Long Term Community Plan 2012-2022 - Hurunui District Council

Hurunui Community Long Term Plan 2012 - 2022
Other owners of buildings will need to do the same once they
have information provided to them. There is of course, nothing
stopping anyone getting their own independent assessment at
their own cost in the meantime, or seeking a second opinion.
We do not have the in-house expertise to perform this work.
We do know that structural engineers are highly sought after
in the Canterbury region and we are making this plan on the
proviso that we will be able to contract the skills we need to
undertake this work.
We consider this work to be vital because of the threat to life
if buildings collapse. The cost for this work will be paid for this
through the general rate for three years from 2012/13 because
of the potential impact on the general public. The general rate is
funded through a portion being assessed as a fixed charge per
property and the balance assessed on the capital value of the
property.
Cost to Defend RMA/Court Action
Each year we need to get legal advice or representa tion, or
specialist advice about a variety of matters relating to resource
consents, district plan changes and policy de velopment.
Traditionally, we have tended to under-budget for these costs
as many of them are unknown when we prepare our annual
budgets. However, last year we were aware of a number of
situations that were going to incur legal or consultancy costs
and we did make a budget provision based on that knowledge.
Although we will continue to face unexpected legal costs into
the future, we have decided to continue to budget what we did
last year for each year of the long term plan, that is, $105,000
(adjusted for inflation) annually. This will be funded through a
District Rate. There will be situations where legal costs are far
in excess of our budget. The most recent example of this was
the cost to defend MainPower’s Mt Cass Wind Farm resource
consent. The cost to ratepayers was approximately $300,000
(allowing for the successful costs award against Mainpower
from the Environment Court of $136,394). Legal and specialist
advice comes at a price and we do not always have in-house
expertise for every scenario that comes to us.
Road Funding
Our roads are maintained and built using subsidy funds from
New Zealand Transport Agency (NZTA) and money collected
through rates. This excludes state highways which are funded
and maintained solely through NZTA. Three years ago,
central government deliberately cut maintenance funding to
all district councils, as it decided to focus on capital works to
national state highways (Roads of National Significance) and
the Auckland roading network needs as priorities. Central
government believes that “increased funding for State Highway
construction will bring benefits for national economic growth
and productivity, particularly given that State Highways carry
most inter-regional freight and link major ports, airports and
urban areas (Government Policy Statement 2012)
In 2009, all Road Controlling Agencies (RCA), of which we are
one, were told by the Minister of Transport to “do more with
less” in terms of road maintenance financial subsidy allocations.
We were tasked to find better and smarter ways of looking
after our roads without relying on the previous levels of NZTA
subsidy funding. To qualify for financial subsidy assistance, all
RCA’s are to use Activity Management Plans (AMP). When up
to date, our AMP provides us with a better understanding of our
current assets in terms of location, age and condition. This sets
our works programme for the following three years in terms
of maintenance, operations, renewals and capital works. This
programme is submitted to NZTA as part of the Regional Land
Transport Programme (RLTP). Our funding was cut by $600,000
per annum on average on our RLTP for the full funding cycle
covering the years from 2009 to 2012. Although the approved
subsidy funding was 4.5% more than the previous year’s budget,
it was substantially less than that required to maintain the
levels of service we wanted for our roading infrastructure. No
escalation (or inflation) was added for year 2 and 3 of this
programme which placed further pressure for us to “do more
with less”. In the meantime, we have restructured our road
maintenance contracts to get the most we can for our money
and to maintain levels of service for our local roads. Indicative
budgets have been released by NZTA for the three year period
from 2012 to 2015, which is 5% less than our RLTP submission.
This will result in approximately $226,000 less funding per
annum across all three years. We will continue to retain our
funding as previously indicated as unsubsidised work and the
rate impact for roading will continue as previously stated in the
plan. We have made the assumption that the reduced level of
NZTA funding will continue through the life of the LTP. This has
left us with a major challenge. Our Asset Management Plans
(AMPs) tell us when, how and why we need to do work on
each of our roads to ensure maximum whole-of-life for this
asset (maximum return on investment approach); but we do not
have the required subsidised income to maintain our roading
network to the level our AMPs stipulate.
We have done our best to drive greater efficiencies within
our current road maintenance contracts, without affecting the
current levels of service. The improved collaboration between
our contractors, suppliers and us using a ‘best-for-asset/bestfor
contract’ approach, has provided lower contract rates
that may allow us to maintain our current service levels until
2014/15 (assuming no untoward event happens that damages
our infrastructure). At the end of this period, our maintenance
contracts will be renewed with cost escalations included. This
is where we have a problem. NZTA have declared that they
will not pick up contract price escalations through their road
maintenance subsidy scheme. In the meantime, we have allowed
for inflation adjustments to the roading costs (using the inflation
assumptions) and also assumed that NZTA will continue to
meet their share of those costs that are currently subsidised,
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