Financial Overview 2017/18 is over $50M. The 2015-25 LTP budgeted for a significant increase $million 2018-19 2019-20 2020-21 2021-22 2022-23 2023-242024-25 2025-26 2026-27 2027-28 over historic levels. These budgets have proven optimistic over the last two financial years. As a result, the strategic decision has been taken to limit the Capital 73.8 63.0 60.0 57.5 58.8 58.1 38.7 51.3 34.3 29.6 funding of Capital Expenditure to approximately $60M for the first three years Expenditure of the LTP for core Council Assets. The key point to note is that over the 10 years of the LTP all projects listed remain; it is just that their timing may vary. The largest Capital Expenditure in the early years takes place in Roads, Flaxbourne has been treated separately as it has an alternate means of Sewerage, Water, Library redevelopment in Blenheim and the construction of managing its construction over and above Council’s resources. This figure of the Flaxbourne Irrigation Scheme. $60M is still a significant lift on historic achievement and must be financed. Activity 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 Capital project timing in project delivery terms as compared to financing terms $M $M $M $M $M $M $M $M $M $M can vary for many reasons including: Roading 15.3 15.3 13.5 14.0 14.4 15.5 14.9 15.4 15.9 14.7 Finalising community consultation; Sewerage 17.3 12.8 9.1 18.9 20.2 23.9 7.6 20.5 6.5 1.4 • Obtaining land access; Water 9.7 6.7 16.5 5.9 10.2 3.9 4.8 0.8 1.8 2.7 • Obtaining resource consents; Library 1.3 3.5 6.6 4.6 0.3 0.4 0.4 0.4 0.4 0.4 • Blenheim • The availability of external professional expertise; Stormwater 1.3 1.1 0.6 1.1 1.8 4.0 1.0 0.9 2.2 2.3 • Receiving an acceptable contract price; and Solid Waste 0.3 0.1 0.6 2.1 2.6 0.5 0.8 6.4 0.2 0.1 Contractor availability. Management • Flaxbourne It is for these factors that Council feels comfortable to make the high level Irrigation strategic decision to limit project funding as it has. This level of discounting Scheme 10.9 5.3 project timings is not uncommon across local government Total 56.1 44.8 46.9 46.6 49.5 48.2 29.5 44.4 27.0 21.6 To assist in the financing of the increased Capital Expenditure programme Each year Council will review the continued need and timing of Capital there has been increasing use of the Infrastructure Upgrade Reserve which Expenditure as part of its Annual Planning and budgeting process. In previous has benefited from improved revenue streams and the reduction of the years, these reviews have resulted in expenditure deferrals, which have in Interest Rate assumption in calculating the funds available to allocate towards turn, reduced subsequent years rates increases and actual debt levels. funding Capital Expenditure. The other points to note in regard to Capital Expenditure are: Where Does Council Spend Ratepayers Money? • The full cost of interest and depreciation apply from the year after In addition to the investment in new assets, and the renewal of old, Council construction is completed; and spends its money on delivering services under the following broad activity groupings. As can be seen, the vast majority of expenditure is made on core • New assets generate ongoing operations and maintenance infrastructure operation and maintenance plus environmental, regulatory and expenditure. 2018-2028 Long Term Plan Page 15