I hereby give notice that an ordinary meeting of the Finance and Performance Committee will be held on:

 

Date:                      

Time:

Meeting Room:

Venue:

 

Friday, 13 May 2016

9:30am

Reception Lounge
Auckland Town Hall
301-305 Queen Street
Auckland

 

Finance and Performance Committee

 

OPEN AGENDA

 

 

 

MEMBERSHIP

 

Chairperson

Cr Penny Webster

 

Deputy Chairperson

Cr Ross Clow

 

Members

Cr Anae Arthur Anae

Cr Calum Penrose

 

Cr Cameron Brewer

Cr Dick Quax

 

Mayor Len Brown, JP

Cr Sharon Stewart, QSM

 

Cr Dr Cathy Casey

Member David Taipari

 

Cr Bill Cashmore

Member John Tamihere

 

Cr Linda Cooper, JP

Cr Sir John Walker, KNZM, CBE

 

Cr Chris Darby

Cr Wayne Walker

 

Cr Alf Filipaina

Cr John Watson

 

Cr Hon Christine Fletcher, QSO

Cr George Wood, CNZM

 

Deputy Mayor Penny Hulse

 

 

Cr Denise Krum

 

 

Cr Mike Lee

 

 

(Quorum 11 members)

 

 

 

Mike Giddey

Democracy Advisor

 

10 May 2016

 

Contact Telephone:  (09) 890 8143

Email: mike.giddey@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz

 

 


 


TERMS OF REFERENCE

 

Responsibilities

 

This committee will be responsible for monitoring overall financial management and the performance of the council parent organisation and the financial monitoring of the Auckland Council Group. It will also make financial decisions required outside of the annual budgeting processes. Key responsibilities include:

 

·           Financial management

·           Approval of non-budgeted expenditure

·           Write-offs

·           Acquisition and disposal of property relating to the Committee’s responsibilities

·           Monitoring achievement  of  financial and other measures of  performance and service levels

·           Recommending the Annual Report to the Governing Body

·           Development of the 2016/17 Annual Plan and amendments to the LTP including:

-        Local Board agreements

-        Financial Policy related to AP (recommendation to the Governing Body)

-        Setting of rates (recommendation to the Governing Body)

-        Preparation of the consultation document and supporting information for the LTP and Annual Plan (recommendation to the Governing Body)

·           Financial policy outside the LTP and AP

 

Powers

 

(i)      All powers necessary to perform the committee’s responsibilities.

 

Except:

(a)       powers that the Governing Body cannot delegate or has retained to itself (section 2)

(b)       where the committee’s responsibility is limited to making a recommendation only

 

(ii)      Approval of a submission to an external body

 

(iii)     Powers belonging to another committee, where it is necessary to make a decision prior to the next meeting of that other committee.

 

(iv)    Power to establish subcommittees.

 

 

 

 


EXCLUSION OF THE PUBLIC – WHO NEEDS TO LEAVE THE MEETING

 

Members of the public

 

All members of the public must leave the meeting when the public are excluded unless a resolution is passed permitting a person to remain because their knowledge will assist the meeting.

 

Those who are not members of the public

 

General principles

 

·           Access to confidential information is managed on a “need to know” basis where access to the information is required in order for a person to perform their role.

·           Those who are not members of the meeting (see list below) must leave unless it is necessary for them to remain and hear the debate in order to perform their role.

·           Those who need to be present for one confidential item can remain only for that item and must leave the room for any other confidential items.

·           In any case of doubt, the ruling of the chairperson is final.

 

Members of the meeting

 

·           The members of the meeting remain (all Governing Body members if the meeting is a Governing Body meeting; all members of the committee if the meeting is a committee meeting).

·           However, standing orders require that a councillor who has a pecuniary conflict of interest leave the room.

·           All councillors have the right to attend any meeting of a committee and councillors who are not members of a committee may remain, subject to any limitations in standing orders.

 

Independent Māori Statutory Board

 

·           Members of the Independent Māori Statutory Board who are appointed members of the committee remain.

·           Independent Māori Statutory Board members and staff remain if this is necessary in order for them to perform their role.

 

Staff

 

·           All staff supporting the meeting (administrative, senior management) remain.

·           Other staff who need to because of their role may remain.

 

Local Board members

 

·           Local Board members who need to hear the matter being discussed in order to perform their role may remain.  This will usually be if the matter affects, or is relevant to, a particular Local Board area.

 

Council Controlled Organisations

 

·           Representatives of a Council Controlled Organisation can remain only if required to for discussion of a matter relevant to the Council Controlled Organisation.

 

 


Finance and Performance Committee

13 May 2016

 

ITEM   TABLE OF CONTENTS                                                                                        PAGE

1          Apologies                                                                                                                        7

2          Declaration of Interest                                                                                                   7

3          Confirmation of Minutes                                                                                               7

4          Petitions                                                                                                                          7  

5          Public Input                                                                                                                    7

6          Local Board Input                                                                                                          7

7          Extraordinary Business                                                                                                8

8          Notices of Motion                                                                                                          8

9          Annual Budget 2016/2017 - Overview to decision-making                                       9

10        Annual Budget 2016/2017 - local board feedback                                                    95

11        Local Board budget update                                                                                      201

12        Final Annual Plan 2016/17 - Mayoral Proposal                                                       209  

13        Consideration of Extraordinary Items 

 

 


1          Apologies

 

At the close of the agenda no apologies had been received.

 

 

2          Declaration of Interest

 

Members are reminded of the need to be vigilant to stand aside from decision making when a conflict arises between their role as a member and any private or other external interest they might have.

 

 

3          Confirmation of Minutes

 

That the Finance and Performance Committee:

a)         confirm the ordinary minutes of its meeting held on Tuesday, 12 April 2016, including the confidential section, as a true and correct record.

 

 

4          Petitions

 

At the close of the agenda no requests to present petitions had been received.

 

 

5          Public Input

 

Standing Order 7.7 provides for Public Input.  Applications to speak must be made to the Democracy Advisor, in writing, no later than one (1) clear working day prior to the meeting and must include the subject matter.  The meeting Chairperson has the discretion to decline any application that does not meet the requirements of Standing Orders.  A maximum of thirty (30) minutes is allocated to the period for public input with five (5) minutes speaking time for each speaker.

 

At the close of the agenda no requests for public input had been received.

 

 

6          Local Board Input

 

Standing Order 6.2 provides for Local Board Input.  The Chairperson (or nominee of that Chairperson) is entitled to speak for up to five (5) minutes during this time.  The Chairperson of the Local Board (or nominee of that Chairperson) shall wherever practical, give one (1) day’s notice of their wish to speak.  The meeting Chairperson has the discretion to decline any application that does not meet the requirements of Standing Orders.

 

This right is in addition to the right under Standing Order 6.1 to speak to matters on the agenda.

 

At the close of the agenda no requests for local board input had been received.


 

7          Extraordinary Business

 

Section 46A(7) of the Local Government Official Information and Meetings Act 1987 (as amended) states:

 

“An item that is not on the agenda for a meeting may be dealt with at that meeting if-

 

(a)        The local  authority by resolution so decides; and

 

(b)        The presiding member explains at the meeting, at a time when it is open to the public,-

 

(i)         The reason why the item is not on the agenda; and

 

(ii)        The reason why the discussion of the item cannot be delayed until a subsequent meeting.”

 

Section 46A(7A) of the Local Government Official Information and Meetings Act 1987 (as amended) states:

 

“Where an item is not on the agenda for a meeting,-

 

(a)        That item may be discussed at that meeting if-

 

(i)         That item is a minor matter relating to the general business of the local authority; and

 

(ii)        the presiding member explains at the beginning of the meeting, at a time when it is open to the public, that the item will be discussed at the meeting; but

 

(b)        no resolution, decision or recommendation may be made in respect of that item except to refer that item to a subsequent meeting of the local authority for further discussion.”

 

 

8          Notices of Motion

 

At the close of the agenda no requests for notices of motion had been received.

 


Finance and Performance Committee

13 May 2016

 

Annual Budget 2016/2017 - Overview to decision-making

 

File No.: CP2016/08912

 

  

 

Purpose

1.       This report provides an overview of the process undertaken to consult and consider feedback to inform the council’s next Annual Budget (the Annual Plan 2016/2017 or AP) and sets out the decisions now required, including adoption of the Tūpuna Maunga Authority Operational Plan 2016/17.

Executive Summary

2.       Between 15 February and 24 March 2016, Auckland Council undertook public consultation to inform the Annual Budget 2016/2017. Consultation included potential changes to rating policies, local board priorities, and the draft Tūpuna Maunga Authority Operational Plan.

3.       Feedback was received across three broad feedback channels – written, in-person and digital. In summary:

·        3,321 written submissions were received (2,627 related to regional matters and 2,459 related to local matters), providing around 22,684 feedback points

·        426 people attended 31 Have Your Say events, providing around 2,345 feedback points

·        35 feedback points were provided through digital channels (Twitter and Facebook).

4.       Between 15 to 23 April local boards considered feedback received on local matters. On 26 April the Tūpuna Maunga Authority and Governing Body held joint deliberations on the draft Maunga Authority Operational Plan. On 26 April the Finance and Performance Committee considered feedback received on regional matters. 

5.       On 2 May the Tūpuna Maunga Authority approved the Tūpuna Maunga Authority Operational Plan 2016/2017 (Attachment A).  The Chair and Deputy Chair of the Tūpuna Maunga Authority, under delegated authority, have subsequently approved the Summary of the Operational Plan 2016/2017 (Attachment B) for inclusion in the Annual Budget 2016/2017.

6.       Between 2 May and 11 May the Finance and Performance Committee held workshops to consider key matters for decision-making for 2016/2017 and also held discussions with local boards.

7.       Decisions are now required in order for staff to finalise financial statements, local board agreements, and the Annual Budget document ahead of adoption on 30 June 2016.

 

Recommendation/s

That the Finance and Performance Committee:

a)      recommend to the Governing Body that it agree the Tūpuna Maunga Authority Operational Plan 2016/17 (Attachment A to the agenda report) and Summary of the Tūpuna Maunga Authority Operational Plan 2016/17 (Attachment B to the agenda report) for inclusion in the Annual Plan 2016/2017

b)      note that other decisions required to finalise the Annual Plan 2016/2017 are set out in separate reports on this agenda.

 

 

Comments

Consultation to inform the Annual Budget 2016/2017

 

8.       Between 15 February and 24 March 2016, Auckland Council undertook public consultation to inform the Annual Budget 2016/2017. Key elements of the consultation process undertaken are set out below.

·        A consultation document with supporting information was adopted by the Governing Body on 10 February 2016. The consultation document focussed on the potential changes for 2016/2017 from year 2 of the 10-year Budget.

·        Public consultation ran between 15 February 2016 and 24 March 2016 – this longer consultation period provided around four weeks from when the household summary was delivered to letterboxes in the March edition of OurAuckland.

·        A public awareness raising campaign was undertaken over early February to mid-March to encourage Aucklanders to participate in the consultation process. This included the February edition of OurAuckland, March edition of OurAuckland, advertisements in local and regional newspapers, online banner advertisements, media releases, targeted stakeholder communications and social media.

·        Three broad channels were used to collect feedback to make it easy for Aucklanders to get involved. These were:

o   Written submissions – this included a hard copy feedback form (distributed to Auckland households as part of OurAuckland), an online feedback form and also any emails, letters, pro forma or other written communications received.

o   In person – events were held across Auckland (largely in the evenings and weekends) to provide an opportunity for Aucklanders to speak in person to elected members and subject matter experts.

o   Digital – feedback was also collected through social media channels (Facebook and Twitter) using #aklbudget.

 

Consideration of feedback

9.       There were 3,321 written submissions received (including 45 late submissions), providing around 22,684 feedback points. Of the submissions received:

·        most was received through the written channel with 75 per cent being provided using the council consultation feedback form (either online, posted or emailed)

·        online submissions increased from 25 per cent from consultation on the 10-year Budget to 31 per cent

·        2,627 submitters provided feedback on regional topics and 2,459 on local topics.

10.     There were 426 attendees at 31 Have Your Say events, providing around 2,345 feedback points. Two Have Your Say events and one community event were specifically targeted towards Māori with a focus on rating of Māori Freehold Land. One Have Your Say event was held for key stakeholders in a traditional hearing style with all councillors invited to hear spoken feedback.  There were eight community events held by local boards which recorded feedback (119 feedback points received) and other community events were used for raising awareness. All attendees at events were also given the opportunity to provide a written submission. Have Your Say and community events provided a qualitative source of feedback to consider alongside the qualitative analysis of written feedback.

11.     There were 35 pieces of feedback received through digital channels (Twitter and Facebook).

 

12.     A significant volume of feedback was received in response to the rates related questions. The three other rates topics did not have specific questions in the feedback form and only a small volume of feedback was received on these topics.  Feedback was also received on topics that had not been consulted upon.

13.     The following approach was used to ensure decision-makers are well informed about feedback received on the Annual Budget 2016/2017:

·        Staff with specific subject matter expertise reviewed feedback received relevant to their own area and summarised the issues raised to ensure councillors understand community views.

·        Two reports were prepared summarising feedback on regional matters and considered at the Finance and Performance Committee briefing 26 April.  These reports did not contain analysis of the implications of the feedback received. This has been included in decision-making reports that have been considered through a series of workshops between 28 April and 11 May.

·        21 reports were also prepared summarising the feedback for each local board area and were considered by each local board between 15 and 26 April.

·        A separate report was prepared summarising feedback received on the draft Tūpuna Maunga Operational Plan. This report was considered on 26 April when joint deliberations were held between the Tūpuna Maunga o Tamaki Makaurau Authority and Governing Body.

14.     In addition to the summary of feedback reports, all feedback received has been made available to elected members and have also been made publicly available on the Auckland Council website.

15.     On 9 May discussions were held between local boards and the Finance and Performance Committee.  These discussions provided an opportunity for local board views to be considered ahead of the Finance and Performance Committee making final decisions for the Annual Budget 2016/2017.

Agreeing the Tūpuna Maunga Operational Plan 2016/2017

16.     Auckland Council is responsible for the routine maintenance of the Tūpuna Maunga (under the direction of the Tūpuna Maunga Authority) along with associated costs. The Maunga Authority and Auckland Council must agree the Maunga Authority Operational Plan (Operational Plan) and a Summary of the Operational Plan every year. The Operational Plan sets out how the Council will meet its legislative responsibilities.

17.     The Operational Plan for 2016/17 includes capital expenditure of $1.9 million and operating expenditure of $2.9 million as set out in year two of the 10-year Budget 2015-25.

18.     At Hui 18 (2 May 2016) the Tūpuna Maunga Authority approved the Tūpuna Maunga Authority Operational Plan 2016/2017 (attachment A). Under delegation, the Chair and Deputy Chair of the Maunga Authority have subsequently approved the Summary of the Operational Plan 2016/2017 (attachment B) for inclusion in the Annual Plan 2016/2017.

Other decision-making

19.     Consultation on the Annual Budget 2016/2017 included the following potential changes to rates for year two of the 10-year budget:

·        level of the UAGC

·        share of the ITL between business and residential ratepayers

·        rates on farm/lifestyle properties

·        proposed changes to rating of Māori land.

·        proposed changes to business improvement district targeted rates

·        proposed pilot programme to finance septic tank replacements and upgrades

·        proposed introduction of a rural Franklin recycling targeted rate.

20.     Between February and March staff undertook their standard annual review process across all council budgets for the 2016/2017 year. This included a review of cost pressures, progress against savings targets and any changes to the capital programme. It also included an update on planning assumptions for key items such as inflation and dividend expectations. The key budget decisions are set out in the Budget update report attached to the Mayoral report.

21.     The Mayoral report for the Annual Budget sets out the Mayor’s recommendations for budgets and rates.  Staff reports on these areas are attached to the Mayor’s Report.

22.     In addition, the Finance and Performance Committee will also consider reports on:

·        local board advocacy for regional decision-making

·        decisions required to prepare local board agreements.

Consideration

Local Board views and implications

23.     Information on local projects and priorities was included in the consultation material to inform the development of local board agreements for 2016/2017.  During the consultation process, local boards held events to engage with their communities and at least one Have Your Say event was held in each local board area. These events provided an opportunity for Aucklanders to provide feedback in person to local board members on local issues.

24.     Reports summarising the feedback received relevant to each local board area were considered by each local board between 15 and 26 April. Local board views were then shared with the Finance and Performance Committee during discussions on 9 May. 

25.     A separate report on today’s agenda covers local board advocacy for the Annual Budget 2016/2017.  Local board views are also considered in each of the relevant decision-making reports on today’s agenda.

26.     Local boards will hold workshops following the decisions made today and then meet to agree final budgets and adopt local board agreements between 6-16 June.

Māori impact statement

27.     In the 10-year Budget, a strategic top down approach was taken to agree and prioritise activities that contribute to Māori outcomes through clarifying the council’s political direction on priority Māori transformational shift activities and associated budgets.

28.     Consultation on the Annual Budget 2016/2017 has focussed on those issues that the council potentially considered changing from the 10-year Budget. Decisions on those issues required to finalise the Annual Budget 2016/2017 are set out in separate reports on today’s agenda. The impact of those decisions on Maori are covered in each report.

Implementation

29.     Decisions on the Annual Budget 2016/2017 are required today in order for staff to:

·        finalise financial statements

·        finalise local board agreements – local boards will hold workshops in May and then meet between 6-16 June to adopt local board agreements for 2016/2017

·        finalise the annual plan document for adoption.

30.     A rates resolution will also be prepared for adoption at the 30 June Governing Body meeting, for consideration following the adoption of the Annual Plan 2016/2017.

 

Attachments

No.

Title

Page

aView

Tūpuna Maunga Operational Plan 2016-2017

15

bView

Summary Tūpuna Maunga Operational Plan 2016-2017

87

      

Signatories

Author

Aaron Matich - Acting Programme Director

Authorisers

Matthew Walker - GM Financial Strategy and Planning

Kevin Ramsay – Acting Group Chief Financial Officer

 


Finance and Performance Committee

13 May 2016

 

















Finance and Performance Committee

13 May 2016

 


Finance and Performance Committee

13 May 2016

 


Finance and Performance Committee

13 May 2016

 






















































Finance and Performance Committee

13 May 2016

 








Finance and Performance Committee

13 May 2016

 

Annual Budget 2016/2017 - local board feedback

 

File No.: CP2016/06927

 

  

 

Purpose

1.       To provide local board feedback on regional financial policy issues with a local impact, key advocacy issues, local targeted rates and Business Improvement District (BID) targeted rates, for the Finance and Performance Committee’s consideration when agreeing 2016/2017 budgets.

Executive Summary

2.       Local boards, in fulfilling their role in council’s shared governance model, have been providing feedback and views on various issues as part of the annual budget process.  This has included considering:

·   regional issues (the Uniform Annual General Charge (UAGC), Interim Transport Levy (ITL), Māori land rates and rates for farm/lifestyle properties over 50 hectares)

·   key issues the local boards would like the Finance and Performance Committee to consider prioritising for progression

·   proposed new/amended local targeted rates and Business Improvement District (BID) targeted rates.

3.       Local boards provided initial views on these matters to the Finance and Performance Committee on 27 and 30 November 2015.  Local boards have now considered the feedback received for their local area, from public consultation which took place between 15 February and 24 March 2016, and resolved on these issues.

4.       This report summarises the feedback from local boards, and focuses on common themes.  As such, it does not include all of the matters raised in local board resolutions.  A complete set of the local board resolutions on regional issues, advocacy, local targeted rates and BID targeted rates can be found in Attachment A.

5.       Key themes arising from those local boards that resolved on regional issues included:

·    support for keeping the UAGC at current levels

·    support for businesses paying a greater share of the ITL and reducing the residential share

·    support for the retention of the current allocation of rates for farm/lifestyle sectors.

6.       Local boards had differing views on whether to reduce rates for some Māori land.

7.       In general, the advocacy issues raised by local boards had a focus on what will be required to cope with the demands of Auckland’s projected population growth, development and intensification.  The key themes include:

·   the need for integrated transport infrastructure to support growth and development, including various transport improvements and well connected networks

·   the importance of parks, recreational facilities and open spaces for the liveability of Auckland, requiring strategic and timely land acquisition and equitable funding across the region

·   the provision of community facilities, particularly to accommodate growth.  Regionally fair and consistent levels of service, and adequate operational funding and funding for renewals, are required.  Reinstating a sub-regional fund for community projects would assist with empowering communities

·   the need for resource to: undertake timely planning, projects and strategic development; protect heritage sites; and provide infrastructure (including social infrastructure) to support growth projections

·   use of development contributions in local areas to deal with growth

·   addressing environmental concerns, such as coastal erosion, waste and recycling, pests and water issues.

8.       BID and local targeted rates matters were raised by Henderson-Massey, Waitākere Ranges, Māngere-Ōtāhuhu, Ōtara-Papatoetoe, Franklin and Hibiscus and Bays local boards.

 

Recommendation/s

That the Finance and Performance Committee, when agreeing 2016/2017 budgets:

a)      consider feedback from local boards on regional financial policy issues, advocacy and proposals for Business Improvement District targeted rates and local targeted rates.

Comments

9.       Local board views are summarised below and their resolutions can be found in Attachment A.

The UAGC

10.     Under legislation the council can set the fixed portion of rates (UAGC) at up to 30 per cent of rates collected, which is around $980.  As part of its consultation on the annual budget, council sought the community’s views on whether to change the UAGC or keep it at $397.  For those that favoured change, views were sought as to the level it should be set between $350 and $650.

11.     The majority of local boards that provided views on this issue supported keeping the UAGC at current levels:

·   the following local boards supported retaining the status quo: Albert-Eden, Waitākere Ranges, Henderson-Massey, Maungakiekie-Tāmaki, Manurewa, Ōtara-Papatoetoe, Puketāpapa, Rodney, Waiheke, Waitematā, Kaipātiki and Whau.  These local boards consider that the UAGC should remain at current levels, in particular, to stabilise rates and minimise changes for ratepayers 

·   there was support for increasing the level of the UAGC from Devonport-Takapuna, Hibiscus and Bays, Howick, Ōrākei and Upper Harbour local boards.  Hibiscus and Bays Local Board supported increasing the UAGC to $650.  Ōrākei Local Board supported a minimum UAGC of $450

·   Māngere-Ōtāhuhu Local Board considered the level should be decreased.  Puketāpapa Local Board considered that if the UAGC is to be changed, it should be decreased to $350 (but prefers that it remains at current levels).

The ITL

12.     The ITL (targeted rate) runs for three years and will collect $181 million to help fund the accelerated transport program of $523 million.  Consultation sought the community’s views on two possible changes to the ITL (presently $113.85 (including GST) for residential and farm/lifestyle ratepayers and $182.85 (including GST) for businesses):

·   bring the share of the ITL paid by businesses into line with the share they pay of general rates, 32.7 per cent, increasing the business ITL to $407 and reducing the residential and farm/lifestyle ITL to $90

·   share the ITL amongst businesses based on their capital value, whether or not the share paid by business changes.

 

13.     Most local boards that provided views on this issue supported businesses paying a greater share of the ITL and reducing the residential share:

·   the following local boards supported businesses paying a greater share of the ITL and reducing the residential: Albert-Eden, Kaipātiki, Henderson-Massey, Māngere-Ōtāhuhu, Waitematā, Upper Harbour, Puketāpapa, Howick, Waiheke, Hibiscus and Bays, Waitākere Ranges and Whau

·   not increasing the ITL share paid by businesses was supported by Devonport-Takapuna, Manurewa, Franklin, Rodney and Ōtara-Papatoetoe local boards

·   charging businesses based on their capital value was supported by Henderson-Massey, Waiheke, Maungakiekie-Tāmaki, Puketāpapa, Waitematā, Kaipātiki and Whau

·   Ōtara-Papatoetoe and Franklin local boards considered that the share of the ITL paid by businesses should be retained as a fixed charge

·   Waitākere Ranges Local Board would prefer that the ITL was not a stand-alone levy, rather it should be part of the general rates take.  However, if the ITL is retained the Local Board supports the allocation of the ITL across all ratepayers to be on the basis of capital value rather than via a fixed charge.  Ōrākei Local Board does not support the ITL unless the benefits to its area can be demonstrated by way of support for local transport projects.

Māori land rates

14.     The legal restrictions on Māori freehold land mean that the owners often cannot use the land optimally.  As a result, the share of rates allocated to some Māori freehold land may not be fair relative to general land.  The council consulted on addressing these issues by providing for additional rates remissions.

15.     The Consultation Document sought the community’s views on a proposal to amend the:

a.            Māori freehold land rates remission and postponement policy to:

·     adjust rates to the equivalent of those that would have been charged, had the property been valued excluding any potential use that is unlikely to be achieved within Māori ownership

·     adjust rates to the equivalent of those that would have been charged, had the rateable value of the property been adjusted by 10 per cent (the maximum adjustment available under the valuation rules); where properties have significant barriers to development such as owners being deceased or not succeeded to

·     remit rates for marae and urupā land in excess of the 2 hectare limit for non-rateability

b.            Rates remission and postponement policy to:

·     remit fixed charges on Māori land on multiple titles used as single property.

 

16.     The local boards that provided views on this issue had differing views on whether to reduce rates collected from Māori land:

·   Devonport-Takapuna, Hibiscus and Bays, Upper Harbour, Howick and Ōtara-Papatoetoe local boards did not support reducing rates collected from Māori land to reflect restrictions on its use

·   Henderson-Massey, Albert-Eden, Māngere-Ōtāhuhu, Franklin, Waitematā, Waitākere Ranges and Whau local boards supported reducing rates for some Māori land as there are significant barriers to development.         


 

Rates for farm/lifestyle properties over 50 hectares

17.     Council’s consultation sought the community’s views on whether to reduce the rates on farm/lifestyle properties from 80 per cent of the urban residential rates to 60 per cent.  An option to provide a remission for non-contiguous farm/lifestyle properties managed as a single unit to bring their rates to the level they would have paid if they were under a single title i.e. if the combined land area is greater than 50 hectares was also consulted on.

18.     Most local boards that provided views on this issue supported the retention of the current allocation of rates for farm/lifestyle sectors:

·   the retention of the current allocation of rates within the farm/lifestyle sectors was supported by Hibiscus and Bays, Māngere-Ōtāhuhu, Puketāpapa, Whau, Ōtara-Papatoetoe, Kaipātiki, Henderson-Massey, Howick, Albert-Eden, Waitākere Ranges Waitematā, Upper Harbour, Waiheke and Devonport-Takapuna local boards

·   Franklin and Rodney local board supported the proposed reduction of rates farm/lifestyle.

 

Other issues

19.     Great Barrier and Waiheke local boards request that the Great Barrier and Waiheke LDI budgets be adjusted annually for inflation.

20.     Under the Local Boards Funding Policy, funding for expenditure on local activities for Great Barrier and Waiheke local boards is agreed with the governing body each year.

Key advocacy themes

21.     Council departments and CCOs have provided information to local boards and the Finance and Performance Committee on advocacy issues.

22.     After considering this information, and public feedback from consultation, local boards (at their April business meetings) identified particular projects or initiatives that are a priority for progression in their local areas for which they would like governing body support in the annual budget 2016/2017.  In general, the advocacy issues raised by local boards had a focus on what will be required to cope with the demands of Auckland’s projected population growth, development and intensification. 

23.     The key themes/issues arising from these priorities are set out below along with a high-level summary of the relevant information provided to local boards from council departments and CCOs. 

 

Transport infrastructure

24.     The provision of integrated transport infrastructure to support growth and development was considered an important issue by a number of local boards.

 

The provision of integrated transport infrastructure to support growth  

Issues raised by local boards in November 2015:

·  transport improvements

 

 

·  a safe and comprehensive network of greenways, cycling and walking connections

Council department and CCO responses:

·   consider if issue falls within the Regional Land Transport Plan (RLTP)

·   Auckland Transport, the New Zealand Transport Agency and Auckland Council are undertaking public consultation on options for transport improvements for the special housing and future urban growth areas

 

·   Auckland Transport is looking at a business and economic case for light rail within the isthmus

·   strategic documents such as the Open Space Acquisition Policy, Community Facility Network Plans and the Proposed Auckland Unitary Plan, will guide the integration of infrastructure, development and meeting future community needs

·   funding in the RLTP and Urban Cycleway Fund for the next three years will allow AT to deliver almost 52 kilometres of cycle lanes in Auckland

·   local boards will be consulted on an Auckland Greenways Plan prior to the end of the financial year. This plan will include criteria to inform the allocation of available budget to specific greenways projects on a rolling three year investment programme.

At their April 2016 business meetings the following local boards resolved on transport issues:

·   Hibiscus and Bays, Henderson-Massey, Howick, Ōrākei, Manurewa, Whau, Great Barrier, Albert-Eden, Maungakiekie-Tāmaki, Franklin, Māngere-Ōtāhuhu, Ōtara-Papatoetoe, Devonport-Takapuna, Waitematā, Waiheke, Kaipātiki, Rodney, Puketāpapa and Papakura local boards all seek various transport improvements, including: protecting land for transport purposes, bus and rail plans, parking and park-and-ride provision, ferry terminals and services, traffic congestion solutions, grade separation, roading and footpaths, and safe transport options

·   Maungakiekie-Tāmaki, Albert-Eden, Kaipātiki, Puketāpapa, Ōrākei,  Ōtara-Papatoetoe, Franklin, Waitematā, Rodney, Waiheke and Whau local boards advocate for further investment in a safe and comprehensive network of greenways, cycling, bridle and walking connections.  Franklin Local Board emphasised the importance of a regional approach and network.

 

 

 

 

 

Parks, recreational facilities and open spaces 

25.     A number of local boards highlighted the importance of parks, recreational facilities and open spaces for the livability of Auckland.

 

Parks, recreational facilities and open spaces 

Issues raised by local boards in November 2015:

·  funding for much needed local parks, recreational facilities, sports fields and open spaces

Council department and CCO responses:

·   a Sports Facility Investment Plan is being developed, to provide future investment in sports facilities and look at funding models

·   budget is available in the 2015 Long Term Plan (LTP) to acquire land for open space to meet the needs of growth. The open space acquisition programme is both reactive to opportunities to acquire land as they arise, and proactive in identifying open space needs in further growth areas and acquiring land to meet those needs

·   decision-making for open space acquisition is undertaken according to the Parks and Open Space Acquisition Policy and Interim Level of Provision Guidelines.

At their April 2016 business meetings the following local boards resolved on parks, recreational facilities and open spaces issues:

·   Henderson-Massey, Albert-Eden, Kaipātiki, Franklin, Ōrākei, Ōtara-Papatoetoe, Puketāpapa, Waiheke and Waitematā local boards request funding and land for much needed local parks, recreational facilities, sports fields and open spaces. Ōtara-Papatoetoe Local Board advocates for a more equitable share of regional funds for local sports facilities and parks. Upper Harbour Local Board emphasised the need for strategic acquisition of open space and recreation land to accommodate growth, particularly in close proximity to Special Housing Areas.  Timing and planning is key so that land is acquired prior to inflated costs and limited availability

·   Maungakiekie-Tāmaki Local Board advocates for improvements to meet community needs, and Ōtara-Papatoetoe Local Board considers the management of competing interests important in this respect – particularly to protect future generation’s interests.

 

 

Community facilities

26.     Resourcing for community facilities, particularly to accommodate growth, is a key focus for local boards.

 

Community facilities

Issues raised by local boards in November 2015:

·   community houses and other community facilities across the region to be fully asset based funded to an agreed basic standard

·   regionally fair and consistent levels of service

·   resourcing and the prioritisation of actions identified in the Community Facilities Network Plan

·   adequate funds for renewals

·   resources for business cases, needs assessments, feasibility studies, planning support

·   a network of indoor sports and recreation facilities

·   development of multi-use community facilities

·  establish a fund, similar to the Central Facilities Partnership Fund (which has now ceased to exist/is incorporated into the new local board discretionary capex fund), to provide community projects

Council department and CCO responses:

·   work on service levels for community centres is being progressed, and discussions are currently taking place on scope

·   arts facilities funding is an issue for review as part of the next LTP, where the varying levels of funding and any inequities across the region can be considered for harmonisation and realignment 

·   there are 116 actions identified in the Community Facilities Network Plan, 50 are priority actions that will be delivered over the next three years (2015/16-2017/18).  33 actions are currently underway. The highest priority actions will be completed in time to inform the next long-term plan discussions. This will enable any new or additional budget requirements to be considered by the governing body

·   to focus resources, actions with capital funding in the first five years of the LTP 2015-2025, network priority actions in spatial priority areas and actions with opportunities for optimisation are being progressed first

·   Asset Management Plans and baseline service levels agreed by the governing body are the key drivers of funding for renewals programmes

·   resources to conduct feasibility, design, concept and consenting work will be provided for LTP approved asset based services projects.  The timing and costs to conduct this work will be built into overall project budgets and timelines.  Resources to conduct this work may come from a variety of departments.  For projects that do not have approved funding, the local board can either advocate for concept / feasibility funding through the annual plan process, or allocate LDI opex towards the concept / feasibility study

·   council is developing a Sports Facility Investment Plan, which will provide a policy framework for council’s future investment in sports facilities, including indoor sport and recreation facilities

·   funding for the Central Facilities Partnership fund ($4m) was transferred and incorporated into the new local board discretionary capex fund.  The new capex fund has been further increased to $10m per year to enable all local boards to make discretionary decisions about funding local capital projects.  These funds can still continue to be used for the same purpose as the original Central Facilities Partnership fund.

At their April 2016 business meetings the following local boards resolved on community facilities:

·   Maungakiekie-Tāmaki, Waitematā, Ōrākei, Franklin, Ōtara-Papatoetoe, Howick, Upper Harbour, Rodney, Puketāpapa and Papakura local boards request prioritising community facilities, ensuring they are fit for purpose, meet the community needs and able to accommodate population growth. Hibiscus and Bays Local Board notes there is a gap in the regional information required in order to assess needs and locations for new community facilities, as growth places pressure on existing assets

·   Kaipātiki, Rodney and Hibiscus and Bays local boards consider that community facilities/assets across the region should receive an accurate, appropriate and equitable level of Asset Based Services operational funding to an agreed service levelMaungakiekie-Tāmaki Local Board advocates for a review of current levels of service of community centres and halls to ensure they are regionally fair and consistent

·   Waitematā, Ōrākei, Waiheke and Kaipātiki local boards request that funding (including funding brought forward) is provided for arts facilities community centres, toilets and youth centres.  Whau Local Board seeks consolidation of funding for community facilities

·   Māngere-Ōtāhuhu, Rodney and Albert-Eden local boards request funding, resourcing and the prioritisation of actions identified in the Community Facilities Network Plan.  Upper Harbour Local Board advocates for a strategic approach to access and provision of indoor sports and recreation facilities

·   Henderson-Massey, Waiheke, and Waitematā local boards advocate for community swimming pools, Albert-Eden and Howick local boards request funds for aquatics centres and Ōtara-Papatoetoe local boards advocates for no charges for entry to swimming pools 

·   Waitematā, Albert-Eden, Great Barrier, Ōrākei and Kaipātiki local boards would like the governing body to re-instate a sub-regional fund, similar to the Central Facilities Partnership Fund (which has now ceased), to provide community projects. This community-led approach would be consistent with the empowered communities’ philosophy 

·   Rodney and Hibiscus and Bays local boards seek recognition of the contribution that community owned assets make across the council’s network of community facilities

·   Kaipātiki, Waitākere Ranges, Rodney and Hibiscus and Bays local boards advocate for addressing reductions in levels of services/a review of levels of service changes; and committing to quality service levels  (in particular, in relation to the rationalisation of library hours, the change to the method of parks edging from mechanical to chemical spray and overall reductions in parks standards) 

·   Papakura, Albert-Eden, Rodney and Kaipātiki local boards seek adequate funding for renewals, for the long term

·   Rodney and Kaipātiki local boards emphasise the importance of resources for delivery of projects, e.g. those in a Local Board Agreements.

 

 

 

Growth

27.     A number of local boards raised issues they consider important for Auckland’s growth.

 

Auckland’s growth

Issues raised by local boards in November 2015:

·   infrastructure, including social infrastructure provision

·   community led planning, masterplans, structure planning

·   funding (including funding brought forward) for town centre renewals, rejuvenation and transformation projects

·   more localised development contribution catchments

Council department and CCO responses:

·   strategic documents such as the Open Space Acquisition Policy, Community Facility Network Plans and the Proposed Auckland Unitary Plan, will guide the integration of infrastructure, development and meeting future community needs

·   planning priorities for 2016/17 are the Unitary Plan and Spatial Priority Areas, however staff will be considering the future work programme, including requests from local boards for local plans, over the next few months

·   there is a current gap in resourcing concept/design work for transformation projects, such as mainstreets.  Roles and responsibilities are being worked through as part of the new structure under Project Reshape.  The new Community Empowerment Unit will also play a key role in supporting these types of initiatives through engagement and capacity building with local community groups. This can include scoping of projects, but not resourcing concept/design work for transformation projects or project managing them

·   staff have reported to the Finance and Performance Committee in March on a proposal to consult on increasing the number of funding areas for stormwater and parks (reserve acquisition, reserve development and community infrastructure activities). Local board feedback has been requested.

At their April 2016 business meetings the following local boards resolved on Auckland’s growth:

·   Manurewa, Howick, Franklin, Waitematā and Upper Harbour local boards raise the need for budget and timely investment and delivery of infrastructure, including social infrastructure, to support growth – e.g. in for Special Housing Areas  

·   Upper Harbour, Waiheke, Howick, Hibiscus and Bays, Rodney, Puketāpapa and Waitematā local boards advocate for resources to support local, community led planning, masterplans, structure planning, transformation and other projects. Howick Local Board raised the importance of aligning related projects for efficiencies

·   Henderson-Massey, Albert-Eden, Ōtara-Papatoetoe, Puketāpapa, Manurewa, and Whau local boards seek funding for strategic, quality development for metropolitan and town centres, renewals, regeneration and revitalisation projects

·   Maungakiekie-Tāmaki Local Board advocates for taking steps to ensure the provision of a range of quality housing options, Waitematā Local Board recommends an affordable housing policy.  Waiheke and Puketāpapa local boards seek options for pensioner, affordable, social and community housing

·   Ōtara-Papatoetoe Local Board advocates for targeted use of development and financial contributions to fund local projects, with local board participation in decisions. Upper Harbour Local Board’s view is that development contributions should consider and account for current and future population growth requirements for infrastructure and open space.  Franklin and Howick local boards seek to ensure development contributions are spent in the area from which they are collected.  Hibiscus and Bays supports the increased number of localised development contribution catchments, requests work towards further localised catchments, advocates that reserve contributions are set at a level more closely related to the cost of reserve acquisition and that agreements are made with developers to deliver new assets to meet growth costs.

 

 

 

 

Coastal erosion

28.     Management and regulation of the environment to help prevent coastal erosion is an issue raised by some local boards.

 

Coastal erosion  

Issues raised by local boards in November 2015:

·  coastal erosion, asset degradation and beach replenishment

Council department and CCO responses:

·   a regional approach has been agreed by the Regional Strategy and Policy Committee at its meeting on 3 December 2015, including the use of coastal compartment management plans (CCMPs) and a public awareness plan for coastal management issues, including climate change

·   local board input will be sought.    

At their April 2016 business meetings the following local boards resolved on coastal erosion:

·   Hibiscus and Bays and Rodney local boards advocate for funding for priorities in the Coastal Management Framework - particularly to address coastal asset degradation, works and a clear well-funded coastal renewals programme 

·   Howick, Maungakiekie-Tāmaki and Franklin local boards suggest a regional approach to address Auckland-wide issues of erosion and beach replenishment – coordination will lead to efficiencies and cost savings.

 


 

Waste and recycling

29.     How we deal with waste and recycling was highlighted by some local boards.

Waste and recycling  

Issues raised by local boards in November 2015:

·  the need for improved waste management and more sustainable solutions – including the provision of hazardous waste and recovery and recycling facilities

Council department and CCO responses:

·   council has adopted a Waste Management and Minimisation Plan forward work programme and resource recovery network.

 

At their April 2016 business meetings the following local boards resolved on waste and recycling:

Māngere-Ōtāhuhu, Howick, Great Barrier, Puketāpapa, Waiheke and Waitematā local boards advocate for the provision of resource recovery and local waste and recycling centres / drop off sites.

 

Pests

30.     Management and regulation of the environment to help eradicate pests was raised by the some local boards.

 

Eradicate pests  

Issues raised by local boards in November 2015:

·   animal and plant pest management

Council department and CCO responses:

·   regional spend on pest management programmes across the region is allocated to deliver on the Regional Pest Management Plan and the agreed LTP levels of service.  Any additional spend would require additional budget

·   a Regional Pest Management Plan review is occurring in 2016

·   agrichemical use is one of the eight objectives of the Auckland Council’s Weed Management Policy and will be considered in the renewal of contracts for parks maintenance alongside the other seven objectives and the levels of service they are required to meet. Changes to these levels of service could be funded either by  governing body funding changes to the regional budgets for weed management or by the local board funding an additional level of service through their LDI.

At their April 2016 business meetings the following local boards resolved on eradicating pests:

·   Great Barrier and Waiheke local boards seek support for moving towards herbicide free weed management practices.  Waitematā Local Board seeks minimisation of agrichemical use in accordance with the Weed Management Policy

·   Waiheke, Rodney, Howick, Whau and Waitākere Ranges local boards request the prioritisation of pest management and ecological restoration measures, including for vegetation/weeds, rabbits, stouts and possums.

 

Other

 

31.     Other themes raised by local boards at the April 2016 meetings included:

 

·   Papakura, Puketāpapa, Franklin, Manurewa, and Māngere-Ōtāhuhu local boards advocate for hydrodynamic modelling of the Manukau Harbour

·   Puketāpapa and Waiheke local boards seek marine spatial planning and the development of a network of marine reserves and protected areas

·   Papakura, Waiheke, Waitematā and Devonport-Takapuna local boards request research and funds to enable water improvements, including catchment management plans, stormwater improvements, ensuring recreational amenity and dealing with contamination

·   Howick, Puketāpapa and Waiheke local boards advocate for the procurement of local services wherever possible

·   Māngere-Ōtāhuhu Local Board requests a framework to monitor the implementation of sale and supply legislation in practice, and consider a request to government for legislative change. Ōtara-Papatoetoe Local Board supports policies to minimise the negative impact of alcohol

·   Maungakiekie-Tāmaki, Howick, Puketāpapa, Waitematā, Waitākere Ranges, Waiheke and Papakura local boards seek land acquisition, budget and protection of places of heritage and historic significance.  Ōtara-Papatoetoe Local Board advocates for the celebration of heritage and cultural diversity

·   Kaipātiki and Great Barrier local boards request that local boards do not incur the additional costs imposed under the empowered communities model

·   Whau and Waitematā local boards advocate for policies that put children and young people first, and support early childhood education

·    Puketāpapa and Waitematā local boards advocate for budget for provision of a ‘living wage’ for council employees.

 

Local targeted rates and BID targeted rates

32.     BID expansion proposals and changes to other BID rates will be included in the rates setting report scheduled for 30 June.  This will allow time for relevant local boards to consider the outcomes of the special general meetings that business associations are required to have prior to adopting an expansion proposal.  The rates setting report will note the relevant local board resolutions.  At this stage of the annual budget process, Henderson-Massey, Hibiscus and Bays and Waitākere Ranges local boards resolved on BID issues. 

33.     Local boards proposed the following in relation to local targeted rates:

·   Māngere-Ōtāhuhu and Ōtara-Papatoetoe  local boards recommend that the governing body adopts a targeted rate, set as a uniform charge per separately used or inhabited part of a property, on residential properties in their local areas - for the purpose of fully subsidising entry to swimming pools for persons 17 years and over. The rate is estimated to be $31.06 in the Māngere-Ōtāhuhu Local Board area and $29.37 in the Ōtara-Papatoetoe Local Board area.  This is a continuation of an existing targeted rate

·   Henderson-Massey Local Board requests the governing body authorises the release of Harbourview-Orangihina targeted rate reserve, to fund the development of Harbourview-Orangihina Park

·   Franklin Local Board supports bringing forward to 1 November 2016 implementation of a kerbside recycling collection for Franklin residents funded by a proposed targeted rate.

Consideration

Local Board views and implications

34.     Local boards have been involved at key stages throughout the development of the Annual Budget 2016/2017.  Local board views and feedback has been provided in this report.

Māori impact statement

35.     Many local board decisions are of importance to and impact on Māori. Local board agreements and the annual budget are important tools that enable and can demonstrate council’s responsiveness to Māori. Local board plans, which were developed in 2014 through engagement with the community including Māori, form the basis of local priorities.There is a need to continue to build relationships between local boards and iwi, and where relevant the wider Māori community. Ongoing conversations will assist local boards and Māori to understand each other’s priorities and issues. This in turn can influence and encourage Māori participation in council’s decision-making processes.

Implementation

36.     The governing body will adopt the Annual Budget 2016/2017 in June 2016.

 

Attachments

No.

Title

Page

aView

Local board resolutions

107

     

Signatories

Author

Chantal Creese - Senior Policy Advisor

Authorisers

Karen Lyons - Manager Local Board Services

Matthew Walker - GM Financial Strategy and Planning

Kevin Ramsay – Acting Group Chief Financial Officer

 


Finance and Performance Committee

13 May 2016

 






























































































Finance and Performance Committee

13 May 2016

 

Local Board budget update

 

File No.: CP2016/08344

 

  

 

Purpose

1.       The purpose of this report is to provide an update on the local board process to finalise the Annual Plan for 2016/2017 and outline local proposals that require governing body decisions to enable this process to continue.

Executive Summary

2.       Following the annual plan consultation, briefing reports on local consultation feedback were provided to local boards in April to inform advocacy and review local priorities.

3.       Discussions were held between the governing body and local boards on key consultation feedback themes, advocacy and local issues prior to budget decisions being made.

4.       Following budget decisions made on 13 May, local boards will finalise Local Board Agreements 2016/2017, local fees and charges schedules for 2016/2017 and budgets for the annual plan. Meetings to adopt these are due between 6-15 June.

5.       In reviewing local priorities, proposals have been identified by local boards where governing body approval is required to enable local boards to continue developing their local board agreement. These proposals are detailed in this report.

6.       As part of the local board funding policy, local boards can resolve to defer those projects that are funded by their Locally Driven Initiatives (LDI) operating fund where there was an agreed scope and cost but have not been delivered.  The Local Boards have resolved on 2015/2016 projects that meet the criteria for deferral to 2016/2017.

 

Recommendation/s

That the Finance and Performance Committee recommend that the Governing Body:

a)      release reserve funds of $1,384,237 held from legacy councils.

b)      approve $3.9 million of capital funding for Locally Driven Initiatives opex to capex conversion which will be sourced through local discretionary budgets.

c)      approve a Locally Driven Initiatives increase of $57,230 for Great Barrier Local Board and $29,472 for Waiheke Local Board, who have the option to negotiate their Locally Driven Initiatives funding annually with the governing body as part of the Local Board Funding Policy.

d)      approve the operating budget amount of $2,096,600 in Attachment A to the agenda report to be deferred from 2015/2016 to 2016/2017.

 

Comments

Process

7.       In mid-April, local boards received local consultation feedback briefing reports reflecting views of each local board area. This information was used to support advocacy and review local priorities.

8.       On 6 and 9 May, workshops were held between local boards and the governing body to discuss key consultation feedback themes, advocacy and local issues.

9.       Following budget decisions made on 13 May, local boards will finalise Local Board Agreements 2016/2017 in workshops between 16 - 25 May. This includes a review of priorities in light of consultation feedback, consideration of local activity budgets, local fees and charges, local performance targets and final allocation of locally driven initiatives (LDI) funds.

10.     Local boards will meet between 6 – 15 June to adopt Local Board Agreements 2016/2017, local activity budgets and local fees and charges schedules for 2016/2017.

Local budgets

11.     In alignment to decision-making responsibilities, governing body approval on each following proposal is required to enable the local boards to continue planning budgets in May.

12.     Release of $1,384,237 special reserve funds.

Local Board

Proposal

Amount

Kaipātiki

Eskdale Reserve Toilet special reserve – reallocation to the development of a new toilet at Rewi Alley Reserve

$238,000

Puketāpapa

Signage to improve the visibility of the Dominion Road carpark, and Roskill South carpark and upgrading car parking in the vicinity of Harold Long Reserve and Fearon Park

$283,686

Hibiscus & Bays

Release of North Shore parking reserve funds - Browns Bay

$66,000

Hibiscus & Bays

Release of North Shore parking reserve funds - Mairangi Bay

$33,000

Waiheke

Release of the parking reserves funds for off-street parking project

$13,551

Orākei

Release parking fund reserve for the development of Shore Road Reserve eastern car park.

$500,000

Orākei

Release parking fund reserve for the development of Waiatarua Reserve car park.

$250,000

Total

 

$1,384,237

 

13.     Conversion of LDI operating budgets of $390,000 to $3.9 million capital. As shown in the table below, in 2016/2017 boards will convert $280,000 of their operating LDI and in 2017/2018 convert a further $110,000 resulting in a cumulative total of $390,000 permanent LDI conversion.

Proposal

Amount 2016/2017

Amount 2017/2018

Orākei

 

 

Develop new multi-use changing rooms and toilets at Michaels Avenue Reserve

$950,000

 

Feeder links to the Orākei Spine

$750,000

 

Total Capital Expenditure

$1,700,000

 

LDI Operating budget given up

$170,000

$170,000

 

 

 

Albert-Eden

 

 

Fowlds Park toilet

$170,000

 

Edendale Reserve – fence around hall

$20,000

 

Gribblehirst Park bowling green

$75,000

 

Gribblehirst Park development plan

$75,000

 

Erin Armishaw Playground

$50,000

 

Watea Reserve development

$40,000

 

Chamberlain Park

$450,000

$450,000

Signage

$20,000

$80,000

Discretionary budget for minor projects including signage

$50,000

$105,000

Upgrade of community facilities

$150,000

$150,000

Oakley Creek improvements

 

$250,000

Windmill Park signage and hill track

 

$65,000

Total Capital Expenditure

$1,100,000

$1,100,000

LDI Operating budget given up

$110,000

$220,000

 

 

 

Total Local Boards

 

 

Total Capital Expenditure

$2,800,000

$1,100,000

LDI Operating budget given up

$280,000

$390,000

 

14.     Additional funding for Great Barrier and Waiheke Local Boards of $86,702 as part of their annual negotiation process.

Local Board

Proposal

Amount

Great Barrier

Request additional LDI funding to offset the additional costs that arose from the implementation of the empowered communities model

$57,230

Waiheke

Request additional LDI funding to offset the additional costs that arose from the implementation of the empowered communities model

$29,472

Total

 

$86,702

 

15.     Under the local board funding policy, LDI operational funding for Waiheke and Great Barrier local boards is agreed with the governing body and able to be negotiated on an annual basis.  For all other local boards the LDI budgets were set under the local board funding policy using the formula of 90 per cent population, 5 per cent deprivation and 5 per cent land area and cannot be negotiated annually.

16.     The local boards did not require governing body approval for any further:

·    New or amended local targeted rate proposal or

·    Capital projects that were over $1 million

 

17.     Local boards have identified projects from their Locally Driven Initiatives (LDI) operating fund where there was an agreed scope and cost which have not been delivered totaling $2,096,600.  Details of these projects for deferral can be found in Attachment A.

Consideration

Local Board views and implications

18.     Local board views and advocacy were expressed through a number of workshops held between local boards and the governing body on 6 and 9 May.

19.     A summary of advocacy, key consultation feedback themes and local priorities is outlined in the Local Board Advocacy report on the agenda for this meeting. These should be considered when making final budget decisions.

Māori impact statement

20.     Many local board decisions are of importance to and impact on Māori. Local board agreements and long-term plans are important tools that enable and can demonstrate council’s responsiveness to Māori. Local board plans, which were developed in 2014 through engagement with the community including Māori, form the basis of local priorities.

 

21.     There is a need to continue to build relationships between local boards and iwi, and where relevant the wider Māori community. Ongoing conversations will assist local boards and Māori to understand each other’s priorities and issues. This in turn can influence and encourage Māori participation in council’s decision-making processes. In particular, local board plans and budget decisions made today will influence future annual plans and local board agreements for 2016/2017 and beyond.

Implementation

22.     Following budget decisions being made today, local boards will finalise their allocation of discretionary locally driven initiatives (LDI) funds to projects and finalise local board agreements for 2016/2017.

23.     Local boards are meeting to adopt Local Board Agreements 2016/17 and local fees and charges schedules for 2016/2017 between 6 – 15 June.

 

Attachments

No.

Title

Page

aView

Deferrals schedule

205

     

Signatories

Author

Mark Purdie - Lead Financial Advisor

Authorisers

Matthew Walker - GM Financial Strategy and Planning

Kevin Ramsay – Acting Group Chief Financial Officer

 


Finance and Performance Committee

13 May 2016

 




Finance and Performance Committee

13 May 2016

 

Final Annual Plan 2016/17 - Mayoral Proposal

 

File No.: CP2016/09069

 

  

 

Purpose

1.       To present the Mayoral proposal for the final Annual Plan 2016/17, for deliberation and decision making.

Executive Summary

2.       The Governing Body adopted a consultation document in February this year which identified the key issues on which the council was seeking feedback before adopting the Annual Plan 2016/17. The starting point for the consultation was proposed changes from the adopted Long Term Plan – year 2.

3.       The key issues for consultation were changes to the rating policy – level of Uniform Annual General Charge (UAGC), Interim Transport Levy (ITL), reduced differential for farms over 50 hectares and the rates remission and postponement policy for Maori freehold land.

4.       Review of the underlying budgets by CCO and council staff has identified some cost changes, mostly positive, and a few issues where specific decisions are required. These specific issues include – some aspects of concessionary fares to SuperGold card holders and senior citizens, additional capital funding for strategic transport land acquisition, and diversified financial assets – funds release. In addition to these issues I am also proposing the inclusion of a small budget for town and local centre clean-ups.

5.       Earlier on this agenda a report on Local Board budgets has identified a few changes which are also incorporated in this proposal. The discussions between Local Boards and this committee held earlier this week may also require some further consideration where there is little or no impact on the budget.

6.       The net result of the budget changes set out in this proposed budget is an average increase in rates revenue of 2.4%.

7.       With regard to rating policy, this proposal is based on minimal change. I am firmly of the view that after 5 years of massive change as a consequence of the amalgamation of the rating system it is time to have some stability. I acknowledge the work that Cr Clow has done to look for alternatives in the way the ITL is charged and I think that was a debate worth having. However, on balance, I feel that this should be a year of minimal change and therefore my proposal is to remain with status quo for the UAGC, ITL and the differential for farms over 50 hectares.

8.       I am supporting the recommended changes to the Maori freehold land rates remission and postponement policy and also to the more local targeted rate issues – where supported by the Local Board. These are all minor and do not undermine the stability principle.

9.       With regard to the budget I am proposing for 2016/17 that we continue to support the SuperGold card holders and senior citizens in free use of public transport in the current arrangements.  The introduction of the HOP card for these users will enable data gathering to support any future consideration of this ongoing subsidy. I am disappointed that the government has withdrawn its support in the absence of such information and I intend to write to the Minister to express our views. I am proposing that the additional cost of continuing this level of service is 50% funded from within AT’s existing budgets and 50% by additional funding from rates.

 

 

10.     I have also proposed partial funding of the additional strategic land acquisition and supported the drawdown of funds from the diversified financial assets portfolio to manage our debt within prudent limits. These assets are not, in my view, core to the functions of council and it is appropriate to utilize them to prudently manage our debt and debt ratios and by so doing maintain our AA credit rating.

11.     The net result of these proposals is an interest to revenue ratio of 11.5% and a debt to revenue ratio of 265%.

 

Recommendation/s

That the Finance and Performance Committee:

a)      recommend that the Governing Body adopt the following rates policy decisions for the Annual Plan 2016/2017:

i)       that the UAGC be set at $394

ii)      that the Interim Transport Levy (targeted rate) be set to retain the status quo of a fixed charge of $113.85 (including GST) for non-business ratepayers and $183.85 (including GST) for business ratepayers

iii)      that the general rate differential for farm and lifestyle properties be retained at its present level of 80 per cent of the urban residential rate

iv)      that the Māori freehold land rates remission and postponement policy be amended to include remissions:

1)   to adjust rates to the equivalent of those that would have been charged, had the property been valued excluding any potential use that is unlikely to be achieved within Māori ownership

2)   to adjust rates to the equivalent of those that would have been charged, had the rateable value of the property been adjusted by 10 per cent; where properties have significant barriers to development such as owners being deceased or not succeeded to

3)   for marae and urupā land in excess of the two hectare limit for non-rateability

4)   for land returned under treaty settlement for commercial redress where the land is set aside and protected for cultural, historic or natural conservation purposes or because it is wahi tapu, or used for a marae or urupā.

v)      that the Rates remission and postponement policy be amended to remit fixed charges on Māori land on multiple titles used as single property

vi)      that a two year pilot programme providing financial assistance of up to $35,000 per property to eligible homeowners in Piha, Te Henga, Karekare and Little Oneroa catchments to replace or upgrade their failing systems be established. This will be funded by a targeted rate set from 1 July 2017

vii)     that a targeted rate be set (at two thirds of the level set regionally for a full year recycling service) to fund a fortnightly kerbside fully commingled recycling collection in rural Franklin

viii)         that the Brown’s Bay, Glen Eden and North Harbour BIDs are extended

b)      recommend to the Governing Body that the budget for the final Annual Plan 2016/2017 be based on year two of the Long-term Plan 2015-2025, adjusted for the updates set out in the staff reports, and to incorporate the following changes and specific decisions:

i)        Auckland Council continue its existing public transport concessions for the 2016/2017 financial year

ii)       additional funding to Auckland Transport of $1.5 million noting that the remaining $1.5 million estimated cost of the discontinued government subsidy to come from internal savings in Auckland Transport

iii)      additional capital funding of $30 million in 2016/2017 and $20 million in 2017/2018 to Auckland Transport to support the early acquisition of land for future capital projects excluding light rail

iv)      request Auckland Transport to work with  NZTA and Kiwirail to retain the land at the Waterview Tunnel construction site until the decision on the light rail project has been progressed

v)       additional operating expenditure of $150,000 to deliver town and local centre clean-ups across the region.

c)      request Auckland Transport to collect data on the usage of the SuperGoldcard and Senior Citizens card during peak periods over the next 12 months and report this back to council for further consideration of the current subsidy

d)      request the Mayor write to the Minister of Transport regarding the withdrawal of public transport subsidy for SuperGold card holders in the afternoon peak and Auckland Senior Citizen card holders expressing council’s disappointment in this decision, particularly in light of the work that has been undertaken jointly to increase public transport usage

e)      recommend to the Governing Body that the Group Financial Officer be authorised to draw down up to $100 million per annum of the Diversified Financial Asset portfolio for the 2016/2017 and 2017/2018 financial years in order to manage the debt ratios within prudent limits.

 

 

Comments

Background

 

12.     In February this year we adopted a consultation document which set out for the community the key issues that we wished to receive feedback on before adopting our Annual Plan for 2016/17. The list of consultation issues were the result of several discussions through the Finance and Performance Committee and, as appropriate for year 2 of the Long Term Plan, were small in number.

13.     The Long Term Plan 2015-25, went through an extensive consultation process, delivered a budget that contained a major reset of our financial parameters and enabled us to continue to deliver on our key strategic platforms.  In presenting my proposal for this Annual Plan in December last year I highlighted the need for us to maintain a steady and consistent approach based on the LTP.

14.     Also in my proposal last year, while no service reductions were proposed, I signaled my desire to see further reduction in the proposed rate increase. I congratulate the Chief Executive and his staff in the work that they have done to achieve this.

15.     The number of submissions received were, as expected, significantly less than the LTP consultation, but similar to previous Annual Plan years. Having considered the community feedback and weighed this up with other factors, I am now presenting my proposal for discussion and decision making.

16.     In addition to the key consultation issues, council and CCO staff have reviewed the LTP year 2 budgets and presented us with an updated picture. There are a few financial matters that need us to make a specific decision and then these, along with the rating policy decisions, will form the basis of the Annual Plan 2016/17


 

 

Rating policy

Note officer reports on these issues are attached at Attachment B

UAGC

17.     The consultation on the Uniform Annual General Charge (UAGC) has delivered similar results to previous consultations – the majority wanted the amount to be the same or lower than the current level.  I also hold the view that there is no compelling reason to look at change, in fact there is a strong argument that some stability in our rating policy allowing the average increase to play out equally across all ratepayers is desirable. The shift in the business differential will impact a little in the annual plan year, but compared to the significant swings in previous years this is minimal.

18.     I accept that there will always be different views on how we use the UAGC as a tool to balance rates across different sectors of our community.  However, in my view, we struck a balance at the beginning of our rates transition process which found favour with the majority around the council table and continues to be an acceptable level with the majority of the community. On that basis I am recommending that we maintain the UAGC at $394.

Interim Transport Levy

19.     The Interim Transport Levy (ITL) is a targeted rate that we agreed to introduce for a 3 year period until alternate mechanisms for funding transport infrastructure can be agreed. The Auckland Transport Alignment Project (ATAP) is progressing well and will be completed in August. This will enable us to have constructive discussion with central government about the alternative funding options for Auckland’s transport needs (bringing to conclusion the almost five years of work Auckland has undertaken in this area). The ITL allows us to continue investing in transport infrastructure at an acceptable level in the meantime and was always intended to be temporary as we took the final steps in aligning Auckland’s thinking with that of the government.

20.     In introducing the ITL through the last Long Term Plan, we set it as fixed charge on both residential and business ratepayers.  The amount is set at $113.85 (incl GST) for non-business ratepayers and $182.85 (incl GST) for business ratepayers.

21.     Through the early stages of this Annual Plan Cr Clow put forward his proposal for changing the balance of the ITL cost between the residential and business sectors, and also the option of redistributing the cost within the business sector based on capital value rather than a fixed charge. The proposed change between the sectors would reduce the non-business fixed charge to $90 and increase the business charge (if it were to remain fixed) to $407.

22.     This was an idea well worth exploring and attracted a range of views through the consultation. Slightly more people supported changing the distribution between residential business and significantly more supported the change to distribution based on capital value for the business sector.  However, having said that, those organisations representing business, by majority were in favour of leaving the status quo in both respects.

23.     Arguments can be made to either support a change or the status quo. On balance I still feel that stability in the rating structures outweighs the argument to change. I am also cognisant of the fact that business will always get outnumbered in a consultation process and we need to consider the overall picture around this table. For those reasons I am recommending status quo.


 

Farms and lifestyle properties over 50 hectares

24.     We consulted on the option of lowering the differential for farms and lifestyle properties over 50 hectares from 80% of the urban residential rate to 60%, with the consequent shortfall being distributed across all other residential and farm/lifestyle properties. As might be expected the greater number of submissions were opposed to the option.  While I understand the rationale for this proposal, I am still of the view that leaving our rating policy basically unchanged is a desirable outcome at this stage of the planning cycle.  The Long Term Plan, which coincides with new valuations,  is a good time to review significant change to differentials.

Maori freehold land rates remission and postponement policy

25.     I am supporting the staff recommendations to amend our Maori freehold land rates remission and postponement policy. The proposal seeks to reflect the limited potential for development of some land in multiple ownership, remit rates on marae and urupa and extend the remission of fixed charges for farm land used as a single property to Maori. All of these recommendations are about achieving fairness and equity and the impact is very minimal and will not affect the stability of the rating policy. While this was not well supported by the public consultation, there would not be good understanding of the equity issues.

Miscellaneous other rating changes

26.     The other proposed rating changes are local issues and I am supporting the Local Board recommendations in this regard. These are as follows:

27.     Financial assistance pilot for on-site wastewater systems (septic tank) upgrade. This would operate in a similar way to the Retrofit your home scheme i.e. the home owner is loaned the upfront cost by council and then repays this, including interest costs, through a targeted rate.

28.     Rural Franklin targeted rate for recycling collection. The withdrawal of a free recycling drop-off service by Envirowaste has resulted in the Franklin Local Board consulting on the early introduction of a fortnightly kerbside recycling collection in the rural area.

29.     Business Improvement Districts. We have consulted on the creation of two new BIDs and expansion of three others. Following the resolutions of the relevant Local Boards I am supporting the extension of the Browns Bay, Glen Eden and North Harbour BIDs.

 

Budget

Note officer reports on these issues are attached at Attachment A

30.     In the major 10 year budget exercise of the Long Term Plan last year, we reset our financial parameters with significant reductions in both rates and debt levels from the previous Long Term Plan three years earlier. A general rates cap of 3.5% was put in place and firm management of debt levels – with particular targets around the debt and interest to revenue ratios. These are key ratios for maintaining our AA credit rating.

31.     In leading out this budget late last year I set the challenge to the Chief Executive and his staff, as I have every year, to look for further reductions before setting our final Annual Plan budget. The projected increase in rates revenue for 2016/17 was 3.2% and the staff have responded well, proposing a minimum rates increase (assuming no additions) of 2.3%. Were we to add the full amount of the Auckland Transport request this would rise to 2.5%.

32.     Debt to revenue ratios are also a key consideration and are factored in this proposal in order to ensure that we do not breach those ratios and can maintain our credit rating. The key issues for decision are as follows:


 

Auckland Transport – concessionary fares

33.     NZTA have advised Auckland Transport that the funding for central government subsidy of some categories of travel will be withdrawn. Currently in Auckland SuperGold card holders can travel free on public transport after 9am and all day at weekends. Auckland is unique in allowing free travel in the afternoon peak hours (3.00pm to 6.30pm), elsewhere in the country this is not part of the arrangement.  NZTA have advised they will be withdrawing subsidy for travel by SuperGold card holders in the afternoon peak.

34.     Auckland is also unique in allowing free travel for senior citizens (65+) who are NZ citizens or permanent residents but not eligible for the SuperGold card. Again NZTA will be withdrawing subsidy for this category of travellers.

35.     The additional estimated cost of both of these categories of travel to the ratepayer, were they to continue, is $3 million.

36.     Early discussion on the options raised a number of concerns from councillors, many of which cannot be answered as robust information is not currently able to be collected. In order to qualify for the free travel going forward SuperGold card holders will need a HOP card. If this is extended to the current senior citizen group – good data will be able to be collected over the next year or so.

37.     Regional uniqueness alone does not necessarily provide a sound public policy rationale for removal of the NZTA subsidy and I am disappointed that the government has decided to withdraw this benefit to our seniors without the robust information that we feel we need to consider this issue properly. However,  I am proposing that the current arrangements for free travel for both the non-gold card seniors and the afternoon peak, stay in place for at least the next year and that the issue be revisited in light of the better data that will be collected through the HOP card.

38.     I am proposing that the additional cost of $3 million be split 50/50 with half coming from savings from the existing AT budget and half ($1.5 million) of additional funding to AT.

39.     I also intend to write to the Minister expressing our disappointment at the withdrawal of this funding.

Auckland Transport land acquisition

40.     AT have signalled a request for additional capital expenditure provision of $80 million in the 2016/17 year for strategic land purchase.  The LTP includes a number of transport projects which will require land acquisition and largely these are budgeted close to the time when the project would commence. However, as development is progressing at such speed it has become apparent that on some sites it would make more sense to designate and potentially acquire the land now before any development takes place and make the acquisition significantly more expensive.

41.     There are three categories of acquisition identified – projects that are planned and in the budget but at a later date (effectively this is bringing budgeted expenditure forward); projects that are identified but beyond the current LTP and there is an opportunity to designate/ secure land now; acquisition associated with a light rail depot that, should that project be approved in the future, would be the most suitable location and will only be available for a relatively short period of time. More detailed information is available at Attachment A-4

42.     I am proposing to deal with this request as follows – allow an additional $30 million of capex funding in the 2016/17 year and a further $20 million in the 2017/18 year. This will allow us to maintain our debt to revenue ratios (subject to the proposal on the diversified financial asset fund release proposal below), but also allow AT to designate and if required secure the land required for future projects in the most cost effective manner. The risk associated with these purchases is relatively low, should projects not proceed then the land can be on-sold, most likely at a profit.  Note, this funding is to cover existing future projects – not light rail.

43.     With regard to light rail, there is still a significant amount of work to do before either ourselves or the government is ready to give the green light on that project. I recognise the limited opportunities to identify and designate land in critical spots in the central area. I am proposing that we enter into discussion with NZTA, who currently own the land in question, and seek the ability to keep this land available until there is a decision on the future of light rail. Should this become an urgent matter of consideration before the next budget then it can be brought back to the council of the day.

Town and local centre clean-up initiatives

44.     During the discussions with Local Boards we heard a lot about dissatisfaction with levels of service around basics such as mowing and street cleaning. I am aware that there is a process underway to review the way we deliver some of these services. The outcome of that is expected to be an improved level of service and this will roll out over the next 12 to 18 months.  While this is the underlying issue that needs to be resolved there are other activities we can leverage fore relatively small amounts of budget.

45.     I am proposing a small budget of $150,000 to deliver a number of town and local centre clean-ups across the region.  Resources will be targeted towards those areas that are in high demand for graffiti and other clean-ups.  Council’s service providers will support and work with business owners, business improvement districts (BIDs), business associations and others to remove any graffiti vandalism that is outside the scope of council’s normal service delivery.  Typically this means graffiti that is on private premises such as storefronts, rubbish skips, private signs and fences.  The clean-ups will also include: litter removal; weeding; and painting of fascias where possible and permitted.  This new initiative will help to improve the overall look of local business environments across the region.  The service will help to strengthen and enhance council’s relationships with business owners, BIDs and business associations across the region.

46.     The proposed budget of $150K per annum allows for up to fifty clean-ups throughout the year.  At a minimum, and over the first year of operation, 32 clean-up initiatives will be delivered.  Town and local centres will be prioritised based on council’s extensive data on graffiti “hot-spot” areas as well as call centre information on demand for council services.  The service has been designed to be responsive to local issues and concerns and can be further targeted based on local needs if required.  It is expected that this initiative will encourage business owners to periodically improve the look of their storefronts, to keep them up to standard and to work with neighbouring businesses, BIDs and business associations to help improve their local business environments.

Diversified financial assets – funds release

47.     Following the review of alternative sources of funding, one of the areas that we have spent some time discussing is the continued holding of the diversified financial assets portfolio. While this has in the past created a good return for the council, there have been periods where it has been extremely low.  Of more impact is the need to manage our debt to revenue ratios to maintain our AA credit rating and the benefit on borrowing interest rates that this provides. The portfolio is not, in my view, an asset core to the functions of council and it should be used in the prudent management of our debt.  For that reason I am proposing that we follow the staff recommendation and authorise the Chief Financial Officer to draw down up to $100 million per annum in order to manage our debt within prudent limits.

Local Board funding requests

48.     The Local Board budget update report, also on this agenda, contains four recommendations with financial implications. Only one has a minor impact on costs in the 2016/17 year and  I intend to support all of those recommendations so they are factored into the proposed budget.

 

49.     In addition I have listened to the very good discussions between Local Boards and the Governing Body on Monday 9 May. It is clear that there are some issues that need to be further progressed. Most of these are not specifically Annual Plan matters and can be dealt with over the coming months. Due to the timeframe of getting this report to the public agenda, I intend to present some additional recommendations later in the week that can be considered at the committee meeting.

Miscellaneous funding requests from community groups

50.     As always we have received a number or requests from various community groups for additional funding. While it would be easy to justify supporting many of them – I am not proposing that we add further costs to our rating bill.

Summary of changes

51.     The updated budgets as presented by staff give a starting point of an average 2.3% rates increase, assuming we do not continue to support the afternoon peak free travel for SuperGold card holders or the free travel of senior citizens not entitled to the SuperGold card. They are also presented without the changes to capex requested by AT and the additional funding for town centre clean ups outlined above. The table below sets out the impact of the changes on the rates increase, debt levels and key debt ratios included in this proposal.

 

2016/2017

Average rates increase

Capital Programme

Operating expenditure

Closing debt

Interest to revenue ratio

S&P ratio

Long-term Plan 2015-2025

3.2%

$1,911m

$3.689m

$8,850m

11.6%

265%

 

 

 

 

 

 

 

After budget review

2.3%

$1,911m

$3,669m

$8,838m

11.6%

267%

 

 

 

 

 

 

 

Mayoral Proposal

2.4%

$1,945m

$3,670m

$8,774m

11.5%

265%

 

 

Attachments

No.

Title

Page

aView

Budget update report

217

bView

Rates related policies

257

     

Signatories

Author

Mayor Len Brown, JP

 


Finance and Performance Committee

13 May 2016

 









 


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Finance and Performance Committee

13 May 2016