Leading locally
Better than competent
The elected members and management exhibit a strong sense of purpose, with overlapping responsibilities and a sense of shared challenge and trust.
Underlying all discussions with Council or staff is a sense that New Plymouth seeks to build a lifestyle capital.
Investing money well
Better than competent
The Council is in good order financially and has a clear view of its forward spending commitments and debt. The investment fund gives the Council some resilience to future shocks as well as taking some of the sting off an increasing debt level.
The Council's financial strategy is a clear, well set out document published as part of the Long Term Plan.
The strategy and its antecedents are very clear. The Council has been through a period of retrenchment with deferred asset renewals. A lack of resilience in the network came to a head with a recent three day water outage. The strategy sets out a sharp upkick in investment in water assets, meaning the Council will breach its recommended rates affordability limit. This "up-kick" adds to an approximate five per cent increase in rates (seven per cent in year one). Debt levels will climb to be close to the interest ceiling in 2023 as debt is taken on to help fund reinvestment.
The issues around replacing the stadium are not addressed in the financial strategy and could mean a further rates increase of five per cent. There is also investment needed in a new terminal at the airport; it was not clear that there was full consideration of the options, for example, postponing this expenditure line while three waters investment is in catch-up.
Despite these substantial rates increases, there has not been much work identified on rate distress into the future. However, the Council does closely monitor rate distress and ensures uptake of an approximately $600 rates rebate for those under pressure. The Council has an investment fund which it operates through a council controlled organisation called New Plymouth PIF Guardians Limited. The fund was established in two steps; first by sale of a shareholding in the Council's lines company and then by reinvestment and sale of dairy farms, principally in Tasmania.
The investment fund now functions as an independent operation with the objective of being "a sustainable perpetual investment fund in the long-term". A strategic asset management process has been in place for three years. In the past, the take from this fund has been too large to sustain the fund in the long-term. Now, the fund operates under close supervision, with outsourced fund management, and with a spending rule in place that mirrors good practice endowment funds. Councillors should thoroughly understand the strategic allocation mechanism and the spending rule.
New Plymouth District Council has a Standard and Poors rating of "AA" long-term foreign currency and local currency ratings and "A-1+" short-term rating. These are very good ratings. The Council has substantial liquidity and can call on $32 million, as at the time of this review.
The audit is unqualified.
Ninety nine per cent of rates are collected, as are most arrears. However, it might be worth exploring collection assumptions for the future with the proposed rate increases, particularly if the stadium is as costly as it might seem to be.
Delivering what’s important
Competent
The Council's greatest operational strength is in its management of its most significant assets - the roading and three waters networks - with assets well planned and monitored. However, delivery of all day-to-day services could be enhanced by more demanding and relevant performance measures and, in the case of community facilities, a clearer strategy for the future. The Council is also making positive strides toward developing a stronger organisational culture.
At a strategic planning level, the Council's operations are generally well thought out. The financial and infrastructure strategies "talk" to the others well, with costs well planned across the life of the infrastructure strategy, and the financial strategy clearly highlighting the significance of infrastructure issues.
Listening and responding
Performing well
The quality of the Council's communications, and efforts at community engagement is strong. They are strategic in managing their reputation and are ably led by a Mayor who has a strong and generally positive profile within the community.
Elected members and staff both place a high priority on good quality engagement and communication, and this area enjoys significant resourcing by the Council.
The Council's dominant role across the wider Taranaki region creates some challenges in terms of being perceived as a good listener as well as communicator and, in this regard, equal and effective collaboration with iwi and the business community will be important to the district's overall success.