Draft Long Term Plan 2012-2022 - Hurunui District Council

Hurunui Community Long Term Plan 2012 - 2022• Setting a percentage increase.• Setting an increase based on known factors andassumptions.We felt that setting rate increase limits based on an arbitraryrate of inflation was not consistent to the assessment of theproposed costs outlined in the LTP. This is because it did nottake into account items such as new capital expenditure, whichcould 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 reflectthe assessment of the proposed costs in the long term.Furthermore, as the rates for individual communities canincreases at varying amounts due to various factors, it wasdifficult to set a percentage increase that reflected these factorsadequately.As a result, we decided that the limit to be placed on rateincreases is to be set as a percentage of the overall ratesincreases predicted in the LTP.LimitsThe percentage on top of the predicted rates increases will be2%. In determining this percentage, we that felt 2% providessufficient flexibility, particularly if there is significant costincreases (on top of what has been allowed for using the BERLcost price increase projections) imposed on us as a result of theon-going effects of the Canterbury Earthquakes.As a result, the limits will be as followsYearOverallIncreaseOverallIncrease Limit2012/2013 (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 individualproperties can vary markedly.Non-Rates IncomeWe rely heavily on other forms of income to finance ouroperations. For the period of the LTP, the budget has scheduledthat 54% of our total income is generated from sources otherthan rates.25,000,00020,000,00015,000,00010,000,0005,000,000-For 2012/2013, the income from non-rate sources is expectedto total $16.6 million and this is scheduled to increase to $23million by 2021/2022.New Zealand Transport Authority SubsidiesThe first key component of non-rate income is NZTA subsidies,which are used to fund both operating and capital expenditurerelating to the roading network. We have assumed that thecurrent funding assistance rate of funding provided by NZTAwill be maintained for the period of the LTP. Further discussionof this is provided in the Forecasting Assumptions on page 148and in the Key Issues section.Hanmer Springs Thermal Pools and Spa RevenueThe other key component is the Revenue derived from theHSTP&S, which accounts for approximately one third of the totalincome received. The HSTP&S is run as a separate business unitof the Council and after allowing for Operating Expenses andInterest, the surpluses are actively used to fund reserve coststhroughout the District. The reserve costs include: the costof the library, cemeteries, public toilets and a range of districtreserve costs. Over the last five years, the surpluses from thepools have contributed a total of $7.65 million to these reservecosts, which would otherwise need to be rated for. Over the lifethe long term plan it is forecast that a total of $24 million willbe used from the surpluses derived from the HSTP&S to offsetthese reserve costs.Development ContributionsOther IncomeHanmer Springs Thermal Pools and SpaNZTA SubsidiesExternal Interest ReceivedDevelopment ContributionsDevelopment Contributions also form a key component forfunding capital expenditure which has been required due toincreased growth. It is anticipated that over the life of the LTP, wewill receive a total of $4.3 million in Development Contributions,however the amount actually received will be dependent on thelevel of growth experienced. The Development ContributionPolicy is on page 201.29