Agenda of Budget Committee

Budget Committee

07 May 2015

Long-term Plan 2015-2025 - Overview to decision-making

File No.: CP2015/07295

Purpose

1. This report provides an overview of the process undertaken to consult and consider feedback to inform the Council’s next 10-year budget (the Long-term Plan 2015-2025 or LTP), the decisions now required and the next steps to finalise the plan.

Executive Summary

2. Between 23 January and 16 March 2015, Auckland Council undertook public consultation to inform its next 10-year budget using the special consultative procedure.

3. The consultation approach reflected recent changes in legislation that provide greater flexibility to enable the process to work better for the community and decision-makers, and established three broad channels of feedback (written, in-person and digital).

4. To support the consultation process, a significant public awareness raising campaign was undertaken over mid-January to mid-March. The level of awareness of the 10-year budget (LTP) across the Auckland population increased significantly over this period, from 34% in December 2014 to 54% in mid-March 2015 when the consultation period closed.

5. The volume of feedback received across the three broad channels was:

· 27,383 written submissions (including 203 late submissions) were received, providing over 260,000 feedback points

· 1,412 people attended a Have Your Say event, providing over 8,600 feedback points, and around 900 people attended local community events and provided over 1,600 feedback points

· 1,354 pieces of eligible feedback were provided through digital channels

6. All feedback was processed and coded into feedback points across a range of themes and topics. Staff with specific subject matter expertise then reviewed all feedback relevant to their area and distilled this into a set of 11 regional and 21 local ‘Summary of Feedback’ reports for consideration by elected members.

7. All Summary of Feedback reports are available on the Auckland Council website at http://www.aucklandcouncil.govt.nz/EN/planspoliciesprojects/plansstrategies/longtermplan2015/Pages/home.aspx. The submissions and feedback received will also be available on the council website by 30 April 2015.

8. This approach was designed to suit the size and scale of the Auckland Council consultation process and ensure decision-makers were well informed about the feedback received from Aucklanders on the 10-year budget.

9. In addition to collecting feedback on transport issues using the consultation process, an independent survey of 5,022 respondents was undertaken by Colmar Brunton on the key transport issues facing Auckland. The end to end survey process and final report on the survey results were peer-reviewed by the University of Auckland.

10. Prior to meeting today to make decisions, the Budget Committee held discussions with local boards and also held workshops to consider key matters for decision-making.

11. Decisions on the 10-year budget are now required in order for staff to finalise financial statements, progress local board agreements, finalise the long-term plan document and complete an audit process ahead of adoption of the final plan on 25 June 2015.

Recommendation/s

That the Budget Committee:

a) note that the decisions required to finalise the Long-term Plan 2015-2025 are set out in separate reports on today’s agenda.

Comments

Consultation to inform the 10-year budget

12. Between 23 January and 16 March 2015, Auckland Council undertook public consultation to inform its next 10-year budget (the Long-term Plan 2015-2025) using the special consultative procedure.

13. The consultation approach reflected recent changes in legislation that provide greater flexibility to enable the process to work better for the community and decision-makers.

14. Key elements of the consultation process undertaken are set out below.

· The Governing Body adopted a consultation document and supporting information on 18 December 2014 for consultation on the 10-year budget. The consultation document focused on the key issues facing Auckland and the proposals and options to address these issues. Developing a consultation document was required under the new legislation and aimed to make it easier for Aucklanders to understand and engage on the most important decisions being made by council. A summary of the documents and tools available to support consultation are set out in Attachment A.

· The public consultation period opened on 23 January 2015 and closed on 16 March 2015 – this longer consultation period provided more time for Aucklanders to provide feedback.

· A public awareness raising campaign was undertaken over mid-January to mid-March to encourage Aucklanders to participate in the consultation process. This included distributing a Summary document to all households promoting the consultation document and the shapeauckland website, as well as a significant campaign at both a regional and local level to raise awareness - across media channels (print, radio, television), engagement events, targeted stakeholder communications and social media.

· The level of awareness of the 10-year budget (LTP) across the Auckland population increased significantly over this period, from 34% in December 2014 to 54% in mid-March 2015 when the consultation period closed. An overview of the public awareness raising activity undertaken and key stats is provided in Attachment B.

· Three broad channels were used to collect feedback to make it easier for Aucklanders to get involved and feedback was collected across all channels at the same time.

i. Written feedback – this included a hard copy feedback form (distributed to Auckland households as part of a Summary document), an online feedback form and also any emails, letters, proformas or other written communications received.

ii. In person feedback – Events were held across Auckland (largely in the evenings and weekends) to provide an opportunity for Aucklanders to provide feedback in person to elected members. Two types of events were held:

o Have your say events - Traditional hearings were replaced with 37 public spoken interaction events called Have Your Say (HYS) events across the Auckland region from 14 February through to 16 March 2015. This included events for key stakeholders and also for specific communities (Maori, Ethnic, Pacific, Disability and Youth/Seniors). 1,412 Aucklanders attended the Have Your Say events and feedback was recorded and analysed alongside other channels.

o 40 local community feedback events were also held, which were attended by around 900 people. These events were led by local boards and focussed more on local issues.

iii. Digital feedback – Feedback was also collected for the first time through social media channels (facebook, twitter and blogs) using #LTP2015 and through an online chat event.

Independent Transport Survey

15. In addition to collecting feedback on transport issues using the consultation process an independent survey of 5,022 respondents was undertaken by Colmar Brunton on the key transport issues facing Auckland. The end to end survey process and final report on the survey results were peer-reviewed by the University of Auckland.

Consideration of feedback

16. Feedback was received across the three broad channels established for the consultation process and most feedback received covered a wide range of issues, providing multiple ‘feedback points’. In some cases, feedback points comment on more than one issue.

17. In summary:

· 27,383 written submissions (including 203 late submissions) were received, providing over 260,000 feedback points

· 1,412 people attended a Have Your Say event, providing over 8,600 feedback points, and around 900 people attended local community events and provided over 1,600 feedback points

· 1,354 pieces of eligible feedback were provided through digital channels.

18. Feedback was also received through events held with housing for older people tenants, empowered community workshops and from council advisory panels.

19. All feedback was processed and coded into feedback points across a range of themes and topics. Staff with specific subject matter expertise then reviewed all feedback relevant to their area and distilled this into a set of ‘Summary of Feedback’ reports for consideration by elected members.

20. 11 ‘Summary of Feedback’ reports were prepared to summarise the feedback received on regional topics and themes and these were considered by the Budget Committee between 20-22 April. As a set, these reports covered each of the key issues for consultation and all areas of council group activity. The results of the Colmar Brunton transport survey were considered alongside the consultation feedback on the key transport questions (refer to the Summary of Feedback report on Transport Choices).

21. In addition, 21 reports summarising the feedback relevant to each local board area were prepared and considered by local boards at meetings held between 15 – 23 April.

22. All Summary of Feedback reports are available on the Auckland Council website at http://www.aucklandcouncil.govt.nz/EN/planspoliciesprojects/plansstrategies/longtermplan2015/Pages/home.aspx. All submissions and feedback received will also be available on the council website by 30 April 2015.

23. This approach was designed to suit the size and scale of the Auckland Council consultation process and ensure decision-makers were well informed about the feedback received from Aucklanders on the 10-year budget.

24. Following the Budget Committee and Local Boards separately considering the feedback received, three days of discussions were held between local boards and the Budget Committee. These discussions provided an opportunity for local board views to be considered ahead of the Budget Committee making final decisions for the 10-year budget.

Decision-making

25. Since the draft 10-year budget was adopted, staff have reviewed and updated group budgets to better reflect the true cost of delivering the planned activities. Now, some key budget decisions are required, including:

· confirming (or not) service level changes consulted on in the draft

· decisions on transport spending and funding

· considering a range of new budget proposals and funding requests, including those from CCOs, council departments, submitters, local boards, the Independent Maori Statutory Board and co-governance entities.

26. The Mayoral Report for the LTP sets out the Mayor’s recommendations for budgets, rates and fees and charges. Staff reports on these areas are attached to the Mayor’s Report.

27. In addition, the Budget Committee will consider reports on local board advocacy, recommended amendments to policies, performance measures and targets, funding for the Independent Maori Statutory Board and the Maunga Authority and also the proposal to establish a new CCO (Development Auckland).

Consideration

Local Board views and implications

28. Information on local projects and priorities was included in the consultation material for the 10-year budget to inform the development of local board agreements for 2015/2016. During the consultation process, local boards held local community events to engage with their communities and a Have your say event was held in each local board area, which provided an opportunity for Aucklanders to provide feedback in person to local board members on local issues.

29. Reports summarising the feedback received relevant to each local board area were considered by each local board between 15-23 April and local board views were then shared with the Budget Committee during discussions on 24, 28 and 29 April.

30. A separate report on today’s agenda covers local board advocacy for the 10-year budget. Local board views are also considered in each of the relevant decision-making reports on today’s agenda.

31. Local boards will hold workshops following the budget decisions made today and then meet to agree final budgets and adopt local board agreements between 9-16 June.

Māori impact statement

32. In June 2014 the Finance and Performance Committee agreed to take a strategic top down approach to agreeing and prioritising activities that contribute to Māori outcomes through clarifying the council’s political direction on priority Māori transformational shift activities and associated budgets in the LTP.

33. The Māori transformational shift priorities included in the LTP consultation material included proposed funding for a Māori signature event, Māori capital projects (including marae development and papakāinga housing), Kaitiakitanga of Tāmaki Makaurau, a waka programme, whānau well being, Effectiveness for Maori, Treaty Settlements, Sites of significance and mataawaka contribution to council decision-making.

34. A tailored approach was followed to engage with Maori on the 10-year budget, including:

· Targeted communications to Maori communities, organisations and mana whenua (291)

· Maori awareness raising events

· 4 Māori ‘Have your say’ and 2 local community events

· A tailored video highlighting relevant aspects of the draft 10-year budget for Maori

· Maori specific press releases

· Interviews with maori media

· Te Reo Maori Summary document .

35. The Have your Say events were attended by 157 people, and in addition a specific event was held for mana whenua. Translators were available to support the Have your say events and to translate written submissions received. A summary of the feedback received is available as part of the ‘Summary of Feedback on the Governance and Support’ theme on the council website.

36. As directed by the Budget Committee on November 5, Council and IMSB secretariat staff have worked together to identify specific activities and budgets within overall budget envelopes that deliver on the Maori transformational shift.

Implementation

37. Decisions on the 10-year budget are required today in order for staff to:

· finalise financial statements to reflect decisions made today

· progress local board agreements – local boards will hold workshops in May and then meet between 9-16 June to agree local 10-year budgets and adopt local board agreements for 2015/2016

· finalise the long-term plan document for adoption following decisions made today; and

· complete an audit process ahead of adoption of the final plan on 25 June 2015.

38. A rates resolution will also be prepared for adoption at the 25 June Governing Body meeting, for consideration after the adoption of the LTP.

39. Following decisions made today relating to development contributions, the Development Contributions policy will also be updated for adoption on 25 June.

Attachments

No.	Title	Page
a View	Consultation documentation and tools	15
b View	Overview of public awareness raising activity to support consultation	17

Signatories

Author

Tanya Stocks - Programme Director

Authorisers

Matthew Walker – General Manager Financial Planning, Policy and Budgeting

Sue Tindal - Chief Financial Officer

Budget Committee

07 May 2015

Long-term Plan 2015-2025 – Draft Tūpuna Maunga Operational Plan 2015/16

File No.: CP2015/07500

Purpose

1. This report provides the necessary information to enable the Budget Committee to make a decision on the 10 year budget for the Draft Tūpuna Maunga Operational Plan 2015/16.

Executive Summary

2. The Mayor’s Long-term Plan proposal announced in August 2014 included a commitment to provide a reasonable level of funding / support to reflect the projected cost of co-governance entities.

3. The Ngā Mana Whenua o Tāmaki Makaurau Collective Redress Act 2014 (the Act) requires the Tūpuna Maunga o Tāmaki Makaurau Authority (Maunga Authority) and the council to agree an annual operational plan through the council’s Long Term Plan or Annual Plan Process.

4. The Draft Tūpuna Maunga Operational Plan 2015/16 was adopted through unanimous decision by the Maunga Authority at Hui 4 on 1 December 2014. It sets out a high level 10 year work programme with more detailed information for each maunga for the first three years of the Long-term Plan (that is, 2015/16, 2016/17 and 2017/18).

5. The draft Long-term Plan 2015-2025 proposed $45,671,879 capital funding over 10 years and $30,733,031 operating funding over 10 years for the Tūpuna Maunga under the Co-Governance Entities Theme. This funding is set at a regional level and deemed by the Maunga Authority as the minimum funding necessary to commence restoration and visitor management. The Proposed Net Operating Expenditure incorporated the funding from the Open Space and Volcanic Cones Targeted Rate Reserve ($2.5 million), which has been applied to fund activities over the first six years of the LTP 2015-2025.

6. Feedback was received from one organisation, 18 individuals representing 13 organisations and 24 members of the public.

7. The uniqueness and significance of the Tūpuna Maunga and submitters’ understanding of their spiritual, cultural, historic heritage, geological, landscape and recreation values was evident in the majority of submissions.

8. There was overall strong support for the new co-governance arrangement, improving the protection and enhancement of values associated with the Tūpuna Maunga, the Draft Tūpuna Maunga Operational Plan 2015/16, the Integrated Management Plan and the proposed 10-year budget.

9. There was a common desire noted by submitters to see community partnerships and education and visitor experience brought forward to be a short term operational expenditure priority. Council staff advise that the actions identified by submitters for these areas could be delivered within existing operational budgets and that no reprioritisation of budgets is required.

10. The Governing Body and the Maunga Authority held joint deliberations on the 23 April 2015 at which the public feedback received was discussed.

11. The Maunga Authority will adopt the Draft Tūpuna Maunga Operational Plan 2015/16 at its 8 June hui once the Long-term Plan 2015-2025 budgets have been finalised.

Recommendation/s

Recommendations are included in the Mayoral Report.

Comments

Overview of Draft Tūpuna Maunga Operational Plan 2015/16

12. The Tūpuna Maunga hold a paramount place in the historical, spiritual, ancestral and cultural identity of Ngā Mana Whenua o Tāmaki Makaurau. On 29 August 2014, the Ngā Mana Whenua o Tāmaki Makaurau Collective Redress Act 2014 (the Tāmaki Collective Redress Act) came into effect. The Act vested ownership of the Crown owned-land in 14 Tūpuna Maunga in the Tūpuna Taonga o Tamaki Makaurau Trust, on the basis that they are held in trust for the common benefit of the iwi/hapū of Ngā Mana Whenua o Tāmaki Makaurau and the other people of Auckland.

13. The Tūpuna Maunga o Tāmaki Makaurau Authority (Maunga Authority), which comprises six representatives from Ngā Mana Whenua o Tāmaki Makaurau, six representatives from the council and a non-voting Crown representative, is the administering body for the Tūpuna Maunga. The Maunga Authority is independent of Council. Council is responsible for the routine management of the Tūpuna Maunga and the administered lands under the direction of the Maunga Authority, and for the costs incurred both in carrying out this function and the functions under the Act and the Reserves Act 1977.

14. The Act requires the Maunga Authority and the council to agree an annual operational plan. The operational plan provides a framework in which the council will carry out its functions for routine management of the Tūpuna Maunga and administered lands for that financial year and provides indicative information for the following two years. The annual operational plan must (under the Act), be prepared and adopted concurrently with the council’s Long Term Plan or Annual Plan and must be included in summary form.

15. The Maunga Authority adopted the Draft Tūpuna Maunga Operational Plan 2015/16 at Hui 4 on 1 December 2014. This was summarised in Section 12 of the Auckland Council Long-term Plan 2015-2025 supporting information and a link to the Draft Tūpuna Maunga Operational Plan 2015/16 was made available to the public.

16. The Draft Tūpuna Maunga Operational Plan 2015/16 is one of the five activities within the Co-Governance Entities theme in the Long-Term Plan 2015-2015.

Overview of the proposed 10 year budgets

17. The Draft Tūpuna Maunga Operational Plan 2015/16 / draft Long Term Plan 2015-2025 budget proposes $45,671,879 capital funding over 10 years and $30,733,031 operating funding over 10 years. The Proposed Net Operating Expenditure incorporates the full $2,500,000 of the legacy Open Space and Volcanic Cones Targeted Rate Reserve to help fund activities over the first 6 years of the LTP 2015-2025. A summary of planned expenditure and funding is provided in Attachment A.

18. The Draft Tūpuna Maunga Operational Plan 2015/16’s focus is on reversing the current level of degradation evident over these iconic Auckland landscapes, resourcing the development of an Integrated Management Plan for the 14 Tūpuna Maunga and undertaking capital projects to enhance the visitor experience and improve the awareness of associations Mana Whenua have with the Tūpuna Maunga and values of the Tūpuna Maunga.

19. There is an increase in the funding set aside for capital projects in the last three years of the Long-term Plan 2015 – 2025. This recognises the time required to undertake strategic planning for the Tūpuna Maunga (including completing the integrated management plan) and the project planning requirements (including resource consents and Heritage New Zealand approvals) to deliver the agreed works programme.

20. The draft plan was prepared with the overall council funding in mind. The Maunga Authority consider it the minimum amount necessary to respect these taonga, to restore the living connections and to create and manage them as internationally significant visitor destinations.

Summary of Feedback

21. The importance of the Tūpuna Maunga to Mana Whenua, organisations, communities and individuals was clearly evident in the submissions received. While what submitters valued differed, there was a common desire to see an improvement in the protection and enhancement of the Tūpuna Maunga. There was a level of optimism in a number of submissions that the new ownership and governance regime for the Tūpuna Maunga and the proposed work programme and associated budgets will achieve positive outcomes.

Net Operating Expenditure

22. Submitters supported the need for a long-term vision for the Tūpuna Maunga. The majority of the submitters expressed a desire to be able to work with and influence decisions in respect of the Tūpuna Maunga. Submissions received from two local boards and the Cornwall Park Trust highlighted that by working together it would be possible to improve the connectivity of the Tūpuna Maunga with the broader cultural landscape and open space network and provide a co-ordinated and consistent approach to managing visitor experience and behaviour.

23. Funding to enable the development of the Integrated Management Plan is proposed as a priority within the first three year period of the Long Term Plan 2015-25. The Maunga Authority will shortly consider a proposal to complete the plan over a 12 month period. The development of this plan, which includes two sets of public notification, will enable Mana Whenua, individuals, communities and organisations to input into decisions on the future management of the Tūpuna Maunga and will define a vision for the Tūpuna Maunga collectively and individually.

24. Many submitters highlighted the importance of bringing community partnerships (including volunteering) and education and visitor experience forward to be a short-term operational expenditure priority. The Maunga Authority considers the building of partnerships and stakeholder relationships to be important for achieving its vision for the Tūpuna Maunga. This work stream will be a key priority over coming months.

25. A number of submissions made reference to maintenance of existing infrastructure. Renewal projects on specific maunga are prioritised based on a number of factors such as the condition of the asset, health and safety issues, and whether the infrastructure is still necessary and appropriate. In the future this will be guided by the Tūpuna Maunga Values, Integrated Management Plan, the Visitor Management Plan and the management principles. The upgrade and development of visitor related infrastructure is highlighted as a priority in the Draft Tūpuna Maunga Operational Plan 2015/16, and is recognised as an investment in the economic development of the Tupuna Maunga as visitor destinations.

26. Four of the submitters representing the Friends of Maungawhau noted the need for a dedicated on-site ranger service to adequately protect the maunga and facilitate volunteering. They noted concern about the current ‘thin line’ of front line staff. The Council is in the process of reviewing the operational roles required to deliver the Maunga Authority’s work programme and this feedback will be taken into consideration as part of this review.

27. Council staff advice is that the actions identified by submitters, if supported by the Maunga Authority, can be delivered within existing operational budgets and that no changes to the proposed 10 year operational expenditure budget is required.

Capital Projects

28. Visitor management in terms of pedestrian and vehicle access was a common theme in submissions. There was strong support for the continuation of casual pedestrian access with appropriate controls and infrastructure to protect sites of significance. There were submissions received for and against changes to private vehicle access on the Tūpuna Maunga. At Hui seven, the Maunga Authority resolved to support restricting vehicle access to Maungawhau / Mt Eden’s tihi (summit), with the implementation subject to a further report on the funding requirements. This issue will be one of many considered more generally in the context of developing an Integrated Management Plan. Capital projects associated with implementing a policy position will be budgeted for as part of this project.

Other

29. Much of the feedback focused on non-budget related matters such as:

· The design and location of visitor infrastructure such as way-finding and interpretative signage and the track network,

· Removal of redundant infrastructure by third parties,

· The formalisation of the relationship between the Maunga Authority and The Friends of Maungawhau, and

· Specific mechanisms to enable greater community and stakeholder involvement in decisions, improve communication of Maunga Authority decisions and strengthen partnerships.

Consideration

Local Board views and implications

30. The Maunga Authority includes members from Maungakiekie-Tamaki Local Board, Orakei Local Board and Albert-Eden Local Board.

31. Local Boards with Tūpuna Maunga within their boundaries were advised about the Draft Tūpuna Maunga Operational Plan 2015/16 and the opportunity to submit or attend the Have Your Say Day event. Representatives from two local boards attended the Have Your Say Day Event.

32. 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

33. The Maunga Authority is comprised of two representatives from Marutuahu ropu entity, two representatives from Ngāti Whatua ropu entity and two representatives from the Waiohua Tamaki ropu entity.

34. All 13 iwi/hapu that comprise the Tūpuna Taonga o Tāmaki Makaurau Trust were advised about the Draft Tūpuna Maunga Operational Plan 2015/16 and the opportunity to submit or attend the Have Your Say Day event. Two Mana Whenua Chairs attended the Have Your Say Day Event.

35. The Ngā Mana Whenua o Tamaki Makaurau Collective Redress Act 2014 requires the Maunga Authority in exercising its powers and carrying out its functions to have regards to the spiritual, ancestral, cultural, customary and historical significance of the maunga to Ngā Mana Whenua o Tamaki Makaurau. This requirement has a significant influence on the way in which decisions are made by the Maunga Authority.

Implementation

36. Once the Long-term Plan 2015-2025 has been finalised, the Maunga Authority will review and adopt the Draft Tūpuna Maunga Operational Plan 2015/16 at Hui 9 on the 8 June 2015.

Attachments

No.	Title	Page
a View	Summary of Indicative Funding requirements	55

Signatories

Author

Anna McElrea - Senior Parks and Recreation Advisor

Authorisers

Matthew Walker - General Manager Financial Plan Policy & Budgeting

Grant Taylor - Governance Director

Sue Tindal - Chief Financial Officer

Budget Committee

07 May 2015

Long-term Plan 2015-2025 - Mayor's Report

File No.: CP2015/07647

Purpose

This report sets out the Mayoral proposal for the final Long Term Plan 2015-25 (LTP) for consideration and decisions by the Budget Committee.

Executive Summary

· This report is leading into the final stages of agreeing the LTP 2015-25. This process started well over a year ago.

· The council is in a strong financial position with debt levels well within our prudential ratios and a track record of rates revenue increases well below those projected by the legacy councils and the ATA.

· It is important that this strong financial position is maintained in the years ahead and the draft LTP resets the financial parameters from the LTP 2012-22. Rates revenue increases were reduced from 4.9% per annum to 3.5%, projected debt from $13.7 billion to $10.8 billion and the interest to revenue ratio capped at 12%.

· The capital programme was significantly reduced from previous projections to achieve these lower ratios and in particular transport capex was cut back to a basic level of service, with a clear question to Aucklanders on the level of transport investment they supported and how they would be prepared to pay for it.

· Following record levels of feedback and participation in consultation the council now needs to make the decisions that will impact on the future of Auckland.

· I am supporting the Auckland Plan Transport Network level of investment and motorway tolling as the mechanism to pay for this. We now need to engage with government to support this approach. While these negotiations are underway I am supporting an interim transport programme of additional capital expenditure of $523 million over 3 years, paid for by an interim transport levy of less than $2 per week for non-business ratepayers and $3 per week for business ratepayers.

· Other budget areas are proposed to remain largely unchanged from the draft with only a small number of exceptions covered in the recommendations below.

· The rating policy was also a major consultation question and on the two big issues I am proposing leaving the UAGC at $385 (particularly in light of the proposed transport levy) and slowing down the reduction in the business differential to limit the impact on residential ratepayers to 0.5% per annum

· Other fees, charges and policies remain largely as proposed for consultation. The few changes that are proposed are covered in the recommendations below and includes continuing to subsidise the Hauraki Gulf Islands refuse collection charges.

Recommendation/s

1. That the Budget Committee recommend to the Governing Body that the transport budgets for the final LTP be based on the draft budgets, adjusted for the updates set out in the staff reports, with the following changes:

a. Inclusion of an interim transport capex budget for the first three years of the LTP as follows:

	2015/16	2016/17	2017/18
Additional transport capex	$170 million	$174 million	$179 million

b. Funding of the council share of the interim transport programme to be by way of a Transport Levy (targeted rate) set at $99 per SUIP for non-business ratepayers and $159 per SUIP for business ratepayers.

2. That the Budget Committee recommend to the Governing Body that the Mayor and Chief Executive engage with the government to enable the implementation of a motorway tolling system by 2018/19 to fund the implementation of the Auckland Plan Transport Network for the 2018-28 LTP.

3. That the Budget Committee recommend to the Governing Body that the budget (excluding transport) for the final LTP be based on the draft budgets, adjusted for the updates set out in the staff reports, and to incorporate the following changes and specific decisions:

Auckland Development (Refer Attachment A to the agenda report)

a. The funding of the Vos Yard project from the Heritage Acquisition fund be referred to the Auckland Development Committee, as there is no LTP budget impact

Economic and Cultural Development (Refer Attachment A to the agenda report)

b. The additional capital expenditure of $6 million for Grid AKL be approved on the basis that the consequential opex be managed through the existing ATEED operating budget

Environmental Management and Regulation (Refer Attachment A, A4 to the agenda report)

c. A standardised annual inorganic collection service (on-property, booked in advance) to be implemented and paid for via the solid waste targeted rate.

d. Provide up to $9 million per annum (an increase of $3 million pa) of financial assistance for the Retrofit your Home programme but with a maximum debt exposure of $35 million.

Governance and Support (Refer Attachment A, A6 to the agenda report)

e. Increase the funding of the Parakai Reserves Board by $279,000 opex (rates impact of $169,000) and $50,000 capex over 10 years as set out in the staff report

f. Increase the funding of Ngati Whatua Orakei Reserves Board by a total of $811,000 opex over 10 years as set out in the staff report

g. Increase the funding of COMET by $235,000 per annum

Parks Community and Lifestyle (Refer Attachment A, A5, A8, A9 to the agenda report)

h. Note that an Empowered Communities approach will be implemented during the 2015/16 financial year with final detail of the proposed Community Development and Safety operational model to be presented to the Regional Strategy and Policy (RSP) committee on 4 June 2015.

i. Note that the associated savings target of $1.6m in FY 2015/16 and $2.0m pa each year thereafter, until 2025, has been included in the Budget and that any necessary review of implementation and related budget can be undertaken as part of the 2016/17 Annual Plan process.

j. Provide funding of $1.9 million over the first four years of the LTP to Surf Lifesaving Northern Region for the purposes of redevelopment of the highest priority surf clubs in line with their request

k. Increase the regional grants budget by $350,000 per annum in line with the 2014/15 level of funding

l. Provide funding of $300,000 opex in year 1 of the LTP, $100,000 opex in year 2 and $600,000 capex in year 3 for a World War 1 memorial in the Domain, noting that this will allow applications for funding from other sources.

m. Provide a $350,000 operating grant (from existing provision in the budget) to the James Wallace Arts Trust for a further year and seek a full report back to the Finance and Performance Committee on options for financial sustainability of this Trust.

n. Provide a budget of $360,000 for years 1 and 2 of the LTP and $110,000 for year 3 for emergency housing, homelessness and rough sleeping responses.

Water Supply and Wastewater (Refer Attachment A to the agenda report)

o. Confirm the budgets and water and wastewater pricing increases as set out in the updated budgets

Local Board Discretionary Capex

p. Provide a new Local Board discretionary capex fund of $10 million per annum noting that this will incorporate the existing Facilities Partnership Fund.

q. Approve the following parameters for this fund:

i. The fund may be managed as a three year amount

ii. Local Boards may use the fund to build council owned assets, add to an existing council funded renewal or new capital project, work in partnership with an external provider or seed fund a community project

r. Ask staff and Local Boards to develop a formula for allocation and criteria for qualifying projects and report back to the Finance and Performance Committee

Maori Transformational Shift (Refer Attachment A7 to the agenda report)

s. Note that further work on the council funded activities and budgets that contribute to Maori wellbeing in the LTP has identified $186 million of contribution over the 10 years (including the budgets for co-governance entities).

4. That the Budget Committee recommend to the Governing Body the adoption of the following changes to fees and charges for 2015/2016:

a) standardised licensing fees for street trading across Auckland as included in Attachment B1 to the agenda report

b) standardised rental fees for street trading across Auckland as included in Attachment B1 to the agenda report, which include the following amendments to the draft proposal:

· an additional six month rental option for seasonal outdoor dining operators

· simplified rent for mobile vendors based on typical size and hours, with extra-large vendors being charged an over-size fee

c) any increases to street trading charges (licence fee and rent combined) for existing licensees resulting from the implementation of a) and b) above be capped at $500 per licensee per year for three years starting 2015/2016

d) standardised cemetery fees across Auckland as included in Attachment B2 to the agenda report

e) standardised event permit fees across Auckland as included in Attachment B3 to the agenda report

f) standardised fees for the remainder of the environmental health and licensing services as included in Attachment B4 to the agenda report

g) fees and charges for building control, resource consents and property information as included in Attachment B5 to the agenda report

h) fees and charges for the following services

i. animal management (Attachment B6 to the agenda report)

ii. food premises (Attachment B7 to the agenda report)

iii. Health protection and hairdresser’s licensing (Attachment B8 to the agenda report)

iv. Harbourmaster service (Attachment B9 to the agenda report)

v. Solid waste bylaw licensing (Attachment B10 to the agenda report).

5. That the Budget Committee recommend to the Governing Body the adoption of the following decisions on solid waste services, targeted rates and charges:

(Refer Attachment A to the agenda report)

a) Introduction of a new annual, on-property, pre-booked inorganic collection service from 2015/2016 to be funded from the waste management targeted rate

b) The targeted rate for solid waste services, including the annual inorganic service, in the former council areas be standardised where services, costs and funding methods are similar, for 2015/2016 as follows:

i. Auckland City (including Hauraki Gulf islands) and Manukau City (adjusted as appropriate in Auckland City to provide for the rates where a ratepayer has opted out of either or both of refuse and recycling services)

ii. North Shore and Waitakere

iii. Rodney

iv. Franklin and Papakura (adjusted as appropriate in rural Franklin where a ratepayer does not receive a recycling service).

c) That the costs of providing solid waste services to the Hauraki Gulf Islands in excess of targeted rates revenue from the area be met from the solid waste targeted rates for all of the Auckland region rather than just the former Auckland City area.

d) Staff continue to work with the local communities of the Hauraki Gulf Islands to reduce costs and rationalise services where possible

e) User charges billed to the property owner for refuse for the former Auckland City (including the Hauraki Gulf Islands) and Manukau City areas be gradually introduced from 2017/2018 financial year

f) Recycling services continue to be funded from the waste management targeted rate

g) The new organic collection to be funded from the waste management targeted rate where the service becomes available

h) Standardised existing bag charges at competitive rates in areas where the service is provided by the council.

6. That the Budget Committee recommend to the Governing Body the adoption of the following changes to Housing for Older Persons rentals as set out below:

(Refer Attachment D to the agenda report)

a) the rent on the council’s Housing for Older Persons units be set at 30 per cent of tenants’ pre-tax income

b) the rent be adjusted annually based on tenants income

c) for any given year, changes to annual rents (including increases and decreases) for existing tenants resulting from a) above be capped at $10 per week implemented in $5 steps at six month intervals.

7. That the Budget Committee recommend to the Governing Body:

(Refer Attachment E to the agenda report)

a) that the proposed contributions policy be amended as follows:

i. replace the funding areas for reserve acquisition, reserve development and community infrastructure with the following four areas: Auckland Wide, Greenfield, Urban and Rural

ii. replace the stormwater funding areas with the following areas:

Stormwater
Helensville	Manukau Central
Kumeu / Huapai	Pukekohe / Waiuku
Warkworth	Manukau South
Hibiscus Coast	Manukau West
East Coast Bays	Tamaki West
Mahurangi	Tamaki East
Waitemata North	Wairoa
Waitemata West	Ararimu
Waitemata Central	Waitakere Ranges
Waitemata Northwest	Urban Auckland
Manukau North	Other

iii. reduce the unit of demand factor for attached dwellings (low rise) to reflect the lower levels of demand associated with higher density developments

iv. reduce the unit of demand factors for retirement village units and aged care rooms to exclude costs for sports fields and playground.

v. allow Council the discretion to offer a reduction of contribution charges for stormwater where developers provide relevant infrastructure.

b) Note that the contributions policy will be updated for the decisions made on capital expenditure and adopted alongside the Long-term Plan 2015-2025 on 25 June 2015

c) Note that staff will report back on further refinements to the funding areas for reserve acquisition, reserve development and community infrastructure for consideration alongside the Annual Plan 2016/2017.

8. That the Budget Committee:

a) agree to undertake a review of Auckland Council's mix of funding sources to inform the 2016-17 Annual Plan, with the broad objectives of further reducing the proportion of council revenue funded from rates, maximising the return on council’s investments and exploring alternative sources of funding, including from the optimisation of assets that are poorly aligned with council's core business and the broader strategic growth priorities for Auckland

b) direct the Chief Executive to commence the design of the review and its associated processes following the release of the Local Government New Zealand Funding Review Final Report in June 2015

c) request that the terms of reference for the review be reported back to the July meeting of the Finance and Performance Committee.

9. That the Budget Committee recommend to the Governing Body adoption of the following rates policy decisions for the Long-term Plan 2015-2025:

(Refer Attachment F to the agenda report)

a) a uniform annual general charge of $385 for 2015/16 amended each following year of the LTP by the amount of the average rates increase

b) that the long-term business differential strategy be amended to achieve a proportion of general rates collected from business ratepayers of 33.0 per cent for 2015/2016 falling to 25.8 per cent by 2036/2037 in equal steps and that the differential ratio for business be set annually to reflect this

c) that in line with the amendments to the overall business differential strategy, Franklin business differential be set at a level which will align with the overall business sector in 2016/17

d) no further rates transition

e) extension of the city centre programme and targeted rate to 2025, funding the depreciation and consequential operating expenditure of city centre programme projects from the general rate from 2019/2020, and introduction of a city centre targeted rate of $57.50 per separately used or inhabited part of a property on city centre residents

f) increase Mangere-Otahuhu swimming pool targeted rate to fund free adult entry to the new Otahuhu swimming pool

g) create a new rating differential for properties with no road access (including properties currently classified as the sea only access) and set the differential at 0.25 (current sea only access differential)

h) rates related policies as proposed in the consultation document:

i. setting Uniform Annual General Charge based on separately used or inhabited parts of a rating unit

ii. setting the value based general rate using capital value

iii. the general rate differential categories and descriptions

iv. all targeted rates except waste management, transport and those in e and f above

v. the early payment discount policy

vi. the instalment dates and penalties

i) direct staff to report back with for consideration as part of development of the Annual Plan 2016/2017 on rating options for:

a. motels and other temporary accommodation

b. Maori freehold land.

j) direct staff to complete further work on rates postponement options as a mechanism for assisting rating affordability issues and report this back to the Finance and Performance Committee.

Comments

CONTEXT

10. In August last year when I presented my Mayoral Proposal for the LTP 2015-25, I emphasised the need for us to see this LTP as a reset exercise for Auckland Council. It is time to consign to history the priorities and policies of the legacy councils and create our own future based on Auckland as it exists today and the priorities for the amalgamated region. We have our Auckland Plan to guide the priority setting and we have a set of financial parameters that drive the need to prioritise. There are some tough decisions we need to make if we want to meet community expectations of financial prudence (low rates and debt) while investing in our growth and in particular fixing the transport problem.

11. Despite the popular rhetoric to the contrary we are in excellent financial shape and our track record since the start of this council is extremely good.

Note: Adjusted for growth

12. Our increases in rates revenue have been significantly below the projections of the legacy councils and the ATA, and we are operating well below our policy limit for the “Interest to Revenue” ratio. We have maintained our AA credit rating, the best in the country apart from the government, and our draft LTP was well received by the credit rating agencies.

13. In addition our core costs have been well contained, allowing us to apply increases in revenue to better outcomes for Aucklanders.

14. This is a financial position we should be proud of and one we need to maintain going forward.

The Draft 10 year budget

15. The draft 10 year budget re-set our future financial parameters from the previous LTP by:

· Reducing projected average rates revenue increases from 4.9% to 3.5% per annum

· Reducing projected debt levels at the end of the 10 years by $2.9 billion

· Keeping our interest to revenue ratio at 12% or less

16. To achieve this we needed to reduce and re-focus our capital programme and also reduce our operating costs through some small reductions to levels of service. We have also continued to drive efficiency savings from the organisation.

17. This baseline budget for the LTP gave a much reduced debt profile and more affordable increases in rates revenue but this came with a significant reduction in our investment in transport infrastructure.

18. Against this backdrop, we have introduced to Aucklanders the biggest debate for decades – how much are we prepared to invest in our transport infrastructure and how do we want to pay for it? This will be the biggest decision, among the many that we need to make, and the one that will have the biggest impact on the future of Auckland. It is the one that this Council and its leadership will be remembered by.

CONSULTATION

19. Because of the significance of the decisions in this LTP it was important that we reached as many Aucklanders as possible through the consultation process. A huge effort, involving large numbers of our hard working and dedicated staff, has gone into making this the biggest response rate in any LTP process in Auckland or anywhere else in New Zealand.

20. The awareness raising campaign included:

· Delivering the LTP summary to every household

· A full media campaign

· Attendance at all major events around Auckland during the period e.g. Pasifika, Laneways, A and P shows etc

· Specific engagement events - from local community events through to the Auckland Conversations event

· Targeted stakeholder communications and social media

21. We also replaced our traditional hearings process with 37 “Have Your Say” events which attracted over 1,400 people. For the first time in a LTP process we utilised social media to collect feedback as well as raise awareness.

22. By the time the consultation period closed we had received 27,383 written submissions which provided 260,000 feedback points, The 1,412 people who attended Have Your Say events provided 8,600 feedback points along with 1,600 feedback points from the 900 people who attended local community events. In addition to those feedback channels 1,354 pieces of feedback came through digital channels.

23. The transport question is of such significance that we agreed a statistically robust survey would be carried out in time to inform our decision making. Colmar Brunton was engaged to deliver this survey of just over 5,000 people.

24. All of this material had been analysed and summarised by our staff and we have been provided with a detailed set of reports which give us a very good overview of community views on all of the topics on which we will be making decisions.

25. Key messages coming through from this feedback include:

· The community expects financial prudence

· They want us to continue to invest in the things that they value (although not surprisingly what they value is quite diverse)

· There is significant support for increased investment in transport

· The vast majority are prepared to pay more to have the transport issues addressed

BUDGET PROPOSAL

26. At the end of any LTP or Annual Plan consultation process, most councils are faced with two competing messages from feedback. There is a clear message that rate increases and growth in debt should be minimised alongside messages about where the community want more spending or increased service. Our difficult task is to balance these messages and create a budget that does its best to deliver financial prudence while providing the infrastructure and services that Aucklanders, current and future, need and value.

27. My starting point for this final round of the budget decisions is relatively minimal change from our consultation budget with the clear exception of transport.

28. I am committed to delivering the level of investment as set out in the Auckland Plan Transport Network. In order to do this and keep our rates affordable we need the support of government to raise the revenue required. As part of this proposal I am seeking your endorsement to enter into further negotiations with government on the option of tolling the motorway network to provide the revenue stream. Realistically, the revenue stream and the increased level of investment that it will fund could not commence until 2018/19 (year 4) of the plan.

29. In the interim period, I believe that we have a strong mandate to increase the transport budgets from the “Basic“ level included in the consultation document, to a more aggressive level of investment and that we should fund this additional amount via an interim targeted transport levy.

30. I have also consistently re-iterated my desire to get the average rates revenue increase down closer to my starting point of 2.5% and I think that is even more important if we are to introduce an interim transport levy. The organisation has responded to this message and in the attached staff report (Attachment A to the agenda report), you will see that this has been achieved for 2015/16. A number of changes in underlying assumptions and budgets have been described. The net result of all of these changes and the funding of the interim transport programme by a fixed interim transport levy of $99 per SUIP for non-business ratepayers and $159 per SUIP for business ratepayers, allows us to achieve an updated average rates revenue increase of 2.5%.

Transport (Attachments A, A1, A2 to the agenda report)

31. Aucklanders have clearly indicated their expectation that we address the transport issues. A majority of both those that responded in the consultation and those that took part in the survey show a preference for a higher level of investment and a willingness to pay.

32. In the long-term, to address the transport problem we need an extra revenue stream and government support with tools to generate that revenue. My preference is for motorway tolling and the recommendations in this report seek an endorsement to enter into that conversation with the government. Any solution agreed with government would not be effective until 2018/19 and would be reflected in the next LTP. In the interim, it is clear the basic transport programme will not be acceptable to Aucklanders and I am proposing the following approach:

i. Additional transport capex of $170 - $179 million per annum for the first three years - a total of $523 million. Of this the Council will fund approximately $300 million and the rest will be funded by NZTA subsidy. In the attached staff reports (Attachment A2 to the agenda report) you will see Auckland Transport have prepared an initial prioritisation of this funding. I am supportive of the additional investment for public transport, walking and cycling, safety programmes and the major projects of AMETI and SMART.

However, I believe it is important that this additional funding is of benefit to the whole region as all of the region will be paying. While in this LTP we will be initially approving the amount of funding we also need to give a steer to Auckland Transport on our strategic priorities.

I would like to see $10 million over the three years for road sealing in Rodney (instead of the $6 million currently allocated).

Lake Road is currently not in the interim programme – some minor improvements will be able to be funded and we need to ensure that some priority is given to these. The Auckland Plan Transport network would this project prioritised

There are several important projects where we need to work collaboratively with NZTA and government and to continue strong advocacy for prioritisation i.e.

- Northern Busway extension to Albany – we have provided funding to deliver an extra busway station between Constellation and Albany on the assumption that NZTA will construct the busway extension during the period of the LTP

- North-Western busway – this project is subject to funding within the Auckland Plan Transport Network and consequent support from NZTA

- Penlink – funding to complete the Notice of Requirement process is included in the interim programme but construction is subject to further work with the governemnt

- Pukekohe electrification – this is an important project for the south which we need to strongly advocate to government.

ii. To fund this programme of work I am proposing an interim transport levy (targeted rate). I believe a clearly identified fixed amount, identified as an interim transport levy, would be supported by the majority of Aucklanders. This amount, if applied equally across all ratepayers would be $2 per week ($104 per annum) per SUIP. During earlier discussion around a possible targeted rate there seemed to be a view that applying a differential for business would be a preference. For the purpose of this exercise a differential of 1.6 has been used which is the equivalent of the tax benefits that business receive for this cost. This results in an interim transport levy for business ratepayers of $159 per SUIP ($3 per week) and an interim transport levy for non-business ratepayers of $99 per SUIP (less than $2 per week).

Auckland Development (Attachment A to the agenda report)

33. The consultation document identified a funding envelope requiring a significant saving in our planning activity. I am still comfortable with this approach and am proposing no changes.

34. There is a specific request for budget for the Vos Yard development – proposing to utilise the Heritage Acquisition fund. While I support this in principle – it is not a LTP decision and I propose that the request be referred to the Auckland Development Committee for consideration.

Economic and Cultural Development (Attachment A to the agenda report)

35. Included in the consultation document for this area was a small reduction ($1 million) of operating funding for ATEED and some challenges to raise revenue for a proposed investment fund. ATEED have also been asked re-prioritise their resources to include a significant maori event and more focus on youth employment outcomes. Two further budget requests have been received from ATEED.

i. A request for additional capital expenditure of $6 million to complete the GridAKL fit out. It has been suggested by staff that their operating budget be adjusted for the consequential opex so that there is no rates impact. On that basis I support the request.

ii. A request to move operating funding forward from years 3 and 4 of the LTP to year 2 - $5 million in total. I am not supporting this request. I would like to see ATEED generate additional revenue and apply this to any need for additional funding in year 2.

Environmental Management and Regulation (Attachments A, A4 to the agenda report)

36. The budget for consultation included some small reductions in levels of service in this area. I am proposing to confirm this budget and the service level reductions with one exception. I am concerned that removing the budget for our contribution to the Bio-control Collective is not in our best interests. This budget of $158,000 per annum is needed to ensure that we get maximum engagement in defining research on weed and pest issues that will benefit Auckland. I am asking staff to identify alternative savings and report back to us on 7 May before we make our final budget decisions.

37. There are two other specific areas for decision that I am supporting:

i. The provision of a standardised inorganic service – on-property, annual and booked in advance. This would be paid for by the targeted rate.

ii. The Retrofit your home programme continues to outpace the existing annual allowance for the programme. There is no rates impact from this programme as all costs are recovered from the home owner. Our main concern should be to ensure that the debt is managed within our overall financial parameters. I support the proposal to allow up to $9 million per annum in grants for this programme provided that our debt exposure is no greater than $35 million.

Governance and Support (Attachments A, A6 to the agenda report)

38. Inevitably this area has attracted the most comment in respect of reducing costs. While a significant cost area it was probably not made clear enough in our consultation document that this also includes our contributions to the Auckland War Memorial Museum, MoTAT, and the group of organisations covered by the ARAFA legislation. Between them these organisations will receive $57.4 million in 2015/16 – about half of the costs in this area.

39. However the costs of running the business of Council and its CCOs are still significant. The Chief Executive continues to drive an efficiency programme which will have to find another $36 million of savings in 2015/16 and further savings in future years, which when added to those already achieved will have taken $2.64 billion out of the costs of delivering our services over the term of the LTP.

40. The issue of the numbers and costs of staff continues to be raised. The efficiency savings have, and will continue to impact on staff. It is true that staff numbers have risen since establishment however, to put that in context we are still below the number of staff employed by the legacy councils and in that time we have added a population the equivalent of Hamilton (who have a staff of over 750).

41. I am not proposing to change this budget except for the specific items below.

i. We have received additional funding requests from Ngati Whatua Orakei Reserves Board and the Parakai Reserves Board and I am supporting those requests for sufficient funding to support the activities of those boards.

ii. COMET had their funding reduced in the draft budget. They have expressed the view that their operation is under threat. In response to my request that they advise the minimum level of funding that they would need to continue, they have requested a further $235,000 per annum. This is less that their original submission and I am supporting this increase.

Parks, Community and Lifestyle (Attachments A, A5, A8, A9 to the agenda report)

42. The budget for consultation included a number of service level changes. Many of these were relatively small but engendered a reasonable amount of comment from the community and Local Boards. Overall I am comfortable with the approach to this budget and the savings that have been proposed. We need to standardise service levels across the region but there is flexibility for the Local Boards to use their discretionary funding to raise these service levels if they wish or work with their local community to achieve a different level of service. An example of this is weed control where there has been some community feedback regarding the options proposed. I am comfortable with the general standardised approach that has been proposed as a cost saving, but propose that Local Boards and their communities look at alternative options where they can locally fund or support those alternatives.

43. However, having said that, I am aware that there is concern from several Local Boards, and their communities, about the standardisation of library hours. A suggestion was made that we could substitute that cost saving for a revenue stream generated by charging customers for ordering books from other libraries. I am open to that suggestion if there is general agreement that this would be more acceptable.

44. We have also undertaken a fundamental review of the way that we work with, and support, the community through the Empowered Communities project. Work is still underway on this project and a separate report (Attachment A8) provides an update. It is intended that final detail on the operational model will be brought back to the June Regional Strategy and Policy Committee. In the meantime the indicative savings have been included in the budget.

45. We have also had some requests for funding that need to be considered within this area of activity and some of these I am supporting.

i. Surf Lifesaving Northern Region have applied for $1.9 million over four years to support development of their highest priority clubs. I am proposing to include that request in the budget – funded by loan, in line with our normal practice for capital grants (Attachment A5 number 21)

ii. A number of options for increasing the regional grants budget have been proposed and I proposing that we add $350,000 to bring the budget back to the same level as the current year (Attachment A9)

iii. World War One memorial – this project is to build a lasting memorial to commemorate the centennial of World War 1. I am supporting the allocation of both opex and capex in years 1 and 2 of the LTP. Opex of $300,000 in year 1 and $100,000 in year 2 will fund preparation of designs, concept plans and other professional fees. $600,000 capex in year 2 will seed fund the construction with remaining funding being sought from other sources.

iv. James Wallace Arts Trust – this trust has been provided with an operational grant of $350,000 since 2012. This grant was due to expire at the end of the current financial year on the basis that the trust would become financially sustainable with the development of a catering and function business. However, due to some as yet unresolved issues, this has not been able to be implemented. I am proposing that we agree to continue the funding of $350,000 for a further year and that a full report be brought to the Finance and Performance Committee on progress to resolve the issues. Provision for some ongoing support was included in the budget so there is no financial impact (Attachment A5 number 1 to the agenda report)

In addition to the above I have one further proposal that I am seeking to include in this budget:

v. Emergency Housing and Homelessness

This is an ongoing issue for our city and one that is cause for concern. This is not a problem we can solve on our own. There needs to be a collaborative approach from central and local government and NGOs. We have been in discussions with these parties for some time and I feel we need to put some resources behind our verbal commitments. I am now proposing putting additional funding into the budget to enable some progress i.e.

1. A fund of $250,000 per annum for two years to assist emergency housing providers with costs such as regulatory consents and assistance with planning/professional fees.

2. A budget of $110,000 per annum for three years, to increase our support of organisations such as the City Mission to work with the homeless and rough sleepers in the city. This would be targeted at staff who proactively work with the homeless to ensure:

· they are safe and can access social services

· manage and resolve complaints received from the public and other agencies about homeless people in public spaces.

Water and Wastewater (Attachment A to the agenda report)

46. Watercare have produced a prudent budget which results in water and wastewater price increases of 2.5% in years 1 and 2, and 3.6% for the remaining years. As a self funding entity they have no impact on rates. Their debt levels have been reduced as part of the early consideration of the draft budget and I am supporting their budget being unchanged.

Local Board Discretionary capex

47. Since the adoption of the LTP for consultation, I have had dialogue with a number of Local Board members and it has become apparent that the issue of capital budgets for Local Boards is still a cause for much dissatisfaction.

48. I am still firmly of the view that major asset decisions need to be left with the Governing Body. We need to manage debt and in the face of so many conflicting priorities in a constrained fiscal environment we are best placed to make the decisions on those priorities. We need to take a regional rather local perspective on that decision making. However, it is clear that some discretion for Local Boards, outside of those major asset decisions, would be extremely helpful for them. They would like the ability to respond to the needs of their local community for small projects such as a playground. I have heard of the desire to work with the local community and seed fund some assets. I am also aware there is a legacy fund available to some Local Boards which allow them to enter into partnerships with external agencies to build asset for the community – this is budgeted at $4 million in 2015/16.

49. My proposal is to expand this fund both in dollar terms and in flexibility as follows:

· $10 million per annum but managed as 3 year amount i.e. $30 million for 3 year period. The current facilities partnership fund will be wrapped into this so the existing $4 million pa for that fund will effectively be topped up to $10 million

· The fund will be allocated on a formula to be agreed with the Local Boards – this could be similar to the LDI formula i.e. primarily population

· Local Boards can use the entire 3 year allocation for one project or spread over the 3 years for smaller projects

· The fund could be used for discrete projects or to top up a renewal or other new project for a higher level of service/outcome

· The fund could be used as seed/partial funding for a community based project – criteria for these kinds of projects will need to be agreed.

50. The other elements of the proposal, to ensure we continue to manage debt and prioritise major asset projects at regional level with each LTP, are:

i. Major new capital projects will only be approved by the Governing Body. The current provision that Local Boards can fund a major new facility with opex funded by their LDI fund would be removed.

ii. Local Boards will still be able use their LDI to fund the opex of bringing a funded project forward – the LDI would be reinstated at the point the project was originally due to be built

iii. Programme budgets for capex will only be allocated to specific projects for the first 3 years of the LTP and thereafter would be held at the programme level so that priorities can be revisited with each LTP.

Maori Transformation Shift (Attachment A7 to the agenda report)

51. During the preparation of the draft 10 year budget, proposed priorities for achieving progress on the Māori transformational shift were identified by the council group; the Independent Māori Statutory Board (IMSB); and mana whenua chairs. The Independent Maori Statutory Board (IMSB) advocated for their top 10 projects and associated funding of $180 million. The organisation, through a process of re-prioritisation and new budget proposed an allocation of $82.4 million which was agreed by the Budget Committee. We also agreed that further work would continue to identify activities and budgets that contributed to Maori wellbeing. At this point the exercise has identified $186 million of contribution over the 10 years including $80 million of funding for co-governance entities. It is expected that further contributions may be identified over time as the planning for future projects, including Council’s response to the 2014 Treaty Audit recommendations, is developed.

REVENUE

52. When building the final ten year budget, in-depth consideration of revenue is equally as important as the scrutiny of costs. Currently rates form approximately 43% of our total revenue base. We need to continue to reduce our reliance on rates as a revenue source.

53. The proposal for alternative funding of our transport infrastructure, particularly the option of motorway tolling, is an important step in this direction, but we also need to ensure that our fees and charges reflect a fair sharing of costs between those who benefit from the services and the ratepayer.

54. There has also been a recent discussion about potential asset sales. My position on the sale of our shares in Ports of Auckland and Auckland Airport remains unchanged – I do not support any such sale. However, I recognise that there is a desire for councillors to understand and debate the financial implications of the alternative positions and also a need to communicate with the public about these alternatives. In view of this I am proposing that the Chief Executive prepare information that will enable this discussion to take place through the work programme of the Finance and Performance Committee. This report will need to take account of the work of the Local Government NZ Funding Review – when this is completed.

FEES AND CHARGES

55. Over the last four years we have been reviewing and standardising our approach to a range of fees and charges and in this LTP we have another set to consider and approve. Largely I am supporting the staff views on these – which reflect primarily the position on which we consulted the public.

56. Street trading (Attachments B, B1 to the agenda report)

The proposal is to charge a standardised administration fee for those using the public footpath or other public areas for outdoor dining, drinking and retailing. Also part of this proposal is charging a rental for that use of public assets. A transition approach is included to cap any change to $500 per annum for those who have not had these charges previously, or had them at a lower level. Two changes are proposed by staff; adding an additional category for a six monthly rental to recognise the seasonal nature of some of these businesses and simplifying the rent calculation for mobile vendors to reduce administrative costs and minimise the incidence of extreme changes. I support this proposal with the staff recommended changes.

57. Cemetery fees (Attachments B, B2 to the agenda report)

This proposal is also one of standardisation and to ensure that costs are borne equally by those using our burial and cremation services. The gulf islands are the most affected by a major increase in charges for this service. However, while I am prepared to accept that there is a case for the islands to be subsidised for refuse charges (see below) using that same principle I cannot find any rationale to support island residents not bearing the costs of interment. Therefore I am supporting the standardisation of these fees.

58. Housing for the Elderly (Attachment D to the agenda report)

I have carefully considered the feedback on this issue. I still believe that our proposal of 30% of gross income as the basis of setting the rental for our housing for the elderly units is appropriate. This does enable residents to access the accommodation supplement and reduces the burden on ratepayers. However, feedback on slowing the rate of change is important and I am proposing that the transitional increases and decreases are applied at no more than $5 per week each 6 months.

59. Solid Waste targeted rates (Attachment C to the agenda report)

The proposal in the draft budget was for standardisation of the targeted rate for refuse across areas with a similar level of service. The exception that was proposed was the Gulf Islands. This would have resulted in quite significant increases in the islands. Costs for services across all of Auckland will vary, rural areas are inevitably more expensive to service than urban areas. However, we are proposing to standardise and I think it is only fair that the islands are part of that standardisation.

60. All other fees and charges (Attachments B, B3-B11 to the agenda report)

The variety of other fees and charges, that were part of the draft budget proposal, have not generated significant feedback and I am proposing that these be adopted as originally proposed.

DEVELOPMENT CONTRIBUTIONS POLICY

(Attachment E to the agenda report)

61. Following consultation, staff are proposing five amendments to the proposed development contributions policy:

a) Replacing the single funding area for reserve acquisition and the seven funding areas for reserve development and community infrastructure with four funding areas for each. This is the first step to creating more localised funding areas. Further work will be done for the next Annual Plan.

b) Increasing stormwater funding areas from 17 to 22 based on updated analysis

c) Reducing the unit of demand factor for attached dwellings

d) Reducing the unit of demand factor for retirement villages and aged care rooms

e) Allowing discretion to offer reduced contribution charges for stormwater when developers provide infrastructure that reduces demand for this service.

I support all of these amendments.

RATES POLICY

(Attachment F to the agenda report)

62. The rates policy, as always, has generated a significant amount of feedback and a wide range of views. Much of the comment is targeted at affordability issues for individuals in different financial circumstances. As we all know well, rates are a blunt tool, they are a property tax and take no account of individual circumstance or individual usage of council’s services. However having said that there is high correlation, as demonstrated by some of the work that staff have produced, between property value and income level. That has guided much of my thinking and I am sure many others around the council table. Having considered the feedback I am proposing the following key elements of the rating policy.

i. UAGC – I am proposing that this remains at the $385 level which was the basis of consultation and received a high level of support. I am comfortable that this is an appropriate level and, while I know there is an appetite from some to raise it, when considered alongside a fixed, targeted levy for transport I think this would be hard to justify.

ii. Business differential – as would be expected the feedback from the community has been strongly against the reduction of the business differential. I am still of the view that it does need to come down. However, I am also cognisant of the impact on residential ratepayers. On that basis I am now proposing that we phase the lowering of the business differential over a longer period so that the impact of this particular shift is no more than 0.5% per annum on residential ratepayers. This will result in the 25.8% proportion of rates for business being achieved in 2036/37.

iii. Transition – there are no palatable options for transition. Most of the significant change this time has been driven by the re-valuation which is a fact of life in a funding system based on property value. I do not see a viable, fair alternative and am therefore supporting no further transition.

iv. City Centre targeted rate – I am comfortable with the proposal that was the basis of consultation and there seems to be no strong argument to move away from that position.

v. Mangere-Otahuhu Local Board consulted on raising their targeted rate for free swimming pool entry for adults. They have recommended that this be approved and I am supporting the Local Board in this.

vi. Rating differential – for “no road access” properties. This has been proposed by staff to recognise the very small number of properties which have no vehicular access and therefore very limited ability to use council services. I am supporting this proposal.

vii. Rates postponement – We have very limited tools available to assist those on fixed incomes with escalating property values and the attendant rate increases. Using the rate postponement option would enable such people to utilise a very small proportion of their increased equity to alleviate their rating burden. I am encouraging our staff to continue work on this option and bring back some proposals through the Finance and Performance Committee.

Attachments

No.	Title	Page
a View	Long-term Plan 2015-2025 - Budget update	77
b View	Changes to fees and charges for street trading, cemeteries and other services	137
c View	Solid waste targeted rates and fees and waste management and minimisation funding	197
d View	Standardisation of social housing (housing for older people) rents	205
e View	Contributions Policy	213
f View	Rates related policy	223

Signatories

Author

Mayor Len Brown

Budget Committee

07 May 2015

Long-term Plan 2015-2025 - Proposal to establish a new Urban Development Entity (Development Auckland)

File No.: CP2015/07342

Purpose

1. To recommend the establishment of a new Council Controlled Agency (CCO) to further the council’s urban development objectives by joining together Auckland Council Property Ltd (ACPL) and Auckland Waterfront Development Agency Ltd (Waterfront Auckland). The new entity would be called Development Auckland Ltd.

Executive Summary

2. The proposal to establish Development Auckland arose out of the 2014 CCO review where three options for structural change to the way property and redevelopment activity were delivered were analysed. On 27 November 2014, the Governing Body agreed to consult on the option to join together ACPL and Waterfront Auckland to create Development Auckland through the Long Term Plan (LTP).

3. The consultation with the public resulted in 14,011 feedback points of which 42% supported the proposal, 33% did not support, 7% reflected partial support and 18% reflected other views that could not be coded as either supportive or non-supportive. Several property groups supported the proposal, as did the Auckland Council Youth, Seniors and Disability Advisory Panels.

4. During the consultation process, staff from across the council group have undertaken further analysis to determine if the proposal was robust, feasible and addressed key issues that were raised by councillors during the CCO review, in particular the level of risk and the costs associated with transition that the proposal entailed. The analysis concluded that the risks are outweighed by the benefits and can be adequately managed through existing council policies and best practice guidelines, noting that the council group has recently strengthened its risk management procedures and reporting. This analysis is outlined in the Evaluation Report (Attachment A).

5. The public feedback showed concern around the costs associated with the proposal, both in terms of transition costs and longer term funding for the agency. Staff have confirmed that establishment and transition costs can be met through appropriate adjustments to existing budgets either through the 2016/2017 Annual Plan or as recommended adjustments during the 2015/2016 year.

6. One-off costs associated with transition will be more than compensated for by ongoing savings associated with the lower remuneration of a single board and executive team. Most importantly, the cost associated with the transition can be met without any rating impact. The proposal envisages a simple consolidation of the existing budgets and funding sources of ACPL and Waterfront Auckland.

7. The longer term funding model proposed is more cost effective than the current model and still does not rely on increases in ratepayer funding. An increase in redevelopment activity can be gained by reprioritisation of existing capital expenditure and productivity gains within existing operating expenditure. Further increases in redevelopment activity are envisaged by facilitating private, government, philanthropic and potentially iwi investment into redevelopment locations by minimising the inherent risks associated with redevelopment.

8. Minimising risk for others does not involve council taking on additional risk, but rather means that council uses its significant regulatory powers and existing planned investment to bring developable brownfield land to market.

9. Further investigation should be undertaken on a ‘value capture’ mechanism where a proportion of the ‘windfall’ gains to landowners that occur from redevelopment activity are captured in order to reimburse the public purse for the infrastructure that is provided.

10. Four further meetings and workshops of the CCO Governance and Monitoring committee are envisaged to review and make recommendations to the Governing Body on the operating parameters of Development Auckland prior to a proposed establishment date of 1 September 2015.

Recommendation/s

That the Budget Committee:

a) agree to establish Development Auckland Ltd by amalgamating Auckland Council Property Ltd and Auckland Waterfront Development Agency Ltd, having taken into account the feedback from the public

b) delegate to the Chief Executive of Auckland Council the ability to undertake all necessary steps, other than board appointments, to execute the establishment and transition of Development Auckland Ltd by 1 September 2015

c) agree that board appointment process for Development Auckland is delegated to the CCO Governance & Monitoring Committee and will include the following considerations:

· the number of directors required on the board of Development Auckland

· the skills requirements for the board of Development Auckland

· which skill sets of the existing directors of Auckland Council Properties Limited (ACPL) and Auckland Waterfront Development Agency Ltd (AWDAL) are likely to be valuable in the early establishment phase of Development Auckland

d) agree that the proposed budgets of Auckland Council Property Ltd and Auckland Waterfront Development Agency Ltd will be consolidated from 1 September 2015 to 30 June 2025 as outlined in a separate report on this agenda

e) note that the cost of establishment and transition can be met through appropriate adjustments to existing budgets either through the 2016/2017 Annual Plan or as recommended adjustments during the 2015/2016 year

f) agree that the proposed performance measures of Auckland Council Property Ltd and Auckland Waterfront Development Agency Ltd will be combined to form the initial performance framework for Development Auckland Ltd as outlined in a separate report on this agenda

g) note that further reports will be brought to the CCO Governance and Monitoring committee to confirm more detailed operating parameters for Development Auckland Ltd prior to its establishment

h) agree that further investigation should continue on value capture mechanisms in order to inform future financial policy.

Comments

Recap on previous decisions about this proposal

11. The proposal to establish a new CCO by bringing together Waterfront Auckland and ACPL to form Development Auckland began in February 2014 as part of the CCO review process. The review tested the rationale for delivering urban redevelopment and property services through a CCO, and identified that there are benefits and challenges from delivering services at ‘arms-length’. It was noted that CCO delivery is likely to be optimal when the benefits of delivering through CCOs outweigh the challenges, and where the challenges can be effectively managed.

12. The benefits included commercial focus, efficiency and cost effectiveness, agility and flexibility in decision-making, and the ability to attract specialist skills. Challenges include retaining accountability for ratepayer funding, ensuring that CCO decision-making is cognisant of political factors, and achieving integration of CCO activities with other council services and priorities.

13. On 27 November 2014, the Governing Body evaluated three options for structural change, those being:

· Option A1: (This proposal) - The establishment of a new urban development entity (Development Auckland) by bringing together Waterfront Auckland and ACPL

· Option A2: (not recommended) - The establishment of a new urban development entity (Development Auckland) and the disestablishment of ACPL. Waterfront Auckland would remain structurally unchanged

· Option B: (not recommended) Enhanced Status Quo - left both ACPL and Waterfront Auckland structurally unchanged but enlarged the mandate for ACPL to work in conjunction with council to achieve urban redevelopment in agreed locations.

14. At that same meeting, the Governing Body agreed that option A1 (conceptual diagram shown below) was the preferred option. It agreed to progress evaluation of the establishment of an urban development agency, noting that the proposal for the new agency would be provided for in the LTP and subject to public consultation.

The LTP process and feedback

15. The LTP framed this proposal within one of seven key questions, asking Aucklanders whether they supported council becoming more involved in urban redevelopment activity. Supporting material outlined the proposal and options that had been considered throughout the CCO review process.

16. A ‘Summary of Feedback’ report (available on the council’s website) was compiled and considered by the Budget Committee on 22 April. It included an overview of the key themes raised by the public in their feedback.

17. Key themes were consistent through all feedback channels. Of the 14,011 feedback responses, only 6,863 provided comments to justify their opinion. The rest were through the written feedback channel, where submitters had chosen not to comment. The major issue that came out through all feedback categories was the cost of the new entity with around 2,500 feedback points.

18. Overall, 42% (5,943 feedback points) were in support of Development Auckland. The main reasons given were that submitters believed that establishing the new entity would lead to increased efficiencies and costs savings with approximately 500 submission points. In addition, there were around 200 feedback points about the establishment of Development Auckland how it would lead to better housing outcomes through better affordability, choice, and quality of the current housing stock.

19. 33% (4,612 feedback points) did not support the establishment of Development Auckland. The main reasons given were that the establishment would increase the cost to council with around 900 feedback points. Most of these submission points stated that establishing the entity would increase the cost to council and increase individual’s future rates bills. In addition, there was also the belief that housing development should not be the role of council (around 300 feedback points) and believing that council should stick to core roles, reduce its size and leave development to the private sector.

20. 7% (962 feedback points) partially supported the establishment of Development Auckland. A majority of points had supported the proposal only if it leads to a long term decrease in costs and if the cost of amalgamating the two entities is covered by current operational expenditure (around 600 feedback points). Most submission points outlined increased efficiencies and the cutting of staff numbers from the amalgamation as their requirement for support. In addition, there was also support provided there was better housing outcomes and that the local board/community had input in the decision making.

21. 18% (2,494 feedback points) were categorised into ‘other’ and covered a broad range of topics. The main concern raised was that the household summary document did not provide enough information to develop a clear opinion on the establishment of Development Auckland. Furthermore, there were multiple feedback points outlining confusion with which two CCO’s would be replaced in the formation of Development Auckland and felt that the household summary was not clear on this. Around 550 feedback points were received on both of these themes.

22. This ‘Summary of Feedback’ report can be found at http://www.aucklandcouncil.govt.nz/EN/planspoliciesprojects/plansstrategies/longtermplan2015/Documents/ltpbriefingdevelopmentauckland.pdf

23. Several property development groups submitted in support of the proposal including the Property Council and the Kiwi Property Group, and added useful commentary. The Youth, Seniors and Disability Advisory Panels supported the proposal. This feedback is provided in Attachment B.

24. This feedback has been taken into consideration in making the recommendations in this report, in particular

a. The feedback on cost. The cost of establishment and transition can be met within existing budget envelopes and savings driven from the amalgamation of the entities. The proposed funding model does not require additional rates funding.

b. The feedback on improved housing outcomes. The purpose of Development Auckland is to provide a greater focus on improving housing outcomes and this will be reflected in all establishment documentation including the constitution the Statement of Intent non-financial performance framework.

c. The perception that Development Auckland would undertake construction in place of the private sector. Development Auckland will not build residential and/or commercial space in town centres, but will facilitate the private sector to build. It will not undertake any construction, marketing or sales activity in its own right.

d. The feedback that the provision of housing is not a core council role. The purpose of local government as outlined in the Local Government Act 2002 is to provide good quality local infrastructure and services for current and future generations. Council has determined through the Auckland Plan, that a quality compact urban form is the most effective way to provide infrastructure and services now and in the future. The facilitation of brownfield redevelopment is the most significant factor in the achievement of quality compact urban form.

Investigation concurrent with LTP consultation

25. Since November, at the same time that council was seeking feedback from the public on the proposal, staff from council, ACPL and Waterfront Auckland have been examining further detail around the feasibility of achieving these outcomes through the proposed new CCO.

26. This work has concentrated on the achievability, the costs, the risks and the high level funding model for the proposal in order to decide if a recommendation to proceed with establishment was advisable. The work is summarized in Attachment A and has concluded that:

a. the benefits of this proposal outweigh the risks

b. risks to the council group can be effectively mitigated or controlled

c. Development Auckland needs to be an empowered agency in order to achieve the benefits of amalgamation and the objectives sought by council

d. a conservative estimate of medium term savings brought about by having a single executive team and board of directors would more than cover one-off transition costs. These remuneration savings are permanent. The vast majority of transition and establishment work can be undertaken by existing staff

e. the proposed funding model is more cost effective than current and does not rely on increases in ratepayer funding

f. future funding mechanisms should now be actively pursued in readiness for the first redevelopment projects and in time for the Annual Plan 2016/17

g. establishment could occur by 1 September 2015 – if a decision to establish was made today. This timeframe is achievable and encompasses all foundational policy work. There are several matters that would benefit from a slightly longer timeframe and are not necessary for ‘day one’ operations e.g. locational analysis

h. the final details of establishment include policy decisions that need to be worked through with councillors and executive teams between now and 1 September.

27. The more recent analysis has also shown that there is sufficient justification for council to become more involved in redevelopment activity. It shows that from 2010 to 2014, only 15% of consents occurred in town centres within the 2010 MUL^{^[1]}. Feedback from the Property Council on the proposal continues to articulate the difficulty for the private sector in undertaking comprehensive redevelopment of brownfield locations.

28. Given the level of investment in infrastructure to support growth in town centres, particularly public transport, these statistics present a more compelling case for an empowered agency that can catalyse private sector investment in the most cost effective locations with the best public transport infrastructure and services.

Decision to establish Development Auckland

29. On the basis of previous work undertaken via the CCO review, the feedback received from the public via the LTP consultation, and the subsequent analysis undertaken concurrently with the LTP, this report proposes that council establish Development Auckland by joining together ACPL and Waterfront Auckland and that the establishment date be set at 1 September 2015.

30. Development Auckland is the name that has been used for the new agency. This name is thought to allow the Waterfront Auckland brand to fit neatly alongside and the word ‘development’ describes simply what the agency will be empowered to achieve should the proposal be approved. Although this name has not been agreed to by the Governing Body as yet, it has made it easier to discuss with the public throughout the LTP consultation and has fallen into general usage. Auckland Council’s brand advisors reflect that the brand sits well within the council group and that since the name has been generally accepted, it would be cost effective to continue to use it.

Objectives for Development Auckland

31. A decision to establish a CCO must be accompanied by council’s objectives in relation to ownership and control of the organisation and an outline of the nature and scope of its activities. The objectives for Development Auckland are set out in a draft purpose statement set out in paragraphs 32-35 below. Further opportunity to refine the purpose statement, and activities, powers and delegations can occur in upcoming meetings and workshops from now until early August 2015 in order to achieve establishment by 1 September 2015.

Draft purpose statement

32. Consistent with the urban form and infrastructure objectives in the Auckland Plan, the purpose of Development Auckland is to increase the supply of affordable living options for Aucklanders, primarily by facilitating the urban renewal of brownfield town centres towards quality intensified mixed use town centres with excellent public transport infrastructure and services. Development Auckland will also achieve this objective by facilitating and/or delivering quality residential and mixed used redevelopment on under-utilised council landholdings. This will support council to meet the current and future needs of communities for good quality^{^[2]} local infrastructure.

33. It will harness third sector and private sector investment to deliver vibrant and diverse town centre locations with a range of household types. This means catering for households with and without children and includes housing for low to moderate income households. Some affordability should be met by diversity in typology and availability of smaller dwellings^{^[3]}. Renewal activity should contribute to the stock of housing options that are fully accessible to disabled people and meets the needs of an aging population.

34. Consistent with the Waterfront Plan 2012, Development Auckland will continue to lead the development of the Auckland waterfront in a way that balances commercial and public good objectives, including high quality urban design.

35. Development Auckland will also manage council’s non-service properties^{^[4]} on behalf of the council group with an increasing focus on a range of policy and commercial outcomes.

Nature and scope of activities of Development Auckland

36. The proposed nature and scope of Development Auckland activities are set out in paragraphs 37-38 below.

37. In agreed Development Auckland brownfield redevelopment locations

a. Masterplanning– with the community via local boards and with developers

b. Making land available for redevelopment – Land purchase, sale and amalgamation in redevelopment locations

c. Seeking development partners and overcoming financial barriers to participation in development by ‘de-risking’ development projects

d. Co-ordinating public infrastructure - collaborating with council and government departments on design, capacity and the timing of public infrastructure

e. ‘Pre- application’ resource consent and building consent facilitation

f. Place management and activation – in conjunction with local boards

38. On council owned land elsewhere within the current Rural Urban Boundary:

a. Management of the current ACPL portfolio of council ‘non-service’ assets, including maintenance, leasing, tenancy management, preparation of asset management plans, and identification of underutilised property assets for disposal

b. Acquisition of property assets on behalf of the council group as directed, in a commercially robust and legally compliant manner

c. Disposal of underutilised property assets on behalf of the council group in a commercially robust and legally compliant manner (including Public Works Act ‘offer-back’ provisions). This includes identification of opportunities and actions to enhance sale price.

d. Provision of commercial property advice to the council group as required

e. Activities of the former Waterfront Auckland - Continuation of planning, management, operation and development of land, water and public assets within the AWDAL ‘Area of Ownership’.

39. These activities are described in further detail in Attachment A.

Funding this proposal – Establishment costs and operational funding

40. The existing budgets of Waterfront Auckland and ACPL will be consolidated from 1 September 2015 to 30 June 2025 for Development Auckland. Council staff have confirmed that establishment and transition costs can be met through appropriate adjustments to existing budgets either through the 2016/2017 Annual Plan or as recommended adjustments during the 2015/2016 year.

Funding model for Development Auckland.

41. Through the CCO review, it was recognized that joining together ACPL and Waterfront provided the greatest economies of scale and scope and was the most efficient and effective structural model for delivery of council’s urban form objectives. The decision to establish Development Auckland is therefore not dependent on having a fully detailed funding model for the entity, but rather, this work needs to continue as ancillary to the decision to establish. Further detail on this can be found in the Evaluation Report provided in Attachment A.

42. The proposed funding model is being designed to accelerate brownfield redevelopment without an increased reliance on rates funding. In order to accelerate activity further, council staff should continue to pursue the ability to capture some of the uplift in land value associated with redevelopment activity, especially that created by the actions of Development Auckland.

43. Any new funding mechanism would need to be analysed alongside current mechanisms such as development and financial contributions. Although the results of any such study would have a wider application than Development Auckland, these mechanisms are more applicable where redevelopment activity is defined within a geographic boundary and where it is possible to model the relative uplift caused specifically by public sector interventions and investment. Staff now believe such a modelling is achievable.

44. Although this work is not required prior to a proposed establishment date of 1 September 2015, it should be pursued in readiness for the 2016/2017 Annual Plan.

45. Further detail on the funding model for Development Auckland will be brought to the council in workshops and meetings between now and mid-August.

Risk for the council group

46. Various levels of risk assessment are needed to proceed with this proposal. These can be categorised as follows:

· Group risk – analysis of ongoing risks for the council group arising from having a development agency. Council will be responsible for the management of these risks

· Transition risk – risks to the council, ACPL and WA during the transition period which are additional to those which each organisation is already managing.

· Organisational risk – risks from the operation of a development agency which will be the responsibility of Board of Development Auckland to manage.

· Project related risk (risks arising from involvement in a particular redevelopment project) which will be the responsibility of Board of Development Auckland to manage.

47. An Enterprise Risk Management Framework (ERMF) assessment has been undertaken to identify and quantify the level of additional risk council may be undertaking as it accelerates urban redevelopment activity. As noted in the LTP, all of these risks currently exist in the current portfolio of activities undertaken by the council group, in particular by ACPL and Waterfront. The analysis for this proposal therefore concentrated on identifying if an increase in activity was unmanageable, or outside the scope of our current policy settings.

48. This analysis was comprehensive and has concluded that the risks to the council group that are associated with Development Auckland’s proposed activities can be controlled through existing council policy and risk management frameworks. Further information on key risks (financial, strategic and property market, health and safety and business continuity) can be found in the attachment to this report.

49. An ERMF will be drafted to identify and manage risks associated with the transition of Development Auckland should the proposal be approved.

50. The ERMF developed for this proposal will be used as the basis by which to draft an organizational ERMF for Development should this proposal be approved. Project Risk will be managed by the board of Development Auckland in accordance with the council groups best practice guidelines and policies.

Performance measures

51. If the proposal to establish Development Auckland is approved, the existing LTP performance measures that apply to Waterfront Auckland and ACPL will apply i.e. the five measures contained in the Waterfront Development activity and the two measures contained in the Property Development activity. It is anticipated that a review of performance measures will be developed as part of the Annual Plan 2016/2017 in relation to the broader mandate that Development Auckland will have. The proposed performance measures for Development Auckland are outlined in another report on this agenda.

Impact on the CCO Accountability Policy

52. If Development Auckland is established, council’s Accountability policy will apply to all six substantive CCOs including Development Auckland^{^[5]}, and any strategic assets currently owned or managed by Waterfront Auckland would transfer to Development Auckland. The same requirements in relation to CCO’s management of strategic assets and process for approval of major transactions in relation to strategic assets would apply.

Consideration

Local Board views and implications

53. Of those boards that provided feedback on this proposal the majority supported Development Auckland being established. Some boards expressed concerns about council moving into a development role with associated financial risk and a view that it is not core business. The views of the twelve local boards that provided feedback are summarised as follows:

54. Albert-Eden, Mangere-Otahuhu, Waitemata, Waitakere Ranges and Whau Local Boards support council taking a more active role in the development of Auckland through Development Auckland. Henderson-Massey Local Board supports the proposed Development Auckland CCO as a partner in strategic urban regeneration in Henderson. Papakura Local Board also supports the proposal and is hopeful that the agency will be able to contribute to the regeneration of Papakura metropolitan centre and the delivery of a community hub in Takanini.

55. Upper Harbour Local Board would like to see specific outcomes achieved such as quality urban form and design, high level amenities, good community provision, good infrastructure provision, with a focus on open space delivery.

56. Hibiscus and Bays Local Board supports the merging of ACPL and Waterfront Auckland but not to create an urban regeneration agency. The board is concerned that council may take on financial risk that should rest with developers.

57. Manurewa Local Board feels that council’s role is to support and enable rather than develop. Rodney Local Board does not support the establishment of a development agency as this is not a core council business. The board feels that council already has a range of vehicles for helping deliver on these objectives (Waterfront Auckland, City Transformations, ACPL, Tamaki Redevelopment Company and Housing Project Office).

58. Orakei Local Board feels that not enough information has been provided and is not clear on what the benefits are.

Māori impact statement

59. The Independent Māori Statutory Board (IMSB) was generally supportive of the progression the proposal through the CCO review, recognising that the proposed Development Auckland has the potential to lead to more consistent development outcomes, including providing opportunity for the council group to take a more comprehensive, efficient approach to:

· engaging with the IMSB and addressing Issues of Significance for Auckland’s Māori

· proactively consulting Māori on development projects

· delivering on lifting Māori social and economic wellbeing

· increasing the visibility of Māori identity (including the application of the Te Aranga Māori Design Principles which are incorporated into the Auckland Design Manual) across Auckland.

60. The IMSB also asked for further input to establishment, purpose and scope if the proposal to establish Development Auckland went ahead. It also requested more information on how it would be funded. This opportunity will be provided to discuss these matters at the upcoming workshops planned for the CCO Governance and Monitoring committee, on which the IMSB are represented.

61. All other points raised by the IMSB will need to be addressed in the later stages of evaluation. As with other CCOs, the extent to which Development Auckland will be able to achieve particular outcomes outlined in the Issues of Significance will need to be balanced with the achievement of its core purpose.

Implementation

62. If approved, staff will take all necessary steps to establish Development Auckland and transition all the current undertakings of ACPL and Waterfront Auckland into the new entity on 1 September. Four further opportunities are planned for the members of the CCO Governance and Monitoring Committee between now and mid - August to deliberate and make recommendations to the Governing Body on the operating parameters for Development Auckland, including (but not limited to) the following matters:

· further opportunity to refine and agree on the purpose, role, functions, powers and delegations that will be given to Development Auckland

· the redevelopment locations that represent the best opportunities for Development Auckland. The criteria and methodology for choosing redevelopment locations will be discussed with councillors at the earliest meeting. This work does not duplicate previous analysis of locations but will build on the data, planning and investigations to date

· funding and accounting structures

· options for a streamlined regulatory regime – including mechanisms used for Special Housing Areas

· further opportunities for productivity improvements in property management and development activities within the council group

· the powers required by Development Auckland for ensuring infrastructure co-ordination in redevelopment locations

· the mechanisms Development Auckland might use for engaging with a local board in a redevelopment location.

· clarification of offer-back provisions under the Public Works Act 1981.

Attachments

No.	Title	Page
a View	Evaluation report for the establishment of Development Auckland	243
b View	Key stakeholder feedback on Development Auckland from the LTP consultation	257

Signatories

Author

Rose Leonard - Principal Advisor

Authorisers

Matthew Walker - General Manager Financial Plan Policy & Budgeting

John Bishop - Treasurer and Manager CCO Governance & External Partnerships

Sue Tindal - Chief Financial Officer

Budget Committee

07 May 2015

Greenways - A regional approach to greenways

File No.: CP2015/04589

Purpose

1. To provide an update on the planning and implementation of a regional greenways programme.

Executive Summary

2. Since 2012, Local Boards have been leading the development and implementation of greenways plans. 13 local boards have adopted greenways plans, or have draft greenways plans in preparation.

3. This report responds to a resolution of the Budget Committee seeking a report on the regional coordination of the greenways programme.

4. This resolution was one of a number of initiatives in 2014 to develop a more coordinated approach to the implementation of the greenways programme .These included:

· a Local Board Chairs forum, which shares information and learnings for the delivery of local board greenway initiative

· a staff working group, which is exploring the opportunities for a more coordinated approach to greenways planning and delivery

5. This report outlines a coordinated regional approach to the delivery of greenways, including:

· preparation of the regional greenways plan

· formation of a greenways advisory group to oversee the development and implementation of the regional greenways plan

Recommendation/s

That the Budget Committee:

a) endorse the development of a regional greenways network plan to complement Local Board greenways plans

b) endorse the establishment of a greenways advisory group to oversee the development and implementation of the regional greenways plan.

Discussion

Background

6. In 2012, the Puketapapa Local Board initiated the first local board greenways plan. Since then a further 12 local boards have led greenways plans through to adoption or have greenways plans in a draft form.

7. While there is some variation in emphasis across the 13 local board greenways plans, there is broad consistency in the objectives of the plans. As a collective, the local board greenways plans identify:

· local connections providing recreation opportunities and connecting people to local destinations

· routes that may also serve a commuter transport function

· ecological connections

· a long term approach to developing a connected network of routes

· priority routes for implementation.

· regional connections which provide links across more than one local board area

8. The development and implementation of local board greenways plans have been mainly funded by local boards or through local board advocacy to Auckland Transport. Projects have been delivered by building upon existing opportunities either by topping up Auckland Transport or parks renewal projects, or by funding specific elements in capital projects, like bridges.

9. Since March 2014, a Local Board Chairs group has been meeting to discuss a collaborative approach to the delivery of greenways and to share information and best practice across local boards. This forum has met on a number of occasions.

10. The November 2014 meeting of the Budget Committee resolved:

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.

b) agree to establish a cross-council working group (with staff representatives from Parks, Auckland Transport, Local Board Services, Financial Planning, the Chief Planning Office and the IMSB Secretariat) to report back to the Budget Committee prior to May 2015 on ‘Developing a Regional Greenways Network Plan and identification of budgets to support implementation of that plan at a local and regional level’ for consideration as part of decisions for the final LTP 2015-2025.

Comment

Regional Greenways Plan

11. A regional greenways plan is proposed which will provide an enabling framework for the greenways initiative. The regional plan would seek to:

· promote the delivery of a greenways network as a ‘flagship’ initiative, setting out the multiple benefits greenways can deliver and their direct contribution towards the vision of Auckland as the world’s most liveable city

· map a strategic greenway network, which will overlay and complement local greenways networks

· identify priority regional greenways projects and an implementation plan for their delivery

12. Regional priority projects would be funded through a strategic allocation of existing budgets from both Auckland Council and Auckland Transport. Significant regional projects could also be attractive to external funders, including corporate partners and philanthropic organisations.

13. The development and implementation of the regional greenways plan will be overseen by a greenways advisory group. This advisory group would consist of a small number of representatives from:

· Auckland Council Governing Body

· Local Boards

· Auckland Transport Board

· Independent Maori Statutory Board

14. The purpose of the advisory group would be to:

· oversee the development of the regional greenways plan

· monitor implementation of the plan

· support funding for priority greenway projects

· champion the greenways initiative

15. A virtual greenways project office will be established to resource and coordinate the development and delivery of the regional greenways plan. The virtual project office will draw on staff and operational resources from across Auckland Council and Auckland Transport.

Greenways Funding

16. A key challenge is to coordinate Auckland Council and Auckland Transport budgets and potential external funding sources, and to use them in the most efficient way to deliver greenways outcomes.

17. The regional greenways plan will provide a basis for allocation of regional funding to priority greenways projects through the Annual Plan and Long term Plan processes. Local Boards will continue to fund local priority greenways projects from their discretionary budgets.

Funding source	Indicative budget Draft 2015-2015 LTP
Auckland Council Parks, Sport and Recreation
Approved greenways capex programme A number of specific greenways related projects have been identified in the draft 2015-2025 LTP	$14.5 million
Unallocated greenways capex programme The draft 2015-2025 LTP includes budget provision that is currently unallocated to specific projects. It is proposed a portion of that unallocated budget could be allocated to deliver a greenways programme. Funded from development contributions and would need to support growth related greenways projects.	$20 million (indicative allocation)
Renewals capex Renewals capex can be utilised as a contribution towards future greenways projects where those projects involve the replacement of an existing asset	Greenways component not specified
Open space acquisition This budget may be available to purchase open space land to create greenways. Funded from development contributions, so project would need to be caused by and benefit the growth community. High demand on limited budget provision may limit the extent that greenways projects can be funded	Greenways component not specified
Other Auckland Council
Projects initiated by a range of departments within Auckland Council could contribute to the delivery of greenways outcomes, including Infrastructure and Environmental Services, City Transformation, and Waterfront Auckland.	Greenways component not specified.
Auckland Transport
Cycling and walking budget.	Budget level will depend on council budget decisions following Regional Land Transport Plan feedback
Local Board discretionary funding
Locally driven initiatives This budget can be allocated to specific greenways projects at the discretion of individual local boards	Budget not yet allocated
Local Board transport fund This budget can be allocated to specific greenways projects at the discretion of individual local boards	$10 million per annum divided across 21 local boards

18. In addition to Auckland Council and Auckland Transport funding there are external funders who could fund greenways.

· the New Zealand Transport Agency can provide funding for greenways through its urban cycleways fund and the National Land Transport Fund. This funding is coordinated and delivered by Auckland Transport

· greenways can deliver on local economic development and tourism and are projects which philanthropic organisations may fund

· greenways can also be developed by local communities with seed funding from council.

19. By taking an Auckland wide coordinated approach to greenways these funding sources can be to be targeted to priority greenways investment.

Next Steps

20. Staff will start the appropriate approval process and set up activities required to develop a regional greenways plan, establish the greenways advisory group and virtual greenways project office.

Consideration

Local Board views and implications

21. Local Board Chairs have been meeting on regular basis to discuss the development of greenways, the proposal to establish a regional greenways plan and a steering group was discussed with them at their April meeting.

Māori impact statement

22. It is proposed that Māori be represented on the greenways advisory group through representation from IMSB. Additional mana whenua and matāwaka partners and stakeholders need to be identified as the regional greenways initiative develops.

Implementation

23. Not applicable.

Attachments

There are no attachments for this report.

Signatories

Authors

Shyrel Burt - Principal Policy Analyst

Andrew Wood - Team Leader Parks and Recreation Policy - North/West

Authorisers

Kataraina Maki - GM - Community & Social Policy

Roger Blakeley - Chief Planning Officer

Sue Tindal - Chief Financial Officer

Budget Committee

07 May 2015

Review of Business Improvement Districts Service Delivery Model

File No.: CP2015/06360

Purpose

1. This report presents service options, cost saving and efficiency opportunities for council’s Business Improvement Districts (BIDs) service delivery model.

Executive Summary

2. The Budget Committee at their 5^th November 2014 meeting (Resolution BUD/2014/54) resolved to review the nature and costs of council support services to Business Improvement Districts (BIDs). The review was to work with BIDs and local boards.

3. Key findings underpinning the options presented are:

· That council will continue to provide the BID Partnership Programme in some form

· That services provided need to relate to the life cycle of a BID, rather than its size

· That efficiencies with the service can be made

· That some BIDs are prepared to pay for essential services

· That local boards should have the direct relationship with BIDs in their area

· That improved accountability mechanisms will be developed as part of the BID Policy review process

4. Four options are presented. They take in account feedback from both BIDS and local boards. Each has different savings potential and service provision for both BIDs and local boards.

5. The option recommended is a mixture of essential service delivery, growth of the Programme (assistance with new BID establishment) and provision of support on a ‘as needed’ basis for existing BIDs.

Recommendation/s

That the Budget Committee:

a) approve Option 3, Differential Services, Needs Based Model, as the service delivery model for the Business Improvement District Partnership Programme from 1 July 2016

b) approve charging an annual administration fee per annum, commencing from 1 July 2016, against all Business Improvement Districts to recover costs relating to essential service provision.

c) approve the review of the BID Policy by 1 July 2016 to be undertaken in collaboration with Business Improvement Districts and local boards.

Comments

6. There are 48 Business Improvement Districts (BIDs) in the Auckland BID Partnership Programme (BIDPP). In the current financial year, there is a targeted rate amount of $14,518,560 dispersed to the BIDs. The annual opex cost to Auckland Council is $1.2 million (staff and corporate overheads), all of which is funded through the general rate. Appendix 1 provides a snapshot of information about the programme, current activities, success factors and benefit examples.

7. In response to the Mayoral Proposal for the 2015-25 Long Term Plan, the Chief Planning Office identified savings to be made in the BIDPP. In particular it recommended charging a proportional targeted rate that would have recovered $860,000 from BIDs on an ongoing annual basis, commencing 1 July 2015. This would effectively have made the BIDPP ‘user pays’ for the majority of the programme cost.

8. There was significant concern raised by both the BIDs and local boards to this proposal. The Budget Committee resolved “agree that staff carry out work with the Business Improvement Districts (BIDs) and the relevant local boards on the nature and costs of council support services for BIDs to ensure services provide value for money and to identify opportunity for BID amalgamation and sharing of services” (BUD/2014/54).

9. A cross council team agreed the following objectives:

· Consider the nature and cost of council support services

· Identify opportunities for cost efficiencies in the services provided by council to BIDs in order to ensure services provide value for money

· Assess options for cost recovery of the BID programme, including any options for BID amalgamation and sharing of services.

· Demonstrate the value and benefits of BIDs to the region.

10. Feedback was sought from both the BID community and local boards via:

· Two facilitated workshops with BIDs – managers and Executive Committee members

· Four facilitated local board cluster briefings

· Post workshop survey sent to all BIDs

High level consultation feedback from BIDS and local boards

11. Full details of feedback from the BIDs and local boards who attended the facilitated sessions is attached as Appendix 2 (facilitated sessions). Appendix 3 contains the full BID survey results. The following identify key areas of agreement and feedback.

12. Benefits of the BIDPP, identified from facilitated sessions and common to both local boards and BIDs:

· Regional and local benefits include local economic growth, reduced vacancy rates, improved business attraction and retention rates

· Reduced crime, graffiti and improved safety

· Single point of contact for Auckland Council and local boards to connect with the business community

· Coherent and well organised advocacy and submissions to Auckland Council and local boards as a single voice on behalf of the whole business community

13. Essential services provided by BIDPP that were common to both local boards and BIDS:

· Collection and distribution of the targeted rate

· Support at critical times of the BID life-stage

· Ensuring accountability of BIDs for use of targeted rate

· Connecting with the right people across council and CCO’s

· Support and advice for BID managers

· Providing relevant economic data and information

Other Key Points

14. From the facilitated sessions, it was evident that local boards also valued:

· The programmes contribution to place-shaping & presentation of an area

· The opportunities for local investment

· The independence of BIDs from council

· Training and support for managers

· Assistance with new BID establishment

· Assistance to struggling BIDs

15. Services that some BIDs would be prepared to pay for include:

· Collection and distribution of the targeted rate

· Some specific advice as needed on issues such as BID expansion and the BID Policy

16. There was a strong correlation between the facilitated session feedback and the survey results relating to what benefits BIDs thought the programme provided to the local economy. Additionally the survey identified it as an incubator for small business growth and its ability to influence CCO outcomes. 47 respondents- BIDs and Executive Committee members - completed the survey.

Ideas for improving the service

17. BIDs identified ideas, via the survey, for improving financial efficiency and cost recovery:

· Improving access to information about BIDs (through, for example, a greater online presence, or a dedicated call centre)

· Developing different models to suit different BID contexts and needs

· Encouraging more shared services and collaboration between BIDs

18. 80% of BID survey respondents thought Auckland Council should cover the costs of essential services in the future. Respondents also suggested the value of the BIDPP could be increased by:

· The provision of more funding

· Improved performance and streamlining of processes (amalgamation of smaller BIDs, shared learnings)

· Greater recognition of the work that BIDs do.

19. The survey found when comparing patterns of response that:

· There were few patterns that were consistent. BIDs that had a similar profile often had widely different views about the services they received

· New BIDs valued the services offered more than well-established BIDs

· Some services where more valued by those with a higher proportion of members in the retail category (e.g. specialist advice, facilitation)

20. The majority of respondents did not answer the survey question on whether service could be provided by a third party or external supplier. Answers provided ranged between all services could be externalised (with the exception of the target rate collection) and others questioned if using external suppliers or third parties would add costs.

Key findings underpinning BID service delivery model options

21. Auckland Council will continue to provide the BIDPP in some form as both BIDs and local boards place high value on the benefits of the programme to the local economy.

22. The Status Quo is not an option for future service delivery. The current approach of a ‘one size fits all’ model is not delivering the best outcomes for all BIDs. The model should be refined to focus service more effectively. Any future service delivery model will need to be flexible to respond to different situations, region wide.

23. The services provided need to relate to the life-cycle stage of a BID, rather than its current size. The life cycle pattern consists of

· Business associations wanting to develop into a BID

· Business associations on the pre-establishment journey

· Newly established BIDs (up to first two years of operation)

· Mature BIDs operating effectively independently

24. Some BIDs are willing to pay for the BIDPP but only for essential services.

25. An opportunity for local boards and BIDs to have a direct relationship that does not require council advisor involvement exists. Local boards have decision making delegation for the BIDPP.

26. Improved accountability for spending the targeted rate should be developed as part of the BID Policy review.

Public vs Private Benefits

27. Whilst the prosperity of local businesses serves the interest of the entire region, the benefits of the BIDPP primarily accrue to local businesses within BID boundaries. The beneficiaries can be clearly defined; but it is difficult to quantify the exact benefits received by individual members.

28. One way to recognise the public good being enjoyed by private members of the BID approach is to consider charging an administration fee to each BID.

29. The administration fee would be charged to recover the cost of essential service provision. It would be charged annually as a flat fee across all BIDs.

30. Based on 2014/2015 figures, a cost recovery amount of $156,000 would see each BID charged an administration fee of $3,250.00.

31. The report seeks guidance from the Budget Committee on whether the administration fee should be charged or not.

32. The administration fee approach would increase the savings identified for each option.

Options

33. These options take account of feedback from BIDs and local boards in their development.

34. There are four options recommended for consideration, including the Status Quo (Option 0) . Options 1,2 and 3 all:

· Provide the “essential services” agreed through the feedback and outlined earlier in this report (i.e. services is more ‘fit for purpose’)

· Provide for maintenance of existing BIDs

· Require a stronger, more direct relationship between the local board and BIDs with less council staff involvement

· Represent a reduction in staff and change in service focus from the current state

35. Options other than the Status Quo will require up to one year’s lead in time before savings are fully recovered. Development of tools, commitments to existing business areas already engaged in the establishment process, BID Policy development and the operationalisation of the chosen option will require resources to implement. Savings available from the proposed service delivery models will therefore not commence until year two of the Long Term Plan.

Options

Financial Impact

Service Impact

Option 0 Status Quo

Cost: $1.2M opex annually

Maintain current service provided by 8 FTEs, no change in service proposed.

Services delivered are: target rate collection and disbursement, policy, BID development advice and support, including key account services, liaison with local boards and connection into relevant council services.

Feedback that current service offering

· Not directed enough to those in most need

· Inconsistent service provision

Option 1 Minimal Services for existing BIDs

Cost: $308K per annum

Savings identified: $924K from 1 July 2016

Focus on providing essential services only

· Policy development

· Accountability

· Collection and distribution of targeted rate

BIDs expected to buy-in all additional support services from external providers

Struggling BIDs would be expected to self-regulate. Funding would be an issue smaller BIDs.

Growth in number of BIDs only possible if business associations can self-organise and directly approach local boards for seed funding.

Liaison with local boards focused on policy and accountability issues only

Impact of model on local/regional economy

Staffing reduction from 8 FTEs to 2 FTEs

Lead in time required, commence 1 July 2016

Option 2

Minimal Services for existing BIDS PLUS

Cost: $616K per annum

Savings identified: $616K from 1 July 2016

Focus on providing essential services (Option 1) plus

· leveraging Programme scale through relationship development with service providers

Focus moves from individual BIDs to the BID Programme itself

BIDs expected to buy-in all additional support services from external providers

Struggling BIDs would be expected to self-regulate. Funding would be an issue smaller BIDs.

Growth in number of BIDs only possible if business associations can self-organise and directly approach local boards for seed funding.

Liaison with local boards focused on policy and accountability issues only

No support for new BID establishment (valued by local boards)

Expansions – fully financed/ supported by BID

Development of information sharing approaches (online web portal)

Staffing reduction from 8 FTEs to 4 FTEs

Lead in time required, commence 1 July 2016

Option 3

Differential service’s needs-based

Cost $770K per annum

Savings identified: $462K from 1 July 2016

Focus on providing essential services (option 1) plus

· Limited resources to respond to issues - ‘needs based’ only

· Assistance with BID establishment (up to 2 years) and support for first 2 years – strongly valued by local boards

· Provision of upskilling / capability building for managers (governance/ accountability)

· Leveraging Programme scale through relationship development with service providers (option 2)

· Monitoring of Programme

· Development of information sharing approaches (online web portal)

Redesign of service

· ‘Hub’ model with targeted roles. Staff from generalists to specialist roles. Approach precedent other departmental redesigns.

· Greater consistency of service provision across the region

· Responds to feedback that not all BIDs require all services

· Small BIDs with target rates below $50k would be assisted to amalgamate, align to an umbrella BID, dis-establish or to increase revenue.

Expansions – fully financed/ supported by BID

Advisor liaison with local boards focused on BID policy, accountability and governance issues.

Staffing reduction from 8 FTEs to 5 FTEs

Lead in time required, commence 1 July 2016

Local Board views and implications

36. Local boards value the BIDPP as a way to connect with their business communities and work together to achieve common local objectives. Local boards have a decision making role in the BIDPP.

37. The process to review the nature and costs of council support services for BIDs has received local board feedback through a process with cluster briefings held over February/ March 2015.

38. A summary of local board feedback from briefings is contained in sections 11-13 of this report.

39. Feedback received from the 24 April workshop was:

· There was some reluctance to the administration fee being charged

· There was concern that local boards where not formally consulted

· That local boards recognised the value of the BIDPP and its continuation

· There was some support for the maintenance of the status quo in terms of service delivery

40. Additional feedback received will form an addendum to this report for the 7 May Budget Committee meeting.

Māori impact statement

41. Council does not hold information on the ethnicity of business owners. The impact on Māori business will be the same as the impact on other businesses within a BID programme who benefit from a strong local business community.

Implementation

42. Implementation towards embedding a new service delivery model would commence post the decision of the Budget Committee. Progress steps would include the operational design of a selected option, the review of the BID Policy and implementation towards a new model.

Attachments

No.	Title	Page
a View	Appendix 1 - Auckland BID Programme Snapshot April 2015	275
b View	Appendix 2 - BID Programme Service Review Engagement - March 2015	285

Signatories

Author

Gillian Plume - Team Leader BID Partnership

Authorisers

Penny Pirrit - GM - Plans & Places

Roger Blakeley - Chief Planning Officer

Sue Tindal - Chief Financial Officer

[1] RIMU data – building consents in town centres from Jan 2010- December 2014.

[2] Defined in the Local Government Act 2002 as “efficient, effective and appropriate”.

[3] Family sized apartments should be provided at a range of price points and will ideally include shared-equity and rent-to-buy products

[4] Non-service properties are defined in the Local Government (Tamaki Makaurau Reorganisation) Council-controlled Organisations Vesting Order 2010 as property that is not infrastructure or used to deliver services (for example, property not used as council offices, a park or reserve, art gallery, library, swimming pool, recreation centre, sporting facility, community hall, community centre, or other community facility, early childhood centre, public toilet, as housing for elderly persons, a wharf or boat ramp, or as a heritage property).

[5] The sections in the current accountability policy that relate to Waterfront Auckland and ACPL will be removed and a new section will be drafted that reflects the purpose of Development Auckland

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