Submission to Wanganui District Council AP 2011/2012

Wanganui District Council Draft annual Plan 2011/12 Submission

This submission is made on behalf of the Mainstreet Wanganui Promotions Division and has been prepared by Elise Goodge, Marketing Manager.

This organisation represents all businesses located within the Central Business District (CBD) of Wanganui and this submission is made on their behalf.

It is the wish of this organisation that the council revisit the amount of the overall CBD levy apportioned for promotions.

The current annual promotions levy is $62,000.00. The proposed promotions levy for 2011/12 is $62,000.00.

Mainstreet seeks that there be an inflation adjustment of 2.5% made to the current promotions levy, thereby increasing the promotions levy to $63,550.00.

The levy provides funding for Mainstreet’s promotional activities.

Mainstreet is answerable to its members for the services it provides under the levy.

For a number of years the levy was regularly adjusted in line with inflation.  The levy has not been adjusted since 2006.  It has been left at $62,000 which has been curtailing Mainstreet’s promotional activities. 

Wanganui District Council and Mainstreet Wanganui Inc have worked tirelessly over the past 20 years to enhance Wanganui’s CBD. Enormous investment has been made in beautification projects and in making the CBD more consumer friendly. All of this effort has paid dividends with a beautiful CBD that Wanganui can be proud of. Mainstreet considers its role moving forward to be one of promotion and retention. We want the community to utilise the city centre more readily and ensure visitors put it on their itinerary as a ‘must see’ destination. Mainstreet is in a position to be an instigator and supporter of future programmes and events in the CBD that enhance Wanganui’s reputation, drive consumer spending, increase foot traffic and help to deliver on Wanganui District Council’s ‘Family Friendly’ vision.

The present levy, without inflation adjustment, has been steadily decreasing over the past 5 years. This has resulted in some Mainstreet promotions and services being abandoned due to lack of funds and will continue to impact negatively on Mainstreet’s ability to future proof and deliver the desired services and promotions of Mainstreet business shareholders.

Difference $9060.00

Submission on upgrading of the City Flag System

This is a submission requesting funding for an upgrade of the Flag Systems on the Light Poles around Wanganui.

The Flag System is owned by the ‘Wanganui District Council’ and has been always maintained and operated by Mainstreet Wanganui Incorporated.

At present we are able to place flags at three of the entrances to Wanganui, the City Bridge, and in the CBD. There are also flags at Springvale Park.

The Flags are placed on poles as above picture indicates. To carry out the Flag Changes is slow and expensive requiring the hire of a Bucket Truck and the work to take place outside normal work hours (eg. Work on the city bridge can only be carried out on Saturday or Sunday morning before 9.00am.)

Flagmakers in Wellington the main supplier of flags in NZ have now deveoloped a system which simplifies the erection of flags and cuts the expense of changing the flags considerably. This will enable more organisations to use the flags to advertise their up coming events.

With the advent of the upcomming RWC in 2011 and the VCC Rally in 2012 it would be advantagous to replace the old system with this new system plus at the same time extend out the number of flag positions we have. With the RWC it has been identified that with major matches in both Palmerston North and New Plymouth there will be a larger than normal amount of people passing through Wanganui and so anything we do to invite these people to stay in our City for a time will benefit us greatly. The thought is that we look at placing flags at Bulls, Raetihi, Taihape, Waiouru, Ohakune, Marton, Upokongaro, Kai Iwi and maybe at other areas as well.

We have allowed for a total of 140 Flag units in the following estimate with 95 of these already existing in the City at present and the remainder for the outer area’s.

To reduce costs I have only allowed to fit one flag per pole where as at present, we have two flags per pole.

To fund the cost of the upgrade Mainstreet intends to apply for funding assistance from Wanganui PowerCo Trust, Whanganui Community Foundation, Wanganui District Council and Mainstreet Wanganui Inc.

The Total Cost Estimate to upgrade the system is at present: -

Mainstreet is prepared to contribute 25% of the cost and would like to think that WDC would be prepared to cover up to 50% of the cost with the remainder coming from the two trusts mentioned.

Our Submission is for Council to contribute $34,322.50 to install a Flagmakers Flagtrax System to the existing poles in Wanganui City and outer towns in our region.

CBD Maintenance

Mainstreet Wanganui Inc has carried out the maintenance of the CBD area for a number of years. This has proved to be of benefit to both the Council and businesses that operate in the CBD because both are vitally interested in maintaining the area to a high standard.

Over the period there have been a number of tasks added to the work programme with little increase in the costs.

The current regime of maintenance commenced in July 2001.

Attached is a spreadsheet showing the history of amount of funds allocated for the programme of work under the Service Level Agreement between 2001/2002 and 2009/2010. Also shown are a number of relevant cost indices that give an indication of how prices have moved over the same period. Other than the New Zealand Transport Agency Maintenance Cost Index all have been sourced from the Department of Statistics.

As can be seen from the indices it would be expected that costs have increased in the order of 30% over the period. However the amount actually paid by Council has only increased by half of that amount a significant saving. This has come about by a cooperative approach between Council and the Mainstreet organisation which has allowed Mainstreet to make significant efficiency gains over the period largely through the effort of the Town Centre Operations Manager Ritchie Minnell and supportive Council Officers.

As well as holding costs the range of activities carried out by Mainstreet Wanganui has increased during the period.

Among the extra benefits the Council has received while still maintaining a low cost structure are;

Majestic Square Maintenance (initially Mainstreet only looked after the Rose Gardens and a small section of grass)

Preparation of Traffic Plans and supervision of Road Closures and Parades in CBD e.g. the parade and celebrations at Memorial Hall for the Krupp Gun.

Extra Cleaning and longer opening hours for Orient Toilets since they were expanded four years ago.

Facilitation of and removal/protection of Council Assets affected by new developments e.g. CJ’s Development

Maintenance of Access to Riverbank adjacent to Town Bridge

Maintenance of Guyton St Walkway.

Facilitation of associated works for tree replacements.

Coordination of other contractors working in CBD

Upholding of bylaws e.g. skateboarding and bikes on footpaths.

Policing of footpath obstructions such as sandwich boards, café furniture, trades working in the CBD.

Whilst the increase in funding for the 2010/2011 year has allowed us to break even we are facing some further increases which will put pressure on this year’s budget.

Over the last 5 years we have been using machines known as Billy Goats to assist us in cleaning the streets. These have gone well over their used date and we are unable to now purchase any more. Beside that they are very noisy to operate resulting in many complaints about noise in the early morning.

We have now invested in a Machine known and used by many Councils in New Zealand and around the world as a 414 Green Machine.

This machine is specifically designed for cleaning streets, runs a lot quieter than the Billy Goats and is far more efficient. However the cost for one of these is also very high as are the running costs. Because we do not have a lot of experience with these type of machines it is difficult to cost it out but to date it does appear there will be some increases but over time these will be contained. It will however allow us to carry out work in some of the extended areas Council Officers have asked us to look at.

One area which is increasing in costs is the picking up of leaves and twigs from the Plane Trees. These used to be trimmed out annually just before the main leaf fall and this in turn reduced a major costs when the main fall happened.

Sadly this has ceased in the name of costs and over the last two years has created a significant increase in costs for us.

Something in the line of $6-7,000 per year plus major problems for the Building Owners with blocked drains overflowing into their Buildings.

Note: Please refer to our submission on the Management of the Trees with-in the CBD.

The other area of concern to Mainstreet again this year is increases in our wage bill. Our Staff are only rewarded at just above the minimum rate. Cleaners at our General Hospital earn considerably more than our staff do. (I’m told that they are on an average of $18.00 per hour whilst our staff are only receiving and average of $14.05 per hr)

When we go through our next wage round there is going to be a good deal of pressure to increase their wages again and fair enough with costs soaring out of control for the low paid. This will probably add another $10,000 per year to our budget.

With the increases mentioned added to WDC’s proposed budget Mainstreet will be able to continue to provide the Service expected and given.

This submission requests Council to adjust the amount allowed in the 2010/2011 Annual Plan from $494,747 to $511,747 plus GST to enable the current levels of service to be maintained.

Alternatively it asks Council to decide which areas of activity are no longer to be performed to the high standards that people have come to expect for the Central City.

CENTRAL CITY SERVICES RATES

Central City businesses have expressed concern with the way that the CBD A and B services charges are calculated and applied.

It has always been understood that the services charges were levied on the particular group of properties as a specified rate.  And that such specified rates were a differential rate that should be sufficient to recover the costs of providing the services.  And no more than recovering the costs of providing those services.

We note with concern that an increasing amount of the differential rate charge is being directed to management, administration and executive office overhead.  We can understand a direct contract administration charge.  We have difficulty with what seems to be an increasingly generic “bureau” type charge for the general costs of running the city.  We feel those charges should be met out of general rates.  Not a targeted rate recovered under a differential levy.

Our understanding is that, under the Rating Powers Act and the Local Government Act, special rates are not to be used as general contributors to the city coffers.  Special services rates, parking rates, reserves funds contributions and the like should not be applied to reduce general rates.   

As can be seen by the chart above our analysis of the CBD A and CBD B services rates for the last three years show that the administrative overhead factor has increase considerably.

Whilst the 2011 proposed figures, at present in the draft annual plan, do not indicate any drop in the total amount of this particular rate. The Council Overheads have increased at a much greater rate than the increases paid to the contractors (including Mainstreet) who carry out the work!

Mainstreet considers that the targeted rate should be set at a level which recovers only: -

a)      The cost of the contractors providing the services; and

b)      The basic Council cost of the staff directly administering those contracts.

The rate should not include any general contribution to executive office overheads or other Council activities as this should be covered by general rates.  It should also not include any costs for collecting the special rates as these collection costs should be part of the general rating.

The problem is that the targeted rates fall on a group that is small in numbers.  Not the 20,000 or so ratepayers for the whole city but on barely 200 central city ratepayers, ie; barely 1% of the total number of ratepayers.  This means that the dollar impact is large for each property in the small group.  Having a general costs contribution such as executive office overhead levied on this small group is disproportionate.

We consider that the direct management and administration costs of this targeted CBD services rates should be no more than say $30,000-$40,000 per annum.  Not the figure that the Council has most recently been charging of ($119,000).

Could we ask that Council quantify how this amount has been arrived at for us?

There is a matter of principle and legality involved.  We believe it is incumbent on Council to ensure its policies are transparent and fair and do not involve hidden cross-subsidisations.

This submission seeks that this matter be addressed in the Funding Review.

Submission regarding the Funding of the Under Verandah lighting in the CBD

The Under Verandah Lighting in the CBD is for the security of pedestrians using or passing through the CBD. It is of limited value to the retailers who have there own lighting in their store windows. However Mainstreet members realise there is some advantage to having the Under Verandah Lighting and so are prepared to pay towards the Energy costs.

Over the past few years the full cost of the Under Verandah Lighting in the CBD has been born by the CBD A and B Levy Rate Payers. This includes the repairs and maintenance of the lighting infrastructure.

Mainstreet believes that a 60/40 split in the costs of the CBD lighting would be a fairer way of costing this item. That is 60% paid by the CBD A and CBD B rate payers and 40% coming from the Community Facilitys Rate.

Mainstreet has over the last ten years managed the Under Verandah Lighting for WDC.

The infrastructure for the Under Verandah Lighting belongs to the Wanganui District Council and costs an average of $13,870 to repair and maintain.

Mainstreets submits that it is unfair to expect the CBD A and CBD B levy payers to pay for the upkeep of the Under Verandah Lighting Infrastructure.

This submission seeks to request  Council to fund the  Repairs and Maintenance of Under Verandah Lighting from the Community Facilities Rate rather than the Central City Sevices Levy.

mission for:

“The Management and Control of all trees with-in the CBD under the SLA with Mainstreet Wanganui Inc.”

At Present:

I have been with Mainstreet Wanganui for 10 years now. When I first started I was asked by Council to look at a program to trim the London Planes back to a manageable level that would reduce the growth, the leaf fall and formulate a management program that would be used for the trees every year.

I also was in charge of the root damage done to the footpaths.

I did this and for 5 years or so this worked well, didn’t cost WDC very much for my time and used the Tree Contractor from Council.

Then things changed. Parks and Reserves took back the management of the trees, reduced the amount of work done annually and we now have major issues with the trees and roots. Massive leaf falls which not only create logistic problems and costs for us but cause major problems for building owners.

There was a Tree Policy adopted by Council in 2008 where it was decided that a Management program be written up but this has not happened.

Our submission is:

1. Mainstreet would like to begin negotiations to take on as part of our SLA the management of all of the trees in the CBD .
   
   
2. We would continue to use the WDC Contractor if that’s what’s preferred but we would be controlling the Budget set aside for the trees.
   We would set up a Budget and Management Plan to be presented to WDC each year for the trees and would also oversee the replacement program for any trees needing replaced and the cost to do so.

3. Mainstreet would also take on responsiblity for root damage and repairs to footpaths and with a budget and management plan for this as well.
   
   

Our experience gained in looking after the trees in the CBD, understanding the problems and costs over the past 10 years I believe will give Council a more favourable cost and control over these trees and reduce a lot of the problems we have through work not being carried out regularly.

Regarding Wanganui in Bloom

1.      Mainstreet recommends a target of 1052 hanging baskets for Summer 2011 and a residual of 400-500 winter baskets or maintenance backup.
Last year because of budgets restraints we were only able to provide for 920 Baskets
This year we are budgeting for a deficit of $14,700.
We need the levy to be raised to $66,700 for the year or alternativly we will need to reduce the summer basket numbers down to 700.
We are also experiencing a major reaction to the cost of the Winter Baskets with numbers down from 400 to 250 to date. It could be that we look seriously at combining the funding via the levy for both winter baskets and summer baskets next year.

2.      In June 2009 Mainstreet presented a proposal to Council that Wanganui in Bloom should be funded: -

·        50% by the businesses through the targeted Central City Services Rate and

·        50% by the the Community Facilities Rate.

·        That Winter Baskets should be funded voluntarily by businesses.

3.      The Wanganui in Bloom cost has now been incorporated into the Central City Services Rate, however the 50-50 split between the Central Services Rate and the Community Facilities Rate has not taken place.

4.      Mainstreet Wanganui believes that this is very unfair on the CBD A and B rate payers. 
The Hanging Baskets are a iconic event in Wanganui which attract vistors all year round. This not only brings some benefit to the shops in the CBD but a greater benefit to all of Wanganui’s Ratepayers with tourists using all of the cities facilities, some people including businesses deciding to take up residence here ect.

5.      Mainstreet continues to receive very favourable comments every year about the mass effect of the baskets.   It is important to note that we produce an extra 50% of the number of baskets required to allow for the rotation and replacement of baskets that are damaged by incliment weather or failure of plants. The problems are worse in the side streets where there is a lot less protection from the weather.

6.      Mainstreet would like Council to consider the further extension  of theWanganui in Bloom programme into the Old Town Area. Approx  500 baskets would be required.  Council may wish to consider extending the CBD Levy at an appropriate rate into that area on the same basis as the CBD Levy is calculated. Mainstreet Wanganui would produce further costings and a proposal if Council wishes to consider this.

7.      This submission seeks : -

(a) for a 50 – 50 split of the levy to be split between Central Service Rate and the Community Facilities Rate

(b) for an increase in the levy to $66,700 for Wanganui in Bloom

Cost / Benefit

The cost of Wanganui in Bloom is small in terms of the total promotional budget of the Council.  It is small in the context of the costs of a tv ad or newpaper campaign.  It is even smaller in comparison to the real benefits that accrue from having one of the most attractive city precincts in the country.  Each visitor photo of the city with its buildings and baskets sells the Wanganui message far wider and more positively than any catchy jingle or quirky voiceover.

Mainstreets view is that Wanganui in Bloom has been a very successful programme,and  that it has  got a lot of capacity for enhancement.  It has not yet reached its full potential!