Agenda of Governing Body

Terms of Reference

Those powers which cannot legally be delegated:

(a) the power to make a rate

(b) the power to make a bylaw

(d) the power to adopt a long term plan, annual plan, or annual report

(e) the power to appoint a chief executive

(f) the power to adopt policies required to be adopted and consulted on under the Local Government Act 2002 in association with the long-term plan or developed for the purpose of the local governance statement

(g) the power to adopt a remuneration and employment policy.

Additional responsibilities retained by the Governing Body:

(a) approval of long-term plan or annual plan consultation documents, supporting information and consultation process prior to consultation

(b) approval of a draft bylaw prior to consultation

(c) resolutions required to be made by a local authority under the Local Electoral Act 2001, including the appointment of electoral officer

(d) adoption of, and amendment to, the Committee Terms of Reference, Standing Orders and Code of Conduct

(e) relationships with the Independent Māori Statutory Board, including the funding agreement and appointments to committees

(f) approval of the Unitary Plan

(g) overview of the implementation and refresh of the Auckland Plan through setting direction on key strategic projects (e.g. the City Rail Link and the alternative funding mechanisms for transport) and receiving regular reporting on the overall achievement of Auckland Plan priorities and performance measures.

Exclusion of the public – who needs to leave the meeting

Members of the public

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

Those who are not members of the public

General principles

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

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

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

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

Members of the meeting

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

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

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

Independent Māori Statutory Board

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

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

Staff

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

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

Local Board members

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

Council Controlled Organisations

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

Governing Body

29 June 2017

Adoption of the Annual Budget 2017/2018 (Annual plan)

File No.: CP2017/12072

Purpose

1. To adopt the Annual Budget 2017/2018 (Annual Plan), including 21 Local Board Agreements.

Executive summary

2. Once every three years, Auckland Council is required to adopt a ten-year budget (long-term plan or LTP), and in the intervening years an annual budget (annual plan). These plans set out the service levels and budgets for the coming year(s) as well as being used to set rates.

3. On 15 December 2016, the Governing Body agreed the consultation topics for the annual budget 2017/2018. In mid-December 2016, local boards also met to adopt their consultation content that covered key local proposals and advocacy areas. On 9 February 2017, the Governing Body adopted the consultation document, supporting material, and agreed to the approach to consultation.

4. Between 27 February and 27 March 2017, the council undertook public consultation. Consultation included the draft Tūpuna Maunga Authority Operational Plan 2017/2018, local board priorities and potential changes to rating policies. A total of 8,058 written submissions were received, along with feedback provided in-person at have your say events and through social media.

5. On 1 June 2017, following the consideration of feedback received and political discussions, the Governing Body agreed decisions to finalise the Annual Budget 2017/2018. The Annual Budget 2017/2018 has been prepared reflecting these decisions. In particular, it includes:

· prospective financial statements and other financial information based on year three of the LTP 2015-2025 updated to reflect the budget decisions made on 1 June 2017

· rating policy, reflecting decisions made on 1 June 2017

· local board agreements – as adopted by local boards between 1 and 19 June 2017.

6. On 2 June 2017, the Tūpuna Maunga Authority adopted the Authority’s Operational Plan 2017/2018. The Governing Body is invited to approve the The Tūpuna Maunga Authority Operational Plan 2017/2018 and the summary of the Tūpuna Maunga Authority Operational Plan 2017/2018 for inclusion in the Annual Budget 2017/2018.

7. The Local Government Act 2002 requires the council to adopt the Annual Budget 2017/2018 before 1 July 2017. Following adoption, staff will finalise documentation for distribution and also undertake activity to close the consultation loop with Aucklanders.

8. The setting of rates for 2017/2018 will be considered in a separate report on this agenda, following the adoption of the Annual Budget 2017/2018.

Recommendation/s

That the Governing Body:

a) agree the Tūpuna Maunga Authority Operational Plan 2017/2018 (Attachment A to the agenda report) and Summary of the Tūpuna Maunga Authority Operational Plan 2017/2018 (Attachment B to the agenda report) for inclusion in the Annual Budget 2017/2018 (Annual Plan).

b) adopt the amended Revenue and Financing Policy (Attachment C to the agenda report), which reflects the decisions made by the Governing Body on 1 June 2017.

c) adopt the Annual Budget 2017/2018 (Annual Plan), including 21 local board agreements.

d) delegate the authority and responsibility for agreeing any required minor editorial changes and the correction of minor errors to the Annual Budget 2017/2018 (Annual Plan) document to the Chair of the Finance and Performance Committee and the Group Chief Financial Officer.

Comments

9. Once every three years, the council is required to adopt a ten-year budget (long-term plan or LTP), and in the intervening years an annual budget. These plans set out the service levels and budgets for the coming year as well as being used to set rates.

10. Each year an agreement must be developed for each local board that sets out priorities, budgets and intended levels of service for local activities, and the capital and operating expenditure required to fund these activities. These agreements between local boards and the Governing Body are made as part of the annual budget or LTP process.

11. Each year the Tūpuna Maunga Authority Operational Plan is developed to provide a framework in which the council will carry out its functions for the routine management of the maunga and administered lands. The Tūpuna Maunga Authority Operational Plan must be adopted concurrently with the council’s annual budget and be included in summary form in the annual budget.

Developing the consultation document

12. The process to develop the council’s consultation document for the annual budget 2017/2018 began with a programme briefing to the Finance and Performance Committee in October 2016. Workshops were held in November and December 2016.

13. On 30 November 2016, the Finance and Performance Committee received the mayoral proposal for consultation.

14. In December 2016, the Governing Body agreed the following consultation topics for the Annual Budget 2017/2018:

· Rate increases

· Rating stability

· Paying for tourism promotion

· Paying for housing infrastructure

· Paying council staff a living wage

· Priorities in your local area.

The consultation document also sought feedback on:

· Waste management and charges

· Mass transit network

· Changes to Business Improvement Districts (BIDs) targeted rates

· Skypath implementation

· Collaborations on reducing homelessness

· Rural fire service

· Co-governance of volcanic cones.

15. Local boards held a series of meetings and workshops in October and November 2016, ahead of meetings in December to adopt their content for consultation. This included key priorities for 2017/2018 and a brief summary by local board, that was distributed as part of OurAuckland to all households.

16. In November 2016, the Tūpuna Maunga Authority met to approve its draft budget for 2017/2018 and the Draft Tūpuna Maunga Operational Plan was subsequently adopted by the Tūpuna Maunga Authority.

17. On 9 February 2017, the Governing Body adopted the consultation document, supporting material, and agreed the approach to consultation.

Public consultation

18. The consultation document formed the basis for public consultation and focused on the key potential changes for 2017/2018. More detailed information was also provided in supporting information.

19. Public consultation ran between 27 February 2017 and 27 March 2017.

20. Public awareness raising activities were delivered from mid-February to the end of March to encourage Aucklanders to participate in the consultation process. These activities included the March edition of OurAuckland, advertising in local and regional newspapers, ethnic media, online banner advertisements in local and regional newspapers, ethnic media, online banner advertisements, media releases, targeted stakeholders communications and social media and media partnership with Fairfax.

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

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

· in-person – events were held across Auckland (largely in the evenings and weekends) to provide an opportunity for Aucklanders to speak in person to elected members and rates subject matter experts. Three events were specifically targeted towards Māori. One event was also held for regional stakeholders in a traditional hearing style with all councillors invited to hear spoken feedback

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

22. Tūpuna Maunga Authority received feedback via three mechanisms:

· via the Auckland Council process and events

· directly to the Tūpuna Maunga Authority

· Tūpuna Maunga Authority held one hearing on the 10 April 2017.

Consideration of feedback received

23. There were 8,058 written submissions received. Of the submissions received:

· most were written, with 72 per cent being provided using the feedback form (either online, posted or emailed)

· online submissions increased to 44 per cent (up from 31 per cent on the 2016/2017 Annual Budget)

· 7,849 provided feedback on regional topics and 4,708 on local topics.

24. There were 2,510 attendees at 70 Have Your Say events and existing community events. All attendees were also given the opportunity to provide a written submission. Have Your Say and community events provided a qualitative source of feedback to consider alongside the quantitative analysis of written feedback.

25. There were 103 pieces of feedback received through digital channels (Twitter and Facebook).

26. The following approach was used to ensure decision-makers were well informed about feedback received:

· staff with specific subject matter expertise reviewed feedback received relevant to their areas of expertise and summarised the issues raised

· two reports were prepared, one summarised the feedback on regional matters and the other provided an overview to the communication and consultation approach and results. These were discussed at the Finance and Performance Committee workshop on 26 April 2016. These reports did not contain analysis of the implications of the feedback received as this was included in decision-making reports

· 21 reports were also prepared summarising the feedback for each local board area and these were considered by each local board between 18 April and 2 May 2017.

· a separate report was prepared summarising feedback received on the draft Tūpuna Maunga Operational Plan. This was considered on 13 April 2017, when joint deliberation was held between the Tūpuna Maunga o Tamaki Makaurau Authority and the Finance and Performance Committee.

27. In addition to the feedback summary report, all feedback received was made available to elected members prior to the Finance and Performance Committee briefing on 26 April 2017. In early May, the feedback summary report, along with all submissions, was made available to the public via the Auckland Council website.

28. On 9 May 2017, discussions were held between local boards and the Finance and Performance Committee. These discussions provided an opportunity for local board views on regional issues and advocacy items to be considered ahead of decision making.

Decision making

29. On 1 June 2017, the Finance and Performance Committee recommended to the Governing Body the decisions required to finalise the Annual Budget 2017/2018. The Governing Body subsequently agreed these decisions. This included decisions required to finalise local board agreements.

30. Following decisions made by the Governing Body on 1 June 2017, agreements were prepared for each local board that reflected:

· the impact of decisions made by the Governing Body on 1 June 2017

· re-prioritisation decisions by local boards of locally driven initiative (discretionary) budgets

· the allocation of central costs (including depreciation, interest, corporate overheads and staff costs)

· minor administrative adjustments, if any.

31. Decisions made on 20 June 2017 at the Finance and Performance Committee have been incorporated into the Annual Budget 2017/2018.

32. On 2 June 2017, the Tūpuna Maunga Authority approved the Tūpuna Maunga Authority Operational Plan 2017/2018 and the summary of the Tūpuna Maunga Authority Operational Plan 2017/2018 for inclusion in the Annual Budget 2017/2018.

33. Local board business meetings were held between 1 and 19 June 2017, where all 21 local boards adopted their agreements for 2017/2018.

34. Two volumes (attachments D and E) have been prepared that make up the annual budget for adoption today, these are:

· Volume 1 – Provides an overview of the key highlights and priorities for 2017/2018, the prospective financial statements and funding impact statements for 2017/2018, and a summary of the Tūpuna Maunga Operational Plan 2017/2018

· Volume 2 – Includes the local board agreements and other local information, including the Allocation of decision-making for non-regulatory activities.

35. When preparing, consulting on and making decisions on the Annual Budget 2017/2018, the council has followed a thorough process, including considering:

· significance or materiality of the differences to year three of the LTP

· whether any formal amendment to the LTP is necessary

· extent of the council’s resources

· statutory decision-making practices in the Local Government Act 2002 (Part 6)

· decisions that are required for this annual budget

· financial management requirements.

Staff have reviewed the processes outlined above and confirm that council has complied with all legal requirements for adoption of the annual budget today.

Consideration

Local board views and implications

36. Local board agreements are required to be adopted each year as part of the annual budget and ten-year budget. These agreements set out priorities, budgets and intended level of service for local activities, and the capital and operating expenditure required to fund these activities.

37. Local boards have been involved in developing the Annual Budget 2017/2018. Prior to making final decisions, discussions were held between the Finance and Performance Committee and local boards. On 1 June 2017, the Finance and Performance Committee was also provided with a summary report and all resolutions on advocacy and regional issues passed by local boards regarding decision making for the annual budget.

Māori impact statement

38. Auckland Council has an important role in enabling mana whenua and our Māori communities to fully contribute to and benefit from a successful Auckland. Activities that contribute to this were identified in the LTP 2015-2025. Key highlights since the adoption of the ten-year Budget 2015-2025, for each area of spend are included in Part 2: Our Activities of Volume 1.

Implementation

39. The Local Government Act 2002 requires the council to adopt the Annual Budget 2017/2018 before 1 July 2017. Adoption of the Annual Budget 2017/2018 is required before the council can set rates for 2017/2018, which will be considered in a separate report following adoption on today’s agenda.

40. Following adoption of the Annual Budget 2017/2018 today, staff will prepare the final documentation for distribution and also undertake activity to close the consultation loop with Aucklanders. A digital version of the document will be available from council’s website and printed copies will be available to view at libraries service centres and local board offices. Copies will also be provided to the Secretary for Local Government and the Auditor-General to meet legislative requirements and to council’s trustee companies who oversee our debenture trust deed requirements in New Zealand and other jurisdictions. Hard copies will also be available on request.

41. An email will be sent to all submitters or have your say event attendees (who provided an email address) advising them of the adoption of the Annual Budget 2017/2018. They will be directed to the council website where they will find a summary of the decisions made along with electronic copies of the document.

42. Local boards may also undertake activity to close the loop at a local level as part of their ongoing programme of engagement activity with local communities.

Attachments

No.	Title	Page
a ⇩	Summary of the Tūpuna Maunga Authority Operational Plan 2017/2018	15
b ⇩	Final Tupuna Maunga Authority Operational Plan 2017/2018	21
c ⇩	Revenue and Financing policy	95
d ⇨	Volume 1: Our Plan 2017/2018 (Under Separate Cover)
e ⇨	Volume 2: Local Board Information and Agreements 2017/2018 (Under Separate Cover)

Signatories

Author

Kylie Evans - Senior Project Manager

Authorisers

Matthew Walker - GM Financial Strategy and Planning

Stephen Town - Chief Executive

Governing Body

29 June 2017

Rates setting 2017/2018

File No.: CP2017/12079

Purpose

1. To set the rates for 2017/2018.

Executive summary

2. This report contains the recommendations necessary to set the rates for 2017/2018. Legislation requires that rates are set by resolution of the council after the adoption of the Annual Budget 2017/0218 (annual plan) and that they must be set in accordance with the:

· Revenue and Financing Policy

· Funding Impact Statement in the Annual Budget 2017/2018.

3. The recommendations include the following agreed rates related decisions for 2017/2018:

· an average general rates increase of 2.5 per cent for existing ratepayers

· a Uniform Annual General Charge (UAGC) of $404

· pausing the Long-term differential strategy for one year

· introduction of an Accommodation provider targeted rate

· implementation of decisions regarding Business Improvement District (BID) rates and waste management targeted rates.

4. The average general rates increase of 2.5 per cent will apply to all ratepayers. Individual targeted rates have been calculated to reflect the updated budgets for 2017/2018.

5. The recommendations in this report also set the instalment dates, early payment discount, and penalties to be applied for late payment for 2017/2018.

Recommendation/s

That the Governing Body:

a) resolve under the Local Government (Rating) Act 2002 to set rates for the 2017/2018 financial year and to authorise the addition of penalties as follows:

i) that a Uniform Annual General Charge be set, for all rateable land, at $404 (including GST) per separately used or inhabited part of a rating unit

ii) that a general rate be set for all rateable land based on the capital value of the land and at different rates in the dollar for different categories of land as set out in the table below:

Category	Rate in the dollar of capital value (including GST)
Urban business	0.00711134
Urban residential	0.00259753
Rural business	0.00640020
Rural residential	0.00233778
Farm/lifestyle	0.00207803
No road access	0.00064938
Uninhabitable islands	0

iii) that a transport targeted rate be set for all rateable land, except land in the Uninhabitable Islands category, per separately used or inhabited part of a rating unit (SUIP) and differentially for different categories of land, as follows:

a) Categories	b) Amount of rate per SUIP ($) (including GST)
c) Urban business and rural business	d) 182.85
e) Urban residential, rural residential, farm/lifestyle and no road access	f) 113.85

iv) that waste management targeted rates be set differentially for different categories of land at different fixed amounts, as set out in the table below:

Service	Differential group	Amount of rate ($ including GST)	Basis for charging
Base service	Rating units in the former Auckland City	101.63	Per service available
Base service	Rating units in the former Franklin District, Manukau City, North Shore City, Papakura District, Rodney District and Waitakere City	101.63	Per SUIP
Base service excluding recycling	Rating units in the former Auckland City	39.61	Per service available
Standard refuse	Rating units in the former Auckland City	117.02	Per service available
Standard refuse	Rating units in the former Manukau City	117.02	Per SUIP
Large refuse	Rating units in the former Manukau City	55.00	Per service available
Additional recycling	All rating units	62.01	Per service available

Note to table: For these purposes the various waste services are as set out in the Auckland Waste Management and Minimisation Plan and the Funding Impact Statement in the council’s Annual Budget 2017/2018.

v) that a city centre targeted rate be set differentially for all rateable land in the urban business or urban residential differential category, as defined for the purposes of the general rate, and in the city centre area, of an amount of $0.00190468 (including GST) per dollar of the capital value of the rating unit for urban business rating units and of a fixed amount of $59.41 (including GST) per separately used or inhabited part of a rating unit for urban residential rating units.

vi) that an accommodation provider targeted rate be set for all rateable land that is in the urban business or rural business differential category and is located within Zones A or B, and that is used for Tier one or Tier two commercial accommodation purposes, and be set differentially for different categories of land per dollar of the capital value of the rating unit used for commercial accommodation purposes as set out in the table below:

Category	Rate in the dollar of capital value (including GST)
Tier one – Zone A	0.00811379
Tier one – Zone B	0.00405690
Tier two – Zone A	0.00486827
Tier two – Zone B	0.00243414

vii) that Business Improvement District (BID) targeted rates be set for all rateable land in the urban business or rural business differential category, as defined for the purposes of the general rate, within the defined Business Improvement District area, of a fixed amount per rating unit and a rate in the dollar of capital value of the rating unit, as set out in the table below:

BID area	Fixed amount per rating unit ($) (including GST)	Rate in the dollar of capital value (including GST)
Avondale	0.00	0.00156943
Birkenhead	0.00	0.00125406
Blockhouse Bay	0.00	0.00189800
Browns Bay	0.00	0.00066977
Devonport	250.00	0.00082468
Dominion Road	0.00	0.00083173
Ellerslie	0.00	0.00262458
Glen Eden	0.00	0.00141796
Glen Innes	0.00	0.00163249
Greater East Tamaki	195.00	0.00003858
Heart of the City	0.00	0.00059964
Howick	0.00	0.00121697
Hunters Corner	0.00	0.00097111
Karangahape Road	0.00	0.00074801
Kingsland	0.00	0.00061814
Mairangi Bay	250.00	0.00146280
Māngere Bridge	0.00	0.00192782
Māngere East Village	0.00	0.00039300
Māngere Town	0.00	0.00495938
Manukau Central	0.00	0.00046798
Manurewa	0.00	0.00116649
Milford	0.00	0.00085700
Mt Eden Village	0.00	0.00082353
New Lynn	0.00	0.00066566
Newmarket	0.00	0.00087685
North Harbour	150.00	0.00012638
North West District	250.00	0.00033076
Northcote	0.00	0.00344805
Old Papatoetoe	0.00	0.00172611
Onehunga	0.00	0.00170498
Orewa	0.00	0.00111686
Ōtāhuhu	0.00	0.00099439
Ōtara	0.00	0.00171257
Panmure	0.00	0.00228894
Papakura	0.00	0.00081895
Parnell	0.00	0.00075233
Ponsonby	0.00	0.00077564
Pukekohe	0.00	0.00066414
Remuera	0.00	0.00149967
Rosebank	0.00	0.00046097
South Harbour	0.00	0.00060881
St Heliers	0.00	0.00143002
Takapuna	0.00	0.00052778
Te Atatu	0.00	0.00197667
Torbay	0.00	0.00101269
Uptown	0.00	0.00020426
Waiuku	0.00	0.00128923
Wiri	0.00	0.00031415

viii) that the Ōtara-Papatoetoe and Māngere-Ōtāhuhu swimming pool targeted rates be set for all rateable land in the urban residential or rural residential differential category, as defined for the purposes of the general rate, located in the respective Māngere–Ōtāhuhu Local Board or Ōtara-Papatoetoe Local Board area, of a fixed amount per separately used or inhabited part of a rating unit (SUIP), as set out in the table below:

Local board area	Fixed amount per SUIP ($) (including GST)
Māngere–Ōtāhuhu	31.14
Ōtara-Papatoetoe	29.15

ix) that the Riverhaven Drive targeted rate be set on land in Riverhaven Drive, Rodney, in respect of which the council has provided financial assistance for the construction of a road that gives access to the properties, of an amount of $10,317.02 (including GST) per rating unit

x) that the Glorit flood gate restoration targeted rate be set at an amount of $166.0784 (including GST) per hectare of land in the three properties below protected by the facility (as assessed by the council), as follows:

Valuation number	Legal description (abbreviated)	Area of benefit (Ha)	Amount of rate ($) (including GST)
00910-00102	Sec 27 SO 59120	245	40,689.21
00910-00502	Lot 5 DP 127940	2	332.15
00910-12128597	Lot 1 DP 497349	17.5	2,906.37

xi) that the Waitakere rural sewerage targeted rate be set for all land in the district of the former Waitakere City Council which has an on-site waste management system and in respect of which the council has available the service of pumping out the system and which is scheduled to take place within the three-year period commencing 1 July 2017, of an amount of $191.29 (including GST) per service for each such on-site waste management system.

xii) that the Retro-fit Your Home targeted rate be set on land in respect of which the council has provided financial assistance under the Retro-fit your home scheme, at different levels based on the extent of the outstanding assistance by reference to the year that the ratepayer started repaying the financial assistance by this targeted rate, of an amount set out in the table below:

Year of repayment	Rate in the dollar of value outstanding as at 1 July 2017 (including GST)
1	0.14702887
2	0.16069483
3	0.17835963
4	0.20202336
5	0.23528609
6	0.28534778

xiii) that the Kumeu Huapai Riverhead Wastewater targeted rate be set on land in respect of which the council has provided financial assistance to connect to the Kumeu Huapai Riverhead pressurised wastewater scheme, at different levels based on the extent of the outstanding assistance by reference to the year that the ratepayer started repaying the financial assistance by this targeted rate, of an amount set out in the table below:

Year of repayment	Rate in the dollar of value outstanding as at 1 July 2017 (including GST)
1	0.11983333
2	0.12497975
3	0.13097333
5	0.14642887

xiv) that the Point Wells Wastewater targeted rate be set on land in respect of which the council has provided financial assistance to connect to a pressure wastewater collection system in Point Wells, of an amount per separately used or inhabited part of a rating unit based on the extent of the financial assistance as shown in the following table:

Total assistance provided	Amount of rate ($) per SUIP (including GST)
$ 8,000	674.60
$ 8,500	716.76
$ 9,000	758.92
$ 9,500	801.08
$10,000	843.25

xv) that the Jackson Crescent Wastewater targeted rate be set on land in respect of which the council has provided financial assistance to connect to a wastewater collection scheme in the Jackson Crescent, Martins Bay area, of an amount of $608.88 (including GST) per rating unit.

xvi) that for the purposes of the above rates, the definitions of commercial accommodation provider, the city centre area, the various Business Improvement Districts, the expression "separately used or inhabited part of a rating unit" and the differential categories for the general rate and the accommodation provider targeted rate are as set out in the Funding Impact Statement in the council's Annual Budget 2017/2018.

xvii) that for the 2017/2018 financial year, the rates be payable in four equal instalments, on the following due dates:

Instalment	Due Date
1	31 August 2017
2	28 November 2017
3	28 February 2018
4	28 May 2018

xviii) that a penalty of ten per cent of any portion of any instalment of rates assessed in the 2017/2018 rating year that is not paid by the due date for payment of that instalment be added to the amount of unpaid rates. The penalty will be added on the day following the due date, being 1 September 2017, 29 November 2017, 1 March 2018, and 29 May 2018 respectively.

xix) that a further penalty of ten per cent of any rates assessed in any financial year prior to 1 July 2017 that remain unpaid on 6 July 2017, be added on 7 July 2017.

xx) that a further penalty of ten per cent of any rates to which a penalty has been added under resolution (xix) if those rates are unpaid on 7 January 2018, be added on 8 January 2018.

xxi) that in accordance with the council’s Early Payment Discount Policy the discount for the early payment of rates be set at 0.83 per cent of the 2017/2018 rates, if those rates, together with any outstanding prior years’ rates and penalties, are paid in full on or before the due date of the first instalment (31 August 2017).

Comments

Background

6. At its meeting on 1 June 2017, the Governing Body agreed the Finance and Performance Committee recommendations regarding rates policy issues for inclusion in the Annual Budget 2017/2018. These included:

a) general rates increase of 2.5 per cent for all ratepayers

b) pausing the Long-term differential strategy for one year

c) introduction of an Accommodation provider targeted rate

d) BID expansions in Manukau, Uptown and Wiri

e) standardisation of the Waste management targeted rate.

7. Items b) and c) above require amendments to the Revenue and financing policy which are discussed in a separate report on this agenda.

8. The average general rates increase of 2.5 per cent will apply to all ratepayers. Because the transition to one rating system is complete and the council is making no change to the UAGC or general rate differentials, most ratepayers will experience general rates increases that are very close to the average outlined above.

Decision-Making

Rates resolution

9. For the council to assess rates for the 2017/2018 financial period, section 23 of the Local Government (Rating) Act 2002 (LG(R)A) requires the council to set the rates by resolution. The resolutions contained in this report are consistent with the relevant legislation and the Annual Budget 2017/2018.

10. The budget is set based on the assumption that rates will be invoiced on time. A delay in setting the rates may cause issues in delivery of the rates assessment/invoice in time for the first instalment due date. It will also cause delays to when the arrears penalty can be applied. Delaying the setting of rates may result in increased administrative costs to the council.

11. A copy of the rates resolution will be sent to the Secretary of Local Government within 20 working days of adopting the rates resolution.

12. The LG(R)A requires that the instalment due dates must also be set in the same resolution as those used to set the rates. The resolutions necessary for the Governing Body to set the rates and instalment due dates for the 2017/2018 financial period are included in the recommendations in this report.

Business Improvement District targeted rates

13. The council uses targeted rates to fund Business Improvement District (BID) programmes where businesses have agreed to work together, with the support of the council, to improve their business environment.

14. Consultation on the Annual Budget 2017/2018 included possible extensions to the existing BID programmes in Manukau, Uptown and Wiri BID boundaries. Successful ballots for the extension of the Manukau, Uptown and Wiri were undertaken in early 2017.

15. The resolutions necessary for the Governing Body to set the BID rates for 2017/2018 are included in recommendations of this report.

Early payment discount, late payment penalties and instalment dates

16. This report recommends that the rates be payable in four equal instalments on:

· instalment 1: 31 August 2017

· instalment 2: 28 November 2017

· instalment 3: 28 February 2018

· instalment 4: 28 May 2018.

These dates are adjusted from those in the ten-year Budget 2015-2025 to ensure they remain on a week day and provide the rates team sufficient time to produce the rates notices. Ratepayers can pay more regularly if they wish.

17. Staff recommend that a ten per cent penalty be payable for late payment of rates for each rates instalment due date, and that a ten per cent penalty on the previous years’ rates arrears be added at the beginning of the financial year (or five working days after the rates resolution, whichever is the later) and then again six months later. It is necessary to set the penalty rate at ten per cent, as used by all the previous councils, to discourage the use of the council as a bank by ratepayers. Costs incurred by the council from the late payment of rates must inevitably be met by those ratepayers that pay on time. Most councils use a ten per cent penalty. This is consistent with the current policy.

18. The early payment discount policy is available to ratepayers who pay their full year’s rates before the due date of the first rates instalment. Under this policy, the council provides a discount based on the council’s forecast short term borrowing cost, 2.25 per cent for 2017/2018. This passes on council’s interest cost saving to those ratepayers who pay early. For the early payment discount to remain cost neutral the early payment discount rate should be set at 0.83 per cent.

19. The resolutions necessary for the Governing Body to set the early payment discount, late payment penalty, and instalment dates are included in the recommendations of this report.

Consideration

Local board views and implications

20. The Governing Body has decision-making authority for setting rates.

21. Local boards’ views on the rating policy proposals were considered as part of decision making on the Annual Budget 2017/2018 on 1 June 2017.

Māori impact statement

22. The council does not hold information on the ethnicity of ratepayers, so is not able to identify the exact impact of the policy options on Māori. The rates recommendations in this report will have a similar impact on Māori as it will on other ratepayers.

Implementation

23. Setting the rates included in this report requires the adoption of amendments to the Revenue and Financing policy with regard to the pausing of the Long-term differential strategy and the introduction of the Accommodation provider targeted rate. A separate report on this agenda advises on the adoption of these amendments.

24. The recommendations in this report have been checked by the legal department for legislative compliance.

Attachments

There are no attachments for this report.

Signatories

Authors

Andrew Duncan - Manager Financial Policy

Eric Wen - Advisor - Financial Polciy

Authorisers

Matthew Walker - GM Financial Strategy and Planning

Stephen Town - Chief Executive

Mayor	Hon Phil Goff, CNZM, JP
Deputy Mayor	Cr Bill Cashmore
Councillors	Cr Dr Cathy Casey	Cr Dick Quax
	Cr Ross Clow	Cr Greg Sayers
	Cr Fa’anana Efeso Collins	Cr Desley Simpson, JP
	Cr Linda Cooper, JP	Cr Sharon Stewart, QSM
	Cr Chris Darby	Cr Sir John Walker, KNZM, CBE
	Cr Alf Filipaina	Cr Wayne Walker
	Cr Hon Christine Fletcher, QSO	Cr John Watson
	Cr Richard Hills
	Cr Penny Hulse
	Cr Denise Lee
	Cr Mike Lee
	Cr Daniel Newman, JP

Author	Michael Quinn - Executive Officer
Authoriser	Stephen Town - Chief Executive