Long Term Community Plan 2012-2022 - Hurunui District Council

www.hurunui.govt.nz
5. Emissions Trading Scheme
The Emissions Trading Scheme (ETS) is in place; however, there
is still limited detail on how its implementation will affect costs
moving forward. The price change adjustors as provided by
BERL have made some allowance for the effects of the ETS
and the Council has applied those rates in accordance with its
assumption on inflation.
The Council has registered its Forestry Assets under the ETS
and it should qualify for carbon credits. These carbon credits
will have a value, however, as it is in its initial stage, there is no
details to assess the effect of this value and as a result, it has not
been accounted for in the preparation of the LTP.
Risks and Uncertainties
There is an inherent risk that the inflation rates used in the
preparation of the LTP may not reflect the actual costs. Should
the resulting costs from the implementation of the ETS be
greater than the levels of inflation that have been allowed for,
then the Council will need to increase the funding from rates
and other income to allow for it.
As the Council has not accounted for the value of the carbon
credits in the preparation of the LTP, any potential value that is
assigned to the credits, or any proceeds from the potential sale
of any carbon credits will be credited to the Forestry Reserve,
which can be utilised in a manner determined appropriate by
the Council.
Rating of Uncertainty: Medium
6. Unknown/Unconformed Legislation
or Policy
Due to the recent change of Government, the level of uncertainty
in this area is too high for any changes to be sufficiently
quantifiable to be taken into account for the present plan. The
Council remains aware of the key issues on a qualitative level,
and will take them into account as best they are able.
Rating of Uncertainty: High
7. NZTA Subsidy Rates
To fund roading operational and capital expenditure, the Council
receives a percentage of the cost as a subsidy from the New
Zealand Transport Agency (NZTA). The subsidy rate is based
on a calculation performed nationally which takes into account
the land value of each District Council area. For the 2012/2013
financial year, the subsidy rates are as follows:
• Operating Expenditure 50%
• Capital Expenditure 50%
• Minor Safety Improvements 60%
• Level Crossing Warnings 100%
• Special Purpose Roading 100%
There has been no indication that any of these rates are expected
to change in the next three years, therefore the Council has
made the assumption that subsidy rates are to remain constant
over the life of the LTP. Based on NZTA’s indicative costs for
2012-2015, we have assumed that the level of funding we will be
allocated will continue over the remaining life of the Plan.
Risks and Uncertainties
The NZTA subsidy rates are based on a calculation which
takes into account the land value of the Hurunui District as a
comparison with other local authorities throughout the country.
Should the land value of the Hurunui increase or decrease at a
rate different to the average over the country, the calculation
may result in the subsidy rate for the Hurunui increasing or
decreasing.
Should the subsidy rates decrease from the levels assumed, it will
result in the amount of subsidy for roading works to decrease
and placing a greater burden for funding the operational and
capital expenditure of the roading network on the ratepayers.
As an example, if each category of subsidy reduced by 10%
(resulting in the subsidy rates Operating & Capital Expenditure
to 40%; Minor Safety Improvements to 50% and Level Crossing
Warnings and Special purpose Roading to 90%), for the
2012/2013 year, based on the budgeted level of expenditure, the
roading rate would need to increase by $624,803.
Rating of Uncertainty: High
8. Projected Growth Change Factors
See the Development Contributions Policy for details of
projected growth in the numbers of new properties in the
district. The effects of the growth will be factored in when
determining:
• The level of development contributions which will flow
through the organisation
• The level of vested assets that the Council is expected
to take ownership of
For growth in the customer numbers at the Hanmer Springs
Thermal Pools and Spa, the Council has assumed that the
increase in customer numbers will be 3% each year over the life
of the Long Term Plan. The resulting revenue is supplemented by
a predicted increase to the standard entry price which provides
a further increase of 4.5% in 2015, 2018 and 2021.
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