Part D: ​Financial information

Infrastructure strategy

Part 1: Strategy overview

Strategy introduction

This strategy explains how we will deliver infrastructure services to meet the needs of current and future generations.

It aims to achieve a balanced investment programme, which keeps existing infrastructure in good condition as well as allowing for investment in new infrastructure to meet expected growth. The strategy covers a period of 30 years. It includes an overview of major matters and trends that will have an impact on our infrastructure over this period, how we propose to respond to these, and the risks and costs associated with our investment in infrastructure over that time. All with the primary imperative of providing public value.

Strategy context

This Infrastructure strategy has been developed in the following context.

Wellington has experienced modest growth over recent years (typically 1 percent per annum). The Long-term Plan aims to invest in projects that will accelerate the city’s economic growth. The Urban Growth Plan 2014–2043 expects the population to increase from the current 200,000 to 250,000 within the 30-year period, with the majority of this happening along a defined growth spine. While there will be some changes in the demographics of the city, ageing of the population will be considerably less than in other parts of the country.

With this in mind, and as our city relies heavily on infrastructure and the services delivered through these assets, the focus of this strategy will be to maximise the benefits and value of investments already made in the past and into the future.

Collectively, the city has $6.5 billion invested in physical assets – everything from water, roads and footpaths (network assets) through to libraries and community halls (social assets). We spend around $94 million per year to maintain and renew these assets. Over the first third of this 30-year infrastructure strategy (30IS), we will be investing in additional infrastructure to meet modest demand from growth and fill gaps in our service offering, particularly where these investments support the Council’s economic development goals.

This strategy provides a clear “line of sight” from our vision for the city through to the 2015 Long-term Plan and the two foundation strategies – infrastructure and financial – that drive that plan.

The strategy will have the following imperatives:

Strategy scope

This strategy recognises two groups of assets – network infrastructure and social infrastructure. This strategy focusses on these infrastructure assets. The Council also owns additional assets and delivers services that are not reliant on assets; these are not covered in this strategy. Our network and social infrastructure are made up of the below services:

Network infrastructure Social Infrastructure
Roads/transport Libraries
Three Waters; Community services
Water supply Community Health services
Wastewater Parks and open spaces
Stormwater inc, Flood Protection Corporate property
  City Housing
  Recreation Services

Network infrastructure net book value as at 30 June 2014

Network infrastructure net book value as at 30 June 2014.

Note: Detailed information of the make-up of individual asset groups is available in relevant service plans covering the above network and social infrastructure services (see the brief appendix at the end of this document for direction to these documents).

Major issues influencing our strategy

Population growth and demographics

We expect that the city will experience modest population growth over the next 30 years, similar to current and historic trends for the city. Beyond this period, population in New Zealand is expected to stabilise; Wellington (both the region and the city) is not expected to be materially different. Planning implications are being considered as part of the longer-term view of our long-life assets as part of any deliberations for investment.

The Council is considering investing in the city to promote economic growth. While we do not expect that growth in itself will place unpredictable demand on infrastructure services in the future, any significant population growth, will increase demand on services and infrastructure. We will regularly update service levels through annual plans in response to population growth beyond those currently forecast.

Changing demographic profile of the city over time:

Population growth and demographics.

Resilience and sustainability

The Council has a responsibility to manage its assets and services in a way that provides resilience and protection for the city. Wellington is particularly exposed to the risk of natural disasters. The main concern is earthquakes but we are also at risk of severe weather events (such as big storms), as well as the longer-term effects of climate change (for example, sea-level rises).

A number of programmes looking at quantifying and measuring the impact of climate change on our infrastructure are under way, the additional data and information from these studies will inform future versions of the infrastructure strategy.

These initiatives support an ongoing programme of capital renewals that provide for improved resilience in our networks with a careful selection of material types and engineering design techniques. Critical assets have been treated with priority. This programme has been operating for more than a decade and will continue through the 2015 Long-term Plan (LTP), the 2015/45 30IS and beyond.

Community demand and affordability

Community expectations of Council services are continually increasing, while tolerance for cost increases, disruptions, and service failure is decreasing.

The Council will have an ongoing dialogue with the community through the annual and long-term plans about the levels of service it provides. This is to make sure it meets expectations, and any changes to service levels will take into account factors such as cost, the distribution of benefits and who pays.

Alongside current growth and demand considerations, asset capacity and utilisation (discussed below) are being carefully analysed against future demand. One of the key programmes of work is to understand where prior investments in infrastructure are underutilised in the current environment. District Plan planning rules and other key constructs (such as urban design) are being considered carefully as part of this analysis. Affordability, current and future, is another.

Regulatory requirements

Changing statutory requirements and national standards set by central government (for example, health and safety) can impact on how and to what level we deliver services. We will work with the government on changes to national standards that impact our infrastructure services and implement them in accordance with legislative requirements.  

Overall approach

We will take a principled approach to how we manage our infrastructure portfolio. The following principles will guide our decision-making. In the last three years, and as a result of a number of decisions the Council resolved in the 2012 LTP, the Council has developed and implemented a vigorous data collection programme across all its infrastructure assets. The result is a specialised strategic asset management framework that uses analytics and evidenced-based decision-making tools to inform short, medium and long-term infrastructure investment decisions on behalf of the community. Experts from new disciplines (such as statisticians, mathematicians and actuaries) have been included alongside the more traditional engineering and financial disciplines to build robust forecasting models to inform the 2015 Long-term Plan and the 2015/45 30IS in the “big data” environments this entails. One of the key considerations has been a refocus on the “whole of life” costs and benefits of an asset and the services these provide.

Critical to these considerations has been the reconciliation of the depreciation expense (funding) against the forecast renewals (expense) across the whole of life of the Council’s assets (although a 30-year timeframe is published in this strategy, the analytics are span 100 years). The financial principles that support this approach are clearly described in the Financial Strategy. The following are key general considerations that have supported this new approach and informed this strategy.

Fit for purpose

We will provide quality infrastructure that can deliver services in a manner that meets community expectations now and into the future; we will maintain and renew infrastructure and facilities in accordance with best practice.

Asset utilisation

We will improve our understanding of the capacity and utilisation of our assets. Where asset networks are under-utilised, we will develop strategies to increase utilisation to ensure maximum benefit is derived from our investment.

Strategic long-term view

We will continually scrutinise our asset performance with an eye on service outcomes and investment value, with a distinct focus on whole-of-life costs and long-term affordability. We will consider the long-term implications of investment in infrastructure and make sure the level of contribution from each generation is set at a fair and reasonable level.

Improved knowledge and data

We will continually increase the level of understanding of our assets to ensure maintenance and renewal programmes are optimally set. Quality information and data will enable us to accurately link the relationships between costs, benefits, and risks.

Coordinated

We will ensure infrastructure decisions are coordinated across the Council, its subsidiaries, other agencies and local councils in the region.

Resilient

We will work to ensure our infrastructure can deal with significant disruption as a result of natural hazards. We have a good understanding of the seismic risk to Council assets from earthquakes. We will continue to utilise technological advances to increase the resilience of assets we renew, and ensure the risk of financial loss resulting from earthquake events is prudently managed and reduced over time. We will increase our understanding of the impact of climate change on our infrastructure networks to improve management of our assets and guide future infrastructure investment.

Managed risk

We will comply with all legislation and national standards that apply to infrastructure and service provision.

Our assumptions

Underlying this strategy is a number of key assumptions. These assumptions have a specific and important influence on the picture this strategy builds for Wellington City and how the Council addresses any challenges and opportunities it highlights. These assumptions similarly inform the Financial Strategy. This strategy is based on the following assumptions.

Investment

Investment in civic infrastructure will be set at a level that retains existing levels of service and can meet demand from growth. The funding models that support the longer-term view of our infrastructure replacement and upgrade profiles demonstrate this is affordable over the next 30 years and beyond.

Population growth

The population increase through to 2043 is expected to be 246,693 (a movement of 46,273). Should economic growth be achieved above historic norms, population growth is likely to exceed this expected level. Population, if it follows current long-term projections for New Zealand generally, will likely remain static for the next 30 to 50 years.

Community demand

Community demand for improved social infrastructure services will generally only be made where there is a “gap” in our service offering, or where increasing service levels would retain our competitive advantage in that service in comparison to other cities.

National standards

Although the statutory environment for local government will evolve, the broad requirements for infrastructure will remain static.

Economic

The city’s economic performance (in terms of performance as measured by GDP) will move from just below the national average to consistently above the average over the period of this strategy.

Forecasting assumptions

Over the past three years, there has been a substantial data collection programme across all core infrastructure assets (transport, water, wastewater, stormwater). This information has been used to determine asset value, asset life, and the forecast renewal programmes that are captured in the expenditure graphs, illustrated on the following pages. Our forecasting assumptions are based on deterministic modelling on available information on asset quantity, condition, life, and value to inform our depreciation and renewal programme.

This information tells us that our short-term asset renewal requirements are generally lower than we have budgeted for our renewals in the past.

We have maintained a prudent approach in continuing to fully fund depreciation where it is anticipated that the Council will be responsible for renewing the asset in the future. Also, we have mitigated the risk that there is a need for renewal expenditure over and above that determined by our model (for example to respond to urgent / emergency situations).

We have achieved this by additional capital funding capacity in years 2–10 of our LTP. This amount is equal to the difference between our renewal expenditure and depreciation over the first 3 years of our LTP.

Part 2: Our infrastructure servicesTop

Network infrastructure (three waters and transport)

Infrastructure (three waters (Water supply, Wastewater, Stormwater) and transport) 2015–45 Financials

Description 2016 2017 2018 2019–2025 LTP TOTAL 2026–30 2031–35 2036–40 2041–45 30 Year Financials
Operating expenditure 87,773,914 91,624,491 97,189,358 846,786,896 1,123,374,659 757,459,441 878,103,092 1,017,962,149 1,180,097,128 4,956,996,468
Stewardship [depreciation] 54,231,816 54,620,863 59,176,480 478,739,448 646,768,607 435,481,675 504,842,615 585,250,955 678,466,260 2,850,810,112
Income (6,689,118) (7,451,623) (7,819,127) (57,264,416) (79,224,285) (49,454,826) (57,331,698) (66,463,151) (77,049,008) (329,522,968)
Total Operating Projects 135,316,611 138,793,732 148,546,710 1,268,261,927 1,690,918,981 1,143,486,289 1,325,614,009 1,536,749,953 1,781,514,380 7,478,283,612
Capital Project Renewals 51,338,878 43,261,266 46,182,449 405,694,114 546,476,707 383,089,154 379,907,871 473,787,414 545,324,707 2,328,585,853
Capital Project Upgrades 18,977,948 30,102,199 36,809,524 272,691,097 358,580,768 - - - - 358,580,768
Capital Projects Growth 2,521,880 926,060 6,383,039 38,819,428 48,650,407 26,604,037 30,841,370 35,753,601 41,448,222 183,297,637
Total Capital Projects 72,838,705 74,289,525 89,375,012 717,204,639 953,707,882 409,693,191 410,749,241 509,541,015 586,772,929 2,870,464,258
  - - - - - - - - - -
Grand Total 208,155,316 213,083,257 237,921,722 1,985,466,567 2,644,626,863 1,553,179,480 1,736,363,250 2,046,290,968 2,368,287,309 10,348,747,870

The above table shows the projected operational and capital expenditure for 30 years for three waters and transport activity. This is followed by the projected expenditure in each subsequent 5-year period. This excludes capital upgrades for the remaining 20 years of the 30-year plan. The upgrades from years 11 to 30 are currently unplanned and unbudgeted.

Infrastructure (three waters (Water supply, Wastewater, Stormwater) and transport) 2015–2045 Financials.

The above graph shows the projected capital renewal expenditure and depreciation funding for 30 years of three waters and transport activity. The movement in renewals reflects the age and condition of the asset and its replacement cycle.

Infrastructure (three waters (Water supply, Wastewater, Stormwater) and transport) 2015–2045 Financials.

The above shows the projected capital renewal, growth and upgrade expenditure for the next 30 years. The upgrades from years 11 to 30 are currently unplanned and unbudgeted.

Transport

Summary

Our transport service is focussed on delivering safe, effective, and efficient movement of people and goods. This includes carriageways for private travel, public transport, and cycling and walking. As with all our core infrastructure services, we have a large inventory of physical assets and therefore a large funding requirement for operation, renewal, and development. The city has a sophisticated and complex transport network with a corresponding maturity in its operational and capital management programmes for delivering this network and service.

Transport infrastructure profile and level of service

Our transport infrastructure is in good condition, our levels of service are currently meeting the needs of the city, and these service levels are sustainable and affordable. Asset condition is assessed annually and whole-of-life investment decisions are made with regard to the information provided by these surveys. Our current operations and renewal programmes are adequate to sustain this level of service over the short and medium-term (a 10–30 year horizon). Details of levels of service can be found within the Transport Service Plan (refer appendix for details). The current levels of service are not expected to materially change. There will, however, be a focus from time to time on the types of initiatives outlined in that plan to meet shifting priorities and demands in the future as circumstances dictate.

Growth and demand

Growth and demand in the transport service is very closely aligned with population and economic growth, which are expected to moderately increase in the future. Demand is affected by behavioural changes (such as parents using cars to deliver their children to schools, or people choosing to use public transport versus drive a car, walk or cycle). Consequently, there are a number of capacity and utilisation projects under way to improve our understanding of the behaviour and use of the transportation network by its commuters. This includes projects that provide real-time traffic data and transport data by “mode”. This is a key capability. It also forms the substantive backbone for the “sensing city” initiative that has been adopted by the Council. Growth in capital expenditure requirements are primarily in the areas of resilience, network infrastructure improvements identified in existing local and regional transport plans, and network improvements needed to unlock economic growth. This growth is catered for in the current capital development programmes of the service.

Major issues and risks

Issue/risk Options to address issue/risk
Increasing congestion around the city, especially at peak times along major routes. Close integration of the Council’s network with planned investment by NZTA, particularly the Ngauranga to Airport corridor.

Encourage change in mode choice.
Increased public expectations for multi-model transport options. No new investment in PT and active modes.

One-off investment in PT and active modes.

Continuous investment in PT and active modes.
Competing demands for road space by different modes on very constrained road corridors. Prioritisation of some routes for specific transport modes.

Acquisition of wider road corridor on key routes.
Sea level rise impact on coastal roads. Improve understanding of risk and timing.
Network resilience to earthquake risk. Continuous network resilience improvements, prioritised on strategic routes.

Most likely scenario for service

Increased service levels are proposed in the continuous investment of improved provision of multi-modal infrastructure, with the inclusion of $74 million of capital investment over the next 10 years. The level of service in roading and streetscapes will be gradually increased with the expenditure of $112 million in urban development over the next 10 years. The operations and renewals programmes in place will adequately deliver this level of service sustainably over the medium and long-term.

Significant future decisions

Significant future decisions are subject to the Council’s Policy on Significance. This is reviewed every 3 years with the LTP. Over the period of this strategy the Council will consider the following as part of this review.

The development and maintenance of an increasingly resilient network.

Maintaining sufficient flexibility in the network to be able to respond to changing transport mode choices.

Integrating the Council’s network with NZTA investments, particularly the Ngauranga to Airport, Transmission Gully and Petone to Grenada projects.

Financial commentary

The forecasts we have tell us that spending on the network over the next 100 years is relatively predictable and stable, and that forecasted actual costs are less than what is forecast in the current LTP. Most of the capital spending will be on roads, with a relatively high proportion of that spending going towards upgrades.

Infrastructure and financial profiles

With the level of detail the Council now has at its disposal to interrogate the performance of its infrastructure assets, we can now have a high degree of confidence around that performance. The charts below clearly demonstrate the expected future financial commitments expected in each asset group.

Scenario/service cost

Transport 2015–45

Description 2016 2017 2018 2019–2025 LTP TOTAL 2026–30 2031–35 2036–40 2041–45 30 Year Financials
Operating expenditure 24,514,761 25,361,382 27,064,028 220,243,950 297,184,121 192,095,565 222,691,409 258,160,377 299,278,632 1,269,410,103
Stewardship [depreciation] 22,667,346 23,045,480 25,309,635 218,742,335 289,764,796 209,656,194 243,048,990 281,760,393 326,637,519 1,350,867,892
Income (6,030,018) (6,780,000) (7,134,322) (52,024,569) (71,968,908) (45,064,873) (52,242,539) (60,563,421) (70,209,604) (300,049,346)
Total Operating Projects 41,152,090 41,626,862 45,239,341 386,961,716 514,980,009 356,686,886 413,497,860 479,357,348 555,706,546 2,320,228,650
Capital Project Renewals 24,936,946 20,448,842 22,858,398 272,843,726 341,087,912 139,813,817 166,852,197 195,177,025 241,221,632 1,084,152,583
Capital Project Upgrades 14,435,237 20,558,652 24,874,777 121,633,928 181,502,595         181,502,595
Capital Projects Growth 1,579,516 - 5,260,176 30,037,633 36,877,326 20,166,033 23,377,960 27,101,462 31,418,023 138,940,804
Total Capital Projects 40,951,699 41,007,495 52,993,351 424,515,288 559,467,833 159,979,850 190,230,156 222,278,487 272,639,654 1,404,595,981
        - -          
Grand Total 82,103,789 82,634,357 98,232,692 811,477,003 1,074,447,842 516,666,737 603,728,016 701,635,836 828,346,201 3,724,824,631

The above table shows the projected operational and capital expenditure for the 30 years of transport activity. This is followed by the projected expenditure in subsequent 5-year period. This excludes capital upgrades for the remaining 20 years of the 30-year plan. The upgrades from years 11 to 30 are currently unplanned and unbudgeted.

Transport 2015–2045 Financial Plan.

The above graph shows the projected capital renewal expenditure and depreciation funding for 30 years of transport activity. The movement in renewals reflect the age and condition of the asset and its replacement cycle.

Transport 2015–2045 Financial Plan.

The above shows the projected capital renewal, growth and upgrade expenditure for 30 years for transport activity. This excludes capital upgrades for the remaining 20 years of the 30-year plan. The upgrades from years 11 to 30 are currently unplanned and unbudgeted.

Stormwater

Summary

Our stormwater service provides protection from flooding and weather events, while minimising the adverse effects of stormwater discharges on the harbours, streams and other water bodies of the city. As with all our core infrastructure services, we have a large inventory of physical assets and therefore a large funding requirement for operation, renewal and development.

Stormwater infrastructure profile and level of service

While our stormwater infrastructure is in generally good condition, we know there are parts of the network where we are not meeting the current implied policy of providing flood protection to a 1 in 50 year severity event. Meeting this level of flood protection is not practical or financially sustainable. Our challenge over the next few years will be to model the stormwater catchments (hydraulic models), with the ability to examine them to a level of detail where we can make more informed capital investment and planning decisions in the future. In the meantime, we will be focussing on determining a city wide view of the at-risk areas where we will need to undertake stormwater improvements. For other parts of the city, we are addressing some known problem areas and we will continue to meet the level of service currently provided, generally protection to a 1 in 5 year severity event.

It is likely this work will also highlight the need for some rethinking of the current policy settings in stormwater – and in particular the levels of service the city might likely be able to provide into the future. Our approach will inform future discussions with our community. The stormwater service directly impacts coastal and freshwater quality around the city. While in general water quality standards are currently being met there are instances where this is not the case. A flagship blue-belt project focussing on water quality is one of a number of important initiatives proposed in the 2015–25 LTP.

Growth and demand

Incomplete data currently exists to accurately quantify future demand on the stormwater network. Effects of climate change are expected to lead to increased discharge into waterways and impacts on the network where capacity constraints already exist. Expenditure growth will focus on planning controls and targeted investments to address service shortfalls, areas with repeated flooding and improvements in data and the network.

Major issues and risks

Issue/risk Options to address issue/risk
Data availability and confidence. Comprehensive programme of data collection and data review.
There is a lack of clarity regarding the level of service (LoS) to be provided for flood protection – currently there is an implied LoS of protecting to a 1 in 50 year severity event but an actual service level provision is generally 1 in 5 year severity event. Define the levels of service and protection the network is to provide.
Lack of understanding of the current level of flood protection provided and where. Develop hydraulic models of the entire network.
There may be areas where due to the flood risk exposure that a LoS of protecting to a 1 in 50 year severity event is desirable. However, there are affordability issues associated with meeting this LoS. Targeted improvements in network capacity. Use of planning controls and minimum floor levels.
We need to understand the risks from climate change impacts on the network and identify adaptation measures. Use new hydraulic models to improve understanding of risk and Timing.
We need to consider the effects on water quality from our stormwater discharges and the effects on the community. Engagement with the whaitua committees through the process to set standards for water quality.

Most likely scenario for service

The most likely scenario, looking forward, will be:

In order to achieve this, the Council needs to better understand the existing capacity of the network, where and to what extent we are providing flood protection to a 1 in 5 year severity event, and where the areas exposed to high flood risk are. Our hydraulic modelling projects will address this over the next three years; planning controls will also play an important and increasing role in reducing risk. There are some known problem areas and we propose progressive improvement in these areas whilst still advancing our understanding of city wide issues.

The water quality impacts of the network are also not well understood. The ongoing integrated catchment management planning work will identify targeted improvement opportunities, which will assist in meeting new standards set through the Greater Wellington Regional Council whaitua process.

Significant future decisions

Significant future decisions are subject to the Council’s Policy on Significance. This is reviewed every 3 years with the LTP. Over the period of this strategy, the Council will consider the following as part of this review.

The funding and consenting impacts of water quality standards in the National Policy Statement on Freshwater Management and set through the Wellington regional plan review and whaitua processes.

The integration of land use and infrastructure development – identifying network upgrades and bringing forward renewals to support the Council’s growth aspirations.

Identifying and funding those localised flood protection projects required to provide flood protection to a 1 in 50 year severity event in at risk areas.

Financial commentary

The charts that follow tell us that actual forecasted renewal costs will be less than budgeted for in the current LTP. In addition, spending fluctuates over the next 100 years with several spending spikes relating to the age and condition of the assets during that time, and most of the renewal and upgrade work is being undertaken around storm flood protection.

Infrastructure and financial profiles

With the level of detail the Council now has at its disposal to interrogate the performance of its infrastructure assets, we can have a high degree of confidence around that performance. The charts below clearly demonstrate the expected future financial commitments expected in each asset group.

Scenario/service cost

Stormwater 2015–45

Description 2016 2017 2018 2019–2025 LTP TOTAL 2026–30 2031–35 2036–40 2041–45 30 Year Financials
Operating expenditure 10,528,489 10,865,471 11,558,182 101,651,965 134,604,108 80,834,913 93,709,819 108,635,364 125,938,161 543,722,365
Stewardship [depreciation] 6,051,949 6,031,270 6,453,127 49,116,707 67,653,053 42,538,579 49,313,872 57,168,293 66,273,720 282,947,518
Income (9,500) (9,681) (9,871) (75,525) (104,576) (63,275) (73,353) (85,036) (98,580) (424,821)
Total Operating Projects 16,570,938 16,887,060 18,001,439 150,693,147 202,152,585 123,310,217 142,950,338 165,718,621 192,113,301 826,245,062
Capital Project Renewals 2,793,658 2,233,314 2,748,833 19,626,854 27,402,657 28,560,380 26,795,498 82,028,003 53,386,189 218,172,728
Capital Project Upgrades 1,514,871 4,641,154 4,753,723 19,163,380 30,073,127         30,073,127
Capital Projects Growth 146,588 145,891 149,366 1,558,743 2,000,589 1,094,004 1,268,250 1,470,250 1,704,423 7,537,516
Total Capital Projects 4,455,117 7,020,359 7,651,922 40,348,976 59,476,373 29,654,384 28,063,748 83,498,253 55,090,612 255,783,371
        - -       - -
Grand Total 21,026,055 23,907,419 25,653,361 191,042,124 261,628,958 152,964,602 171,014,086 249,216,874 247,203,913 1,082,028,433

The above table shows the projected operational and capital expenditure for the 30 years of stormwater activity. This is followed by the projected expenditure in subsequent 5-year periods. This excludes capital upgrades for the remaining 20 years of the 30-year plan. The upgrades from years 11 to 30 are currently unplanned and unbudgeted.

Stormwater 2015–2045 Financial Plan.

The above graph shows the projected capital renewal expenditure and depreciation funding for 30 years of stormwater activity. The movement in renewals reflects the age and condition of the asset and its replacement cycle. 

Stormwater 2015–2045 Financial Plan.

The above shows the projected capital renewal, growth and upgrade expenditure for the 30 years of stormwater activity. This excludes capital upgrades for the remaining 20 years of the 30-year plan. The upgrades from years 11 to 30 are currently unplanned and unbudgeted.

Water Supply

Summary

Our water network provides the city with a cost-effective, safe and secure supply of potable water during normal conditions (on a day-to-day basis), along with supply of water during adverse conditions, such as after an earthquake or other natural disaster. The water supply network is large and complex, delivering 30 billion litres of water a year through the network. As with all our core infrastructure services, we have a large inventory of physical assets that require funding commitments for operation, renewal, and development.

The Council is working with other councils in the region to agree on a level of service for the provision of water during and after a major earthquake.

Water supply infrastructure profile and level of service

Our water supply infrastructure is in good condition and our levels of service are meeting the needs of the city. These service levels are sustainable and affordable. Our current operations, programmes, and financial commitments are adequate to sustain this level of service over the immediate and medium-term (being within a 10–30 year horizon). Where low-risk assets are efficiently used to full capacity, close monitoring will occur.

Growth and demand

While at a city-wide level we do not have a problem in meeting expected future demands on water supply, we expect to see increased demand in localised parts of the city. This will put pressure on the local network’s ability to meet increased demand that will necessitate extra local storage. For example, the Hospital Prince of Wales reservoir proposed for construction over the 2018 25 period will cater for intensification of dwellings in the central city.

A more detailed evaluation of future demand and the development of a strategy to adequately meet this demand are required in the future.

Major issues and risks

Issue/risk Options to address issue/risk
Data availability and confidence. Comprehensive programme of data collection and data review.
Some areas experience low water pressure. Progressive improvements concurrent with renewals projects.
Some areas do not comply with Fire Service Code of Practice. Progressive improvements concurrent with renewals projects.
Reduction of water consumption and unaccounted for water. Continued education programmes, coordinated regionally by Wellington Water.
Increasing demand from population and economic growth. Continue with water conservation education to free up capacity.

Additional local storage to respond to localised increases in demand.
Network resilience to earthquake risk. Continue programme of increasing seismic resilience of existing reservoirs and network.

Work with Wellington Water to improve bulk network resilience.

Work with District Health Board to increase storage for the Hospital

Increase treated water storage with construction of the Prince of Wales reservoir.
Continuity of supply during and after a seismic event. Work with other councils to agree on a LoS for provision of water during and after a major earthquake. Implement a work programme to achieve this target.

Most likely scenario for service

The current level of service will be maintained and the operations and renewals programmes in place will adequately deliver this level of service sustainably over the medium and long-term. Reactive maintenance costs will be monitored closely. Efficiencies and economies of scale will be achieved from the Wellington Water merger, along with growth to match capacity and renewals requirements.

Innovation is likely to reduce renewal costs in the medium term

Aside from some spending spikes over the next 100 years, a relatively high proportion of the spending on renewing potable water pipes will be during the next 10-30 years (with a focus in the city’s northern areas). In addition, forecasted actual costs will be less than what is budgeted for in the LTP.

We will work with other councils in the region to agree on a LoS for the provision of a water supply during and after a seismic event. This will then inform a work programme to achieve this target.

Significant future decisions

Significant future decisions are subject to the Council’s Policy on Significance. This is reviewed every 3 years with the LTP. Over the period of this strategy, the Council will consider the following as part of this review.

Improvements associated with the development and maintenance of an increasingly resilient network.

Financial commentary

The diagrams below tell us that, aside from some spending spikes over the next 100 years, a relatively high proportion of the spending on renewing potable water pipes will be during the next 10–20 years (with a focus in the city’s northern areas). In addition, forecasted actual costs will be less than what is budgeted for in the LTP.

Infrastructure and financial profiles

With the level of detail the Council now has at its disposal to interrogate the performance of its infrastructure assets, we can have a high degree of confidence around that performance. The charts below clearly demonstrate the expected future financial commitments expected in each asset group.

Scenario/service cost

Water Supply 2015–45

Description 2016 2017 2018 2019–2025 LTP TOTAL 2026–30 2031–35 2036–40 2041–45 30 Year Financials
Operating expenditure 26,029,088 27,561,861 29,305,878 274,290,082 357,186,909 246,012,446 285,195,851 330,620,156 383,279,375 1,602,294,738
Stewardship [depreciation] 12,282,211 12,301,414 13,182,209 100,909,855 138,675,689 88,028,110 102,048,706 118,302,419 137,144,927 584,199,852
Income (34,700) (35,359) (36,053) (275,865) (381,978) (231,120) (267,932) (310,606) (360,078) (1,551,713)
Total Operating Projects 38,276,600 39,827,916 42,452,033 374,924,072 495,480,621 333,809,436 386,976,625 448,611,969 520,064,225 2,184,942,877
Capital Project Renewals 13,350,699 10,191,111 9,583,830 92,779,073 125,904,712 102,834,665 99,384,472 91,884,171 116,112,020 536,120,041
Capital Project Upgrades 3,029,513 4,196,858 5,175,237 56,757,310 69,158,918         69,158,918
Capital Projects Growth 570,980 546,936 651,211 4,600,427 6,369,554 3,483,133 4,037,906 4,681,040 5,426,608 23,998,240
Total Capital Projects 16,951,192 14,934,904 15,410,278 154,136,810 201,433,184 106,317,798 103,422,378 96,565,211 121,538,628 629,277,199
        - -       - -
Grand Total 55,227,792 54,762,820 57,862,311 529,060,882 696,913,805 440,127,234 490,399,004 545,177,180 641,602,853 2,814,220,076

The above table shows the projected operational and capital expenditure for 30 years of water supply activity. This is followed by the projected expenditure in subsequent 5-year periods. This excludes capital upgrades for the remaining 20 years of the 30-year plan. The upgrades from years 11 to 30 are currently unplanned and unbudgeted.

Water Supply 2015–2045 Financial Plan.

The above graph shows the projected capital renewal expenditure and depreciation funding for 30 years of water supply activity. The movement in renewals reflects the age and condition of the asset and its replacement cycle.

Water Supply 2015–2045 Financial Plan.

The above shows the projected capital renewal, growth and upgrade expenditure for the 30 years of water supply activity. This excludes capital upgrades for the remaining 20 years of the 30-year plan. The upgrades from year 11 to 30 are currently unplanned and unbudgeted.

Wastewater

Summary

Our wastewater service is focussed on providing the safe and reliable conveyance and treatment of wastewater. This incorporates the safe, efficient conveyance of wastewater from households and other properties to treatment plants and treatment that meets environmental and health standards. As with all our core infrastructure services, we have a large inventory of physical assets and therefore require funding commitments for operation, renewal and development. The wastewater network primary assets are pipes for conveyance and treatment plants. A flagship blue-belt project focussing on inflow, infiltration and the real-time monitoring of wastewater flows is one of a number of key initiatives in the 2015–25 LTP.

Wastewater infrastructure profile and levels of service

Our wastewater infrastructure is in good condition and our levels of service are meeting the needs of the city. These service levels are sustainable and affordable. Our current operations, programmes, and financial commitments are adequate to sustain this level of service over the immediate and medium-term (being within a 10–30 year horizon). Where low-risk assets are efficiently used to full capacity, close monitoring will occur. A high proportion of renewals work will be concentrated on fixing inflow and infiltration problems linked to pipe condition; a relatively high proportion of the money spent will be during the next 10–20 years.

Growth and demand

Demand increases are likely to come from northern parts of the city over the medium (10 to 30 years) to long-term (post 30 years) with particular implications for the capacity of the Porirua wastewater treatment plant (of which the Council owns 27.6 percent). Renewals requirements will ramp up between 8 and 20 years into the future.

Major issues and risks

Issue/risk Options to address issue/risk
Data availability and confidence. Comprehensive programme of data collection and data review.
Stormwater and groundwater ingress into the sewer network causing overflows to stormwater and water quality problems. Use new hydraulic models to target intervention in both public and private networks.

Install real-time monitoring system throughout network to proactively manage overflows.
Effects from hydrogen sulphide on the network. Implementation of a monitoring plan and improvement works as required.
Existing network has capacity limitations. Address stormwater and groundwater ingress.

Progressive improvements concurrent with renewals projects.

Use new hydraulic models to identify trunk network deficiencies.
New water quality standards and consenting requirements. Introduction of the blue-belt project focussing on inflow, infiltration and the real-time monitoring of wastewater flows to reduce the impact on water quality.
Climate change impact on network. Use new hydraulic models to improve understanding of risk and timing.
Increasing demand from population and economic growth – in particular the impact of growth from the northern suburbs on the Porirua wastewater treatment plant. Work with Porirua City to increase Johnsonville treatment plant capacity to accommodate growth in northern growth areas.
Sludge disposal. Investigations are under way to develop a regional solution to sludge disposal. There is likely to be capital implications, which will be included in the 2018–2021 LTP.

Most likely scenario for service

The current level of service will be maintained and the operations and renewals programmes in place will adequately deliver this level of service sustainably over the medium and long-term.

Significant future decisions

Significant future decisions are subject to the Council’s Policy on Significance. This is reviewed every 3 years with the LTP. Over the period of this strategy, the Council will consider the following as part of this review:

Financial commentary

The detailed information we have tells us, firstly, that forecasted actual costs over the next 100 years are very closely aligned with what is budgeted for in the LTP. It also shows that a high proportion of renewals work will be concentrated in the city’s northern areas and that a relatively high proportion of the money spent will be during the next 10–20 years. Finally, all growth, upgrade, and renewal work will be focussed on safe transport of wastewater; and that spending on wastewater treatment is expected to be operational only.

Infrastructure and financial profiles

With the level of detail the Council now has at its disposal to interrogate the performance of its infrastructure assets, we can have a high degree of confidence around that performance. The charts below clearly demonstrate the expected future financial commitments expected in each asset group.

Scenario/service cost

Wastewater Supply 2015–45

Description 2016 2017 2018 2019–2025 LTP TOTAL 2026–30 2031–35 2036–40 2041–45 30 Year Financials
Operating expenditure 26,701,575 27,835,777 29,261,270 250,600,899 334,399,520 238,516,516 276,506,013 320,546,252 371,600,960 1,541,569,262
Stewardship [depreciation] 13,230,309 13,242,700 14,231,509 109,970,551 150,675,069 95,258,791 110,431,047 128,019,850 148,410,093 632,794,850
Income (614,900) (626,583) (638,881) (4,888,458) (6,768,823) (4,095,558) (4,747,874) (5,504,087) (6,380,746) (27,497,089)
Total Operating Projects 39,316,984 40,451,893 42,853,897 355,682,992 478,305,766 329,679,749 382,189,186 443,062,015 513,630,307 2,146,867,023
Capital Project Renewals 10,257,575 10,779,959 11,380,464 91,262,915 123,680,913 111,880,292 86,875,704 104,698,215 134,604,866 561,739,990
Capital Project Upgrades 1,673 313,575 1,616,712 4,318,025 6,246,639         6,246,639
Capital Projects Growth 224,795 233,234 322,285 2,622,625 3,402,939 1,860,866 2,157,254 2,500,849 2,899,169 12,821,077
Total Capital Projects 10,480,697 11,326,767 13,319,461 98,203,566 133,330,491 113,741,158 89,032,959 107,199,063 137,504,035 580,807,707
        - -       - -
Grand Total 49,797,681 51,778,661 56,173,358 453,886,558 611,636,257 443,420,908 471,222,145 550,261,078 651,134,342 2,727,674,730

The above table shows the projected operational and capital expenditure for the 30 years of wastewater activity. This is followed by the projected expenditure in subsequent 5-year periods. This excludes capital upgrades for the remaining 20 years of the 30-year plan. The upgrades from years 11 to 30 are currently unplanned and unbudgeted.

Wastewater Supply 2015–2045 Financial Plan.

The above graph shows the projected capital renewal expenditure and depreciation funding for 30 years of wastewater activity. The movement in renewals reflects the age and condition of the asset and its replacement cycle.

Wastewater Supply 2015–2045 Financial Plan.

The above shows the projected capital renewal, growth and upgrade expenditure for the 30 years of wastewater activity. This excludes capital upgrades for the remaining 20 years of the 30-year plan. The upgrades from years 11 to 30 are currently unplanned and unbudgeted.

Social infrastructure

Legislation does not require the Council to include its Social Infrastructure in its 30-year Infrastructure Strategy. However, as part of its broader asset management strategy, the Council is working towards developing similar asset management information it now holds for its network infrastructure, which it will improve further over time. This will allow the Council to develop statistical modelling to inform its long-term renewal work programme in its social infrastructure. The following section summarises the Council’s planned responses to asset management using a similar approach to that used in the network infrastructure. It includes service profile and level of service, growth and demand assumptions, issues and risks, and options to address risk. The social infrastructure included in the following section includes:

Libraries and Community Services

Summary, profile and level of service

Libraries and Community Services incorporate the facilities and spaces used for library and community activities (including childcare centres and services). These facilities and services help educate, inform, and bring people together; they provide a platform to deliver the activities and services that contribute to strong communities, and provide for important functions within those communities. In our community infrastructure there is under-utilisation and in some geographical areas lack of alignment between the level of services. These services are intensive in the heavy use associated with physical assets (i.e. the properties and buildings). Currently, our levels of service are meeting the needs of the city, though in some cases demand exceeds capacity and in other areas there is under-utilisation of facilities.

Growth and demand

Growth in services will be driven predominantly by population growth, mainly in the northern and central areas of the city. Changes in demand will be aligned with changing demographics, community expectations, and the adoption of technological solutions for service provision. Aligning services with community expectations will likely determine demand growth, for example, the more technology is adopted, and the greater the demand will be for services.

Major issues and risks

Libraries

Issue/risk Options to address issue/risk
Facilities not fit for purpose. Rationalise and transform the network of buildings and develop as “hubs” to address the changing role of libraries.

Work with local communities to transition parts of the current branch network to a more community-driven model for smaller libraries.
Cost of service provision. Current funding model is not sustainable. Review Funding Policy.

Rationalise and transform the network of buildings and develop as “hubs” to address the changing role of libraries.

Work with local communities to transition parts of the current branch network to a more community-driven model for smaller libraries.
Managing customer expectations for digital services. Continue working with aggregators and other library partners, for example the National Library, to expand digital offerings.

Community Services

Issue/risk Options to address issue/risk
Facilities not fit for purpose. Rationalise/divest.

Explore options of decoupling service from old and not fit for purpose buildings.

Look at opportunity to support further devolvement to community ownership and service delivery.

Devolve service delivery to community groups. Partner with existing non-Council community venues and support service delivery through grants.
Cost of direct (Council) delivery of service Continue to devolve service delivery to community groups and support through three contracts for services – from grants.

Ensure support is in place to assist community groups to provide effective outcomes for their local communities.

This includes use of technology.

Most likely scenario for service

In the short to medium term (5–10 years), the libraries’ current services will grow as we face the challenge of transitioning to online communities, while at the same time we maintain our current physical services. Over the longer term of the 30IS, under-utilisation and capacity / demand alignment may drive changes in the delivery and level of the service. In the short to medium term (5–10 years) current services from community services/assets will transition to partnership arrangements to deliver hyper-local community driven programmes and services, as well as a move to further decoupling of services from Council-owned assets.

Significant future decisions

Over the period of this strategy, the Council will need to consider the following:

Libraries

Community Services

Scenario/service cost

Libraries and Community Services 2015–45

Description 2016 2017 2018 2019–2025 LTP TOTAL 2026–30 2031–35 2036–40 2041–45 30 Year Financials
Operating expenditure 19,987,296 20,736,884 21,443,734 167,508,923 229,676,836 135,074,955 156,588,893 181,529,444 210,442,378 913,312,505
Stewardship [depreciation] 3,694,551 4,481,085 5,007,786 44,404,253 57,587,676 33,126,322 38,402,486 44,519,007 51,609,731 225,245,222
Income (1,714,966) (1,611,497) (1,523,441) (9,854,732) (14,704,636) (7,699,942) (8,926,343) (10,348,078) (11,996,258) (53,675,256)
Total Operating Projects 21,966,881 23,606,471 24,928,079 202,058,445 272,559,876 160,501,335 186,065,037 215,700,373 250,055,850 1,084,882,471
Capital Project Renewals 2,245,276 3,395,500 4,374,279 19,476,751 29,491,806 16,127,328 18,695,993 21,673,780 25,125,852 111,114,759
Capital Project Upgrades 843,920 5,709,416 8,551,982 4,978,727 20,084,045         20,084,045
Capital Projects Growth - - - - -         -
Total Capital Projects 3,089,196 9,104,916 12,926,261 24,455,478 49,575,851 16,127,328 18,695,993 21,673,780 25,125,852 131,198,804
        - -         -
Grand Total 25,056,076 32,711,387 37,854,340 193,031,920 322,135,726 176,628,663 204,761,030 237,374,154 275,181,702 1,216,081,275

The above table shows the projected operational and capital expenditure for the 30 years for libraries activity. This is followed by the projected expenditure in subsequent 5-year periods. This excludes capital upgrades for the remaining 20 years of the 30-year plan. The upgrades from years 11 to 30 are currently unplanned and unbudgeted.

Libraries and Community Services 2015–2045 Financial Plan.

The above shows the projected capital renewal, growth, and upgrade expenditure for the 30 years of libraries activity. This is followed by the projected capital expenditure in subsequent 5-year period. This excludes capital upgrades for the remaining 20 years of the 30-year plan. The upgrades from years 11 to 30 are currently unplanned and unbudgeted.

Parks and Open Spaces

Summary, profile, and level of service

Our parks and open spaces provide year-round opportunities for residents and visitors to access open space, recreation, and natural areas. The service comprises open spaces, botanic gardens, outdoor public arts, memorials, and playgrounds. Open spaces are managed in ways that balance conservation and enhancement with opportunities for enjoyment and recreation. Playgrounds give families and young people safe, accessible, and convenient places to play, while our public art and memorials make a significant contribution to the quality of public space and are often colourful expressions of the city’s creativity.

Our parks and open spaces are in good condition, and our levels of service are meeting the needs of the city. The provision of open spaces is also supported by a strong network of volunteers, who advocate for and help maintain these areas. While in general levels of service are currently being met there are instances where this is not the case.

Growth and demand

Growth in the service is driven by increases in urban development and improvement, along with an increase in reserve estate assets though subdivision growth. Growth and demand are also influenced by recreational trends, for example dog exercise areas, walking, and mountain biking. Changing demographics will also influence how our customers will use the parks and open spaces and how we will respond to those needs, for example providing opportunities for an ageing population to access and enjoy the natural areas. Growth and demand, such as increasing public expectations for access, puts pressure on levels of service.

Major issues and risks

Issue/risk Options to address issue/risk
Growing asset base due to development. Plan for development areas to make sure levels of service are maintained.

Reduce levels of service.
Intensified use of open space due to urban intensification and population growth. Adapt spaces; prioritise use and service to respond to intensified use.
Climate change and weather events. Improve understanding of risks and timing.

Target improvements to key open space land and infrastructure.
Changes in recreation trends. Engage with and understand our stakeholders to make sure we plan for current and future trends and patterns.

Most likely scenario for service

Due to development, growth in the use of our existing network and land asset base will mean we need to manage operational funding levels to maintain the current levels of service. We also need to make sure we have the ability to respond to effects of climate change, especially in coastal areas and as a result of storm events.

Significant future decisions

Over the period of this strategy, the Council will need to consider the following:

Financial commentary

The renewals programme for this service is based on the National Asset Management Steering Group (NAMS) industry standards, combined with the Council’s specific growth, demand, and environmental factors. The operation, maintenance, and renewal of this service is relatively predictable, and the Council will continue to implement optimised asset lifecycles to meet legislative and level of service requirements. The short to medium-term capital investment in the parks and open spaces will be partially funded by the Charles Plimmer Bequest; this includes the Wellington Botanic Garden Children’s Garden, the proposed heritage park on Watts Peninsula, and various open space upgrades. A corresponding operation and maintenance programme has been funded mid to long-term to make sure the future growth of the asset base through new subdivisions and reserves agreements is managed, with provision to support to the increasing parks and open space volunteer base.

Scenario/service cost

Parks and Open Spaces 2015–45

Description 2016 2017 2018 2019–2025 LTP TOTAL 2026–30 2031–35 2036–40 2041–45 30 Year Financials
Operating expenditure 18,649,235 18,732,820 19,505,311 163,329,119 220,216,486 137,905,152 159,869,868 185,332,993 214,851,734 918,176,232
Stewardship [depreciation] 4,213,954 4,210,412 4,279,942 30,946,336 43,650,645 26,383,611 30,585,836 35,457,367 41,104,806 177,182,264
Income (537,268) (547,476) (558,221) (4,271,281) (5,914,246) (3,578,486) (4,148,446) (4,809,186) (5,575,165) (24,025,529)
Total Operating Projects 22,325,921 22,395,756 23,227,032 190,004,175 257,952,884 160,710,277 186,307,258 215,981,174 250,381,375 1,071,332,967
Capital Project Renewals 5,387,506 5,027,005 4,745,478 25,157,039 40,317,028 22,628,246 26,232,339 30,410,470 35,254,070 154,842,152
Capital Project Upgrades 1,151,445 1,108,289 1,984,167 12,581,271 16,825,172         16,825,172
Capital Projects Growth 34,332 35,178 36,062 4,284,212 4,389,784 2,400,514 2,782,853 3,226,089 3,739,922 16,539,162
Total Capital Projects 6,573,284 6,170,472 6,765,706 42,022,521 61,531,983 25,028,759 29,015,192 33,636,560 38,993,992 188,206,485
        - -         -
Grand Total 28,899,205 28,566,228 29,992,739 232,026,697 319,484,867 185,739,036 215,322,449 249,617,733 289,375,367 1,259,539,453

The above table shows the projected operational and capital expenditure for the 30 years for parks and open spaces activity. This is followed by the projected expenditure in subsequent 5-year periods. This excludes capital upgrades for the remaining 20 years of the 30-year plan. The upgrades from years 11–30 are currently unplanned and unbudgeted.

Parks and Open Spaces 2015–2045 Financial Plan.

The above shows the projected capital renewal, growth and upgrade expenditure for the 30 years of parks and open spaces activity. This is followed by the projected capital expenditure in subsequent 5-year period. This excludes capital upgrades for the remaining 20 years of the 30-year plan. The upgrades from years 11–30 are currently unplanned and unbudgeted.

Recreation Services

Summary, profile, and level of service

Recreation Services – which includes swimming pools, recreation centres, sportsfields and marinas – provide a wide variety of accessible recreation opportunities throughout the city to enhance and encourage health, wellbeing, and quality of life. By providing a range of recreation facilities we also attract visitors, raise the city’s profile and provide economic benefit by hosting national and international events.

Currently, our levels of service are meeting the needs of the city, though in some cases demand exceeds capacity, such as peak time availability of sportsfields training spaces, and in other areas there is under-utilisation of services, for example daytime use of some facilities, such as recreation centres and swimming pools. The physical asset inventory used to provision recreation is generally in good condition, and we will continue to optimise the investment we have made in assets to provide sustainable networks of facilities. This includes making sure we respond and plan accordingly where operational costs for assets are rising, such as for natural turf sportsfields, and also consider future options for unviable assets.

Growth and demand

Service growth will broadly be driven by population growth and demographic changes in areas of the city. Overall service growth is expected to be modest and in line with moderate changes over time in population and demographics. Demand changes for recreation services can be more challenging to understand as they are driven by changing leisure and recreational trends, which can include the demand for casual and informal sporting and recreational activities. Changing demographics will also influence how our customers will use recreation services and how we will respond to those needs, for example providing recreational opportunities for an active ageing population. Increasing community and elite sport expectations also puts pressure on levels of service.

Major issues and risks

Issue/risk Options to address issue/risk
Impact on the sportsfield network and facilities from NZTA projects, e.g. SH1 Ruahine Street Airport Corridor (Kilbirnie Park, Hataitai Park), and Petone/Grenada Link Road (Grenada North Park). Work with NZTA to continue to provide a sustainable network of sportsfield facilities.
Viability and purpose of some facilities and services. Explore and implement long-term sustainable options for facilities and services.
Increasing and changing demands from customers and stakeholders, including increasing expectations from community and elite sports. Work closely with customers and stakeholders and make sure planning is undertaken in a regional context where appropriate.
Utilisation and revenue of recreation services. Maintain utilisation and revenue through the provision of relevant and attractive facilities to customers.
Climate change impact on marinas. Target improvements to infrastructure.
Built recreation network resilience to earthquake risk. Continuous network resilience improvements, prioritised and aligned with 5-yearly maintenance closures.

Most likely scenario for service

In general, the short to medium-term current service levels will be maintained, with some longer term decisions around viability of assets and variations to service required. Decisions about utilisation, capacity, and requirements for further investment in some services may provide for variations in service levels over the medium to long-term.

Significant future decisions

Over the period of this strategy, the Council will need to consider the following:

Financial commentary

The renewals programme for this service is based on the National Asset Management Steering Group (NAMS) industry standards, combined with the Council’s specific growth, demand, and environmental factors. The operation, maintenance, and renewal of this service is relatively predictable, and the Council will continue to implement optimised asset lifecycles to meet legislative and level of service requirements. The capital investment programme in the sportsfields network will be subject to ongoing regional planning requirements, with a corresponding operation and maintenance programme required to ensure the lifecycle of these capital investments are optimised. Implementing long-term sustainable options for facilities providing this service will include exploring other options for use based on growth and demand in leisure and recreational activities.

Scenario/service cost

Recreation Services 2015–45

Description 2016 2017 2018 2019–2025 LTP TOTAL 2026–30 2031–35 2036–40 2041–45 30 Year Financials
Operating expenditure 29,220,440 29,902,361 30,587,254 237,120,900 326,830,955 192,518,404 223,181,594 258,728,636 299,937,400 1,301,196,989
Stewardship [depreciation] 6,865,097 6,899,655 6,359,585 44,152,828 64,277,164 36,779,312 42,637,303 49,428,320 57,300,970 250,423,071
Income (11,481,303) (11,780,360) (11,933,812) (91,580,590) (126,776,065) (77,476,639) (89,816,659) (104,122,125) (120,706,080) (518,897,568)
Total Operating Projects 24,604,233 25,021,656 25,013,027 189,693,138 264,332,055 151,821,077 176,002,238 204,034,832 236,532,290 1,032,722,491
Capital Project Renewals 2,967,628 2,407,950 1,976,078 24,811,072 32,162,728 17,587,898 20,389,194 23,636,664 27,401,372 121,177,857
Capital Project Upgrades 1,126,203 1,465,862 325,381 1,316,462 4,233,908         4,233,908
Capital Projects Growth - - - - - - - - - -
Total Capital Projects 4,093,832 3,873,812 2,301,459 26,127,534 36,396,637 17,587,898 20,389,194 23,636,664 27,401,372 125,411,765
        - -         -
Grand Total 28,698,065 28,895,468 27,314,486 215,820,672 300,728,691 169,408,975 196,391,432 227,671,496 263,933,662 1,158,134,256

The above table shows the projected operational and capital expenditure for the 30 years of recreation services activity. This is followed by the projected expenditure in subsequent 5-year periods. This excludes capital upgrades for the remaining 20 years of the 30-year plan. The upgrades from years 11–30 are currently unplanned and unbudgeted.

Recreation Services 2015–2045 Financial Plan.

The above shows the projected capital renewal, growth, and upgrade expenditure for the 30 years of recreation services activity. This is followed by the projected capital expenditure in subsequent 5-year period. This excludes capital upgrades for the remaining 20 years of the 30-year plan. The upgrades from years 11–30 are currently unplanned and unbudgeted.

Community Health Services

Summary, profile, and level of service

Community health services support the health and safety of the city’s communities, and also provide for dignified bereavement and resting places. The service comprises public toilets, pavilions, cemeteries, and crematorium services. By providing these services, the Council meets its legislative and policy obligations (such as the Local Government Act (2002) and the Assessment of Water and Sanitary Services (2005) Policy) and reduces public health and environmental risks.

Our public toilets infrastructure currently provides a level of service that is adequate for the city. To ensure the Council continues to meet its legislative requirements (Burial and Cremation Act 1964 – Part 1; section 4) it will continue to invest in cemetery infrastructure to ensure future development requirements are achievable.

Growth and demand

Growth in public toilets and burial and cremation services is closely linked to population, demographic changes, and urban growth. It is expected that service growth will closely match these changes. Demand for particular services can be influenced by changes in trends, for example more people choosing to be cremated, with the public toilet network responding to meet the configuration and growth of the city. Growth and demand, such as increasing public expectations for access, puts pressure on levels of service.

Major issues and risks

Issue/risk Options to address issue/risk
Cemeteries that will reach capacity in the medium-term of our 30-year horizon. Makara Cemetery will be required to expand into available flat land to continue to meet the demand for burials.

Invest in infrastructure upgrades at Makara Cemetery to ensure future development requirements are achievable.
Cremation services infrastructure that has reached the end of its service life. We are undertaking a business case to re-invest in crematorium plant examining the return on investment, impact on our funding policy, and key risks and benefits to retaining this level of service.

Private provision of service.

Most likely scenario for service

Current public toilet levels of service will be maintained, though urban growth and intensification will put pressure on maintaining this level of service over the medium-term. Burials and cremations infrastructure requires development and renewal to achieve a level of service that meets legislative requirements and community expectations.

Significant future decisions

Over the period of this strategy, the Council will need to consider the following:

Financial commentary

The renewals programme for this service is based on the National Asset Management Steering Group (NAMS) industry standards, combined with the Council’s specific growth, demand, and environmental factors. The operation, maintenance, and renewal of this service is relatively predictable, and the Council will continue to implement optimised asset lifecycles to meet legislative and level of service requirements. The capital reinvestment in the crematorium plant is subject to the approval of the business case and the result will be reflected in the LTP. The capital investment required for the future development of Makara Cemetery will be informed by the survey and geotechnical assessments of the undeveloped land prior to the 2018/19 LTP.

Scenario/service cost

Community Health Services 2015–45

Description 2016 2017 2018 2019–2025 LTP TOTAL 2026–30 2031–35 2036–40 2041–45 30 Year Financials
Operating expenditure 3,824,407 3,927,892 4,084,282 32,697,350 44,533,931 27,795,747 32,222,888 37,355,159 43,304,868 185,212,592
Stewardship [depreciation] 640,326 705,203 744,432 6,846,875 8,936,835 6,780,144 7,860,045 9,111,947 10,563,243 43,252,214
Income (800,396) (855,523) (872,314) (6,674,590) (9,202,824) (5,591,983) (6,482,641) (7,515,157) (8,712,127) (37,504,731)
Total Operating Projects 3,664,337 3,777,571 3,956,399 32,869,635 44,267,942 28,983,908 33,600,293 38,951,949 45,155,984 190,960,075
Capital Project Renewals 1,509,102 1,190,541 1,589,117 9,710,548 13,999,308 7,969,087 9,238,356 10,709,787 12,415,578 54,332,116
Capital Project Upgrades 110,480 150,991 252,935 1,448,926 1,963,332         1,963,332
Capital Projects Growth - - - - - - - - - -
Total Capital Projects 1,619,582 1,341,532 1,842,052 11,159,475 15,962,640 7,969,087 9,238,356 10,709,787 12,415,578 56,295,449
        - -         -
Grand Total 5,283,918 5,119,104 5,798,451 44,029,109 60,230,582 36,952,995 42,838,649 49,661,735 57,571,562 247,255,524

The above table shows the projected operational and capital expenditure for the 30 years of community health activity. This is followed by the projected expenditure in subsequent 5-year periods. This excludes capital upgrades for the remaining 20 years of the 30-year plan. The upgrades from years 11 to 30 are currently unplanned and unbudgeted.

Community Health Services 2015–2045 Financial Plan.

The above shows the projected capital renewal, growth, and upgrade expenditure for the 30 years of community health service activity. This is followed by the projected capital expenditure in subsequent 5 year-period. This excludes capital upgrades for the remaining 20 years of the 30-year plan. The upgrades from years 11 to 30 are currently unplanned and unbudgeted. 

City Housing

Summary, profile, and level of service

Our social housing serves to ensure that basic housing needs are met for people who face barriers in accessing affordable and appropriate housing, and to enable and empower people, where possible, to make changes in their lives. This is carried out through provision of the housing assets, tenancy management services, and community development. At current levels of provision we experience an excess of demand for social housing services over supply.

Approximately 40 percent of the social housing infrastructure has been upgraded within the last 5 years, another 10 percent will be completed by 2016, and there are plans for the remainder to be completed by 2027. Maintenance and renewals programmes are keeping the remainder of the portfolio in a reasonable standard of repair, although poor condition data means we may be currently under or over investing in these programmes.

Growth and demand

Social housing need is driven by population growth, coupled with income levels and access to appropriate and affordable housing by vulnerable households. Demographic changes, along with household composition changes, will require modifications to the types of properties offered by the service.

The form and location of the Council’s housing assets is largely based on decisions taken in the 1960s and 1970s. Our stock is therefore predominantly single-person accommodation located in high-density high-rise apartment blocks. Many units are in areas where Housing New Zealand Corporation also has a significant presence. Having a high density of social housing in a suburb brings social and community development challenges. Future demand for social housing needs to be better understood in order to plan for service changes.

Major issues and risks

Issue/risk Options to address issue/risk
Capital tied up in poor performing assets and cash-flow considerations. Develop and gain approval for a divestment and investment strategy that targets poor performing assets.

Initiate divestment and reinvestment programme in 2015/16.

Develop and apply property performance data collection tools and systems.
Lack of future capital to fund growth. Government housing policy is now firmly focussed on growing the third sector, so it is unlikely the Council will itself receive any direct Crown assistance in the foreseeable future.

Explore new capital funding and other opportunities for the Council and its housing partners to grow the quantum of social housing in Wellington.

Use any surpluses to fund housing renewal activity.
Upgraded properties offering a higher level of service than non-upgraded properties. Completion of asset and condition data to enable accurate future projection of maintenance costs.

Review of business model to enable sustainable delivery of service.
Ability to deliver key community development programmes constrained. Review of business model to enable sustainable delivery of service.
Affordability issues for some service users. Review of Social Housing Policy including policy for rent setting, reviewing options for service user access to government subsidy, and progressing access to IRR.

Most likely scenario for service

The service suffers from a cash flow issue, which puts the tenancy management and community development service levels and reinvestment in the portfolio at risk. Funding constraints and cost escalations mean that levels of service for the social housing asset will continue to fall short of meeting the needs of the city. The long-term sustainability of the social housing service requires a reassessment of the existing business model, which is under way.

Significant future decisions

Over the period of this strategy, the Council will need to consider the following:

Scenario/service cost

City Housing 2015–45

Description 2016 2017 2018 2019–2025 LTP TOTAL 2026–30 2031–35 2036–40 2041–45 30 Year Financials
Operating expenditure 14,033,621 13,691,812 14,239,061 111,053,678 153,018,173 104,169,330 (44,014,316) (51,024,655) (59,151,560) 102,996,972
Stewardship [depreciation] 11,614,076 11,918,830 12,580,102 94,646,000 130,759,009 82,289,632 95,396,237 110,590,384 128,204,565 547,239,827
Income (43,271,356) (41,102,185) (25,457,979) (177,669,058) (287,500,578) (143,279,398) (1,324,972) (1,536,006) (1,780,652) (435,421,605)
Total Operating Projects (17,623,659) (15,491,542) 1,361,185 28,030,620 (3,723,397) 43,179,564 50,056,949 58,029,723 67,272,354 214,815,194
Capital Project Renewals 3,825,841 4,151,085 6,626,141 27,838,533 42,441,600 23,208,806 26,905,368 31,190,695 36,158,564 159,905,034
Capital Project Upgrades 25,295,276 19,340,971 1,249,751 64,897,864 110,783,861 0 0 0 0 110,783,861
Capital Projects Growth - - - - - - - - - -
Total Capital Projects 29,121,117 23,492,055 7,875,892 92,736,397 153,225,461 23,208,806 26,905,368 31,190,695 36,158,564 270,688,895
                     
Grand Total 11,497,457 8,000,513 9,237,077 120,767,017 149,502,064 66,388,371 76,962,317 89,220,419 103,430,918 485,504,088

The above table shows the projected operational and capital expenditure for the 30 years of city housing activity. This is followed by the projected expenditure in subsequent 5-year periods. This excludes capital upgrades for the remaining 20 years of the 30-year plan. The upgrades from years 11 to 30 are currently unplanned and unbudgeted.

City Housing 2015–2045 Financial Plan.

The above shows the projected capital renewal, growth, and upgrade expenditure for the 30 years of city housing activity. This is followed by the projected capital expenditure in subsequent 5-year period. This excludes capital upgrades for the remaining 20 years of the 30-year plan. The upgrades from years 11 to 30 are currently unplanned and unbudgeted.

Property and Corporate Assets

Summary, profile, and level of service

We provide property management services to ensure the Council’s civic and commercial buildings are safe, compliant, and fit for purpose for occupants and users. This function is delivered by the property management and advisory functions with support from contract management services. Our current levels of service are broadly meeting the needs of users, however this becomes increasingly challenging with ageing properties and the changing legislative and compliance requirements.

The corporate assets portfolio includes IT infrastructure systems, fleet, security, and a range of other minor capital items.

Growth and demand

Growth in corporate property services is primarily driven by changes in the Council’s own strategies and property requirements; this would usually relate to changing accommodation requirements for business units and CCO services. Possible areas of service growth include incorporating Wellington Waterfront assets into the portfolio and any integration of Council functions across the region.

Major issues and risks

Issue/risk Options to address issue/risk
Asset condition data collection and analysis needs to improve to support asset management decision making. The Council's new strategic asset management unit will provide increased data assessment and asset management capability for our assets.

This will assist corporate property services to determine how best to utilise and maintain its assets and optimise the delivery of its service.
Current workplace is dated and does not support contemporary working or the Council’s need for a flexible, mobile, future-focussed working environment. The Workplace Project is part of the wider Civic Precinct Development Project. Its key objectives are to:
  • modernise our workplace to increase flexibility and improve collaboration
  • reduce the total floor space we occupy in the Civic Campus
  • assess whether there are any consequential development opportunities for the Administration Buildings.
Legislative and compliance changes that will likely have a significant impact on risk profiles and health and safety processes. A full legal and procedures review is required to understand the new requirements and implications of the new Health and Safety in Employment Act.
Earthquake strengthening requirements will impact on funding and our ability to maintain service levels for building occupiers and users. Strengthening options for the Town Hall and other Civic Campus buildings are being considered under the Civic Precinct Development Project.
IT investment priorities to support the changing business environment. The rationalisation of systems across the Council to accommodate the new Core Council Application Platform may impact on the specific Corporate Property data collection and reporting requirements. Ensure property requirements are considered within the wider Council requirements.

Most likely scenario for service

Generally our current levels of service will be maintained, however the portfolio’s ageing profile and earthquake strengthening requirements mean we need to critically review our asset condition data and renewal cycles to ensure we optimise the funding available.

The Civic Precinct Development proposal will have a significant impact on occupants of the Civic Campus This project seeks to find a solution that addresses the earthquake strengthening requirements across the campus, modernises our workplace, releases sites for development, and revitalises the Civic Square public space. Maintaining service levels within the Civic Campus assets will continue to be a challenge until the future state of each of the buildings/sites is resolved.

Investment in IT solutions will enable the Council to effectively and efficiently deliver its core services and enable us to respond to future change.

Significant future decisions

Over the period of this strategy, the Council will need to consider the following:

Scenario/service cost

Property and Corporate 2015–45

Description 2016 2017 2018 2019–2025 LTP TOTAL 2026–30 2031–35 2036–40 2041–45 30 Year Financials
Operating expenditure 777,348 2,924,037 3,683,303 12,312,635 19,697,323 8,761,552 10,157,040 11,774,793 13,650,213 64,040,921
Stewardship [depreciation] 2,873,601 3,635,182 5,947,658 101,532,606 113,989,047 89,881,780 104,197,617 120,793,596 139,560,588 568,422,628
Income                    
Total Operating Projects 3,650,949 6,559,220 9,630,961 113,845,241 133,686,370 98,643,332 114,354,657 132,568,390 153,210,801 632,463,550
Capital Project Renewals 28,062,307 27,076,073 25,326,689 154,846,499 235,311,568 144,399,388 167,398,467 194,060,702 224,969,541 966,139,665
Capital Project Upgrades 12,157,616 24,538,599 60,612,121 131,607,988 228,916,324 16,353,759 18,958,488 21,978,084 25,478,623 311,685,278
Capital Projects Growth                    
Total Capital Projects 40,219,923 51,614,672 85,938,810 286,454,487 464,227,892 160,753,146 186,356,955 216,038,786 250,448,164 1,277,824,944
                     
Grand Total 43,870,871 58,173,892 95,569,771 400,299,728 597,914,262 259,396,478 300,711,612 348,607,176 403,658,965 1,910,288,493

The above table shows the projected operational and capital expenditure for the 30 years of property and corporate activity. This is followed by the projected expenditure in subsequent 5-year periods. This excludes capital upgrades for the remaining 20 years of the 30-year plan. The upgrades from years 11 to 30 are currently unplanned and unbudgeted.

Property and Corporate 2015–2045 Financial Plan.

The above shows the projected capital renewal, growth, and upgrade expenditure for the 30 years of property and corporate activity. This is followed by the projected capital expenditure in subsequent 5-year periods. This excludes capital upgrades for the remaining 20 years of the 30-year plan. The upgrades from years 11 to 30 are currently unplanned and unbudgeted.

Strategy development and review

The 30IS will be reviewed in each Long-term Plan triennium. Our 30IS will evolve and develop as our infrastructure management capability evolves. As the quality of our information and analytics improves the understanding of our assets, levels of service, and demand for those services, we will focus our infrastructure strategies, planning, and outcomes.

The horizon for our strategy will be held at a 30-year constant for each iteration; as the strategy develops, the legacy of changes will be quantified in the document. In theory, there should be continuity across 30IS development cycles and it should be possible to pick up our 30IS years later and see a clear and concise pathway of its progression. In practice, this would encompass: