Part 3 - Council Activities - Governance

This section contains the Governance group of activities. The 10 year budgets for the Governance activities are outlined in the following table along with the 2011/2012 budgets for comparison.

Governance	2011/2012  Budget $	2012/2013 Budget $	2013/2014  Budget $	2014/2015  Budget $	2015/2016  Budget $
Governance	3,908,407	3,697,561	3,982,268	3,898,441	13,684,205
TOTAL COSTS	3,908,407	3,697,561	3,982,268	3,898,441	13,684,205

Governance	2016/2017 Budget $	2017/2018  Budget $	2018/2019  Budget $	20019/2020  Budget $	2020/2021  Budget $	2021/2022  Budget $
Governance	8,029,612	7,968,896	8,116,494	8,470,045	8,448,171	8,581,690
TOTAL COSTS	8,029,612	7,968,896	8,116,494	8,470,045	8,448,171	8,581,690

Details of each of this group of activities are outlined in the following pages. These pages cover what the Council does in relation to the activity group, why we do it, the contribution of the activities to the Community Outcomes, the activity goal, key issues, how we will measure our performance, the key things we will be doing in relation  to the activities and funding of the activities.

What we do

These activities involve running the electoral process to provide the District with a democratically elected Mayor, Councillors and Community Board members and the governance of the District by its elected representatives. It also involves:

• Support for councillors, Council and Community Boards.
• Organising and preparation for Council meetings.
• Preparing Council’s strategic plans and annual financial reports.
• Running elections and democratic processes, including community consultation.
• Managing Council’s investments in Council Controlled Trading Organisations (CCTOs).

Council invests in CCTOs to assist it to achieve its objectives. The CCTOs, listed below, independently manage facilities, deliver services, and undertake developments on behalf of Council:

• Nelson Airport Limited.
• Tourism Nelson Tasman Limited.
• Port Nelson Limited (note: although Port Nelson  is a company half-owned by Council, it is not classed as a CCTO in legislation. However, performance monitoring requirements are similar to those  of a CCTO).

Why we do it

We undertake this function to support democratic processes and Council decision-making, while meeting our statutory functions and requirements, and to provide economic benefits to our community.

Contribution to Community Outcomes

Community Outcomes	How Our Activity Contributes to the Community Outcome
Our communities engage with Council’s decision-making processes.	The Governance activity contributes to the community outcomes by ensuring democratic processes and strategic planning are undertaken, and by supporting the work of elected members.
Our developing and sustainable economy provides opportunities for us all.	The Governance activity contributes to the community outcomes by the CCTOs providing an economic return to Council and ratepayers and by providing employment opportunities.

Electoral process

Tasman District is divided into five electoral wards – Golden Bay, Lakes/Murchison, Motueka, Moutere/Waimea and Richmond. Councillors are elected by ward. The Mayor is elected from across the District. We have Community Boards in Golden Bay and Motueka.

Elections are held every three years under the Local Electoral Act 2001.

Council comprises a Mayor and 13 Councillors elected  as follows:

Ward	Councillors
Golden Bay	2
Lakes/Murchison	1
Motueka	3
Moutere/Waimea	3
Richmond	4

Friendly Towns/Community Relationships

Tasman District Council enjoys Friendly Town/Communities Relationships with three towns, two in Japan and one in Holland. Motueka has a friendly town relationship with Kiyosato in Japan, and Richmond has a friendly town relationship with Fujimi-Machi in Japan. There are regular exchanges of students and adults between the towns. Takaka has a friendly towns relationship with Grootegast in Holland, and the Tasman District Council has a friendly communities relationship with Grootegast Council. These relationships foster and encourage economic and cultural relations between the areas.

Key Issues

Iwi and Māori matters

Local Iwi and Council both support community wellbeing and contribute to the economic development of the Tasman District, but in different ways, for example Iwi have a kaitiakitanga (guardianship) role for the environment and Council has a range of enhancement, monitoring and regulatory functions that it undertakes to protect and improve the environment.  Iwi have a long term commitment to the region and through various businesses provide economic development and significant employment to residents of the District, whereas Council focuses more on providing infrastructure to support businesses.

The Tasman District Council appreciates the important contribution Iwi and Māori organisations make towards these common goals.

It is important to Council that it has a good working relationship with Iwi and a number of steps have been taken over the last few years to enable greater contribution by Māori in the decision making processes.  These are set out on page 84 in Volume 2 of this Plan, some of the recent actions are inclusion of Iwi representatives on important working groups and the appointment of a Kaumatua to assist the Mayor and Chief Executive with Māori protocol.  Māori have asked that they be included in more of Council’s decision making processes and that Council provide resources to enable this participation.

Unfortunately the cost of many of these initiatives would increase rates significantly and, therefore, Council has not provided any additional funding in the final Long Term Plan. However, Council recognises that as the Te Tiriti o Waitangi/The Treaty of Waitangi claims are settled that the role of Iwi in the District will develop and their relationship with Council may be defined. Therefore, Council has requested that staff and Iwi work through the operational requests to determine if some requested actions can be undertaken within existing budgets. Council will also continue to be mindful of opportunities to include Iwi and Māori views in its decision making processes.

Amalgamation Proposal

At the time of writing the Draft Long Term Plan, the Local Government Commission had just announced its decision on the proposed union of Nelson City and Tasman District.

A postal vote on the Commission’s final draft reorganisation scheme closed 21 April 2012 with  75 percent of Tasman voters rejecting the proposed scheme, and accordingly as over 50 percent of the people that vote in each of the polls would need to vote for the amalgamation, the proposal failed.

The Draft Long Term Plan was prepared for the Tasman District only and the assumption used when preparing the financial information was that amalgamation would not occur.

Therefore no changes have been required to be made  in finalising the Long Term Plan in respect to the poll.

Tourism Funding and Targeted Rate

Tasman District Council provides a significant sum of money to assist funding the operations of Nelson Tasman Tourism (refer to pages 222-223 for a summary of this Council Controlled Trading Organisation). Nelson Tasman Tourism is a joint venture between Tasman and Nelson Councils which provides tourism services to visitors and residents. In order to improve transparency and administrative efficiency, and to recognise that the benefits of tourism are widely spread and that there is a public good from many of Nelson Tasman Tourism’s services, Council consulted on changing the funding of this company from a mix of general rates and a targeted rate on commercial activities that benefit from tourism, to a $23.51 uniform charge on all properties within Tasman District. Following consideration of submissions Council has decided to adopt the $23.51 uniform charge. The current $115 targeted rate per commercial property that benefits from tourism has been discontinued as well  as the general rate contribution.

The $23.51 targeted rate will collect $442,199 in 2012/2013 of which $313,639 would be used to fund the i-Site component of Nelson Tasman Tourism Limited, including $50,000 earmarked for the Motueka i-Site. The balance would be applied to destination marketing by Nelson Tasman Tourism Limited and a strategic review of Council’s role in supporting tourism.

Community Board Targeted Rate

Council has agreed to retain the Community Board targeted rate in the Long Term Plan. It has, however, made some changes to the rate. It has removed the general rate contribution from the calculation of the Community Board targeted rate from 2012/2013 onwards and has decided to not charge the Boards for staff time to deal with matters raised by the Boards. As a result, the Community Board targeted rates for the 2012/2013 year will be:

• Motueka Ward: $12.26 (this figure includes the allowance of approximately $5 per property for projects to be spent in the Motueka Ward, the funding for which will be allocated by the Motueka Community Board).
• Golden Bay Ward: $15.07.

Our level of service – What the Council will do and how it will measure performance over  the 10 years from 2012-2022

Levels Of Service (We provide)	We will know we are meeting the Level Of Service if...	Current Performance	Forecast Performance
			Year 1	Year 2	Year 3	By Year 10
1. Support for Iwi to enable them to be consulted on Council statutory issues.	Funding is provided to enable Iwi consultation with Council on a wide range of statutory issues.	Council continues to provide funding and engage with Iwi on a wide range of issues.	90% of funding budgeted is allocated during any given year.	90% of funding budgeted is allocated during any given year.	90% of funding budgeted is allocated during any given year.	90% of funding budgeted is allocated during any given year.
2. Support for economic development in the Tasman District.	Funding is provided for economic development opportunities in Tasman District.	Council continues to provide funding for economic development.	90% of funding budgeted is allocated during any given year.	90% of funding budgeted is allocated during any given year.	90% of funding budgeted is allocated during any given year.	90% of funding budgeted is allocated during any given year.
3. Good strategic and annual planning for the Council.	The Long Term Plan, Annual Plans and Annual Reports are prepared within statutory timeframes.	Council prepared its Annual Plan 2011/2012. All statutory requirements and timeframes were met.	All Long Term Plan, Annual Plan and Annual Report statutory timeframes are met. Variations are managed to meet statutory requirements.	All Long Term Plan, Annual Plan and Annual Report statutory timeframes are met. Variations are managed to meet statutory requirements.	All Long Term Plan, Annual Plan and Annual Report statutory timeframes are met. Variations are managed to meet statutory requirements.	All Long Term Plan, Annual Plan and Annual Report statutory timeframes are met. Variations are managed to meet statutory requirements.
4. Effectively run election processes.	The election process is carried out effectively and there are no successful challenges.	There were no successful challenges to the 2010 election processes.	There are no successful challenges to the 2013 election processes.	There are no successful challenges to the 2013 election processes.	There are no successful challenges to the 2013 election processes.	There are no successful challenges to the 2016 and 2019 election processes.

Major activities

• Three yearly elections, with the next scheduled for October 2013.
• Preparation of the Long Term  Plan, Annual Plan and Annual Report.

Council controlled trading organisations –  Performance Targets

Note: the information provided below is from the 2011/2012 Statements of Intent for each organisation.

Nelson Airport Ltd

Nature of the CCO

This Company was established as the successor to the Nelson Regional Airport Authority. The Company provides for the efficient and economic management of Nelson Airport, which is acknowledged as the fourth busiest commuter airport in New Zealand. The key objectives of the Company, as detailed in its Statement  of Intent, include:

• To provide facilities and services at fair market prices.
• To ensure the full operating potential of the airport is maintained so that it continues to meet the needs of the region as it grows.
• To exhibit a sense of social and environmental responsibility by providing for the present and future needs of the airport users, including recreational users, in ways that are sensitive to the needs of the community.

Our investment in the CCO

The Tasman District Council holds 50 percent of the shares in this entity. Nelson City Council holds the other 50 percent. Council intends to maintain its 50 percent investment in the Company and aims, with Nelson City Council, to retain effective local body control of this strategic investment.

The current dividend policy of the company is that the company will endeavour to pay an annual dividend of 5 percent of the opening shareholder funds for that year. Under this policy Council has budgeted to receive $210,000 during the 2012/2013 financial year with incremental increases in subsequent years. Council makes no financial contribution to Nelson Airport Ltd.

The value of Council’s shareholding in Nelson Airport Ltd at 30 June 2011 was $6.8 million.

Currently five Directors sit on the Board of Nelson Airport Ltd. Mr M J Higgins is the Council appointed director  on the Board.

Performance Targets

The key performance targets identified in the Company’s Statement of Intent are:

• To pass all Civil Aviation certification audits  at a satisfactory standard.
• To achieve financial performance targets as represented in the annual plan.
• To hold regular meetings of the Nelson Airport Noise Environment Advisory Committee and provide this Committee with the appropriate monitoring information.
• Ensure the Company complies with all employment related legislation.

Tourism Nelson Tasman Ltd  (trading as Nelson Tasman Tourism)

Nature of the CCO

This Company was established on 1 July 1994 for the purpose of promoting and marketing tourism activities in the region to the potential tourism markets throughout New Zealand, the Pacific Basin, and globally.

Our investment in the CCO

Tasman District Council holds 50 percent of the shares  in this entity, with Nelson City Council holding the other 50 percent.

Council’s financial contribution towards the administration and operation of the Company, and the five visitor information centres within Tasman District will be around $413,884 during the 2012/2013 financial year. Council is not planning to receive a dividend from this Company for the 2012/2013 financial year.

There are currently four Directors of Tourism Nelson Tasman Ltd.

Performance Targets

The Company’s key objectives identified in the Company’s Statement of Intent are:

• Increase tourism sector investment in destination marketing.
• Achieve growth in international and domestic visitors to our region.
• To operate within the budgets agreed with the shareholders.
• To provide comprehensive, objective information which meets visitors expectations.
• To improve the reputation of Nelson/Tasman  as a visitor friendly destination.

Port Nelson Ltd

Port Companies are not classified as Council Controlled Organisations under the Local Government Act 2002.

Council is a 50 percent shareholder in this Company, with Nelson City Council holding the other 50 percent shareholding. This Company is regarded by Council as a strategic investment and is noted for its efficient and flexible operations.

The Company’s Mission Statement states that it will operate a successful business providing cost-efficient, effective and competitive services and facilities for port users and shippers. It will provide for the present and future needs of the company in ways that are sensitive  to people, uses resources wisely, and are in harmony  with an environment of an export port. Port Nelson  Ltd provides for the efficient and economic passage  of cargo through Port Nelson and acknowledges its part in maintaining and improving the economic prosperity  of the Nelson Tasman Region.

Performance Targets

Performance targets identified in the Company’s Statement of Intent include its desire to:

• Have a lost time injury frequency rate of less than  1.5 percent.
• To pay a dividend of $4.2 million to its shareholders.
• Debt equity ratio not to exceed 40:60.
• To fully comply with NZ Maritime Safety requirements in respect of dredged channels compliant with charts, navigation aids, and pilotage.
• To disclose breaches of noise level guidelines.
• To meet stated cargo tonnages and numbers of ships.

The current dividend policy of the Company is that  a dividend of at least 50 percent of net profit after tax will be returned to shareholders annually. Under this policy Council has budgeted to receive $2.1 million in the 2012/2013 financial year. Council makes no financial contribution to Port Nelson Ltd. The value of Council’s shareholding in Port Nelson Ltd at 30 June 2011 was $68.4 million.

Currently the Port Nelson Board has six Directors. Cr Tim King is the Council appointed director on the Board.

Revenue and Finance Policy –  Governance section

Impact on the current/future social, economic, environmental and cultural wellbeing of the community

This group of activities has an impact on the social, economic, cultural and environmental wellbeing of the community, in terms of providing effective decision-making and leadership for the community, and through effective public information and providing opportunities for public input into Council’s strategic planning and decision-making processes.

Beneficiaries of the group of activities

All citizens within Tasman District benefit from these activities.

Distribution of benefits

The Governance process provides a public benefit. The democratic process and decisions affect individuals and properties within the community. Everyone has an equal opportunity to be heard by Council and have his or her views considered. The provisions surrounding the number of wards and makeup of Council and community boards ensures that the governing bodies in the District are democratically elected and that they carry out Council functions in accordance with democratic processes.

Council acknowledges that the sole responsibility for funding of non cash expenses associated with these activities does not lie with the beneficiaries, direct or indirect, of these activities, therefore depreciation has been funded at the income statement level.

The costs and benefits of funding these activities distinctly from other activities

Council has the appropriate systems in place to separately identify the charges and costs of these activities. Council considers that the most appropriate method to recover the public benefit component is general rate. However in line with Council’s policy of charging by targeted rate those that directly benefit from a service are funded by a targeted rate (e.g. the Motueka and Golden Bay wards pay for the Community Boards via a targeted rate).

For transparency and accountability, the costs associated with the democratic process have been separated from other Council activities.

The extent to which the actions or inaction of particular individuals or a group contribute to the need to undertake these activities

Demand for the governance activities is largely a result of the democratic and legislative framework within which the local government sector operates.  However, some demand for these activities is driven by public demand, for example the wards that choose to have community boards and the levels of public engagement and consultation that communities seek on various matters. 

Period in which the benefits are expected to occur

The benefits will occur in the year in which expenditure is made to ensure the people of the Tasman District are adequately represented, informed and consulted.

Funding	Operating	Capital
General Rates	Yes	Yes
Targeted Rates	Yes
Fees and Charges	Yes	Yes
Interest and Dividends from Investments (Sundry Income)	Yes
Borrowing		Yes
Proceeds from Asset Sales
Development Contributions
Financial Contributions under the Resource Management Act 1991
Grants and Subsidies	Yes	Yes

Funding impact statements and funding sources for the Group of Activities

Governance	2011/2012 Budget $	2012/2013 Budget $	2013/2014 Budget $	2014/2015 Budget $	2015/2016 Budget $
SOURCES OF OPERATING FUNDING
General rates, uniform annual general charge, rates penalties	3,833,115	3,563,886	3,411,987	3,009,809	3,817,773
Targeted rates (other than a targeted rate for water supply)	343,086	682,264	728,907	756,544	4,050,065
Subsidies and grants for operating purposes	-	-	-	-	-
Fees, charges and targeted rates for water supply	-	-	-	-	-
Internal charges and overheads recovered	-	-	-	-	-
Local authorities fuel tax, fines, infringement fees, and other receipts	255,687	348,474	448,154	497,378	519,462
TOTAL OPERATING FUNDING	4,431,888	4,594,624	4,589,048	4,263,731	8,387,300
APPLICATIONS OF OPERATING FUNDING
Payments to staff and suppliers	3,436,394	2,989,865	3,258,295	3,148,791	12,726,171
Finance costs	60,100	180,100	182,100	186,100	392,608
Internal charges and overheads applied	411,913	527,596	541,873	563,550	565,426
Other operating funding applications	-	-	-	-	-
TOTAL APPLICATIONS OF OPERATING FUNDING	3,908,407	3,697,561	3,982,268	3,898,441	13,684,205
SURPLUS (DEFICIT) OF OPERATING FUNDING	523,481	897,063	606,780	365,290	(5,296,905)
SOURCES OF CAPITAL FUNDING
Subsidies and grants for capital expenditure	-	-	-	-	-
Development and financial contributions	-	-	-	-	-
Increase (decrease) in debt	-	-	-	-	6,076,000
Gross proceeds from sale of assets	-	-	-	-	-
Lump sum contributions	-	-	-	-	-
TOTAL SOURCES OF CAPITAL FUNDING	-	-	-	-	6,076,000
APPLICATIONS OF CAPITAL FUNDING
Capital expenditure
- to meet additional demand	-	-	-	-	-
- to improve the level of service	-	-	-	-	-
- to replace existing assets	-	2,076	2,153	2,224	2,299
Increase (decrease) in reserves	523,481	894,987	604,627	363,066	776,796
Increase (decrease) in investments	-	-	-	-	-
TOTAL APPLICATIONS OF CAPITAL FUNDING	523,481	897,063	606,780	365,290	779,095
SURPLUS (DEFICIT) OF CAPITAL FUNDING	(523,481)	(897,063)	(606,780)	(365,290)	5,296,905
FUNDING BALANCE	-	-	-	-	-

Governance	2016/2017 Budget $	2017/2018 Budget $	2018/2019 Budget $	2019/2020 Budget $	2020/2021 Budget $	2021/2022 Budget $
SOURCES OF OPERATING FUNDING
General rates, uniform annual general charge, rates penalties	4,389,980	4,351,347	4,456,897	4,713,425	4,713,028	4,804,441
Targeted rates (other than a targeted rate for water supply)	4,084,461	4,119,479	4,155,239	4,192,697	4,234,489	4,277,298
Subsidies and grants for operating purposes	-	-	-	-	-	-
Fees, charges and targeted rates for water supply	-	-	-	-	-	-
Internal charges and overheads recovered	-	-	-	-	-	-
Local authorities fuel tax, fines, infringement fees, and other receipts	617,063	596,298	640,817	739,070	716,958	758,592
TOTAL OPERATING FUNDING	9,091,504	9,067,124	9,252,953	9,645,192	9,664,475	9,840,331
APPLICATIONS OF OPERATING FUNDING
Payments to staff and suppliers	6,848,463	6,764,399	6,901,753	7,247,626	7,172,556	7,329,401
Finance costs	597,436	592,380	600,744	557,668	549,930	528,176
Internal charges and overheads applied	583,713	612,117	613,997	664,751	725,685	724,113
Other operating funding applications	-	-	-	-	-	-
TOTAL APPLICATIONS OF OPERATING FUNDING	8,029,612	7,968,896	8,116,494	8,470,045	8,448,171	8,581,690
SURPLUS (DEFICIT) OF OPERATING FUNDING	1,061,892	1,098,228	1,136,459	1,175,147	1,216,304	1,258,641
SOURCES OF CAPITAL FUNDING
Subsidies and grants for capital expenditure	-	-	-	-	-	-
Development and financial contributions	-	-	-	-	-	-
Increase (decrease) in debt	(348,000)	(248,000)	(348,000)	(248,000)	(348,000)	(248,000)
Gross proceeds from sale of assets	-	-	-	-	-	-
Lump sum contributions	-	-	-	-	-	-
TOTAL SOURCES OF CAPITAL FUNDING	(348,000)	(248,000)	(348,000)	(248,000)	(348,000)	(248,000)
APPLICATIONS OF CAPITAL FUNDING
Capital expenditure
- to meet additional demand	-	-	-	-	-	-
- to improve the level of service	-	-	-	-	-	-
- to replace existing assets	2,382	2,473	2,572	2,682	2,803	2,932
Increase (decrease) in reserves	711,510	847,755	785,887	924,465	865,501	1,007,709
Increase (decrease) in investments	-	-	-	-	-	-
TOTAL APPLICATIONS OF CAPITAL FUNDING	713,892	850,228	788,459	927,147	868,304	1,010,641
SURPLUS (DEFICIT) OF CAPITAL FUNDING	(1,061,892)	(1,098,228)	(1,136,459)	(1,175,147)	(1,216,304)	(1,258,641)
FUNDING BALANCE	-	-	-	-	-	-