Funding Impact Statement

Otorohanga District Council Amended Long Term Plan 2017-25

Funding Impact Statement Introduction Amount of funds to be produced The Local Government (Rating) Act 2002 sets out the methods by The amount of funds to be produced by each mechanism in relation which local authorities can rate and the detailed criteria around their to the Long-Term Plan can be found on page 195 of this funding uses. impact statement. The Local Government Act 2002 sets out processes and policies The amount to be produced from each rating mechanism is further that local authorities must apply in the establishment of their rating broken down by the Note of the funding impact statement. systems, including the provisions of information to communities. General Rate This funding impact statement sets out: The valuation system to be used for the general rate is capital  The revenue and financing mechanisms used; value.  An indicative level or amount of funding for each mechanism; Uniform Annual General Charge  Explanatory information supporting the use of general and A uniform annual general charge will be set at a fixed dollar amount targeted rates; and for each rating unit in the District.  A summary of the total rates requirement. Under the Local Government (Rating) Act 2002 the Council is  The application of funding methods to Council’s activities is required to ensure that its uniform charges do not exceed 30% of summarised in a table at the end of this section. the total rates take. For the 2015/16 year the uniform charges equate to 22.02% of the total rates take. This statement should be read in conjunction with Council’s Revenue and Financing policy that sets out Council’s policies in Lump Sum Contributions. respect of each source of funding of operating and capital There are currently no plans to invite lump sum contributions in expenses. respect of any of the targeted rates listed below. Revenue and Financing Mechanisms Background Targeted Rates The Revenue and Financing mechanisms to be used by the Council Individual targeted rates to be set and assessed for the Long-Term in relation to the Long-Term Plan can be found on page 195 of this Plan are listed on page 195 of this Funding Impact Statement. funding impact statement. These apply to all years covered by this plan. Definitions of various categories of rateable land used on page 195 for setting targeted rates are as follows:

Page 190

Page 191

Land Transport Rate Security Targeted Rate All properties within the District fall under this category. The area of benefit is defined on a map approved by Council. Rural Rate Otorohanga Water Supply All areas not within either the Otorohanga or Kawhia Communities All properties connected to the Otorohanga Water Supply Scheme fall under this category. Valuation numbers begin with 05550, are levied a rate per connection. 05620, 05650, 05670 or 05680. Otorohanga Sewerage Kawhia Community Rate All properties that are connected to the Otorohanga Sewerage The area of the Kawhia Community is defined on a map approved Treatment & Reticulation Scheme are levied a rate per separately by Council. Valuation numbers begin with 05640. used or inhabited part of the rating unit. All properties with four or less water closets or urinals pay a flat fee. For all water closets or Hall Targeted Rates urinals over 4, a charge for each additional water closet or urinal Hall areas are defined on maps approved by the hall committees applies. and Council. Funds received are generally available to Hall Committees to go towards the operation, maintenance, renovation Water Supplied By Volume Rates - Otorohanga and/or extension of those facilities. Properties in the Otorohanga Community water supply area with water meters are levied a targeted rate for water usage over the Water Supplied By Volume Rates – Rural Water free allowance. This rate is set on a per cubic metre usage basis. Schemes (Arohena, Tihiroa, Ranginui and Waipa) Every non-rateable separate rating unit within the Otorohanga Separate rating units in the Rural Water Supply areas with water Community has a targeted rate per annum. Those that are metered meters are levied a targeted rate for water usage. This rate is set on are charged for consumption, with a minimum charge applying. a per cubic metre usage basis. Properties outside the Otorohanga Community water supply area, Separate rating units in the Rural Water Supply areas also attract a whether rateable or non-rateable, that are using water from the charge for each meter connected to the Rural Water Scheme. Otorohanga scheme are levied a targeted rate for water usage, on a per cubic metre basis, with a minimum charge per annum. Otorohanga Refuse Targeted Rate All properties, either rateable or non-rateable, receiving an All properties situated in the Otorohanga Community that have a extraordinary supply from the Otorohanga Community Water building erected thereon are levied a uniform targeted rate for each Supply will have a charge for each water meter. separately occupied portion of any building.

Otorohanga District Council Amended Long Term Plan 2017-25

Kawhia Refuse Targeted Rate Treatment Plant Upgrade after 30 June 2009 (or which has provided water to such a rating unit from the Kawhia Community All properties situated in the Kawhia Community that have a Supply) shall be charged for a proportion of metered water used building erected thereon are levied a uniform targeted rate for each during the period from 20 December to the following 20 February at separately occupied portion of any building. a higher rate per cubic metre. The proportion of metered water used Kawhia Water Supply to which the Peak Season Metered Water Charge (PSMWC) shall be applicable for a particular rateable or non-rateable unit shall be All properties that are connected to the Kawhia Water Supply established based upon the following table: Scheme are levied a uniform targeted rate per connection.

Kawhia Targeted Water Loan Rate Water Consuming Unit Proportion of metered water volume to Properties in the Kawhia Community water supply area are levied a Category which PSMWC charges applicable for targeted loan rate to finance loan repayment costs in respect of consuming unit loans raised for capital expenditure on the Kawhia water scheme. New residential unit 100% Water Supplied By Volume Rates - Kawhia Unit identified as supplying 100% Separate rating units in the Kawhia Community water supply area water to another unit liable with water meters are levied a targeted rate for water usage over for PSMWC charges the free allowance. This rate is set on a per cubic metre usage Addition of Minor 33% basis. Household Unit to existing Separate rating units outside the Kawhia Community water supply residential lot to which area with water meters that are using water from the Kawhia PSMWC not applicable scheme are levied a targeted rate for water usage, on a per cubic Other developments Case by case assessments based upon metre basis, with a minimum charge per annum. the proportion of development contribution applicable Household All separate rating units, either rateable or non-rateable, receiving 4 an extraordinary supply from the Kawhia Community Water Supply Equivalent Units (HEUs) as a will have a charge for each water meter. proportion of the total Household Equivalent Units of the property after Water Supplied By Volume Rates – Kawhia (Peak development. Season Metered Water Charge) Example: 2 HEU property developed to Separate rating units, both rateable and non-rateable, in the Kawhia Community water supply area that would have been liable for a Development Contribution in respect of the Kawhia Water 4 Where HEUs are defined as in Council’s Policy on Development and Financial Contributions

Page 192

Page 193

Water Consuming Unit Proportion of metered water volume to Separately Used of Inhabited Part of a Rating Unit Category which PSMWC charges applicable for consuming unit A separately used or inhabited part of a rating unit includes any part of a rating unit separately used or inhabited by the owner or any 5 HEU other person who has the right to use or inhabit that part by virtue of Proportion = (5 – 2)/5 = 60% a tenancy, lease or other agreement. As a minimum, the land or premises intended to form the separately used or inhabited part of the rating unit must be capable of actual habitation, or separate use. For the avoidance of doubt, a rating unit that has only one use Differential Targeted Rates (i.e. does not have separate parts or is vacant land) is treated as Differential Definitions being one separately used or inhabited part. Properties within the Otorohanga Community may be charged Other Definitions targeted rates under one of two differentials. The differentials are applied based on the use to which the land is put. Metered supply for the purpose of extraordinary water supply shall exclude those properties where a water meter has been installed for The definitions of the two land use categories are: research purposes only, or which do not otherwise satisfy the  Otorohanga Commercial criteria for an Extraordinary Water Supply as defined below.  Otorohanga Residential The supply of water to a customer which is used solely for domestic purposes in the dwelling unit shall be deemed to be an Ordinary The following targeted rates are set using differentials. Supply. Otorohanga Community Rate All other purposes for which water is supplied other than Ordinary The area of the Otorohanga Community is defined on a map Supply shall be deemed to be an Extraordinary Supply and may be approved by Council. Valuation numbers begin with either 05540 or subject to specific conditions and limitations. Extraordinary Supply, 05541. as defined in Council’s Water Services Bylaw 2007, refers to the following circumstances: Otorohanga Targeted Sewerage Loan Rate All premises outside the Otorohanga and Kawhia Communities Areas of benefit are defined on maps and approved by Council. which are connected to and draw water from the public water Otorohanga Targeted Water Loan Rate supply networks serving those communities, excluding those premises within the defined area of the Waipa Rural Water Supply Areas of benefit are defined on maps and approved by Council. Scheme; and All premises within the Otorohanga or Kawhia communities used for commercial, industrial or agricultural purposes, and schools, clubs and other non-residential premises where levels of water

Otorohanga District Council Amended Long Term Plan 2017-25

consumption would be expected to be significantly higher than that of a typical residential property. Funding Impact Statement and Financial Statements Two sets of financial information are presented within this Long Term Plan:  The usual Generally Accepted Accounting Principles (GAAP) regulated statements of financial position, comprehensive income and the like; and  A funding impact statement. Key differences between these two sets of information are that GAAP regulated financial statements as the name suggest must adhere to GAAP requirements. The Funding Impact Statement (FIS) is intended to make the sources and applications of Council funds more transparent to its stakeholders than might be the case if only the usual GAAP financial requirements but it must follow a prescribed format. The Council level FIS  Links the Councils Revenue and Financing Policy, the annual setting of rates, fees, development contribution and the annual borrowing requirement;  Sets out the revenue and financing mechanisms that will be used in each year along with an indicative level or amount of funds to come from each mechanism; and  Shows the planned application of funds in each year.

Page 194

Page 195

2015/16 Rates Information Total Rates 2015/16 (GST Categories on which Factor or Factors Differential Differential Indicative Revenue Exclusive) Rate is set Categories Calculation Required Units of Rate or Charge Measure 2,122,077 General Rate Every rating unit in the Rate in the $ on 3,484,363,001 0.0006090 district capital value (partially funds activities as detailed below) 1,334,557 Uniform Annual Every rating unit in the Fixed amount for 4,116 324.24 General Charge district each rating unit (partially funds activities as detailed below) 3,821,131 Land Transport Rate Every rating unit in the Rate in the $ on 3,483,684,001 0.0010969 district capital value (partially funds the Land transport 1,206,673 programme in Fixed amount for compliance with the 4,116 293.17 each rating unit Revenue and Financing Policy). 145,474 Rural Targeted Rate Every rating unit in the Rate in the $ on 3,007,172,008 0.0000484 defined rural rating capital value (partially funds area activities as detailed Fixed amount for 252,477 2,192 115.18 below) each rating unit 79,414 Otorohanga Every rating unit in the Rate in the $ on Commercial Ratio 2.5 83,849,798 0.0009471 Community Targeted defined Otorohanga capital value Properties

Rate Community area

90,533 Ratio 1.0 238,972,651 0.0003788 (partially funds Residential

Otorohanga District Council Amended Long Term Plan 2017-25

Total Rates 2015/16 (GST Categories on which Factor or Factors Differential Differential Indicative Revenue Exclusive) Rate is set Categories Calculation Required Units of Rate or Charge Measure activities as detailed Properties below) 233,934 1,306 179.12 Fixed amount for each rating unit 88,009 Kawhia Community Every rating unit in the Rate in the $ on 152,899,044 0.0005756 Targeted Rate defined Kawhia capital value

Community area (partially funds Fixed amount for 53,168 606 87.74 activities as detailed each rating unit below) 146,754 Refuse Collection Every rating unit in the Fixed amount for 1,363 107.67 Targeted Rate defined Otorohanga each separately Otorohanga Community area used or inhabited part of a rating unit

115,995 Refuse Collection Every rating unit in the Fixed amount for 524 221.36 Targeted Rate Kawhia defined Kawhia each separately Community area used or inhabited part of a rating unit 422,123 Water Supply Every rating unit in the Fixed amount for Otorohanga Ratio 1.0 1,370 308.12 Targeted Rate defined Otorohanga each separately Community

Otorohanga Water Supply area used or inhabited

1,250 part of a rating unit Ratio 1.0 3 416.67 Outer Area 180,188 Water Supply Every rating unit in the Fixed amount for 418 431.07 Targeted Rate Kawhia defined Kawhia Water each separately Supply area used or inhabited

Page 196

Page 197

Total Rates 2015/16 (GST Categories on which Factor or Factors Differential Differential Indicative Revenue Exclusive) Rate is set Categories Calculation Required Units of Rate or Charge Measure part of a rating unit 15,957 Water Supply Every rating unit in the Rate in the $ on Commercial Ratio 2.5 69,248,500 0.0002304 Targeted Loan Rate – defined Otorohanga capital value Properties

Otorohanga Water Supply area

21,985 Ratio 1.0 238,524,651 0.0000922 Residential Properties 17,069 Water Supply Every rating unit in the Rate in the $ on 113,114,100 0.0001509 Targeted Loan Rate – defined Kawhia Water capital value Kawhia Supply area 10,945 Water Supply Every rating unit in the Rate in the $ on Arohena Rural 115,477,800 0.0000948 Targeted Loan Rate – defined Rural Water capital value Water Scheme Rural Schemes Scheme areas 421,800 Sewerage Treatment Every rating unit in the Fixed amount for Less than 4 1,335 315.96 Targeted Rate defined Otorohanga each separately

Sewerage Treatment used or inhabited 1,555 area part of a rating unit 5 or more per urinal 35 44.44 39,276 Sewerage Treatment Every rating unit in the Rate in the $ on Commercial Ratio 2.5 68,412,500 0.0005741 Targeted Loan Rate defined Otorohanga capital value Properties

Sewerage Treatment

52,063 area Ratio 1.0 226,714,651 0.0002296 Residential Properties 864 Rural Halls Targeted Every rating unit Rate in the $ on Arohena 172,738,900 0.0000050 1,622 Rate within the defined capital value Kio Kio 270,339,150 0.0000060 734 Rural Hall areas Puketotara/ 244,827,50 0.0000030 Ngutunui 2,057 Maihiihi 120,975,600 0.0000170

Otorohanga District Council Amended Long Term Plan 2017-25

2,790 Fixed amount for Arohena 62 45.00 3,840 each separately Kio Kio 192 20.00 3,540 used or inhabited Crossroads 177 20.00 2,394 part of a rating unit Puketotara/ 266 9.00 Ngutunui 2,286 Otewa 127 18.00 15,450 Aotea Erosion Every rating unit Fixed amount for 164 94.20 Targeted Rate within the defined each rating unit Aotea Community area 12,355 Aotea Erosion Every rating unit Fixed amount for 26 475.17 Targeted Loan Rate within the defined each property that Aotea Community did not make a area capital contribution 10,000 CBD Development Every commercial Rate in the $ on 84,084,798 0.0001189 Rate property within the capital value

defined Otorohanga

22,492 Commercial area Fixed amount for 150 149.95 each rating unit 41,570 Security Patrol Rate Every commercial Rate in the $ on 45,372,750 0.0009162 property within the capital value

defined Otorohanga

41,570 Commercial area Fixed amount for 98 424.19 each rating unit 643,000 Water Supplied by Every property Fixed amount for Arohena 395,442 0.40

Page 198

Page 199

Total Rates 2015/16 (GST Categories on which Factor or Factors Differential Differential Indicative Revenue Exclusive) Rate is set Categories Calculation Required Units of Rate or Charge Measure Volume – Rural Water connected to the each cubic metre of Tihiroa 229,885 0.87 Supplies defined Rural Water water consumed Ranginui 175,349 0.43 Schemes.

Waipa 266,409 0.52

Arohena 71 377.78 Fixed amount per Tihiroa 50 400.00 meter Ranginui First meter 7 1,800.00 Additional 11 No charge meter Waipa 129 88.89 118,000 Water Supplied by Every property Fixed amount for Rateable % of revenue Volume – Otorohanga connected to the each cubic metre of properties 51.1% 90,442 0.57 Water Supply defined Otorohanga water consumed Non-rateable Water Supply Scheme (220 cubic metre free 3.2% 4,248 0.76 properties allowance)

Property outside

Otorohanga 45.7% 60,663 0.76 Community

Non rateable inside 10 308.12 Community

All connected

Otorohanga District Council Amended Long Term Plan 2017-25

Total Rates 2015/16 (GST Categories on which Factor or Factors Differential Differential Indicative Revenue Exclusive) Rate is set Categories Calculation Required Units of Rate or Charge Measure Fixed amount per properties 150 102.22 meter 308.12 Minimum charge (where applicable) 7,000 Water Supplied by Every property Fixed amount for Within Community % of revenue 3,084 1.01 Volume – Kawhia connected to the each cubic metre of 68.5% Water Supply defined Kawhia Water water consumed Supply Scheme (220 cubic metre free Outside allowance) Community 31.5% 1,224 1.17

Non rateable inside 431.07 community

All connected Fixed amount per properties 24 102.22 meter 431.07 Minimum charge (where applicable) 2,000 Water Supplied by Every property Fixed amount for 196 10.22 Volume – Kawhia connected to the each cubic meter of Water Supply defined Kawhia Water water consumed (PSMWC) Supply Scheme between 20 meeting the December and 20 conditions. February each year. 11,810,269 TOTAL

Page 200

Page 201

Rate Contributions to Activities Unifrom Annual General Charge and Community Fixed Targeted Rates

District Rural Community Otorohanga Community Kawhia Community $$ $ $ Democratic Process 86.97 - 40.48 43.71 Council Support 16.16 - - - Corporate Planning 52.25 - - - District Economic Development 48.60 - - - Policy Development 6.96 - - - Civil Defence 22.56 - - - Environmental Health 12.64 - - - Dog Control 3.38 - - - Stock Ranging & Impounding 1.82 - - - Litter Control 5.00 - - - Sport Waikato 8.74 - - - Parks & Reserves 38.39 - - - Refuse 5.72 28.00 - - Water Supply 7.99 - - - Sewerage 5.56 - - - Library 38.65 - - - Public Conveniences 7.09 - 3.30 - Kawhia Medical Centre 1.62 - - 10.92 Kawhia Wharf 3.50 - - 7.83 Council Property- 0.71 - - 2.36 11.65 Pool - 104.45 156.83 12.29 Security Patrol - - 7.75 - Halls - - - 14.50 372.87 132.46 205.99 100.90

Otorohanga District Council Amended Long Term Plan 2017-25

General Rate and Targeted Community Rates The following schedule indicates how the proprtion of general rates, and targeted rates set as a rate in the dollar on capital value, are spent on individual activities, for each $10,000 of capital value. District Rural CommunityOtorohanga Community Otorohanga Community Kawhia Community Residential Commercial $$ $ $ $ Democratic Process 1.07 - 2.93 7.33 1.82 Corporate Planning 0.64 - - - - District Economic Development 0.40 - - - - Environmental Services Manager 0.27 - - - - Planning & Development 0.47 - - - - Policy Development 0.09 - - - - Building Control 0.93 - - - - Environmental Health 0.16 - - - - Litter Control 0.12 - - - - Sport Waikato 0.05 - - - - Council Support 0.22 - - - - Refuse 0.07 - - - - Parks & Reserves 1.42 - - - - Library 0.48 - - - - Security Patrol 0.02 - - - - Cemeteries 0.20 - - - - Public Conveniences 0.30 - - - - Kawhia Wharf 0.04 - - - 0.33 Kawhia Medical Centre 0.02 - - - 0.45 Halls - 0.01 - - - Land Drainage - 0.19 - - - Rural Fire - 0.30 - - - Council Property- 0.01 - - 0.17 - 0.43 0.48 Stormwater - 0.06 7.59 18.99 2.35 Property Development 0.05 - - 6.00 - 14.99 1.19

$7.00 $0.56 $4.36 $10.89 $6.62

Page 202

Page 203

Examples of Contributions to Council Services – 2015/16 year 250,000 300,000 250,000 500,000 200,000 300,000 1,000,000 1,500,000 4,500,000 Property Value Otorohanga ResidentialOtorohanga Commercial Kawhia Rural Activity $ $$$$$$$$ Democratic Process 227 247 337 547 188 217 194 247 568 Council Support 22 23 22 27 21 23 39 50 117 Corporate Planning 68 72 68 84 65 72 117 149 341 District Economic Development 59 61 59 69 57 61 88 108 228 Policy Development 9 10 9 11 9 10 16 20 45 Civil Defence 23 23 23 23 23 23 23 23 23 Environmental Health 17 17 17 20 16 17 28 36 83 Dog Control 3 3 3 3 3 3 3 3 3 Stock Ranging & Impounding 2 2 2 2 2 2 2 2 2 Litter Control 8 9 8 11 7 9 17 24 61 Sport Waikato 10 10 10 11 10 10 14 17 33 Parks & Reserves 74 81 74 109 67 81 180 251 676 Refuse 131 132 131 133 262 262 41 44 65 Water Supply 362 362 362 362 504 504 8 8 8 Sewerage 369 369 369 369 6 6 6 6 6 Library 51 53 51 62 48 53 86 110 253 Public Conveniences 18 19 18 25 13 16 37 52 141 Kawhia Medical Centre 2 2 2 3 22 27 4 5 11 Kawhia Wharf 5 5 5 6 19 22 8 10 23 Council Property - 8 - 8 - 14 - 25 20 25 - 2 - 2 - 5 Pool 157 157 157 157 12 12 104 104 104 Security Patrol 8 8 759 1,023 0 0 2 2 7 Halls - - - - 14 14 1 1 3 Environmental Services Manager 7 8 7 13 5 8 27 40 121 Planning & Development 12 14 12 23 9 14 47 70 210 Building Control 23 28 23 46 19 28 93 139 418 Cemeteries 5 6 5 10 4 6 20 31 92 Rural Fire ------30 45 134 Stormwater 190 228 475 949 47 71 6 10 29 Land Transport 652 716 652 968 589 716 1,599 2,229 6,013 Sewerage Loan 66 79 165 330 - - - - - Water Loan 26 32 66 132 35 52 - - - Land Drainage ------19 28 85 Property Development - 149 - 178 - 373 - 747 25 37 5 8 24 CBD Development - - 207 241 - - - - - $2,449.39 $2,587.77 $3,709.40 $5,001.04 $2,120.66 $2,400.39 $2,859.88 $3,868.59 $9,920.81

Otorohanga District Council Amended Long Term Plan 2017-25

Proposed Rates Levies and Funding Mix Otorohanga District

Page 204

Page 205

Otorohanga Rural

Otorohanga District Council Amended Long Term Plan 2017-25

Otorohanga Community

Page 206

Page 207

Kawhia Community

Otorohanga District Council Amended Long Term Plan 2017-25

Combined Otorohanga District Summary

Page 208

Page 209

Example Rate increases The following rate increases are indicative only, and are only for reference purposes. The actual increases in later years may be impacted by revaluations of the rating roll and any changes in the number of properties in an area. The following examples exclude specific rates such as Aotea Erosion rates and Rural Hall rates. 2015/16 2016/17 2017/18 Property % Increase $ increase % Increase $ increase % Increase $ increase $250,000 value Otorohanga 2.43% $58.19 3.46% $84.80 -0.42% ($10.54) Residential $300,000 value Otorohanga 2.23% $56.37 3.27% $84.70 -0.22% ($5.88) Residential $250,000 value Otorohanga 6.29% $219.42 1.72% $63.81 0.62% $23.53 Commercial $500,000 value Otorohanga 5.28% $250.84 0.77% $38.53 1.26% $63.74 Commercial $200,000 value Kawhia Residential 3.48% $71.27 3.12% $76.89 3.88% $84.92 $300,000 value Kawhia Residential 3.47% $80.56 2.34% $72.32 3.85% $94.51 $1,000,000 value Rural 2.31% $64.67 3.00% $85.68 3.73% $109.79 $1,500,000 value Rural 1.96% $74.49 2.75% $106.25 3.60% $143.05 $4,500,000 value Rural 1.36% $133.44 2.32% $229.65 3.38% $342.61

Otorohanga District Council Amended Long Term Plan 2017-25

Whole of Council Funding Impact Statement

Page 210

Page 211

Financial Regulations Benchmarks Rates (income) affordability The following graph compares the council's planned rates with a Long Term Plan disclosure statement for the period quantified limit on rates contained in the financial strategy included commencing 1 July 2015 in this long-term plan. The quantified limit is rates being less than 75% of total income for the year.

What is the purpose of this statement? The purpose of this statement is to disclose the council's planned financial performance in relation to various benchmarks to enable the assessment of whether the council is prudently managing its revenues, expenses, assets, liabilities, and general financial dealings. The council is required to include this statement in its long-term plan in accordance with the Local Government (Financial Reporting and Prudence) Regulations 2014 (the regulations). Refer to the regulations for more information, including definitions of some of the terms used in this statement.

Rates affordability benchmark

The council meets the rates affordability benchmark if— Figure 61 - Rates (Income) Affordability  its planned rates income equals or is less than each quantified limit on rates; and  its planned rates increases equal or are less than each quantified limit on rates increases.

Otorohanga District Council Amended Long Term Plan 2017-25

Rates (increases) affordability Debt affordability benchmark The following graph compares the council's planned rates increases The council meets the debt affordability benchmark if its planned with a quantified limit on rates increases contained in the financial borrowing is within each quantified limit on borrowing. strategy included in this long-term plan. The quantified limit is LGCI The following graph compares the council's planned debt with a inflation plus 2%. Refer to the table on page 60 for these limits. quantified limit on borrowing contained in the financial strategy included in this long-term plan. The quantified limit is debt being no more than 100% of total revenue for the year.

Figure 62 - Rates (Increase) Affordability

Figure 63 - Debt Affordability

Page 212

Page 213

Balanced budget benchmark Essential services benchmark The following graph displays the council's planned revenue The following graph displays the council's planned capital (excluding development contributions, financial contributions, expenditure on network services as a proportion of expected vested assets, gains on derivative financial instruments, and depreciation on network services. revaluations of property, plant, or equipment) as a proportion of The council meets the essential services benchmark if its planned planned operating expenses (excluding losses on derivative capital expenditure on network services equals or is greater than financial instruments and revaluations of property, plant, or expected depreciation on network services. equipment).

The council meets the balanced budget benchmark if its planned revenue equals or is greater than its planned operating expenses.

Figure 65 - Essential Services Benchmark

Figure 64 - Balance Budget Benchmark

Otorohanga District Council Amended Long Term Plan 2017-25

Debt servicing benchmark The following graph displays the council's planned borrowing costs as a proportion of planned revenue (excluding development contributions, financial contributions, vested assets, gains on derivative financial instruments, and revaluations of property, plant, or equipment). Because Statistics New Zealand projects the council's population will grow more slowly than the national population is projected to grow, it meets the debt servicing benchmark if its planned borrowing costs equal or are less than 10% of its planned revenue.

Figure 66 - Debt Servicing Benchmark

Page 214