Agenda of Allandale Rural Water Supply Ratepayers Annual General Meeting

Allandale Rural Water Supply Ratepayers Annual General Meeting Agenda 7 March 2019

MINUTES OF Mackenzie District Council
Allandale Rural Water Supply Ratepayers Annual General Meeting
HELD AT THE Council Chambers, Fairlie
ON Thursday, 24 May 2018 AT 5.09pm

PRESENT: Neil Campbell (Chairman), Andrew McLaughlin, Robert Trotter, Noel Macpherson, Tony Harbraken, Brian Tremewan, Andrew Johnson, Pieter Alberlyn, Evan Williams, Stephen Whittaker.

IN ATTENDANCE: Cr Stuart Barwood, Cr Anne Munro, Paul Morris (Group Manager Finance), Pauline Jackson (Rates Officer), Geoff Horler (Utilities Manager), Arlene Goss (Committee Administrator).

1 Opening

The chairman welcomed everyone to the meeting.

2 Apologies

Committee Resolution ALL/2018/1

Moved: Brian Tremewan

Seconded: Robert Trotter

That the apologies received from Cr Chris Clarke, Roland Johnson, David Morgan, Ralph Moffat, Ashley Biggs and Peter Grant be accepted and leave of absence granted.

Carried

3 Public FOrum

There was no public forum.

4 Declarations Of Interest

There were no declarations of interest.

5 Reports

5.1 Confirmation of Minutes of the meeting on Tuesday, May 2, 2017

Commenting on page 9 of the minutes, Mr Horler noted work was required on problem areas in the scheme. It was a pipe that was breaking. He was asked how that was going. Mr Horler said there had been some issues this year but it seemed to have settled down in the last few months. There was an old line that blows out at the bottom of the smokehouse. The pipe cannot cope with the pressure. Replacement was on the ‘to-do list’.

Under General Business in the minutes, the Chairman said he was making a point about the livestock using drinking water, as compared to households, so the meaning of his words had been wrongly reversed.

Committee Resolution ALL/2018/2

Moved: Steven Whittaker

Seconded: Evan Williams

That the minutes of the Annual General Meeting of the Allandale Rural Water Supply Ratepayers Committee, held on Tuesday, May 2, 2017, be confirmed and adopted as a correct record of the meeting.

Carried

5.2 Chairman's Report

The chairman noted the loss of former Mayor Neil Anderson and recognised the work Mr Anderson did during the construction of the Opuha Dam, working with Mr Campbell.

The water scheme continued to function well. Didymo was less of a concern than previous years at the intake. It was still a concern to have leaks, and also the amount of time it took to find leaks on the ground. He would like to isolate sections of the main line, as this would have the potential for further cost savings.

Of concern was one period of high turbidity due to a land slip in the headwaters. The committee needed to be more proactive in getting that information out. Otherwise the scheme functioned well. There was a debate happening around water, but the people on the scheme had a very good supply.

Committee Resolution ALL/2018/3

Moved: Cr Neil Campbell

Seconded: Cr Steven Whittaker

That the chairman’s report be received and Mr Campbell thanked for his work as chairman over the previous year.

Carried

5.3 Financial Report and Budget

This report had been prepared for the committee members to review the financial performance for the year ended 30 June, 2017, and determine the budget for the 2018/2019 year.

Mr Morris spoke to this report. He had budgeted a small end-of-year deficit of $3,000 but thought this would be more like $9,000. This was because of unanticipated spending on materials and higher electricity costs.

Contracting costs would come down a little bit. There was a small contingency for unplanned operating costs.

A question was asked about the cause of contracting costs. Mr Horler said the time spent locating the leaks was the reason for this. However the Scada monitoring system allowed staff to get onto leaks faster and try to reduce costs.

Mr Morris noted the capital reserve balances. On page 17 and 18 the headworks project reserve closing balance was $329,846.

He then read out the staff recommendations regarding the rates requirements.

Mr Morris suggested moving the annual general meeting to January to allow input from the committee into the budget and rate-setting processes. Mr Campbell said an upcoming need to consider drinking water standards was also an issue that needed to be considered.

Discussion took place on this and the chairman said he favoured one meeting per year.

Noel Macpherson moved that the annual general meeting be moved to late January. This was seconded by Tony Harbraken and carried.

Committee Resolution ALL/2018/4

Moved: Evan Williams

Seconded: Robert Trotter

1. That the report be received.

2. That the financial report for the year ended 30 June 2017 be adopted.

3. That the budget for 2018/2019 be adopted as presented.

4. That the water supply recommend to Council a rate requirement of $228.10 (GST Incl.) per unit to achieve an income requirement of $124,768 for the Allandale section of the scheme.

5. That the water supply recommend to Council a rate requirement of $86.22 (GST incl) per unit to achieve an income requirement of $5,776 for the Spur Road scheme.

Carried

Committee Resolution ALL/2018/5

Moved: Noel Macpherson

Seconded: Tony Harbraken

6. That the annual general meeting be moved to late January each year.

Carried

5.4 Election of Chairperson and Election of Committee

Paul Morris called for nominations for the role of chairman. Robert Trotter moved that Mr Campbell be re-elected and this was seconded by Brian Tremewan. There were no other nominations and Mr Campbell was confirmed as chairman.

The committee then agreed that the list of people named on page 2 of the agenda as committee members be re-confirmed for the following year.

Committee Resolution ALL/2018/6

Moved: Robert Trotter

Seconded: Brian Tremewan

That Neil Campbell be re-elected chairperson of the Allandale Rural Water Supply Ratepayers Committee for 2018/19.

Carried

Committee Resolution ALL/2018/7

Moved: Cr Evan Williams

Seconded: Cr Neil Campbell

That the members of the committee for 2018/19 are Steven Whittaker, Tony Harbraken, Simon Geary, Stephen Adams, Evan Williams, Andrew Johnson, and Brian Tremewan

Carried

5.5 General Business

Mr Campbell asked Mr Horler to talk about treatment options for the new drinking water standards. Mr Horler reported that the Fairlie supply would cost just under a million dollars to bring up to the standards. For the Allandale scheme the price was just under $380,000. There were some issues with Allandale that needed to be resolved. They would need to do something at the intake to stop turbid water entering the supply after a rain event. Mr Horler provided background information on the nationwide issues with drinking water.

A member of the committee, Andrew Johnson, asked the committee to note the danger of standing on old concrete tanks, after one collapsed on his property. This was noted.

The Meeting closed at 6.01pm.

The minutes of this meeting were confirmed at the Allandale Rural Water Supply Ratepayers Annual General Meeting held on .

...................................................

CHAIRPERSON

Allandale Rural Water Supply Ratepayers Annual General Meeting Agenda 7 March 2019

5.3 Financial Report and Budget

File Reference: FIN 1/3/4

Author: Paul Morris, Group Manager Finance

Authoriser: Suzette van Aswegen, Chief Executive Officer

Attachments: 1. Allandale Spur Road Consolidated Budget Report 2018 ⇩

Purpose of Report

The report has been prepared for the Committee members to review the Financial Report for the year ended 30 June 2018 and determine the budget for the 2019/2020 year.

Staff Recommendations

1. That the report be received.

2. That the financial report for the year ended 30 June 2018 be adopted.

3. That the budget for 2019/2020 be adopted as presented.

4. That the water supply recommend to Council a rate requirement of $273.61 (GST Incl.) per unit to achieve an income requirement of $130,620 for the Allandale section of the scheme.

5. That the water supply recommend to Council a rate requirement of $187.43 (GST incl) per unit to achieve an income requirement of $12,320 for the Spur Road scheme.

ATTACHMENTS:

Appendix 1: Financial Report and Budget for Allandale Section Water Supply

Appendix 2: Financial Report for Spur Road Section Water Supply.

Appendix 3: Consolidated Financial Report and Budget for Allandale/Spur Road Water Supply.

Appendix 4: Capital Reserves Movements for Allandale Headworks Project for 2017/2018

Appendix 5: Capital Reserves Movements for Allandale Headworks Project for 2018/2019

Appendix 6: Capital Reserve Movements for Allandale Water Supply for 2017/2018

Appendix 7: Capital Reserve Movements for Allandale Water Supply for 2018/2019

Appendix 8: Listing of Current Consumers and Number of Points for the Allandale Water Supply.

INTRODUCTION:

The financial statement attached as Appendix 1-3 has 4 sets of figures, designed to provide comparative data covering 3 consecutive years. Moving left to right:

· The first column represents revenue and expenditure for last year, the 12 months to 30 June 2018.

· The second and third columns present information on the current year - for the six months from July 2018 to December 2018.

· The fourth and fifth columns compare the year’s budget with our latest annual forecast.

· The final column on the far right hand side of the page represents the budget for the next year.

FINANCIAL PERFORMANCE:

Allandale

2017/2018 year:

For the year ended 30 June 2018, the Allandale Water Supply recorded a deficit of $7,999. The budgeted surplus for the year was set at $Nil, with the key variance being unbudgeted treatment costs of $3,553 and quality monitoring costs were $2.018 higher than planned.

2018/2019 year:

For the current year, the forecast is that the Water Supply will show a deficit of $4,912. The forecast result is more favourable than the budgeted deficit of $12,184 due to the unbudgeted income of $14,383 being received for new connections. Although costs for tank inspections are higher than planned to date.

Although, the capital expenditure budget of $10,000 has not been spent to date, pipe replacement is planned before the end of the year.

RESERVE BALANCES:

For Allandale, there are two separate Capital Reserves:

· One specifically for the Headworks Project

· One for any other Capital Work, principally the Reticulation Extension.

Headworks Project

This Reserve has been set up to account for the shortfall in the Headworks Project. Loan repayments of $14,290 were made in 2017/18. The agreement between the Council and the Water Supply is that this loan as a result of the project will be charged at an interest rate of 3.75%, rather than the standard interest rate which is set at the Official Cash Rate + 1% (currently 1.75%).

The reserve opened the 2017/18 year with a balance of $329,846 and a closing balance of $315,556.

No further contributions have been accounted for at this stage, so the forecast cost of servicing the interest component (at 3.75%) is estimated to be $8,197.

Water Supply Reserve:

The Council has not provided the Reticulation project with the same discounted rate of interest, so any overdrawn amounts in the Reserve is charged at the standard rate of interest, which moves according to Council policy.

The opening balance of the Reserve as at 1 July 2017 was $5,031 surplus. The Reserve is anticipated to be in surplus by $16,296 as at 30 June 2018 due to total repayments by way of Depreciation totalling $20,559 to be recognised on a monthly basis less capital expenditure of $1,295 and the deficit of $7,999.

The level of forecast depreciation transferred into the reserve for the 2018/2019 year is $9,569 resulting in the reserve balance closing at $2,671 by 30 June 2019 after allowing for capital expenditure of $10,000, loan repayments totalling $13,194 and the forecast deficit of $Nil. The remaining funded depreciation balance will be applied to the headworks loan.

BUDGET FOR 2019/2020:

The key expenses budgeted for the 2019/2020 year are contractor costs and depreciation. Depreciation is dependent on Councils infrastructure revaluations every three years. A three year revaluation took place in 2017 which has revised the value to replace the asset over its remaining useful life has increased the level of depreciation required. This is now $36,633 up from $34,947. Capital reserve interest is expected to decrease by $611 to $8,097. Operating costs totalling $130,620 are to be rated for. There is a predicted total of 549 points including 67 for Spur Road on which to spread the rating burden. For Allandale, the GST inclusive rate is calculated to be $273.61 per point, which is $45.51 higher than the rate set last year. Committees budget recommendations to Council will form part of Councils Annual Plan for 2019/2020.

Spur Road

2017/2018 year:

For the year ended 30 June 2018, the Spur Road Water Supply recorded an operating deficit of $4,081 with a budgeted cash deficit of $2,840 as depreciation is not funded and consequently not rated. The cash deficit of $1,214 was higher than anticipated and arose from electricity costs of $7,136 being $2,501 over budget. This over spend is partially offset by unbudgeted income of $1,287 received from on-charged electricity costs.

2018/2019 year:

For the current year, it is anticipated that the Spur Road Water Supply will record a deficit of $6,008 primarily due to unplanned expenditure on pump repairs of $4,088 and unfunded depreciation of $1,920.

BUDGET FOR 2019/2020:

Rates have been increased to $10,920 to recover the unrated contractor costs incurred in 2018//2019.

The total operating costs budgeted are $9,310 primarily due to electricity costs, a portion of which is oncharged as reflected in other income.

It is anticipated that the supply will produce a cash surplus of $5,604 after adding back depreciation. Based on the 67 points, a GST inclusive rate of $187.43 is required to meet the cash costs of $6,716. This is higher than the level set last year, due to pump repair costs incurred in 2017/2018.

As consumers of the Allandale Water Supply, Spur Road consumers will be required to meet the per part charge set for the Allandale section.

ALLANDALE WATER SUPPLY

CAPITAL RESERVES MOVEMENTS 2017/2018

Summary & Reconciliation

Opening Balance 1/7/2017 5,031

Add deposits

Budgeted Depreciation 20,559

Year End Deficit

Less withdrawals

Capital Expenditure (1,295)

Year End Deficit (7,999)

________

30/06/2018 Closing Balance $16,296

ALLANDALE WATER SUPPLY

CAPITAL RESERVES MOVEMENTS 2018/2019

Summary & Reconciliation

Opening Balance 1/7/2018 16,296

Add deposits

Budgeted Depreciation 9,569

Less withdrawals

Capital Expenditure (10,000) Year End Deficit 0

Loan Repayment (13,194)

________

30/06/2019 Closing Balance $2,671

ALLANDALE WATER SUPPLY (HEADWORKS PROJECT ONLY)

CAPITAL RESERVES MOVEMENTS 2017/2018

Summary & Reconciliation

Opening Balance 1/7/2017 (329,846)

Add deposits 14,290

Less withdrawals ________

30/06/2018 Closing Balance ($315,556)

ALLANDALE WATER SUPPLY (HEADWORKS PROJECT ONLY)

CAPITAL RESERVES MOVEMENTS 2018/2019

Summary & Reconciliation

Opening Balance 1/7/2018 (315,556)

Add deposits 7,700

Less withdrawals

Capital Expenditure -______

30/06/2019 Closing Balance ($307,856)

ALLANDALE

	Ratepayer Name	Points

3 Bears Running Limited			14.00
Adams Bruce George			3.00
Adams Mark Hayden			7.00
Adams Stephen Craig			7.00
Albertyn Peter			1.00
Bell Brian Lester			10.00
Bennett Stephen Alexander			4.00
Bennett Stephen Alexander			2.00
Biggs Farming Company Limited			8.00
Biggs Land Company Limited			16.00
Birss Trevor John			1.00
Blair Nigel John			1.00
Blair Robert Quintin			8.00
Blakemore Norman John			1.00
Blanchard Stephen David			4.00
Bodger Brendon Maxwell			1.00
Brien Peter William			1.00
Brien Stephen Morley			1.00
Broatch Matthew James			1.00
Brown Grant Gavin			1.00
Bryce Gene Stanley			3.00
Caines William Mckenzie			1.00
Callaghan Cameron Robert			7.00
Callaghan Cameron Robert			7.00
Callaghan Forbes Andrew			1.00
Callaghan Nancy Allison			1.00
Callaghan Peter George			4.00
Callaghan Peter George			5.00
Callaghan Peter George			9.00
Carruthers Lynne Marie			1.00
Cartlidge Nicola Jane			1.00
Cassie Timothy Ira			1.00
Chapman Neil Frederick			1.00
Clandeboye Trustees Limited			1.00
Cooke Peter James			1.00
Cooper Rex Graham			1.00
Crampton Geoffrey Charles			3.00
Crampton Geoffrey Charles			10.00
Dash Daniel Raymond			1.00
Dawber Gregory Willliam			1.00
Day Catherine			1.00
Dickson Sally Lynette			1.00
Edmondson Grant			2.00
Edmondson Grant			1.00
Edmondson Grant			3.00
Edmondson Grant			2.00
Farm Barn Cafe Limited			3.00
Farmer Paul Joseph			2.00
Fat Albert Limited			1.00
Foote Bruce James			1.00
Ford Elisabeth			2.00
Forest Downs 2014 Limited			20.00
Fox Peak Station Company Limited			6.00
Foxburn Limited			3.00
Gallagher Michael Brendon			1.00
Gallagher Ruari Joseph			2.00
Geary Simon Robert			12.00
Glenapitea Limited			20.00
Glenleigh Agriculture Limited			5.00
Goodall Dean Bryce			1.00
Granger Judith Edna			2.00
Grant Peter			2.00
Guiney Kieran Joseph			12.00
Guy Kenneth Gordon			1.00
Habberfield-Short Michael			1.00
Habraken Antonius Cornelis			16.00
Haigh William Henry			1.00
Hellier Ashley Richard			1.00
Hendry John William			1.00
Hendry Tina Joyce			4.00
Johnson Anthony Peter			1.00
Johnson Roland Charles			5.00
Joll Ronald Owen			1.00
Kerr Murray James			1.00
Kirk Simon Royce			2.00
Kirkbeck Anton William			1.00
Lamothe Holdings Limited			3.00
Latta Garry James			3.00
Leslie Downs Farming Limited			2.00
Loader Luke Edward			2.00
Lott Farming Company Limited			8.00
MacPherson Noel Fraser			2.00
MacPherson Noel Fraser			4.00
Madrepore Services Limited			5.00
Marshall Angela Marie			4.00
Marshall Gregory David			11.00
McDonald Daniel Keenon			1.00
McHaffie Stephen Eion			2.00
McKenzie Stewart James			1.00
Miller Wayne Charles			1.00
Moffatt Ralph Ronald			2.00
Moffitt Dairy Limited			15.00
Morelea Farm Holdings Limited			1.00
Morgan Denis Keith			1.00
Mountainview Dairy Farm Limited			6.00
Mulligan Alistair Robert			5.00
Murray David Mathew			1.00
N R and L M Campbell Limited			25.00
Nimmo Fran Julie			1.00
OConnell Terence Michael			3.00
OLoughlin Rodney Kevin			3.00
ONeill Craig Joseph			3.00
ONeill Gerard Denis			3.00
OPTIM Holdings Limited			4.00
Olds Peter John			8.00
Opua Holdings Limited			1.00
Opuha Downs Limited			5.00
P G Wardle Limited			1.00
Pawsey John Edward			2.00
Raincliff Station Limited			12.00
Reid Aaron Caleb			4.00
Robertson John Andrew			1.00
Robertson Nigel Robert			4.00
Scarlett Malcolm Wayne			21.00
Shallow Creek Farms Limited			1.00
Skipton Ag. Limited			6.00
Te Puni Land Company Limited			20.00
The Kowhais Limited			23.00
Thompson Phillippa			1.00
Trotter Robert Brown			8.00
Two Thumb Holdings Limited			1.00
Two Thumb Holdings Limited			3.00
Van Hassel Christine Wilhelmina			1.00
Waite Graeme Lionel			1.00
Weeks Colin Lionel			1.00
Whittaker Stephen David			7.00
Williams David Allan			2.00
Grand Total			549.00

SPUR ROAD

	Ratepayer Name	Points

2529005400	Adams Bruce George	3.00
2529007500	Adams Mark Hayden	7.00
2529005500	Adams Stephen Craig	7.00
2529005503	Bell Brian Lester	5.00
2529000200	Blair Robert Quintin	8.00
2529000600	Glenleigh Agriculture Limited	5.00
2529000100	Guiney Kieran Joseph	12.00
2529000500	Marshall Gregory David	11.00
2529004901	N R and L M Campbell Limited	7.00
2529005000	Te Puni Land Company Limited	2.00
		67.00

Suzette van Aswegen

Chief Executive Officer