Annual Plan 2020/21

Current Consultations

Council's Plan for 2020/21

Our Annual Plan sets out Council’s plan and budget for the year.  This Annual Plan correlates to Year 3 of our Long Term Plan and reflects changes and updates to the work programme for this year.  However, this year, like the rest of the world, we need to make adjustments as we respond to the unprecedented situation arising from COVID-19.

Businesses, households and individuals will be under significant pressure in the months ahead, and like you, we still do not know the full impact of this crisis. So, we have stepped back to carefully evaluate our plans for the next year.

In revising our plan, we want to make sure our decisions support a recovering economy - striking a balance between continuing to provide quality services to our community, while easing the financial burden. This means continued investment in essential services and projects that will help our district.

As a Council we are in a strong financial position. Over many years, there has been prudent management of Council’s finances and assets. We have been careful to make sure we have comparatively low levels of debt, we have built up strong reserves and savings and maintained good infrastructure to ensure levels of service can continue.  All these factors combined mean Council is in a good position to use some of its savings and reserves to lower the rates increase in these exceptional times.

For full details see our Consultation Document

Submissions close Friday 12 June - 5pm

Our Options

Council has identified two options for how we deal with the impact of COVID-19 and continue to provide quality services and infrastructure in 2020/21.

Option 1 (This is Council’s preferred option).  Because Council is in a strong financial position we plan to use $3 million of reserves and savings to cover the funding shortfall and to reduce the total amount of rates we need to collect.This is the “rainy day” option, where we draw on these reserves and savings to help ease the financial storm that COVID-19 has brought.

Using $3 million of reserves and savings will lower the rates increase across the district to 2%. This option recognises the hardship faced by our residents and businesses and means that you will spend less on rates this year than we had originally proposed. We can continue to meet the levels of service we agreed with you, in the Long Term Plan 2018-28, and carry on with our important capital work programme, which will also help stimulate the economy.

However, using our savings this year means we will need to repay them in future years which will impact on rates.  It will mean we lose the opportunity to invest that money now and earn interest (like a term deposit). For that reason, we charge interest as these reserves are repaid. This means when all the savings are repaid in 10 years’ time we are in the same position as we would have been as if we had deposited that money at the bank and earned interest on it.

Option 2 – Council does not use any reserves and savings to reduce the rates increase.  Under this option we would still maintain our levels of service and our capital works programme.  This option would result in a total rates increase of 7.73%, and would be in line with that agreed in the Long Term Plan.  This option would mean that in future years we would not be repaying any savings or reserves. We would also still have access to the $3 million of reserves in the future, should we need them for other purposes.

For full details on these options, including their impact on rates, view the full Consultation Document

Have your say on these options

$2 Million Stimulus Fund

As part of our recovery response to the impact of COVID-19, Council is proposing to establish a $2m stimulus fund. This will be a discretionary fund aimed at supporting local projects and activities that will stimulate the local economy and promote community wellbeing. It will be funded from our general reserves.

The finer details of how the fund will operate are being considered. At this stage, the following principles are proposed. We are interested in your feedback on this.

Stimulus Fund Principles

  • The fund will support projects or events that will stimulate the local economy or provide other stimulus to assist Timaru District’s recovery from the COVID-19 crisis;
  • Economic wellbeing outcomes will be a primary consideration, but other wellbeing outcomes including social, cultural and environmental will also be considered.
  • Applications should demonstrate alignment to the Council’s community outcomes in the Long Term Plan
  • The fund will target projects and events:
    • of sufficient scale and size to provide real stimulus.
    • that are beyond concept (i.e. how quickly they can be progressed will be a consideration)
    • where private or community co-funding can be demonstrated
  • Council co-funding of up to 25% for projects or events is being considered.

A policy will be developed that will provide discretion for Council to make changes as priorities and circumstances change in the COVID-19 environment.

We welcome your feedback on how you think the fund could be used to aid the Timaru District's recovery from COVID-19 and the Fund's proposed principles. Have your say here.

Some of our big projects

Project2020/21 Budget
Timaru - Pareora pipeline renewal$11 million
Downlands water supply renewal and upgrade$17.6 million
Te Moana water supply reticulation renewals and treatment upgrade$2.2 million
Washdyke water supply network improvements$3 million
Geraldine - Coach/Tiplady Roads intersection upgrade$2 million
Washdyke roading network improvements$1.5 million
LED streetlighting$0.7 million
District-wide road resurfacing, renewals and improvements$8.5 million
Road safety improvements$1.95 million
Theatre Royal/Heritage Facility redevelopment$5.2 million
Art Gallery building renewals$0.6 million
New cemetery for Timaru$1.7 million
Timaru District Parks upgrading$1.6 million
Social Housing upgrading$0.6-0.9 million

For more details on these projects view or download our Consultation Document

Key Changes from Year 3 of the Long Term Plan

2020/21 is Year 3 of our Long Term Plan and most of what was agreed in the LTP is still going ahead, particularly in terms of our planned capital works programme. This table highlights the key changes we are proposing.

Change from Year 3 LTPHow Much
$2 million stimulus fund$2 million from general reserves
Using Council reserves and savings to reduce the rates rise$3 million from general reserves

Total Operating Expenses
- Operating and personnel costs have increased ($4.5m e.g. contractors, insurance, carbon liability,  personnel, IT, District Plan review).  Finance & depreciation costs have decreased ($3.9m)

$0.6 million funded by rates, subsidies and user fees
New Capital Projects:
- Heating and ventilation upgrades to our social housing units

- Additional earthquake strengthening on Council owned buildings

- Orari Back Road seal extension

$0.6 to $0.9 million loan funded
$0.3 million funded from general reserves
$1.2 million funded from reserves and loan funding
Capital Projects starting earlier than planned:
- Caroline Bay Soundshell seating upgrade/replacement
- Timaru Airport runway and carpark extension

$1.8 million loan funded
$0.7 million loan funded

Fees and Charges

Council uses fees and charges for services where users directly benefit (e.g. swimming pool charges, building and resource consents, waste disposal fees, dog registration fees, hall hire fees, lease charges for fishing hut sites, and our social housing rents).

The impact of COVID-19 means we are expecting a $1.2 million reduction in fees and charges.

Council is proposing to increase fees and charges in some activities where the cost of operating that activity has increased.

Some examples include increases for airport parking, dog control, the use of our pools, hall hire, cemeteries and waste disposal.  It also includes rent increases for our fishing hut sites, and (with effect from October 2020) our social housing units.  If Council does not increase the fees and charges then the burden falls to the ratepayer and we need to increase the rates.

See the full fees and charges document here

Annual Plan - Frequently Asked Questions

What's the Annual Plan?

All local authorities are required to prepare an Annual Plan under Section 95 of the Local Government Act 2002.

Annual plans are produced for the years between Long-Term Plans (LTP), with the LTP setting the longer term strategic direction.

The annual plan is a one-year snapshot of Council’s intended work programme for the year. It outlines what the Council is planning to do, and any changes to the relevant year of the Long Term Plan, including financial information such as costs and funding and rates.

Annual plans are based on the relevant year of the Long Term Plan, and give us the opportunity to refresh information and budgets for the coming year, and include the setting of rates. They also highlight any changes to the Annual Plan for that particular year.

How does Council's planning process work?

Every three years – part way through each election term – the council is required to develop and adopt a long-term plan. The first year of each LTP represents the Annual Plan for that year. In the years between long-term plans, annual plans are produced. These outline any changes to the LTP work programme and budget.

At the end of each year, an annual report and summary annual report is produced. These let the community know about what’s been achieved and how we have performed, as well as anything that hasn’t quite gone to plan or anything unexpected that's come up.

What is the Annual Plan consultation process?

This year, we are undertaking consultation in accordance with section 95A of the Local Government Act. The purpose of this consultation is provide an opportunity for public participation in the decision-making process relating to our plan for the coming year. We need to do this by identifing significant or material differences between our proposed Annual Plan, and what we had planned to do  when we set our Long Term Plan in 2018.

As part of this process our consultation document needs to clearly explain:

  • significant or material variations from our LTP financial statements or the funding impact statement; and
  • any significant new spending proposals, the costs of these proposals, and how these costs will be met; and
  • any proposal to substantially delay, or not proceed with a significant project.; and
  • the expected impact of these proposals.

The consultation process allows anyone who may be affected by, or have an interest in, the proposed plan, an opportunity to present their views to Council. We will also hold a public hearing, so anyone who wishes to speak to Council in person can do so. Please note that we will be following all Government COVID-19 requirements and guidelines relating to public meetings

An annual plan that includes an overview of any minor changes in costs (along with all other information required under Part 2 of Schedule 10 of the Act) must still be prepared and adopted by council resolution before 30 June.

How do we decide what is significant?

Section 5 of the Local Government Act 2002 (the Act) describes “significance” as the degree of importance of any issue, proposal, decision, or matter, as assessed by the local authority, in terms of its likely impact on, and likely consequences for:

  • the district or region
  • anyone likely to be particularly affected or interested
  • the capacity of the local authority to perform its role, and the financial and other costs of doing so.

Section 5 also describes “significant” as any issue, proposal, decision, or other matter having a “high degree of significance, that is:

  • significant or material variations/departures from the financial statements or funding impact statement in the long-term plan
  • significant new spending proposals, and the associated costs, or
  • substantial delays to, or cancellation of, significant projects, and associated implications.

The Council is required to have a Significance and Engagement policy under Section 76AA of the Local Government Act 2002. The Policy is reviewed every three years as part of long-term plans.

Timaru District Council Significance and Engagement policy

Significance covers more than just a financial impact, and sometimes items with low value but that have high public interest can be significant.

Significance is ultimately determined by the elected members.

Last updated: 25 May 2020