Agenda of Budget Committee - 5 November 2014

Budget Committee

05 November 2014

Long-term Plan 2015-2025 - Overview

File No.: CP2014/24832

Purpose

1. The development of the Auckland Council Long-term Plan 2015-2025 (LTP) represents the most significant review of council’s work programmes and budgets since amalgamation.

2. This report recaps the LTP process to date, provides an overview of the decisions now required and sets out the next steps that will be undertaken to consult with Aucklanders and finalise the LTP.

Executive summary

3. All councils are required by legislation to adopt a long-term plan (LTP) and review it every three years. The process to develop council’s second LTP (2015-2025) began in February 2014. Led by the Mayor, this LTP provides our most significant opportunity yet to take stock and align budgets with the direction of the Auckland Plan and ensure we are delivering the right mix of services and investments for Auckland.

4. It will take 18 months to develop the LTP 2015-2025. The process to date has been more strategic and collaborative in its approach, with strong support from senior management to critically review budgets and respond to the direction and proposal set by the Mayor.

5. Today the Budget Committee will consider draft budgets, policies and other material for the purpose of supporting LTP consultation with Aucklanders. The reports on today’s agenda fall into three categories:

· Reports supporting decisions on the size and make-up of the draft LTP budget – including consideration of budget envelopes for each council activity theme, advocacy from local boards and iwi co-governance entities, other proposals that impact on the general rates requirement and a proposal to fix Auckland’s transport issues and options to fund it.

· Reports supporting decisions on how Aucklanders will pay for the draft plan - including rating policy, inorganic waste and solid waste rates and fees, and contributions policy.

· Reports setting expectations for performance – agreeing draft performance measures and targets for the council group and setting letters of expectation for CCOs.

6. Following decisions made today:

· Staff will update budgets and finalise a consultation document and set of supporting material for consultation with Aucklanders. This reflects a new set of legislative requirements and aims to support a better conversation with Aucklanders on the issues of greatest importance to the future of Auckland. The primary focus of the consultation document will be to clearly set out the key issues of importance for Auckland, along with options for addressing each issue, the proposal to fix the issue and the implications for rates, debt and levels of service. An insert setting out the key issues for the relevant local board area will also be included.

· Local boards will finalise and adopt local material for consultation between 10 November and 17 December.

· An audit process will be completed and the consultation document will include an audit opinion.

7. The Governing Body will then meet to adopt the consultation document and supporting material on 18 December.

8. The recent changes to legislation also provide opportunity to improve the approach to consultation for the LTP. The consultation process is currently being developed and will be considered by elected members in December.

9. The consultation process will run from late January to late March. Following feedback from the community, local boards and the governing body will reconsider budgets and make final decisions before adopting the final LTP in June 2015.

Recommendation/s

That the Budget Committee:

a) note the contents of this report, which sets the context for the other reports and decisions on today’s agenda.

Comments

Background

10. All councils are required by legislation to adopt a long-term plan (LTP) and review it every three years. The LTP sets out Council’s activities, plans, budgets and policies and must be adopted before beginning of the first year it relates to, having used a special consultative procedure to consult with the community.

11. The LTP 2012-2022 set council’s first 10-year budget and financial strategy. It was developed very soon after the formation of Auckland Council and its CCOs and, by necessity, largely reflected an amalgamation of legacy budgets.

Developing the LTP 2015-2025

12. The process to develop council’s second LTP (2015-2025) began in February 2014. Led by the Mayor, this LTP provides our most significant opportunity yet to take stock and align budgets with the direction of the Auckland Plan and ensure we are delivering the right mix of services and investments for Auckland.

13. Attachments B and C set out the key phases and the political engagement process followed by Council to date. Key elements of the process have been:

· A more strategic approach - The Auckland Plan provided the starting point for the LTP with the mayor’s direction challenging staff to critically review budgets against the direction set by the Auckland Plan and to identify opportunities to deliver on the six transformational shifts. Financial parameters for rates and debt, along with setting budget envelopes and priorities at a theme level have ensured discussions were maintained at a more strategic level through the first half of the process.

· A more collaborative approach - There has been a strong focus on bringing together governance and management from across the council group at key points in the process to ensure a common understanding and the opportunity to share perspectives and debate key issues. Local boards have been closely involved through the process with a number of joint workshops with the Budget Committee to discuss challenges and opportunities and provide feedback in a workshop environment. In addition, numerous workshops were held following the mayoral proposal to provide opportunity for political debate and discussion of options and implications.

· Strong senior management support - Senior managers have led the development of options and advice to shape discussion on which council activities and investments deliver the greatest (and least) value to Auckland and where changes could be made.

Agreeing a draft budget to support consultation

14. Today the Budget Committee will consider draft budgets, policies and other material for the purpose of supporting LTP consultation with Aucklanders. Attachment A provides an overview of the reports on today’s agenda and how they fit together. The reports fall into three categories:

i. Reports to support decisions on the size and make-up of the draft budget (what council delivers, what it invests in and how much it costs) – this includes consideration of:

· advocacy from local boards, iwi co-governance entities and the IMSB

· reports relating to fees, charges and social housing rent where the decisions will have an impact on the general rates requirement

· whether council supports consulting on a proposal to fix Auckland’s transport issues through implementation of the Auckland Plan Transport programme and options to fund this programme

· an LTP Budget Update report which wraps up all of the above reports to support decisions required to finalise the draft ten-year budget for 2015-2025.

ii. Reports supporting decisions on how Aucklanders will pay for the expenditure in the draft budget – including rating policy, inorganic waste and solid waste rates and fees and contributions policy.

iii. Reports setting expectations for performance – agreeing draft performance measures and targets for the council group and setting letters of expectation for CCOs

Next steps

Preparing for consultation

15. The Local Government Act 2002 has recently been amended and sets new requirements for consultation. The new requirements aim to ensure that both the consultation material and process provide a more effective basis for public to participate in local authority decision-making processes.

16. As a result, instead of a draft LTP, on 18 December the Governing Body will meet to adopt a consultation document and a set of supporting material developed by staff following decisions made today. The consultation document will be a short document, written in plain language with graphs and charts. The primary focus of the consultation document will be to set out the key issues of importance to Auckland and Aucklanders, along with options for addressing each issue, the proposal to fix the issue and the implications for rates, debt and levels of service.

17. The supporting material will include the more detailed information relied on to prepare the consultation document and will made readily available to the public.

18. Staff will also prepare material to support the communication and engagement campaign for consultation, including an information pack for elected members.

19. The consultation document must also include an opinion from the Auditor-General on whether the document gives effect to its purpose and on the quality of the information and underlying assumptions. The audit process is underway and will be completed by 15 December.

Finalising the long-term plan

20. Consultation for the LTP will take place between January and March 2015. The table below sets out the high level process to finalise the LTP following decisions made today.

Table One: Finalising the LTP following decisions made today

Phase	Timing
Development of consultation document and supporting material	7 Nov – 15 Dec
Budget Committee meets to make decisions on rating transition management	Mid Nov
Local boards hold workshops and meetings to finalise local content for consultation	10 Nov – 17 Dec
Governing body meets to adopt consultation document and supporting material and agree the consultation process	18 December
Public consultation (special consultative procedure)	23 Jan – late March
Local boards will make decisions to finalise their local board agreement for 2015/2016 and content for the remaining years of the LTP	7-24 April
The Budget Committee will hold discussions with local boards and CCOs	28 April – 1 May
The Budget Committee will make final decisions for the LTP	7 May
Budgets will be updated and all LTP documentation, including local board agreements, will be updated	May / June
Local boards will meet to adopt their local board agreements and 10-year budgets	9-19 June
Governing Body will meet to adopt the final LTP	25 June
Documentation will be published and made available to the public and information on the decisions made will be shared with people who participated in the consultation process.	July / August

Consideration

Local board views and implications

21. Local boards have been engaged throughout the development of the LTP to date. All local board members were invited to attend three joint council group workshops on the LTP at the scene setting, options development and mayoral proposal stages of the process. Local board chairs also attended five joint workshops with the Budget Committee to discuss transport, parks, community and lifestyle (PCL), geographic priorities, māori priorities and general engagement with councillors. Specific workshops were also held for local boards to discuss financial policies and PCL budgets.

22. Local boards have held workshops between 23 September and 16 October to discuss their locally driven initiatives (LDI) budgets and consider the responses developed by staff to the mayoral proposal. All local boards have provided feedback on the mayoral proposal and the staff response, as well as feedback on financial policies. Proposed changes to budgets for parks and community related activities have been a key area of concern for local boards.

23. Local boards met with the Budget Committee over three days between 17 – 24 October to discuss their priorities, advocacy, feedback on the mayoral proposal and the proposed new model for delivering community development activities. A separate report (Local board feedback and advocacy) on today’s agenda covers local board feedback and advocacy – in addition, local board views are considered within each of the relevant reports on today’s agenda.

Māori impact statement

24. A top-down approach has been taken to prioritising Māori transformational shift activities for the draft LTP. Advice provided to the mayor ahead of the mayoral proposal included an assessment of the relative priorities and commonalities across business cases prepared by the IMSB, priorities articulated by mana whenua and proposed initiatives from across the council group co-ordinated by Te Waka Angamua. The mayor identified three priority areas in his proposal (a significant Māori event, marae development and papakainga development) and also requested the Council’s chief executive work with the council group to progress other opportunities to deliver on priorities for Māori. A separate report on today’s agenda (Priority areas for Māori) provides further information for consideration by the Budget Committee.

25. The mayor held two hui with mana whenua ahead of the mayoral proposal to discuss mana whenua priorities and aspirations and feedback on proposals. A further hui was held with mana whenua on 23 October to discuss the mayoral proposal.

Implementation

26. Key risks to be managed over the next phase of the process include:

· Development of the consultation document and supporting material – As this is the first time a consultation document and set of supporting materials have been developed staff will work closely with the Legal department and Audit NZ to ensure documents meet legislative requirements and provide a sound basis for consulting with Aucklanders to inform the final LTP.

· Finalising and implementing the consultation process – the new legislation provides an opportunity to make improvements to the consultation process. Staff will focus on ensuring changes are well communicated to the public and elected members and actively manage the risks associated with making changes to an established process.

· Finalising local board budgets – Taking an envelope approach to budgets, along with the new local board funding policy coming into effect on 1 July 2015, has meant that there has been a lot of change in the process to develop local board budgets and local boards are yet to receive visibility of the proposed capital expenditure programmes for their local area. Further engagement with local boards will take place following decisions made today to inform the final LTP.

Attachments

No.	Title	Page
a View	Reports on agenda for 5 and 6 November	13
b View	LTP 2015-2025 overview - direction setting to today	15
c View	Political process overview	17

Signatories

Author

Tanya Stocks – Acting Programme Director – Annual Plan & Long-term Plan

Authorisers

Matthew Walker - Manager Financial Plan Policy and Budgeting

Kevin Ramsay - Chief Financial Officer

Budget Committee

05 November 2014

Decision-making allocation review

File No.: CP2014/25449

Purpose

1. The purpose of this report is to recommend the draft allocation of Auckland Council non-regulatory decision-making responsibilities for inclusion in the Long-term Plan consultation supporting material.

Executive summary

2. The Local Government (Auckland Council) Act 2009 (the Act) requires the governing body to allocate decision-making responsibility for non-regulatory activities to either the governing body or local boards. This must be undertaken in accordance with certain legislative principles and after considering the views and preferences of each local board.

3. Each Long-term Plan (LTP) and annual plan must identify the non-regulatory activities allocated to local boards. There is a presumption that local boards will be responsible for making decisions on non-regulatory activities except where decision-making on a region-wide basis will better promote the wellbeing of communities across Auckland.

4. As part of the development of the 2015-2025 LTP, a review of the current decision-making allocation has been undertaken. The review has been informed by input from across the organisation and feedback from local boards.

5. The review concluded that a number of clarifications and text changes are required but no substantive changes are needed to the allocated responsibilities. The current allocation has worked well and there has been growing understanding and increasing sophistication of how to use it.

Recommendation/s

That the Budget Committee:

a) approve the draft allocation of non-regulatory decision-making responsibilities between the governing body and local boards for inclusion in the supporting material to be adopted by the governing body to support the Long-term Plan consultation process.

Comments

Background

6. The Auckland Transition Agency (ATA) was given the task of determining the initial allocation of the council’s non-regulatory activities using the Local Government (Auckland Council) Act 2009 (the Auckland Council Act). In undertaking this exercise, the question considered by ATA was not “why should the activity be allocated to local boards?” but “why not?”. This was in line with the Auckland Council Act and reflects that:

· local decisions are best made at a local level to ensure local knowledge and community input are considered

· the governing body should focus on region-wide issues

· from a practical perspective, with 20 governing body members and a mayor governing a region the size of Auckland, the governing body needs to retain a focus on big picture issues.

Current allocation table

7. The current decision-making allocation was determined as part of the 2012-2022 LTP and was adopted by the governing body.

8. The allocation has been written on an inclusive basis. It does not contain an exhaustive list of all elements that might make up an allocated activity. The items listed are to aid interpretation.

9. The current allocation has worked well and there has been growing understanding and sophistication of how to use it.

10. For local decision-making further operational clarity has been provided by the development of protocols that set out how staff should operate under the delegations provided by local boards to staff.

Review – scope and approach

11. In undertaking the review for the 2015-2025 LTP, the current allocation has been taken as the baseline. It has focused on:

· any major areas where decision-making on an activity needs to be allocated differently to better meet the requirements of the Auckland Council Act.

· areas where the decision-making allocation is appropriate but further clarification may be needed.

12. During May 2014, council departments were invited to identify relevant issues. These issues were analysed against the scope of the review. The issues identified mainly focused on clarifications and changes to the wording of the current allocation. A number of operational issues were identified, which are out of the scope of the review and will be addressed separately.

13. During July 2014, local boards provided formal feedback on issues identified by the organisation and any other issues they have experienced with the allocation.

14. Overall local boards support the current allocation. Their feedback on the identified issues is discussed below. Attachment B includes a copy of local boards’ formal feedback. Some boards also made additional comments and the most significant are discussed later in this report.

Decision-making allocation

15. A revised draft allocation table has been prepared and is included at attachment A. The format of the revised allocation table has followed the same approach as the current allocation table:

· a number of changes have been made to clarify and tighten up the wording of the allocation. Generally, the wording of the current allocation has been kept.

· some of the sections and headings have been amended to reflect the new activity structure for the draft 2015-2025 LTP.

The next section of the report explains the main proposed changes to the allocation table.

Spatial priorities

16. Through the 2015-2025 LTP a number of regional spatial priority areas have been identified to support the strategic alignment of council resources over the next 10 years. The emergence of spatial priority areas requires an addition to the table for clarification.

17. It is proposed that a line is added to the allocation table for the governing body stating that the governing body has decision-making responsibility for ‘the Auckland Plan, area plans and regional spatial priority areas focusing on growth, development and key infrastructure priorities’.

18. This addition simply clarifies the role of the governing body, while retaining the role for local boards in place making and planning (within parameters set by regional strategies, policies and plans) and their input role into regional policies, plans and bylaws.

Community development and environmental protection

19. Auckland Council’s Thriving Communities Strategic Action Plan places a strong emphasis on community empowerment and community led development.

20. Given this, it is proposed to add a line for local boards noting their role in ‘facilitating community-led placemaking and development initiatives’. This reflects what local boards tend to do in these activities already and has been included to provide clarity.

21. Local boards have not provided formal feedback on this change but it is expected that boards would support the new text.

Submissions and objections

22. In August 2014, the Local Government Act 2002 was amended to expressly note that local boards do not have separate legal standing from Auckland Council, and therefore may not “commence, be a party to or be heard in legal proceedings^{^[1]}”. The change also applies to the Auckland Council Act.

23. This means that local boards do not have the power to make submissions or objections on matters where the council is exercising its regulatory responsibilities. This power now needs to be allocated or delegated to local boards by the governing body (for example, in September 2014, the governing body delegated to local boards the power to make objections to alcohol licence applications).

24. The legislative change arose after local board feedback was provided on the decision making allocation review.

25. The current allocation does not specifically address this issue and so an explanatory note has been added to the planning, policy and governance section noting that ‘a local board does not have the power to make submissions or objections on matters where the council is exercising its regulatory responsibilities unless specifically delegated by the governing body’.

Local asset renewals

26. During the review the operations division requested that decision-making responsibility for all asset renewals be allocated to the governing body. The current allocation table states that the role of local boards is to “maintain the integrity of local assets in accordance with Auckland wide parameters and standards set by the Governing Body”. An example of local assets includes local parks, libraries, community halls and public toilets.

27. The governing body has decision-making responsibility for regional assets which are often part of a network such as stormwater infrastructure or libraries collections, as well as setting Auckland-wide parameters and standards for all asset management planning.

28. Operational staff pointed to the lack of flexibility in the management of local asset renewals and inappropriate allocation of renewals budgets (based on earlier information) as key issues.

29. In looking at the issues it was concluded no change to the allocation table is needed. It is recognised that local boards have a high degree of knowledge and understanding of their local area, the needs of their local communities and the requirements for their local assets and facilities. They are best placed to make governance decisions on local renewal works, within the planning and funding framework set by the governing body and supported by the organisation's asset management plans.

30. Some operational changes are required, such as the setting of regional standards (and readjusting budget allocations) setting longer time horizons for renewals planning and bundling procurement to achieve efficiency. The organisation will be undertaking further work in these areas which will need to involve discussion with local boards.

Additions to the appendix

31. In August 2013, the governing body adopted a schedule of regional parks and list of parks subject to Treaty of Waitangi settlements. This is absent from the current allocation table. The allocation table can now include a more specific definition and list of regional parks and parks governed by the Maunga Authority.

32. A further addition to the appendix is a list of events categories and definitions. This update reflects the categories in the Auckland Council Events Policy adopted by the governing body in April 2013.

Other issues identified by local boards

33. Local boards also raised several non-allocation issues. While they are out of scope of the review, they reflect how the allocation is working in practice and are relevant for the governing body to consider.

34. A significant issue for local boards has been the extent to which regional policy constrains or restricts local decision-making. The current allocation notes that regional strategies and policies are not intended to be prescriptive or unduly restrict the decision-making role of local boards but on several occasions draft regional policy has overridden local board decision making. Several local boards commented that in their experience regional strategies and policies are often too prescriptive and go beyond setting parameters within which local boards can operate.

35. Local boards raised an issue around the governance implications for local economic development if this activity moves to ATEED. Currently local boards have governance responsibility for local economic development, but do not have a governance relationship with CCOs (this sits with the governing body). Any changes that impact on decision-making for local economic development would need discussion and input from local boards.

36. Local boards have raised a number of issues around procurement. In particular, how the decision-making allocation is applied to the procurement of goods and services that relate to local activities but involve major service delivery contracts and also constraints put on local procurement. Auckland Council’s procurement strategy and policy does request that processes should support social, environmental, cultural and economic interests in the community but local boards are not seeing the intent of the policy on the ground. A working group of local board chairs has been established to look at the issues with the relevant staff.

37. There is also a request to investigate potential delegations from Auckland Transport as local boards feel their place making role in street environments and town centres is constrained.

Consideration

Local board views and implications

38. Local board views are discussed above. A copy of local boards’ formal feedback is provided in attachment B.

Maori impact statement

39. The decision-making allocation underpins the Auckland Council governance model. Maori are impacted by both governing body and local board decision-making and need to be engaged appropriately in Auckland Council decision-making processes.

Implementation

40. The recommendations in this report confirm the current allocation of decision making with changes relating to clarification issues. As such there are no significant implementation issues. The new decision making allocation would come into effect on 1 July 2015.

Please add Alastair Child as author and remove Anna Bray.

Attachments

No.	Title	Page
a View	Attachment A - DRAFT decision making allocation	25
b	Attachment B - Local board feedback - DMA review (Under Separate Cover)

Signatories

Author

Anna Bray - Policy and Planning Manager - Local Boards

Authorisers

Karen Lyons - Manager Local Board Services

Grant Taylor - Governance Director

Matthew Walker - Manager Financial Plan Policy and Budgeting

Kevin Ramsay - Chief Financial Officer

Budget Committee

05 November 2014

Long-term Plan 2015-2025: Local Board Views

File No.: CP2014/25550

Purpose

1. The purpose of this report is to formally note local board feedback on the mayoral proposal and key advocacy areas, as previously discussed with the Budget Committee, for consideration in decision making on draft Long-term Plan 2015-2025 budgets.

Executive summary

2. Local board plans informed by extensive community engagement were adopted in October 2014. Legislation requires that they help inform the development of the Long-term Plan 2015-2025.

3. Throughout the year, local boards have been involved as part of council’s shared governance model in the development of the Long-term Plan 2015-2025. This has included workshops, briefings and written material.

4. In October, local boards held advocacy discussions with the governing body on key advocacy areas and proposed LTP priorities. The common areas of feedback include that:

· No new asset based projects in the parks and community areas for the first five years (unless contractually committed or 100% development contribution funded) is of concern

· Local communities have facilities that are fit for purpose with concern expressed about the adequacy of renewals budgets

· The proposal puts pressure on local programme budgets to fund assets as local boards have no capital budgets for small projects

· Community-led community development is supported, including community environmental initiatives but planning, transition and resourcing all need careful consideration

· The environment is protected, particularly coastlines and waterways

· Urban regeneration and planning for growth is not restricted to spatial priority areas but occurs where it is needed

· Local economic development with a focus on youth employment is supported

· A well connected and affordable public transport system is a priority

· Cycleways and walkways are invested in

5. In discussions with the Budget Committee on 24 October local board chairs also indicated while respecting that the final decisions are with the Governing Body, they would value having visibility of the entire proposed LTP budget, to have a rebalancing discussion and to work together with the Governing Body in the development of the full LTP.

Recommendation/s

That the Budget Committee:

a) consider feedback from local boards on the mayoral proposal and key advocacy areas before making decisions on draft Long-term Plan 2015-2025 budgets and consultation material.

Comments

6. In early 2014 local boards undertook extensive engagement with their communities on local priorities and preferences for the development of draft local board plans. In July 2014, local boards consulted with the community on their draft local board plans after which they were adopted in October 2014. The Local Government (Auckland Council) Act 2009 requires that the priorities identified in the 2014 local board plans should inform the development of the Long-term Plan 2015-2025.

7. With reference to the community priorities identified in their local board plans, each local board has considered feedback on the mayoral proposal and has identified key advocacy areas. Local boards have had the opportunity to discuss these with the Budget Committee on 17, 22 or 24 October. The areas of commonality across the local boards are detailed below with more information provided in Attachment 1.

8. Some local boards chose to pass resolutions at business meetings to provide formal feedback on the mayoral proposal. These resolutions and advocacy sheets were provided to the Budget Committee on 24 October.

9. On 24 October local board chairs discussed with the Budget Committee the common areas of feedback and advocacy across the 21 local boards. Local board chairs also indicated that they would value a rebalancing discussion with the Governing Body, to ensure that the draft LTP budget took into account the priorities of local communities. While respecting that the final decisions are with the Governing Body, local board chairs put forward that they would value having visibility of the entire proposed LTP budget and to work together with the Governing Body in the development of the full LTP.

10. Areas of common feedback on the mayoral proposal and advocacy across the 21 local boards are summarised below with more details in Attachment 1.

Parks Community and Lifestyle

11. Parks, Community and Lifestyle is a key area for boards as it is vital for delivering the world’s most liveable city at a local level. In their feedback boards have expressed concern that this area is subject to significant reductions in comparison to other activity areas and would like to see a more balanced approach considered with reductions in capital works across all activities. This may include modelling the impact of reprioritisation across the whole budget.

12. As Auckland grows our community and sports facilities, parks and open spaces come under pressure. Many are reaching their capacity and need upgrades so that they remain fit-for-purpose. The main focus of local board’s advocacy with regards to Parks, Community and Lifestyle is for upgrades to and extensions of existing assets so that they can continue to serve the needs of the community.

13. Local boards generally support a more empowered community approach to community development if it is resourced appropriately and so short term savings are considered unlikely.

14. Walkways, cycleways and greenways also remain a top advocacy priority for local boards. As these initiatives often leverage external funding and contribute to social, environmental and transport outcomes they could enable cost effective delivery on Auckland Plan outcomes

Environmental Management and Regulation

15. In their feedback local boards noted the importance of ongoing investment in environmental management to deliver on the environmental outcomes in the Auckland Plan.

16. The main priorities for local board advocacy with regards to environmental management and regulation are regional investment in coastal protection and increased focus on water quality, including the impact of stormwater.

Auckland Development

17. Local board feedback shows that board’s understand the need to focus investment on priority areas however, they would like to see some resourcing allocated to smaller scale local planning and to investment in urban areas outside of spatial priority areas that need revival or need to accommodate growth.

18. This is also reflected in the priority advocacy areas which focus on support for town centre, metro centre and area planning as well as the implementation of these.

Economic and Cultural Development

19. Local boards support a focus on youth employment and are advocating for more support for local economic development. Given the key role that Business Improvement Districts (BIDs) play in local economic development, boards are concerned about the negative impact the proposed BID funding model could have on BIDs.

Transport

20. A well-connected and affordable public transport system remains a transport priority for local boards. Linked with this is the desire to provide real choice in modes of travel whether by road, water, rail or walkways and cycleways. Investment in walkways and cycleways remains a key focus of local board’s advocacy. Details of this are discussed under Parks, Community and Lifestyle; there is an obvious link to this activity.

Consideration

Local board views and implications

21. The purpose of this report is to provide an overview of local board feedback on the mayoral proposal and key advocacy areas for input into the development of the LTP.

Māori impact statement

22. Many local board decisions are of importance to Māori and there is a need to continue to build relationships between local boards and relevant iwi. The local board plans have been developed through engagement with the community, including Māori, and this has formed the basis for local priorities input into developing the LTP.

Implementation

23. Following Budget Committee decisions on draft LTP budgets in early November, local boards will be provided with budgets on asset based services.

Attachments

No.	Title	Page
a View	Long-Term Plan 2015-2025: Local Board views Attachment 1	39

Signatories

Author

Karen Titulaer - Senior Policy Advisor

Authorisers

Karen Lyons - Manager Local Board Services

Matthew Walker - Manager Financial Plan Policy and Budgeting

Kevin Ramsay - Chief Financial Officer

Budget Committee

05 November 2014

Long term Plan 2015-2025-Priority proposals for Māori

File No.: CP2014/24502

Purpose

1. This report responds to the questions asked by the chair of the Independent Māori Statutory Board (IMSB), Mr David Taipari, in a letter to His Worship the Mayor (dated 14 October 2014).

Executive summary

2. This report responds to a letter from the chair of the IMSB and describes the top down approach agreed by the June 2014 Finance and Performance Committee [FIN/2014/34] to clarify council’s political direction on priority Māori transformational shift activities and associated budgets for the draft 2015-2025 Long-term Plan (LTP).

3. Proposed priorities for achieving progress on the Auckland Plan Māori transformational shift ‘significantly lift Māori social and economic wellbeing’ were identified by the council group; the IMSB; and Mana Whenua chairs and staff and were provided for the mayor’s consideration prior to his LTP proposal.

4. The mayor’s LTP proposal included funding for council’s co-governance obligations and identified his top three priorities for the Māori transformational shift as:

· A signature Māori event

· Marae development

· Papakāinga development

5. Options for achieving the mayor’s top three priorities within current budgets were presented to the Budget Committee workshop on 8 October 2014. In accordance with the mayor’s request to council’s chief executive, staff also undertook further work to identify options for achieving the remaining proposed priorities, within the budget envelopes identified in the mayor’s LTP proposal.

6. The options identified are unlikely to achieve the IMSB’s priorities or the Auckland Plan Māori transformational shift. Taking this into account, staff have proposed additional funding for years 4 -10 of the LTP ($7 million opex and $42 million capex in total) and identified high level activities which will contribute towards the achievement of the Auckland Plan Māori transformational shift and IMSB’s priorities. This proposal is addressed in the report to this committee entitled Long-term Plan 2015-2025 – Budget Update on today’s agenda.

7. Council staff will work closely with the IMSB secretariat staff over the next month on the allocation of the proposed additional funding to specific LTP transformational shift priorities prior to adoption of the LTP consultation document by the Governing Body on 18 December 2014.

8. Following this, as part of planning and budgeting to implement the agreed LTP Maori transformational shift priorities, council and IMSB secretariat staff will work together on identifying activities and budgets within overall budget envelopes and report back to this committee prior to the LTP being adopted.

Recommendations

That the Budget Committee:

a) note that this report responds to a letter from the chair of the Independent Māori Statutory Board and describes the top down approach agreed by the June 2014 Finance and Performance Committee [FIN/2014/34] to clarify council’s political direction on priority Māori transformational shift activities and associated budgets for the draft 2015-2025 Long-term Plan.

b) note that staff have proposed additional funding for years 4 -10 of the LTP ($7 million opex and $42 million capex) and identified high level activities which will contribute towards the achievement of the Auckland Plan Māori transformational shift and IMSB’s priorities.

c) agree that council staff will work closely with the IMSB secretariat staff over the next month on the allocation of the proposed additional funding to specific LTP transformational shift priorities prior to adoption of the LTP consultation document by the Governing Body on 18 December 2014.

d) agree that, as part of planning and budgeting to implement the agreed LTP Maori transformational shift priorities, council and IMSB secretariat staff will work together on identifying activities and budgets within overall budget envelopes and report back to this committee prior to the LTP being adopted.

Comments

9. In a letter to His Worship the Mayor (dated 14 October 2014) the chair of the IMSB requested a report to the Budget Committee with the response to five questions. Mr Taipari’s letter is attached at Appendix A.

10. Taken together, Mr Taipari’s questions seek to understand:

· how council has used the strategic top down approach to clarifying its political direction on priority Māori transformational shift activities and associated budgets in the 2015-2025 Long-term Plan (LTP), as agreed by the June 2014 Finance and Performance Committee (resolution FIN/2014/34);

· how council has considered and taken into account IMSB’s proposals for the LTP;

· how council has ascertained Mana Whenua priorities for the LTP;

· what work has occurred since the mayor’s LTP proposals were released on 28 August 2014 to address the mayor’s top three priorities and the remainder of the proposed priorities identified by IMSB, Mana Whenua and the council group to achieve progress towards the transformational shift ‘Significantly lift Māori social and economic wellbeing’; and

· the approach and timeline for council to address the scoping and funding of the mayor’s top three priorities and the other proposed priorities, as presented to the Budget Committee workshop on 8 October 2014.

June 2014 Finance and Performance Committee resolutions (Mr Taipari’s questions three and five)

11. In June 2014 the Finance and Performance Committee made a number of resolutions in response to a report entitled “Independent Assessment of Expenditure incurred by Auckland Council to achieve Māori outcomes” commissioned by the IMSB and undertaken by KPMG. The committee:

· noted that the KPMG report recommendations 1, 2, 5, 6, 9, 10, 11 and 13 were together proposing that the council group took a strategic top down approach to agreeing and prioritising activities that contribute to Māori outcomes (resolution c);

· agreed to support this approach through clarifying the council’s political direction on priority Māori transformational shift activities and associated budgets in the LTP; (resolution d);

· requested work to be undertaken to support [this approach] and to ensure that the council’s budgeting, business planning, monitoring and reporting processes identify progress on priority Māori transformational shift activities through the LTP years (resolution e); and

· noted that Auckland Council’s chief executive will lead a Māori Responsiveness Leadership team across the Auckland Council group to ensure progress on the agreed actions arising from this report (resolution h).

12. Resolutions (d) and (e) have guided the work undertaken by council staff in preparing information for the mayor’s consideration in his LTP proposals, discussed further below. Council’s chief executive has established the Māori Responsiveness Leadership team, which includes the Council’s Executive Leadership team and the chief executives of the substantive CCOs and IMSB.

13. Other resolutions relating to the development of a new monitoring and reporting framework for tracking actions and progress towards achieving the Māori transformational shift in the 2014/2015 FY and throughout the 2015-2025 LTP have been, or are being, progressed.

Top down approach to prioritising Māori transformational shift activities in the LTP (Mr Taipari’s question three)

14. The mayor has given clear direction to the council group that the 2015-2025 LTP will align council group activity to ensure progress towards delivering on Auckland Plan priorities, within a budget envelope that is affordable for Aucklanders. The Auckland Plan has two geographic priorities and six transformational shifts, including “Significantly lift Māori social and economic wellbeing”.

15. In accordance with resolution (e) noted above, several sources of information were provided to the mayor for consideration in the development of his LTP proposals. These are described further below and include business cases prepared by the IMSB, priorities articulated by Mana Whenua, and proposed initiatives from across the council group, coordinated by Te Waka Angamua staff. In addition, council’s Parks, Sports and Recreation department provided the mayor with an assessment of costs relating to reserves administered by co-governance entities.

Proposed council group priorities for 2015-2025 LTP

16. Te Waka Angamua staff coordinated the development of proposals from across the council group for priority Māori transformational shift activities in the 2015-2025 LTP. Council’s obligations and commitments to Māori as expressed in the Auckland Plan, other strategic plans and the Māori responsiveness framework, the IMSB’s Māori Plan, and the views of Mana Whenua were taken into consideration in developing these proposals. The council group proposals are attached as Appendix B.

17. The proposals were aligned across five key focus areas for investment, forming the proposed framework for the LTP top down approach to agreeing priority areas for investment to achieve Māori transformational shift activities. The five key areas forming the proposed LTP framework are:

· Whai Tiaki – Māori Cultural Well-being: To celebrate and sustain Māori cultural identity, knowledge and practice. Māori cultural well-being is inextricably linked to Auckland Council’s land planning and environmental protection functions. The council’s leadership role can have a transformative effect on the place and sustainability of Māori cultural well-being.

· Whai Rawa – Māori Economic Well-being: To enable all Māori to contribute to and benefit from the economic successes of Tāmaki Makaurau, Auckland. Through its leadership, operational activities, and procurement leverage, Auckland Council can both enable and transform Māori economic well-being.

· Whai Painga – Māori Social Well-being: To enable all Māori to harness the opportunities that come from living in Tāmaki Makaurau, Auckland. Through place-making, regulation, public transport and roads, community development policy and activities, bylaws, operations, and services, Auckland Council plays a significant role in the shaping of communities which impacts on social well-being.

· Whai Tika – Māori Effectiveness: To ensure the council has the capability and capacity to deliver on its commitments and obligations to Māori.

· Whai Tahinga – Post-Treaty Settlements: To ensure Treaty Settlement outcomes that mutually benefit mana whenua and the council.

18. These five areas also form the basis of the new monitoring and reporting framework agreed by the Finance and Performance Committee in September 2014 [FIN/2014/53]. The report to that committee noted that the new framework is based on:

· Clear criteria and a ranking system (developed by Te Waka Angamua in consultation with the IMSB secretariat) for the identification of projects which significantly contribute to the Auckland Plan Māori transformational shift ‘significantly lift Māori social and economic well-being’;

· An improved financial and narrative based reporting system which will enable tracking of progress on specific Māori transformational shift activities as well as on general activities which significantly benefit or engage Māori; and

· Partnering and support from Te Waka Angamua and Finance staff with business owners to ensure implementation of the monitoring and reporting system.

19. Many other council general activities contribute towards Māori wellbeing but the specific benefit to Māori is difficult to measure. Through the LTP years these general activities will be reported on with explanatory narrative.

Proposed IMSB business cases for 2015-2025 LTP

20. Following the KPMG report ‘Independent Assessment of Expenditure incurred by Auckland Council to achieve Māori outcomes’ the IMSB prepared business cases for their top 10 priorities for the 2015-2025 LTP entitled ‘Leveraging Auckland’s Māori point of difference to create the world’s most liveable city’. The top IMSB’s 10 priorities were estimated as costing $73 million opex and $63 million capex.

21. IMSB presented these business cases to the Mayor on 4 August 2014 and they were also provided to Governing Body members at the joint Governing Body/IMSB meeting on 18 August 2014. IMSB’s 10 business cases for the 2015-2025 LTP are proposals for:

1) Regional marae development

2) Major signature Māori event

3) Increasing the visibility of Auckland’s Māori identity

4) Promoting te reo Māori

5) Regional papakāinga development

6) Developing iwi management plans and environmental projects

7) Co-governance and co-management arrangements

8) Increasing Māori engagement in key economic growth activities

9) Māori contribution to decision-making

10) Sites of significance to Mana Whenua work programme

22. IMSB’s view is that collectively, these business cases will help resolve the six key issues relating to Māori interests identified in the Auckland Plan:

· Establish papakāinga in Auckland

· Enable tangata whenua to participate in the co-management of natural resources

· Explore partnerships with Mana Whenua to protect, identify and manage wahi tapu sites

· Enable Māori aspirations for thriving and self-sustained marae

· Support sustainable development of Māori: outcomes, leadership, community and partnerships

· Facilitating a Māori/iwi economic powerhouse.

23. A summary of the IMSB’s top 10 business case proposals are attached as Appendix C.

Proposed Mana Whenua priorities for 2015-2025 LTP (Mr Taipari’s question two)

24. The mayor met with Mana Whenua chairs and staff to discuss their priorities and aspirations for the 2015-2025 LTP. Mana Whenua representatives also provided some feedback on the council group proposals and the IMSB’s priorities. Staff also met with Mana Whenua chairs and staff to discuss LTP priorities.

25. Priorities in the table attached as Appendix D reflect those discussions but also reflect Mana Whenua views submitted in person or by email and priorities and issues raised through Auckland Plan, Unitary Plan and Local Board Plan submissions. Mana Whenua priorities were included in the development of the LTP proposal provided to the mayor for consideration.

Development of LTP proposal for the mayor’s consideration

26. Te Waka Angamua and Finance staff undertook a process of triangulating the LTP proposals put forward by the IMSB, Mana Whenua and the council group to determine the degree of consistency between proposals and to identify the relative priority given to different activities from the three sets of information. These activities were aligned to the five key areas in the proposed LTP top down framework discussed in paragraph 17.

27. The results of this triangulation exercise were shared with the IMSB and informed the development of a proposal for the mayor’s consideration. This proposal (attached as Appendix E) sought $96 million of new investment ($45 million capex and $51 million opex); and identified $3 million of activities and budgets from across the council group which would need to be reprioritised; and approximately $23 million of existing activities which would need to continue in order to achieve meaningful progress on the Māori transformational shift in the 2015-2025 LTP.

28. The mayor has advised that he took into consideration the financial constraints across the council group and used the information provided by Te Waka Angamua and the Finance staff to identify the top three priorities that he felt should be included in the LTP. Specific funding was not identified for each priority in the mayor’s proposal.

Work undertaken since the mayor’s LTP proposals were released (Mr Taipari’s question one)

29. On 28 August 2014 the mayor announced his LTP proposals. The mayor noted that the 2012-2022 LTP projected an average annual rates increase capped at 4.9 per cent. For the 2015-2025 LTP, the mayor has proposed to cap the average rates increases at 2.5 per cent for the first two years and 3.5 per cent for the remaining years. Achieving this requires a significant reduction in council’s projected operational and capital expenditure budgets and careful prioritisation of agreed expenditure.

30. Staff from across the council group have identified options to reprioritise capex and opex budgets in line with the mayor’s proposals and have discussed these with the Budget Committee and local board chairs at a series of workshops throughout September and October.

31. To achieve progress towards the transformational shift to ‘Significantly lift Māori social and economic wellbeing”, the mayor’s LTP proposal included funding for council’s co-governance obligations and prioritised work (without any new funding) on:

· A signature Māori event

· Marae development

· Papakāinga development

32. The mayor’s top three priorities are drawn from the common priorities identified by IMSB, Mana Whenua and the council group through the triangulation exercise described in paragraphs 26 and 27. A separate report to this committee provides information on the proposed options for meeting council’s co-governance obligations through the LTP.

33. Following the release of the mayor’s LTP proposals, the IMSB chair and chief executive met with the mayor to discuss the remaining priorities identified in IMSB’s business cases. The mayor requested that the council’s chief executive work with the council group to identify whether and how progress could be achieved on these.

34. The chief executive wrote to key business owners across the council group, noting the mayor’s top three prioritised LTP proposals and expressing his view that significant progress can be made on these through working together strategically across the council group. The chief executive requested that business owners work together with Te Waka Angamua and Finance staff to identify options for delivery on the mayor’s top three proposals for discussion at a Budget Committee workshop, with a clear identification of the contribution from different departments and CCOs towards this.

35. In respect of IMSB’s other proposals, the chief executive noted that further work across the council group would be needed to identify potential options for delivery on these and that his Māori Responsiveness Leadership team would drive this process.

36. On October 8, the Budget Committee workshop received a presentation, led by Te Waka Angamua, outlining the process identified in this report; identifying options for achieving the mayor’s top three priorities and noting that work was underway to identify potential options for achieving the other identified priorities arising from the triangulation exercise. Indicative costings for these were the same as presented to the mayor prior to 28 August 2014.

Approach and timeline for addressing the scoping and funding of the identified [proposed] priorities. (Mr Taipari’s question four)

37. The chair of the IMSB wrote to the mayor following the Budget Committee workshop on 8 October 2014. Mr Taipari’s questions one to three and five have been addressed above. The table attached as Appendix F responds to question four.

38. Appendix F notes proposed delivery options for the mayor’s top three priorities and the IMSB’s other priorities. In accordance with the mayor’s request to council’s chief executive, staff also undertook further work to identify options for achieving the remaining proposed priorities, within the budget envelopes identified in the mayor’s LTP proposal.

39. The options identified are unlikely to achieve the IMSB’s priorities or the Auckland Plan Māori transformational shift. Taking this into account, staff have proposed additional funding for years 4 -10 of the LTP ($7 million opex and $42 million capex in total) and identified high level activities which will contribute towards the achievement of the Auckland Plan Māori transformational shift and IMSB’s priorities. This proposal is addressed in the report to this committee entitled Long-term Plan 2015-2025 – Budget Update on today’s agenda.

40. Further work is needed to fully quantify the work programs for the proposed priorities and this report proposes that council staff work closely with the IMSB secretariat staff over the next month on the allocation of the proposed additional funding to specific priorities prior to adoption of the LTP consultation document by the Governing Body on 18 December 2014.

41. Following this, as part of planning and budgeting to implement the agreed LTP Maori transformational shift priorities, council and IMSB secretariat staff will work together on identifying activities and budgets within overall budget envelopes and report back to this committee prior to the LTP being adopted.

Consideration

Local board views and implications

42. Local boards have not been consulted in the development of this report. This report responds to five questions from the chair of the IMSB and identifies the process council has followed to date to help clarify its political direction on priority Māori transformational shift activities in the 2015-2025 LTP; and work undertaken to develop options to respond to the mayor’s LTP proposals. The final LTP will be adopted by 1 July 2015 and agreed actions will apply across the council group including local boards.

Māori impact statement

43. This report responds to five questions from the chair of the IMSB and identifies the process council has followed to date to help clarify its political direction on priority Māori transformational shift activities in the 2015-2025 LTP; and work undertaken to develop options to respond to the mayor’s LTP proposals.

44. The attachments to this report identify proposals put forward by IMSB, Mana Whenua and the council group to achieve the Auckland Plan transformational shift to ‘significantly lift Māori social and economic wellbeing’.

Implementation

45. This report notes that work will continue throughout the LTP development process to identify options for delivery on the mayor’s top three priorities and the other activities prioritised by IMSB, Mana Whenua and the council group to achieve the Auckland Plan transformational shift to ‘significantly lift Māori social and economic wellbeing’.

Attachments

No.	Title	Page
a View	Appendix A Letter from chair of Independent Māori Statutory Board	65
b View	Appendix B Proposed council group LTP proposals August 2014	67
c View	Appendix C Summary of IMSB LTP business cases August 2014	69
d View	Appendix D Mana Whenua LTP priorities August 2014	71
e View	Appendix E Triangulated LTP proposals August 2014	73
f View	Appendix F Proposed LTP priorities	75

Signatories

Author

Deborah James - Executive Officer

Authorisers

Grant Taylor - Governance Director

Stephen Town - Chief Executive

Matthew Walker - Manager Financial Plan Policy and Budgeting

Kevin Ramsay - Chief Financial Officer

Budget Committee

05 November 2014

City Centre Targeted Rate

File No.: CP2014/25352

Purpose

1. This report asks the Budget Committee to approve a renewed City Centre Targeted Rate (CCTR) for the 2016-25 period and to include this rate in the relevant Long Term Plan activity budgets, financial policies and statements.

2. The Auckland City Centre Advisory Board (ACCAB) wishes to formally request that the application of the renewed rate to projects is on a significantly different basis to the historic CCTR.

3. In particular, the ACCAB wants brought to the Committee’s attention that the City Centre is self-funding what are becoming standard levels of service and funded via the general rate elsewhere in the region. The ACCAB is willing to see such capital investments continue to be funded by City Centre targeted rates, but asks that in return - ongoing depreciation and consequential opex costs are funded by the general rate.

Mayoral summary

4. The former Auckland City Council adopted a CBD targeted rate in 2004-05 to develop and upgrade the City Centre. This rate currently generates at approximately $20 million every year until 2015-16, after which a residual amount was to be levied to fund the depreciation and consequential operating expenditure (opex) that arose from targeted rate projects.

5. The application of this rate to projects is managed by Council and CCO staff and it is completely separate to the targeted rates that fund Heart of the City and the Karangahape Road Business Association.

6. The ACCAB also acts as a ready-made, well informed and representative consultation forum for Auckland Council on City Centre issues.

7. The ACCAB has had detailed formal discussion around renewing the targeted rate. It supports the renewal from 2016-17 onwards, but wishes to remedy what it sees as serious flaws in the current arrangements. In particular, it wishes to see consequential opex and depreciation funded from general rates. Depending on how and when this occurs, it would, at most, result in a one-off increase of 0.69% in the general rate and 0.14% each year thereafter.

8. The ACCAB has offered to smooth the impact on the general rate of any transition by recommending that some of the substantial unspent balance, sitting in the targeted rate account, be used to fund consequential opex and depreciation over a number of years to avoid it hitting the general rate in the early years of the LTP.

9. The ACCAB asks the Budget Committee to note that while there is an impact from the proposed arrangements on the general rate, this is more than offset by the $20 million per annum (in real terms) to be levied solely on City Centre business ratepayers from 2016-22.

10. As part of its LTP deliberations, it is appropriate that the Auckland Council consider whether to renew this targeted rate and on what basis it should be renewed.

11. The Budget Committee's attention is drawn to the need to renew the targeted rate if there is to be any significant transformation of the Region's centre over the first half of the LTP period. Such transformation is necessary if the City Centre is to be internationally competitive in terms of attracting tourists, high productivity workers and investment, as well as retaining talented Aucklanders.

Recommendation/s

That the Budget Committee, for the purposes of the Draft 2015-25 Long Term Plan approve the following changes to the City Centre Targeted Rate for adoption by the Governing Body as part of the material to support LTP consultation:

a) agree to make provision for the City Centre programme in the LTP budget of $20 million each financial year, in real terms, from 2016/2017 to 2024/2025 inclusive

b) agree that, in general, the additional depreciation and operational costs (consequential opex) of capital works arising from the City Centre programme cease to be funded from the City Centre targeted rate, from 2019-20 financial year onwards and that these be met from general rates, or other appropriate revenue sources

c) agree that the general rates impact of “b” above be transitioned in over the early years of the LTP budget by utilising the unspent funds that have already been raised from the City Centre targeted rate

d) agree that the City Centre Targeted Rate can be used to fund projects already proposed by the Auckland Council Group, but as a general operating principle, ACCAB retains an active and formal role in early project identification, selection, prioritisation and design.

e) agree that a significant proportion of each year’s targeted rate is available for the ACCAB to respond by continue to recommend operating or capital project opportunities.

Comments

12. This report follows a presentation to the Council’s Budget Committee on 22 September this year.

13. At the time of establishing the CCTR, Auckland City also established the CBD Advisory Board. The Board has been continued by Auckland Council and renamed the Auckland City Centre Advisory Board (ACCAB). Its terms of reference (Attachment A)include a role in providing guidance into the portfolio of City Centre projects, including those funded via the City Centre targeted rate. The board is made up of senior representatives from commercial, business promotion, residential and education organisations, as well as mayoral, local board and council ward representatives.

14. The City Centre Advisory Board (ACCAB) exists to “assist the Auckland Council, specifically the governing body and the Waitemata Local Board and Auckland council controlled organisations to oversee and be a key advisor to the Auckland Council on achieving the vision and strategic outcomes of the Auckland Plan, the City Centre Masterplan, the expenditure of the city centre targeted rate, and city centre issues” (Extract from the Terms of Reference for the Auckland City Centre Advisory Board, Attachment A).

15. Since the inception of the targeted rate in 2004, it has been used to fund the mix of expenditures depicted in the pie graph below:

16. The advisory board has met over the course of this calendar year to discuss the renewal and nature of the city centre targeted rate. Discussion has focussed on what the board believe are necessary changes to what the targeted rate gets spent on. These changes are discussed below.

17. Depreciation and Consequential Opex. Currently, the targeted rate funds any depreciation and operating costs that arise from targeted rate funded capital projects. This has two significant implications:

a) As more projects are funded by the targeted rate, the amount of the targeted rate needed for resulting depreciation and consequential opex increases. Currently, over $7 million of the $20 million raised in 2014 will be spent on depreciation and consequential opex, leaving only $13 million for new projects. If the current targeted rate regime were to continue, eventually all of the revenue raised would go to funding depreciation and consequential opex, leaving none for new projects. This would mean that any new City Centre upgrades would need to be funded by the general rate^{^[2]}. This depicted in the diagram below.

b) Targeted rate projects, such as shared spaces, have the full depreciation and consequential opex of the asset charged to the targeted rate. For all of the shared spaces, there were already roads and footpaths in place, for which the depreciation and consequential opex would have been charged to the general rate. Instead of only paying for the higher level of service (the marginal costs), the targeted rate picks up the cost of the base/unimproved level of service as well, thus taking on costs that would have been spread over the whole region via the general rate.

This issue also has implications for how the shared space was funded. Before any upgrade to a shared space occurs, the existing road, footpaths, streetlights and other Council group owned assets have had depreciation charged against those assets. This would have been collected as general rates, NZTA subsidies, etc. and be effectively saved until the time came to renew the assets. Any accumulated depreciation, therefore, should be used at the time of an upgrade (e.g. to a shared space) to fund that upgrade.

18. The ACCAB propose that under a renewed targeted rate regime, depreciation and consequential opex should be funded by the general rate. If that were to happen in 2016-17, it would mean a one-off 0.69% increase in the general rate, in addition to any programmed rates increase. In subsequent years, as new projects are funded from the targeted rate, additional annual rates rises of 0.14% would need to be accommodated.

19. Transition Mechanism to Soften Rates Impact. There is, however, a substantial unspent balance in the City Centre Targeted Rate account. By the 2014-15 financial year this is expected to be at $20.3 million and, depending on whether any additional projects to the $15 million capex are planned for 2015-16, a similar surplus is expected for that year.

20. As it is a targeted rate, this money needs to be spent for the purpose for which it was collected. The ACCAB have indicated that they are willing to support use of the some of the targeted rate account balance to fund depreciation and consequential opex in the earlier years of the LTP period to soften the impact of moving depreciation and consequential opex to the general rate.

If the targeted rate account balance is used to soften the effect of transitioning depreciation and consequential opex to the general rate, the effect on the general rate could be scheduled according to any of the scenario options in Appendix 3. Option 3 is the recommended option.

21. Levels of Service and City Centre General Rate Contribution. The ACCAB have asked that upgraded streetscapes receive the highest level of service in terms of cleaning frequencies, refuse pickup, etc. It is the ACCAB’s expectation that these higher levels of service are funded from the general rate. The rationale for this is that these streetscapes are regional showcases and are situated in Auckland's largest and highest productivity employment area. The City Centre is a regional, as opposed to local, employment centre. The highly developed employment and residential nature of the City Centre results in high capital values (particularly driven by high rise buildings) and thus a relatively high share of the general rate is generated by City Centre property. In addition to the City Centre, Karangahape Road and Heart of the City targeted rates, the area also generates over $90 million in general rates and uniform annual general charges each year

22. A Broader Range of Projects. In general, the City Centre targeted rate is currently used to fund projects in addition to, or at a higher level of service than, those that the Council proposes to fund as part of its “business as usual” programmes. The ACCAB proposes that this practice could change so that the targeted rate could fund projects proposed by Auckland Council, CCOs and the ACCAB, where funding is not available under proposed LTP budgets.

23. As a general operating principle, ACCAB requests that it retains an active and formal role in early input into project identification, selection, prioritisation and design.

24. The ACCAB, however, also has stressed the importance of retaining some financial capacity, in the targeted rate account, to respond to emerging opportunities in terms of operating and capital projects.

25. Depending on the outcome of the LTP budgeting process, targeted rate funding of some programmed Auckland Council and Auckland Transport projects could make the difference between having very few transformational projects in the City Centre and a programme that sees the City Centre sufficiently upgraded to a standard comparable to competing cities in Australia and further afield.

26. A Broader Base for the Targeted Rate. At the suggestion of the board membership, consideration should be given to: 1) broadening the types of property liable for the rate to include residential properties to the degree that they benefit form targeted rate expenditure, and 2) broadening the geographic area, where appropriate, to include groups of property benefiting from targeted rate expenditure.

27. There are around 16,000 residential units in the City Centre area. A targeted rate of $50 (excluding GST) per unit would generate $800,000, while a targeted rate of $100 (excluding GST) per unit would generate $1.6 million.

28. The discussions above is intended to reflect the advisory board’s formal resolutions. Relevant resolutions are attached as Attachment B.

Consideration

Local board views and implications

29. The Waitemata Local Board is directly represented on the ACCAB through the presence of its chairman as a member. The Local Board’s representative has taken an active role in the ACCAB’s deliberations.

Maori impact statement

30. Ngati Whatua Orakei Whai Rawa Limited are also represented on the Advisory Board. City Centre projects are of direct interest to Ngati Whatua, particularly those affecting its own significant property holdings in Central Auckland.

31. The Advisory Board relies on Auckland Council advisors to ensure that the projects that it supports are implemented according to any agreements with mana whenua, as well as ensuring tikanga in general is accommodated.

Implementation

32. The renewal of the targeted rate needs to be implemented via legislated decision making processes within the overall LTP process. Specifically, the targeted rate needs to be incorporated into the Funding Impact Statement each year.

33. While the ACCAB has no absolute right to determine the size or nature of the targeted rate, or what it is to be spent on, it is recommended that Council staff work with the advisory board to finalise an agreed common position on the targeted rate for inclusion in the LTP.

Attachments

No.	Title	Page
a View	Terms of Reference for the Auckland City Centre Advisory Board	83
b View	Auckland City Centre Advisory Board, 27 August 2014, Confidential Minutes Page 3	93
c View	City centre targeted rate (CCTR) options for funding depreciation and consequential opex	95

Signatories

Authors

John Dunshea - Manager City Transformation Projects

Rick Walden – General Manager, City Centre Integration

Authorisers

Matthew Walker - Manager Financial Plan Policy and Budgeting

Kevin Ramsay - Chief Financial Officer

Budget Committee

05 November 2014

Terms of Reference for the Auckland City Centre Advisory Board

1. These terms of reference set out the roles, responsibilities and working arrangements for the Auckland City Centre Advisory Board.

2. The board is a key advisory body, with no decision-making or autonomous budgetary authority.

3. The board will assist the Auckland Council, specifically the governing body and the Waitemata Local Board and Auckland council controlled organisations to oversee and be a key advisor to the Auckland Council on achieving the vision and strategic outcomes of the Auckland Plan, the City Centre Masterplan, the expenditure of the city centre targeted rate, and city centre issues.

4. The City Centre Masterplan’s vision is to grow and consolidate the city centre’s international reputation as one of the world’s most vibrant and dynamic business and cultural centres. The strategic outcome areas supporting the vision are that Auckland’s city centre will be:

· recognised as one of the Pacific Rim’s premier business locations

· a high quality living urban environment

· the most popular destination for Aucklanders and visitors to the region

· a world class centre for education, research, innovation and development

· a place recognised as the heart of the world’s most liveable city.

Role of the Auckland City Centre Advisory Board

5. The role of the board is to:

· Assist the council to plan, develop, shape and drive the delivery of the city centre strategies

· Report stakeholder views and promote dialogue on initiatives within the city centre portfolio

· Act as a think tank and sounding board for the City transformation projects team on new and existing initiatives

· Champion and provide leadership for city centre strategies in the wider community

· Maintain an overview of the strategies and action plans to assist with integration of the initiatives

· Monitor the progress of strategies and action plans relating to the city centre

· Provide guidance into the portfolio of city centre projects including those funded via the city centre targeted rate

· Establish, safeguard and promote the pursuit of excellence of all projects in the city centre portfolio from inception to delivery.

· Provide input to or lead other city centre stakeholder reference groups on specific projects or relevant council strategies impacting the city centre

· Review or recommend any proposed changes to the city centre targeted rate policy

· Review and provide feedback on the city centre streetscapes and open space upgrade projects:

a) concept designs

b) developed designs

c) endorse the concept designs prior to going out for public consultation

· Provide a sounding board to the designers for the city centre streetscapes and open space upgrade projects

· Ensure a cohesive approach to the designs of the city centre streetscapes and open space upgrade projects

Note: These roles are also shared by the governing body and the Waitemata Local Board and Auckland council controlled organisations as appropriate and are not solely the function of the Auckland City Centre Advisory Board.

6. These roles and responsibilities are detailed below, with an explanation of what they will mean in practice.

(a) Assist the council to plan, shape and drive the delivery of the city centre strategies

This means the board members, individually and collectively, will:

· come prepared to meetings having pre-read and considered agendas and associated documents

· participate actively in the city centre strategy review process led by Auckland Council

· bring their own ideas for programme and process improvements to the board’s attention

· feed ideas and comments into the council’s decision making processes (eg making recommendations to council committees.

(b) Report stakeholder views and promote dialogue on initiatives within the city centre portfolio

This means the board members, individually and collectively will:

· actively engage their networks in dialogue about city centre strategies and programmes

· bring ideas and comments from their networks/stakeholders back to board meetings for discussion

· ensure their networks get feedback on any ideas and issues they raise.

(c) Act as a sounding board for the City Transformation Projects team on new and existing initiatives

This means the board members, individually and collectively, will:

· receive and discuss reports and presentations from the City Transformation Projects team members

· provide comment and feedback on ideas and initiatives brought to it by City Transformation Projects team members

· actively debate issues but seek, ultimately, to develop a single board view on ideas and initiatives brought to it

· request that reviews of projects be conducted for consideration by Council.

(d) Champion and provide leadership for city centre strategies in the wider community

This means the board members, individually and collectively, will:

· invest time and effort into understanding the city centre strategies and its programme of action

· seek opportunities to speak positively about the strategies to external audiences

· provide media comment if requested by the City Centre Advisory Board Chair.

(e) Maintain an overview of the strategies and action plans to assist with integration of the initiatives

This means the board members, individually and collectively, will:

· familiarise themselves with the three year action plans (with a particular focus on the current year’s programme of action/works)

· actively monitor opportunities for city centre projects to leverage from/add value to each other

· identify potential conflicts between individual projects and/or project objectives

· debate and provide a view on trade-offs between projects and between the objectives of individual projects

· identify and bring to the board’s attention potential conflicts and synergies between external (non-council) and the council initiatives, perspectives and programmes.

(f) Monitor the progress of the city centre portfolio

This means the board members, individually and collectively, will:

· receive and actively consider progress reports presented to the board

· identify any concerns about progress

· recommend ways of addressing any progress delays or issues (e.g. reviewing the scope, quantity, timing, of and/or resources for delivering on projects).

(g) Provide guidance into the portfolio of projects funded via the city centre targeted rate

This means the board members, individually and collectively, will:

· familiarise themselves with the city centre targeted rates supported programme of works

· discuss the programme with their networks

· invest time and effort into understanding how and to what extent individual projects contribute to achieving the city centre vision and outcomes

· develop an informed view about project priorities.

(h) Establish and safeguard the pursuit of excellence of all projects in the city centre portfolio from inception to delivery.

This means the board members, individually and collectively, will:

· demonstrate in themselves and their board input and participation their personal best expression of the quality of excellence and its pursuit

· work collectively to ensure that all board goals seek the best possible inputs into city centre strategies, action plans and outcomes.

(i) Provide input to or lead other city centre stakeholder reference groups on specific projects or relevant council strategies impacting the city centre.

This means the board members, individually and collectively, will:

· make known to the board their areas of expertise and interest

· actively participate in specially convened city centre stakeholder reference groups

· convene and lead specially convened city centre stakeholder reference groups

· actively participate in consultation on council policies and strategies which have implications for the city centre.

(j) Review or recommend any proposed changes to the city centre targeted rate policy

This means the board members individually and collectively, will:

· receive and discuss information relating to city centre targeted rate policy annually

· make recommendations into council’s decision making processes relating to any targeted rate policy change.

(k) To review and provide feedback on city centre streetscapes and open space upgrade projects :

i. concept designs

ii. developed designs

iii. endorse the concept designs prior to going out for public consultation

This means the board members, individually and collectively, will:

· provide comment and feedback on the designs presented to them by members of the City Transformation Projects team

· feed ideas and comments prior to council’s decision making processes.

(l) Provide a sounding board to the designers on city centre streetscapes and open space upgrade projects

This means the board, individually and collectively, will

· provide constructive feedback to designers in advance of formal consultation processes.

(m) Ensure a cohesive approach to the designs of the city centre streetscapes and open space upgrade projects

This means the board members, individually and collectively, will

· consider the designs from the perspective of their respective sectors, seeking to provide comments on the designs from a holistic perspective.

Auckland City Centre Advisory Board composition

1. The board will comprise up to 15 external city centre stakeholder representatives and 3 political representatives.

2. The board members need to demonstrate the following qualities:

· passion and commitment to the development of Auckland’s central city

· credibility and prominence in the community

· an understanding of the city centre and support for Auckland Council’s vision

· commitment to playing an active role on the board

· an ability to effectively chair meetings.

3. The board will be sought from the following sectors or groups:

City Stakeholders	Representatives
corporate sector including financial and other professional services	2
urban design/institute of architects	1
tourism/travel	2
Business Improvement Districts	2
Retail	1
Education (The University of Auckland & Auckland University of Technology)	2
Ngati Whatua	1
Residents (representatives from the CBD Residents Advisory Group)	2
Property Council	1
Arts and Cultural Sector	1
Governing Body of Auckland Council (Mayor and Waitemata Ward Councillor)	2
Waitemata Local Board	1

All board members and alternates, either individual or representing an organisation, should have a city centre focus and support interest.

Selection of Members

4. Selection of members will follow the “Policy for selection and replacement of Auckland City Centre Advisory Board members” process. (see Appendix A)

5. Each representative should be a person that is able to demonstrate the qualities outlined above.

Chair and Deputy Chair

6. The roles of Chair and Deputy Chair will be elected from the non elected/political representatives by the full board at the first board meeting and thereafter annually at a meeting determined by the Auckland City Centre Advisory Board.

Term of office/resignations/replacements/alternates

7. Board members may represent their stakeholder group/sector for an unlimited number of terms, as membership is sought through representative organisations.

· A Chair and Deputy Chair will be elected annually.

· The Chair and Deputy Chair can be re-elected each year of their term as Board members.

· The Policy for Selection and Replacement of Auckland City Centre Advisory Board Members records how the board will receive and process resignations and subsequent replacements of members, as well as the selection of new the board members.

· Alternates may be nominated for political representatives and representatives of the following bodies:

· Business Improvement Districts,

· Auckland University of Technology,

· University of Auckland,

· Ngati Whatua,

· Property Council,

· Institute of Architects,

· CBD Residents Advisory Group, and

· NZ Institute of Landscape Architects.

Meetings

Meeting schedule/timing/nature

8. Members will meet on an (unpaid) voluntary basis.

· The board meets monthly, with the flexibility to meet as and when required on specific issues/projects.

· Meetings will generally be of 2 hours duration unless an alternative duration is agreed beforehand.

· The Democracy advisor will arrange the venue and catering for each meeting.

· Meeting agendas will focus on progressing the strategies for the city centre as a whole and on specific projects.

· Subgroups may be formed to expedite progress, with one board member taking responsibility for championing particular projects or outcome area.

· The quorum at a meeting shall be at least half the number of members.

Reporting

9. The Auckland Council is constituted under a co-governance model.

10. The Auckland City Centre Advisory Board may make recommendations to the governing body, the Waitemata Local Board, and relevant Auckland Council Controlled Organisations, and/or the City Centre Integration Group, depending on which of these bodies has decision making authority over the matter(s) being reported on.

Agenda distribution/minutes

11. Agendas for the board meetings will be distributed 3 working days prior to the meeting date.

· A proposed agenda item may be submitted by a board member to the board secretary (Democracy Advisor, up to 15 days prior to a board meeting. If the item is not accepted by the chair and/or deputy chair, the member will be advised of the reason prior to the agenda being circulated.

· Meeting agendas will be set by the chair and/or the deputy chair in consultation with the City Transformation Team Leader or City Transformation Projects Manager.

· Minutes of the board meetings will be distributed to members and public no later than 5 working days after the board meeting.

Staff support/servicing of board

12. The City Transformation Projects Manager is responsible for the Auckland City Centre Advisory Board.

· The Democracy Advisor, Democracy Services department will act as secretary and will be the first point of contact for board meetings.

· The Democracy Advisor will be responsible for arranging board meetings, catering, paperwork, reimbursements, council/board communications etc.

· The City Transformation Projects Manager will provide a monthly portfolio report to the board.

· A staff member from the City Centre Integration Group will, where practicable, attend board meetings and report.

Resourcing of the board

13. $8000 per annum will be allocated to the administration of board meetings – catering, printing, reimbursements etc.

· Members will not be remunerated for participation on the board, however reasonable travel/parking costs may be reimbursed.

Protocols for members/conflicts of interest

14. The board will work under a code of conduct for their members and meetings (covering issues such as conflicts of interest, pecuniary interests, qualified privilege etc).

· To assist the board members in the above matter, each board member will provide a list of the organisations they represent and their role within each of these organisations.

Code of conduct

15. The code of conduct includes protocols around conflicts of interest, respecting confidentiality and ensuring ones actions and comments do not bring the council into disrepute.

16. With this in mind, board members are to:

· declare any conflicts of interest to the board and then abstain from decisions where there is a conflict of interest.

(N.B a conflict of interest is likely to occur if a board member has a pecuniary or social interest in a matter being discussed by the board. In other words, the member may stand to benefit from a decision made by the board about that particular matter. An example could be a discussion about a piece of work that the member may propose to carry out as a consultant or contractor. A conflict may also be perceived rather than actual. Such conflicts need to be considered and a decision made as to whether they should be treated as actual).

· raise their concerns with the board, where there is a lack of clarity around whether there is a real conflict of interest or where such a conflict could be perceived, and seek a decision on whether or not the issue is to be considered as if a conflict of interest exists.

· keep confidential any matters brought to it in confidence.

(N.B as a public body council must always justify why something is to be heard in confidence. It is unlikely; therefore, that many confidential matters will be brought to the board)

· ensure that their behaviour or actions do not bring the council into disrepute.

(N.B. This does not prevent members from legitimately challenging council policy decisions.)

Recommendation processes

17. Board recommendations are to be:

· based on robust information and debate ensuring that the different perspectives of the members are considered

· developed and presented as the board’s view.

(N.B. This does not mean there can be no difference of opinion. What it does mean is that members are expected to not undermine the board’s collective agreed view, even if their personal view differs from the collective view; although this does not prevent members from legitimately expressing their individual or representative organisations’ view on council policy decisions, on the condition that they do not purport to represent the view of the board.)

Review of Board

18. The board will be reviewed on delivery of the Auckland Plan, and thereafter, every three years.

Policy for selection and replacement of Auckland City Centre Advisory Board members

Selection of new or replacement Board members

Industry representatives

· As elected representatives appointed to the Auckland City Centre Advisory Board have authority to appoint other members.

· A list of suitable industry bodies will be identified from the sectors/groups listed in the Auckland City Centre Advisory Board Terms of Reference, utilising the Auckland City Centre Advisory Board members knowledge, influence and wider professional networks and in conjunction with the Manager City Transformation Projects

· An Auckland City Centre Advisory Board member will then approach the representative organisation for nomination a suitable representative candidate

· The candidate should demonstrate the qualities outlined in the terms of reference

· Once a suitable candidate is nominated by the representative organisation, the person is then formally invited by letter to participate in the Auckland City Centre Advisory Board

· Acceptance should also be by formal letter.

Auckland Council political representatives

· A report is written to Council that recommends appointment of elected representatives to the Auckland City Centre Advisory Board, once delegation for Auckland City Centre Advisory Board are known.

Resignations

Industry representatives

When a representative ends their term of office (or resigns) from the industry or professional organisation:

· Formal letter of resignation received by the Chair of the Auckland City Centre Advisory Board

· One month notice should be provided

· Chair of Auckland City Centre Advisory Board to table the resignation at the next Auckland City Centre Board meeting

· A formal response/letter to be sent the resigning Auckland City Centre Advisory Board member

· The selection for new or replacement members is then followed.

Budget Committee

05 November 2014

Increasing Business Improvement District (BID) rates to recover BID support costs

File No.: CP2014/24982

Purpose

1. This report recommends that the Auckland Region Business Improvement District (BID) Policy and BID targeted rates be amended to provide for the cost of support provided to the BIDs by the council to be funded by the BID targeted rates.

Executive summary

2. There are currently 48 BIDs in the Auckland region for which the council will collect $14,518,560 in targeted rates in 2014/2015 to spend on projects they have determined. A BID is only established where a majority of the businesses in the area vote in support.

3. The costs of the support provided to the BIDs under the BID programme are $860,000, 70 per cent of the total programme cost of $1.2 million for the 2014-2015 financial year. These are presently funded from general rates.

4. The benefits of the BID programme and support provided to BIDs accrue to the member businesses. Staff recommend that these costs be recovered from the targeted rates levied on BIDs as follows:

· a fixed charge of $2000 for business improvement districts with annual targeted rate revenue of less than $100,000 per annum

· a fixed charge of $5000 for business improvement districts with annual targeted rate revenue in excess of $100,000 per annum

· remainder of the costs allocated based on capital value of the business improvement districts

5. This option shares the costs across the BIDs recognizing the additional effort required to support smaller BIDs by the BID Partnership team. On the other hand the larger BIDs while more self-sufficient due to their scale, are actively involved in and benefit from wider council programmes. This will add on average 6 per cent to the revenue to be raised from the targeted rate.

Recommendation/s

That for the purposes of developing the draft Long-term Plan 2015-25 for consultation, the Budget Committee adopt the proposed changes to the Auckland Region Business Improvement Districts Policy and Business Improvement District targeted rates as set out below:

a) agree that 70% of the cost to support the business improvement district programme be recovered from business improvement districts via the existing business improvement district targeted rates and that the costs be allocated to each Business Improvement District according to the formula below:

i. $2,000 for business improvement districts (BIDs) with annual targeted rate revenue of less than $100,000 per annum

ii. $5,000 for business improvement districts (BIDs) with annual targeted rate revenue in excess of $100,000 per annum

iii. remainder of the costs allocated based on capital value of the business improvement districts.

Background

Auckland region BID Programme

6. Under the BID Partnership Programme, $14,518,560 will be collected through the BID targeted rate and paid out to the BIDs for the 2014/15 financial year. The targeted rate revenue received by the BIDs ranges between $7,017 to over $4,450,000. Key facts about the BID programme are:

· 48 BIDs

· More than 25,000 businesses

· 17,233 properties

· Capital value over $24 billion

· $187 million general rates in 2014/15.

7. BID activities include business development, networking, training, branding, marketing and promotion, local improvement initiatives, business events, strategic planning, website development and advocacy.

8. All BIDs have signed Partnering Agreements with Auckland Council and have agreed to abide by the Auckland Region Business Improvement District Policy. The policy sets the criteria for establishment of a new BID, BID operating parameters and reporting requirements.

9. BIDs are currently holding 2014 Annual General Meetings (AGM’s) where they will set a draft budget for the 2015-2016 financial year. The council levies a rate on the BID members to fund their agreed budget. Any change to the amount sought under the BID targeted rate will impact on their 2015-2016 budgets, potentially requiring additional meetings to be held.

Council support to the BID Programme

10. The costs of the BID Programme were $1.2 million for the 2014-2015 financial year. This was funded by Auckland Council from general rates. Approximately 70% of the BID Partnership team’s time is spent on services to BIDs including; liaison, facilitation and promotion of best practice. The remaining 30% of the time is spent on servicing local boards, assisting with planning (for example Local Economic Development Action Plans, spatial planning, Place Audits) and pre-BID establishment investigations.

Comments

11. Staff recommend that 70 per cent of the costs of support provided to BIDs under the BID Partnership Programme be funded by the BIDs via a targeted rate. This will provide a cost saving of $860,000. The targeted rate should be structured as follows:

· a fixed charge of $2,000 for business improvement districts with annual targeted rate revenue of less than $100,000 per annum

· a fixed charge of $5,000 for business improvement districts with annual targeted rate revenue in excess of $100,000 per annum

· remainder of the costs allocated based on the capital value of the business improvement districts.

12. Staff will continue to review the costs of providing support to BIDs so that the service meets the needs of the participants and delivers value for money.

Benefits of the BID programme and appropriate cost recovery

13. While the prosperity of local businesses serves the interest of the entire region the benefits of the BID Partnership Programme primarily accrue to local businesses within the Business Improvement Districts (BIDs). BIDs are only formed when a majority of the relevant businesses agree which implies they consider the benefits to them exceed the costs. While the beneficiaries can be clearly defined it is difficult to quantify the exact benefits received by individual members.

14. While staff consider that the benefits of the programme and hence the costs should accrue to the member businesses this may create affordability issues. Consideration was given to a range of other cost recovery levels and it was determined that a recovery of 70 per cent represented the appropriate balance between affordability and benefits. The remaining 30 per cent of the costs is related to the programme but driven by governance and management demands from within the organisation.

15. A 70 per cent cost recovery will increase the funding requirement for BIDs by around 6 per cent; the actual change will vary for individual BIDs and members. The modelling for each cost recovery option along with the alternative methods for allocating this between BIDs is set out in Attachment A.

Allocation of costs between BIDs

16. A combined fixed cost and capital value allocation provides the best reflection of the relative effort required to support the BIDs. It also spreads the costs in a way that provides for a more manageable level of change. Smaller BIDs require a degree of support not related to their size given they aren’t large enough to have sufficient internal expertise to address all the issues they face. On the other hand the larger BIDs due to their scale are actively involved in and benefit from wider council programmes. There is often more Auckland Council/local board activity in the areas of the larger BIDs. Examples of initiatives relevant to two of the largest BIDs are the draft Integrated Business Precinct Plan, East Tamaki Business Precinct Plan and the City Centre Master Plan.

Impacts

17. Allocation by the combined fixed and variable charge raises the total target rate by more than 10% for five BIDs. These are:

· 2 very small BIDs with low membership and revenue (Mangere East Village, Torbay)

· 3 large BIDs with high revenue and/or capital value (Uptown, North Harbour and Greater East Tamaki).

18. The two small BIDs above collect, $7,017 and $16,002 targeted rate revenue respectively. This is far less than the $50,000 required under the Auckland Region Business Improvement District policy. These BIDs may need to purchase services from alternative suppliers, including other BIDs, or seek to amalgamate with larger BIDs.

19. The three largest BIDs, Heart of the City, North Harbour and Great East Tamaki will face charges of $194,000, $69,000 and $103,000 respectively.

Alternatives

20. Staff also considered two alternative options for the allocation of the costs across the BIDs:

· equal payment by each BID of $18,000

· allocation to each BID based on their share of the capital value of total BID properties.

21. An equal payment presents affordability issues for the smaller BIDs with over half the BIDs facing increases over 10 per cent. It also isn’t fair reflection of the effort required to support the larger BIDs. Conversely allocating the costs on a capital value basis places too much of the costs on the larger BIDs.

Consideration

Local board views and implications

22. The BID Partnership Programme is regional in nature and there is overall benefit to the region from a strong partnership with the business sector. However, impacts of any change to cost recovery will be felt by individual BIDs operating within local board areas.

23. Local boards have been consulted as part of the LTP workshops, with presentations from CPO managers on the impact of savings proposed as part of the Mayors Proposal on department’s ability to deliver on Locally Driven Initiatives (LDI).

Māori impact statement

24. Council does not hold information on the ethnicity of business owners. The impact on Maori businesses will be similar to the impact on other businesses.

25. The independent Māori Statutory Board has two members on the Budget Committee who will consider the Mayor’s Proposal on financial/rating policies including options for setting the BID targeted rates.

Significance

26. The recommendations in this report are not significant. However, BID targeted rates must be included in the Funding Impact Statement and will therefore be consulted on as part of the LTP process. Staff will write to BIDs advising them of the proposed changes.

Implementation

27. Implementation issues have been addressed in the report.

Attachments

No.	Title	Page
a View	BID analysis	101

Signatories

Author

Janet Schofield - Business Area Planning Manager

Authorisers

Roger Blakeley - Chief Planning Officer

Matthew Walker - Manager Financial Plan Policy and Budgeting

Kevin Ramsay - Chief Financial Officer

Budget Committee

05 November 2014

Harmonisation and increases to social housing rents

File No.: CP2014/25326

Purpose

1. This report recommends harmonisation of social housing rents based on 30% of tenants’ gross income.

Mayoral summary and recommendations

2. During the Annual Plan 2014/15 process we considered a report on the levels of rental for our social housing. There were a wide range of rents being charged by the legacy councils and some differences in the levels of service. At that time we agreed to consult with the tenants on a 5% increase in the rental (which had not been reviewed for several years) while also signalling a wider review at the time of the LTP.

3. This is always a difficult issue to tackle, but we do need to be conscious of ratepayers (including elderly people on pensions) subsidising our tenants.

4. The staff report canvasses a number of options and recommends an approach based on 30% of gross income – in line with our housing affordability benchmark in the Auckland Plan.

5. This will result in a number of tenants facing increases although some will get decreases. However, I am also conscious of the fact that for those tenants facing increase that:

· it is proposed that the increase be phased in by capping any increase to $15 per week;

· the government funded accommodation supplement will become available to many of these tenants.

6. The additional revenue generated will assist us to ensure that an adequate renewal programme is funded so that we can maintain our social housing stock to an appropriate level – much of it is quite rundown.

7. On that basis I am prepared to support the officer recommendations:

Recommendations

8. That for the purposes of developing the draft LTP 2015-25 for consultation, the Budget Committee adopt the proposed changes to social housing rentals as set out below:

a) the rent on the council’s social housing units be set at 30 per cent of tenants’ pre-tax income

b) for any given year, changes to annual rents (including increases and decreases) resulting from a) above be capped at $780 per unit (equivalent to $15 cap on weekly rents).

Executive summary

9. The council owns social housing units in five legacy council areas with rents based on six different polices varying from $52 to $221 per week. Rents had not increased for between three and six years prior to the application of a region wide 5 per cent increase for the 2014/15 year. The cost of the service excluding depreciation is $4.8 million and current revenue $6.5 million. The value of the ratepayers’ subsidy, foregone revenue, is $12 million or on average $170 per tenant per week based on the market rental for the units.

10. Staff have considered four options as basis for setting uniform rentals:

1. 30 per cent of pre-tax income (housing affordability benchmark in Auckland Plan)

2. 70 per cent of market (equivalent to non-government social housing providers)

3. 25 per cent of after-tax income (equivalent to Housing New Zealand)

4. status quo.

11. Staff recommend the option 1 because all tenants would be paying rent below the housing affordability benchmark referenced in the Auckland Plan. This option would also provide an extra $2.4 million of revenue. The proposed policy reduces the cost to ratepayers whilst maintaining a rent level comparable to Housing New Zealand and affordable to tenants. It is also broadly consistent with the intent of the policies of the legacy councils.

12. The other options either result in too many tenants facing major rental increases (option 2), leave rents disparate across the region (option 4), or under-utilise the government funded Accommodation Supplement by imposing effective rent increases to tenants but generating no additional revenue to the council (option 3).

13. Staff recommend that tenants be transitioned to their new rentals by capping the change in rent in any one year to no more than a $15 per week, either up or down. This would reduce the additional revenue under option 1 to $787,000 for 2015/2016.

14. Staff also recommend that rents under option 1 above be increased each year in line with changes in tenants income. As 99.7 per cent of tenants are on government benefits, adjustments would take place when these are changed.

15. The recommended option with transition will generate additional revenue for the council in the order of $787,000, $1.5 million and $2.1 million in 2015/2016, 2016/2017 and 2017/2018 respectively. This is higher than the $1 million per annum proposed in the Mayor’s budget proposal. The additional monies could be used to fund a more extensive renewals budget for the housing stock.

Recommendation

That for the purposes of developing the draft LTP 2015-25 for consultation, the Budget Committee adopt the proposed changes to social housing rentals as set out below:

a) the rent on the council’s social housing units be set at 30 per cent of tenants’ pre- tax income

b) for any given year, changes to annual rents (including increases and decreases) resulting from a) above be capped at $780 per unit (equivalent to $15 cap on weekly rents).

Comments

Background

16. Auckland Council owns 1,412 housing units which provide affordable long-term accommodation for eligible older people in Auckland. The rents charged by the council on these units vary across the region based on legacy council policies. Table 1 below summarises the legacy policies and the rents charged in each of the former council areas.

17. Central government provides Accommodation Supplement (AS) to eligible tenants whose rents exceed 25 per cent of their after-tax income. This is administered by Work and Income. The rent figures in the Table 1 are “net” rents – the actual amount tenants pay after the AS is factored in (where applicable). It is estimated that a third of Auckland Council’s tenants are currently receiving AS.^{^[3]}

Table 1 Current rent levels based on legacy policies (after AS is factored in)

Former council	Legacy policy	Last adjustment of rent prior to 14/15	Single tenant		Couple		No of occupied units ⁴⁾
Former council	Legacy policy	Last adjustment of rent prior to 14/15	Ave rent	Range	Ave rent	Range	No of occupied units ⁴⁾
MCC	· 25% net Superannuation	2010/11	$83	$62-$116	$124	$99-$128	492
PDC	· 27% market	2008/09	$80	$60-$106	$136	$103-$144	71
FDC	· 60% market	2010/11	$95	$70-$98	$149	$149-$149	98
NSCC	· =< 30% net Superannuation	2007/08	$69	$56-$103	$117	$90-$130	422
WCC	· =< 25% gross income; · 70-80% market and =< 30% gross ³⁾	2010/11	$95	$52-$221	$135	$90-$152	262
Region			$82	$52-$221	$124	$90-$152	1,345

Notes to the table:

1) All rent figures in the table are based on the tenants’ effective level of rents after the AS is factored in (where applicable).

2) There are no social housing units in the former districts of Auckland City Council and Rodney District Council.

3) In 2008, the former Waitakere City Council adjusted its rent charges to 70-80% of market capped at 30% of gross income for tenants moving in after 1 April 2008.

4) At the time information was extracted for modelling, 67 units were vacant.

18. Prior to 2014/2015, rents for the Auckland Council owned units had remained static for between three and six years. In 2014/2015, the council introduced a uniform 5 per cent rent increase across all units as a nominal catchup on council cost inflation. However rents in real terms still decreased during the period (see Table 2 below).

Table 2 Rent adjustments in comparison with cumulative CPI change

	Previous rent adjustment (prior to 14/15)	Cumulative change in CPI between previous adjustment and 14/15	Rent adjustment during the period	Difference between CPI and actual rent adjustment	Average rent reduction in real terms
MCC	2010/11	6.2%	5%	-1.2%	$1.0
PDC	2008/09	12.6%	5%	-7.6%	$6.2
FDC	2010/11	6.2%	5%	-1.2%	$1.1
NSCC	2007/08	16.4%	5%	-11.4%	$8.0
WCC	2010/11	6.2%	5%	-1.2%	$1.1

19. Currently the council incurs $4.8 million in operating expenditure excluding depreciation for social housing. This excludes the cost of capital. The total rent revenue received is $6.5 million. The full market rental on these units is estimated at around $18-$19 million,^{^[4]} indicating a ratepayer subsidy in the form of foregone revenue is in the region of $12 million. The average weekly subsidy per tenant is $170. This is probably similar to benefit to tenants of Housing New Zealand properties.

20. Most of the housing units were built in the 1960s and 1970s. 872 units (62 per cent of the total stock) have been upgraded since 2006. The balance of the stock (predominantly in the north) is generally in poor condition in terms of size and amenity.

21. In accordance with earlier resolutions of the committee, staff will develop a consistent set of eligibility criteria to guide the evaluation of tenancy applications. The operational criteria will consider factors such as age, housing need, connection to place, and independence. Staff will report on this to the Community Development and Safety Committee by May 2015.

Discussion

22. Staff have identified four options for harmonising the rents. These are assessed in terms of revenue to council, affordability and change. No consideration has been given to the varying quality of the units as the council is gradually planning to upgrade this and the level of subsidy proposed under any of the options more than compensates for lower amenity.

· Option 1 – 30 per cent of pre-tax income

Rent for each tenant will be set at 30 per cent of their pre-tax income. This is consistent with the benchmark for affordable housing referenced in the Auckland Plan.^{^[5]}

· Option 2 – 70 per cent of market rent

Tenants will be charged 70 per cent of the estimated market rent.^{^[6]} This is the approach typically used by the non-government social housing providers.

· Option 3 – 25 per cent of after-tax income

Rent will be set at:

- 25 per cent of tenants’ after-tax income up to the amount of national superannuation, plus

- 50 per cent of tenants’ after-tax income over and above the amount of national superannuation (if applicable).

This mirrors the approach currently used by Housing New Zealand. The vast majority of the council’s tenants will be paying just 25 per cent of their after-tax income because their income is no more than national superannuation.

· Option 4 – status quo

Rents will be set based on legacy council policies which vary across the region (see table 1). Note that this will result in slightly different rents from the current levels as rents had not been adjusted for between three and six years prior to 2014/2015.

23. Table 3 below summarises the impact of each of the options on the council as well as the tenants. The estimated impact of the options on tenants in each of the legacy council areas is detailed in Attachment A.

Table 3 impact of options

Option number	1	2	3	4
Description	30% Gross	70% Market	25% Net	Status quo
Rental revenue for council	$8.9m	$ 13.0m	$6.5m	$6.6m
Additional revenue (relative to the current revenue)	$2.4m	$6.5m	$0m	$0.15m
Ratepayer subsidy	$9.6m	$5.6m	$12.1m	$12m
Average rent increase	20%	40%	8%	1.7%
AS utilised ³⁾	$1.7m	$4.5m	$0	$0.49m
Ave weekly rent	$104	$121	$93	$88
Ave rent as a % of ave net income	27.9%	32.5%	25.1%	23.6%
Ave rent as a % of ave gross income	24.4%	28.4%	21.9%	20.6%
No of tenants facing change:
Decrease btw $15-$50	5	3	43	0
Decrease btw $0- $15	182	3	469	0
Increase btw $0- $15	335	186	463	1,345
Increase btw $15-$30	581	394	365	0
Increase btw $30-$50	238	421	2	0
Increase btw $50-$75	4	338	3	0
Total (excl. vacant units)	1,345	1,345	1,345	1,345

Notes to the table:

1) All figures are based on the assumption that all tenants (except those in employment) with rent in excess of 25 per cent of their pre-tax income are eligible for AS.

2) All rent-related figures are based on net rent i.e. after the AS is factored in (where applicable).

3) Amount of AS available to tenants if all of them are eligible.

24. Note that all rent figures are based on the assumption that all tenants with rent in excess of 25 per cent of their after-tax income are eligible for AS. It is likely that some of these tenants will not be eligible for AS due to factors such as bank deposits exceeding the limit set by Work and Income. Staff do not have access to information on tenants’ cash assets (hence their eligibility for AS) and therefore cannot produce a precise estimate of the effective level of rent tenants will pay. However the analysis should provide some indication as to the degree of change facing tenants under each of the options.

Option 1 – 30 per cent of pre-tax income

25. No tenants will be paying rents in excess of the 30 per cent affordability limit set out in the Auckland Plan. This option generates $2.4 million additional revenue. Assessing the current service on basis that the council will maintain its ownership of the units staff note that while the benefits are private it provides social benefits by offering affordable housing to a vulnerable group and minimising change they may struggle to afford. The proposed policy reduces the cost to ratepayers whilst maintaining a rent level comparable to Housing New Zealand and affordable to tenants. It is also broadly consistent with the intent of the policies of the legacy councils.

Option 2 – 70 percent of market rent

26. Under this option 16 per cent of the tenants will be paying rent above 30 per cent of pre-tax income, even if all of them are eligible for AS. This option generates $6.5 million extra revenue. As rent is not directly linked to income affordability varies widely across tenants.

Option 3 – 25 per cent of after-tax income

27. Under this option most tenants will be paying 22 per cent of their pre-tax income (or 25 per cent of their after-tax income) as rent. However, under this option it is likely that no tenants will be eligible for AS. Therefore, while there is no additional revenue to the council the net impact on tenants (effective rents after AS is factored in) will increase by 8 per cent on average due to the loss of AS currently available to a third of the tenants.

Option 4 – status quo

28. Under this option tenants will face the least change. However rents and rent setting methodologies will remain disparate across the region. This option generates $150,000 additional revenue.

Transition

29. Staff recommend that any harmonisation of rents is managed by transition except for option 4 where no tenant will have an increase of more than $5 per week. Staff have considered two transition scenarios:

1. spread the increases and decreases evenly over five years

2. cap increases and decreases to weekly rents at $15 per year.

30. Staff recommend the second scenario. Under this scenario changes in rents are kept at manageable levels. This will move 99 per cent of the tenants onto harmonised rentals within five years. The first scenario would add administrative complexity without adding any benefit because some rental changes are very small. The cap on rent changes would be based on rent before the AS. Calculating the cap after the AS would add administrative complexity and be difficult for tenants to understand.

31. The proposed transition would lower the additional revenue for options 1 and 2 to the levels noted below (for 2015/2016):

· 30 per cent gross income – $787,000

· 70 per cent market – $1 million

32. Under option 3 the proposed transition would increase revenue by $190,000 in 2015/2016 but this would be roughly offset by revenue reductions over the next six years.

Annual rent adjustment

33. Staff propose that the following approaches be adopted for adjusting social housing rents annually.

· Options 1 and 3: rents adjusted in line with changes to tenants’ income. (99.7 per cent of tenants are on some form of government benefit so rents will change in line with changes to their benefit)

· Option 2: market rent set annually using the most recent bond lodgment data^{^[7]} for the lower quartile of rents. (This is in line with the general approach used by the non-government providers)

· Option 4: rents adjusted based on legacy council policies.

34. For tenants who are under the transition arrangement discussed earlier (e.g. whose rent increases are capped), their full rents will be adjusted using the above-mentioned approaches but will not be applied until their transition (capped) rents have caught up with the level of their full rents. An example is given in Attachment B.

Consultation

35. If the council decides to propose a change to social housing rentals targeted consultation will be conducted in November and December 2014 with all tenants and interest groups such as Auckland Council Seniors Panel and Age Concern. This will prepare those groups for the formal consultation in January and February 2015.

Consideration

Local board views and implications

36. Social housing is a regional activity. The governing body has decision making authority for setting the rents. However, local boards are engaged in the review process:

· two representatives of each local board were invited to a briefing on the financial policies, including social housing, for the Long-term Plan 2015-2025 on 18 August 2014

· a further briefing was provided on 20 October, to which all local board members were invited

· local boards considered their views on financial policy issues at workshops in September and October and during their formal October meetings. Key themes are noted below.

37. There were mixed views on the proposal for social housing rentals.

· there was general support for harmonisation with the exception of one board that did not support any form of increase

· some boards supported the recommended proposal of rentals based on 30% of gross income and others supported 25% of net income

· many boards expressed concern about maintaining affordable rental prices.

38. A more detailed report of local board views is in this agenda along with the full text of their resolutions on these issues.

Maori impact statement

39. An anonymous survey conducted in 2013/2014 identified approximately 10 per cent of the council tenants as Maori. They were unevenly distributed across different areas:

Area	North Shore	Waitakere	Manukau, Franklin and Papakura combined	Region
Distribution of Maori tenants	6%	15%	79%	100%

40. Staff do not hold information on the ethnicity of individual tenants, therefore cannot identify the specific impact on Maori tenants when analysing the options. However, since four out of five Maori tenants are in the south (Manukau, Franklin and Papakura), the impact on Maori tenants overall will link strongly to the impact on tenants in the south. Please refer to the estimated impact of the options on each of the legacy council areas, which is outlined in Attachment A.

41. The Independent Māori Statutory Board has two members on the Budget Committee who will consider the Mayor’s Proposal on financial/rating policies including options for setting the social housing rents.

Seniors Advisory Panel

42. Staff consulted with the Seniors Advisory Panel in September. Panel members noted that any impacts on current tenants should be considered.

Significance

43. The recommendations in this report are not significant. These changes will be consulted on alongside the LTP to ensure that not only those Aucklanders who are directly affected may consider the issue. Staff will organise meetings with and write to directly affected parties advising them of the proposed changes.

Implementation

44. Implementation issues have been addressed in the report.

Attachments

No.	Title	Page
a View	Impact of options on tenants by former council area	111
b View	Illustrative example of transition & annual adjustment	113

Signatories

Authors

Eric Wen - Advisor

Kat Teirney – Manager Community Occupancy

Andrew Duncan - Manager Financial Policy

Authorisers

Kevin Marriott - Manager Community Facilities

Matthew Walker - Manager Financial Plan Policy and Budgeting

Kevin Ramsay - Chief Financial Officer

Budget Committee

05 November 2014

Attachment 1 Impact of options on tenants by former council area

All figures in the tables are based on the assumption that all tenants (except those in employment) with rent in excess of 25 per cent of their pre-tax income are eligible for Accommodation Supplement (AS).

Option 1 – 30% of pre-tax income (recommended option)

No of tenants facing change		Franklin	Manukau	North Shore	Papakura	Waitakere	Sub-total
Decrease	Btw $15-$30	0	0	0	0	5	5
Decrease	Btw $0-$15	10	45	13	8	106	182
Increase	Btw $0-$15	88	60	35	8	144	335
	Btw $15-$30	0	387	137	55	2	581
	Btw $30-$50	0	0	237	0	1	238
	Btw $50-$75	0	0	0	0	4	4
Total		98	492	422	71	262	1,345

Option 2 – 70% of market rent

No of tenants facing change		Franklin	Manukau	North Shore	Papakura	Waitakere	Sub-total
Decrease	Btw $30-$50	0	0	0	0	1	1
	Btw $15-$30	0	0	0	0	2	2
	Btw $0-$15	1	0	0	0	2	3
Increase	Btw $0-$15	97	2	0	11	76	186
	Btw $15-$30	0	163	30	34	167	394
	Btw $30-$50	0	327	55	26	13	421
	Btw $50-$75	0	0	337	0	1	338
Total		98	492	422	71	262	1,345

Option 3 – 25% of after-tax income

No of tenants facing change		Franklin	Manukau	North Shore	Papakura	Waitakere	Sub-total
Decrease	Btw $15-$30	9	1	1	1	31	43
Decrease	Btw $0-$15	89	104	44	9	223	469
Increase	Btw $0-$15	0	387	14	61	1	463
	Btw $15-$30	0	0	363	0	2	365
	Btw $30-$50	0	0	0	0	2	2
	Btw $50-$75	0	0	0	0	3	3
Total		98	492	422	71	262	1,345

Option 4 – Status quo (current rent plus inflation)

No of tenants facing change		Franklin	Manukau	North Shore	Papakura	Waitakere	Sub-total
Increase	Btw $0-$15	98	492	422	71	262	1,345
Total		98	492	422	71	262	1,345

Budget Committee

05 November 2014

Harmonisation of fees and charges for street trading, cemeteries and other services

File No.: CP2014/25413

Purpose

1. This report recommends the harmonisation of the fees and charges for street trading, cemeteries and a number of other services.

Mayoral summary and recommendations

2. Since the first Auckland Council LTP in 2012 we have progressively been harmonising our approach to the funding of our activities from the diverse policies of the legacy councils.

3. Most of the major funding policies have been addressed but there are still some areas that need to be brought together in one pricing structure. This report addresses the areas of street trading licences, cemetery fees, event and other fees – and also introduces a proposal for rental fees for street trading across Auckland.

Street trading licences and rental fees

4. I am supportive of harmonising the licence fees and, after some reflection, the introduction of rental for the use of public assets for street trading. Ratepayers pay the cost of maintaining public assets and, while the commercial use of these assets adds to the vibrancy of our urban centres, it is only fair that those having use of these assets make a contribution to the ratepayers costs.

Cemeteries

5. The staff proposal is to both harmonise the fees and achieve cost recovery through the pricing structure. I believe that is appropriate and that the ratepayer should not be subsidising these activities.

Event fees

6. I am supportive of the staff proposal to have an Auckland wide fee structure based on cost recovery for commercial and private events, 50% cost recovery for community events and full subsidy for community events funded by the council.

Other fees

7. There is a proposal to increase our resource and building consent fees in line with our costs and other metropolitan centres, which I believe is appropriate. The proposed changes to other by-law and licensing fees are also supported.

8. On that basis I support the staff recommendations as follows:

Recommendations

9. That for the purposes of developing the draft LTP 2015-25 for consultation, the Budget Committee adopt changes to the fees and charges for street trading, cemeteries and a number of other services as set out below:

a) harmonised licensing fees for street trading across Auckland as included in Attachment C

b) harmonised full rental fees for street trading across Auckland as included in Attachment C

c) harmonised cemetery fees across Auckland as included in Attachment D

d) harmonised event permit fees across Auckland as included in Table 10 of this report

e) harmonised fees for the remainder of the environmental health and licensing services as included in Attachment E

f) an average 4-5 per cent increase to fees and charges for building control, resource consents and property information as included in Attachment F.

Executive summary

Street trading licenses

10. Staff recommend adoption of harmonised licensing fees and a full rental for use of public space for street trading, with increases greater than $1,000 for a single licence to be phased in over two years. This would increase revenue by $1.2 million in 2015/2016.

11. A harmonised street trading bylaw is to be introduced from 1 July 2015. Staff propose a harmonised set of licensing fees to recover the costs of the activity. These will range from $60 for distributing promotional materials to $360 for outdoor dining.

12. Staff also propose the introduction of rentals to:

· compensate for the reduction in public access

· provide a return for the ratepayer from their asset

· ensure that businesses trading on private property are not unfairly disadvantaged.

13. Rentals will be set in three tiers (with the city centre as tier one) for outdoor dining and drinking, mobile vendors and temporary stalls. Staff have developed two options for rentals. The first recovers the full rental and the second is at a 25 per cent discount to reflect the goal of developing vibrant town centres. Both options lead to change with the full rental option leading to increases up to $1,300 for the average outdoor dining area in Orewa. For around 80 to 85 per cent of the licensees across Auckland the fee increases would be within $1,000 per annum. Staff do not consider these changes to present affordability issues as they are around $12 per week for commercial operations (after adjustments for tax deductibility and GST claim-back). For those facing increases greater than $1,000 a two year transition is recommended.

Cemeteries

14. Staff recommend that the fees are adopted as proposed. This would increase revenue.

15. The council has yet to harmonise fees for:

· burial or ash plots

· interment (digging)

· related facilities hire (chapels, function lounges etc.)

16. As the benefit of these services is private, the fees should be harmonised based on market prices or to recover costs where the service is contracted out. This will ensure that:

· the private sector is not disadvantaged by the council’s ability to subsidise user charges through rates

· return on ratepayers’ investment is optimized and consistent.

17. This will lead to some increase in fees with the largest being on Waiheke and Great Barrier Island ranging from $1,096 to $1,876 where interments have, in effect, been subsidised. Staff do not consider that this will raise affordability issues as the cost are one-off and the government provides funeral grants of up to $1,998 to cover burial, plot, and cremation charges. In some cases customers can avoid the high charges (e.g. weekend and late fees) by changing the day or time of their service.

Event fees and other fees

18. Staff also recommend the harmonisation of event permit fees and fees for a range of environmental health and licensing activities. All of the proposed fees are based on recovering the council’s costs of delivering the licensing related services except for:

· the permit fees for community events which will be set on a partial cost recovery basis to recognise the public benefit these events generate

· the permit fees for council (including local board) funded events which will continue to be free of charge

· the fire permit fee which will be set at zero to encourage engagement with the council.

Recommendations

That for the purposes of developing the draft LTP 2015-25 for consultation, the Budget Committee adopt changes to the fees and charges for street trading, cemeteries and a number of other services as set out below:

a) harmonised licensing fees for street trading across Auckland as included in Attachment C

b) harmonised full rental fees for street trading across Auckland as included in Attachment C

c) harmonised cemetery fees across Auckland as included in Attachment D

d) harmonised event permit fees across Auckland as included in Table 10 of this report

e) harmonised fees for the remainder of the environmental health and licensing services as included in Attachment E

f) an average 4-5 per cent increase to fees and charges for building control, resource consents and property information as included in Attachment F.

Comments

19. The council has 3,000 fees divided up into 21 categories. Of these, seven categories of fees have yet to be harmonised. This report advises on the harmonisation of fees in four of the categories. The harmonisation of social housing and solid waste charges is discuss in other reports on this agenda. The harmonisation of filming permit fees will be discussed in a report to the Regional Strategy and Policy Committee in December.

Fees for street trading licences

20. Staff recommend the proposed street trading licence fees and the full rental option be adopted for consultation.

21. Under the full rental option, the proposed licence fees and rents for street trading are estimated to generate an additional $1.4 million in revenue. The proposed transition would however reduce this to $1.2 million in 2015/2016.

22. The council regulates street trading activities under seven legacy council bylaws. This includes managing around 800 licences for outdoor dining and drinking, 600 licences for mobile vendors and temporary stalls, and 33 licences for market operators. Current licensing fees vary across Auckland based on legacy council policies.

23. Auckland Council is scheduled to adopt a new Trading and Events in Public Places Bylaw effective from 1 July 2015 that will replace the relevant legacy bylaws.

Proposed licence fees

24. Staff propose that harmonised licensing fees be adopted to recover 100 per cent of the cost of the service on the basis that the benefit accrues primarily to the licensee. The proposed licence fees are set out in the table below. The variance between the fees reflects the degree of effort required to perform the various regulatory functions. Performance on streets (including busking) will require a licence under the proposed bylaw but a zero fee is proposed on ground of minimal impact, affordability, and contribution to city vibrancy.

Table 1 Proposed fees for street trading licensing

Licence type	Proposed annual fee for 2015/2016 (incl. GST)
Outdoor dining and drinking	$360
Mobile vendor or temporary stall	$300
Market operator	$360
Distribution of promotional material	$60
Street performance	$0

Note: under the proposed bylaw, outdoor display of goods no longer requires a licence provided the display complies with the relevant rules and regulations. No fee is proposed.

Proposed rental charges

25. The licence allows the exclusive use of certain public space by the licensee for a period of time permitted by council bylaws and policies. The occupation of the public space (e.g. for dining on the footpath) benefits the licensee while reducing accessibility for the general public.

26. Staff consider that the licensee should pay a rental charge in addition to the license fee for the use of the space to:

· compensate for the reduction in public access

· provide a return for the ratepayer from their asset

· ensure that businesses trading on private property are not unfairly disadvantaged.

27. Other councils in New Zealand (Wellington, Christchurch and Hamilton), Australia and the UK charge for occupancy of public spaces in addition to licence fees. These rents are usually assessed based on the value of the location. While the former councils did not explicitly identify a separate rental charge, the fee structure of some implied the presence of a rental component.

28. The council is committed to building vibrant town centres in Auckland and street trading activities contribute to the vibrancy of town centres. There is therefore a case for not charging a full rental in order to encourage outdoor trading activities.

29. Staff have developed two options:

· full rental

· 25 per cent discount to full rental to reflect vitality benefit to town centres.

30. Full rental is calculated using the most comparable price information available (see table below). The rent levels for outdoor dining and drinking include a 40 per cent discount to the estimated commercial yield reflecting the greater restrictions on this activity in comparison to trading in privately rented premises.^{^[8]} While the land value and economic desirability of locations will vary materially within the proposed tiers the proposed rentals do not justify the administrative cost of applying a more refined rental calculation. Further details with regard to the estimation of commercial land value is provided in Attachment A.

Table 2 Basis for calculating rental charges

Licence type	Basis for determining the rental charge
Outdoor dining and drinking	Estimated yield on commercial land
Mobile vendor or temporary stall	Council parking charges
Market operator	Estimated yield on commercial land
Distribution of promotional material	Estimated yield on commercial land

31. The rentals would be applied:

· uniformly for market operators and the distribution of promotional material^{^[9]}

· in three tiers for outdoor dining and drinking and mobile vendors or temporary stalls.

32. The proposed tiers are based on:

· demand measured by the volume of street trading activities

· affordability measured by the level of deprivation in the area (to the extent that higher deprivation in the customer base will translate into lower demand for space as rent rises).

Table 3 Proposed tiers for setting street trading rents

Tier 1	City centre
Tier 2	Orewa, Browns Bay, Takapuna, Birkenhead, Devonport, Ponsonby, Herne Bay, Freemans Bay, Mission Bay, Grey Lynn, Newmarket, Ellerslie, Howick, Epsom, Kingsland, Milford, Mount Eden, Newton, Parnell, Remuera, St Heliers
Tier 3	All other suburbs

33. The proposed rental charges for the options are shown in Table 4 and Table 5 below, respectively. Street trading activities occupying less than one square metre of public space will not attract a rent. This saves the council from having to charge minor businesses (such as newspaper sellers) where administrative costs can easily outweigh rental revenue.

Table 4 Full rental

Licence type	Proposed rent for 2015/16 (incl. GST)
Licence type	Tier 1	Tier 2	Tier 3
Outdoor dining and drinking	$140/m²/yr	$85/m²/yr	$20/m²/yr
Mobile vendor or temporary stall	$0.30/m²/hr	$0.20/m²/hr	$0.05/m²/hr
Market operator	$0.35/m²/day
Distribution of promotional material	$75/distribution stand/yr

Table 5 25 per cent discount

Licence type	Proposed rent for 2015/16 (incl. GST)
Licence type	Tier 1	Tier 2	Tier 3
Outdoor dining and drinking	105/m²/yr	$65/m²/yr	$15/m²/yr
Mobile vendor or temporary stall (area over 1m²)	$0.23/m²/hr	$0.15/m²/hr	$0.04/m²/hr
Market operator	$0.25/m²/day
Distribution of promotional material	$55/distribution stand/yr

Changes facing licensees

34. The current fee structure varies widely between former council areas and does not explicitly distinguish between licensing fees and rental charges. The actual amount of fees licensees pay depends on both the fees set and the size of the area or hours of trading. Consequently, direct comparison between the current and the proposed fees is difficult. Tables 6 and 7 below provides an indication of the change facing licensees by comparing current and proposed charges for an average-size outdoor dining area within each former council district.

Table 6 Comparison between current and proposed charges associated with outdoor dining/drinking licences – full rental option

Current category	New category	Ave outdoor area (m2)	Current fee	Proposed fee (incl. both licence and rent)	Ave change	Current volume
City centre	Tier 1	12.7	$902	$1,998	$1,096	188
ACC (excl. city centre)	Tier 2	8.3	$591	$983	$392	369
ACC (excl. city centre)	Tier 3	8.3	$591	$507	-$85	369
NSCC	Tier 2	7.4	$544	$904	$360	120
NSCC	Tier 3	7.4	$544	$488	-$56	120
MCC	Tier 2	11.0	$198	$1,210	$1,012	25
MCC	Tier 3	11.0	$198	$560	$362	25
RDC	Tier 2	12.4	$0	$1,329	$1,329	45
RDC	Tier 3	12.4	$0	$588	$588	45
WCC	Tier 3	8.8	$262	$516	$254	22
PDC	Tier 3	4.0	$161	$420	$259	6
FDC	Tier 3	6.5	$0	$470	$470	19

Table 7 Comparison between current and proposed charges associated with outdoor dining/drinking licences – full rental less 25% discount

Current category	New category	Ave outdoor area (m²)	Current fee	Proposed fee (incl. both licence and rent)	Ave change	Current volume
City centre	Tier 1	12.7	$902	$1,589	$687	188
ACC (excl. city centre)	Tier 2	8.3	$591	$836	$245	369
ACC (excl. city centre)	Tier 3	8.3	$591	$470	-$121	369
NSCC	Tier 2	7.4	$544	$776	$232	120
NSCC	Tier 3	7.4	$544	$456	-$88	120
MCC	Tier 2	11.0	$198	$1,010	$812	25
MCC	Tier 3	11.0	$198	$510	$312	25
RDC	Tier 2	12.4	$0	$1,101	$1,101	45
RDC	Tier 3	12.4	$0	$531	$531	45
WCC	Tier 3	8.8	$262	$477	$215	22
PDC	Tier 3	4.0	$161	$405	$244	6
FDC	Tier 3	6.5	$0	$443	$443	19

35. Both options lead to change and in some cases the change is significant. For example, the full rental option could result in a $1,300 increase for the average trader in the tier 2 area of Rodney (Orewa).

36. The current fee structure for mobile vendor and temporary stall licences is extremely complicated. There is no easy way to summarise the changes facing licensees. The following table provides an indication of the changes through selected examples.

Table 8 Comparison between current and proposed charges for a mobile vendor of 6m² (a typical coffee cart) operating 20 hours a week for 52 weeks a year

	Current fee	Proposed fee (incl. both licence and rent)
City centre (tier 1)	$1,132	$2,172
Mt Eden (tier 2)	$1,132	$1,548
Glenfield (teir 3)	$247	$612

37. The harmonisation of licence fees and rents for street trading activities are expected to cause significant fee changes to some businesses. Staff consider that in most cases the changes will be manageable. It is estimated that under the full rental option 80 to 85 per cent of the licensees will have an increase of no more than $1,000 (with licence fee and rent combined). Staff do not consider these changes to present affordability issue as it is within $12 per week for commercial operations (after adjustments for tax deductibility and GST claim-back). For those facing increases greater than $1,000, it is proposed that their changes be phased in over two years to help manage the impact.

38. In some tier three areas the average fees will decrease under both options.

Comparison with other councils

39. Comparing with charges set by other New Zealand councils who do charge for occupancy of public spaces, the combined licensing and full rental charges proposed in this report for street trading are:

· Tier 1 (city centre) at the high end of the charges

· Tier 2 generally comparable with other councils

· Tier 3 at the low end of the charges

40. Staff identified a few samples of street trading locations and investigated the commercial rents charged on adjacent private premises. The full rental charges proposed in this report are in all cases significantly lower than the commercial rents. More detailed information is included in Attachment B.

41. The proposed changes to street tranding fees and rents are included in Attachment C.

Fees for cemetery and cremation services

42. Auckland Council operates 30 cemeteries conducting an average of 1,600 burials, 700 ash interments and 3,000 cremations every year. This accounts for approximately 60 per cent of the burials and cremations in the region. The balance is provided for by private cemeteries and crematoriums which compete with the council.

43. The council has harmonised most of the fees it charges for cremation services. Fees for the following key services still vary across the region, some of which are not recovering costs:

· burial or ash plots

· interment (digging)

· related facilities hire (chapels, function lounges etc.)

44. Staff recommend that the fees be harmonised based on market prices or to recover costs where the service is contracted out. This will ensure that:

· the private sector is not disadvantaged by the council’s ability to subsidise user charges through rates

· return on ratepayers’ investment is maximised.

45. Due to significant misalignment between existing fees and costs in certain areas, the proposal involves considerable changes to some fees. The proposed schedule of fees and charges are detailed in Attachment D. The table below provides a summary view of the changes for the key services.

Table 9 Summary of proposed changes to fees for plots, interment and facilities hire

Service category	Summary of proposed changes
Burial plot	· Significant changes to some fees · Largest increases in dollar terms are for adult plot in Onetangi Cemetery ($572) and Manukau Memorial Garden ($536) · Largest decreases in dollar terms are for child plot in Helensville, Wainui and Puhoi cemeteries ($1,837)
Ash plot	· 55-84% ($268-$353) increases in Waikaraka and Onetangi cemeteries · 47% ($533) decrease in Rodney Urban Cemetery · All other changes between 14% decrease and 19% increase (in dollar terms all changes are below $170)
Interment (digging)	· Significant changes (up to $1,350) to most fees
Cremation	· Most fees already harmonised · Only change is cremation for 5-12 year-old in Manukau Memorial Garden where fee will drop by $224
Chapel and function lounge hire	· Moderate to significant changes (from 42% decrease to 75% increase) · In dollar terms no increase exceeds $100 · Largest decrease is $141

46. The biggest proposed increases in dollar terms are for the burial interment fees in the two cemeteries below:

· Tryphena Cemetery of Great Barrier Island (proposed increase $1,350)

· Onetangi Cemetery of Waiheke (proposed increase $1,096 - $1,174)

47. The council provides the interment service through contractors. The proposed fees pass on the actual costs of interment. Most of the existing interment fees are heavily subsidized by the Council.

48. Staff do not consider that any transition is necessary. The fees are not an on-going cost. For customers for whom affordability may be an issue Work and Income provides funeral grants of up to $1,998 to cover burial, plot, and cremation charges.

49. Staff also recommend harmonising all other miscellaneous related fees (weekend service, late booking, ash scattering, disinterment, DVD recording, etc). The proposed miscellaneous fees are included in Attachment D. Some proposed changes are significant due to the level of subsidy in existing fees. The biggest proposed increases in dollar terms are in Onetangi Cemetery of Waiheke:

· disinterment fee (proposed increase $1,876)

· reinterment fee (proposed increase $1,123)

50. None of these fees are for essential services. Instead they are provided for the special needs of a limited number of customers. In most cases (e.g. weekend service, late booking) customers can avoid paying these fees by changing the time or day of their service or choosing an alternative service.

51. Fees in some cemeteries are proposed to decrease. The most significant decreases are for the disinterment service in Rodney Cemetery, Howick Cemetery, North Shore Memorial Park, Waikumete Cemetery and Manukau Memorial Garden where the fee is proposed to drop by $1,452.

52. The proposed changes are estimated to increase total revenue by approximately $600,000.

53. Staff recommend the proposed fees for cemetery and cremation services be adopted for consultation.

Fees for event permits

54. Auckland Council issues around 2,200 event permits (excluding events in regional parks) each year under the relevant legacy council bylaws. The permitting scheme ensures that the potential nuisance, obstruction or hazard associated with events held in public places are minimised. In addition to this regulatory service, the council also provides facilitation support for events.^{^[10]}

55. Out of the 2,200 permits issued across the region, approximately 500 are for commercial or private events, 400 are for community events funded by the council (mostly local boards), and 1,300 are for community events funded by community groups.

56. The cost of delivering the regulatory and facilitation services is approximately $1.1 million per annum. Currently permit fees are only charged in the former Auckland City Council area.

57. The legacy bylaws are to be replaced by the new Trading and Events in Public Places Bylaw effective from 1 July 2015. A region-wide regulatory approach will be introduced accordingly.

58. Staff propose a set of standardised fees be applied to commercial and private events across the region to recover 100 per cent of the regulatory and facilitation costs. This reflects the primarily private benefit event applicants receive. Staff also propose a set of standardised permit fees be applied to community events to recover 50 per cent of the regulatory cost. This recognises the public benefit these events generate. Alternatively, permits may be issued to community events free of charge. This is however not recommended because the council incurs costs in providing the service and charging a fee assists customers in appreciating the costs and making informed decisions about using council services. The exceptions are community events funded by the council (including local boards). It is proposed the permit fees for these be waived. Applying the fees to council funded events would not generate additional revenue for the council but would incur transaction costs and GST charges without adding any benefit of transparency.

59. The proposed permit fees are shown in Table 10 below.

Table 10 Proposed fees for event permits

Impact category	Proposed permit fee for 2015/16 (incl. GST)
Impact category	Commercial and private event	Community event funded by council	Other community event
Cost recovered	Regulatory + facilitation	None	50% of regulatory
High (over 5,000 people)	$1,100	$0	330
Medium (501-4,999 people)	$600	$0	180
Low (under 500 people)	$300	$0	90

60. Under each event category, permits will be classed under one of three impact categories and fees are set accordingly. The permit fee under each impact category is calculated based on the average number of officer hours required to carry out the permitting function under the bylaw.

61. For commercial and private events held in the former Auckland City Council area, the proposed fees are comparable with the existing charges. For commercial and private events held in other areas of the region, this would be a new fee. Staff do not consider it to present a significant affordability issue as most private events are of low impact and will attract only a small fee and most high impact commercial events are ticketed and have the ability to pass on the cost to customers. For the non-council funded community events across the region, they too would face a new fee. However given the level of the discounted fees ($90-$330) the cost is considered reasonable.

62. The proposed fees are expected to generate $310,000 of additional revenue.

63. Staff recommend the proposed event permit fees be adopted for consultation.

Filming permit fees

64. ATEED issues around 500 permits each year for filming in public places and collects approximately $150,000 in fees for these. Current fees and charges are based on legacy council practices and so vary across Auckland. These are being reviewed with the aim of harmonising filming charges across the region. Staff will report to the Regional Strategy and Policy Committee in December on options and proposals. Any changes will be consulted on as part of the amendments to the Auckland Film Protocol early next year. The harmonisation of filming charges is not expected to have an material impact on budgets but will over time benefit Auckland through making Auckland a more attractive place for filming.

Other environmental health and licensing fees

65. In addition to street trading, event permit and filming permit, there are over 100 other regulatory fees (divided in 23 sub-categories) that are yet to be standardised. These include:

a) fees covered by legacy bylaws that are no longer considered necessary (4 sub-categories)

b) fees set for regulatory activities covered by either government legislation or legacy bylaws currently under review (16 sub-categories)

c) administration or re-inspection fees associated with the relevant licences (3 sub-categories).

66. Fees under a) above will be allowed to lapse on 31 October 2015 along with the relevant bylaws. Staff propose that the balance of the fees above be standardised and be set at levels to recover 100 per cent of the cost of delivering the service except for fire permit fee which will be set at zero to encourage engagement with the council. The detailed fee schedules are included in Attachment E.

67. The proposed licence fees range between zero and $420 (including GST) based largely on officer time and degree of expertise required.

68. As an indication, the table below shows the proposed changes in the key fee categories. All licence fees will be charged annually.

Table 11 Selected examples of proposed changes to other environmental health and licensing fees

Licence category	Range of current licence fee (incl. GST)	Proposed licence fee (incl. GST)
Funeral directors	$263-$448	$240
Offensive trades	$0-$536	$420
Camping grounds	$148-$536	$300
Fire permit	$0-$99	$0
Commercial sex premises	$272-$708	$240

69. Staff recommend the proposed fees for the remainder of licensing services be adopted for consultation.

Fees for building control, resource consents and property information

70. Staff propose a small increase to building control and resource consents fees to better align revenue with recoverable cost (cost that the council can legally recover). This includes:

· a 4-5 per cent increase to all hourly rates (which makes up over 90 per cent of the council’s revenue from these activities)

· an average 4-5 per cent increase to other regulatory fees with the exception of the building consent authority accreditation fee which is increasing form 20c per $1000 value of work to 30c per $1000 value of work to reflect the additional costs of compliance.

71. The charges for LIM services and property file CDs are also proposed to increase by between 4 and 5 per cent. The rest of the property information fees will remain unchanged.

72. The changes proposed above will increase council revenue by $4.5 million. The impact on consent customers will be a 4-5% increase on current charges . The proposed charges will make our rates comparable with other NZ metropolitan councils.

73. The proposed changes will not require amendment to the council’s funding policy for these services.

74. The schedule of proposed changes to building control, resource consents and property information fees is included in Attachment F.

Consideration

Local board views and implications

75. The fees discussed in this report are regional fees and accordingly the decisions proposed herein are regional.

76. Two representatives of each local board were invited to a briefing on the financial policies, including fees and charges, for the Long-term Plan 2015-2025 on 18 August 2014. A further briefing was provided on 20 October, to which all local board members were invited. Local boards considered their views on financial policy issues at workshops in September and October and during their formal October meetings. Key themes are noted below.

77. The Local Boards broadly support the proposals in this report. However, local boards suggest that the:

· third tier of street trading licensing fees receive a higher reduction of 50% and that there are case by case assessments

· the Environmental and health and licensing fees should not become a cost barrier in lower socio-economic areas.

78. A more detailed report of local board views is in this agenda along with the full text of their resolutions on these issues.

Maori impact statement

79. Council does not hold information on the ethnicity of customers or licensees. The impact on Maori will be similar to the impact on other residents and ratepayers.

80. The Independent Māori Statutory Board has two members on the Budget Committee who will consider the Mayor’s Proposal on financial/rating policies including options for setting the social housing rents.

Significance

81. The recommendations in this report are not significant. They will be consulted on alongside the LTP, to ensure that not only those Aucklanders who are directly affected may consider the issue. Staff will write to directly affected parties advising them of the proposed changes.

Implementation

82. Implementation issues have been addressed in the report.

Attachments

No.	Title	Page
a View	Estimation of commercial land value	127
b View	Private rents on a selected sample of adjacent properties	129
c View	Proposed changes to street trading fees and rents	131
d View	Proposed changes to cemetery fees	135
e View	Proposed changes to other environmental health and licensing fees	143
f View	Proposed changes to building control, resource consents and property information fees	151

Signatories

Authors

Eric Wen - Advisor

Max Wilde - Manager Bylaws and Compliance

Andrew Duncan - Manager Financial Policy

Juliette Jones - Manager - Event Facilitation

Catherine Moore - Manager Auckland Cemeteries

Authorisers

Mace Ward - Acting Manager - Parks, Sports and Recreation

Graham Bodman - Manager - Community Development, Arts and Culture

Matthew Walker - Manager Financial Plan Policy and Budgeting

Kevin Ramsay - Chief Financial Officer

Budget Committee

05 November 2014

Attachment C Proposed changes to street trading fees and rents

Table 1 Proposed fees for street trading licences for 2015/2016

Licence type	Proposed annual fee (incl. GST)
Outdoor dining and drinking	$360
Mobile vendor or temporary stall	$300
Market operator	$360
Distribution of promotional material	$60
Street performance	$0

Note: under the proposed bylaw, outdoor display of goods no longer requires a licence provided the display complies with the relevant rules and regulations. No fee is proposed.

Table 2 Proposed rents for street trading for 2015/2016

Licence type	Proposed rent (incl. GST)
Licence type	Tier 1 *	Tier 2 *	Tier 3 *
Outdoor dining and drinking	$140/m²/year	$85/m²/year	$20/m²/year
Mobile vendor or temporary stall	$0.30/m²/hour	$0.20/m²/hour	$0.05/m²/hour
Market operator	$0.35/m²/day
Distribution of promotional material	$75/distributor/year

* All suburbs in Auckland are categorised under three tiers as set out in the table below:

Tier 1	City centre
Tier 2	Orewa, Browns Bay, Takapuna, Birkenhead, Devonport, Ponsonby, Herne Bay, Freemans Bay, Mission Bay, Grey Lynn, Newmarket, Ellerslie, Howick, Epsom, Kingsland, Milford, Mount Eden, Newton, Parnell, Remuera, St Heliers
Tier 3	All other suburbs

Note to Tables 1 and 2:

· The proposed licence fees and rents apply to street trading activities across Auckland.

· Street trading activities occupying less than one square metre or placing no furniture or equipment in the public space will not attract a rent. Street trading activities occupying more than one square metre and with furniture or equipment placed in the public space will be charged based on the full trading area.

Table 3 to 9 below provide a comparison between the existing fees and the proposed fees in each sub-category.

Table 3 Outdoor dining and drinking areas

Former council area	Current fee description	Current fee $ (incl. GST)	Proposed fee 2015/2016 $ (incl. GST)
ACC	Street trading: On-street outdoor seating (per m2 of site coverage)	71/m2	360 (plus 140/m2 or 85/m2 or 20/m2)
FDC	Trading in public places (6 months)	84	360 (plus 20/m2)
FDC	Trading in public places (12 months)	152	360 (plus 20/m2)
MCC	Trading in public places	198	360 (plus 85m2 or 20/m2)
NSCC	Outdoor cafes in public places: Application fee	181	0
NSCC	Outdoor cafes in public places: Annual licence fee	49/m2	360 (plus 85/m2 or 20/m2)
PDC	Other fees - Street dining approval per year	161	360 (plus 20/m2)
RDC	Any… licence not specifically covered by a fee under any chapter of the bylaw or any other enactment	121	360 (plus 85/m2 or 20/m2)
WCC	Other fees & charges: Outdoor cafe areas	262	360 (plus 20/m2)

Table 4 Mobile vendors

Former council area	Current fee description	Current fee $ (incl. GST)	Proposed fee 2015/2016 $ (incl. GST)
ACC	Street trading: Mobile vendors	566/ 6 months	300 (plus 0.30/m2/hr or 0.20/m2/hr or 0.05/m2/hr)
FDC	Other licences/registration: Mobile food vehicle	162	300 (plus 0.05/m2/hr)
MCC	Permits – trading in public places	198	300 (plus 0.20/m2 or 0.05/m2/hr)
NSCC	Vendor - Mobile Shop Trading Permit	247	300 (plus 0.20/m2/hr or 0.05/m2/hr
PDC	Statute based licenses - Mobile Shops/Roadside Traders (other charitable or community organisations)	102/ first month	300 (plus 0.05/m2/hr)
PDC	Statute based licenses - Mobile Shops/Roadside Traders (other charitable or community organisations)	54/ subsequent months	300 (plus 0.05/m2/hr)
RDC	Trading in public places - licence fee: Mobile or travelling shop	270	300 (plus 0.20/m2/hr or 0.05/m2/hr
RDC	Trading in public places - licence fee: Hawker	148	0
WCC	Other fees and charges - Mobile Shop Licence	139	300 (plus 0.05/m2/hr)
WCC	Other fees and charges - Inspection fee if food sold - mobile shops	158	300 (plus 0.05/m2/hr)
WCC	Other fees and charges - Hawkers Licence	41	0

Table 5 Temporary stalls

Former council area	Current fee description	Current fee $ (incl. GST)	Proposed fee 2015/2016 $ (incl. GST)
ACC	Street trading - Flower sellers	401/ month	300 (plus 0.30/m2/hr or 0.20/m2/hr or 0.05/m2/hr)
ACC	Street trading - Newspapers - per seller, per site, per annum	126	300 (plus 0.30/m2/hr or 0.20/m2/hr or 0.05/m2/hr)
ACC	Street trading: Pie carts, Newmarket	1114/ month	300 (plus 0.20/m2/hr)
ACC	Street trading: Pie carts, Commerce Street - per month	1334/ month	300 (plus 0.30/m2/hr)
ACC	Street trading: Strawberry and vegetable vendors	400/ month	300 (plus 0.30/m2/hr or 0.20/m2/hr or 0.05/m2/hr)
FDC	Trading in public places (6 months)	84	300 (plus 0.05/m2/hr)
FDC	Trading in public places (12 months)	152	300 (plus 0.05/m2/hr)
MCC	Permits – markets and stalls	345	300 (plus 0.20/m2 or 0.05/m2/hr)
NSCC	Vendor – mobile shop	247	300 (plus 0.20/m2/hr or 0.05/m2/hr)
PDC	Bylaw licences: Non-food stalls (other than charitable or community organisations)	49/event	300 (plus 0.05/m2/hr)
PDC	Bylaw licences: Non-food stalls (other than charitable or community organisations) - annual	319	300 (plus 0.05/m2/hr)

Table 6 Market operators

Former council area	Current fee description	Current fee $ (incl. GST)	Proposed fee 2015/2016 $ (incl. GST)
ACC	Food stalls: Market organisers licence (blanket licence held by market organiser covers stalls selling fruit, vegetables and uncooked eggs only)	164	360 (plus 0.35/m2/day)
FDC	Trading in public places (6 months)	84	360 (plus 0.35/m2/day)
FDC	Trading in public places (12 months)	152	360 (plus 0.35/m2/day)
MCC	Permits – markets and stalls	345	360 (plus 0.35/m2/day)
NSCC	(not specifically scheduled)	-	360 (plus 0.35/m2/day)
PDC	Other fees – street trading approval per year	161	360 (plus 0.35/m2/day)
RDC	Trading in public places - licence fee: Commercial open air market (includes single stall) - annual permit	270	360 (plus 0.35/m2/day)
RDC	Trading in public places - licence fee: Commercial open air market (includes single stall) - daily (or part thereof) permit	83	360 (plus 0.35/m2/day)
WCC	Markets licence – excluding any individual vendor stall licences	189	360 (plus 0.35/m2/day)

Table 7 Street performance, pavement art and busking

Former council area	Current fee description	Current fee $ (incl. GST)	Proposed fee 2015/2016 $ (incl. GST)
ACC	No existing fee	-	0
FDC	No existing fee	-	0
MCC	No existing fee	-	0
NSCC	No existing fee	-	0
PDC	No existing fee	-	0
RDC	No existing fee	-	0
WCC	Buskers licence	189	0

Table 8 Outdoor display of goods

Former council area	Current fee description	Current fee $ (incl. GST)	Proposed fee 2015/2016 $ (incl. GST)
ACC	Street trading - Display of goods	148/ month	0
FDC	No existing fee	-	0
MCC	No existing fee	-	0
NSCC	Miscellaneous licenses: Display of goods exemption - application Fee	181	0
NSCC	Miscellaneous licenses: Display of goods exemption - m2	49	0
PDC	No existing fee	-	0
RDC	Occupation fee: business occupying public footpath – Display of goods	83	0
WCC	No existing fee	-	0

Table 9 Other street trading fees

Former council area	Current fee description	Current fee $ (incl. GST)	Proposed fee 2015/2016 $ (incl. GST)
ACC	Street trading - Recycling bins - per annum	345	0
ACC	Street trading - Sports services vendors	236/month	300 (plus 0.30/m2/hr or 0.20/m2/hr or 0.05/m2/hr)
ACC	Street trading - Street Trading Application Fee	181	0
PDC	Other fees - Street trading approval per year	161	300 or 360 (plus or 20/m2, or 0,05/m2/hr, or 0.35m2/day)
PDC	Application for dispensation from sandwich board, street trading & street trading requirements	493	180

Chairperson	Mayor Len Brown, JP
Deputy Chairperson	Cr Penny Webster
Members	Cr Anae Arthur Anae	Cr Calum Penrose
	Cr Cameron Brewer	Cr Dick Quax
	Cr Dr Cathy Casey	Cr Sharon Stewart, QSM
	Cr Bill Cashmore	Member David Taipari
	Cr Ross Clow	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

Cultural		Economic		Social		Post Treaty Settlements		Maori effectiveness
Mana whenua capability and capacity i.e. Forum, RMA training etc.	3.91	Waka Strategy & Cultural Centre	3.0 22.12	Affordable Housing: Provider Forum	0.75 0.22	Post -Treaty settlements team	1.0	Leaders programme	0.25
Marae development	30.7	Signature Event	10.0	Whanau well-being – focus on most vulnerable	0.5	Maunga Authority resourcing	1.8	Internship programme	2.0
Papakainga development	35.3	Maori business analysis and sector strategies	1.7	Maori sport and recreation plan	0.5			Innovation Fund	0.5
Matauranga Maori including mana whenua planning documents	1.08	Raise educational outcomes	0.4	Mataawaka networks and engagement	1.5
Cultural landscapes	0.0	Land & property development opportunities	0.4
Maori cultural heritage ring fence	0.0	Trade training – leverage contractor relationships	0.1
Te reo Maori	0.0	Haere whakamua – social enterprise	2.2
		Maori economic growth forum	1.7
Total $m	71		41.6		3.5		2.8		2.75

Cultural		Economic			Social			Post-Treaty Settlements			Maori Effectiveness
Marae development	38.95	Major signature event		21.23	Maori contribution to decision-making	12.22		Co-governance & co-management arrangements	31.16
Papakainga development	22.5	2 FTEs ATEED		2.0
Iwi management plans	2.85	Key Sector strategies		1.35
Environmental projects	28.9	Maori sculpture and symposium		7.36
Sites of significance	7.56
Te reo Maori	4.17
Total	104.9		31.94				12.22			31.16

Cultural	Economic	Social	Post Treaty Settlements	Maori effectiveness
Mana Whenua capability and capacity to respond to the council	Economic Development	Affordable Housing	Resourcing for Maunga Authority	IS solution for information to and from mana whenua
Marae capability and development, including establishing own	Support for waka programme, activities, and facility	Maori youth resilience	Enable settlement outcomes
Papakainga development	Internships in partnership with mana whenua and universities	Child poverty
Water quality	Impacts of development	Maternal and ante-natal care
Cultural landscapes and sites of significance work	Impact of SHAs on mana whenua rates – ability to live in Auckland	Address domestic violence
Mana Whenua involvement in environmental monitoring	Partnering with universities to leverage outcomes (particularly environmental)
Maori identity across the entire region	Commercial development opportunities
Mana Whenua strategic planning

Prioritised transformational activities
	Social	Economic	Cultural	Māori effectiveness	Post Treaty Settlements
New funding sought $96m	Mataawaka networks and engagement $1.5m	Waka Strategy $1m capex $2m opex	Mana whenua participation in natural resource management* $5m	Māori responsiveness leadership programme $0.25m	Maunga Authority resourcing $1.8m
		Economic development activities* $7m	Marae development $22.5m capex $8.2 opex	Innovation fund $0.5m	Post Treaty Settlement Team $1m
		Signature Event $10m	Papakāinga development $22.5m capex $12.8m opex
To be reprioritised	Whānau well-being -most vulnerable $0.5m	Raise educational outcomes $0.4m	Cultural landscapes $0.0	Internship programme – Māori focus $2m
		Land & property development opportunities $0.4	Māori cultural heritage fund ringfence $0.0
		Māori economic growth forum $1.5m
Current work programme	Māori sport and recreation plan		Marae development $5m
		Trade training – leveraging contractor relationships	Sites of significance $7.6	Ngā kete akoranga – learning and development $1m
		Haere whakamua – social enterprise	Capacity contracts $9.5m
			Te reo Māori

IMSB business case priority	Proposed draft LTP priority	Proposed delivery option	Proposed timeline for scoping and funding	Additional funding proposed
Regional marae development	Yes – one of Mayor’s top 3 priorities	· $10m over LTP life for Marae and Papakainga development · Auckland Council group approach to utilise staff expertise and reduce burden of planning and consenting costs · Potential dedicated capex fund, ring fenced within Watercare and Auckland Transport for roading and water infrastructure for marae development and papakainga development. · Facilitation of joint agency investors forum with other partners to maximise available support	Marae needs analysis is underway and will be completed in Dec 2014. Results will inform development of detailed work programme. Council staff will work closely with the IMSB secretariat staff over the next month to allocate the proposed additional funding to specific priorities prior to adoption of the LTP consultation document by the Governing Body on 18 December 2014.	Yes – proposed dedicated budget including provision within Watercare and Auckland Transport for network infrastructure for marae and papakainga development.
Regional papakāinga development	Yes – one of Mayor’s top 3 priorities
Major signature Māori event	Yes – one of Mayor’s top 3 priorities.	To be developed and delivered by ATEED. ATEED have confirmed $5m over LTP lifetime for this.	Explore increasing funding envelope for Māori signature event to level of council investment in Diwali and the Lantern Festival Explore potential for CDAC budget of $1.4m for Matariki community events and $1.8m for Waitangi Day events to form part of the budget to create a Māori calendar of events. Council staff will work closely with the IMSB secretariat staff over the next month to allocate the proposed additional funding to specific priorities prior to adoption of the LTP consultation document by the Governing Body on 18 December 2014.	Yes to leverage off a signature event to create a Māori calendar of events.
Increasing the visibility of Auckland’s Māori identity	Yes – one of Mayor’s top 3 priorities.
Sites of significance to Mana Whenua work programme	Yes- led by Heritage team.	Recommend ring fence currently agreed funding of $7.7m over LTP lifetime.	The work plan for the first year and proposal for the longer term have been discussed with IMSB secretariat staff and been agreed to by iwi.	No
Increasing Māori engagement in key economic growth activities	Yes- needs further discussion regarding approach	IMSB key recommendation is to establish 2 FTE Economic Growth Specialists positions at ATEED to ensure growth of Maori business. Council group proposals focus on supporting Maori businesses to engage with international events, trade delegations and foreign direct investment; working at marae level to grow social enterprise; Maori business analysis and Maori economic development forum.	Council staff will work closely with the IMSB secretariat staff over the next month to allocate the proposed additional funding to specific priorities prior to adoption of the LTP consultation document by the Governing Body on 18 December 2014.	Yes to ensure sufficient support and focus for growth of Maori business.
Developing iwi management plans and environmental projects	Yes	Needs further discussion regarding approach	Council staff will work closely with the IMSB secretariat staff over the next month to allocate the proposed additional funding to specific priorities prior to adoption of the LTP consultation document by the Governing Body on 18 December 2014.	No
Māori contribution to decision-making	Yes	Increase support for development of Regional Mana Whenua Forum to ensure regular opportunities for leadership and officer level discussion.	Preliminary work to establish this Forum is underway. Council staff will work closely with the IMSB secretariat staff over the next month to allocate the proposed additional funding to specific priorities prior to adoption of the LTP consultation document by the Governing Body on 18 December 2014	Yes – to ensure sufficient resourcing to ensure Forum functions optimally.
Co-governance and co-management arrangements	Yes	The Mayor’s LTP proposal identifies funding for council to meet its co-governance obligations through the LTP.	A separate report to this committee discusses the estimated cost to meet council’s co-governance obligations through the LTP.	See separate report.
Promoting te reo Māori	Yes	IMSB priorities are proposed Te Reo in libraries programme; dual language signage and public transport announcements in Te Reo. Renewals programme and city transformation project creates potential opportunities to implement.	Council staff will work closely with the IMSB secretariat staff over the next month to allocate the proposed additional funding to specific priorities prior to adoption of the LTP consultation document by the Governing Body on 18 December 2014.	Yes to address remaining components.

	2014/2015	2015/16	2016/17	2017/18	2018/19	2019/20
Weekly superannuation (pre-tax)	$421.76	$430.2	$439.66	$450.65	$461.01	$469.31
Annual increase to superannuation		2%	2.20%	2.50%	2.30%	1.80%
Full weekly rent (30% of weekly pre-tax superannuation)	$126.53	$129.06	$131.9	$135.2	$138.3	$140.79
Current weekly rent	$90
Current weekly rent plus $15 cap		$105	$120	$135	$150	$165
Weekly rent Jane actually pays	$90	$105	$120	$135	$138.3	$140.79
Year in which capped rent catches up with full rent					x

Location	Full rental option (incl. GST)	25% discount option (incl. GST)
Tier 1	$140/m²/year	$105/m²/year
Tier 2	$85/m²/year	$65/m²/year
Tier 3	$20/m²/year	$15/m²/year

Name of premises	Address	Est. private indoor rentals per m² per annum	Proposed rent for outdoor dining/drinking per m² per annum	Proposed tier
Mexico	164 Ponsonby Rd, Ponsonby	$600-$700	$85	2
Jolly Good	41A Mangere Town Centre	$230-$325	$20	3
Stafford Rd Wine Bar	141 Queen St, Northcode	$150-$250	$20	3
Café Alba	31 Bowen St, Waiuku	$125-$175	$20	3
Organic Ice Cream Café	Matakana Vallue Rd, Matakana	$200-$250	$20	3
Columbus Café	4 Pioneer St, Henderson	$175-$250	$20	3
Café Ceo	258 Onehunga Mall, Onehunga	$250-$350	$20	3

Item	Cemetery		Current fee (incl. GST)	Proposed fee 2015/16 (incl. GST)
Cremation Adult	All		$570	$570
Cremation Child	NSMP &WC	0-1yr	$187	$187
	NSMP &WC	1-12 yr	$346	$346
	MMG	0-1 yr	$187	$187
		1-5 yr