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Budget
Committee
27 March 2014
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Annual
Plan 2014/2015 Budget Update
File No.:
CP2014/04845
Purpose
1. To provide an
update on the budget context and related issues ahead of the hearings of public
submissions on the Draft Annual Plan 2014/2015. Also to inform the mayoral-led
process of deciding on the final budgets for 2014/2015 by 8 May 2014.
Executive
Summary
2. The current
long-term plan sets out a programme of significant capital investment to help
achieve the Auckland Plan vision to make Auckland the world’s most liveable
city by 2040.
3. The long-term
plan also identifies the funding streams and efficiency savings necessary to
support council’s delivery of core services alongside the capital investment
programme in a way which is affordable for current ratepayers and financially
sustainable for future ratepayers.
4. The Draft
Annual Plan 2014/2015 represented an update and refinement of year three of the
Long-term Plan 2012-2022 (LTP), focusing on maintaining the momentum generated
over the first two years of the LTP.
5. Since the
adoption of the Draft Annual Plan, budgets have been refreshed to better
reflect the true cost of delivering the activities and projects planned for 2014/2015.
Performance measures and targets, and schedules of user fees and charges have
also been reviewed.
6. A total of
1,944 public submissions were received on the draft annual plan with a sizeable
number commenting on the council’s financial strategy, expenditure levels and
proposed rates increases. A number of these submissions were requests for
additional funding.
7. Projected
capital expenditure for the group for 2014/2015 has been revised down by about
$80 million to $1.70 billion. Along with the return of capital from Auckland
Airport and capex reductions for 2013/2014, this has resulted in the projected
net debt for the group at 30 June 2015 being revised down by about $150 million
to $7.28 billion.
8. These capital
expenditure projections include proposed increases in capital expenditure for
Ports of Auckland, bylaw implementation and animal management.
9. The budget
refresh also identified approximately $25 million of operating cost pressures
not provided for in the draft annual plan. This includes:
· a budget shortfall for Auckland
Transport with a rates impact of $10.1 million. In part, this budget shortfall
is driven by lower projections of public transport revenue as a result of lower
than expected patronage
· additional expenditure requirements
relating to the Proposed Auckland Unitary Plan as detailed in a separate report
on this agenda
· a
budget shortfall and new funding requests of $7.6 million for Auckland Tourism,
Events and Economic Development (ATEED).
10. This is
partially mitigated by favourable budget movements relating to Ports of
Auckland and Auckland Airport. Further mitigating budget movement of about $16
million would need to be identified over the next six weeks to achieve the
average rates increase of 2.4 per cent proposed in the draft annual plan.
11. The range of
options for mitigating the projected cost pressures include:
· deferring
consideration of some or all of ATEED’s funding request to the Long-Term Plan
2015-2025
· holding
further discussions with the board and senior staff of Auckland Transport on a
range of cost and revenue issues, including parking volumes, prices and
penalties. A Budget Committee workshop on this matter has been scheduled for
10 April
· reviewing
the approach to funding the future replacement of Auckland Transport’s Electric
Motor Units to better align this with the approach to replacing other assets
· holding
discussions with the board and senior staff of Auckland Council Investments
Limited on the dividend projections for Auckland Airport and Ports of Auckland.
12. Following the
annual plan hearings, staff will report back to this committee on 8 May 2014 on
progress with these and other cost mitigating options to further inform the
mayoral-led process of deciding on the final budgets for 2014/2015.
13. Aside from
ongoing discussions about performance targets for public transport patronage and
customer satisfaction, no other material issues have been raised in relation to
the performance measures and targets included in the draft annual plan.
14. The average
price increase for water and wastewater has now been set at 2.4 per cent for
2014/2015. This is down from 3.5 per cent for water and 3.75 per cent for
wastewater in the draft annual plan. The reduction in the price increase
reflects reduced operating costs from continued business efficiencies and
improved borrowing costs.
15. The draft annual
plan proposed to standardise Health Protection License Fees across the region
following the introduction of new region-wide health and hygiene bylaw. The
draft plan also proposed a uniform 5 per cent increase in rental charges for
social housing, reflecting the fact that rents have not been adjusted for at
least three years, and in some cases, six years.
16. The next steps
for the Annual Plan 2014/2015 are for the local boards and the governing body
to hear public submissions on the draft plan. The local boards will then
review their advocacy items and make decisions on budgets, performance targets
and user fees within their allocation of decision-making responsibility. The
mayor will then propose the budget for the final annual plan ahead of the Budget
Committee meeting on 8 May 2014.
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Recommendation/s
That the Budget Committee:
a) receive the
report.
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Discussion
Background
Investing in Auckland
17. The Long-term
Plan 2012-2022 (LTP) set out a programme of significant investment in Auckland,
with an average of $1.15 billion to be spent on new assets for the first three
years.
18. Some of the key
capital project budgets included over the three year period were:
· $528 million
for local activities, including local parks, libraries and cultural, community,
and recreation facilities
· $461 million
for the City Rail Link
· $323 million
to purchase electric trains
· $184 million
for the Panmure transport corridor as part of the Auckland-Manukau Eastern
Transport Initiative (AMETI)
· $58 million
to upgrade the Albany Highway
· $31 million
to develop cycleways
· $154 million
for the Hunua Number 4 water supply scheme
· $49 million
for North Shore trunk sewer upgrades
· $35 million
for strategic property developments.
19. Total assets
were projected to increase by $6 billion over the first three years of the
long-term plan and be $41.7 billion at 30 June 2015.
20. The LTP also
sets out the council’s strategy and policies for funding this investment, based
on the key principles of fairness, prudence, affordability and efficiency.
21. Debt is used to
fund investment in new assets after netting off other sources of capital
funding such as subsidies, development contributions and asset sales. The use
of debt to fund new assets promotes the principle of fairness as the benefits
from those assets are spread over time.
22. In accordance
with the principle of prudence, the LTP included limits on its borrowing to
maintain debt at a sustainable level and provide flexibility to deal with
unforeseen events. While debt was projected to increase substantially over the
10 year period of the plan, it was projected to remain within prudent levels in
comparison to the council’s income and able to be managed within the limits on
rates and debt.
23. Net debt was
projected to increase by $2.7 billion over the first three years of the
long-term plan and be $7.5 billion at 30 June 2015.
24. The following
chart shows the projected movements in assets and net debt over these three
years:
Draft Annual Plan
2014/2015
25. The Draft Annual
Plan 2014/2015 represented an update and refinement of year three of the
long-term plan, focusing on maintaining the momentum generated over the first two
years of the LTP.
26. The capital
programme for the council group in the draft annual plan was as follows:
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$ million
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2014/15
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New works
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1,230
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Renewals
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550
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Total capex
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1,780
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27. To help fund the
$1,230 million investment in new assets, net debt for the group was projected
to increase by $920 million. As a result, net debt at 30 June 2015 was
projected to be $7.4 billion, just slightly lower than the LTP projection.
28. The group’s
sizeable capital investment programme has resulted in depreciation and interest
expense growing much faster than the rate of inflation.
29. Over the first
three years of the long-term plan, depreciation was projected to grow at an
average rate of 7 per cent per annum while interest expense was projected to
grow by an average rate of 16 per cent per annum. This means that the capital
investment programme places considerable pressure on operating budgets.
30. These cost
pressures, along with $17 million of new cost pressures related to increasing
customer expectations and additional legislative compliance requirements, were
able to be accommodated in the draft annual plan with only a projected 2.4 per
cent average rates increase through the identification of further efficiency
savings.
31. Auckland
Transport signaled an $18 million budget shortfall for 2014/2015, in
part driven by lower projections of public transport revenue as a result of
lower than expected patronage. However, no provision was made
for covering this shortfall in the draft annual plan. Instead, the mayor
proposed holding robust discussion with the board and senior staff on the
underlying issues before considering any increases in funding.
Budget
refresh
32. Since the
adoption of the draft annual plan, budgets have been refreshed to better
reflect the true cost of delivering the activities and projects planned for
2014/2015. Performance measures and targets, and schedules of user fees and
charges have also been reviewed.
33. The following
sections present the key results from this budget refresh, along with other new
information such as the preliminary results from the analysis of public
submissions.
Public submissions
34. A total of 1,944
public submissions were received on the draft annual plan. While these
submissions have yet to be analysed in detail, the coding of submissions has
identified that:
· 84
submissions commented on the council’s financial strategy, with 37 of these
specifically commenting that the proposed expenditure was too high
· 47
submissions commented on rates, with 23 specifically commenting that the
proposed rates increase was too high
· 24
submissions opposed the proposed 5 per cent increase in charges for social
housing on the basis of affordability
· 51
submissions requested annual funding for Massive Theatre Company and funding to
assist them with finding a home
· 31 submissions
requested funding for other various arts, culture,
community and sports organisations.
35. Many of these 31
funding requests were general in nature, or requests for increases to existing
annual grants already made by Auckland Council, rather than requests for
specific amounts. Seven requests were for Auckland Council to provide
additional funding to support Auckland Sport implement priority actions from
the Sports and Recreation Strategic Action Plan.
36. For those
submissions requesting specific amounts, the total capital funding requested
was $1,276,000 and the total operational funding requested was $195,000.
Capital budgets and debt
levels
37. The budget refresh process has
resulted in projected 2014/2015 capital expenditure for the group of about $1.70
billion, which is about $80 million lower than the $1.78 billion in the draft
plan. This is primarily the result of:
· Colin Maiden
Park being acquired in 2013/2014 rather than 2014/2015
· deferral of
land acquisitions for the City Rail Link
· capital
expenditure deferrals for Watercare and Waterfront Auckland.
These reductions were partially offset by:
· $57 million
of proposed additional capex for Ports of Auckland’s commercial operations
· $10 million
of proposed new capex for integrated bylaw implementation
· $7 million
of proposed new capex to co-locate and in-house some animal management services
to deliver enhanced operational efficiencies
· $6 million
proposed bring forward for ACPL’s Yard 37 development
· $1.5 million
of proposed additional capex for ATEED’s fit out of the Wynyard Quarter
Innovation Precinct.
38. In addition to the net reduction
in projected capex for 2014/2015, the group’s borrowing requirement has also
reduced due to:
· deferral of
city rail link property acquisitions from 2013/2014
· the return of capital from Auckland
Airport
· lower projections for weathertightness
claims.
39. Overall, if all the proposed
additional capital expenditure is approved, the closing net debt balance for
2014/2015 would now be about $7.28 billion, which is about $150 million lower
than the $7.43 billion in the draft plan.
Operating budgets
40. Overall the budget refresh has
identified approximately $25 million of cost pressures not provided for in the
draft annual plan.
41. This includes the Auckland
Transport funding shortfall, which has been now been revised down from a rates
impact of $18 million to a rates impact of $10.1 million. Other major items
include the additional expenditure required in relation to the Proposed
Auckland Unitary Plan as detailed in a separate report on this agenda, and new
funding requests from Auckland Tourism, Events and Economic Development
(ATEED).
42. A full breakdown of these cost pressures is set out in the
following table:
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Organisation
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Budget request
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Rates requirement
$000
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Auckland Council
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Unitary Plan
Independent Hearing Panel
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3,140
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Unitary Plan
geographical information systems
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730
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Democracy
services support for advisory panels
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365
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Decisions of the
Finance and Performance committee
-primarily the interest impact of decisions to spend
additional operating expenditure in 2013/2014
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400
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Waitakere Ranges
possum control
-referred from the February 2014 Regional Strategy
and Policy Committee meeting
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150
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Auckland
Transport
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Budget shortfall
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10,100
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ATEED
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Budget shortfall
and new funding requests
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7,600
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ACPL
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Budget shortfall
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1,800
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RFA
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Budget shortfall
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1,100
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Total
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25,385
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43. These cost pressures are
partially mitigated by the following items that have not yet been included in
the annual plan budgets:
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Organisation
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Budget contribution
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Rates requirement
$000
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Auckland Council
Investments Limited
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Interest savings
from Auckland Airport capital return
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4,750
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Enhanced
dividends from Ports of Auckland, net of reduced 2014/2015 dividend from
Auckland Airport
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4,700
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Total
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9,450
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44. Further
mitigating budget movement of about $16 million would need to be identified
over the next six weeks to achieve the average rates increase of 2.4 per cent
proposed in the draft annual plan.
45. The range of
options for mitigating the projected cost pressures include:
· deferring
consideration of some or all of ATEED’s funding request to the Long-Term Plan
2015-2025
· holding
further discussions with the board and senior staff of Auckland Transport on a
range of cost and revenue issues, including parking volumes, prices and
penalties. A Budget Committee workshop on this matter has been scheduled for 10
April
· reviewing
the approach to funding the future replacement of Auckland Transport’s Electric
Motor Units to better align this with the approach to replacing other assets
· holding
discussions with the board and senior staff of Auckland Council Investments
Limited on the dividend projections for Auckland Airport and Ports of Auckland.
46. Following the
annual plan hearings, staff will report back to this committee on 8 May 2014 on
progress with these and other cost mitigating options to further inform the
mayoral-led process of deciding on the final budgets for 2014/2015.
47. The council also
has the option of a higher rates increase, reducing some service levels,
significantly reducing or deferring capital expenditure and/or requesting
further efficiency savings. These options are not recommended at this stage
given that public consultation on the annual plan has already been completed
and work on these kinds of options has now commenced as part of the Long-term
Plan 2015-2025 process.
Other potential budget issues
48. At this stage
the following potential budget issues have been excluded from the annual plan
projections:
· the funding
requests from public submissions outlined above
· local board
advocacy items
· additional
funding for the development of the Maunga and other reserves under new
co-governance arrangements
· additional
funding for the Auckland Regional Rescue Helicopter Trust
· the cost of
inspecting and strengthening of any council owned earthquake-prone buildings
· the possible
outcomes of the CCO review.
49. In December 2013 the Finance and
Performance Committee resolved to acquire a property in Birkdale as a community
facility and open space with an associated consequential operating expenditure
of approximately $175,000 per annum. It is has not yet been confirmed whether
this cost can and will be funded by the Kaipatiki Local Board, or whether this
on-going cost will have to be funded on a regional basis.
Performance measures and
targets
50. Aside from
ongoing discussions about performance targets for public transport patronage
and customer satisfaction, no other material issues have been raised in relation
to the performance measures and targets included in the draft annual plan.
51. As part of the
process for finalising their Local Board Agreements for 2014/2015, local boards
are currently reviewing the 2014/2015 performance targets for their local area.
Fees and charges
Water and
wastewater charges
52. The average
price increase for water and wastewater is set at 2.4 per cent for 2014/2015.
This is down from 3.5 per cent for water and 3.75 per cent for wastewater in
the Draft Annual Plan 2014/2015. The reduction in the price increase reflects
reduced operating costs from continued business efficiencies and improved
borrowing costs.
53. Following
extensive consultation as part of Annual Plan 2013/2014, Watercare's new
non-domestic wastewater tariff will begin to come into effect on 1 July 2014.
This new tariff regime combines an annual fixed charge (per water meter) and a
volumetric charge. The volumetric charge is based on a percentage of the volume
of water that flows through the customer’s water meter.
54. The new tariff
features four pricing usage plans - the fixed and volumetric charges vary
depending on how much water an individual business or organisation uses. To
allow time for customers to plan and prepare, the new tariff will be phased in
over three years with the full new tariff taking effect from 1 July 2016.
Other fees
and charges
55. Rental charges
and the level of services for social housing for older people vary across the
region due to the different policies of the former councils. The draft annual
plan included a proposal to increase rental charges by a uniform five per cent
for the 2014/2015 year. This increase is more than the council rate of
inflation, due to the fact that rents have not been adjusted for at least three
years, and in some cases, six years. For most tenants, the increase (after
government assistance is factored in) would be no more than $4 a week.
Differences with service levels will be addressed as part of the Long-term Plan
2015-2025, in consultation with tenants and Auckland Council’s Seniors Panel.
56. The draft annual
plan also proposes changes to the Health Protection License Fees. The council
has adopted a new region-wide health and hygiene bylaw that standardises the
regulation of services such as tattooing, body piercing, hair removal, indoor
tanning and nail services across the region. With the introduction of the new
bylaw and regulation approach, the associated fees and charges should now be
set on a region-wide basis. The council proposes to recover 90 per cent of the
cost of licensing these premises as the benefits associated with the activity
are mainly private. The resultant changes to licence fees for currently
registered premises will range between a decrease of $62 and an increase of $76
per annum. Premises that are not currently registered will face a new fee of
either $240 or $300 per annum in 2014/2015 depending on number of services
provided onsite.
57. As part of the
process for finalising their Local Board Agreements for 2014/2015, local boards
are currently reviewing the 2014/2015 fee schedules for their local area. As
part of this process, the local boards will consider a proposal to standardise
the approach for administering fees for the use of local community, arts and
cultural facilities. This includes:
· applying
consistent naming convention across the region for the various fees
· a consistent
approach for local boards to apply extra discounts to particular activities
(e.g. religious practice, or sport and fitness) in line with their Local Board
Plan priorities
· adjustments
to the fees and charges themselves where necessary to improve consistency
across the portfolio of facilities within a local board area, or for similar
facilities in adjoining boards.
Consideration
Local Board Views
58. Local boards
will hear annual plan submissions, review their advocacy items and make
decisions on budgets, performance targets and user fees within their allocation
of decision-making responsibility. Local board views on advocacy items and any
other matters pertaining to regional decision-making will then be reported to
this committee in May.
Maori
Impact Statement
59. None of the
revised budget projections covered by this report have been identified as
having any material new implications for the delivery of Maori outcomes and
initiatives. A separate report on this agenda provides an update on progress on
the Maori priority project areas identified in the Annual Plan 2013/2014.
General
60. Some of the
budget matters covered by this report may be significant under the council’s
significance policy. Any decisions on these matters are considered to be within
the scope of the statutory decision-making process for the Annual Plan
2014/2015.
Implementation
Issues
61. Decisions will
need to be made on the annual plan budgets on or about 8 May 2014 in order for
staff to prepare financial statements, co-ordinate the sign-off of the local
board agreements and prepare the annual plan document for final adoption by the
statutory deadline.
Attachments
There are no
attachments for this report.
Signatories
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Author
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Ross Tucker - Team Leader Capital Planning
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Authorisers
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Matthew Walker - Manager Financial Plan Policy and
Budgeting
Andrew McKenzie - Chief Finance Officer
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Budget
Committee
27 March 2014
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Proposed Auckland Unitary Plan Funding 2014/2015 to
2016/2017
File No.:
CP2014/04219
Purpose
1. The purpose of
this report is to provide an overview of current planned funding relating to
the Unitary Plan for the next three years and request approval for further
funding specifically for the establishment and operation of the Unitary Plan
Independent Hearings Panel office for the 2014/2015, 2015/2016 and 2016/2017
years; and for currently unfunded mapping and spatial analysis work required
for the Unitary Plan.
Executive
Summary
2. In September
2013 the Local Government (Auckland Transitional Provision) Amendment Act 2013
was passed providing for the establishment and operation of an Independent
Hearings Panel for the Auckland Unitary Plan. Under the legislation the
Independent Hearings Panel sets its own processes for undertaking the hearing
of submissions. The panel must provide a report making recommendations to
Auckland Council on the Proposed Auckland Unitary Plan by August 2016 (unless
an extension is formally requested). The Act provides that Auckland Council is
responsible for all costs and activities incurred by the hearings panel
including remuneration of the members of the hearings panel, the administration
costs of each hearing session, and remuneration of any experts or mediators
requested by the panel.
3. While the
current Long-term Plan had no funding specifically for the operation of the
hearings panel, provisional funding for the Independent Hearings Panel was
included in the Draft Annual Plan as a placeholder while staff commenced
working with Ministry for the Environment to get sufficient detail to formally
request funding approval. This provision covered the 2014/2015 and 2015/2016
years. At their February meeting, the Finance and Performance Committee
approved $1.3 million operating expenditure for the 2013/2014 year to establish
and commence operations, noting that a more complete report on future year
operating requirements would be reported to this budget committee. Approval is
required at this stage as the office and operations need to be established and
commitments entered into e.g. lease equipment.
4. The current
placeholder figures for the operation of the Independent Hearings Panel in the
draft annual plan is currently $12,621,300 spread over 2014/2015 ($3,121,000)
and 2015/2016 ($9,500,000). This was based on early discussions with the
Ministry for the Environment (MFE) staff before the appointment of the panel
chair and members. Their determinations on how the panel will operate and
particularly early emphasis on frequency and number of mediations, while
decreasing the original total placeholder funding required by $181,687 now
spreads the costs over three years (rather than two) and significantly
increases the funding required in 2014/2015 from $3,121,000 to $6,261,989.
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Auckland Unitary Plan Independent
Hearings Panel (AUPIHP)
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2014/2015
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2015/2016
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2016/2017
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Total
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|
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|
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Draft Annual
Plan placeholder
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3,121,000
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9,500,300
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0
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12,621,300
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Rephasing of
placeholder amounts
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3,140,898
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-4,088,301
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765,625
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-182,687
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AUPIHP funding
approval required
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6,261,989
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5,411,999
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765,625
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12,439,613
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|
|
|
|
|
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5. Unrelated
directly to the operation of the Independent Hearings Panel the current
Long-term Plan contains funding for $1,518,000 each year for professional
services as well as funding for the planning staff in the Unitary Plan Team (37 FTE with salary costs of $3,081,931). A planning
manager and four planners will be specifically allocated from this team to work
within the hearings panel office.
6. During the
development of the Proposed Auckland Unitary Plan (PAUP), a dedicated team of
Geospatial Analysts worked in a highly collaborative manner with staff in the
Policy and Planning Division which, at its peak, numbered approximately 12 full
time staff but was disestablished shortly after the notification of the PAUP on
30 September 2013. A team of four permanently assigned geospatial staff
supported by other specialist geospatial roles is required for the next three
years with an annual cost of $727,000 each year (2014/2015, 2015/2016 and
2016/2017). There is currently no funding or resources set aside for this
purpose and further funding is required for the three years.
|
Recommendation/s
That the Budget Committee:
a) note the total
funding required for the operation of the Auckland Unitary Plan Independent
Hearings Panel and currently included in the draft annual plan as a
placeholder at $12,439,613 is reduced by $181,687 to $12,621,300. This
funding is now required to be spread over three years instead of two, increasing
the funding required in 2014/15 from $3,121,000 to $6,261,000, reducing the
requirement in 2015/16 to $5,411,999 and a new requirement of $765,625
for 2016/17.
b) approve the
operational expenditure funding of $12,439,613 for the operation of the
Auckland Unitary Plan Independent Hearings Panel spread as follows: 2014/15
$6,261,989; 2015/16 $5,411,999 and 2016/17 $765,625.
c) approve
additional operating expenditure of $727,000 for the 2014/2015, 2015/2016 and
2016/2017 years respectively required to ensure the council has the
geospatial resources available to enable it to respond to submissions on the
Proposed Auckland Unitary Plan and present its case before the Independent
Hearings Panel.
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Discussion
Existing Unitary Plan Funding
7. For the
2014/2015, 2015/2016, and 2016/2017 years there is currently provision in the
current Long-term Plan for $1,518,000 each year for professional services as
well as funding for the staff in the Unitary Plan Team (37 FTE with salary
costs of $3,081,931). These funds are already allocated to enable the council to respond to submissions on the PAUP.
In particular, a combination of staff and professional services will be
required to:
· Analyse
the submissions on the PAUP
· Coordinate
inputs from technical specialists (e.g. traffic engineers, heritage experts,
water quality experts, ecologists, urban designers, etc)
· Prepare
reports to the Unitary Plan Committee on a wide range of topics from strategic
regional policy statement matters through to place-specific matters
· Represent
the council at pre-hearing meetings, mediation and expert witness caucusing
· Prepare
and present evidence in support of the council’s position at the Unitary Plan
hearings
· Report
the Independent Hearing Panel’s recommendations back to the Unitary Plan
Committee and governing body
· Update
the Auckland Unitary Plan once the council makes its decisions in response to
the recommendations of the Independent Hearing Panel
Unitary Plan Independent Hearings
Panel
8. In September
2013 the Local Government (Auckland Transitional Provision) Amendment Act 2013
was passed providing for the establishment and operation of an independent
hearings panel for the Auckland Unitary Plan. Section 161 requested that the
Minister for the Environment and the Minister of Conservation establish a
hearings panel comprising a chairperson and seven members, to hold a hearing
into the submissions on the proposed plan, including hearing sessions,
prehearing session meetings, conferences of experts and alternative dispute resolution
processes, to communicate reports and make recommendations to Auckland Council
on the proposed plan and any variation.
9. Section 168
provides that Auckland Council is responsible for all costs incurred by the
hearings panel, and for the activities referred to in the performance or
exercise of the panel’s functions and powers and that the council is
responsible for:
a) The remuneration
and expenses of the members of the hearings panel including the provision of
office premises.
b) The
administration costs of each hearing session, including the venue hire and
public notices.
c) The remuneration
of any expert, mediator or other dispute resolution facilitation, or any other
person whose services are engaged by the hearings panel under this part.
d) The allowances
of any witnesses called by the hearings panel.
e) The provision of
hearings administration staff as well as office and programme support and
planners to run the hearings panel office and support the work of the hearings
panel members.
10. In December 2013
the Minister for the Environment advised the council of the appointment of the
Auckland Unitary Plan Hearings Panel, appointing Judge David Kirkpatrick as
Chairperson along with seven panel members, confirming various administration
and support expectations, as well as advising the remuneration rates for the
chairperson and members. The panel is required to make its final
recommendation and produce a written report ‘no later than 50 working days
before the expiry of the three years from the date on which the council
notified the proposed plan’. This means the hearings panel will be in
operation until the third quarter of 2016. It should also be noted that section
147 provides for either the hearings panel, the council, or both to request an
extension of the deadline for a period of up to a year, and if that happened
then there would be further cost implications that have been factored in in
this report.
11. Council staff
have been working with the Chair and MFE staff to identify the requirements of
the panel, and mode of operation. A suitable central Auckland venue has been
located to accommodate the panel and staff, as well as a venue for mediation
and hearing meetings.
12. The Draft Annual
Plan contains placeholder figures of $3,121,000 and $9,500,300 for 2014/2015
and 2015/2016 years respectively (a total of $12,621,300 for the two years)
which was based on very early discussions with MFE staff.
13. On 20 February
2014 the Finance and Performance Committee resolved amongst other things the
following:
a) Approve 1.3
million additional operating expenditure in the 2013/2014 financial year for
the establishment and operation of the Unitary Plan Independent Hearings Panel,
noting that future year funding requirements will be considered in a more
detailed report to the Budget Committee in March 2014.
14. Since the early
discussions with MFE staff there has been more detailed planning work both with
MFE staff and Judge Kirkpatrick. Key changes that have been made which have
impacted either the budgeted costs or the timing of the costs include:
· An
increase in the number of panel members to seven plus a chair;
· the
setting of daily rates for the panel members rather than the proposed hourly
rates;
· an
increase in the mediation/facilitation costs in 2014/2015 as a result of the
panel advising they will put more emphasis on pre-hearing meetings and
pre-hearing caucusing with a corresponding increase in resourcing levels;
· clarification
by the hearings panel of both the technology support required and the level of
programme support and
· office
management required for panel to function.
15. The
clarification of requirements and finer detailed planning has an impact on both
the overall funding required and the phasing of the funding. The current
placeholder figures for the operation of the Independent Hearings Panel in the
Draft Annual Plan is currently $12,621,300 spread over 2014/2015 ($3,121,000)
and 2015/2016 ($9,500,000). This was based on early discussions with the
Ministry for the Environment (MFE) staff before the appointment of the panel
chair and members. The more recent determinations on how the panel will operate
and particularly early emphasis on frequency and number of mediations, while
decreasing the total funding required by $181,687 now spreads the costs over
three years (rather than two) and significantly increasing the funding required
in 2014/2015 from $3,121,000 to $6,261,989.
16. As mentioned
above these costs include building lease costs, remuneration of the chairperson
and panel members, venue hire, additional staffing costs, as well as additional
office running costs. More detail is provided in Attachment A. The changes in funding requirements over the
three years is reflected in the table below which also includes current Unitary
Plan funding and a request for additional funding for GIS support (detailed
later in this report) in order to give an overview of all funding relating to
the Unitary Plan for the next three years.
|
Unitary Plan Funding (2014/15 to 2016/17)
|
|
|
|
|
|
|
|
|
|
|
2014/15
|
2015/16
|
2016/17
|
Total
|
|
|
|
|
|
|
|
|
Current LTP
|
Professional
services
|
1,518,390
|
1,518,390
|
1,518,390
|
4,555,170
|
|
Current LTP
|
Existing UP
staff
|
3,081,931
|
3,081,931
|
3,081,931
|
9,245,792
|
|
|
Total
|
4,600,321
|
4,600,321
|
4,600,321
|
13,800,962
|
|
New funding
request
|
GIS support
|
727,000
|
727,000
|
727,000
|
2,181,000
|
|
|
Total UP
costs (excluding IHP)
|
5,327,321
|
5,327,321
|
5,327,321
|
15,981,962
|
|
|
|
|
|
|
|
|
Draft Annual
Plan (IP)
|
Draft Annual
Plan placeholder
|
3,121,000
|
9,500,300
|
0
|
12,621,300
|
|
Additional
funding required
|
Rephasing of
placeholder amounts
|
3,140,989
|
-4,088,301
|
765,625
|
-181,687
|
|
|
AUPIHP
funding approval required
|
6,261,989
|
5,411,999
|
765,625
|
12,439,613
|
|
|
|
|
|
|
|
|
|
Total UP
Funding (including IHP)
|
11,589,310
|
10,739,320
|
6,092,946
|
28,421,575
|
|
|
|
|
|
|
|
17. Negotiations are
still continuing in regard to the proposed lease as well as determination of
the extent and number of hearings. As such, these costs are therefore
indicative and may be subject to change with the legislation providing for the
chair and panel to determine the process and means of the hearings which may
further impact costs.
18. The budgets will
be allocated across a number of departments (Democracy Services, IS, Regional
and Local Planning) with all budgets and costs tagged to relate to the Unitary
Plan Independent Hearings Panel.
Mapping and
Spatial Analysis
19. One of the key
innovations of the Proposed Auckland Unitary Plan (PAUP) that sets it apart
from all previous Resource Management Act plans in Auckland, and virtually
every other plan in New Zealand, is the way in which complex spatial
information (i.e. mapping) is presented online and capable of being summarised
at an individual property level. The spatial presentation of the PAUP has
received extensive positive feedback from members of the planning, design,
legal, advocacy and development sectors, together with the general public since
the plan was notified. This outcome was achieved due to a number of factors. In
particular, it required the establishment of a dedicated team of Geospatial
Analysts working in a highly collaborative manner with staff in the Policy and
Planning Division. At the peak of the development of the PAUP (i.e. in the
2012/2013 financial year and the early part of the current financial year),
this dedicated team numbered approximately 12 full-time staff.
20. The Unitary Plan
geospatial support team was disestablished shortly after the notification of
the PAUP on 30 September 2013. Since that time, the council’s geospatial
analysts have been tasked with working on a wide range of priority council
projects, and are now no longer available to work on the Unitary Plan project.
While much of the core spatial information is in place, the zones, precincts
and overlays will all be subject to numerous submissions that seek changes.
There will also be submissions on the various diagrams within the PAUP, and
submissions that challenge fundamental policies in the PAUP (e.g. the
identification and protection of Auckland’s outstanding landscapes and
significant ecological areas).
21. While a team of
the size that was available to prepare the PAUP will not be required, it is
anticipated that a permanent team of around four geospatial analysts
supplemented by a number of specialists will be required to assist the council
in regard to the Unitary Plan work. Initially these staff are required
specifically in relation to work responding to submissions on the PAUP during
the 2014/2015 financial year and as the Independent Hearings Panel begins to
make its recommendations back to the council, a larger team will likely be
required in the 2015/2016 financial year and during 2016/2017 as changes are
required as part of the decision making process. The funds required for this
team over the three years (including staff salaries and overheads) is $727,000
per year.
22. In order to
ensure the council is able to respond to submissions on the PAUP and present
its case before the Independent Hearings Panel, it is recommended that the
committee notes the additional funding of $727,000 per year for 2014/2015,
2015/2016, and 2016/2017 respectively for the wide range of spatial analysis
and mapping tasks that will be required and that this request for funding will
be considered as part of the future annual plan deliberations.
Consideration
Local
Board Views
23. Local Board
views have not been sought.
Maori
Impact Statement
24. There are no
impacts to Maori.
Attachments
|
No.
|
Title
|
Page
|
|
aView
|
Draft - Independent Hearings Panel
Indicative Costs
|
21
|
Signatories
|
Author
|
Roger King - Manager Bylaws, Business Development and
Support
|
|
Authorisers
|
Penny Pirrit - Regional & Local Planning Manager
Roger Blakeley - Chief Planning Officer
Andrew McKenzie - Chief Finance Officer
|
