1% - Waikato District Council

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40NAVIGATING THE FUTURE | WAIKATO DISTRICT COUNCILNon-Residential Property ExamplesIndustrial – Horotiu 9.359 ha 2011 CV1 Com Bldg $4,900,000Rate Type 2011-12 Actual 2012-13 25%UAGCGeneral 9,719 11,484UAGC 487 403Hall 25 25CommmunityBoard- 18Stormwater - -Wastewater 388 438Water 89 100TOTAL 10,708 12,468Base 10,708Movement $ Increase (Decrease) 1,760% Increase (Decrease) 16%Commercial – Ngaruawahia0.2929 ha 2011 CV1 Com Bldg $1,550,000Rate Type 2011-12 Actual 2012-13 25%UAGCGeneral 3,217 3,633UAGC 487 403Hall 25 25CommmunityBoard- 18Stormwater 84 194Wastewater 970 1,096Water 356 400TOTAL 5,139 5,769Base 5,139Movement $ Increase (Decrease) 630% Increase (Decrease) 12%Industrial – Raglan 0.1222 ha 2011 CV1 Com Bldg $580,000Rate Type 2011-12 Actual 2012-13 25%UAGCGeneral 1,512 1,359UAGC 487 403Hall 15 15Solid Waste - -Economic - -CommmunityBoard- 18Stormwater 215 194Wastewater 255 288Water 536 600TOTAL 3,020 2,877Base 3,020Movement $ Increase (Decrease) (143)% Increase (Decrease) (5%)Tuakau Business0.1209 ha 2011 CV1 dwelling $265,000Rate Type 2011-12 Actual 2012-13 25%UAGCGeneral 403 621UAGC 422 403Hall 46 46Solid Waste 391 403Economic 912 -CommmunityBoard24 18Stormwater 257 194Wastewater 496 496Water - -TOTAL 2,951 2,181Base 2,951Movement $ Increase (Decrease) (770)% Increase (Decrease) (26%)
41Paying for the planFew people like to see their rates go up. However, mostappreciate how better services add to our communitiesand lifestyle, and also understand the impacts of inflation.There’s more detail on the council’s funding philosophy inthe Revenue and Financing Policy on page 111 in Volume Two.In summary the council’s aims are for:• All operating costs to be met by operating income(includes rates, fees and charges and grants and subsidies)• Growth-related operating costs met by increasing ourincome base. (This is not achievable immediately as projectsare completed and incur operating costs before growthoccurs. The council aims to minimise the effect of this)financial pathway• Asset renewal costs to be paid generally from CapitalReplacement Funds or new borrowing• All growth capital costs to be met from developmentcontributions.We have to set our operating revenues to cover our operatingexpenses. The Funding Impact Statement shows that overallwe can achieve this in each of the 10 years in this plan. We’veconsidered what this means and have decided it’s prudent foroperating costs to be met in the year in which they fall.This means we are able to deal with hard times, and costs areallocated fairly and equitably across each generation.The graph below shows the amount the council needs foroperating costs for each of the next 10 years. It also showswhere the funds will come from.10 year operating expenses and funding sourcesThis shows that although revenue will rise during the next10 years, rates remains at about 70 per cent of our income.It also shows we will receive slightly more from our fees andcharges over the same period. This reflects our more proactiveapproach to raising fees and charges in line with cost increasesthan in the past.Unlike many other councils, we don’t have investments earningsignificant returns to help keep our rates down.Funding asset replacementWe have budgeted to spend $274 million on rebuilding orreplacing existing assets to maintain our current services. Wepay for this programme each year by ensuring our revenue willcover asset depreciation charges. Most of this comes from rates,and some from subsidies (mostly for roads ).Every year we spend some of the funds, and the rest istransferred into Capital Replacement Reserves. The amountspent on replacing assets is not the same every year, (seethe Asset Renewal Expenditure graph below). However, ourplanning keeps your rates changes relatively small while stillmaking sure we have enough to pay for bigger projects.Asset renewal expenditure32241612081008060Millions02012/132013/142014/152015/162016/172017/182018/192019/202020/212021/224020Millions02012/132013/142014/152015/162016/172017/182018/192019/202020/212021/22Other operating fundingInterest and dividends from investmentsFees and chargesSubsidies for operating purposesTargeted ratesGeneral ratesOperating expenditure
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