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Other Information 357 357 long term plan 2012-22 Other Information This section contains the assumptions on which this plan is based, the Our Way Southland Outcomes that inform Council’s priorities, a summary of the Assessment of Water and Sanitary Serices and a summary of the Waste Management and Minimisation Plan. COUNCIL VISION other information Creating an exciting, innovative, safe, caring and friendly City offering lifestyles based on a healthy environment and diverse growing economy. 358 Significant Assumptions This Plan is based on a number of assumptions and Annual Plans and Annual Reports will identify where predictions about the future. Assumptions are a there have been significant variations between the “best guess” based on the information available. assumptions and the realised future. Level of Risk Assumption Financial Impact (High/Medium/Low) Catastrophes Medium A major catastrophe could significantly affect the demand for products produced within There will be no major catastrophes (local or the District and Southland, and therefore the remote) that impact on the District and its local economy, reducing the community’s economy. ability to fund current levels of services. Changes in the Invercargill or Southland Medium Significant change to the economy, such Economy as a large employer choosing to locate in the District, may require Council to review There will be gradual positive growth in the and change its current activities and levels Invercargill and Southland economy. of service. These demands will need to be quantified and an amendment to this Plan developed if the costs are significant. Climate Change* Low A Civil Defence emergency in the District would impact financially on Council and The impact of climate change on the District the Community. Financial risk to Council is will be minimal in the next ten years. reduced by maintaining insurance cover for Southland’s climate is expected to become emergency events as well as access to central warmer, wetter and windier. It is assumed government assistance. that flood protection works will also offer protection from storm surge. Delivery of Service Low Confirming current delivery service allows budgets to be developed, based on existing There will be no changes to the way Council costs and contractual agreements. delivers its services, in-house or contractors. Council will continue to investigate Continued investigation into shared services the potential for shared services with could result in cost savings across a range of neighbouring local authorities. Council activities. * Climate Change The New Zealand Climate Change Office has • Stronger west-east rainfall gradient (wetter in the produced a report “Climate Change Effects and west and drier in the east). Impacts Assessment – A Guidance Manual for Local • Increased rainfall and frequency of extreme Government in New Zealand – 2nd Edition”, May (heavy) daily rainfalls. 2008, which predicts: • Increased sea level. • Increased temperatures (with greater increases in • Increased strength of westerly winds. the winter season). • Decreased frost risk but increased risk of very high Projections for Invercargill indicate a rise in average temperatures. annual mean temperature of 0.1 to 1.9 degrees over the next 25 – 30 years. Rainfall is expected to vary 359 long term plan 2012-22 from -2% to 19% over the next 25 – 30 years. The Long term changes in the flows and quality of water greatest rainfall increases are projected during courses which traverse the District, as well as the winter. Invercargill has experienced a history of surrounding sea environment, have the potential to flooding and has varying levels of protection in a impact significantly on the operation of the City’s design flood event. Flood protection works may also infrastructure. The changes are not expected to offer protection in a storm surge event. become evident in the next 20 years. Level of Risk Assumption continued Financial Impact (High/Medium/Low) Financial – Cost Change Factors Medium Cost change factors based on information developed for Council’s by Business and The cost change factors will be as follows: Economic Research Limited (BERL) in Local Government September 2011. Significant variations from Year Cost Index % these adjustments will be identified in future Annual Plans and Annual Reports. (Local 2012/13 3.79 Authority cost structures are significantly 2013/14 3.46 different to the CPI.) 2014/15 3.17 2015/16 3.27 2016/17 3.42 2017/18 3.26 2018/19 3.38 2019/20 3.69 2020/21 3.89 2021/22 3.90 * Source: Derived from forecast indices from BERL Forecasts of Price Level Change Adjuster to 2022 (September 2011). Financial – Existing Funding Renewal Medium Council’s terms and conditions for its borrowing facility have mirrored market Council borrowing facility will be renewed trends in recent times. (three-yearly) with the terms and conditions mirroring market trends. Financial – Expected Interest Rates on Medium Higher than expected interest rates on Borrowing borrowing will require Council to consider collecting a greater amount in rates to cover Interest on future borrowing has been the additional interest costs or reducing calculated at 6.5% for 2012/13 -2014/15 and the amount borrowed (and level of service then at 7.25% until 2021/22. This is based provided). on Council’s current borrowing rates which are hedged for a number of years into the future. other information 360 Level of Risk Assumption continued Financial Impact (High/Medium/Low) Financial – Forecast on Return on Medium Lower than expected returns on investments Investments will require Council to consider collecting a greater amount in rates, reduce spending or Return on cash investments is calculated increase borrowings to cover any reduction in on the borrowing rate less 2%. (4.5% for income. 2012/13 -2014/15 and then at 5.25% until 2021/22.) Dividends and subvention payments from Invercargill City Holdings Limited are assumed to be those contained within their Statement of Intent. Council has and may be acquiring land for future development and sale. The timing of this development and sale is uncertain. Financial – Other Income Medium Changes in development activity and the economy will determine the level of other Income from consents, licences and other income received by Council. user charges is assumed to be at the same level but adjusted by the relevant price adjuster. Financial – Sources of Funds for Future Low Should loan funds need to be used, this could Replacement of Significant Assets have a financial impact on future ratepayers who will incur the costs of paying interest on Future replacement of significant assets the loan. will be funded from rates levies to fund depreciation. If the rates so levied are insufficient to fund the required level of renewals, applications to community funders will be made and loan funds used. Fixed Assets Valuations Low Consistent use of national standards minimises the financial risk of inaccurate Estimates are prepared based on Council’s asset valuation. Accounting Policies which in turn are drawn from IFRS and NZ GAAP. Those Accounting Policies include valuation policies appropriate for public benefit entity assets. Government - Subsidies Medium The New Zealand Transport Agency is yet to confirm its subsidy rates for the next three There will be no change to Council’s years. Lower than anticipated subsidies can eligibility to subsidies, particularly New result in service delivery costs needing to be Zealand Transport Agency. met by other means or decreases in the levels of service. Government - Legislation Medium Significant legislative change can impose significant financial and service delivery costs Central Government has signalled potential on Council. How these costs will be funded significant changes to the Building Act, also needs to be considered. Health Act and Food Act which may impact on Council and its activities. 361 long term plan 2012-22 Level of Risk Assumption continued Financial Impact (High/Medium/Low) Local Authority Boundaries Boundary changes would require a review of this Plan with its associated community There will be no changes to local authority consultation. boundaries. Population - Employment Opportunities Medium Significant changes in employment opportunities (positive or negative) would Employment opportunities will increase in impact on the community’s ability to fund the District. current levels of infrastructure and services. Population – Growth** Medium Significant increase in population may create a demand for infrastructure and services Population growth will remain positive. beyond existing capacity. Population of 56,400 by 2031 (Statistics Significant decrease in population would New Zealand projections). adversely impact on the community’s ability to fund current levels of infrastructure and services. Population - Household Composition and Medium Significant increase in dwellings to be Size connected to infrastructure may create a demand for infrastructure and services Average of 2.5 people/household in the beyond current levels. District. Significant decrease in dwellings would Additional 1,500 dwellings by 2031. adversely impact on the community’s ability to fund current levels of infrastructure and services. Resource Consents Low Capital expenditure may need to be spent should the impacts of the Regional Policy No change in the resource consent Statement or Regional Plans result in the conditions relating to Council’s water supply need for further resource consents or from the Oreti River or to its Foveaux Strait changes to how Council delivers services. discharge. Capital expenditure may be incurred if the The air discharge resource consent for the conditions of new resource consents are Sewerage Activity expires in 2014. The significantly different to the existing consent. resource consent for Stormwater expires in 2016. Council assumes that we will get new resource consents. No other resource consents expire during the term of the LTP. No resource consents are required from the implementation of the Regional Policy Statement or Regional Plans. Useful Lives of Assets and Depreciation Medium A shorter useful life for assets would create Rates a financial burden on the community.
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