Long Term Community Plan 2012-2022 - Hurunui District Council

Hurunui Community Long Term Plan 2012 - 2022
Risks and Uncertainties
The projected growth in the number of new sections may occur
at rates significantly different to those predicted, which will
result in the amounts received in Development Contributions
and Vested Assets will differ from the figures budgeted for.
The result may be that the period for collecting development
contributions for specific growth related projects may reduce
or be extended.
If the movement in customer numbers at the Hanmer Springs
Thermal Pools and Spa differs from the level assumed, it will
have an effect on the revenue flows for the Pools. The Council
intends on funding a certain level of the other reserve costs
from surpluses from the Pools. After doing so, there is still a
level of surpluses that are retained on an annual basis. If the
growth in the customer numbers from the Pools is lower than
the level projected, then the level of surpluses retained will
reduce. Depending on the extent of any change to the growth
in customer numbers, this may have an effect on the funds that
are used to directly offset the various reserve costs throughout
the District.
Rating of Uncertainty: Medium
9. Resource Consents
It has been assumed that all current resource consents held by
Council will be renewed at the appropriate time, with similar
conditions and length of term as currently in place. Any costs
associated with Capital Expenditure forecast throughout the
ten year period have been included as an integral part of the
cost of the asset and will be capitalised and depreciated in line
with the physical works carried out.
Risks and Uncertainties
There is a risk that various resource consents held by the
Council may not be renewed, or the conditions and term of
the resource consent may vary from those currently in place.
In addition, there is a risk that renewing resource consent may
incur additional costs that have not currently been budgeted for.
Rating of Uncertainty: Medium
10. Revaluation of Assets
The Council has adopted an approach of revaluing its land
and buildings, roading and infrastructural assets on a three
yearly basis to comply with the New Zealand equivalent to
International Financial Reporting Standards.
The valuation process is staggered so only one key asset class is
revalued each year and as a result, the revaluation cycle over the
period of the LTP will be as follows:
Land and Buildings 30 June 2011 (most recent revaluation)
30 June 2014
30 June 2017
30 June 2020
Infrastructural Assets 30 June 2009 (most recent revaluation)
30 June 2012
(based on inflation indices for the
prior 3 years)
30 June 2015
30 June 2018
30 June 2021
Roading Assets 30 June 2010 (most recent revaluation)
30 June 2013
30 June 2016
30 June 2019
30 June 2022
As was the case for the preparation of the 2009 LTCCP, the
Council has made the assumption that the value of Land will not
change over the ten year period, with the exemption of proposed
purchase of land required to extend the area of cemeteries. The
Council has also assumed that the value of Buildings will change
only in accordance to the amount of depreciation charged.
The Council has made the assumption that the book values of the
buildings, roading and infrastructural assets as at the revaluation
dates will be increased by the cumulative inflation rates as per
the BERL inflation forecasts as described in the assumption for
inflation. The depreciation charge will be amended to reflect the
remaining useful life of each asset and the charge made on the
revalued amount of the asset.
An example of how the cumulative inflation will be applied is
as follows:
• A length of water pipe may have a value of $1,000 as of
30 June 2012 - the date of its last revaluation.
• The next revaluation is set for 30 June 2015, and the
cumulative inflation rate for Capital Expenditure over
that period is 11.94%, therefore the new value should
be $1,119.
• The next revaluation is set for 30 June 2018, and the
cumulative inflation rate for Capital Expenditure over
that period is 24.52%, therefore the new value should
be $1,245.
• The next revaluation is set for 30 June 2021, and the
cumulative inflation rate for Capital Expenditure over
that period is 41.27%, therefore the new value should
be $1,413.
Any movement in the valuation of the roading and infrastructural
assets is recognised in the asset revaluation reserve. The
movements, along with any increase on capital purchases made
in the intervening years have been applied to the existing values
to arrive at the revalued amount for each asset.
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