Long Term Community Plan 2012-2022 - Hurunui District Council

Hurunui Community Long Term Plan 2012 - 2022
• Setting a percentage increase.
• Setting an increase based on known factors and
assumptions.
We felt that setting rate increase limits based on an arbitrary
rate of inflation was not consistent to the assessment of the
proposed costs outlined in the LTP. This is because it did not
take into account items such as new capital expenditure, which
could result in a necessary increase in rates to fund the work,
which could exceed the overall increase in rates.
Setting a percentage increase per annum again did not reflect
the assessment of the proposed costs in the long term.
Furthermore, as the rates for individual communities can
increases at varying amounts due to various factors, it was
difficult to set a percentage increase that reflected these factors
adequately.
As a result, we decided that the limit to be placed on rate
increases is to be set as a percentage of the overall rates
increases predicted in the LTP.
Limits
The percentage on top of the predicted rates increases will be
2%. In determining this percentage, we that felt 2% provides
sufficient flexibility, particularly if there is significant cost
increases (on top of what has been allowed for using the BERL
cost price increase projections) imposed on us as a result of the
on-going effects of the Canterbury Earthquakes.
As a result, the limits will be as follows
Year
Overall
Increase
Overall
Increase Limit
2012/2013 (Year 1) 5.83% 7.83%
2013/2014 (Year 2) 5.77% 7.77%
2014/2015 (Year 3) 5.37% 7.37%
2015/2016 (Year 4) 3.17% 5.17%
2016/2017 (Year 5) 3.82% 5.82%
2017/2018 (Year 6) 3.13% 5.15%
2018/2019 (Year 7) 2.61% 4.61%
2019/2020 (Year 8) 4.01% 6.01%
2020/2021 (Year 9) 3.74% 5.74%
2021/2022 (Year 10) 3.33% 5.33%
Again, because of the nature of the targeted rate structure,
the increase (or decrease) in rates for any year for individual
properties can vary markedly.
Non-Rates Income
We rely heavily on other forms of income to finance our
operations. For the period of the LTP, the budget has scheduled
that 54% of our total income is generated from sources other
than rates.
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
-
For 2012/2013, the income from non-rate sources is expected
to total $16.6 million and this is scheduled to increase to $23
million by 2021/2022.
New Zealand Transport Authority Subsidies
The first key component of non-rate income is NZTA subsidies,
which are used to fund both operating and capital expenditure
relating to the roading network. We have assumed that the
current funding assistance rate of funding provided by NZTA
will be maintained for the period of the LTP. Further discussion
of this is provided in the Forecasting Assumptions on page 150
and in the Key Issues section.
Hanmer Springs Thermal Pools and Spa Revenue
The other key component is the Revenue derived from the
HSTP&S, which accounts for approximately one third of the total
income received. The HSTP&S is run as a separate business unit
of the Council and after allowing for Operating Expenses and
Interest, the surpluses are actively used to fund reserve costs
throughout the District. The reserve costs include: the cost
of the library, cemeteries, public toilets and a range of district
reserve costs. Over the last five years, the surpluses from the
pools have contributed a total of $7.65 million to these reserve
costs, which would otherwise need to be rated for. Over the life
the long term plan it is forecast that a total of $24 million will
be used from the surpluses derived from the HSTP&S to offset
these reserve costs.
Development Contributions
Other Income
Hanmer Springs Thermal Pools and Spa
NZTA Subsidies
External Interest Received
Development Contributions
Development Contributions also form a key component for
funding capital expenditure which has been required due to
increased growth. It is anticipated that over the life of the LTP, we
will receive a total of $4.3 million in Development Contributions,
however the amount actually received will be dependent on the
level of growth experienced. The Development Contribution
Policy is on page 206.
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