Pre-election report 2019 - Tauranga City Council
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Pre-election report 2019 TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 1
Kia ora Tauranga! Mai te awa o Kaituna, ki te awa o Wairoa, mai ngā Kaimai ki Te Awanui – ko te kaunihera o Tauranga Moana tēnei e karanga atu ki te hapori katoa. Tū mai ōu pōti hei whiriwhiri i ngā kaimangai tika mō to tātou tāone, mō te ao hurihuri e haere mai nei. Hello Tauranga! From the banks of the Kaituna to the waters of the Wairoa, from the Kaimai Range to Tauranga Harbour – this is Tauranga City Council calling out to the entire community. Stand up so your vote is counted in selecting the very best representatives for our city to address the challenges of our ever-changing world. TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 2
It’s election
year in 2019
Local body elections are held every
three years. This year, they will be
held on 12 October 2019.
Key dates
Now Check your enrolment to vote at www.elections.nz. Consider standing for Council
19 July Candidate nominations open. Electoral rolls open for inspection at council offices
16 August Last day to enrol to vote. Candidate nominations close at noon
21 August Candidates’ names publicised by electoral officers
20-25 September Voting papers delivered to homes
12 October Polling day – ballot boxes close at noon
17-23 October Official results declared Do you want to
represent your
community?
If so, consider standing as a
candidate to help shape our
city’s future.
TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 3Ward boundaries
Tauranga is split into three wards. Our 11 elected members include:
• One mayor
• Four councillors at large (city-wide)
• Two councillors for the Te Papa/Welcome Bay ward
• Two councillors for the Otumoetai/Pyes Pa ward
• Two councillors for the Mount Maunganui/Papamoa ward
The 2019 election is your chance to help decide who will fill these positions.
You can see the ward boundaries in the map below, or you can go to the Electoral Commission’s
website and follow the prompts to check your enrolment details.
Matakana Island
Key
Moturiki Island
Mauao Tauranga City Council boundary
Mount Approximate suburb boundaries
Maunganui
Ward boundaries
Otumoetai – Pyes Pa Ward
Sulphur Omanu
Matua Point Mount Maunganui – Papamoa Ward
Otumoetai
Te Papa – Welcome Bay Ward
ue
llev
Tauranga Arataki
Be
city centre
Brookfield
Bethlehem Judea
Matapihi N
Tauranga
South Kairua Papamoa Beach
Gate Pa u
tap
ga Waita
o
un
ale
Ma
riv
Wa
Me
irakei
Greerton Poike
Tauriko
Welcome Bay
Hairini Te Tumu
Pyes Pa Oropi Papamoa Hills
Oman
awa
TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 4Contents About this report 6 From the chief executive 7 About Tauranga 8 Tracking our progress 11 Our organisational challenges and risks 12 How we are responding to these challenges 14 Key initiatives and investments for the future 15 Compliance with the financial strategy 20 Financial position 21 Funding impact statements 23 Further useful resources 24 TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 5
About this report
The Local Government Act 2002 requires the chief executive of every council to prepare a pre-election report before
each local government election. The goal is to provide information to the community and prospective candidates, to
enable an informed election debate around the issues and opportunities facing each council.
This report provides financial information for the three years preceding the election, this financial year (2019/20), and
the three years following the election. It is based on the information contained in Tauranga City Council’s audited
annual reports for 2016/17 and 2017/18, the audited Long Term Plan 2018-2028 (LTP), and the un-audited Annual Plan
2019/20. Financial information for the 2018/19 year is based on the best available estimates at the time of publication.
This report also sets out information about the major projects in progress, or planned over these years, and their relation
to the four key priority areas identified in our LTP. These priorities are:
1 Land supply and urban form
2 Connectivity
3 Resilience to environmental changes and natural disasters
4 Increased environmental standards.
This should help readers consider Council’s performance to date, and the major priorities for the next Council’s term of office.
For more information on Tauranga City Council, its activities and financial information, please visit our website at
www.tauranga.govt.nz and refer to the Long Term Plan 2018-2028, or the latest annual plan for 2019/20.
TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 6From the chief executive
E ngā mana, e ngā reo, e ngā karangaranga o Tauranga Moana. Anei te
rīpoata e pā ana te kōwhiringa pōti mō tēnei tau. Hei ārahi, hei tautoko, hei
awhi hoki i ngā tangāta katoa.
Welcome to Tauranga City Council’s Pre-Election Report The main issue highlighted in our 2019/20 annual plan
2019. consultation earlier this year was how we position
ourselves financially for future years. New information
The purpose of this report is to provide information to
has identified potential financial issues in a few years’
voters and election candidates before the 2019 local
time, partly due to a $100 million increase in our capital
government elections.
programme over the remaining nine years of the current
The Local Government Act 2002 requires the council to LTP. This increase, coupled with a reduction in proposed
produce this report to promote clarity about our financial revenue, means that if we were to deliver everything
position and projections for the future. proposed, we would likely exceed the debt limit set-
out in our financial strategy by 2022/23. The incoming
The report focuses on what Council has achieved in the
Council will need to consider to what extent we should
past three years, our financial position, the main projects
start addressing that situation in the short- to medium-
we aim to undertake in the next three years, and the
term, and how we should do that.
associated impact on our finances.
Issues the newly-elected Council will also need to
Tauranga continues to grow quickly as people move here
consider include:
from other regions, attracted by the lifestyle options our
city offers. • The level of rate rises in future years (our current LTP
budgets for an 8.2% rates increase in 2020-21)
In general, well-managed growth is good. It creates jobs,
• Reducing the capital expenditure proposed in the
increases economic activity and can improve efficiency.
current LTP
However, it also increases the cost of providing roads,
water, parks, libraries and most of the other services and • Alternative infrastructure funding and financing models
infrastructure that a modern city requires to meet the now being developed with central government, which
needs of its residents. may help keep Council’s rates and debt levels to
sustainable levels
To tackle those long-term challenges, we are focusing
• Maintaining our current levels of service.
our efforts on the four key priority areas that were
identified and agreed with the community in our Long We will soon be starting conversations with communities
Term Plan 2018-2028 (LTP). These are: throughout the city about how they see their future. The
council is committed to working alongside and engaging
• Land supply and urban form – making new land
with our communities to ensure we continue meeting
available for housing and enabling more housing to be
their needs and expectations.
developed on existing land
• Connectivity – how we keep our city connected and Ngā mihi mahana
moving, ensuring efficient travel through roads, cycle
ways, footpaths and parking improvements
• Resilience to environmental changes and natural
disasters – recognising the risks to our properties
and infrastructure from changes in groundwater
levels, flooding frequency, sea level rise, tsunamis and Marty Grenfell
earthquakes Chief Executive
• Increased environmental standards – aiming for
improved water quality in our streams, rivers and
oceans.
TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 7About Tauranga
Tauranga is New Zealand’s fifth-largest city and is growing fast.
Here’s a snapshot of our city, its growth, its economy, and a look at the years ahead.
In the past 30 years, Tauranga’s population has grown by more than 70,000 people. Currently, 135,000 people call
Tauranga home. Our city is projected to grow to almost 200,000 people by 2063.
Growing population, growing city SmartGrowth projections
117,280 135,000 195,852
2013 census 2018 estimate 2063 projection
This means that many new ratepayers are joining us every year. The rating base growth over the next three years is
assumed to align with SmartGrowth projections.
Total rating units (ratepayers) each year SmartGrowth projections
54,901 59,144 60,226 61,278
2019/20 2020/21 2021/22 2022/23
What is SmartGrowth?
SmartGrowth is a partnership between Tauranga City Council, Western Bay of Plenty District Council, Bay of Plenty
Regional Council and local tangata whenua. The New Zealand Transport Agency and Bay of Plenty District Health
Board are also involved. SmartGrowth sets the strategic vision and direction for managing growth in the western Bay of
Plenty sub-region. The partnership initiative is underpinned by Treaty of Waitangi principles.
TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 8Residential building consents for new builds 2014-2019
Since 2014, there has been an increase in people building new houses in Tauranga. Growth is still occurring, but the
number of consents has eased off over the past two years.
Residential building consents for new builds 2014-2019
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
Development contributions 2014-2019
Developers and new-home builders provide money to pay for the additional infrastructure required by a growing
population. In line with the reduction in new residential building, the amount of development contributions received has
declined from a high of $36 million in 2016/17 to $27 million in 2018/19. Local development contributions are received at
the time of subdivision, while citywide development contributions are received at the time a building consent is issued.
Actual development contributions revenue 2014-2019
$40m
$35m
$30m
$25m
$20m
$15m
$10m
$5m
$0
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
Citywide development contributions Local development contributions
TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 9Jobs and economy
Infometrics 2018 economic profile
Our economy is healthy
4.8% vs 3.2%
annual GDP national
growth average
and we have more 5.0% vs 3.0%
job opportunities annual growth in nationally
employment
meaning less 4.4% vs 4.6%
unemployment for Tauranga nationwide
but people are earning less $56,450 vs $60,891
than the national average mean annual earnings
Building and running the city
Council owns $4.3 billion worth This compares with our net Rates will cover $179 million of
of physical assets (facilities, debt, which totalled $441 the operational costs of running
infrastructure, property etc). million, as at 30 June 2019. the city in 2019/20.
We’ll spend $187 million
(capital expenditure excluding Decisions are made by your They’re implemented by
vested assets) on infrastructure 11 elected members: one Council’s approximately 663
and assets in 2019/20. mayor and 10 councillors. staff (full-time equivalent).
TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 10Tracking our progress
What we have delivered/undertaken in recent years
We have focused on key projects in the past three years Vessel Works
to help meet the requirements of a growing city and
Vessel Works is an $11.5 million project to create a
support associated growth in our economy.
purpose-built marine servicing hub in the heart of Tauranga.
These include:
The council-owned Vessel Works facilities now include
• completion of the Southern Pipeline (for wastewater) a 6300m2, post-tensioned hardstand – a pavement able
to support loads of 500 tonnes – which set a record for
• building a new, larger airport terminal
the largest outdoor concrete pour ever attempted in the
• improving people’s travel options
Bay of Plenty.
• development of our marine precinct
A travel-lift named Hikinui (‘big lift’) arrived in parts from
• delivering high-performance sports opportunities
Italy in March 2018. The $2 million lift was funded by the
• introduction of kerbside glass collection Bay of Plenty Regional Council’s Regional Infrastructure
Fund, which provided $5 million to help pay for new
Southern Pipeline features in the precinct.
The Southern Pipeline is the city’s largest and most
complicated wastewater project to date, taking Home of high performance sports
wastewater from the Maleme Street pump station to the Since January 2016, Bay Oval has hosted one-day
Te Maunga treatment plant. and Twenty20 international cricket matches, with the
The Southern Pipeline project cost $107 million and was Black Caps playing seven of the top-10 cricket nations
completed in 2018/19, after 15 years of work. It enables in the world.
the continuing growth of the southern and western areas The ground has become one of the top cricket venues
of Tauranga, and Omokoroa in the Western Bay. in the country, thanks to the Bay Oval Trust’s vision and
council’s investment in events and new LED floodlights.
Tauranga Airport
Tauranga has also proven to be a destination for high-
We have completed a $14 million upgrade of the
performance rugby. The University of Waikato Adams
Tauranga Airport terminal.
Centre for High Performance has become the home
The upgrade more than doubles the floor area of the of rugby sevens, with the national men’s and women’s
terminal to 3800 square metres, making room for a teams training daily at Blake Park and at the centre.
larger lounge, new check-in area and facilities, and a
These developments showcase the city’s commitment
bigger cafe.
to high performance sport and cement Tauranga’s
Air New Zealand has worked closely with the airport on international reputation as a major sporting event
the terminal redevelopment programme over the past destination.
24 months.
Kerbside glass collection
The expansion will accommodate an increase in Air
New Zealand passenger volumes and provide for other We introduced an interim kerbside glass collection service
regional network operators’ needs. Tauranga is an in October 2018, after Tauranga’s private collection
important port on the domestic network, with business providers stopped accepting glass for recycling.
and leisure traveller demand for flights into and out of the Nearly 2650 tonnes of glass had been diverted from
region continuing to grow. landfill in the period to June 2019, with all of this glass
recycled at the O-I Glass NZ plant in Auckland.
TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 11Our organisational challenges and risks
As the consenting agent, Council assumed a level of
Capital expenditure delivery responsibility. We bought all 21 properties late last year,
To meet the city’s needs and challenges, our providing certainty to homeowners after the liquidation of
organisation has had to review the way it approaches the developer. We also started investigations to find out
capital expenditure. why the problems occurred, and especially to identify
any failures on our part.
Council’s large capital programme comes at a time
when the city and the country as a whole needs We paid approximately $14 million to settle with the
improvements to core infrastructure. This means that we homeowners and received an insurance pay-out of
are experiencing delays and difficulty in obtaining the approximately $10.5 million, leaving a difference of
resources we need, and also that costs are significantly approximately $3.5 million (including GST).
higher than they have been in the past.
The intent is to recover as much of that shortfall as
possible through the sale of the sites and remaining
Managing and meeting community dwellings.
expectations
The weathertightness of new builds continues to be
Some council projects have drawn criticism from many a challenge. Council consents buildings and is one of
people in the community, who believe they have not the agencies likely to be identified as responsible when
delivered the expected outcomes. new buildings experience weathertightness issues. Our
responsibility for helping compensate homeowners for
The following projects have been independently reviewed,
leaky buildings has seen council pay out $4.4 million,
with the findings reported back to Council:
including legal costs, or make provisions for $17.3 million
• Greerton Village roading improvements in the last three years, leaving a difference of $12.9 million.
• Development of Te Papa o ngā Manu Porotakataka
(former Phoenix Carpark) Land supply challenges
• Redevelopment of Kulim Park
Ensuring there is sufficient land and associated
• Council’s role in the Mount Maunganui Surf Club’s infrastructure to support residential growth is a high
new clubrooms priority for Tauranga. In the short term (1-3 years), there
• A high-level review of current transport-related is an under-supply of around 1000 houses. This is
projects, to ensure alignment with the programme of forecast to increase in the medium term, until new land is
works and future needs. zoned and available for development.
Council found several common issues in these The impending supply shortage has been discussed
projects relating to delivery and engagement, and with central government ministers, and officials from
has received recommendations for organisational the Ministry of Housing and Urban Development and
improvements. Action is being taken to implement those the New Zealand Transport Agency (NZTA). There is
recommendations. a willingness to work collaboratively to address these
matters and a need to ensure that responses align with
Risks associated with new central government’s broader urban growth agenda.
buildings and development Existing rules for suburban residential, commercial and
city living zones are inconsistent with emerging land
Council consented 5660 new homes between 2015/16
use strategies and are not achieving the outcomes
and 2018/19.
the city needs for its urban and suburban areas. To
Among these were 21 properties at the Bella address that, Council is working on planning initiatives,
Vista subdivision at the Lakes. In early 2018, plan change proposals and technical planning studies.
Bella Vista residents evacuated their homes after This has identified the Te Papa peninsula – between
a comprehensive assessment by geotechnical, Sulphur Point and Greerton – as an appropriate area for
structural and compliance experts raised concerns increased housing density, improved public amenities
about the safety of the properties. and transportation services.
TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 12We need to be able to respond to events while
Connectivity challenges continuing to provide critical services, ensuring vital
More people are trying to move around our city, and this infrastructure (such as water mains, roads, community
causes challenges such as traffic congestion. Council facilities and bridges) is not affected. Climate change
therefore needs to find better ways for people and goods will affect Tauranga in several ways. For example, the
to be moved around the city. Tauranga Moana harbour margins and open coastal
areas are likely to be affected by erosion, sea-level rise,
While growth is affecting all types of infrastructure, the
heavier rain, and a higher groundwater table.
most visible impacts for most residents relate to the
transport network, with traffic congestion highlighted in As our understanding of natural disasters increases,
submissions to our Annual Plan 2019/20. the resilience of new and existing developments and
infrastructure becomes clearer. However, it can be costly
Council understands the importance of cars, and
to upgrade assets and build new ones that meet higher
significant investment in a car-based transport network
standards of resilience. This presents a challenge for our
has occurred in Tauranga during the past 25 years.
council and for the city, especially while our population is
Unfortunately, investment in other types of transport growing rapidly.
has fallen well behind. The Government has directed
that transport projects focusing mostly on cars will not Increased environmental standards
be looked upon favourably for future funding. The focus
for the Government and councils across New Zealand, Our natural environment is our greatest asset and the
including Tauranga, is to invest more in public transport, way we treat it should therefore be at the forefront of
encourage more walking and cycling, and reduce the every decision we make.
impact of transport on the environment. These priorities The Government is addressing environmental standards
are reflected in the type of projects included in Council’s through regulation and legislation. This affects what
Long Term Plan 2018-28, and in the formation of the councils do, and how they do it. It also increases
Urban Form and Transport Initiative (UFTI). the costs of planning, consenting and building new
infrastructure, as well as our day-to-day operations.
Transport funding challenges The introduction of new standards – and the strengthening
Local authorities receive a subsidy from Government of existing standards by central government – has shifted
for transport projects which meet certain criteria. For more responsibilities to local government.
Tauranga, that subsidy is 51% of the capital cost of
We face challenges in aligning the city’s goals for urban
transport projects. Councils have been advised that
development capacity with improved standards set out
there is not enough Government funding in the 2018-
in the Government’s National Policy Statements.
21 period for all transport projects around the country.
This means some projects cannot proceed - some have
been cancelled or deferred, while others will need more Council accommodation challenges
ratepayer funding.
After the evacuation of a portion of Council’s Willow
Where appropriate, Council and NZTA will still invest in Street building in 2014, we have been operating out of
new roads. However, this investment will aim to provide three separate offices in the city centre. Most staff work
a balanced transport network that gives people a range at our Cameron Road building, with others at offices
of choices for moving around the city. in Spring Street and Willow Street. The geographical
spread of the three premises affects our culture and
efficiency. Staff travel frequently between buildings,
Resilience to environmental resulting in lost productivity. Internal communication is
changes and natural disasters also affected.
Tauranga is exposed to natural hazards including The community is also inconvenienced by the need to
earthquakes, sea-level rise, tsunamis, flooding, severe meet with staff at different sites. In addition, the costs
weather and land slippage. of maintaining the Willow Street building (particularly
A lot of work needs to be done to understand these air conditioning) are high because of its age. Work is
hazards. As our understanding evolves, it will affect underway to address these issues in the short term
the way we plan new urban areas, and the type of through a possible consolidation of Council premises.
development and infrastructure we need in existing areas.
TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 13How we are responding to these challenges
We are reviewing the way we work with the community
and deliver projects, and are also reviewing our business
Urban Form and Transport Initiative
structure. These reviews have already helped us improve (UFTI)
our practices. This project aims to develop a long-term, integrated
masterplan for urban development and transport that
In January 2019, the chief executive decided on a new
is aligned with the Government’s new transport policy
organisation structure to deliver high-quality services and
statement and urban growth agenda.
facilities that meet the needs of the city, while addressing
future growth-related challenges. The objective was to UFTI will bring a coordinated approach to many projects
create a structure that: already underway in the western Bay of Plenty. Three
of these projects have been identified as critical to
• is aligned with Council’s strategic priorities
unlocking near-term housing supply and alleviating
• promotes the effective and efficient delivery of basic
congestion. These relate to improving the roading
services and capital projects
network at Tauriko (including State Highway 29), State
• is well-positioned to plan for and manage the city’s Highway 2 from Tauranga to Omokoroa (including the
rapid growth Tauranga Northern Link), and the Hewletts Road area
• has clear lines of accountability for the delivery of near the Port of Tauranga.
community outcomes
• will help re-build the council’s reputation with the
community.
Other improvements that Council is undertaking as a
result of recent reviews are:
• an organisational culture-change programme aimed
at putting the community at the forefront of projects
and services
• the development of an ‘infrastructure project lifecycle’
process, to ensure effective project reviews, at
appropriate milestones, with relevant stakeholders
• linking cost estimates and scope reviews to consultation
• an independent review of the communications and
engagement functions within Council.
TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 14Key initiatives and investments for the future
Major projects 2019/20 – 2022/23
We’re working to manage Tauranga’s growth into the future by providing and maintaining infrastructure for our growing
city, delivering efficient services to our community, and investing in the city’s future.
Growth areas
Tauranga and the wider western Bay of Plenty sub-region will only be able to resolve the short- and medium-term
housing supply challenges by enabling large-scale projects at Te Tumu and Tauriko West. However, both these projects
face significant delays and risks.
Urban growth area Potential number of dwellings Estimated timeframe for development
Te Tumu 7,700 2023
Tauriko West 3,000 2023
Structure planning is underway for the Te Tumu and Tauriko West urban growth areas.
Council is working to finish all the technical reports required to prepare and finish these planning requirements.
Preparation of the Resource Management Act 1991 (RMA) planning framework is also underway.
Intensification in Te Papa Climate change action
The intention is to provide for the development of a variety We have been focusing on two key areas for climate
of housing types across the city, including duplexes and change action: adaptation and mitigation.
low-rise comprehensive developments (e.g. terraced
Climate change mitigation
housing), with a medium-rise comprehensive development
Council is working on an updated energy management
framework applying to the Te Papa peninsula.
plan and policy, and is producing a greenhouse gas
The intensification plan changes (Plan Change 26, 28 management plan. Both aim to reduce our greenhouse
and 29) are still in the early stage of development. We are gas footprint. An energy and carbon manager has been
testing the potential City Plan responses relating to infill employed to manage this programme of work. The
and intensification, which will involve a preliminary round plans will be combined with climate change strategic
of targeted engagement with key stakeholders, including objectives to be considered for inclusion in Council’s
landowners, developers, interested community groups and Long-term Plan 2021-31.
tangata whenua. The current timeline would see plan-
Adaptation planning
change proposals being considered by Council early in
Council has been researching, mapping, planning for,
2020, followed by a full community consultation process.
and informing the community about natural hazards for
over 20 years. Since 2016, Council has been working
Waste collection
with Western Bay of Plenty District Council and Bay
The introduction of a full, council-led kerbside collection of Plenty Regional Council to understand how natural
service is planned from July 2021. This service has been hazards could affect our wider community. This covers
provided by the private sector for many years (apart from inner harbour erosion and inner harbour inundation.
the rubbish bag collection service organised by council Council has also started a resilience project which aims
and contracted to Waste Management Limited). to provide for robust infrastructure and informed land
The planned service is likely to include recycling, food use planning. This will help us understand the city’s
scraps, glass and rubbish collections. The collected resilience to natural hazards. A resilience specialist has
waste will be processed with the primary goal of been employed to manage this programme of work.
minimising the volumes sent to landfill. The transfer
stations and waste processing facilities at Te Maunga
and Maleme Street form part of this solution.
TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 15Capital projects
As part of the Annual Plan 2019/20 process, council We are considering options to keep our debt levels
has reviewed the costs of delivering key capital projects within the agreed limit, including conducting a review of
identified in the Long Term Plan 2018-28 (LTP). Pricing our operational and capital expenditure programme and
increases and more detailed design for some projects resetting our capital works programme during the next
mean that the estimated cost of the capital programme LTP process.
has increased by more than $100m over the remaining
Here’s an overview of the major projects that are in
years of the LTP. This increase, coupled with a reduction
progress or planned for this year (2019/20), and for the
in proposed revenue, means that if we were to deliver
three years after that.
everything proposed in the LTP we would exceed the
debt limit in our financial strategy by 2022/23.
Capital program by year
$300m
G $93m
C $135m
$200m
A $113m E $112m
$100m H $148m
B $92m D $107m
F $89m
$33m $36m $32m $36m
$0
2020 2021 2022 2023
Renewals Level of service Growth
A This includes: E This includes:
Waiāri water systems: $34m Waiāri water systems: $4m
Ta Maunga wastewater systems: $14m Te Maunga wastewater systems: $16
Domain Rd upgrade: $7m Papamoa East interchange: $3
B This includes: F This includes:
Harington St Transport Hub: $11m Tauranga Cycle Plan: $13m
Arataki multi-modal: $3m 15th Ave, Fraser St and Turret Rd upgrade: $7m
Totara St capacity improvements: $1m Infrastructure resilience spend: $9m
Memorial Pool redevelopment: $6m
C This includes:
Waiāri water systems: $38m
G This includes:
Te Maunga wastewater systems: $15m Te Maunga wastewater systems: $12m
Pamamoa East interchange: $7m Eastern reservoir: $4m
Wairoa Reserve development: $4m
D This includes:
New central city library: $20m
H This includes:
Tauranga Cycle Plan: $7m Memorial Pool redevelopment: $28m
Totara St capacity improvements: $4m Infrastructure resilience spend: $24m
15th Ave, Fraser St and Turret Rd upgrade: $4m Tauranga Cycle Plan: $13m
Tsunami evacuation projects: $4m
TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 16Water supply Civic facilities
Our water supply system is fast running out of spare A new civic administration building is one of four main
capacity as water demand grows across the city and projects included in the 2018-28 LTP for potential
the western Bay of Plenty. We are building a new $145 development on, or near, the Willow Street site.
million Waiāri water-processing plant and associated
The other projects are a new library building, a hotel, and
infrastructure for increased supply, and building new
an open public space.
reservoirs to increase our storage capacity. The new
treatment plant will serve the future needs of Tauranga, In July 2018, Council signed a partnering agreement with
add resilience to the city’s water supply and provide Willis Bond and Company (Tauranga) Limited, setting out
backup for Western Bay of Plenty District Council’s Te the process under which these projects would progress.
Puke water supply, if required. The agreement recognises the potential for developing a
museum and a performance venue, but neither of these
We’re aiming to complete the Waiāri project by 2021 but,
are provided for in the LTP.
until then, our existing water infrastructure will likely come
under increasing pressure during dry summer periods. The new library building was expected to progress first,
but during the development of the Annual Plan 2019-20
Cycleways it was decided to defer that project.
Council recognises the importance of prioritising a As part of the agreement with Willis Bond, work has
cycle network that lets people bike safely around our started on concept plans for a new civic administration
city. The development of the network will be guided building. It is likely that the new Council will make
by the outcomes of engagement with the community decisions on the civic administration building proposal
and key stakeholders, and by the wider needs of the early in the new triennium.
transport network.
The main council projects and estimated costs through
The priority will be on investment in cycle routes and to 2022/23 are summarised in the table overleaf.
projects that connect key locations while getting more
people to ride their bikes to work, school and tertiary Revised future years’ budgets for 2021-23 reflect the
locations. revision of costs for key projects and timing adjustments,
primarily where projects have been deferred from 2019
City centre and 2020. A process of reprioritisation and timing
revisions will be undertaken before the Annual Plan
Our city centre is in transition, with several major
2020-21 and LTP 2021-31.
developments underway or recently completed,
including the new Durham Street university campus.
We are undertaking a series of projects to improve
streetscapes and other spaces in the city centre. These
will support more people coming to and staying in the
city centre.
The Durham Street and Durham Lane upgrades will be
completed in October 2019. Other projects currently
in the design phase include creating a permanent ‘Eat
Street’ precinct on lower Wharf Street, upgrades to
the area surrounding the Farmers redevelopment on
Elizabeth Street, and an upgrade to the southern end of
The Strand extension, where the Bay of Plenty Regional
Council will establish marine facilities to support its
upgraded headquarters. The city centre projects
will support these other developments and will be
coordinated with infrastructure capacity improvements
or renewals programmed for the city centre.
TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 17Existing
Future years
Annual Plan LTP LTP LTP estimate
Project Name
2019/20** 2020/21*** 2021/22*** 2022/23*** 2021-2023
including
inflation*
GROWTH PROJECTS
Domain Road Upgrade $6,815,099 $4,006,077
Papamoa East Interchange $5,000,000 $7,329,570 $2,774,265 $46,324,575
SH2 /Welcome Bay Road Trunk Main (Poplar
$10,116,200 $5,618,478 $9,044,104 $23,895,777
Lane to Eastern Reservoir) (Water Supply)
Te Maunga Wastewater Treatment Plant
$15,060,686 $15,496,495 $11,082,193 $7,598,404 $62,685,164
Upgrades - Growth Component
Te Tumu Growth Area - Growth Component $33,174,913 $1,286,815 $1,316,412 $17,087,858
Waiāri Project - Development of Tauranga's
$23,822,600 $32,315,843 $4,024,928 $80,815,160
third water scheme
Wairakei Stormwater Projects $2,644,080 $12,888,368 $43,368,749
Wairoa Active Reserve Development -
$150,000 $3,288,549 $3,756,355 $4,086,825 $6,827,814
Growth Component
Wastewater Pump Stations Papamoa East
$850,000 $1,179,021 $11,917,657 $4,761,305 $17,269,985
and Wairakei
LEVEL OF SERVICE (LOS) PROJECTS
15th Avenue, Turret Road and Fraser Street
$1,600,000 $1,732,224 $7,324,060 $1,135,229 $12,386,732
Upgrades
Bay Venues - Memorial Pool
$5,548,530 $28,380,731 $31,870,000
Redevelopment
Civic Rebuild $13,121,372 $28,947,412 $1,071,734 $454,092 $49,881,438
Cycle Action Plan Implementation $900,000 $7,217,601 $12,946,569 $13,244,341 $37,261,686
Infrastructure Resilience Project $8,877,648 $23,839,814 $31,782,000
Stormwater Recovery Programme Bulk
$6,246,000 $6,495,840 $6,389,658
Fund
Te Maunga Wastewater Treatment Plant
$1,000,000 $3,843,372 $6,968,500
Upgrades - LOS Component
Te Tumu Growth Area - LOS Component $1,720,000 $1,438,287 $1,523,757
Totara Street Capacity Improvements - Hull
$1,600,000 $1,732,224 $7,324,060 $1,135,229 $12,386,732
Road to Hewletts Road
Wairoa Active Reserve Development - LOS
$5,548,530 $28,380,731 $31,870,000
Component
*Annual Plan 2019/20 and revised future years’ budgets for the financial year 2021-23 reflects the revision of costs in key projects
and timing adjustments, primarily where projects have been deferred from 2019 and 2020. A process of reprioritisation and revision to
timing will be undertaken before the Annual Plan 2020/21 and the 2021-2031 LTP.
**The financial information for 2019/20 is taken from the Annual Plan 2019/20. This information is unaudited.
***The LTP 2020-2023 figures are taken from the 2018-28 Long Term Plan (LTP) and include inflation. This information was audited
when the 2018-28 LTP was adopted.
TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 18Growth vs non-growth debt funding
$1,000
$800
$600
Millions
$400
$200
$0
2019/2020 2020/2021 2021/2022 2022/2023
Annual Plan Long Term Plan Long Term Plan Long Term Plan
Growth debt HIF debt Rate funded debt User fees debt
Capital expenditure is funded through Council borrowing or subsidies. The cost of Council borrowings for the Annual
Plan 2019/20 is funded 57% from rates, 35% from development contributions and the Housing Infrastructure Fund (HIF)
and 8% through user fees (e.g. airport and parking).
Council’s debt arises mainly from funding our capital works programme. The Council has a policy that growth (in
population) should pay the costs of providing for the infrastructure required to support that growth (i.e. the capital costs
of the infrastructure required).
Therefore, a portion of the debt is funded by growth revenue (development contributions), while the remainder is funded
through rates and user fees. Rates-funded debt is expected to be about 57% of total debt by the end of next year.
TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 19Compliance with the financial strategy
The primary financial strategy for Tauranga City Council revolves around providing the best value for ratepayers, based
on the following key performance indicators. Council performance against each indicator for the past three years is
shown below.
2016/17 2017/18 2018/19
2016/17 2017/18 2018/19
Limit or Limit or Limit or
Actual Actual Actual
Target Target Target
RATES LIMIT
Rates amount* $126.3m $126.50 $134.9m $132m $167.3m* $167.8m
Rates increase after growth**
2.6% 3.9% 3.9% 4.0% 5.4%*** 5.8%
including water by meter
BORROWING LIMITS
Net debt at year end $301m $500m 349m $500m $441m N/A*****
Debt to revenue ratio**** 151% 225% 167% 225% 176% 250%
Net interest expense % of
8.0% 20% 8.1% 20% 7.3% 20%
operating revenue
Net interest expense % of rates
13.0% 25% 11.0% 25% 11% 25%
revenue
Favourable Unfavourable
*excluding water by meter revenue against limits in 2016/17 and 2017/18. For 2019, limits are calculated on total rates, including water
by meter of $21.1m.
**growth factors of 2.5% in 2017, 3.1% in 2018, 2.6% in 2019
***includes cost for new kerbside glass service
****figure excludes Bay Venues Ltd revenue
*****The 2015-25 LTP had an absolute limit on borrowing. However, in the 2018-28 LTP the absolute limit on debt was dropped to
recognise that the rapid growth of the city means substantial additional investment and that associated debt will occur. The prudent
limit on this debt will be the limit of revenue as reflected through the debt to revenue ratio.
Quantified targets for returns on financial investments and equity securities
Details of Council’s investment objectives are included in the treasury policy contained in the LTP. Given the approach
to risk outlined in this policy, council’s quantified target for returns on financial investments and equity securities are:
Better than the daily average of call, 30-day, 60-day, and 90-day bank bill rates,
as published by the New Zealand Financial Markets Association.
2016/17 2016/17 2017/18 2017/18 2018/19 2018/19
Benchmark Actual Benchmark Actual Benchmark Actual
Money market investments 2.23% 2.96% 2.10% 2.85% 2.06% 2.87%
Council has a small money market investment portfolio, as compared to the level of borrowings. Net borrowings are the
total borrowings, less any cash or cash equivalents held as short-term bank deposits.
TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 20Financial position The Statement of Financial Position shows what Tauranga City Council owns (its assets) and what it owes (its liabilities) at the end of the financial year. This statement provides a snapshot of Tauranga City Council’s net worth (assets less liabilities) at a point in time. Assets and liabilities The Council’s net worth is $3.9b as at 30 June 2019. This is calculated as the difference between the total assets and the total liabilities of the Council. Council’s net debt as at 30 June 2019 is $441m. Net debt refers to Council’s borrowings (current and non-current) offset by its cash and short-term deposits. Assets Council’s total assets at 30 June 2019 are worth $4.5b. Major assets include: • Property, plant and equipment – this includes land, buildings and infrastructure assets such as networks to supply water, treat wastewater, provide roads and manage stormwater throughout the city. Each year we construct, develop and renew assets around Tauranga. This contributes to the balance of property, plant and equipment. • Other non-current assets – this includes investment properties, intangible assets such as our systems and databases, and the value of investments in Council Controlled Organisations such as Bay Venues Limited. • Current assets including debtors (people who owe us money), cash and short term deposits. Liabilities Council’s total liabilities at 30 June 2019 are $616m. The major Council liabilities include: • Gross borrowings • Other liabilities such as trade and other payables. TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 21
Estimated
Annual Annual Annual
Annual LTP LTP LTP
Report Report Plan
Report 2020/2021 2021/2022 2022/2023
Statement of Financial Position 2016/2017 2017/2018 2019/2020
2018/2019 Projection Projection Projection
Actuals Actuals Budget
Actuals $000 $000 $000
$000 $000 $000
$000
ASSETS
ASSETS - CURRENT
Cash and Short-term Deposits 54,626 21,540 16,556 0 0 0 0
Debtors and Other Receivables 19,003 48,317 30,569 47,809 19,848 20,285 20,752
Inventories 370 452 451 452 386 395 404
Derivative Financial Instruments 0 264 218 264 0 0 0
Non-Current Assets Held for Sale 5,549 23,118 14,213 1,808 3,237 2,852 23
Total Current Assets 79,548 93,691 62,007 50,333 23,471 23,532 21,179
ASSETS NON-CURRENT
Derivative Financial Instruments 1,320 583 0 583 1,320 1,320 1,320
Other Financial Assets 20,282 20,849 21,582 21,614 21,786 21,786 21,786
Other Investments - CCOs 104,367 106,494 109,209 114,307 144,404 161,701 173,303
Other Investments - Other Entities 281 380 364 380 293 300 307
Investment Properties 57,760 39,019 57,240 39,019 62,533 64,097 65,571
Intangible Assets 12,727 11,189 15,634 11,189 12,727 12,727 12,727
Forestry 9,086 9,798 10,641 9,798 9,837 10,083 10,315
Property, Plant and Equipment 3,462,876 3,768,161 4,236,447 4,046,002 4,419,925 4,696,206 5,017,223
Total Non-Current Assets 3,668,699 3,956,473 4,451,117 4,242,892 4,672,825 4,968,220 5,302,552
TOTAL ASSETS 3,748,247 4,050,164 4,513,124 4,293,225 4,696,296 4,991,752 5,323,731
LIABILITIES
LIABILITIES - CURRENT
Payables and Deferred Revenue 54,705 69,262 64,834 68,754 57,138 58,396 59,739
Provisions 10,039 24,128 19,164 9,128 10,486 10,716 10,963
Employee Entitlements 3,784 3,974 4,330 3,975 3,952 4,039 4,132
Deposits Held 6,072 6,227 5,577 6,228 6,342 6,482 6,631
Revenue in Advance Development Contributions 5,767 9,795 5,175 9,795 6,024 6,156 6,298
Derivative Financial Instruments 834 690 1,473 690 834 834 834
Borrowings 30,057 50,000 54,958 45,000 45,081 50,524 56,501
Total Current Liabilities 111,258 164,076 155,511 143,570 129,857 137,147 145,098
LIABILITIES NON-CURRENT
Deferred Tax Liability 2,615 1,907 1,901 1,907 0 0 0
Provisions 24 14 4 14 25 26 26
Employee Entitlements 72 39 40 39 75 77 79
Derivative Financial Instruments 33,395 37,308 56,054 37,308 33,395 33,395 33,395
Borrowings 325,339 320,311 402,670 498,761 618,390 693,054 775,044
Total Non-Current Liabilities 361,445 359,579 460,669 538,029 651,885 726,552 808,544
TOTAL LIABILITIES 472,703 523,655 616,180 681,599 781,742 863,699 953,642
NET ASSETS 3,275,544 3,526,509 3,896,944 3,611,626 3,914,554 4,128,053 4,370,089
EQUITY
Retained Earnings 982,372 1,045,964 1,117,136 1,181,481 1,463,222 1,581,599 1,698,470
Other Reserves 2,293,172 2,480,545 2,779,808 2,430,145 2,451,332 2,546,454 2,671,619
EQUITY 3,275,544 3,526,509 3,896,944 3,611,626 3,914,554 4,128,053 4,370,089
The figures do not include CCOs.
Financial information for 2018/19 is estimated, unaudited and subject to change.
The financial information for 2019/20 is taken from the Annual Plan 2019-20. This information is unaudited.
The prospective information for 2020-23 is taken from the Long Term Plan 2018-28 (LTP) including an inflation adjustment. This
information was audited when the 2018-2028 LTP was adopted.
TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 22Funding impact statement
The funding impact statement shows how Tauranga City Council will pay for its budget each year. The statement
includes where the money will come from, how much money will come from each available source and where the
money will be spent.
These statements reflect the growth of the rating base and the increase in building activity in Tauranga, and the increased
expenditure to cater for this growth by investing in infrastructure and facilities and adjusting our delivery of services.
Estimated
Annual Annual Annual
Annual LTP LTP LTP
Report Report Plan
Funding Impact Statement - Report 2020/2021 2021/2022 2022/2023
2016/2017 2017/2018 2019/2020
Whole of Council 2018/2019 Projection Projection Projection
Actuals Actuals Budget
Actuals $000 $000 $000
$000 $000 $000
$000
SOURCES OF OPERATING FUNDING
General rates, uniform annual general charges, rates 99,772 106,412 111,074 117,254 136,814 150,044 160,487
penalties
Targeted rates 45,078 48,515 56,277 61,417 70,564 85,771 91,941
Subsidies and grants for operating purposes 4,722 4,873 6,195 5,978 5,527 5,563 5,705
Interest and dividends from investments 2,669 2,722 2,809 2,220 3,138 3,348 3,636
Fees and charges 45,105 45,295 51,103 56,995 58,079 59,562 64,025
Local authorities fuel tax, fines, infringement fees, 1,360 1,742 1,876 1,822 1,603 1,641 1,681
and other receipts
Total Sources of Operating Funding (A) 198,706 209,559 229,334 245,686 275,725 305,927 327,475
APPLICATIONS OF OPERATING FUNDING
Payments to staff and suppliers 133,810 151,736 167,869 178,958 179,630 195,113 196,051
Finance costs 18,919 19,162 20,865 22,629 30,015 34,605 41,135
Other operating funding applications 0 0 (2,478) 1,221 1,275 1,303 1,333
Total applications of operating funding (B) 152,729 170,898 186,256 202,808 210,920 231,021 238,520
Surplus (deficit) of operating funding (A-B) 45,977 38,661 43,078 42,878 64,805 74,906 88,955
SOURCES OF CAPITAL FUNDING
Subsidies and grants for capital expenditure 4,056 26,473 16,689 23,407 28,634 24,692 27,631
Development and financial contributions 36,209 33,392 26,646 26,067 28,345 29,325 36,063
Increase/(decrease in debt 36,569 46,685 91,737 76,807 86,508 63,377 106,437
Gross proceeds from the sale of assets 1,488 2,229 14,120 1,808 3,237 2,852 23
Lump sum contributions 3,635 6,176 14,059 1,374 2,071 1,891 9,504
Total Sources of Capital Funding (C) 81,957 114,955 163,251 129,463 148,796 122,137 179,658
APPLICATION OF CAPITAL FUNDING
CAPITAL EXPENDITURE
- to meet additional demand 52,769 76,846 82,116 62,110 99,566 74,364 56,576
- to improve level of service 33,877 47,548 97,267 93,821 109,887 91,783 147,865
- to replace existing assets 17,247 18,680 28,413 32,576 36,118 31,728 35,593
Increase/(decrease) in reserves 24,042 10,541 (1,466) (16,166) (31,970) (833) 28,581
Total Applications of Capital Funding (D) 127,934 153,616 206,329 172,341 213,601 197,043 268,613
Surplus/(Deficit) of Capital Funding (C-D) (45,977) (38,661) (43,078) (42,878) (64,805) (74,906) (88,955)
FUNDING BALANCE ((A-B)+(C-D)) 0 0 0 0 0 0 0
The following figures do not include CCOs.
Financial information for 2018/19 is estimated, unaudited and subject to change.
The financial information for 2019/20 is taken from the Annual Plan 2019-20. This information is unaudited.
The prospective information for 2020-23 is taken from the Long Term Plan 2018-28 (LTP), including an inflation adjustment. This
information was audited when the 2018-2028 LTP was adopted.
TAURANGA CITY COUNCIL | PRE-ELECTION REPORT 2019 23Further useful resources
The following resources are available from Tauranga City Council. Search under ‘Stand for Council’ at
www.tauranga.govt.nz/elections
We Build. A candidates guide to local government
This booklet (produced by Local Government New Zealand) provides a general overview of local government in New
Zealand and the roles and responsibilities of elected members.
Eligibility, rules and important steps for election candidates
Information for people who wish to run for Council as an elected member (i.e. mayor or councillor) in October’s local
body election.
Tauranga City Council
91 Willow Street, Tauranga
info@tauranga.govt.nz
07 577 7000
www.tauranga.govt.nzYou can also read
