Draft Annual Plan 2013/14 (10Mb PDF) - Taupo District Council

message from the chief executive
Message from the Chief
Executive
This Draft Annual Plan outlines a programme of work,
as indicated in the Long Term Plan (LTP) 2012-22, that
continues to deliver the wide range of quality services that
make Taupō District an amazing place to live, work and do
business.
During the LTP process, we sought to reduce spending and
debt. This Draft Annual Plan is our continued response to
the slow economic climate by proposing a more acceptable
District rate funding increase of 4.4%, rather than the
previously projected 7.38%.
LTP
Annual Plan
2.4% 2.4% Financial strategy – see
page 9
2.0% 2.0% Infrastructure investment
– mainly water and
wastewater
2.98% 0.0% Operating costs
7.38% 4.4%
Since then, Council has continued to face significant
financial pressure. The demands vary from interest and
depreciation costs of legacy infrastructure to increasing
costs of insurance. We also face the potential of increases
to the minimum wage, price increases in petroleum-based
products such as bitumen that is used to maintain our roads
– all of which are unavoidable and must be met.
As part of this Draft Annual Plan process, we reviewed
projects and budgets to ensure that our dollars are
delivering for our community. We scrutinised our operating
costs and made substantial savings to complement the
previous savings made in the LTP.
I am happy to report that we achieved a cost savings of $3.6
million. This result was possible due to continued prudent
financial management, internal efficiencies and process
improvements to deliver savings with no reduction to service
levels. This achievement is considerable given the continued
financial pressure to provide quality services with less.
Without the cost-cutting undertaken this year, the rates
increase would be much higher. The result is a reduction in
the projected rates increase from 7.38% to 4.4%.
As the table above shows, the 4.4% is needed to pay for the
LTP financial strategy and for debt from major infrastructure
projects. The strategy is Council’s long term approach to
debt reduction.
In addition, Council has debt from major infrastructure
projects including the upgrade to the Taupō Water Treatment
Plant and the Wastewater Treatment Plant.
The upgrade to the Taupō Water Treatment Plant will
mean the town water meets New Zealand Drinking Water
standards. The drinking water standards are set by central
government and councils are obliged to abide by them.
Although we now have a high-tech water treatment plant
that can meet the town’s current and foreseeable future
demand, there is a price tag attached – and water rates for
Taupō township, compared to the rest of the District, will
increase to pay for the top water quality as mandated by
central government.
As we meet our legal obligations for water and wastewater
activities, we also have to focus on economic development.
While the strength of our District’s traditional activities is
encouraging, we need to continue to grow the District’s
economic activity because economic growth will be difficult
for a few more years. We aim to continue to attract new
industries and create new, skilled jobs to meet the needs of
our local communities in the most cost-effective way, as set
out in our LTP.
Finally, we have a busy programme of work ahead of us in
2013/14. We will work to complete some major capital works
projects including the AC Baths refurbishment, and the
Turangi town centre revitalisation, as well putting new public
toilets at Mangakino and Whakamaru to cater for growing
numbers of people using the Waikato River Trails.
In all, we will continue to look after the District’s $1.3 billion
in assets to ensure we continue to meet the needs of the
current community and future generations. We will continue
to deliver the hundreds of vital services on which the
community relies and visitors come to expect.
Managing a Council during a time of global financial crisis
and significant local government reform is a significant
challenge. There is no doubt that our task has been made
more challenging by our tighter financial constraints and the
new purpose for local government in New Zealand, but I am
confident that this plan further shapes direction to help us
reach our agreed vision of a thriving, vibrant community.
Rob Williams // Chief Executive, Taupō District Council
Council has $65 million in loans due to the purchase of
land and the construction of the East Taupō Arterial (ETA).
Council had intended to fund the loans from property
development, though following a global recession and
slowed growth Council must fund the loans (and the
capitalised interest) from rates.
our neighbourhood, our future 5