1.1 COLONCHE UBICACIÓN GEOGÁFICA
1.1.9 El Turismo Sustentable como aporte al desarrollo económico local de
How it will be Funded
Funding ChangesThe bulk of transportation funding is provided by Council and NZTA working as partners under NZTA’s Financial Assistance Rate (FAR) framework.
NZTA’s subsidy rate is reviewed every three years. Changes to either the subsidy calculation and/or value will significantly affect Council’s rate contribution. The overall rate of 56% achieved over the last 10 years is set to rise to 60 % over the next four years. This will have a positive effect on council’s contribution to funding but may be offset by other changes introduced by NZTA such as the One Network Road Classification and Level of Service reviews. The detail of these changes will not be known until after the 2014-25 Long Term Plan has been finalised. Development Contributions
Development contributions are another means of funding network, reserves or community infrastructure. Council’s Development Contribution Policy sets out their methodology for calculating costs associated with development impacts on existing Council infrastructure including the transportation network. This ensures negative impacts are developer funded rather than solely Council funded.
District Transportation
Subsidies are applied to this activity as and when they are available. The balance is funded by district-wide rates recognising the widespread nature of the benefits of the roading network, which includes charges by land value and capital value which recognises affordability issues for some.
Local Transportation
The work associated with this activity is generally of a local nature, and therefore the benefits of this activity apply primarily to local communities. As such, we fund this activity through local targeted rates.
Financial Statement and Projections
SummaryThe projected cost to provide transportation services outlined in this Activity Management Plan over the 10 year planning period (2014/15-2024/25) is $66.4 million dollars or $6.6 million per year. The Council’s present funding levels are sufficient to maintain present levels of service in the medium term. The projected level of expenditure and level of funding available will ensure that we can achieve our goals, meet customer expectations and protect the integrity of our assets.
Protecting our investment
The infrastructure assets that underpin the service we provide have some of the highest values of all Council’s assets, around $302.1 million dollars (Asset Valuation 2014). They represent a
significant investment by past, present and future generations. Our aim is to manage and maintain the transportation assets in a fair, equitable and sustainable manner and ensure even distribution of cost and service across all generations. The Roading Cost of Service statement for the 2015-2025 is shown below. The Annual Plan reviews may change parts of this Statement. These updates will be shown in Appendix E of this document.
Table 11: Roading Cost of Service Statement from 2015-25 Hauraki Long-Term Plan
Funding Strategy
The focus of this AMP is to: Maintain the existing levels of service currently provided
Protect the integrity of the asset and preserve the capital investment in infrastructure
Enhance the level of service through capital investment where minor improvement works are warranted
The first priority is to operate, maintain and protect the existing network. In the three years from 2015/16 – 2017/18 approximately 85% of expenditure will be spent on this task with the remaining 15% spent on improvements to correct network deficiencies and provide additional capacity.
Funding for the management and maintenance of the roading network will be provided from the roading rate and subsidies received from the National Land Transport Fund. Funding for improvements is provided from NZ Transport Agency subsidies, financial contributions paid by developers and the roading rate. It is expected that the local share of funding will be met, however, this is very much determined as part of the Community Plan development process and is not assured.
In determining the improvement projects to be undertaken the benefit/cost ratio will be governing criteria used, with preference given to projects that can be shown to be economically justifiable and attract NZ Transport Agency subsidy. The funding subsidy rate for minor improvements is currently 56%.
Budget Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 EXPENDITURE Pavement Maintenance 1,200 1,248 1,265 1,293 1,428 1,461 1,506 1,550 1,598 1,651 1,708 Amenity Maintenance 517 436 442 452 464 476 489 503 519 535 554 Professional Services 411 550 558 570 584 598 614 632 651 671 693 Other Subsidised 1,291 1,301 1,298 1,355 1,342 1,350 1,396 1,453 1,514 1,566 1,625 Administration 419 421 430 439 448 459 471 482 495 510 524 Non-Subsidised Works 372 410 418 447 436 447 481 470 483 522 512 Public Transport 20 20 21 21 22 22 23 24 24 25 26 Depreciation/Assets written off 3,192 2,970 2,973 3,066 3,070 3,074 3,301 3,305 3,310 3,600 3,605 Interest 807 827 881 917 957 982 1,005 1,009 993 963 909
8,229
8,183 8,286 8,560 8,751 8,869 9,286 9,428 9,587 10,043 10,156 REVENUE
Fees, Charges and Other Income 96 - - - - - External Subsidies 3,327 3,275 3,314 3,614 3,663 3,723 3,873 3,950 4,094 4,240 4,355 Targeted Rates 481 3,945 4,263 4,571 4,900 5,309 5,771 6,151 6,555 7,005 7,468 General Rates 3,116 - - - - - 7,020 7,220 7,577 8,185 8,563 9,032 9,644 10,101 10,649 11,245 11,823 OPERATING SURPLUS/(DEFICIT) (1,209) (963) (709) (375) (188) 163 358 673 1,062 1,202 1,667
Funding of Operation Expenditure
Operating expenditure will be funded from the Uniform Annual General Charge (UAGC), general rates and targeted rates.
Funding of Capital Expenditure
Capital expenditure will be funded from development contributions, borrowings, asset sales, UAGC, depreciation, general rates, targeted rates, grants and subsidy.
Valuation Forecasts
The valuation of asset components is a fundamental part of the asset management cycle. It provides the critical link between asset management and financial management. The valuation consists of an assessment of the replacement cost, depreciated replacement cost and the annual depreciation or decline in service potential of the network. Depreciation is provided on a straight-line basis on all physical assets at rates which write off the cost of the asset to the estimated residual value at the end of its service life.
Confidence Ratings
Table 112: HDC Confidence Ratings
Grade Label Description Accuracy
A Accurate Data based on reliable documents ±5% B Minor inaccuracies Data based on some supporting documentation ±15% C Significant data estimated Data based on local knowledge ±30% D All data estimated Data based on best guess of experienced person ±40%
Assessed Accuracy of 2014 Land Transport Asset Valuation
Table 123: Asset Valuation 2014
Asset Group Asset Type Quantity Costs Unit ORC RUL ODRC
Road Pavement surface A B B B B
Pavement structure C B C C C
Pavement formation C B C N/A C
Footpaths B B B C C Surface water channels B B B C C Drainage B C C C C Structures Bridges A B B B B Major culverts A B B B B Retaining walls B C C C C Traffic Signs B B B B B
Asset Group Asset Type Quantity Costs Unit ORC RUL ODRC
facilities Railings B B B C B
Markings B B B B B
Street lights Street lights A B B C C
The valuation was given a confidence rating of B-C (±20%), due to the quality of data available and methods used to derive unit rates and useful lives.
Key Assumptions Made in Financial Forecasts
The forecasts and their associated analyses are based upon the best available information as at 1 July 2014. The aim of the financial forecast is to demonstrate financial performance in the management of the roading assets to provide the target levels of service defined in this AMP. The structure of the financial forecasts has been developed to:
Be consistent with annual plan budget headings where possible
Demonstrate the balancing of income against expenditure
Differentiate work that is subsidised and work that is not subsidised
Demonstrate the effect the forecast works have on the overall value of the assets.
Forecast Reliability and Confidence
The financial forecasts and analyses included in this section provide an insight into the patterns of expenditure and funding modes associated with meeting the agreed transportation Levels of Service. The forward works programmes in this section are based on 2015/16 – 2024/2025 ten year forward works programme.
A 10 year period has been forecast with a varying degree of confidence. Financial projections for the first three years are supported by detailed studies.
The forecasts for the following seven years are supported by forward work programmes that align with life cycle management practice, required levels of service and demand issues. The forecasts and their associated analyses are based upon the best available information as at 1 July 2014. The aim of the financial forecast is to demonstrate financial prudence in the management of the roading assets to provide the target levels of service defined in this AMP. Income and expenditure projections do not allow for inflation.
Table 14: 10 Year Forward Works Programme Summary
Work Category Description 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25
Studies and Strategies $50,000 $0 $50,000 $0 $0 $0 $0 $0 $0 $0
Activity Management Plans $27,000 $51,000 $27,000 $35,000 $37,667 $36,222 $35,296 $35,396 $34,638 $35,110
Road safety Prog High Priority $28,935 $28,935 $28,935 $28,935 $28,935 $28,935 $28,935 $28,935 $28,935 $28,935
Road safety Prog Medium Priority $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Transportation Planning Sub‐total $110,935 $84,935 $110,935 $68,935 $71,602 $70,157 $69,231 $69,331 $68,573 $69,045
Sealed Pavement Maintenance $980,000 $980,000 $980,000 $986,000 $992,000 $998,000 $1,004,000 $1,010,000 $1,016,000 $1,022,000
Unsealed Pavement Maintenance $168,000 $168,000 $168,000 $163,746 $162,600 $161,462 $160,332 $159,120 $158,095 $156,998
Routine Drainage Maintenance $307,000 $307,000 $307,000 $308,721 $309,493 $310,267 $311,043 $311,820 $312,600 $313,381
Structures Maintenance $283,000 $283,000 $283,000 $275,000 $243,684 $252,700 $261,292 $270,437 $270,437 $270,437
Environmental Maintenance $436,000 $436,000 $436,000 $436,820 $437,257 $437,694 $438,132 $438,570 $439,009 $439,448
Traffic Services Maintenance $472,000 $472,000 $472,000 $475,286 $476,474 $477,665 $478,859 $480,056 $481,256 $482,460
Operational Traffic Management $8,000 $8,000 $8,000 $7,735 $7,735 $7,735 $7,735 $7,735 $7,735 $7,735
Emergency Reinstatement $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000
Network and Asset Management $550,000 $550,000 $550,000 $550,000 $550,000 $550,000 $550,000 $550,000 $550,000 $550,000
Maintenance and Operations Sub‐total $3,324,000 $3,324,000 $3,324,000 $3,323,308 $3,299,243 $3,315,523 $3,331,393 $3,347,738 $3,355,132 $3,362,459
Unsealed Road Metalling $150,000 $150,000 $150,000 $245,767 $238,902 $238,307 $235,283 $231,911 $229,636 $226,835
Sealed Road Resurfacing $550,000 $600,000 $650,000 $700,000 $750,000 $800,000 $800,000 $800,000 $800,000 $800,000
Drainage Renewals $150,000 $168,000 $168,000 $137,458 $127,576 $129,215 $13,141 $129,402 $130,011 $130,276
Pavement Rehabilitation $800,000 $660,000 $600,000 $706,207 $674,984 $680,285 $687,159 $680,809 $682,751 $683,573
Structures Component Replacement $112,000 $112,000 $112,000 $111,627 $111,702 $111,690 $111,673 $111,689 $111,684 $111,682
Traffic Services Renewals $134,000 $134,000 $134,000 $134,790 $135,127 $135,465 $135,804 $136,143 $136,484 $136,825
Renewals Sub‐total $1,896,000 $1,824,000 $1,814,000 $2,035,849 $2,038,291 $2,094,962 $1,983,060 $2,089,954 $2,090,566 $2,089,191
Minor Improvements $687,478 $690,300 $998,024 $791,934 $826,753 $872,237 $830,308 $843,099 $848,548 $840,652
Improvements Sub‐total $687,478 $690,300 $998,024 $791,934 $826,753 $872,237 $830,308 $843,099 $848,548 $840,652
TOTAL SUBSIDISED $6,018,413 $5,923,235 $6,246,959 $6,220,026 $6,235,889 $6,352,879 $6,213,992 $6,350,122 $6,362,819 $6,361,347
New Dust Seals $0 $0 $20,000 $0 $0 $20,000 $0 $0 $20,000 $0
New Footpaths $73,688 $88,862 $138,640 $84,114 $108,600 $103,500 $115,200 $125,000 $125,000 $125,000
Footpath Renewals $9,200 $14,400 $25,904 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000
New Kerb And Channel $110,000 $101,000 $115,000 $110,000 $110,000 $110,000 $110,000 $110,000 $110,000 $110,000
Non‐Subsidised Street Cleaning $67,000 $67,000 $67,000 $67,000 $67,000 $67,000 $67,000 $67,000 $67,000 $67,000
Footpath Maintenance $70,000 $70,000 $70,000 $70,000 $70,000 $70,000 $70,000 $70,000 $70,000 $70,000
New Underpasses $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000
Public transport $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000
TOTAL NON‐SUBSIDISED $364,888 $376,262 $471,544 $381,114 $405,600 $420,500 $412,200 $422,000 $442,000 $422,000
TOTAL Subsidised + Non‐subsidised $6,383,301 $6,299,497 $6,718,503 $6,601,140 $6,641,489 $6,773,379 $6,626,192 $6,772,122 $6,804,819 $6,783,347 TOTAL IMPROVEMENT OF ROADS NO N SU B SI D ISE D SU B SID ISE D TRANSPORTATION PLANNING
MAINTENANCE AND OPERATIONS OF ROADS
RENEWALS OF ROADS