate, together with the Uniform Annual General Charge, recovers the balance of the rating requirement

not recovered from the targeted rates outlined below, and apply to activities where the direct user benefit is recovered

by way of separate fees and charges, and where all or the remainder of the activity benefits ratepayers indirectly

or the community as a whole, and also where Council has determined that some direct user benefit should be met

by the community as a whole in line with particular activity funding policies.

Uniform Annual General Charge � Council’s Uniform Annual General Charge is set at a level that enables all Targeted Rates that are set on a uniform

basis as a fixed amount, excluding those related to Water Supply and Sewage Disposal, to recover about 20% of

total rates.

� The charge is applied to each separately used or inhabited part of a rating unit.

� The Uniform Annual General Charge, together with the General Rate, recovers the balance of the rating requirement

not recovered from the targeted rates.

Water Rates (apply to both City & Bay View water supply systems)

Fire Protection Rate � A targeted rate based on Capital Value of properties connected to the systems.

� Differentially applied, in recognition that the carrying capacity of water required in the reticulation system to protect

commercial and industrial properties is greater than that required for residential properties.

Differentials %

Central Business District and Fringe Area 400%

Suburban Shopping Centres, Hotels and Motels and Industrial properties outside of the CBD

200%

Other properties connected to the water supply systems 100%

� This rate recovers 13.24% of the net costs of the water supply systems before the deduction of water by meter income.

� 50% of the base rate applies for each property not connected but located within 100 metres of the systems.



Water Rate � A targeted rate of a fixed amount set on a uniform basis, applied to each separately used or inhabited part of a

rating unit connected to the systems.

� This rate recovers the balance of the total net cost of the water supply systems.

� 50% of the rate applies for each rating unit not connected but located within 100 metres of the systems.

Refuse Collection and Disposal Rate � A targeted rate of a fixed amount set on a uniform basis, applied to each separately used or inhabited part of a

rating unit for which a rubbish collection service is available.

� For units for which 2 or 3 rubbish collection services per week are available, the rate is 2 or 3 times the weekly charge respectively.

� This rate recovers the net cost of the Solid Waste Activity, excluding costs related to litter control and the kerbside recycling collection service.

Kerbside Recycling Rate � A targeted rate of a fixed amount set on a uniform basis, applied to each separately used or inhabited part of a

rating unit for which the kerbside recycling collection service is available.

� The rate recovers the net cost of the kerbside recycling collection service.

Sewerage Rate � A targeted rate of a fixed amount set on a uniform basis, applied to each separately used or inhabited part of a

rating unit connected to the City Sewerage System.

� 50% of the rate applies to each rating unit (excluding Bay View properties) not connected but located within 30 metres of the system.

� For Bay View properties located within the Stage 1 Urban Drainage Area, 50% of the rate applies to each rating unit not connected but located within 30 metres of the system.

� This rate recovers the net cost of the Wastewater Activity.

Bay View Sewerage Connection RateThe Bay View Sewerage Scheme involves reticulation and pipeline connection to the City Sewerage System. Prior to 1 November 2005 property owners could elect to connect either under a lump sum payment option, or by way of a targeted rate payable over 20 years.

� A targeted rate of a fixed amount set on a uniform basis, applied to each separately used or inhabited part of a rating unit connected to the Bay View Sewerage Scheme, where the lump sum payment option was not elected.

� The rate applies from 1 July following the date of connection for a maximum period of 20 years, or until such time as a lump sum payment for the cost of connection is made.

� The category of rateable land for setting the targeted rate is defined as the provision of a service to those properties connected to the sewerage system, but have not paid the lump sum connection fee.

� The liability for the targeted rate is calculated as a fixed amount per separately used or inhabited part of a rating unit based on the provision of a service by the Council, including any conditions that apply to the provision of the service.

� The rate is used to recover loan servicing costs required to finance the cost of connection to the Bay View Sewerage Scheme for properties connecting under the targeted rate payment option.

Off Street Car Parking RatesTargeted rates based on land value. The following rates apply:

CBD Off Street Car Parking Rate � Differentially applied.

� Relates to all properties in the Central Business District only (except for vacant properties, not contiguous with other separately rateable commercial properties occupied by the same ratepayer, which are used solely as a carpark) and reflects the parking dispensation status of those properties.

Differentials %

Properties with full parking dispensation 100%

Properties with half parking dispensation 50%

Properties with no parking dispensation NIL

� The rate is used to provide additional off street car parking in the Central Business District.



Taradale Off Street Car Parking Rate � Uniformly applied.

� Relates to properties in the Taradale Suburban Commercial area only.

� The rate is used to provide additional off street car parking in the Taradale Suburban Commercial area.

Suburban Shopping Centre Off Street Car Parking Rate � Uniformly applied.

� Relates to properties in suburban shopping centres and to commercial properties located in residential areas which are served by Council supplied off street car parking.

� The rate is used to provide additional off street car parking at each of these areas served by Council supplied off street car parking, and to maintain the existing off street car parking areas.

Ahuriri Beautification Rate � Targeted rate based on land value.

� Uniformly applied.

� Applies to commercial rating units located at the Ahuriri Shopping Centre.

� The rate is used to recover loan servicing costs on loans raised to meet the Ahuriri Commercial ratepayers share of beautification carried out at the Ahuriri Shopping Centre.

CBD Promotion Rate � Targeted rate based on land value.


� Applies to each commercial and industrial rating unit situated within the area bounded by the Marine Parade/Tennyson Street intersection, along Tennyson Street to Herschell Street to Browning Street to Cathedral Lane to the Cathedral Lane/Tennyson Street intersection, then west along Tennyson Street to the intersection with Milton Road and including properties on the northern side of Tennyson Street, then along Clive Square West to Dickens Street, then from Dickens Street to Dalton Street and including properties on the southern side of Dickens Street, from Dalton Street to Station Street, Station Street to Hastings Street, Hastings Street to Faulknor Lane, Faulknor Lane to Marine Parade, and north along Marine Parade to the intersection with Tennyson Street.

� This rate recovers at least 70% of the cost of the promotional activities run by Napier Inner City Marketing. The remainder is met from non targeted rates to reflect the wider community benefit of promoting the CBD to realise its full economic potential.

Taradale Promotion Rate � Targeted rate based on land value.


� Applies to all rating units in the Taradale Suburban Commercial area.

� This rate recovers the full cost of the Taradale Marketing Association’s promotional activities.

Water by Meter Charges � Targeted rate based on actual water use after the first 300m3 per annum.

� Applies to all non domestic water supplies in the Napier Water Supply Area, and domestic supplies outside the Napier Water Supply Area.

Targeted Rates Note:For the purposes of Schedule 10, clause 15(4)(e) or clause 20(4)(e) of the Local Government Act 2002, lump sum contributions will not be invited in respect of targeted rates, unless this is provided within the description of a particular targeted rate.

Separately Used or Inhabited Parts of a Rating UnitDefinitionFor the purposes of the Uniform Annual General Charge and Targeted Rates outlined above, a separately used or inhabited part of a rating unit is defined as:

� Any part of a rating unit that is, or is able to be, separately used or inhabited by the owner or by any other person or body having the right to use or inhabit that part by virtue of a tenancy, lease, licence or other agreement.



Examples of separately used or inhabited parts of a rating unit include:

� For residential rating units, each self contained area is considered a separately used or inhabited part, unless used solely as a single family residence. Each situation is assessed on its merits, but factors considered in determining whether an area is self contained would include the provision of independent facilities such as cooking / kitchen or bathroom, and its own separate entrance.

� Residential properties, where a separate area is used for the purpose of operating a business, such as a medical or dental practice. The business area is considered a separately used or inhabited part.

� For commercial or industrial properties, two or more different businesses operating from or making separate use of the different parts of the rating unit. Each separate business is considered a separately used or inhabited part. A degree of common area would not necessarily negate the separate parts.

These examples are not inclusive of all situations.

Description of Differential CategoriesGROUP 1: City Residential PropertiesEvery separately assessed property used exclusively as a home or residence of one or more households, and also including all vacant utilisable residential land, but excluding properties classified under Diff Groups 5 and 6, formerly within Hawke’s Bay County but which became part of Napier City with effect from 1 November 1989 following Local Government Reform.

Code1.1.1 Improved Residential Properties – Single Unit

1.1.2 Improved Residential Properties – Multi Unit

1.2.1 Vacant Utilisable Residential Land

GROUP 2: Commercial and Industrial PropertiesEvery separately assessed commercial and industrial property in accordance with the subgroups listed below, but excluding properties classified under Diff Groups 5 and 6, formerly within the Hawke’s Bay County but which became part of Napier City with effect from 1 November 1989 following Local Government Reform.

Sub Group 2.1: Central Business DistrictEvery separately assessed commercial and industrial property situated within the area bounded by the base of the Hill, from Marine Parade to Milton Road, south along Clive Square East and south along Munro Street to Edwardes Street south along Hastings Street, east along Sale Street, and north along Marine Parade.

Code2.1.1 Properties Receiving 100% Parking Dispensation

Every separately assessed commercial property in the commercial retail zone bounded by the corner of Clive Square East and Emerson Street, south to Dickens Street excluding Lot 1 DP 18592 then along Dickens Street east at the rear of the sites on the southern side including Pt Lot 14 DP 2015, then south at Dalton Street, then east along Station Street, excluding the corner site on Station Street (being Lot 1 DP 11954) across to Albion Street to the Marine Parade, then north along Marine Parade to Emerson Street, then north along the rear of Pt Town Sec 173, Lot 1 DP 4833, Pt Town Sec 173, then east to include the site on the corner of Tennyson Street and Herschell Street being Pt Town Sec 172 as well as the site opposite being Lot 1 DP 19183, then continuing north along the rear of properties that front Hastings Street across Browning Street to include the property on the corner of Browning Street and Shakespeare Road, then across Shakespeare Road to include the corner of the property on the western corner of Shakespeare Road and Browning Street, then south down Hastings Street ,excluding the Cathedral, along the rear of properties down Hastings Street, then west along the rear of the properties fronting Tennyson Street to Dalton Street then across Tennyson Street south to include the property on the corner of Tennyson Street and Dalton Street (Public Trust), and Pt Town Sec 162, Pt Town Sec 162, Lot 2 DP 6176 west along the rear of properties fronting Emerson Street to Clive Square East.

2.1.2 Properties Receiving 50% Parking Dispensation

Every separately assessed commercial property in part of the Commercial Fringe Retail Zone bounded by the corner of Dickens and Munro Streets, south down Munro Street, east along Edwardes Street, south along Hastings Street, east along Sale Street, north along Marine Parade, west along Albion Street, south west along the rear of the property on the corner of Station Street, and Hastings Street, excluding the next three sites fronting Station Street to the corner at Dalton Street, north along Dalton Street, then west along the rear of the properties fronting Station Street.

2.1.3 Properties Receiving 0% Parking Dispensation

Every separately assessed commercial and industrial property situated within Sub Group 1, excluding the properties in differential codes 2.1.1 and 2.1.2 above.



Sub Group 2.2: Central Business District Fringe AreaEvery separately assessed commercial and industrial property situated within the area bounded by the base of the Hill, from Marine Parade to Faraday Street, south along Faraday Street to Thackeray Street, east along Thackeray Street to Wellesley Road, south along Wellesley Road to Sale Street and east along Sale Street to the Marine Parade, excluding the properties included in Sub Group 2.1 above, and also includes every separately assessed industrial property fronting the remainder of Owen Street and Faulknor Street and every separately assessed industrial property positioned immediately south of Sale Street and fronting Wellesley Road.

Code2.2.1 Improved Fringe Commercial

2.2.2 Unimproved Fringe Commercial

2.2.3 Improved Fringe Industrial

2.2.4 Unimproved Fringe Industrial

Sub Group 2.3: TaradaleEvery separately assessed commercial property situated in the suburban shopping centre of Taradale which is zoned for commercial purposes.

Code2.3.1 Taradale Suburban Commercial Properties south of Puketapu Road

2.3.2 Taradale Suburban Commercial – others not covered in 2.3.1 or 2.3.3

2.3.3 Taradale Suburban Commercial – properties owned by JH McDonald Holdings Ltd

Sub Group 2.4: Other Suburban Shopping CentresEvery separately assessed commercial property situated in the following suburban shopping centres in Napier, which centres are zoned Commercial A, Special Commercial or Industrial; Greenmeadows, Trinity Crescent, Pirimai Plaza, Onekawa, Maraenui, Marewa, Wycliffe Street, League Park, Balmoral, Port Ahuriri, Westshore, Tamatea and Marewa (Latham Street).

Code2.4.1 Suburban Commercial – privately owned

2.4.2 Suburban Commercial – no off street car parking provided

2.4.3 Suburban Commercial – served by Council supplied off street car parking except Marewa Shopping Centre, Onekawa Shopping Centre and Ahuriri Shopping Centre

2.4.4 Suburban Commercial – Marewa Shopping Centre

2.4.5 Suburban Commercial – Onekawa Shopping Centre

2.4.6 Suburban Commercial – Ahuriri Shopping Centre

Sub Group 2.5: Commercial Properties in Residential AreasAll other commercial properties, including retail shops, professional offices, doctors surgeries, dental surgeries, veterinary clinics, garages, service stations and the like, not included in Sub Groups 2.1, 2.2, 2.3 and 2.4.

Code2.5.1 Shops and Commercial Properties in Residential Areas – other than in 2.5.2

2.5.2 Shops and Commercial Properties in Residential Areas – served by Council supplied off street car parking

Sub Group 2.6: Industrial – Outer City AreasProperties used for industrial purposes and not included in Sub Groups 2.1 and 2.2.

Code2.6.1 Improved Outer Industrial

2.6.2 Unimproved Outer Industrial

Sub Group 2.7: Hotels and Motels – Outer City AreasHotels and Motels situated in residential and industrially zoned areas and not included in Sub Groups 2.1 and 2.2.

Code2.7.1 Hotels and Motels in Residential and Industrial zoned areas



GROUP 3: Miscellaneous PropertiesEvery separately assessed property in accordance with the sub groups listed below used exclusively for the purposes indicated but excluding properties classified under Diff Groups 5 and 6, formerly within the Hawke’s Bay County but which became part of Napier City with effect from 1 November 1989 following Local Government Reform.

Sub Group 3.1: Vacant Substandard SectionsEvery separately assessed vacant residential property which, because of its zone or location, cannot be utilised for residential purposes.

Code3.1.1 Vacant Substandard Sections

Sub Group 3.2: Other Miscellaneous Rateable PropertiesEvery separately assessed rateable property used exclusively for the following purposes:

Code3.2.1 Lodge Rooms, Halls and the like in Residential Areas

3.2.2 Land Occupied and/or Used for Churches and Private Schools

3.2.3 Homes for the Elderly, Private Hospitals, etc

3.2.4 Public Schools, Kindergartens and Playcentres

3.2.5 Miscellaneous Crown Properties

3.2.6 Public Utilities (not Council)

3.2.7 Pensioner Flats and Housing for the Aged

3.2.8 Sports Clubs previously eligible for rates remission under Section 179 of the Rating Powers Act 1988

3.2.9 Non Profit Making Organisations, excluding Sports Clubs, previously eligible for rates remission under Section 179 of the Rating Powers Act 1988

3.3.8 Council Properties (other than leased)

Sub Group 3.3: Miscellaneous Non Rateable PropertiesEvery separately non rateable property used exclusively for the following purposes:

Code3.3.1 Land Occupied and/or Used for Churches and Private Schools

3.3.2 Homes for the Elderly, Private Hospitals, etc

3.3.3 Public Schools, Kindergartens and Playcentres

3.3.4 Miscellaneous Crown Properties

3.3.5 Public Utilities (not Council)

3.3.6 Sports Clubs and Other Non Profit Making Organisations previously eligible for rates remission under Section 179 of the Rating Powers Act 1988

3.3.7 Council Properties (used for purposes outlined in subsection 4 of part 1 of schedule 1 of Local Government (Rating) Act 2002)

GROUP 4: Ex-City Rural AreasEvery separately assessed rural property, which is situated in an area not provided with normal city services, and which is not capable of development because of the lack of city services, but excluding all properties formally within the Hawke’s Bay County but which became part of Napier City with effect from 1 November 1989 following Local Government Reform.

Code4.1.1 Ex-City Rural Properties

GROUP 5: Other Rural AreasEvery separately assessed property, formerly within the Hawke’s Bay County, but which became part of Napier City with effect from 1 November 1989 following Local Government Reform, except for those properties included in Group 6, or any subdivided property since reclassified to other Differential Groups.

Code5.1.1 Other Rural Properties (not included under 5.1.2)

5.1.2 Other Rural Properties (under 1500m2) for which Special Rateable Values (SRV) for ‘Existing use’ applied under Section 26 of the Rating Valuations Act 1998, prior to 1 July 2003.



GROUP 6: Bay View Differential Rating AreaEvery separately assessed property falling within the Bay View Differential Rating Area as defined in the following three

schedules:

Schedule 1All of those properties in the Bay View Township contained in the area west of State Highway 2, Main North Road, and on

the north side of and fronting onto Hill Road from Terrace Road up to and including number 36 Hill Road to and along

the rear boundaries of 25 Hill Road and the Bay View Hotel to Petane Road and along the rear boundary of number 23

Petane Road and adjacent properties to 38 Grey Street and including 6 Sheehan Street, then along the south eastern side

of Sheehan Street and the eastern side of Buchanan Street to and along the northern side of Villers Street to Grey Street,

then 40.23m along the south western boundary of Lot 2 DP 17781 and then easterly along the alignments of the rear

boundaries of numbers 3 and 1 Villers Street to State Highway 2, Main North Road.

Schedule 2All of those properties contained in the area north of 66 Ferguson Street south on the eastern side of State Highway 2,

Main North Road, up to number 500 Main North Road and across the State Highway and along the rear boundaries of

numbers 511 to 535 Main North Road, then back across the State Highway to Rogers Road and along the eastern side of

the Petane Stream continuing along the rear boundaries of numbers 15 to 31 Rogers Road and along Rogers Road to and

along the rear boundary of numbers 65 to 117 Rogers Road in the north and then to Rogers Road and southerly along its

eastern side to number 72 Rogers Road, then along the rear boundaries of numbers 72 to 22 Rogers Road, then easterly

across the Railway line to and along the northern boundary of Pt Lot 1 DP 7911 to the coast, then southerly along the

coastal boundary to 66 Ferguson Street south.

Schedule 3

All of those properties in the vicinity of Le Quesne Road contained in the area north of Franklin Road including numbers 49

to 64 Franklin Road and those properties east of the Railway line up to Thurley Place, then northerly along the alignment

of the rear boundaries of the properties extending from 15 Thurley Place up to 86 Le Quesne Road including the access

legs to Pt Lot 5 and Pt Lot 7 DP 11888, then easterly across the boundaries of 86 and 87 Le Quesne Road, then southerly

along the eastern side of Le Quesne Road to Franklin Road.

Code

6.1.1 Bay View Residential Properties

6.1.2 Bay View Non Residential Properties

Other Rating Issues

Instalment RatingRates for 2013/14 are set and assessed effective from Instalment 1 and are due and payable in four equal instalments

as follows:

� First Instalment due 21 August 2013

� Second Instalment due 20 November 2013

� Third Instalment due 19 February 2014

� Fourth Instalment due 21 May 2014

PenaltiesIn accordance with sections 57 and 58 of the Local Government (Rating) Act 2002, a penalty of 10 per cent is added to each

instalment or part thereof which is unpaid 2 full working days after the due date for payment. Previous years rates which

remain unpaid will have a further 10 per cent added 2 full working days after the due date for instalments one and three.

Fees and ChargesCouncil applies a range of fees and charges to fully or partially recover the costs of various activities.

The level of fees and charges are reviewed annually and a schedule of Council Fees and Charges is prepared as a separate

document.

The schedule is available upon request from the Council office.



Indicative Rates

Rates (incl. GST)

Indicative Rates

2013/14 (incl GST)

Rates and Charges (incl GST)

General Rate (cents per $ LV)

Diff 1 City Residential 0.56495

Diff 2 Commercial and Industrial 1.64463

Diff 3 Miscellaneous 0.56495

Diff 4 Ex-City Rural 0.34372

Diff 5 Other Rural 0.34372

Diff 6 Bay View 0.34072

Uniform Annual General Charge (UAGC) $324.00

Targeted Rates

Fire Protection Rate (cents per $ CV)

Diff 1, 2.5, 3, 4, 5, 6 0.00577

Diff 2.1, 2.2 0.02308

Diff 2.3, 2.4, 2.6, 2.7 0.01154

Water Rate - City $140.00

Water Rate - Bay View $140.00

Refuse Collection & Disposal Rate

1 collection per week $60.00

2 collections per week $120.00

3 collections per week $180.00

Kerbside Recycling Rate $16.00

Sewerage Rate $296.00

Bay View Sewerage Connection Rate $941.36

Off Street Car Parking Rate (cents per $ LV)

Diff 2.1.1 0.14533

Diff 2.1.2 0.07266

Diff 2.3.2, 2.4.3, 2.4.4, 2.4.5, 2.5.2 0.11020

Suburban Beautification Rate - Ahuriri (cents per $ LV) 0.25873

Promotion Rate - CBD (cents per $ LV) 0.19657

Promotion Rate - Taradale (cents per $ LV) 0.14154

Water By Meter Charges

Non Domestic Supplies ($/m3) 0.39844

Metered Domestic Supplies outside Napier Water Supply Area ($/m3) 0.73932

Note: For Council properties under differential codes 3.3.8 and 3.3.7, a nil rate will apply.

The indicative rates and charges are provisional only, and are subject to Council setting and assessing its rates during July 2013.


Funding Impact Statement continuedPro

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2013/1

4

ACTIVITY GROUPS


ScopeThe Democracy and Governance Group comprises

� Democracy and Governance

� Mayor and six Councillors elected by the City as a whole

� Ahuriri Ward – 1 Councillor

� Onekawa-Tamatea Ward – 1 Councillor

� Nelson Park Ward – 2 Councillors

� Taradale Ward – 2 Councillors

Through Democracy and Governance, Council provides a democratic and consultative system for decision making. The Council, consisting of a Mayor and twelve Councillors, is elected three yearly. Through its structure of Committees, Subcommittees, Working Parties and Forums, Council carries out the requirements of the Local Government Act 2002 and other related legislation.

Key IssuesThe next Council election is planned to be held in October 2013. Council conducted a review of representation arrangements and resolved that the structure of representation, being 6 members elected from four wards and 6 members elected at large plus the mayor. However there is still one objection that Council is waiting for a response from the Commission.

Changes to the Local Government Act 2002 during the past year have been incorporated into this Annual Plan as required. This includes the legislated change to the Purpose of Local Government. Performance measures mandated by the Act will impact the next Ten Year Plan 2015 - 2025. Council is currently reviewing policies and procedures to enable efficient and effective implementation of the required changes.

Performance Targets

Level of Service Measures

Annual Plan Targets 2013/14

TYP Targets 2013/14

TYP Targets 2012/13

Council holds regular Council and Council Committee meetings that are accessible and notified to the local community.

Number of Council Meeting cycles. 7 cycles (one less in

election year)

8 cycles 8 cycles

All significant issues as defined by the Policy on Significance are subject to public consultation

Report on all consultation carried out



Community Perceptions

Percentage of residents satisfied with the ‘Sufficiency of Public Information’ in the NRB Public Opinion Survey.

80% 80% 80%

Democracy and Governance


Democracy and Governance continued


Actual 2011/12

$000

Annual Plan 2013/14

$000

TYP 2013/14

$000

TYP/AP 2012/13

$000



- Targeted rates (other than water by meter charges) - - -

- Subsidies and grants for operating purposes - - -

- Fees charges and targeted rates for water supply - - -

- Internal charges and overhead recoveries - - -

- Interest and dividends from investments - - -

- Local authorities fuel tax, fines, infringement fees, and other receipts - - -



- Payments to staff and suppliers - - -

- Finance costs - - -

1,910 Internal charges and overhead applied 2,122 2,177 2,105

- Other operating funding applications - - -


- Surplus (deficit) of operating funding (A - B) - - -


- Subsidies and grants for capital expenditure - - -

- Development and financial contributions - - -

- Increase (decrease) in debt - - -

- Gross proceeds from sale of assets - - -


- Total sources of capital funding (C) - - -


- Capital expenditure - - -

- - to meet additional demand - - -

- - to improve the level of service - - -

- - to replace existing assets - - -

- Increase (decrease) in reserves - - -

- Increase (decrease) of investments - - -

- Total application of capital funding (D) - - -

- Surplus (deficit) of capital funding (C - D) - - -


- Group depreciation and amortisation - - -

The Funding Impact Statement (FIS) is provided in accordance with Section 95 and Schedule 10 of the Local Government Act 2002. The FIS is intended to disclose the sources and applications of Council funds. The FIS includes only transactions involving monetary funding and therefore excludes vested assets, revaluations and depreciation. This statement is not GAAP compliant.


ScopeThe Roading Group comprises:

� 363km of Roads (100% sealed)

� 306km Urban Standard Roads (approx. 10% not constructed to Council’s current urban standards)

� 57km Rural Roads (70% requiring widening to cope with current traffic volumes)

� 46.4km State Highways

� 5,441 sumps and manholes to be cleaned

� 480km of kerb and channel to be swept

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

Key IssuesThe plan is based around the assumption that there will not be any changes to New Zealand Transport Agency (NZTA) subsidies. If subsidies were reduced by NZTA, Council would need to reevaluate the priorities as well as the impact on rates.

Growth, changing public perceptions and a desire for a better road environment are giving rise to a demand for environmental projects in the CBD and residential suburbs. A number of projects have been identified throughout the City as a result of various studies undertaken over the last few years. The Capital Plan includes the following roading projects implemented:

Roading Bulk Funded Non-SubsidisedCouncil is currently bulk funding some of the $41 million deferred capital works. For deferred capital works it is allocating expenditure of $1.822 million per annum from rates. In addition to bulk funding, major transportation projects are funded through financial contributions from developers aimed at mitigating the direct effect of new residential and commercial developments.

Roading Transportation Proposals

Miscellaneous Transportation Deficiencies

The Heretaunga Plains Transportation Study 2004 (for the period 2001 to 2026) identified $51.9 million of transportation projects in the first 20 years of the plan. The Capital Plan includes funding for these works at an average of $2.668 million per annum, funded from financial contributions.

In the short to medium term Prebensen Drive requires four-laning. Several intersections, particularly through Meeanee Rd and Kennedy Road will require capacity improvements as will the West Quay/ Pandora Road intersection.

CBD Transportation and Environmental Improvements

$12.4 million of transportation and environmental projects is identified in the CBD area. Council’s Capital Plan has budgeted for only some of these projects to be undertaken. These include:

Herschell Street: Herschell Street is designated a cultural precinct and will be upgraded to reflect this and coincide with the reopening of the Hawke’s Bay Museum and Art Gallery mid 2013.

� Hastings Street: A redevelopment over three years and in three stages will see upgrades from Vautier Street to Albion Lane in Stage 1, Albion Lane to Tennyson Street in Stage 2 and Tennyson Street to Shakespeare Road in Stage 3. The Capital Plan includes $1.44 million for the last year of the project. The redevelopment will add to the revitalisation of the CBD, and result in improved parking, while traffic calming measures will ensure a safer street environment.

� Emerson Street: Within the next 10 years, Council will be undertaking a review of Emerson Street with a view to refurbishing this environment. Details will be defined in a concept plan which is yet to be prepared, and will look at the carriageway, kerb and channels, pavers and painting of hardware in the street.

� Street signage: Street signs in the CBD will be replaced during the term of this plan with black and white Art Deco style signs.

Roading


Roading continued

Performance Measures



TYP Targets 2013/14

TYP Targets 2012/13

Council provides a transport system that is safe and efficient and enables users to move around effectively.

Number of Injury crashes in Napier City.

Reduce by 4% on previous year (109)

Reduce by 4% on previous year (114)

Same as previous year (2011/12 =

119)

Average roughness of sealed roads.

(NAASRA – National Association of Australian State Road Authorities.

Ratings: 70 considered smooth, 150 considered rough.)

Less than 100 NAASRA




Percentage of residents satisfied with Roads in the NRB Public Opinion Survey.

87% 87% 87%

Percentage of residents satisfied with Footpaths in the NRB Public Opinion Survey.

82% 82% 82%

Economic and Financial Performance

Rating cost per rateable property $569 $616 $569


Actual 2011/12

$000

Annual Plan 2013/14

$000

TYP 2013/14

$000

TYP/AP 2012/13

$000



163 Targeted rates (other than water by meter charges) 162 163 163

4,069 Subsidies and grants for operating purposes 1,721 1,888 1,793

69 Fees charges and targeted rates for water supply 38 38 37

515 Internal charges and overhead recoveries 763 790 751


381 Local authorities fuel tax, fines, infringement fees, and other receipts 385 385 385






5 Other operating funding applications - - -


6,586 Surplus (deficit) of operating funding (A - B) 5,412 5,555 5,317


- Subsidies and grants for capital expenditure 1,426 1,463 1,395

917 Development and financial contributions 994 978 955

113 Increase (decrease) in debt 1,414 1,450 2,250

(7) Gross proceeds from sale of assets - - -


1,023 Total sources of capital funding (C) 3,834 3,891 4,600



1,812 - to meet additional demand 3,282 3,367 2,987

2,347 - to improve the level of service 2,481 1,950 1,882


(1,158) Increase (decrease) in reserves (2,032) (1,528) (1,211)



(6,586) Surplus (deficit) of capital funding (C - D) (5,412) (5,555) (5,317)


6,902 Group depreciation and amortisation 7,388 7,388 6,637



Roading continued


ScopeThe Solid Waste Group comprises:

� Domestic refuse collection

� Kerbside recycling

� Litter control

� Redclyffe Transfer Station

� Omarunui Landfill Joint Venture

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

� Residential Properties – once per week

� Commercial (Suburban Shops) – twice per week

� Commercial (Central Business District) – three times per week

A kerbside recycling service for residential properties is provided fortnightly. Litter bins and drums are located throughout the City and serviced on a daily basis. Council’s Refuse Transfer Station at Redclyffe accepts most domestic, garden and building waste, and recyclables.

Currently Napier disposes of approximately 16,000 tonnes of refuse annually at the landfill from the domestic collection, litter collection and the Transfer Station. The Omarunui Landfill is the final disposal point for waste generated by the combined populations of Hastings District and Napier City. It is jointly owned by both the Hastings District and Napier City Councils and is managed on a day to day basis by the Hastings District Council.

Key IssuesThe Napier City Council draft Solid Waste Bylaw 2012 included a Transitional Provision to prohibit the commingling of green waste with general refuse. The Transitional Provision was withdrawn and Council is working to divert more green waste from the landfill as this material creates leachate and greenhouse gases. Both of these are unwanted by-products which must be carefully managed and add significant costs to operating the landfill.

Several local businesses made submissions on the Green Waste Transitional Provision. They consider that green waste diversion could be increased without a Bylaw that prohibits commingling. This could be done by educating existing customers as well as residents and businesses, especially in regards to options for green waste.

At the hearing Council considered this approach to be worth pursuing. Council will work with the solid waste industry to promote the diversion of green waste, which can be carried out as part of the existing Waste Minimisation activity. Based on a solid waste survey carried out in March 2012, the amount of green waste Napier residents send to landfill is in the order of 1,600 tonnes per year.

This initiative will be considered a success if an additional 1,000 tonnes of green waste is diverted. If the diversion of green waste from landfill does not increase, Council may wish to consider future options.

Solid Waste


Performance Targets



TYP Targets 2013/14

TYP Targets 2012/13

Council provides a kerbside refuse collection service weekly to city residents to ensure city household waste is able to be removed from kerbside. In addition this activity provides a user pays facility at the Transfer Station for disposal of non-household refuse. These services are provided to promote community health through the prevention and spread of disease.

Weekly household kerbside waste collection

100%. 100% 100%

Transfer Station open for 362 days per year

100% 100% 100%

Council provides a kerbside recycling collection service fortnightly to reduce the quantity of waste to landfill. Council also actively promotes waste minimisation activities and responsible solid waste management decisions through education initiatives and a hazardous waste collection programme. Council also provides green waste and recycling facilities at the Redclyffe Transfer Station

Waste to Landfill per capita. <306kgs <306kgs <306kg

Refuse Diversion Rate 31% 31% 31%

Compliance with resource consent parameters.

100% 100% 100%

Education and waste reduction promotion programmes in place.

1,000 students per

annum

1,000 students per

annum

1,000 students per

annum

Community Perception

Percentage of residents satisfied with Refuse Collection in the NRB Public Opinion Survey.

92% 92% 92%

Percentage of residents satisfied with Control of Litter, Graffiti, and Vandalism in the NRB Public Opinion Survey.

87% 87% 87%


Cost per rateable property. $202 $218 $207

Solid Waste continued


Actual 2011/12

$000

Annual Plan 2013/14

$000

TYP 2013/14

$000

TYP/AP 2012/13

$000


493 General rates, uniform annual general charges, rates penalties 435 447 429


163 Subsidies and grants for operating purposes 173 173 173

1,231 Fees charges and targeted rates for water supply 1,468 1,576 1,439

- Internal charges and overhead recoveries - - -







223 Internal charges and overhead applied 224 236 236








2 Gross proceeds from sale of assets - - -


2 Total sources of capital funding (C) - - -




7 - to improve the level of service - - -

419 - to replace existing assets 488 831 586

598 Increase (decrease) in reserves 875 571 549





675 Group depreciation and amortisation 733 733 697



Solid Waste continued


ScopeThe Stormwater Group comprises:

� 226km Stormwater Mains

� 58km Open Drains

� 13 Pump Stations (Napier City Council and Hawke’s Bay Regional Council managed)

Council provides and maintains a stormwater disposal system for the 13 separate drainage areas or catchments in the City with the aim to minimise the effects of flooding. The system, serving approximately 97% of the City’s population, consists of open drains, stormwater mains and pump stations with about 75% of the City reliant on pumped systems for stormwater drainage.

Key IssuesThe continued investment in the upgrading of the City stormwater catchments ($26.3 million over the next nine years), including the CBD and Taradale, will be funded from a combination of rates and financial contributions. The construction of a new pump station to the south of the City at a cost of $5.079 million is planned for 2019/20.

Napier CBD - Tennyson StreetThe stormwater upgrade in Tennyson Street will be undertaken in conjunction with the redevelopment of Hastings Street. The deep,large diameter stormwater main will be installed along Tennyson Street through to Marine Parade and end in a pier on the land side of Mean High Water Springs.

Upgrade Taipo StreamThe Taipo Stream forms a major drainage channel on the western boundary of the Napier City area and provides drainage to a significant part of Taradale and the rural area from Avenue Road to Ahuriri Estuary, including Poraiti. Two of the upper tributaries are protected with flood detention dams (Halliwell’s Dam and O’Dowd Road Dam). Taipo Stream will undergo upgrade works in 2015/16 at a cost of $620,000 funded by a combination of rates and financial contributions.

Stormwater Drain ImprovementsPlanned developments include large scale pipe upgrading in the CBD, Taradale and Greenmeadows areas. Ongoing upgrades and renewals of network and pump stations, to meet the demands of growth and development, will continue.

Ellison Stormwater Pump StationLarge scale upgrading for Napier South and Marewa includes a proposed new pumping station at Ellison Street and beach outfall. This is programmed for 2019/20, funded through loan funding and financial contributions at a total cost of $5.079 million.

Te Awa Stormwater PondFinancial contributions from developers in the Te Awa Structure Plan area will fund the $1.674 million required to develop alternative flood pond storage within land north of Kenny Road. This is programmed for 2014/15. The Serpentine area is subject to a structure plan process at present. No explicit provision for infrastructure for the area, other than development of the stormwater detention pond in the Te Awa Estates development, is made in the plan until the outcome of the structure plan process is known.

Stormwater


Stormwater continued

Performance Targets



TYP Targets 2013/14

TYP Targets 2012/13

People, property, infrastructure and the environment are reasonably safeguarded from the adverse effects of surface water.

Reported number of properties inundated during events smaller than a 1 in a 50 year return period

0 0 0

Percentage time total pumping capacity available to prevent flooding.

97% 97% 97%

Council provides this service, which collects, conveys and disposes of stormwater, with no significant adverse environmental effects to protect the environment and the health of the city’s population.

Compliance with discharge consent conditions

100% 100% 100%


Percentage of residents satisfied with Stormwater in the NRB Public Opinion Survey.

87% 87% 87%


Cost per hectare drained $1,303 $1,336 $1,274


Stormwater continued

Actual 2011/12

$000

Annual Plan 2013/14

$000

TYP 2013/14

$000

TYP/AP 2012/13

$000





- Fees charges and targeted rates for water supply - - -






787 Payments to staff and suppliers 1,012 1,061 985





289 Surplus (deficit) of operating funding (A - B) 1,376 1,405 1,500




212 Increase (decrease) in debt - - -



805 Total sources of capital funding (C) 347 346 321



1,807 - to meet additional demand 439 451 429

599 - to improve the level of service 2,945 3,020 2,897


(1,504) Increase (decrease) in reserves (2,311) (2,241) (2,155)



(289) Surplus (deficit) of capital funding (C - D) (1,376) (1,405) (1,500)






ScopeThe Sewerage Group comprises:

Wastewater � 42 Pump Stations

� 367km Wastewater Mains

� Milliscreen Plant (Awatoto)

� 1,607m Marine Outfall

� 93% of Napier’s population serviced by reticulation system

Council provides and maintains a safe domestic and industrial sewage collection, screening and disposal system to maintain the community’s health. Properties are currently being connected to Stage 1 of the Bay View system.

Key Issues

Wastewater Marine Outfall ReplacementA condition assessment of the outfall indicates there is severe corrosion on the pipe that conveys sewage to the drain downstream of the pressure manhole on the beach of the Awatoto Marine Outfall. Replacement of the outfall is necessary to ensure reliable operation and to provide capacity into the future. Provision of $8.9 million in 2021/22 is made in this plan and will require additional funding once detailed costs have been prepared. The plan also provides for an outfall renewal budget.

Completion of Wastewater Treatment PlantA major project included in the plan is the Biological Trickling Filter Wastewater Treatment Plant funded from the Advanced Wastewater Treatment Establishment Fund and scheduled to be completed in August 2014.

Council committed to providing advanced sewage treatment following thorough investigations and a public consultation process which was initiated in 1993/94. There is no other single project with significant capital, operational and maintenance costs that has had a greater impact on Council’s finances over the past two decades. There have been many investigations and delays in the progress towards this facility being completed. Council has now gained Resource Consent and has started the many steps required in order that the plant is fully operational.

The total cost of the project is $32.7 million with much of this provided in past plans. The remaining $2.567 million is included in 2013/14.

Sewerage


Sewerage continued




TYP Targets 2013/14

TYP Targets 2012/13

Provide and maintain the city sewerage system to ensure public health and the environment are safeguarded.

Number of reticulated properties that are unable to dispose of wastewater, due to stormwater infiltration, for longer than 6 hours.

Zero Zero Zero

Blockage resulting in overflow Zero Zero Zero

Compliance with requirements of resource consents for quality and volume.

100% 100% 100%

Ensure the sewerage system is effective and reliable.

Number of complaints relating to odour

Zero Zero Zero


Percentage of residents satisfied with Wastewater in the NRB Public Opinion Survey.

90% 90% 90%


Cost per m3 of wastewater $0.75 $0.76 $0.73

Cost per km of wastewater mains $18,063 $18,892 $18,236

Cost per rateable property $263 $276 $268


Sewerage continued

Actual 2011/12

$000

Annual Plan 2013/14

$000

TYP 2013/14

$000

TYP/AP 2012/13

$000


- General rates, uniform annual general charges, rates penalties - - -






1 Local authorities fuel tax, fines, infringement fees, and other receipts - - -





807 Internal charges and overhead applied 996 1,125 1,048







954 Increase (decrease) in debt 657 673 -



1,118 Total sources of capital funding (C) 740 755 80



2,807 - to meet additional demand 590 605 577

981 - to improve the level of service 2,576 2,642 -


700 Increase (decrease) in reserves (758) (874) 2,483









Water Supply

ScopeThe Water Supply Group comprises:

� 9.8 million m3 water consumed annually

� 10 wells

� 10 ground water and 8 booster Pump Stations

� 8 reservoir sites

� 30 million litres storage facilities

� 463km mains

� 95.5% of Napier’s population serviced by reticulation system

Council provides a water supply system for the supply of potable water as well as for fire fighting purposes. Water is drawn from the Heretaunga Plains aquifer, is free from harmful contamination and no water treatment is required. It is reticulated to the Napier urban area and to Bay View. Council has a programme in place to manage the usage of water, a precious natural resource, to minimise wastage and shortages.

Key IssuesUpgrades to the City’s Water Supply will continue with emphasis on managing demand and achieving a more stable overall pressure. Council’s focus is keep wastage of water to a minimum and is currently reviewing irrigation systems used for sportsgrounds and the city gardens to ensure that all systems are designed to meet industry best-practice.

The Capital Plan includes $17.4 million for Water Supply projects to ensure that levels of service are maintained for the city’s water supply. Projects include a new reservoir in Taradale, development of a new well in Awatoto and a new trunk main from Awatoto (to be undertaken in two stages). Three projects have been added to the plan this year; Te Awa Structure Plan Stages 1 & 2, Severn Street Extension and Upgrade Water Supply Control System.

Severn Street ExtensionThis is the first stage of an upgrade to increase capacity of the reticulation that supplies water to the Pandora industrial area and beyond. Pandora is a high water use area and the level of service to consumers was significantly affected recently when the primary supply, the Pandora Trunk Main, was taken out of service temporarily during construction of the West Quay roundabout. Once this project has been fully completed it will reduce the impact on all downstream consumers in the Pandora, Ahuriri and Westshore areas when the Pandora Trunk Main is out of service.

This stage of the project is from Prebensen Drive to the railway line and the budget will allow the work to be done in conjunction with any road upgrading required in the adjacent area. The balance of the project will be included in the next Ten Year Plan.

Upgrade Water Supply Control SystemThis project is an extension of a current project approved in past years. The control system automatically controls the network’s pumps, monitors reservoir levels and generates alarms when faults or other unfavourable conditions occur. Additional funding is required to ensure that the new system complies with current radio licence rules.


Water Supply Continued

Performance Targets

Water Supply



TYP Targets 2013/14

TYP Targets 2012/13

Minimise the adverse effects of water supply quality on human health by providing a water supply system with adequate capacity and pressure that meets the NZ Drinking Water Standards.

Compliance with requirements of Resource Consent conditions

100% 100% 100%

Water quality adherence to Drinking Water Standards for New Zealand 2005 (Revised 2008).

100% 100% 100%

Percentage of water mains > 100mm in diameter cleaned

20% 20% 20%

No fire hydrants reported by NZ Fire Service not meeting code of practice pressure and flow requirements

0 0 0


Percentage of residents satisfied with Water Supply in the NRB Public Opinion Survey.

90% 90% 90%


Cost per m3 of water $0.41 $0.43 $0.41

Cost per km of water mains $8,712 $9,035 $8,629

Operating cost per rateable property $167 $167 $161



Actual 2011/12

$000

Annual Plan 2013/14

$000

TYP 2013/14

$000

TYP/AP 2012/13

$000























221 Total sources of capital funding (C) 124 122 119



366 - to meet additional demand 1,054 1,082 212

- - to improve the level of service 120 123 119

758 - to replace existing assets 1,175 725 700

871 Increase (decrease) in reserves (687) (266) 616







Water Supply continued


ScopeThe Recreation Group comprises:

Sportgrounds � 15 sports parks (211 hectares)

� Major facilities – McLean Park Complex, Park Island, Nelson Park and Tareha Park.

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

Napier Aquatic Centre � Indoor facilities (heated) – 5 lane 25m pool, 6 lane 25m pool, 15m learner’s pool, 2 toddler pools, 2 spa pools, 2

water slides.

A comprehensive aquatic facility providing educational and recreational programmes, and a range of non aquatic outdoor activities.

Marine Parade Pools � 4 heated outdoor pools

� 5 spa pools

A complex with a range of heated pools and spas managed under contract.

Reserves � 36 neighbourhood parks, 46 greenbelt reserves, 9 foreshore reserves and 9 public gardens

� 75m2 recreational reserves per residential lot

A range of passive recreation facilities providing an open space network and formal gardens of a high standard throughout the City.

Inner Harbour � 95 berths

An area of wharves and catwalks in Ahuriri providing berths for commercial and recreational vessels, and popular for recreational fishing.

Key Issues

Sportsgrounds

Sportsgrounds DevelopmentA master plan, which will guide development of the Park Island sports complex over the next 20 plus years was adopted by Council in early 2013. The plan, which was carefully developed over almost two years, strategically provides for the growth and change in local, regional and national outdoor sporting activity in the city and provides the city with direction to further develop Park Island as an integral part of Napier’s open space network.

The first stages of implementing the plan will be initiated during the 2013/14 Annual Plan, including implementing a District Plan change to enable future sports facility developments and undertaking detailed design and the first stages of ground works on land to the east of the existing sports grounds.

Sport and Active Recreation StrategyCouncil is committed to ensuring that the development of sport and active recreation facilities and the provision of sport and active recreation services for the community is undertaken in a strategic, collaborative, transparent and affordable way. Council considers that an effective Sport and Active Recreation Strategy will contribute to this goal, and to this end Council will continue to work in partnership with other Councils in the region, regional sports organisations and Sport Hawke’s Bay towards redeveloping the existing Sport and Active Recreation Strategy into a better plan for Hawke’s Bay.

Napier Aquatic CentreThe need for an upgrade of the Old Lap Pool enclosure has been identified in previous plans. A detailed condition assessment report, recently carried out by a structural engineer, recommends improvements to the facility that include adequate roof insulation, a vapour barrier, new flooring to replace the deteriorated rubber studded tile, double glazed windows and ceiling replacement. The funding identified in the plan will be sufficient to cover this work. Investigation into the addition of a dedicated Learn to Swim pool (as part of a regional strategy) may lead to additional requirements not budgeted for in this plan.

Recreation


Recreation continued

ReservesThe plan allows for additional Reserve facilities which will cater for Napier’s population growth.

The major works proposed concern the establishment and development of neighbourhood reserves (together with the provision of play equipment where appropriate), walkway reserves, and a number of greenbelt reserves in areas particularly subject to intensive infill development. The establishment and development of reserves in green-field areas is considered to be an on-site cost carried by each developer.

The Capital Plan makes provision for development of passive recreation reserves and the establishment of a new playground (location to be determined) at a total cost of $877,000. Reserve development is funded from combination of rates and financial contributions.

Tree Planting ProgrammeA tree planting programme will continue throughout the term of this plan. Funds allocated to this are in excess of the normal Reserves budget and are in the plan as a response to the community’s desire to enhance the City’s physical environment. The planting will be funded from rates to a total of $689,000 over the nine years.

Reserves Walkway/Cycleway LinkagesA network of formed and unformed walkway/cycleway tracks are located throughout the city to promote and encourage healthy exercise and to provide for the enjoyment of all residents and visitors to the city. A conscious effort has been made to establish a series of linkages between various areas in order to maximise the enjoyment of these walkways/cycleways. Pathways extend through many of the Foreshore Reserves and linear reserves catering for the dual activities of walking and cycling. Council will continue to develop walkway linkages and has included $2.787 million for this, funded from loans.

Marine Parade Landscaping

An extension to the Marine Parade playground was completed in late 2012. This will include family friendly recreational areas (seating, shade covers and barbecues) and landscaping. The plan includes a further $1.2 million funded from the Capital Project Fund to continue development along Marine Parade.

Inner HarbourInvestigation into whether the Meeanee Quay jetties should be renewed, or redeveloped with a view to providing additional berthage for the future is required. An engineering survey will be undertaken during the next 3 years to establish the remaining life and estimated replacement cost of the jetties.

There is no provision for the renewal of the Meeanee Quay jetties within the current renewals programme.



Performance Targets

Sportgrounds



TYP Targets 2013/14

TYP Targets 2012/13

Council provides a sufficient number and range of sports and recreation facilities to satisfy the needs of the community.

Sportsgrounds area per 1,000 residents.

3.5ha 3.5 Ha 3.5 ha

Number of sports grounds suitable for hosting national outdoor sports events.

Minimum of 3

Minimum of 3

Minimum of 3

Number of sports grounds suitable for hosting international outdoor sports events.

Minimum of 1

Minimum of 1

Minimum of 1


Percentage of residents satisfied with Parks and Sportsfields in the NRB Public Opinion Survey.

90% 90% 90%


Operating Cost per rateable property $168 $166 $159

Operating cost per hectare $19,931 $19,675 $18,675

Napier Aquatic Centre



TYP Targets 2013/14

TYP Targets 2012/13


Accredited as meeting Poolsafe standards.

100% 100% 100%

Water quality adherence rate to NZ Water Treatment Standards 5826:2000.

100% 100% 95%

Number of users. 204,000 204,000 204,000


Percentage of residents satisfied with Pools in the NRB Public Opinion Survey.

82% 82% 82%




Reserves



TYP Targets 2013/14

TYP Targets 2012/13


Recreational land per residential lot.

75m2 75m2 75m2

Complaints per annum <60 <60 <60

Number of playgrounds 32 32 32

Playground accidents per annum <10 <10 <10

Council sustainably manages the development and use of reserves as a natural recreational resource for both local residents and visitors.

Annuals propagated and planted throughout the city.

195,000 195,000 195,000


Percentage of residents satisfied with Public Gardens, Street Beds and Trees in the NRB Opinion Survey

95% 95% 95%



Operating cost per hectare of Reserve $8,970 $8,922 $8,307

Inner Harbour



TYP Targets 2013/14

TYP Targets 2012/13

To provide and maintain Inner Harbour facilities to enable the safe berthing of commercial and recreational vessels.

Berths available for commercial and recreational vessels.

98 berths 98 berths 98 berths

Channel depth sufficient for commercial and recreational vessels. Maintain maximum time between depth soundings of inner harbour.

18 months 18 months 18 months




Actual 2011/12

$000

Annual Plan 2013/14

$000

TYP 2013/14

$000

TYP/AP 2012/13

$000














2 Other operating funding applications 2 2 2


405 Surplus (deficit) of operating funding (A - B) 634 1,241 900


25 Subsidies and grants for capital expenditure - - -


- Increase (decrease) in debt 1,103 1,571 765



289 Total sources of capital funding (C) 1,396 1,860 1,041



227 - to meet additional demand 1,409 1,445 1,272

933 - to improve the level of service 1,769 510 1,872

620 - to replace existing assets 1,576 1,968 1,464

(1,086) Increase (decrease) in reserves (2,724) (822) (2,667)


694 Total application of capital funding (D) 2,030 3,101 1,941

(405) Surplus (deficit) of capital funding (C - D) (634) (1,241) (900)






ScopeThe Social and Cultural Group comprises:

Libraries � 2 Libraries – Napier and Taradale

� 39,000 members

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

War Memorial Conference CentreThe facility houses the eternal flame and roll of honour as a memorial to Napier citizens who served and died in the conflicts of the 20th century.

Napier Municipal TheatreThe Art Deco heritage building in Tennyson Street provides modern theatre facilities for local, national and international live theatre, performing arts, exhibitions, and other community functions and events. The auditorium has a seating capacity of 993. Other features include the Pan Pac Foyer for exhibitions, functions and conferences, bar and catering facilities and a Ticketing Box Office.

Hawke's Bay Museum and Art GalleryArts, cultural and museum facilities and a regional archive are provided by the Hawke’s Bay Museum and Art Gallery and Century Theatre. The regional collection of heritage, art and artefacts are managed under an agreement with the Hawke’s Bay Museums Trust. The complex is currently closed to undertake a redevelopment project due to be completed in 2013.

Community PlanningCommunity facilitation, administration of community grants, safer community, youth development and Settlement Support are the main components of Community Planning. Community facilitation and grants support and encourage voluntary and community based organisations to address social issues in the City through self-help processes. Safer community’s purpose is to develop community based crime prevention initiatives, promote safety in the community, and provide coordination and liaison between community groups and organisations. Youth development supports and fosters the role of young people in our community, providing opportunities for young people to participate and engage in decision making. Settlement Support ensures migrants, refugees and their families access appropriate information and responsible services that are available in the wider community.

Halls � 6 casual hire facilities, 2 leased facilities

Council provides a range of facilities with a good geographic spread for recreational, community or leisure activities at affordable prices.

Retirement and Rental Housing � 303 retirement flats in 9 villages – all 1 bedroom

� 72 rental flats in 3 villages - mostly 2 bedrooms

Flats are provided for people with special housing needs, low assets, and low income, with the emphasis on providing for the welfare of the tenants. Council flats are in high demand with the average occupancy rate exceeding 97%.

Cemeteries6 cemeteries - 4 operational and 2 historic

Comprehensive areas for burials, ash interments, and ash scattering. The recently restored historic cemeteries ensure the historical and cultural significance is preserved. Records are available for genealogical enquiries. Note the crematorium for the Hawke’s Bay region, located in Hastings, is owned and operated by Hastings District Council.

Public Toilets � 44 toilet facilities

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

Social and Cultural


Emergency Management � 1 Emergency Management Operations Centre

� 9 Civil Defence Centres

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

Key issues

LibrariesE Books were made available to members in December 2011. It is anticipated that the take up of this service will be gradual. Changes in technology will be reflected in the services offered by the Libraries.

In the latter part of the plan, funding has been allocated for an upgrade of the Napier Library. The impact of electronic media on library services and library facilities required for the future will be assessed during the intervening time.

Hawke's Bay Museum and Art GalleryThe Hawke's Bay Museum and Art Gallery redevelopment is on target for an April handover sto staff to install exhibitions in the new building.

Community PlanningPopulation changes present challenges in the medium to long term. Demand will come from both the ageing population and youth.

Youth unemployment is a growing concern and is exacerbated in a poor economic climate. Work is underway at a regional level to address this issue of which we are part of.

Technology has an important role to play in service provision (the use of online polling, consultation, information sharing etc) and for community organisations. It will be important for Council to utilise technology where possible and to support both the community and voluntary sector in this area.

Funding sources continue to decline for community organisations and demand for their services is on the increase. We will continue to offer support, resources and advice to organisations, both at individual levels and in group settings.

MaraenuiThe Maraenui Urban Renewal Plan Review and Maraenui Shopping Centre Crime Prevention Through Environmental Design (CPTED) Assessment were adopted by Council on 10 August 2011. The recommendations of these reports are being prioritised. The Maraenui CPTED assessment contained sixty-nine specific recommendations to improve the area, with the overall recommendation being to enhance the shopping centre and reserve, ensuring it is safe, secure and functional, and with a view to encourage economic development in the area.

The first stages of the upgrade project focus on the reserve by replacing and improving the playground area, skate park and toilets, and creating a larger open green space. This will be funded from existing CPTED capital and the community development project budget. Further stages to upgrade roading, walkways and parking areas will be funded from other existing Council budgets and may require additional funding through future Annual Planning processes.

Pukemokimoki MaraeThe Pukemokimoki Marae is now well established within Napier, although not currently reaching its original vision and potential for the facility. In order to achieve its growth aspirations, funding of $50,000 has been approved for marketing the Marae for up to three years in order to establish and build capacity and sustainability by growing tourism and service provision while continuing to serve the community of Napier.

HallsThe Capital Plan includes an additional project for the refurbishment of the Memorial Square Building. In addition the Greenmeadows East Community Hall and the Taradale Community Rooms are in need of some minor refurbishment which will be achieved through the existing building maintenance programme.

Social and Cultural continued


Retirement and Rental Housing

BackgroundNapier City Council has a long and proud history of providing affordable Retirement and Rental Housing for people who have low assets and low income. This fills a known gap in the rental market, as it provides both affordable housing and security of tenure with an emphasis on the social and community wellbeing of the tenants. Due to modern medicine and equipment the elderly, despite physical disabilities and illnesses, are being encouraged and supported to remain independent in their homes longer. In addition the average age of the general population is increasing. This increases demand for retirement housing, which provides functional and accessible accommodation and caters for all levels of disability. To meet the growth in demand for retirement housing, Council also allocates its general rental flats to the more fit and able elderly, and the ground floor flats to the less mobile, who are in wheelchairs or require easy access.

Current/FutureIn 2011 Council resolved that the funds in the Pensioner Housing Upgrade Reserve, that had been retained to finance additional flats, would be extended to include improvements to existing Retirement Flats. From a feasibility study carried out in 2008, one of the main areas identified was the improvement of retirement flats insulation and ventilation. The insulation was upgraded during the past three years, and is now to the recommended standard for ceilings R2.9 and under floor R1.3. The Pensioner Housing Upgrade Reserve will be utilised to improve kitchen and bathroom ventilation and, at the same time, renew bathroom fixtures and fittings. The total value of this work is expected to be $658,000.

Minor Capital ProjectsBulk funding for minor capital projects is provided to maintain Council’s flats to a reasonable standard. Funding has been included in this plan of $1.1 million funded from rental income received.

Public ToiletsInvestigation of vandal proof methods/means of improving public health protection may result in additional requirements not currently provided in this plan.

New Toilet ProgrammeCouncil has developed a standardised precast design for new toilet facilities which can be relocated in future should the need occur. This standardised design has tiled floors and walls and improvements in natural lighting, significantly improving the overall standard of toilets in Napier. $250,000 has been included in the Capital Plan for new public toilets, funded from rates.

The toilets at Taradale Park will be replaced, and the toilets in Westshore are under review.

Emergency ManagementA review of the Hawke’s Bay Civil Defence Emergency Management Group Plan is required to identify where regional priorities may conflict with this plan.

Current legislation particularly the Civil Defence Emergency Management Act 2002 due to significant national events will need to be reviewed. This may place additional requirements on Council which are not included in this plan.




Libraries



TYP Targets 2013/14

TYP Targets 2012/13

Council provides library and library membership services to meet the community’s recreational, social and educational needs.

Percentage of Napier City residents who are active borrowers

(two year average)

36% 37% 36%

New stock items per 1,000 residents - including electronic

>350 >350 >350


Percentage of residents satisfied with the Library Service in the NRB Public Opinion Survey

85% 85% 85%


Total cost per door and web entry $6 $6 $6


Napier Municipal Theatre



TYP Targets 2013/14

TYP Targets 2012/13

Council provides a quality performing arts venue experience for local and visitor use

Visitor and local entries to facility 97,808* 173,000 173,000

Number of hire days for theatrical and cultural events.

140 163 163


Operating cost per entry $11 $12 $12


* Calculation basis for the TYP was inappropriate and has been changed for the Annual Plan.



Hawke's Bay Museum and Art Gallery



TYP Targets 2013/14

TYP Targets 2012/13

Provide a facility to display art, culture and heritage.

Visitor and local entries to Museum & Art Gallery

690,000 690,000 closed

Number of events per annum 12 12 closed

Number of collection items lost or damaged

0 0 closed

Number of exhibitions per annum 12 12 closed


Percentage of residents satisfied with Hawkes Bay Museum and Art Gallery (including Century Theatre) in the NRB Public Opinion Survey

Opening August 2013.Museum not included in

survey.

80% closed


Operating cost per entry $6 $5 closed

Rating cost per rateable property $56 $52 closed

Community Planning



TYP Targets 2013/14

TYP Targets 2012/13

Council offers financial support for community initiatives and to secure key community services through grants and service contracts. Council promotes community safety with an emphasis on implementing crime prevention measures. Council also supports youth initiatives in Napier.

Number of local community events coordinated

50 50 50

Number of youth forums coordinated per annum

0 18 18

Minimum number of community based crime reduction strategies supported

4 4 4

Council regularly liaises with community groups, social services and key community organisations and agencies to share community information and advice

Number of community training and networking meetings facilitated per annum

20 20 20

Satisfaction rating of attendees at workshops

95% 95% 95%

Number of community organisations receiving information via email 4 times per year

120 120 120


Percentage of residents with Safety Day in the NRB Public Opinion Survey

96% 96% 96%

Percentage of residents satisfied with Safety Night in the NRB Public Opinion Survey

61% 61% 61%






Halls



TYP Targets 2013/14

TYP Targets 2012/13

Council provides a sufficient number and range of cultural and social facilities to satisfy the needs of the community.

Number of Halls 6 6 6


Customer satisfaction that the service provided meets acceptable standards.

95% 95% 95%


Average rating cost per Hall $35,883 $42,984 $41,517

Retirement and Rental Housing



TYP Targets 2013/14

TYP Targets 2012/13

Council promotes community safety by providing a safe environment for its tenants in council housing.

Village Coordinators available during normal working hours and on call for emergencies after hours

100% 100% 100%

Inspections per unit per year

• Retirement Flats – fortnightly [welfare]

• Retirement and Rental Flats – annually [maintenance)

100% 100% 100%

100% 100% 100%


Occupancy Rate 97% 97% 97%

Cemeteries



TYP Targets 2013/14

TYP Targets 2012/13

Council provides and maintains a tranquil environment for burial, reflection and placing of memorials to deceased family members. Council also maintains both the burial records and the historical features for all cemeteries managed.

Cemeteries records are well maintained and accessible

Online cemetery records system

available 90% of the time





Cemeteries are well maintained and provide a quiet environment for visitors

< 10 complaints per annum



Interment and Burial spaces are available on request

100% 100% 100%


Percentage of residents satisfied with Cemeteries in the NRB Public Opinion Survey.

80% 80% 80%

Economic and Financial Perception




Public Toilets



TYP Targets 2013/14

TYP Targets 2012/13

To ensure the health of the community through the appropriate disposal of human waste in high traffic community areas, Council provides adequate toilets that are accessible, available and appropriately located for use by the public throughout the community

Public toilets cleaned daily. 100% 100% 100%


Percentage of residents satisfied with Public Toilets in the NRB Public Opinion Survey.

80% 80% 80%



Emergency Management



TYP Targets 2013/14

TYP Targets 2012/13

Council protects communities by coordinating and integrating all activities necessary to build, sustain and improve the capability to mitigate against, prepare for, respond to, and recover from threatened or natural disasters or man-made events.

Public Warning Systems are in place

80% of population

receive warnings

80% of population

receive warnings

80% of population

receive warnings

Population prepared in accordance with national guidelines for an emergency event.

60% of survey respondents

have an emergency

kit


have an emergency

kit


have an emergency

kit


Percentage of residents satisfied with Civil Defence Organisation in the NRB Opinion Survey

75% 75% 75%




Actual 2011/12

$000

Annual Plan 2013/14

$000

TYP 2013/14

$000

TYP/AP 2012/13

$000






1,757 Internal charges and overhead recoveries 2,319 1,923 1,687










115 Surplus (deficit) of operating funding (A - B) 1,089 1,004 892


4,850 Subsidies and grants for capital expenditure 619 619 3,388





4,881 Total sources of capital funding (C) 658 658 3,425




5,997 - to improve the level of service 338 39 -

968 - to replace existing assets 1,306 1,226 1,137

(1,970) Increase (decrease) in reserves 103 397 3,180



(115) Surplus (deficit) of capital funding (C - D) (1,089) (1,004) (892)




Note: The TYP comparives have been adjusted to include the Municipal Theatre Activity in the City Promotion Group instead of the Social and Cultural Group.


ScopeThe City Promotion Group comprises:

City and Business Promotion � Business advisory and facilitation services.

� Business re-focus, company rebuilding

� Business start up facilitation.

� Business Mentoring

� The Enterprise Unit facilitates and assists existing and new businesses in the City to develop, expand and create employment.

� Council promotes Napier via the “Time of Your Life” city marketing programme – an ongoing major media advertising programme aimed at informing national and international audiences about Napier to attract migrants and visitors to Hawke’s Bay.

� Sister City relations – Tomakomai (Japan), Lianyungang (China), Victoria (Canada).

� Grants to key local tourism organisations.

� Art Deco bus service (expected to be operational)

Art Deco is an important tourism feature of the City and Council assists the Art Deco Trust in its promotion of Art Deco in Napier by way of a contract for service. Council also provides assistance for the marketing of the Central Business District.

War Memorial Conference CentreA multi-functional facility located on the beach front along Marine Parade, consisting of a ballroom, an exhibition hall, a gallery and three breakout rooms. This venue is highly suitable for conferences, exhibitions, weddings and other functions. The facility also houses an eternal flame as a memorial to Napier citizens who served and died in the conflicts of the 20th century.

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

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

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

Kennedy Park Top 10 ResortKennedy Park Top 10 Resort is one of the busiest holiday parks in New Zealand set in spacious park like surroundings. Facilities include 91 rooms, 170 powered and non powered sites, as well as a restaurant, bar, conference facility, children’s playground, commercial laundry, service buildings, shop and a pool complex.

Key Issues

Marineland of New ZealandMarineland has been closed to the public by decisions of Council dated 2 July 2008 and 9 December 2010. The future of the remaining animals and birds is a key issue for Napier, along with the future use of the Marineland site.

City Promotion



City and Business Promotion



TYP Targets 2013/14

TYP Targets 2012/13

Council has processes in place to encourage new business enterprises to establish in the City which contribute to the economic wellbeing of the city.

Growth in business numbers To be reported

To be reported

To be reported

Number of visitor nights in commercial accommodation

600,000 600,000 590,000

Cruise ship visitor numbers 108,000 108,000 140,000


Percentage of residents satisfied with Council’s Policies to Promote Job Opportunities in the NRB Public Opinion Survey

80% 80% 80%

Percentage of residents satisfied with Tourism Promotion in the NRB Public Opinion Survey

88% 88% 88%


City GDP per capita To be reported

To be reported

To be reported

War Memorial Conference Centre (WMC)



TYP Targets 2013/14

TYP Targets 2012/13

Provide and manage a conference and function facility.

Qualmark rating maintained. Ratings Maintained

Rating maintained

Rating maintained

Number of National and International hires.

260 290 290

Maintain Qualmark Venue 4 star rating.

Maintain Qualmark Venue 4 star rating.

Rating maintained

Rating maintained

Rating maintained


Rates cost per hire $1,448 $1,267 $1,252

National Aquarium of New Zealand



TYP Targets 2013/14

TYP Targets 2012/13

Provide an aquarium for visitors and local citizens for recreation and education.

Number of visitors. 99,000 99,000 99,000

Days Open 364 364 364


Rating cost per visitor $12 $10 $10


City Promotion continued



Napier i-SITE Visitor Centre



TYP Targets 2013/14

TYP Targets 2012/13

Council provides an i-SITE facility for visitors to Napier and Hawke’s Bay to deliver tourism information and tour and accommodation services to encourage visitors to stay longer and to revisit.

Number of visitors through the centre.

310,000 310,000 310,000

Opening hours per days. Minimum 8 hrs / 364

days

Minimum 8 hrs / 364

days

Minimum 8 hrs / 364

days


I-Site revenue per visitor $2 $2 $2

Rating cost per visitor $1.20 $1.30 $1.20

Par2 MiniGolf



TYP Targets 2013/14

TYP Targets 2012/13

Council provides a Mini Golf facility as a visitor attraction and for local community use.

Visitor Admissions per annum. 39,300 39,500 39,500


Revenue per admission $8 $8 $8

Rating return per visitor $1.09* $0.15 $0.15

Return on Assets 12% 12% 12%

*Visitor baseline now reflects Par2 only

Kennedy Park Top 10 Resort


2013/14 Annual Plan

Targets

2013/14 TYP

Targets

2012/13 TYP

Targets

Council provides this facility to contribute to the promotion of Napier as a visitor destination and to provide, within a single location, a mixture of accommodation types and facilities for visitors.

Room nights per annum. 25,000 25,000 25,000.






Actual 2011/12

$000

Annual Plan 2013/14

$000

TYP 2013/14

$000

TYP/AP 2012/13

$000



160 Targeted rates (other than water by meter charges) 167 171 165













217 Surplus (deficit) of operating funding (A - B) 396 407 332










970 - to meet additional demand - - -

- - to improve the level of service - - -


(1,166) Increase (decrease) in reserves - - -


217 Total application of capital funding (D) 396 407 332

(217) Surplus (deficit) of capital funding (C - D) (396) (407) (332)


850 Group depreciation and amortisation 1,107 1,107 1,108


Note: The TYP comparives have been adjusted to include the Municipal Theatre Activity in the City Promotion Group instead of the Social and Cultural Group.


ScopeThe Planning and Regulatory Group Comprises:

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

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

Building ConsentsThe Council ensures that building development within the City is in accordance with the Building Act 2004 through the process of the Building Consents. Services include counter advisory service, processing Building Consent applications, providing Codes of Compliance and Building Warrants of Fitness, and investigating complaints.

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

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

Parking � Public Parking Spaces: CBD – 2,499; Taradale – 339

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

Key Issues

Environmental HealthLegislation covering the sale of liquor has recently been reviewed and substantial work will be required to institute the Sale and Supply of Alcohol Act 2012 and associated statutes. Promulgation of a Local Alcohol Policy and review of Liquor Control Bylaws are underway. A review of food safety legislation is also underway. Council officers are contributing to this review. If passed by Parliament, this legislation will have additional impact on officer service delivery.

Animal ControlCouncil has good news for responsible dog owners: this plan does not include any increase in total dog registration fees collected during the next ten years. However, those dog owners who fail to take their dog ownership obligations seriously will be faced with increased penalties.

Council’s focus during the next years will be on communicating the importance of being a responsible dog owner within the provisions of the Dog Control Act 1996 and Council’s Dog Control Bylaws, and penalising those dog owners who fail to comply with these requirements.

Council’s ongoing focus of identifying and registering previously unregistered dogs is making it difficult to increase the proportion of licensed dog owners in the City. The addition of many previously non-compliant dog owners has driven down the overall percentage of licensed dog owners. However, the identification and registration of the dogs has been so successful that it is allowing Council to hold registration fees steady for most dog owners.

Planning and Regulatory


ParkingThe evolution of technology in the field of parking services is rapid and is likely to have a large impact in future years. The Parking Department is monitoring the deployment of new forms of technology nationally and will seek to see deployment of proven technologies if they are appropriate to Napier’s situation.

CBD ParkingCapital expenditure is in place for several inner city projects including additional CBD parking, parking for cyclists and motorcyclists, development of walkways from parking facilities to inner city areas and security for major parking facilities.

As demand for parking begins to show signs of increase, Council will seek to increase the availability of parking facilities. An option being pursued as part of current planning is to build multi-level parking facilities to minimise the need for land purchase in the CBD. $7.860 million has been included over the period of this plan for CBD parking projects, funded from parking reserve funds.

Re-development of large sections of the City and deployment of ultra-fast broadband infrastructure is likely to put considerable stress on the stock of available parking over the next two years.


Planning Policy



TYP Targets 2013/14

TYP Targets 2012/13

Council monitors and enforces compliance with legislation intended to protect its citizens from threats to their safety (building quality, animal nuisance).

Ensure the integrity of the District Plan is maintained through strategic reviews.

Report on progress

Report on progress

Report on progress

Manage District Plan modifications within legal requirements.

Report on progress

Report on progress

Report on progress



Regulatory Consents



TYP Targets 2013/14

TYP Targets 2012/13

Council monitors and enforces compliance with legislation intended to protect its citizens from threats to their safety through the resource consent process.

Land Information Memorandums processed within the statutory time frame of 10 working days.

100% 100% 100%

Planning complaints are responded to efficiently and effectively in a manner that is fair to all parties.

Response rate to complaints. All urgent complaints

are investigated within 3 days

All urgent complaints

are investigated

within 3 days.

All urgent complaints

are investigated

within 3 days.

Planning and Regulatory continued


Building Consents



TYP Targets 2013/14

TYP Targets 2012/13

Audit 20% of all buildings (100% over 5 years) requiring building warrants of fitness registered from owners of buildings, subject to code of compliance schedule.

20% 20% 20%

Maintain Building Consent Authority (BCA) accreditation.

Accreditation maintained



Process building consents within 20 working days.

100% 100% 100%

Process code of compliance certificates within 20 working days.

100% 100% 100%


Rates cost per building consent $399 $401 $402

Environmental Health



TYP Targets 2013/14

TYP Targets 2012/13

Council monitors and enforces compliance with legislation intended to protect its citizens from threats to their health (food handling, water quality) and wellbeing (noise and environmental effects).

Proportion of all food premises inspected twice per year (including re-checking) and non-food premises inspected once per year.

100% 100% 100%

Number of water samples taken compared to number of the National Standard.

165% 165% 165%

Requests for swimming pool fencing inspections initiated within 10 working days.

100% 100% 100%


Percentage of residents satisfied with Noise Control in the NRB Public Opinion Survey.

80% 80% 80%






Animal Control



TYP Targets 2013/14

TYP Targets 2012/13

Council monitors and enforces compliance with legislation intended to protect its citizens from threats to their safety (building quality, animal nuisance).

Number of service requests/Number of licensed dogs

42% 42% 43%

Number of licensed dog owners. 20% 20% 20%


Percentage of residents satisfied with Animal Control in the NRB Public Opinion Survey.

75% 75% 75%



Parking Services



TYP Targets 2013/14

TYP Targets 2012/13

Council provides on and off street parking facilities

� to provide sufficient parking to meet reasonable public expectations,

� to ensure the equitable s h a r i n g o f p a r k i n g resources, and

� to ensure safe and effective passenger vehicle flow.

CBD parking occupancy rate (off street and on street).

Less than 75%

Less than 75%

Less than 75%

Taradale parking occupancy rate (off street and on street).

Less than 75%

Less than 75%

Less than 75%


Percentage of residents satisfied with Parking in the Inner City in the NRB Public Opinion Survey.

60% 60% 60%

Percentage of residents satisfied with Parking in the Suburbs in the NRB Public Opinion Survey.

60% 80% 80%



Actual 2011/12

$000

Annual Plan 2013/14

$000

TYP 2013/14

$000

TYP/AP 2012/13

$000


2,226 General rates, uniform annual general charges, rates penalties

2,150 2,210 2,170






1,081 Local authorities fuel tax, fines, infringement fees, and other receipts

1,046 983 981


















55 - to meet additional demand 541 555 -

194 - to improve the level of service - - -


1,021 Increase (decrease) in reserves 661 471 1,133









ScopeThe Property Assets Group comprises:

Lagoon FarmThe 350 hectare farm is situated on the south side of the Ahuriri Estuary. It currently runs cattle, sheep, and has some Kiwi Fruit plantings and cropping leases. A quarter acts as a flood ponding area during unusual and extreme weather events.

As residential or business park development occurs, farming operations will reduce. The farming operation has already been impacted upon by construction of the Prebensen Drive extension, which bisects the farm. As these activities progressively impact on the farm operations, it is likely that Council will cease to operate Lagoon Farm as a commercial farm, and move to long term cropping leases.

Parklands Residential DevelopmentThe Council’s Parklands Residential Development on 120 hectares of former Lagoon Farm land providing 440 residential sections for sale during 2012-2022. This plan includes land for sportsgrounds. The rate of development will be driven by market demand.

Property HoldingsLeasehold Properties:

� Commercial – 80

� Residential – 30

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

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

Key Issues

Lagoon Farm Business ParkCouncil has approval for a District Plan change for the Business Park zone. A concept plan is currently being prepared on staged development of the area.

The land is considered a strategic asset and will remain Council owned as leasehold land.

Funding has been provided in past years and a further $433,000 is included in the Capital Plan for development of this area, funded from the Capital Projects Fund.

Property Assets


Property Assets continued


Lagoon Farm



TYP Targets 2013/14

TYP Targets 2012/13

Net operating position $9,500 $18,689 $13,600

Parklands Residential



TYP Targets 2013/14

TYP Targets 2012/13

Number of Lots created. 58 65 52

Property Holdings



TYP Targets 2013/14

TYP Targets 2012/13

Council maintains and manages both its commercial and leasehold land portfolio in accordance with legislation where applicable and in accordance with individual lease agreements.

All freeholding requests handled in accordance with Council policy.

100% 100% 100%

Buildings comply with Building Act and Health & Safety Act and hold current warrant of fitness certificates

100% 100% 100%




Property Assets continued

Actual 2011/12

$000

Annual Plan 2013/14

$000

TYP 2013/14

$000

TYP/AP 2012/13

$000






1,575 Internal charges and overhead recoveries 1,610 1,636 1,581

3 Interest and dividends from investments 2 2 2











- Subsidies and grants for capital expenditure 350 - -



1,218 Gross proceeds from sale of assets 6,784 6,784 186


1,218 Total sources of capital funding (C) 7,134 6,784 186



- - to meet additional demand 433 444 429

547 - to improve the level of service 3,850 - -

200 - to replace existing assets - - -

5,281 Increase (decrease) in reserves 8,716 12,575 5,642









Support Units

ScopeCouncil has a number of cost centres of a corporate and support nature. These cost centres provide the technical and support services necessary for the function of Council’s activities

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

Support Units include the Services Depot units which provide the support for the Utilities and Reserves divisions, including a store and mechanical workshop. Design Services Unit provides scientific and technical services to other Council departments ensuring the community receives engineering services of maximum quality and safety.


Activities and Activity GroupsThe main elements of the Council’s services offered to the Napier community are divided into Activities. These Activities are described in detail in the Activity Groups section of the Plan including the performance measures and targets and the financial budgets for 2013/14

Allocation of OverheadsThe Council’s support units provide “internal” or “support” services to the service delivery business units. The costs of these internal services are allocated across the other business units either as “overheads” based on the support each output receives or recharged directly on a usage basis. This ensures that the true cost of providing specific services to the public is reflected in all budget figures.

Carrying Amount The net amount at which an asset or liability is recognised in the balance sheet.

Community OutcomesThese are goals determined by the community that it believes are important for its present and future economic, social, cultural and environmental wellbeing.

DerecognitionWhen an asset value is no longer recorded in the balance sheet it has been derecognized, e.g. when an asset is sold it is no longer recorded on the balance sheet as from the date of the sale.

Derivative A financial instrument that has the effect of transferring between two or more parties to the instrument one or more risks inherent in an underlying asset. The value of the derivative is determined by fluctuations in the underlying asset. The most common underlying assets include currencies, interest rates, shares, bonds, commodities and market indexes.

Financial ContributionsThe share of the cost of new developments and subdivisions met by developers.

ImpairmentThe amount by which the carrying amount of an asset exceeds its recoverable amount.

Infrastructural AssetsStationary systems forming a network and serving whole communities, where the system as a whole is intended to be maintained indefinitely at a particular level of service potential by the continuing replacement and refurbishment of its components. The network may include normally recognised ordinary assets as components. These include roads, water, sewerage and stormwater systems.

Infrastructural Asset RenewalA statutory requirement to provide for maintenance of infrastructural assets in serviceable condition in perpetuity. The amount required is calculated from asset management plans, and “smoothed” to provide a relatively even flow of funds from year to year.

Levels of ServiceA measure of the quality and quantity of services delivered. They are determined by customer expectations, legislative requirements and affordability.

Non Targeted RateRates other than targeted rates. These are general rates and Uniform Annual General Charges. These fund a wide range of activities that are considered to be of general benefit to the community.

NRB Public Opinion Survey (CommunitrakTM)A wide ranging public opinion survey prepared for the Council by the National Research Bureau Ltd. The survey is of public perceptions and interpretations of Council services and representation with comparisons to National and Peer Group averages.

Prospective Financial StatementsRefers to future-oriented financial statements.

Targeted RateA rate set under section 16 or 19 of the Local Government (Rating) Act 2002 to fund a specific function or service provided. It may be charged as a fixed dollar amount per rating unit, a fixed charge per factor, such as property value, or a differential charge per factor.

Glossary of Terms

napier city council annual plan 2013/2014

Documents

statement of changes

statement of income

year plan

capital plan

statement of cash flows

city council annual

hastings streetprivate

local government act