Section 2 Overview

whakarāpopoto o te akoako hapori | summary of community consultation

Community feedback

Community engagement on the draft 2024/25 Annual Plan took place between 28 March and 24 April 2024, and between 8 May and 15 May 2024.  A mixed method approach to engagement was used.  A consultation document was prepared, and engagement included in person engagement opportunities such as drop in sessions at the Civic Centre, the Farmers Market and Local Board areas, digital content on the DCC website, and taking a proactive use of social media and advertising in print media and radio.

Specific feedback was sought on two topics – community housing and a possible increase in the rent paid by the tenants, and whether or not Council should take ownership of the Hockey Turfs at Logan Park.  The community was also invited to provide any other feedback that they wished to tell us.

Submissions were collected via an online form, emails, and written letters. Around 100 submissions were presented to the Council Annual Plan hearings on 8 and 9 May 2024, and 15 May 2024.

Council received 760 submissions during the feedback period, in addition to social media posts. The community feedback was categorised into topics and the 10 most frequently commented on topics were:

Council decision making

Council considered the community feedback received at its deliberations meeting on 28 May 2024. A complete record of the decisions can be found in the meeting minutes on the DCC website.

The Council made decisions and agreed to look into some matters as a result of the community feedback received. Decisions made at the meeting included:

The 10 year plan 2021-31 outlines the services and activities that the DCC will provide, the projects that will be carried out, and the level of service that the community can expect.  The 10 year plan also includes how much things will cost, how they will be paid for and what it means for rates and debt.

A 10 year plan looks a decade ahead, but is reviewed and consulted on every three years.  An Annual Plan is prepared for the years in between and provides an overview of the Council’s plans for a single year. However, given the recent repeal of 3 Waters legislation, the Government have said that Councils can do an enhanced annual plan instead for this coming year. This is due to uncertainty about the future funding and structure of 3 Waters. As 3 Waters is a significant part of our Council budget, Dunedin City Council decided to do an enhanced annual plan this year. Therefore, 2024/25 budget is ‘year 4’ of the current 10 year plan.

Budget changes for 2024/25

The 2024/25 budget in this document has been compared to the budget for year 4 in the 10 year plan, and differences arising are as follows:

1. Rates revenue is higher than that provided for in year 4 of the 10 year plan. The 2024/25 year provides for a rate increase of 17.5%, which is higher than the 6.0% provided for in year 4 of the 10 year plan. It is also higher than the Financial Strategy rate limit of 6.5%. This rate increase will maintain our current levels of service, and provide our new 4 bin kerbside waste collection service. This decision follows an extensive review of our operations and budgets, while also reflecting our commitment to the city’s wellbeing today and into the future.
2. Financial revenue is higher than forecast in year 4 of the 10 year plan due to the inclusion of an $11.0 million dividend from Dunedin City Holdings Limited.
3. Other expenses are higher than what is provided for in year 4 of the 10 year plan reflecting increases in maintenance, regulation and compliance, monitoring, insurance, energy and rates. This is in part reflecting the fact that actual inflation rates have exceeded the assumed inflation rates in the 10 year plan 2021-31.
4. Personnel costs are higher than what is provided for in year 4 of the 10 year plan. They were increased in the 2022/23 Annual Plan to respond to demand for building and other consents, the 3 Waters reform process, and to reduce our reliance on contractors and consultants, to enable more efficient project delivery. In the 2023/24 Annual Plan, additional staff are required to staff Te Puna o Whakaehu and to increase back-of-house support areas, necessary to support the changes that are being made internally to increase efficiency and support service delivery. In the 2024/25 Annual Plan the increase provides for a union negotiated salary increase for staff.
5. Depreciation costs are higher than provided for in year 4 of the 10 year plan due to the revaluation of assets.
6. Interest expense is also higher than forecast in year 4 of the 10 year plan, reflecting the predicted increase in debt funding required to support the planned capital expenditure programme and an increase in interest rate.
7. In the 2024/25 Annual Plan, there is not sufficient projected revenue to cover the expenses to achieve the predicted levels of service. An operating deficit of $28.585 million has been projected.
8. The updated capital expenditure programme is detailed in Section 4 of the 2024/25 Annual Plan. The capital expenditure programme for 2024/25 is $206.883 million, compared to $157.044 million in year 4 of the 10 year plan. Capital budgets have been reviewed and updated for all activities of Council. The increase reflects an accelerated capital expenditure programme for 3 Waters. In addition, since completing the 10 year plan budgets we have better information on the estimated costs of projects and timing of delivery.
9. The value of the property, plant and equipment is higher than forecast in year 4 of the 10 year plan, reflecting asset revaluation and the accelerated capital expenditure programme.
10. Term loans are higher than provided for in the 10 year plan due to the accelerated 3 Waters capital expenditure programme, with debt projected to reach $709.473 million by 30 June 2025, which represents 190% of revenue. The debt limit in our Financial Strategy is 250% of revenue. This estimated debt is an increase of $120.500 million on the 2023/24 Annual Plan and is $169.894 million higher than provided for in year 4 of the 10 year plan.

Significant forecasting assumptions for 2024/25

The 10 year plan included an assumed interest rate of 2.85% per annum for floating debt.  Due to increases in the official cash rate to manage inflationary pressures and the elevated level of economic activity, the interest rate included in the 2024/25 Annual Plan is 5.00%.

There are no other changes to the significant forecasting assumptions for the 2024/25 year.  Significant forecasting assumptions can be found in Section 4 of the 10 year plan.