Tagged: Transport

Long term plan meeting (full council) 28 May

The following is a speech I had prepared for the full council meeting (held on 28 May 2015) on long term plan (LTP), which Cr Bouillir had kindly undertaken to read out in my absence.

Long term Plan Speech

My sincere apologies for not being able to attend this meeting. However, if I did not attend my brothers wedding (in London), I’m not sure he would speak to me again.

Although I could not make today’s meeting, it does not remove the opportunity for the community to know where I stand on many of the big issues, and where I would have voted, having heard and read all the submissions.

There are many decisions being made today. I take some comfort from workshop discussions held two weeks ago, that some good first steps are being made. However, there are still a number of issues where I do not agree with the majority of councillors. I only hope that councilors have further reflected over the intervening weeks, and will come to the right decision today.

Today, I wish to briefly highlight four issues: (1) debt and rates, (2) storm water, (3) roading expenditure, and (4) the dam.

Debt and rates

While I congratulate the councillors for drawing a line in the sand on rates increases and debt, this should only been seen as a first step.

There are further opportunities to save money (and further reduce rates increases), and I take some comfort that some moves to save money have been progressed.

For example, last week we heard of the cost saving from reviewing one of our annual publications – reducing the cost of production from $40,000 to $5,000. Over 10 years, that is a $350,000 saving.

This should have been done years ago.

As you know I feel other council publications require the same degree of examination. There is room for more savings.

A number of submissions have called for greater savings in this area. I would ask, that while council has set budgets for publications, that these budgets are further reduced over the coming months.

And publishing, is not the only area, where we need to be challenging ourselves to work smarter.

Storm water

Storm water is by far the biggest area of concern for our community.

And rightly so.

However, I still do not believe, we have the right balance in funding, or adequately addressing, this critical infrastructure.

There is a great deal of angst in our community over flooding risk. This is a concern that is strides above any other concern with transport or community development initiatives.

If we truly acknowledge that concern, then we should be shifting more funds to known hotspots in the Richmond area while also addressing the storm water concerns of the central Richmond business district.

I do not support funding more traffic improvements while the community are asking there money to be spent on storm water. Given the growing risk of another event, it should be an over-riding duty to mitigate that risk and ensure the storm water solutions promoted by staff can be achieved earlier and faster.

If we are not prepared to do that then we need to ensure those known hotspots around Richmond are at least mitigated in the interim.

Its about priorities!

Roading expenditure

We need to stop over-capitalising on roading initiatives.

I would like to see budgets for traffic improvements on Salisbury road and a number of other road widening initiatives (that are not funded by development levies) removed from the plan.

In particular, I see no reason to spend $1.2M on the Salisbury Road\Queen Street intersection. The round-about works fine. There is no support for more traffic lights on this road, and there is no need to fund investigating alternatives here. Remove it, or shift those funds to storm water initiatives.

Furthermore, the $600,000 budget for the Salisbury Road\William Street intersection is more than adequate to fund any investigations of Salisbury Road and provide some pragmatic and cost effective solutions for the William Street intersection.

The Dam

The community have made it very clear that they do not support funding any private benefit.

I agree.

I do not believe that the district should be called on to subsidise private water consumers.

I also believe that this is a good guiding principle when considering issues associated with the dam, and is consistent with the “user-pays” ethos of the community.

It is also clear, that were it not for the extraction of water by irrigators and urban water consumers, the river would have a sufficient natural flow. On this basis, the only equitable basis to apportion the cost of funding the environmental benefit portion of the dam cost, is for it to be apportioned between irrigators and urban water consumers.

This means council should only contribute $14M towards any water solution (comprising $8M-$9M for future urban water needs, and $4M-$5M for restoring the natural environmental flow of the river that urban water consumers have extracted). In my mind, $14M is a fair figure and is probably the likely opportunity cost of an alternative water solution for urban water consumers. Council should not approve a $25M contribution.

In my opinion, council also has a duty to find a cost effective solution that protects future urban water needs. This might involve leveraging off a private dam venture, by funding some additional height in a an existing dam project, that provides sufficient water for urban water consumers – or it could mean funding an alternative solution.

In conclusion, I believe council should park any decision on contributing to a dam project, or any other solution, until such time as council knows if irrigators are able to advance such a dam project. It also provides council sufficient time to properly explore other solutions. To act otherwise, is in my opinion, not acting prudently. This might mean council defers any decision of contributing to an irrigator led dam project until later in the year – perhaps September this year?

Capitalisation of Dam Co Ltd

Council are also considering assisting with the capitalisation of the irrigator’s investment holding company – Dam Co Ltd.

In my opinion, council should not be providing any financial assistance to this company. This is a private company and council should now be conducting its dealings with Dam Co Ltd at arms length. Anything else, would suggest otherwise.

In my opinion, providing unsecured public funds to a privately owned company, is not consistent with the aforementioned guiding principles, or a council that should be acting prudently, to ensure public funds are adequately protected.

If the protagonists of the dam cannot raise approximately $300,000 to establish this company, there is clearly insufficient support for a dam, from irrigators. It’s only $300,000. That’s 10 irrigators contributing $30,000 each, or 30 irrigators contributing $10,000 each.

Many dam protagonists made mention of the economic benefits that the dam would provide. If they believe in such benefits, then I would have thought they would be falling over themselves to invest.

Its time for these people to put their money where their mouths are. It is not the role of council to be under-writing private ventures (or private benefits).

Closing remarks

Finally, I appreciate, that the long term plan is just that – a plan.

It is open to further improvements and direction. And that includes further operational savings.

I certainly welcome such an opportunity at the next annual plan.

Agenda and minutes

The agenda and minutes of this meeting are located at http://www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/full-council-meetings/?path=/EDMS/Public/Meetings/FullCouncil/2015/2015-05-28.

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Full council meeting (16 April)

The full council meeting was held on 16 April 2015. All councillors were in attendance, with apologies from Cr Mirfin and Cr Sangster.

The meeting agenda included: (1) receipt of the final regional land transport plan, (2) an update on the Waimea community dam, (3) amendments to the delegations register, and (4) the mayors report.

I will summarise below what I consider to be the main discussion points from the meeting, together with my opinions.

Regional transport plan

The regional land transport plan (a 70 page document) contains the regions strategic road transport projects and funding requirements for the next 10 years. The plan was developed in conjunction with the New Zealand Transport Agency (NZTA) and collectively with Nelson and Marlborough councils.

Why do we produce such a plan? The council is required under the Land Transport Management Act 2003 to adopt a regional land transport plan every 6 years. However, the work programme is reviewed every 3 years.

Just because the council commits to the plan does not mean that everything in the plan will be done. Councils can change their mind, as they often do. Especially in response to feedback from the long term plan process. Clearly anything not in the regional plan is unlikely to be done.

In setting the scene, the plan document makes a number of economic and statistical observations. These included: (1) Tasman has 47,157 residents, Richmond has 14,036 residents, Motueka has 6,590 residents, (2) Tasman covers 14,812 sq kms and has 812km of coastline, (3) 58% of Tasman is conservation estate (which include Nelson lakes, Kahurangi and Abel Tasman national parks), (4) Tasman receives 2,450 hours of sunshine annually, (5) Tasman has 55 wineries (out of a total of 692 in NZ, Marlborough has 145), horticulture and grapes contribute to 15% of Tasman’s economy (and 14% of Marlborough’s), (6) Tasman has one of the highest export road freight levels in New Zealand per capita. Other statistics mixes Nelson in with Tasman.

Interestingly, the biggest impact for Tasman could be the substantial growth in people over 65 years. While this might drive an increase in public transport options (like buses), it also appears to make it even more important to ensure that high density developments, and those other urban environments, in which the elderly can be expected to reside, are closely aligned to public transport services.

In my opinion, councils planning in this regard has been poor. For example, compact density developments have not been aligned to roads, where public transport is currently available, but have instead driven council (excuse the pun) towards spending more money on widening roads to enable public transport to get access. For example, the Olive estate development (a lifestyle village for people over 55 years) is on the outer area of Richmond, rather than the centre, and is also on the opposite side of Richmond to where medial and other retirement service providers are located. Rather than providing easy transport access for visitors from the main highway, visitors now have to weave their way through Richmond South’s residential areas. In my opinion, this is poor planning and only invites increasing pressure on ratepayers to fund road widening projects.

It has also been suggested that Oxford Street should be widened. This is a very expensive thing to do. In my opinion, it should not be widened, as it would make the road more dangerous (inviting people to drive faster) and is an unnecessary expense.

The road could just as easily be made a clear way during peak traffic hours, if peak hour traffic is a problem. This is a far more cost effective solution, and is a solution used in other districts. If parking on Oxford Street is required then other areas for parking need to be explored, before road widening projects are undertaken.

Unfortunately, it appears that previous councils have been buying up land either side of the road with road widening in mind. While this might make it cheaper going forward, the sad reality is that much of the cost, has already been sustained by ratepayers in earlier years. In my opinion, such expenses that should not have been allowed to occur at all.

Finally, it is worth noting the recent changes to the governments roading subsidy. After the long term plan went out for public consultation (in October 2014), the NZTA informed council that the co-investment rate (effectively a government subsidy for eligible road work projects) would be reduced from 52% to 51% from 1 July 2016. The change is generally the result of the government’s emphasis on re-deploying road investment in more highly populated (and used) areas of New Zealand.

Waimea community dam

If you have been following this blog you will be aware of my ongoing opposition (since the December round of consultation) to council funding the establishment of a council controlled organisation (CCO). This is because I do not believe we have enough certainty at this time (or earlier times) to know if we actually need to establish a CCO. Why put the cart, before the horse?

At this meeting, council staff also shared a similar concern and recommended to councilors that a CCO should not be formed at this time. It appears that at least council staff have been listening to what I have been saying. On the basis of that recommendation, those councillors who had earlier objected to my earlier suggestion in December (not to support the establishment of a CCO), now supported the idea. A small victory in common sense prevails.

Of course, this does not prevent a CCO being formed at some future date. But that was never the point of my objection. My point was why spend money setting up a company (or other ownership vehicle) until you have determined whether you intend to support a dam, or know the financial and ownership make-up of such an enterprise. It might eventuate, that a CCO is not the type of vehicle that can actually be used, or what investors want.

So what does this all mean?

Well, we are now left with a privately owned company (Dam Co Ltd) that is now the investment vehicle for any interested irrigators, and the council (which represents ratepayers interests). You might recall that Dam Co Ltd was also used (and funded) by council to secure a resource consent on council’s behalf. That role has now ended and the resource consent will revert (pursuant to a written agreement) to the council.

Council can still pursue the purchase of land for a dam if it thinks that it wants to pursue a dam, or piggy back off the irrigators building one. Given a number of ratepayers are objecting to the dam, it might be that council does not actively pursue a dam. However, it might also be a-miss of council not to piggy back off a privately led dam project, if such a project provided a more cost effective investment for securing Richmond’s future urban water needs ($8 million), than other plan B options.

Whether this is where council finally lands its financial contribution remains unknown territory. Perhaps this is an outcome that even some of the “can the dam” supporters might be able to live with?

Furthermore, in my opinion, there is still an ongoing debate to have over the level of council’s financial contribution. At present council is proposing to fund $25 million of the dam – essentially comprising $8 million to secure Richmond’s urban water supply, and $14 million for environmental benefits. I still remain unconvinced that the proposed financial mix is a fair or equitable one.

I can understand why Richmond might want to secure its future urban water, but why should ratepayers want to pay for the environmental benefit of a river having more water in it? And are the benefits worth $14 million? Is that money (all or part) better spent on other environmental benefits? Surely, without water being extracted from the river, the river would be fine – providing all the benefits, nature intended. Why then should ratepayers be asked to fund the return of the environmental benefit, that has been depleted by water extractors. I cannot see the equity in such an argument.

Some have even suggested its just another subsidy for irrigators, re-worded and re-packaged to ensure ratepayers (not irrigators) are the ones providing most of the money? In the immortal words of President Underwood (in House of Cards), “I could not possibly comment”. But if it smells like a duck and looks like a duck, there is a good chance it is a duck.

I think the council needs to pause and reflect.

That might mean further consultation – which might include an expanded brief. I think the community would support such an approach. It would also give the irrigators the opportunity to see if they can actually raise the $50 + million they will need to find. Because if they don’t, then a dam option, will be a dead duck before it even gets off the water – with or without support from council.

Delegation amendments

Most, if not all of council’s powers come from legislation. For people to act validly, with the authority of council, they must first be given that power by council. Without such authority, their actions would be invalid and unenforceable. The delegations register records not only who has received such powers, but the scope of those powers.

Accordingly, council resolved to make a number of amendments to its delegations register. These amendments updated changes to staff roles and permitted thresholds, and clarified any ambiguity that might have existed before.

Agenda and minutes

The agenda and minutes are located at http://www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/full-council-meetings/?path=/EDMS/Public/Meetings/FullCouncil/2015/2015-04-13.

Consultation document

LTP-Cover

 

The consultation document (formerly known as the “Long Term Plan” or LTP) outlines where council intends to spend your money over the next 10 years (from 2015 to 2025).

The deadline for submissions is 20 April 2015.

The relevant documents and an online submission form are located from http://www.tasman.govt.nz/policy/public-consultation/2015-2025-long-term-plan/.

The 10 year plan includes some very important decisions, including whether the Waimea Community Dam should proceed, and equally importantly, how much of your money council should contribute to that project.

Overall, this is a good start for council, which has indicated a greater willingness to reduce expenditure and debt – which invariably translates to keeping rates increase down. However, this should only be the start of the journey.

In my opinion, there is still room to make further improvements on reducing expenditure and reducing the need to increase revenue (and increasing rates).

This might mean that some services would be reduced or cease. It might mean that some services are delivered through shared service arrangements with the private sector or other councils. It might also mean that their are some asset sales or fundamental questions are asked about whether council should be involved in commercial activities, and instead concentrate on its regulatory functions to achieve positive community outcomes.

Debt

Council debt is very much like shifting a container ship. The larger it is, the longer it takes to turn it around.

ContainerShip

The good news is our projected debt is planned to be reduced. But it will take time and requires discipline with future spending decisions. Choices will need to be made, not only within service areas, but between different services.

It’s a question of priorities.

So what will our debt and rates look like over the next 10 years. And what did it look like before 2013.

The debt position for the next 10 years has substantially improved. By 2025, projected debt will be around $109 million, with it peaking in 2018 to $193 million, if $25 million is invested in the Dam. How this is achieved is outlined on page 11 of the consultative document.

Essentially, its a $143.39 million reduction in expenditure over the 10 year period. However, a number of important infrastructural projects will still proceed. These are outlined on page 34 of the consultative document and include storm water initiatives (Borck creek and Richmond CBD improvements), water storage (the Dam), water supply initiatives to support growth, the Motueka library upgrade, and the second instalment of the Golden Bay recreational facility.

This is a marked improvement on where we have come from. From 2006, there was been a clear trend of escalating debt and expenditure. With debt beginning to increase from 2003.

DebtProjection2

So how did council accumulate this debt? The simple answer is that council spent more than it earned (as illustrated below). In my opinion it often borrowed money in anticipation of earning it, and often those projections were unrealistic or optimistic. In my opinion, council also appeared to over capitalise in anticipation of perceived problems. For example, widening roads. Or spent money on projects that were nice to haves – often within the community development budget. Again it is noticeable that spending began to markedly increase around 2003 and gained momentum after 2006.

DebtProjection4

Rates

The good news is rates increases will now be capped to no more than 3% (plus an allowance for growth). Growth is projected to be between 1.18% to 2.55%. This is a substantial improvement on the past (as illustrated below). However, I believe there is still room for improvement, but this will have to come from reducing or ceasing some activities that the council has performed in the past.

RatesOverview

Revenue

Council’s revenue is driven from three pools of income: (1) general rates, (2) targeted rates, and (3) other charges and revenue sources (eg, consent charges, forestry, and other commercial activities), as illustrated below.

OperatingRevenue

For more detail about the council’s finances read the Draft Finance Strategy report, located in the supporting information table (see http://www.tasman.govt.nz/policy/public-consultation/2015-2025-long-term-plan/supporting-information/).

The Dam decision

This is the big issue for this consultation. Do we proceed with a Dam, how much money should we be contributing, and how big should the dam be?

The majority (not all) of council has suggested a ratepayer contribution of $25 million. This comprises around $9 million to secure urban water supply for the the long term future, and a further $13 million for the environmental benefits of an improved river flow. The remaining amount (roughly $3 million) funds administration and planning.

Any plan B initiatives for urban water needs are likely to cost no more than the urban contribution for the Dam. However, it needs to be remembered that the urban water supply is statutorily protected – such that if there are severe water restrictions, maintaining water supply for people is a priority. Although this would come at a cost to those businesses dependent on water.

The environmental contribution ensures the river flow is maintained to around 1100 litres per second. It might be that a lower flow rate is acceptable. Alternatively you might question pif you are getting your money’s worth from any benefits from providing enough water to fill the river for trout or swimming. It might be that you are happy that there is enough water in the gravels, rather on top of the gravels. What do you think?

How much of the environmental flow is funded, and whether it is funded on a cascading tiered approach, or a flat levy, has yet to be decided. The contributor/exacerbator argument, that many submitters raised, has been accepted in principle. However, council continues to suggest that all ratepayers might be called upon to provide a contribution. What do you think?

To date ,the government has not made any noise on underwriting any cost blow outs for urban water users or assisting in the funding of the environmental flows. However, the government has made noise about providing financial assistance for irrigators. At the same time, Nelson council is consulting (in its consultation document) on any contribution to the Dam.

All the relevant Dam information is still located on the dedicated webpage (see http://www.waimeacommunitydam.co.nz) as well as the in the consultation documents.

Storm water

In a recent survey, storm water risk was, by far, the number one concern for Richmond residents. The question is, has the council done enough?

At present, the council has committed to ensuring the Richmond business centre receives immediate attention.

Council has not reduced the storm water budget from earlier years, whereas it has reduced expenditure in other areas. However, some may question if enough was done in the past.

Should council re-prioritise funding priorities so that known flood risks are mitigated before another heavy down poor happens. For example, shift funds from the transport budget (for new traffic lights on Salisbury Road), to fixing the 4 risk hotspots in Richmond. Or are residents happy to wait for work to be done over a longer period of time.

The edges of Richmond (in particular, Hart’s Road, Bateup Road, Wensely Road, the cemetery reservoir, and Selbourne Avenue), have not received any attention in the short term. Should they?

I mention the cemetery reservoir, because it nearly breached in the last big rainfall, had it not been for a resident clearing the overflow grill in the very early hours of the morning (we’re talking 1-2am). Given the new Olive Estate development has been given consent to discharge storm water water down its road and towards the cemetery, it very likely the cemetery reservoir will have even more water to hold, and is therefore more likely to breach. Some may question the council’s use of a cemetery as a flood plain.

Olive Estate has also been given consent to discharge 600 litres per second of water into Harts Creek (along Fairise Drive in Richmond South). With the reservoir above Fairise drive already expanded to hold storm water from the new Hill Street South development, its likely more water will be entering Harts creek.

In my opinion, council needs to urgently address improvements to Harts creek. This might only be digging it out deeper to allow it to hold more water, and replacing the narrowed pipe between Harts creek culvert and Bateup Road culvert. If this is not done, then I envisage even more water will spilling out of Harts creek, and making its way down Bateup Road in an uncontrolled fashion. Which is exactly what happened in the 2011 floods.

Unfortunately, I have got little support from the other Richmond councillors to invest money in fixing well known hotspots. In my opinion, council should be protecting homes from flooding, before spending money on other projects (like new traffic lights on Salisbury Road or road widening in Lower Queen Street). Its about priorities.

Council is also addressing Borcks creek which much of the Richmond storm water systems were designed to connect into. In fact, Richmond South was at one point in time, prevented from further residential development until Borck’s creek connection work was complete. How this condition was ever removed from the District Plan is beyond me, especially when the revised plan sought to intensify development in the Richmond South area.

For more detail around what is (or is not planned) see the document entitled “Stormwater Activity Management Plan” located at http://www.tasman.govt.nz/policy/public-consultation/2015-2025-long-term-plan/supporting-information/#amps.

Water (supply and quality)

The council has already undertaken to improve water quality in Richmond. In my opinion, infrastructural investment which was well overdue, and should have been done sometime ago before spending money on community development initiatives (like recreation centres). Its about priorities! Fortunately this has now been done, with the new water treatment station coming online this year.

At present council is trying to supply water more water to the Richmond South development area (south of Hart’s Road). To do this council is shifting water around during low consumption periods (mainly over night). Should council be investing in better water supply infrastructure, rather than putting together infrastructure in an ad hoc fashion?

Water charges and expenditure

Water charges are increasing to service expenditure.

Operating expenditure increases from $11.2 to $16.1 million over the 10 year period. This is due to inflation, increased loan servicing costs and network growth.

WaterExpend

To address increasing expenditure, the daily charge is proposed to rise from $0.82 to $1.25 over the 10 year period. The volume per cube is proposed to rise from $2.09 to $3.15 over the 10 year period.

WaterCharges

This roughly translates into the following revenue forecast.

WaterRevenue

Capital expenditure fluctuates over the 10 year period. The notable peak in year 2017-18, in addition to the dam, is due to the Wakefield Treatment Plant ($4,000,000) project.

WaterCosts

For more detail around what is (or is not planned) see the document entitled “Water Supply Activity Management Plan” located at http://www.tasman.govt.nz/policy/public-consultation/2015-2025-long-term-plan/supporting-information/#amps.

Roads

The roading budget has been reduced. This has been achieved by sweating the assets more than in the past. Effectively, roading assets were being replaced (maintained) at very high levels, often being replaced in anticipation of deterioration based on industry best practice, rather than evaluating if the road actually needed to be replaced.

Service levels

In my opinion, the council has a very high level of service in roading compared to the past. You only have to look around to see a high level of capital investment. For example: a pedestrian island on Hill Street with Steel protection barriers, that only has room for one person; traffic lights on Salisbury road when a cheaper round-about would have done the trick; roads being unnecessarily widened in anticipation of increasing use, rather than responding to increasing use; sealing roads that perhaps should not have been sealed, and then having to maintain them.

The roading work that is projected to be done is outlined in the councils activity management plans. These can be viewed in the document entitled “Transportation Activity Management Plan” located at http://www.tasman.govt.nz/policy/public-consultation/2015-2025-long-term-plan/supporting-information/#amps.

If you think some projects are unnecessary – then let council know in your submission.

More traffic lights?

In my opinion, the roading budget needs to be reduced further. For example, the long term plan is proposing two more sets of traffic lights on Salisbury Road. One at the T-junction of William Street, and another replacing the old round-about at the Queen Street\Salisbury Road intersection.

At $1 million a pop, this type of proposed expenditure is unnecessary. Its complete over-kill. My own assessment of the William Street intersection shows that there is only a 20 min period where the road becomes congested and this is primarily to do with the location of the pedestrian crossing next to the intermediate school and the prior traffic lights which send through large blocks of traffic – long enough to block William Street when people are crossing.

Replacing the old around-about, which has probably been the best roading investment council made, with more traffic lights, is in my opinion just bonkers. I’ve continually advised staff that traffic lights are not wanted by the community (in fact people go out of their way to avoid them). In the UK they are ripping out traffic lights and replacing them with round-abouts. At very busy intersections. See my earlier post on the case against traffic lights (https://greeningtasman.wordpress.com/2013/11/04/the-case-against-traffic-lights-removing-the-roads-to-nowhere/).

If you agree or disagree with the proposal to install more traffic lights, put in a submission.

You might also want to mention in your submission how the Gladstone Road\Queen Street traffic lights do not allow you to turn left into Queen Street when coming from Nelson (via the deviation). Apparently the left turn was removed as part of council’s ring road system.

I’m not sure how allowing the left turn again, compromises this ring road system (if at all), but its no surprise that businesses in lower Queen Street are having a hard time, when traffic can not enter lower Queen Street. Council need to allow the left turn.

Again, your submission will hopefully persuade others around the council table that residents want further change and more cost reduction. Because the more money saved, the less money council needs from you in the form of rates and charges.

Submissions

Submissions can be made in hard copy or online. The online submission form has the advantage of letting you make multiple submissions. So if you remember something after making your first submission, you can make another.

The online submission form is located at http://www.tasman.govt.nz/policy/public-consultation/make-a-submission/#form.

Full Council meeting (17 April)

A full council meeting was held on 17 April 2014. Apologies were received from Mayor Kempthorne and Crs King and Norris.

The meeting considered the following agenda items: (1) disestablishment of the communications subcommittee, (2) portable seating policy, (3) report from the joint nelson and tasman regional transport committee, (4) mayor’s report, (5) chief executive’s activity report, (6) machinery resolutions report, and (7) action items – previous council meetings. I intend to summarise the main issues below.

Communications subcommittee

The disestablishment of communications subcommittee was discussed in an earlier post (and was passed unanimously by council with little debate) so I will not re-litigate the merits of disestablishing this committee. This was a good decision. However, in my opinion a working group needs to be established to review (and reduce) councils publishing costs. Especially if some publishing decisions are been driven by political, rather than regulatory, requirements.

Portable seating

In 2007, the council purchased 3000 portable seats as part of its commitment to upgrading the Trafalgar Park (as part of a number of rugby world cup initiatives). Interestingly the Trafalgar Park upgrade also included removing the cycle velodrome (located on the edges of the rugby field) and shifting it to Saxton field as part of improving the park for rugby viewing. To pay the $449,369 cost of the portable seats, $322,369 was taken from the regional facilities budget (ie the shared facilities rate) with the remaining $127,000 taken out on a 40 year loan. The balance on the loan balance is currently $106,500.

Unfortunately, the seats have been poorly managed, and during their use at the rugby world cup, parts were mixed with another supplier’s parts, resulting in the council having a number of inferior parts. Before the council could obtain the parts back, the supplier went bankrupt and any claim to the parts was not pursued further. Flooring planks are now delaminating and an estimate for their replacement is approximately $10,810. Unfortunately, due to parts being mixed it is unlikely a valid warranty claim could be made. However, community groups have provided their time for free in fixing the seats as well as assembling (and removing) them for major rugby events.

Since acquisition the council has spent a further $69,136 (including another $45,136 on replacement parts, $3,500 on maintenance, and $20,500 on loan payments). Over the same period the portable seats have raised $22,838 in income. In effect, an overall loss of around $40k.

Community organisations continue to seek use of the portable seats. However, there remains a tension in the council continuing to supply portable seats and the costs of providing those seats. Given the ongoing pressures the council has to confront increasing cost recovery for the use of the seats against their disposal. In effect leaving the community to hire the seats from a private vendor for higher charges.

Council decided in the short term to retain the seating (given hire interest from the Mako’s and the world cup cricket), but increase the charges and bonds for their use. Given much of the replacement costs had already been incurred, there seemed little merit in disposing of the assets.

Regional transport committee

On 10 February 2014, the NZ transport Agency (NZTA) asked the regional councils to support a joint transport committee. Council authorised the Mayor and the Chair of the engineering committee to advance a joint regional transport committee.

Mayors report

A number of items were raised in this report (including the training and travel budget, currently $17,000 for the 2013-14 year). Of interest to me was a proposal to establish an economic development advisory forum that would comprise business leaders and selected council representatives (p 30).

Chief executives report

The following summary is based on the contents of the chief executive’s report to the full council and the subsequent finance report to the corporate services committee (on 24 April 2014).

Councils net financial position (as at 28 February 2014) has been a good one and there appears to be a good chance that their might be a surplus at the end of the financial year against the planned annual budget for 2013-14. The year to date accounting income (against plan) was $4.4 million ahead of budget and expenditure was $440,000 below budget. The net position is an accounting surplus of $8 million achieved against the year to date budgeted surplus of $3.1 million. The underlying position was a surplus of $0.58 million.

The significant positive variance is mainly due to a $2.5 million gain on unrealised interest swaps, the sale of $110,000 of property and vehicles, vested assets of $2.2 million being lower than the budgeted year to date figure of $3.1 million, a positive variance of $850,000 in development contributions due to recent land development activity in Richmond, and the early arrival of some grant funds.

Capital expenditure at $12.4 million was below the year to date budget. However, this is mainly a timing issue that will be corrected as the richmond water treatment plant begins construction.

As at 31 January 2014, TDC’s working capital position was $5 million, compared to the year end projection of $4.4 million.

As at 31 March 2014, council debt was $151 million, paying a weighted average interest rate of 5.173%. TDC’s cost of funds (including interest rate swaps, bank margins and line fees) is 5.411%. A simple calculation suggests we are roughly paying $8 million in interest payments. Thats several community facilities (or one water treatment plant).

Agenda and minutes

The agenda and minutes for this meeting are located at http://www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/full-council-meetings/?path=/EDMS/Public/Meetings/FullCouncil/2014/2014-04-17.

 

 

Full Council and Community Development meetings (13 February 2014)

February and March 2014 have been a very busy period for myself, with attendance at council meetings and planning workshops taking up a lot of time – not to mention all the associated reading of documents that has to be undertaken. So much for trying to also sustain a personal income. I can now see why some councillors are so keen to top up their part-time remuneration with as many director appointments, chair roles, and commissioner roles, as they can leverage or muster.

February 13th was certainly a busy morning, with the Community Development meeting following hot on the heels of a Full Council meeting. Together with Richmond Ward councillors meeting to discuss the revised Richmond reserves fund. Interestingly, full council meetings are suppose to happen every 6 weeks, but this has not been the case over the start of this year – and in the process has caused some understandable confusion for some residents.

Apart from the mayor (who submitted his apologies for not attending), all councillors were present for both meetings.

Full Council Meeting

The council considered the following agenda items: (1) appointment of advisors to the regional transport committee, and (2) the Richmond water treatment plant project (located in lower Queen Street). The agenda was unusually much shorter than a normal full council meeting and was subsequently followed by another full council meeting a week later on 19 February. Neither were called as extraordinary meetings.

In public forum, Jo-anne Ellis spoke about her concerns about the recycle centre’s demise and the Richmond water treatment plants location and design. She expressed concerns that it was not widely communicated to the public other than in the long term plan.

Regional transport committee advisors

Questions were raised about the need for the appointed of advisors to the regional transport committee and the projected cost ($4,500 per year). However, it was explained that the advisors rarely claimed the $150 meeting fee (eg the police and TRNZ covered their own costs), and advisors had been used before. Further, the appointment of advisors provided a more robust discussion from targeted interest groups (eg cultural and mobility groups) ensuring issues did not arise later in the process. An ambulance at the top, rather than the bottom, of the process. Appointed advisors included: Karen Leee (environmental issues), Bill Findlater (economic issues), Inspector Jeniffer Richardson (safety), Geoff Cameron (public health), Donna Smith (mobility), Frank Hippolite (cultural issues). Together with a representative from Nelson and Marlborough councils.

Richmond water treatment plant

Most of councils time was spent discussing the Richmond water treatment plant. And this was of particular interest to me given the size and importance of the investment.

The water treatment plant will be located in lower Queen Street near Headingly lane and McShanes Road. A good map of the pipework is provided in the agenda (page 15, para 7.10). Effectively the treatment plant will blend two groundwater sources to achieve required nitrate levels together with an ultra-violet treatment to achieve protoza levels in accordance with New Zealand drinking water standards prescribed by statute. Pumps will also be upgraded.

The project is planned to cost roughly $9.5 million. Work will be spread over two years (roughly $4.7 million per year). However, tenders for the project placed its cost well over budget. Council staff have since reviewed the scope of the project finding a number of savings to bring it back into budget. Most of the savings involve deferring replacement of estimated pipework (31% of the tender value).

Apparently for some time now council have been deferring expenditure on a water treatment plant. However, due to potential national water standard breaches (resulting in water boil notices being issued), and water management plans having to be resubmitted if the project did not proceed (a costly exercise), council could no longer defer this project. Richmond is one one of the few towns left in the country that does not currently comply with protoza treatment.

Why such an important project was deferred given $26 million dollars was borrowed to fund community facilities raises some questions over council’s earlier priorities. However, thats history now and this council is reprioritising where it spends ratepayer’s money.

Community Development Meeting

The committee considered the following agenda items: (1) presentation from the Nelson School of Music, and reports on (2) the Moutre Hills Community centre extension (ministerial consent), (3) portable seating for rugby events, (4) the Golden Bay Community facility working party, (5) funding applications, and (6) the ecofest and environment awards. Together manager’s reports on community development and relations. A useful action sheet of council activity is also provided in the agenda.

Portable seating

The most discussed topic was the request from the rugby union to reduce the council’s charges for the use of the council’s portable seating for both the Marko games and the Crusaders game. After some discussion about the equipment being repaired by volunteer groups it was judged that a reduced rate could be afforded and the council was directed to return to the unions with a revised proposal. The poor state of the equipment (and possibly pieces being lost or swapped with other companies equipment) raised questions over the proper management of the potable seating and equipment warranties. Apparently floors were crumbling, when they were suppose to be manufactured from marine ply.

Golden Bay shared recreational facility

Unfortunately, the Golden Bay recreational facility is a hotly debated topic. In part, this is because of decisions and agreements made around the council table by earlier councils. In my opinion, it should have been the first community facility constructed by the council as it went about borrowing over $26 million to fund a number of community and recreational facilities around the Tasman area. Unfortunately it was not, and has been the last cab off the rank.

This is disappointing, as the Golden Bay community is probably the most isolated of all the Tasman communities. It is now even more unfortunate, given the current financial environment. Council is now confronted with keeping debt down – and projects now have to be revisited with a fresh perspective and revised priority. The question we face is do we spend money now Golden Bays community facilities or do we wait another 10 or 20 years time, when we might be in a better financial position to afford them.

I’ve visited the community facilities in Golden Bay. The sports ground facilities are in reasonable condition and have been well looked after by the community, who are clearly proud of what they have. Apart from the stand (located above the rugby club rooms), not meeting current earthquake standards (and these standards could change), and the need to improve discrete access to showers for visiting teams, it would appear the asset has a number of years still left in it.

To my mind I wonder if we have been replacing community assets to quickly and not sweating them a little more. For the sports ground in Golden Bay I wonder if a cheaper option would be for council to close the stand (and wait for earthquake standards to be lowered by forthcoming legislation), as well as provide some temporary screens between visitors changing rooms and showers.

Another important consideration that council needs to weigh up whether deferring investment in community facilities is a wise decision, is that the community already has on its door step the most amazing natural facilities and parks – something Richmond does not have. It has fantastic beaches and reserves. Do we need to provide even more public activities for the community than are already available? Are we over capitalising our community development expenditure in a region that has the smallest population base?

As you can see the debate is hard. Expectations may not be fulfilled in the short term. But council has to confront these hard choices. I think deferring further investment until we can afford it is the most prudent decision we can make. Council is obliged to take a district wide view. We’ve already made a sizeable investment (and debt) in community facilities already. Our spending priorities must now shift to protecting peoples homes and ensuring we have adequate storm water protection in place for now and in the future.

That all said, the decision of council was to approve the design phase to get a better picture of overall costs and to cap any investment of council to $3.5 million (being 80% of the overall cost). This allowed the community to also have a better picture of how much they would need to raise towards the project to get it over the threshold and off the ground.

A copy of the recreational facility plans can be found here http://www.tasman.govt.nz/policy/public-consultation/feedback-form-golden-bay-community-recreation-facility-concept-plan/

Note! Since that meeting, council has decided to remove the Golden Bay recreational facility from the annual plan for the 2014-15 year. And to leave discussion about future investment in the facility to the long term plan. If you support the council’s decision to do this you should make a submission to the annual plan acknowledging your support. A risk of council showing some leadership on this issue is that all of the submissions on the annual plan may come from only those people opposed to the decision to remove the facility from next years planned expenditure. And therefore result in the facility being put back into the plan. This is because council are obliged to take into consideration submissions on the annual plan from the community. That is why we have a consultation process on the annual plan. Therefore, if you think the facilities removal from the annual plan is a good idea, do tell council. And if you have any other ideas to save money – do tell council.

Richmond reserves fund

Each Ward has a reserves fund that is used to make improvements to local reserves and parks. For the next financial year we are looking to ensure that funds are spent on the basis of money received, rather than on planned income. In the past, money was spent on the basis of projected income. However, sometimes that projection did not materialise, leaving a short fall between planned expenditure and projected income. As part of a new approach of living within our means we will only be spending money we have actually received. This means that we will not be doing a lot of reserves work in the next financial year. Further, as part of our collective wish to reduce debt, we will be looking to direct surplus reserve funds towards debt reduction.

Agenda and minutes

The Agenda and minutes for the full council meeting and community development meeting can be found at: (1) http://www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/full-council-meetings/?path=/EDMS/Public/Meetings/FullCouncil/2014/2014-02-13 and (2) http://www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/community-services-committee-meetings/?path=/EDMS/Public/Meetings/CommunityServicesCommittee/2014/2014-02-13.

High density housing – a sensible approach

I recently participated in the an urban development survey for TDC. The survey questions and my answers are reproduced below.

What kind of high density housing could work well in Richmond?

High density housing (HDH) should be allowed in areas that require revitalisation and which would be uneconomic to redevelop but for HDH.  HDH should not be allowed in large greenfield developments. This will incentivise HDH in more central areas closer to transport hubs and services.  HDH should not be allowed in large greenfield developments as these are usually further away from the central town.  However, small clusters of HDH (for example, 6 houses) in large greenfield developments could be allowed to enable a more balanced socio economic mix.  Large estates of HDH should not be allowed as this will tend to create ghettos of low socio economic classes of people.  Council should be aiming for a balance approach.

What do you think about Council’s reasons for looking into higher density forms of housing?

The reasons for examining the issue are valid. Although the population growth pressures may in the long terms not eventuate unless more people move to Richmond. I support the council in not allowing multi-level apartment buildings. Furthermore, general housing prices may fall as more people move into retirement homes.

Where in Richmond do you think it might be more suitable for higher density development?

If the aim is to revisitalise already developed areas of the town that are run down, then the reasoning is good. However, HDH should not be seen as a new form of greenfield development.  For example, very large retirement villages or life style villages.  Large HDH estates can create rapid pressure points on parts of the community that a small cluster approach can avoid.

If the aim is to provide low cost housing for low socio economic people, then incentivising development in already run down areas is the best approach. This will improve the overall health of the wider community while providing better quality and more affordable housing for those that need it.

What do you think Council should do to facilitate higher density development?

Only in already developed areas that require revitalisation or in small clusters (eg 6 houses) mixed in with a standard housing development to create a more balanced socio economic development.