Tauranga City Council is seeking public feedback on a draft annual plan that gives the scope of works and sets the financial tone over the next financial year – election year.

The plan and budgets for public approval reflect the decisions and discussion of councillors over recent months, and represent the preferred options.

Tauranga City Council is calling for public submissions on the draft annual plan. File photo.

The Annual Plan 2016/17 will represent year two of the Long Term Plan 2015-25 adopted last year.

Some changes are required to the LTP budgets and work plan to reflect revised economic and business conditions, and to schedule projects to better meet the needs of the City.

The Council has ensured the proposed average rates increase for residential households is limited to 2.5 per cent, matching the average rates increase planned through the LTP. Commercial ratepayers will have a higher increase due to proposed increases in the economic development rate.

Debt is below that forecast in the Long Term Plan and the debt to revenue ratio is favourable to the LTP, 217 per cent LTP and 205 per cent AP, reflecting higher user fee revenue projections, as well as lower debt.

Amendments are proposed to the LTP budget to reflect revised economic and business conditions to those assumed within the LTP. In particular, growth is projected to continue to be above levels assumed in the LTP and this has implications for both capital and operational budgets.

Several infrastructure projects have been brought forward to the 2016/17 year, from later in the Long Term Plan to allow for new subdivision development.

Next year several transportation and stormwater infrastructure projects in the Western growth areas have been brought forward to provide for development in Pyes Pa West and Tauriko.

Bringing infrastructure projects forward means higher debt in the short term, debt that is partially offset by higher revenue from Development Contributions.

In addition, reviewed timing of some projects and additional land sales this year have resulted in city debt being less than that budgeted in the Long Term Plan.

Capital expenditure has increased from $131m to $133m (excluding vested assets) reflecting retiming of some infrastructure as well as additional provision for expenditure next year related to the Civic Upgrade, development of the Airport terminal and improving Council ICT systems.

Debt is still forecast to be less than the LTP due to the lower opening balance resulting from higher land sales and development contributions in the current year.

Council business activity has increased in areas including planning, engineering and building services, which have affected budgets.

Changes have also been made to reflect regulatory and legislative requirements in areas including building services, planning and health and safety.

The increase in activity across the organisation has led to an increase in staff and other operational costs, primarily in the building services activity.

Offsetting the increase in costs is an increase in user fees which has meant that the costs of providing services has been managed within the overall rate increase to households of 2.5 per cent.

A lower opening debt position and continuation of lower interest rates has also provided an offset to operational expenditure.

The growth activity in the city has also been reflected in higher development contribution revenue now budgeted to be received in 2016/17.

The council is planning to increase staff to be able to scale up delivery of services and projects.

Additional staff costs will be funded mainly through increased user fee revenue.

Some projects have been postponed to 2017/18 to align with development, such as a wastewater pump station in Papamoa East and stormwater management projects in Bethlehem West.

The construction of the Omokoroa to Tauranga cycle trail has also been delayed to 2017/18, to allow for completion of design and consenting.

Altogether the changes to our work programme for Water, wastewater including the Matapihi proposal, Stormwater and Local Roads activities will result in an additional $1.3m required above Long Terni Plan budget for capital expenditure in 2016/17, this will be funded mainly through development contributions along with some NZTA funding for the transportation projects, meaning no impact on 2016/17 rates and debt lower than forecast in the Long Term Plan.