Addendum Agenda of Extraordinary Finance and Performance Committee

Finance and Performance Committee

31 May 2018

10-year Budget 2018 - 2028 - Mayor's final proposal

File No.: CP2018/08548

Te take mō te pūrongo / Purpose of the report

1. To set out out the mayor’s recommendations for the final 10-year Budget 2018-28 (Long-term Plan) for consideration and decisions by the Finance and Performance Committee.

Whakarāpopototanga matua / Executive summary

2. This 10-year Budget is focused on building the infrastructure our city needs to deal with unprecedented population growth while protecting our quality of life and making Auckland a world class city. This Budget sets out $26.2 billion of capital investment over the next decade in our communities.

3. Through this Budget, I have sought to balance our expenditure so that council stays within its prudential limits, while making investments allowed by the introduction of new revenue through targeted rates and the Regional Fuel Tax.

4. The Budget contains the largest ever council transport investment of $12 billion over the next ten years, including $4.3 billion from leveraging the Regional Fuel Tax. The effect will be transformational with improvements in public transport (rail, light rail, buses, and ferries) and cycling and walking, as well as addressing vital improvements to road safety and our road network.

5. The Budget is also transformational in protecting and enhancing our natural environment. Through a water quality targeted rate, we can dramatically improve water quality on our beaches, and in our waterways within a decade; not 30 years as previously planned. A natural environment targeted rate will allow us to protect our native bush and wildlife from disease, weeds and pests to safeguard our natural heritage for future generations. Significant resources will also be put into dealing with the impact of climate change and managing our coastal areas.

6. By investing in water and transport infrastructure, we can build more houses to cope with the shortage of affordable housing, which is putting pressure on the lives of many Aucklanders.

7. While building infrastructure is the focus of our budget, we have not overlooked the things that make our city vibrant, inclusive and interesting to live in.

8. We have significantly increased our investment in sports and recreation, in facilities such as swimming pools, the Art Gallery and the Zoo, and infrastructure to host the America’s Cup.

9. Social investment has been boosted with the creation of a Western Initiative which will improve job and life skills in west Auckland, a grant to the Auckland City Mission to help with homelessness and promotion of a smoke free Auckland. Funding for Local Board initiatives and the Independent Maori Statutory Board have ensured that the needs of all Aucklanders have been considered. Organisations serving Aucklanders such as Surf Lifesaving and the Auckland Rescue Centre Trust have received additional assistance. We have boosted funding to enhance reserves including in Orakei and Parakai, and our Maunga which we hope will be recognised with World Heritage Status.

10. All of this has been achieved while keeping the rise in average general rates at 2.5 percent for the remainder of this term of Council.

11. This has been helped by efficiency savings achieved by value for money reviews and the Corporate Property Strategy, which achieves the economies of scale allowed by amalgamation.

12. This Budget is a transformational step towards achieving our vision of Auckland as a world class city

Ngā tūtohunga / Recommendation/s

That the Finance and Performance Committee:

a) agree to recommend to the Governing Body in respect of the final long-term plan 2018-2028 (10-year budget 2018-2028) the following items as proposed in the consultation document:

i) the introduction of a water quality targeted rate to raise $452 million to fund acceleration of the Water Quality Improvement Programme, set differentially on capital value with 25.8 per cent of the revenue requirement to be raised from businesses.

ii) the introduction of a natural environment targeted rate to raise $311 million for environmental initiatives, including addressing Kauri dieback and targeted ecological protection set differentially on capital value with 25.8 per cent of the revenue requirement to be raised from businesses.

iii) the implementation of a reporting process to provide transparency and accountability over the use of the proceeds of the water quality and natural environment targeted rates.

iv) average general rates increases of 2.5 percent for the first two years and 3.5 percent for each year after that.

v) amend the rating treatment of the online accommodation sector so that business rates and the accommodation provider targeted rate are applied to properties let via web-based accommodation services depending on the number of nights booked and the location of the property as set out in the modified option b) in Attachment D the agenda report (that is, with an additional differential category of between 136 and 180 nights added).

b) agree to recommend to the Governing Body that the budget for the final 10-year budget 2018-2028 be based on the draft budget, adjusted for the updates set out in the staff reports, and to incorporate the following changes and specific decisions (Attachment A of the agenda report):

Transport

i) if the Governing Body decides to adopt the Regional Fuel Tax Proposal for Auckland for submission to Ministers, agree that the Regional Fuel Tax Proposal revenue and capital investment be included in the 10-year Budget.

ii) agree the transport budgets (including Auckland Transport and Auckland Council’s interest in City Rail Link Limited) be based on the draft budgets, adjusted for the updates set out in the staff reports.

Water

iii) approve the water supply, waste water and stormwater budgets based on the draft budgets, which include the Water Quality Targeted Rate funding, adjusted for the updates set out in the staff reports.

Parks and Community

iv) agree the establishment of a Sport and Recreation Facilities Investment Fund with additional capital expenditure of $100 million to create a total fund of $120 million on the basis that each project be subject to a full business case process and be in alignment with the Sports Facilities Investment Plan (under development).

v) agree the establishment of a Climate Change Response Fund of $40 million for pro-active monitoring and planning and reactive response to infrastructure damage as a result of climatic events, including non-coastal slips.

vi) agree additional operational funding of $1 million in the next two years for the development of coastal compartment management plans and additional capital funding of $90 million for coastal asset management.

vii) agree additional capital funding of $25 million for the Regional Facility Network Plan to progress the network of swimming pools.

viii) agree additional operational funding of $5 million for the extension of The Southern Initiative to the west Auckland areas of Whau, Henderson-Massey and Waitakere (The Western Initiative) and request that the staff work with council procurement on social procurement policy implementation and with ATEED on local economic development.

ix) agree additional regional grants funding of $4.3 million to increase the total of three regional funds to $2 million per year in accordance with the Community Development and Safety Committee resolution of 17 May 2018.

x) agree additional operational funding of $1.4 million for the implementation of the Smoke free policy.

Centres Development

xi) agree the centres development budgets (including Panuku Development Auckland) be based on the draft budgets, adjusted for the updates set out in the staff reports.

xii) agree the re-phasing of the city centre programme of works and the increase in capital expenditure from the draft budget of an additional $55 million to support Auckland hosting the America’s Cup and APEC events in 2021.

xiii) agree additional funding for the Whau Multipurpose Community Centre of
$16 million in accordance with the confidential resolution of the Environment and Community Committee of 12 September 2017.

Regional Facilities Auckland

xiv) agree the Regional Facilities Auckland budget be based on the draft budget, adjusted for the updates set out in the staff reports, noting the following changes:

- Additional capital expenditure of $18.7 million for renewals at the zoo

- Additional operating expenditure of $5.7 million for transport and logistical costs associated with animal acquisition at the zoo

- Additional operating funding of $20 million for the Auckland Art Gallery

- Additional capital funding of $5.9 million and operational funding of $3.6 million for facility security and visitor safety

Local Boards – One Local Initiatives

xv) endorse the One Local Initiative budget matters as set out in the One Local Initiative report by the Chair of the Finance and Performance Committee.

Māori Outcomes

xvi) agree additional operational funding for Māori responsiveness outcomes to be funded through the re-prioritisation of the existing draft budget.

Co-governance Entities

xvii) agree additional capital funding of $16.8 million and operational funding of
$6.7 million for the Tupuna Maunga Authority.

xviii) agree additional capital funding of $7.7 million and operational funding of
$6.6 million for the Ngati Whatua Orakei Reserves Board.

xix) agree additional capital funding of $8.7 million and operational funding of
$2.8 million for Te Poari o Kaipatiki ki Kaipara (Parakai).

Other items

xx) agree the transfer of the Festival of Photography operational grant of $72,000 per annum to the Regional Arts and Culture grant programme with a transitional three-year funding agreement.

xxi) agree an extension of capital grant funding of $3.7 million to Surf Lifesaving Northern Region for the development or renewal of facilities at Karioatahi, North Piha and Orewa, subject to appropriate funding agreements.

xxii) agree capital grant funding of $2 million to the Auckland Marine Rescue Centre Trust for urgent repair and renewal of the building, subject to an appropriate funding agreement.

xxiii) agree additional operational funding of $204,000 for each of the first three years to the Mangere Mountain Education Trust.

xxiv) agree a one-off operating grant of $475,000 to the Auckland City Mission to cover building consent fees, resource consent fees and development contributions payable in respect of the redevelopment of the Hobson Street site.

xxv) agree operating funding of $150,000 in an event year and $50,000 in a non-event year (total $1 million) to support the Sculpture in the Gardens biennial event.

xxvi) agree a one-off operational grant to the Hibiscus Youth Council Centre of $100,000 for 2018/2019.

xxvii) request a report back to the Environment and Community Committee following a review of council’s provision of financial support to youth centres including the establishment of criteria for awarding funding through the Regional Community Development and Safety grant programme.

c) agree to recommend to the Governing Body the adoption of the following decisions on solid waste services, targeted rates and charges:

i) introduction of weekly pay as you throw 120 litre refuse bin collection using pre-paid bin tags for the former Auckland and Manukau city areas following introduction of the rates funded food scraps service and consequent removal of the current refuse targeted rate currently planned for 2020/2021.

ii) increase to the waste management targeted rate in Papakura of $67 to fund food waste collection services for the 2018/2019 year onwards.

iii) increase to the waste management targeted rate in other areas of urban Auckland of $67 to fund food waste collection services from 2021/2022 onwards, subject to further refinement based on the experience of the Papakura roll-out and subject to further consultation prior to introduction.

d) agree to recommend to the Governing Body the disestablishment of the Council-controlled organisation Auckland Council Investments Limited as follows:

i) approve a shareholder directive to Auckland Council Investments Limited relating to the transfer of all assets, liabilities and obligations of Auckland Council Investments Limited (including the shares in Ports of Auckland Limited and Auckland International Airport Limited) to Auckland Council.

ii) approve a shareholder directive to remove Auckland Council Investments Limited from the companies register following the transfer of all assets, liabilities and obligations to Auckland Council.

iii) adopt the draft memorandum of understanding between Auckland Council and Ports of Auckland Limited attached to Attachment F of the agenda report.

iv) recommend that the Appointments, Performance Review and Value for Money Committee adopt a revised Auckland Council Board Appointment and Remuneration Policy that includes Annex A of the draft memorandum of understanding between Auckland Council and Ports of Auckland Limited.

v) recommend that the Governing Body adopt relevant amendments to its Terms of Reference to reflect the transfer of the assets, liabilities and obligations of Auckland Council Investments Limited (including the transfer of shares in Ports of Auckland Limited and Auckland International Airport Limited) to Auckland Council.

vi) delegate to the chief executive the power to authorise any action necessary or desirable to effect the transfer of the assets, liabilities and obligations of Auckland Council Investments Limited (including the transfer of shares in Ports of Auckland Limited and Auckland International Airport Limited) to Auckland Council, and the disestablishment of Auckland Council Investments Limited.

vii) note the relationship principles document in respect of Auckland Council and Auckland International Airport Limited contained in Attachment F of the agenda report.

viii) note that all prior resolutions, delegations, approvals, agreements, authorisations by the Governing Body or its committees relating to Auckland Council Investments Limited now apply to Auckland Council.

ix) amend the budget to reflect estimated cost savings of at least $800,000 per annum.

e) agree to recommend to the Governing Body that the final 10-year Budget 2018-2028 give effect to decisions made in relation to issues covered by other reports on this agenda.

Horopaki / Context

13. The initial Mayoral Proposal I set out in November last year prioritised investment in transport, housing and the environment. It included a regional fuel tax to fund a substantial increase in transport investment and additional funding for cleaning up Auckland’s beaches and streams and investment in our natural environment.

14. My final proposal takes forward these priority areas and reflects a record investment of $26.2 billion over the next 10 years. It is a balanced budget that keeps council within its prudential limits, made possible by the introduction of new revenue sources, being the regional fuel tax and targeted rates.

15. Based on the draft 10-year Budget included in the consultation document, updated for the latest forecasting assumptions and budget information, and incorporating the budget decisions set out in this proposal, council’s debt to revenue ratio remains below our 265% internal limit.

Key consultation items for the 10-year Budget

16. The water quality targeted rate was proposed to fund the accelerated Water Quality Improvement Programme to clean up the beaches, harbours and streams in our region. It received strong support through consultation and I support it going ahead unmodified from the draft budget. Refer to Attachment B.

17. The natural environment targeted rate was proposed to fund a substantial increase in the protection of our natural environment, including an urgent need to address the spread of Kauri dieback disease. Two options were consulted on at two different levels of spending. There was strong support through consultation for a rate of at least the lower level of spending. However, in the meantime, council decided to close areas of the Waitakere and Hunua ranges due to the spread of Kauri dieback disease. This is indicative of the need to significantly increase the protection of our natural environment and I am therefore proposing the council proceeds with the proposed natural environment targeted rate at the higher level of funding of $311 million. Refer to Attachment C.

18. Targeted rates are a mechanism that require the rates revenue raised be spent specifically for the purpose for which it was collected. This means there is a higher level of transparency and it is critical we have that accountability to ratepayers. I am proposing that a reporting process be set up to ensure that the expenditure on and delivery of the water quality and natural environment programmes can be monitored. A reporting process is required for the regional fuel tax in the draft legislation.

19. I am honouring my commitment on general rates by proposing that the average general rates increase is not more than 2.5 percent for the first two years of the 10-year Budget and not more than 3.5 percent for each of the remaining years. This reflects my expectation that council will control spending and continue to find operational efficiencies. Refer to Attachment A.

20. Rapid growth in the use of online accommodation marketplaces like Airbnb and bookabach to provide short term rental accommodation has created an inequity with traditional accommodation providers. Online providers are often essentially running a business but paying residential rates. After considering feedback received through the consultation process I recommend applying business rates to online accommodation providers as follows:

- Residential (up to 28 days booked continue to be rated residential)

- Medium-occupancy online accommodation provider (between 29 and 135 days being rated 75% residential and 25% business)

- Moderate-occupancy online accommodation provider (between 136 and 180 days being rated 50% residential and 50% business)

- Business (over 180 days rated as business)

I also propose that online providers pay the accommodation provider targeted rate based on the proportion of business rates paid depending on the number of nights booked and subject to the differentials that currently exist.

No other changes to the accommodation provider targeted rate are proposed. Refer to Attachment D.

10-year Budget matters (Attachment A)

Transport

21. With the introduction of the Regional Fuel Tax we will achieve a milestone transport infrastructure investment package of $12 billion. This, along with our operating costs, delivers our share of ATAP’s $28 billion package. This transport budget enables us to catch-up on years of under-investment and to take steps to invest for the future.

Water

22. Over the next 10 years, Watercare and Healthy Waters will be working together to deliver the Water Quality Improvement Programme, a key feature of which is the central interceptor and related works in the western isthmus. Combined with other water quality projects around the region, funded by the water quality targeted rate, we will be addressing water quality issues that are unacceptable in the 21^st century.

Parks and Community

23. I am supporting the establishment of the Sports and Recreation Facilities Investment Fund at $100 million. This contestable fund will enable council to work with community groups to increase the provision of indoor and outdoor sports facilities needed for our growing population. I also support additional capital funding of $25 million for the Regional Facility Network Plan to progress the network of swimming pools.

24. I am also supporting the establishment of a Climate Change Response Fund of $40 million. Half of this fund will be used to address emergency infrastructure repair works needed as a result of climate change-related events. The other half will be used to proactively monitor and remediate at-risk infrastructure.

25. Climate change is putting substantial pressure on the assets council owns along Auckland’s 3,200 km of coastline. These assets include sea walls, wharves, boat ramps and coastal pathways. I am supporting the request for additional operating expenditure for the development of coastal compartmental management plans which will inform the coastal asset management plans. This spending will support a managed response to the effects of climate change on council’s coastal assets rather than a reactive response that would cost more in the long run. Once the coastal plans are complete the capital budget will need to be re-visited, however it is prudent to provide for some capital expenditure in this 10-year budget and I am proposing an additional amount of $90 million.

26. Following the successes of The Southern Initiative I support the expansion of the programme to west Auckland to create The Western Initiative. I believe that the most significant impact council can have is through social procurement in order to create jobs in our poorer communities. I would like to see this group working closely with council procurement to start making a meaningful difference in this area. ATEED is the council’s organisation tasked with delivering economic development outcomes and due to the clear overlap of interests, I expect The Southern/Western Initiative team to work collaboratively with ATEED. For these reasons I am proposing $5 million of operational funding for The Western Initiative with an expectation that outcomes can be achieved through collaboration across the council family.

27. I support the additional regional grants funding sought by resolution at the 17 May 2018 Community Development and Safety Committee as follows:

b) seek that the 2018 Long Term Plan provide for increased funding of the following programmes such that they total $2 million:

· Regional Arts and Culture grant programme

· Regional Community Development and Safety grant programme

· Regional Events Fund programme.

28. In support of the implementation of Auckland Council’s smoke free policy I am proposing operating expenditure of $1.4 million. This is less than the requested amount but on balance provides for some progress to be made while recognising this is a lower priority at this time.

Centres Development

29. Auckland’s city centre is an important place of business and employment for the whole region and increasingly a place where people choose to live. The city centre and waterfront and the events it hosts attract visitors from across the city, the country and the world. There are a number of strategic work programmes in the city centre which support Auckland’s growth and leverage the benefits of the America’s Cup and APEC events scheduled for 2021. The City Rail Link is a significant transport project that will play a role in transforming the city centre above and below ground.

30. I am supporting an additional $55 million of capital funding being included in the budget and the bringing forward of $53 million of existing budget to support the downtown development programme over the next three years. It will also ensure council can leverage full benefits from the America’s Cup, APEC and the other major transport and infrastructure projects in the city centre, such as the City Rail Link.

31. Based on officers’ advice, the remaining city centre programme will not have additional budget allocated to it in this 10-year budget as timing is dependent on City Rail Link works and managing the overall level of disruption in the city centre.

32. The revised proposal for the Whau Multipurpose Community Centre is supported in accordance with the confidential resolution of the Environment and Community committee meeting of 12 September 2017.

Māori outcomes

33. I acknowledge the advice of the Independent Māori Statutory Board in developing their business cases for this 10-year budget process and appreciate the way they have worked with council to refine their funding request. In line with the letters of expectation to the CCOs earlier this year, I support an increased focus on Māori outcomes through the Māori responsiveness framework and the overall budget request of an additional $35 million over the 10-year period. These outcomes will be delivered through collaboration across the council family including, for example, our parks and governance teams, ATEED and Auckland Transport and therefore I expect budgets in those areas to be ring-fenced for these purposes.

Co-governance Entities

34. The Tupuna Maunga Authority plan has been through consultation and received broad support. I support the 10-year budget increases in capital and operational expenditure to protect and restore the maunga, progress the development of visitor infrastructure and support the UNESCO world heritage bid.

35. I asked the Ngati Whatua Orakei Reserves Board to consider how their funding request could be scaled back based on deliverability and prioritisation of projects. I support their revised funding request which includes a $1 million capital grant for the construction of an iconic Pou at the harbour entrance and further funding for the restoration and infrastructure at Pourewa Creek Recreation Reserve, including the creation of employment- and revenue-generating activities.

36. I also asked Te Poari o Kaipatiki ki Kaipara (Parakai) to consider how their funding request could be scaled back. I support their revised funding request which focuses on immediate health and safety improvements of aged facilities at the reserve and commences infrastructure investment to develop the front of the reserve to provide enhanced public space.

Other items

37. The recommendations in respect of other budget items reflect a judgement on the relative priority of those items, weighed against funding availability and respectful of previous funding arrangements.

38. Regarding the Festival of Photography, it’s important to provide some certainty while transitioning them to the most appropriate council process, being the Regional Arts and Culture grant programme. Therefore my proposal allows for a three-year transition period at the currently funded amount.

39. Council has been providing capital funding to Surf Lifesaving Northern Region for the redevelopment and renewal of certain facilities in Auckland and this request is an extension to that programme which was clearly signalled in advance. The importance of these services, performed largely by volunteer lifeguards, deserves to be recognised and this contribution will enable much needed upgrades/replacements to make their work easier.

40. The Auckland Marine Rescue Centre is the control centre for the Coastguard and Surf Lifesaving as well as housing the Harbourmaster and the Maritime Police for the northern region. The building is in a poor state of repair and I support capital funding of $2 million towards the repair of the centre, acknowledging that further funding will need to be sought from other parties. I also support the investigation of a replacement marine rescue centre that may consolidate the various helicopter services operating from the waterfront.

41. I support some additional operational funding for the Mangere Mountain Education Trust for the next three years, however it would seem that there is an opportunity for the Mangere Mountain Education Trust to consider whether its operations could be joined up with those of the Tupuna Maunga Authority in the future.

42. The Auckland City Mission is undertaking a substantial redevelopment of its Hobson Street site to create Mission HomeGround, a facility providing housing, healthcare and an expanded detox facility alongside other community facilities. I am pleased that council can offer some support to achieving the Auckland City Mission’s project by providing an operating grant of $475,000. The grant will be used to cover the cost of building consent fees, resource consent fees and development contributions.

43. The Sculpture in the Gardens biennial event at the Auckland Botanic Gardens attracts around 350,000 visitors. The event is free of charge and has dramatically increased the number of visitors to the Gardens. I support a modest amount of additional operational funding to support the Gardens to run this event.

44. The Hibiscus Youth Council Centre has requested funding as a last resort as they are otherwise facing closure. I support a one-off operational grant of $100,000 for 2018/2019. However, council has no policy or needs assessment regarding the provision of funding of youth services across the region. I support a review of council’s current funding of youth services and establishment of a policy for the allocation of funding through the Regional Community Development and Safety grant programme and in conjunction with consideration of service provision by central government agencies.

45. Other funding requests have been considered, however I don’t propose to progress them further at this stage due to low prioritisation or a need for further work to be done.

Solid waste services, targeted rates and charges (Attachment E)

46. Refer to officer advice as set out in Attachment E.

Auckland Council Investments Limited (Attachment F)

47. In my initial 10-year budget proposal I sought advice on the possible disestablishment of the council-controlled organisation ACIL, which was subsequently proposed and approved as a consultation item.

48. Based on consultation results and subsequent work done by council officers (refer to Attachment F) and Ports of Auckland Limited officers to develop a Memorandum of Understanding, I am confident that the disestablishment of ACIL should progress. The Memorandum of Understanding will provide the basis to ensure that there continues to be appropriate separation of the shareholder (Auckland Council) from the operations of the port company. The disestablishment will provide savings to council of around $8 million over the 10-year period.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe /
Local impacts and local board views

49. Local board views on regional budget matters are the subject of a separate report on the 10-year Budget.

Tauākī whakaaweawe Māori / Māori impact statement

50. Through the 10-year Budget consultation there has been specific engagement with mana whenua. This is documented in the feedback reports which have been presented previously. The proposed 10-year Budget supports the Maori outcomes increase in funding. It also supports increases in the funding of the co-governance entities and establishment of the Western Initiative.

Ngā tāpirihanga / Attachments

No.	Title	Page
a ⇩	Key budget issues	15
b ⇩	Water quality targeted rate	59
c ⇩	Natural environment targeted rate	71
d ⇩	Rating of online accommodation providers	87
e ⇩	Waste management service charges	103
f ⇩	Proposal to disestablish Auckland Council Investments Limited	115

Ngā kaihaina / Signatories

Author

Mayor of Auckland, Hon Phil Goff

Finance and Performance Committee

31 May 2018

Proposal for One Local Initiatives

File No.: CP2018/08549

Te take mō te pūrongo / Purpose of the report

1. To set out the proposal for progressing One Local Initiatives (OLIs) through the final (Long-term Plan) 10-year Budget 2018-28 for consideration and decisions by the Finance and Performance Committee.

Whakarāpopototanga matua / Executive summary

2. The OLI process was initiated last year in order to improve the local board advocacy process. Local boards worked hard to identify a single priority advocacy initiative, and staff provided comprehensive advice on these initiatives last year.

3. There was no guarantee of funding. Rather, the process was designed to give local board projects a better opportunity to be progressed through investigation, business cases and to be considered for funding.

4. An amount of $200m was provisioned in the draft 10-year Budget 2018-2028 to provide additional financial capacity over and above existing budgets to progress the OLIs. The initiatives largely received strong public support in consultation. The Finance and Performance Committee has indicated strong support for these priority local initiatives.

5. All OLIs are proposed to be progressed through the 10-year Budget 2018-2028, with funding either allocated or earmarked for allocation in a subsequent annual plan process, or through resolutions of the Finance and Performance Committee.

6. A number of projects are more appropriately addressed through transport (five OLIs) or regional funding decisions (six OLIs), and the funding of these projects is covered by other reports on this agenda.

7. It is proposed that $170m of funds be included in the 10-year Budget 2018-2028 for the ten local community OLIs. This amount includes $150m of the $200m provisioned in the draft 10-year Budget to provide additional financial capacity to progress the OLIs, and $20m from existing budgets. The $50m balance of the $200m is proposed to be allocated to help fund the sub-regional OLIs.

8. Of the ten OLIs that are local in nature, it is proposed that specific OLI funding be allocated to three OLIs, and that OLI funding be earmarked for allocation following confirmation of scope, estimated costs, and timing to the remaining seven OLIs.

9. The 10-year Budget 2018-2028 provides more funding overall for local projects. Over and above the allocation and provisioning for OLIs, an additional $200m is budgeted for renewals, along with more funding for growth. Together, these and other budgets will provide each local board area with a capital work programme that progresses important local priorities and outcomes faster than would otherwise have been the case.

10. Auckland Council has not run an OLI process before. The Deputy Chair of the Finance and Performance Committee and I would like to thank the local boards for their efforts to identify a single priority advocacy initiative, and the Finance and Performance Committee members for their willingness to support this process. This has helped ensure the local board’s highest priority initiatives can be progressed.

Ngā tūtohunga / Recommendation

That the Finance and Performance Committee:

a) agree to recommend to the Governing Body in respect of the final long-term plan 2018-2028 (10-year Budget 2018-2028) the following:

i) note that the transport-related OLIs are funded by other budgets: Devonport-Takapuna, Orākei, Papakura, and the transport components of Waiheke are funded in the Regional Land Transport Plan, and the Maungakiekie-Tāmaki and non-transport components of Waiheke could be self-funding, with OLI funding earmarked as a back-up if needed.

ii) note that the sub-regional OLIs (Franklin, Henderson-Massey, Howick, Ōtara-Papatoetoe, Upper Harbour, and Whau) are recommended to be allocated funding, or earmarked funding from development and other regional budgets

iii) agree that $170m of funding be included in the 10-year Budget for local community OLIs, with this funding to be allocated or earmarked as set out in the staff advice in Attachment A of the agenda report.

Horopaki / Context

11. The staff report at Attachment A sets out the context for the OLIs.

Tātaritanga me ngā tohutohu / Analysis and advice

12. The staff report at Attachment A sets out the Analysis and advice.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe /
Local impacts and local board views

13. Local board views on the OLIs and other matters related to the 10-year Budget 2018-2028 are the subject of a separate report on the 10-year Budget 2018-2028. The boards presented these views to the Finance and Performance Committee on 16 and 17 May 2018.

14. Many local boards expressed a strong preference to see their OLI progressed faster than the timeframes set out in these recommendations. Some boards also questioned the need for further work on business cases, investigations and feasibility studies.

Tauākī whakaaweawe Māori / Māori impact statement

15. The OLIs will provide benefits to local communities including Maori. No significant impacts specific to Maori have been identified. Specific opportunities for engagement with mana whenua were included as part of the 10-year Budget process.

Ngā ritenga ā-pūtea / Financial implications

16. The staff advice is that these recommendations are affordable assuming the following:

· the Regional Fuel Tax proposal is approved and implemented

· the proposed sport and recreation fund is approved and external funding is secured as envisaged

· an additional $25m of capital funding for recreational and aquatic facilities is approved

· local boards commit allocation of Local Discretionary Initiative (LDI) funding where indicated.

17. If the funding for the OLIs was brought forward in line with local board preferences, this might require $30-50 million of additional expenditure in the first three years of the 10-year Budget.

18. Aside from any affordability issues staff advice is that it may not be practical nor prudent to attempt to deliver all of these projects under an accelerated timeline. The reality is that the council is facing internal and external capacity constraints that may make faster delivery infeasible. In addition, skipping important steps in the business case or investigation phase can often lead to bigger problems later on. Doing so might also result in lost opportunities for accessing third party funding, leading to less value for money for ratepayers.

Ngā raru tūpono / Risks

19. The staff advice is that the key risks for each initiative are best addressed through appropriate business case and investigation work.

Ngā koringa ā-muri / Next steps

20. Should the Governing Body approve the recommendations set out in this report, allocated funding lines will be included as specific items in the 10-year Budget 2018-2028. The remaining part of the $170 million of funding for the local discretionary OLIs will be held in a ring-fenced line with earmarked funding allocated to specific funding items as the relevant conditions are fulfilled.

Ngā tāpirihanga / Attachments

No.	Title	Page
a ⇩	Proposal for One Local Initiatives	141

Ngā kaihaina / Signatories

Author

Cr Ross Clow, Chairperson of the Finance and Performance Committee

Finance and Performance Committee

31 May 2018

Local Board Budget Update

File No.: CP2018/08552

Te take mō te pūrongo / Purpose of the report

1. To provide an update on the local board process to finalise the annual budget for 2018/2019 and outline local proposals that require Governing Body decisions to enable this process to continue.

Whakarāpopototanga matua / Executive summary

2. Following the 10-year budget consultation, briefing reports on local consultation feedback were provided to local boards in April to inform advocacy and review local priorities.

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

4. Following budget decisions made on 31 May 2018, local boards will meet between 5–7 June 2018 to adopt Local Board Agreements for 2018/2019, local activity budgets, and local fees and charges schedules for 2018/2019.

5. As part of the local board funding policy, local boards can resolve to defer those projects that are funded by their Locally Driven Initiatives (LDI) operating fund where there was an agreed scope and cost but have not been delivered. The local boards have identified 2017/2018 projects that meet the criteria for deferral to 2018/2019.

Ngā tūtohunga / Recommendation

That the Finance and Performance Committee:

a) approve the deferral of the operating budget amount of $3,950,180 (as detailed in Attachment A to the agenda report) from 2017/2018 to 2018/2019.

Horopaki / Context

Process

6. In April 2018, local boards received 10-year budget local consultation feedback briefing reports reflecting views of each local board area. This information was used to support advocacy and review local priorities.

7. On 16 and 17 May 2018, workshops were held between local boards and the Finance and Performance Committee to discuss key consultation feedback themes, advocacy and local issues.

8. Following budget decisions made on 31 May 2018, local boards will meet between 5–7 June 2018 to adopt Local Board Agreements for 2018/2019, local activity budgets and local fees and charges schedules for 2018/2019.

Local Budgets

9. Local boards have identified projects from their Locally Driven Initiatives (LDI) operating fund where there was an agreed scope and cost which have not been delivered totaling $3,950,180. Details of these projects for deferral can be found in Attachment A.

Tātaritanga me ngā tohutohu / Analysis and advice

10. Delivery departments, supported by finance, used results from quarter three local work programmes to identify projects and estimate how much would be needed to complete these projects in the 2018/2019 financial year.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe /
Local impacts and local board views

11. Local board views and advocacy were expressed through a number of workshops held between local boards and the governing body on 16 and 17 May.

12. A summary of advocacy, key consultation feedback themes and local priorities is outlined in the Local Board Advocacy report on the agenda for this meeting. There are also reports with specific local items on the agenda for this meeting such as fees, charges and other rating matters, Local Transport Capital Fund, Rodney Local Board targeted rate, and proposals for One Local Initiatives. These should be considered when making final budget decisions.

Tauākī whakaaweawe Māori / Māori impact statement

13. Many local board decisions are of importance to and impact on Māori. Local board agreements and long-term plans are important tools that enable and can demonstrate council’s responsiveness to Māori. Local board plans, which were developed in 2017 through engagement with the community including Māori, form the basis of local priorities.

14. There is a need to continue to build relationships between local boards and iwi, and where relevant the wider Māori community. Ongoing conversations will assist local boards and Māori to understand each other’s priorities and issues. This in turn can influence and encourage Māori participation in council’s decision-making processes. In particular, local board plans and budget decisions made today will influence future annual plans and local board agreements for 2018/2019 and beyond.

Ngā ritenga ā-pūtea / Financial implications

15. The proposed deferral would not result in any rates impact for financial year 2018/2019, as it would essentially be funded from debt. The debt would be backed by the operating surplus resulting from the underspend in the LDI projects in 2017/2018. Overall, the impact is timing.

Ngā raru tūpono / Risks

16. Agreed projects from 2017/2018 will not be able to progress and be completed without the attached funding being deferred to 2018/2019. If the funding is not deferred and local boards still wish to progress and complete these projects from 2018/2019 funding, this will impact delivery of projects identified in 2018/2019 local work programmes.

Ngā koringa ā-muri / Next steps

17. Following budget decisions being made on 31 May 2018, local boards will meet between 5-7 June 2018 to adopt Local Board Agreements for 2018/19, local activity budgets, and local fees and charges schedules for 2018/2019.

Ngā tāpirihanga / Attachments

No.	Title	Page
a ⇩	Local discretionary operating budgets for deferral	159

Ngā kaihaina / Signatories

Authors

David Gurney - Manager Corporate Performance & Reporting

Mark Purdie - Lead Financial Advisor

Authorisers

Kevin Ramsay - General Manager Corporate Finance and Property

Matthew Walker - Acting Group Chief Financial Officer

Finance and Performance Committee

31 May 2018

Adoption of the Rates Remission and Postponement Policy

File No.: CP2018/05934

Te take mō te pūrongo / Purpose of the report

1. To consider public feedback on and adopt a Rates Remission and Postponement Policy.

Whakarāpopototanga matua / Executive summary

2. The Rates Remission and Postponement Policy has been reviewed and public consultation undertaken on the draft policy.

Legacy schemes carried over from previous councils

3. The council consulted on a proposal to:

· transfer budgets for remissions/postponements for Natural heritage, Community and Sporting organisations and Great Barrier businesses to the operating group with relevant expertise as grants budgets

· provide a three-year transition for all current recipients of a grant equivalent to the current remission

· retain for three years the postponement for two Manukau sports clubs only

· development of a regionally integrated approach to supporting these outcomes within the three-year transition period.

4. A majority of feedback opposed the proposal because of the value of the services provided by the recipients, concerns with the certainty of grants and their administration. The impact on those not GST registered was also raised. A majority of submitters supported rates relief for Queen Elizabeth the Second (QEII) covenanted land.

5. Seventeen local boards supported the proposal in full (one board sought long-term support for QEII covenanted land). Of the remaining boards, two supported the proposal for community and sporting organisations but wanted a regional remission scheme for QEII covenanted land. One board wanted the legacy schemes retained while an integrated approach was developed, while the remaining board expressed concern for the impact on covenanted land.

6. Officers recommend that the proposal be amended as follows to reflect local board and public feedback:

· increase budget by $10,000 to cover the cost of GST for recipients not GST registered

· grants to be applied automatically for three years on same basis as current schemes

· direct officers to work with sector groups on the development of an integrated approach to council support for community and sports organisations including administrative requirements proportionate to the nature of the support

· direct officers to develop options to extend automatic grants for QEII covenanted land regionally by 2019/2020. Options would be developed in conjunction with the QEII Trust to ensure appropriate oversight and to minimise administration.

7. The amended proposal is recommended because it creates transparency in the spending of ratepayer money. It maintains existing support while transferring accountability to the relevant operating groups. By aligning budgets with other funding mechanisms this support is able to be integrated into regionally consistent funding strategies for these activities.

Remission for the accommodation provider targeted rate (APTR)

8. The council consulted on a proposal to introduce a remission for owners of no more than two serviced apartments that are unable to pass the APTR to the hotel operators. The remission would be reduced in equal steps over ten years.

9. A majority of feedback on the remission for the APTR supported the proposal. Officers recommend adoption of the APTR remission scheme as proposed with an amendment to extend the scheme to subsequent purchasers of properties.

Regional schemes

10. Minimal feedback was received on proposed administrative changes to regional schemes. Officers recommend adoption as proposed.

Ngā tūtohunga / Recommendation/s

That the Finance and Performance Committee:

a) transfer the remission budget for legacy schemes to the relevant operating groups or local asset based services budgets.

b) direct that current beneficiaries of (e)(i) below be automatically paid a grant equivalent to their present support (less GST for GST registered organisations) for three years on the same basis as their existing remission or postponement.

c) direct officers to work with sector groups on the development of an integrated approach to council support for these community and sporting organisations including administrative requirements proportionate to the nature of the support

d) direct officers to work with the Queen Elizabeth the Second (QEII) Trust to develop options for a regional scheme for QEII covenanted land for 2019/2020

e) adopts the attached Rates Remission and Postponement Policy which includes the following amendments to the existing policy:

i) removal of the Part 3 remission schemes for natural heritage and community and sports organisations and postponement for Great Barrier Island commercial properties

ii) postponement for Manukau Sport Clubs restricted to current applicants to expire after three years

iii) introduction of a remission scheme for the Accommodation Provider Targeted rate

iv) administrative amendments to the regional remission schemes.

v) notes that the remission of rates for miscellaneous purposes remission scheme could still apply if the criteria in that scheme are met in the 2018/19 year.

Horopaki / Context

11. Council is required to review and consult on its Rates Remission and Postponement Policy every six years. The policy was last reviewed in 2012.

Current policy – legacy schemes

12. The policy offers eleven legacy remissions and postponement schemes that were carried over from the previous councils. These schemes only apply in the district of the originating council. They provide varying levels of support for:

· community and sporting organisations

· rating units protected for natural or historic or cultural conservation purposes

· commercial properties on Great Barrier Island.

13. A summary of the level of funding provided by these remission schemes by local board area is in Attachment D. Confidential Attachment E provides a list of community and sporting organisations receiving support by local board area.

Current policy – regional schemes

14. The policy also includes seven regional schemes that provide financial assistance or address anomalies in how rates are applied.

Remission of APTR

15. When the APTR was adopted in 2017 the council asked officers to consider applications for remission under its existing rate remission scheme (remission of rates for miscellaneous purposes), for example where the owner/ratepayer is separate from the accommodation operator and the nature of the relationship between the parties means the targeted rate is unable to be passed on to the accommodations sector. Applications were considered under the Remission of Rates for Miscellaneous Purposes scheme.

Review and Consultation

16. Officers reviewed the full Rates Remission and Postponement Policy. Local Boards provided feedback before a draft policy for consultation was agreed by the 27 February meeting of the Finance and Performance Committee. Consultation was open to the public from 13 March to 13 April. Local boards provided further feedback after considering the feedback from consultation and officer’s proposed amendments to the proposal at their meetings in May.

17. The existing Rates Remission and Postponement Policy includes a statement on adoption of the policy, requiring the use of the Special Consultative Procedure. This statement reflects the legislative requirements at the time the policy was originally adopted.

18. Consultation on the proposed Rates Remission and Postponement Policy has taken place consistent with the current requirements for consultation under the Local Government Act 2002.

Tātaritanga me ngā tohutohu / Analysis and advice

19. 182 submissions were received on the Rates Remission and Postponement Policy. Local Board resolutions and a full analysis of public feedback are in Attachments B and C. A summary of feedback and officers responses for each component of the proposal is below.

Legacy remission and postponement schemes

Background

20. At present council support for community, sporting and natural heritage activities is inconsistent across the region, with some funding still being delivered using models carried over from the previous councils. As a result, some properties are able to access remissions while others receive grants, subsidised rents or are directly supported to deliver services for council.

21. Depending on location, some properties are able to access multiple forms of council support. For example, two sports facilities receive rates remissions and community access grants, while 16 of the 42 recipients of the Green Network Grants for rates also claim the rates remission. Two submitters noted that removal of remissions would result in the cost of rates needing to be included in their service agreements with council.

Proposal

22. The council consulted on a proposal to:

· transfer budgets for remissions/postponements for natural heritage, community and sporting organisations and Great Barrier Island businesses to the:

- regional activities to operating group with relevant expertise

- local board local asset based services budget for local activities

· support provided in the form of a grant

· provide a three-year transition for all current recipients of a grant equivalent to the current remission (retain for three years the postponement for two Manukau sports clubs)

· development of a regionally integrated approach to supporting these outcomes within the three-year transition period.

Feedback

23. 157 submitters provided feedback on the proposal for legacy schemes for natural heritage and community and sports organisations. Responses are summarised in the table below:

Feedback on Legacy Remission	Number of submitters who:
Feedback on Legacy Remission	Responded	Commented	Hold a remission
Supports proposal	28	13	15
Opposes proposal	114	105	58
Other comment	15	15	11
Total	157	133	84

24. 108 submitters commented on legacy remissions for natural heritage, with 93 opposed to the proposal. Key themes from feedback were:

· Remissions recognise the benefit to the environment of QEII covenants, and the contribution landowners make in maintaining the land (50 responses)

· QEII covenanted land should not be rated (37 responses)

· Covenanters will be worse off under the proposal, because:

o lack of certainty of on-going support (28 responses)

o grants require more administration (24 responses)

o lose out on GST as they are not GST registered (9 responses).

25. 37 submitters commented on legacy remissions for community and sporting organisations, of which 16 represented organisations receiving a remission. 24 respondents did not support the proposal. Key themes from feedback were:

· support should continue due to the benefit provided to the community, and its removal would have a significant financial impact

· there is a lack of certainty of ongoing support and grants require more administration

26. No feedback was received on the proposals for postponements for Manukau Sports Clubs that are provided to two golf clubs. One submitter opposed the transfer of rates postponements to Great Barrier Island businesses to grants as they thought any future loss of support may make essential services financially unviable.

Stakeholder Feedback

27. The QE II Trust and Forest and Bird opposed the proposal to replace legacy remissions with grants for QEII covenanted land. The feedback of the QE II Trust and Forest and Bird reflect the key feedback points above. Federated Farmers considered that transitioning legacy remissions for natural heritage and community and sporting organisations to grants would signal a lack of commitment by council to these activities. Both the QE II Trust and Federated Farmers supported consideration by the council of grants in addition to remissions for QEII covenanted land.

28. The Rural Advisory Panel (RAP) supported a regional remission scheme for QEII land. (The RAP’s resolutions can be found in Attachment B to the report.)

Local Board Feedback

29. Seventeen of the 21 local boards resolved support for the proposal in full. The remaining four boards partially endorsed the proposal as follows:

· Franklin - supports a regional remission scheme for land with a covenant with the Queen Elizabeth the Second Trust (QEII), but otherwise supported the full proposal

· Rodney – did not endorse the proposal for legacy schemes, but did support the development of an integrated approach to support outcomes for natural heritage, and community and sporting activities across the region.

· Waiheke – opposes the removal of remissions for natural heritage, but supports the proposal for legacy schemes for community and sporting organisations

· Waitākere Ranges noted concerns regarding the impact of removing remissions on property owners who seek to covenant their land for long term environmental protection.

30. Great Barrier Local Board supported the proposal in full but requested long term support options for QEII covenanted land and Forest and Bird.

Conclusion

31. In response to local board and public feedback officers recommend the following amendments to the proposal:

a) budget increase of $10,000 to maintain current level of support for non-GST registered recipients

b) direct officers to work with sector groups on the development of integrated funding strategies

c) direct officers to develop administrative requirements for future funding strategies are proportionate to the amount of support provided and nature of the support e.g. land or buildings

d) direct officers to work with the Queen Elizabeth the Second (QEII) Trust to develop options for a regional scheme for QEII covenanted land for 2019/2020 (see below for further details).

32. Officers recommend the adoption of the proposal as amended above because it:

· maintains the current budget for support of these activities with no impact on local board locally driven initiative (LDI) budgets

· aligns responsibility for supporting these activities with relevant areas of council

· grants are a more transparent funding mechanism

· allows this support to be considered alongside other sources of funding as regionally consistent support mechanisms are developed

· minimises change for current recipients.

Development of a grants scheme for QEII covenanted land

33. A majority of submitters sought the extension of rates remissions to all QEII covenanted land. Officers do not support remissions for the reasons outlined in this report. Officers recommend that any continued rates relief be provided through a grants scheme.

34. Grants can be provided automatically on a long-term basis. To ensure that the natural heritage value of the property is being actively maintained, support could be made conditional on properties meeting the maintenance requirements of the covenant, as evidenced by the QEII Trust’s two-yearly inspections. Officers would need to work with the QEII Trust to develop such an approach for the 2019/2020 rating year.

Alternative options for legacy schemes

35. Officers considered the following alternatives but do not recommend them. The council could choose to:

· retain the existing schemes - this will continue the current inequities in regional support

· remove the schemes without a transition - potential for significant impact for current recipients particularly as other forms of council support are not always consistently available across the region.

· extend the remission schemes to cover the entire region - would require further policy work to develop appropriate options and have substantially increased cost. Does not align support with other council funding mechanisms. Level of support determined by rates (driven by property values) rather than outcomes achieved. As some areas currently receive support through non-rates mechanisms a regional remission scheme would increase inequity in allocation of funding

· a regional grants scheme for rates on QEII covenanted land – a grants scheme can be integrated into the existing rates relief grants programme (Green Network Grants) and could be considered for implementation in 2018/2019.

Remission for the Accommodation provider targeted rate

Proposal

36. The draft policy proposed a new remission scheme to remit APTR for the following:

· properties used as emergency accommodation, in proportion to the amount of time and the part of the property that is put to this use

· ratepayers who own no more than two serviced apartments, who are paid a fixed rent by a hotel operator (with no profit sharing), and whose contractual arrangements mean that they are unable to pass on the cost of the rate and unable to exit the contract before the start of the rating year. (A partial remission will apply where the lease to the accommodation operator expires during the rating year). This remission will be phased out over 10 years, with the amount of remission available declining by a tenth each year.

37. Remissions under this scheme are expected to amount to $1.2 million in 2018/2019, with this amount declining over the next ten years.

Feedback

38. 73 submitters provided feedback with 39 in support of the proposal and 30 opposed. Of those opposed, 5 thought the remission should be more generous. Hospitality Services Limited, owners of three hotels, did not support the remission as they were opposed to the APTR itself. No other key stakeholders responded.

39. Ten local boards specifically endorsed the proposed APTR remission scheme. A further five boards supported the proposed Rates Remission and Postponement Policy. Great Barrier Board noted that Aotea Great Barrier Island is excluded from the APTR. The remaining boards did not resolve feedback on this issue.

Other issues

40. Two additional issues that should be considered in the development of a remission scheme for the APTR: subsequent sales of properties, and market rent reviews.

Sales of properties qualifying for remission

41. In general, long term leases for serviced apartments require the lease to be maintained through any sale of the property. The new owner must commit to the lease on the same terms and conditions as apply to the existing owner.

42. Under the remission scheme in the draft Rates Remission and Postponement Policy, as well as the remissions granted under the miscellaneous purposes scheme, the new owner is eligible for remission, as they entered into the contract after the APTR was adopted. This assumes that the new owner would consider the impact of the APTR when negotiating the purchase price. This situation would leave the original owner of the property in a worse position that a similar owner who retains ownership. This issue can be addressed by extending the remission to subsequent purchasers, where the new owner is unable to renegotiate the lease at sale.

Market rent reviews

43. A review of applications to the Miscellaneous Purposes remission has identified that all serviced apartment contracts offered periodic rent reviews, ranging from annual to every ten years.

44. Most schemes provide for market rent reviews, where market rent is defined as the rent on the open market for the property subject to the same lease contract. It is to be expected that over time market rents for such properties will adjust to reflect investors’ expectations for returns in relation to their costs, which will include the impact of the APTR. Officers consider the proposal addresses this issue as the amount of support offered declines over time.

Remission for the APTR conclusions and recommendations

45. Officers recommend the adoption of the remission scheme for the APTR as proposed in the draft Rates Remission and Postponement Policy with an amendment to extend the scheme to subsequent purchasers of qualifying properties who are unable to renegotiate the lease.

46. Officers consider the proposed APTR remission scheme an appropriate balance between recognising that

· some owners of properties charged the APTR are unable to pass on the cost of the rate to the hotel operator and may suffer financial hardship as a result; and

· ownership of a serviced apartment is a choice and investors in these developments should bear the risk of their investments.

47. The proposed APTR remission scheme is available to small scale investors who own no more than two apartments. This provides support to those investors most likely to suffer hardship. The proposed targeted APTR remission scheme is not available to large investors. This recognises that as a general rule, appreciation of the risks of investing, and ability to seek appropriate advice, increases with the size of the investment. In particular, owners of large numbers of apartments are considered generally more capable of negotiating their lease agreements, and managing potential risks associated with their investments.

48. The amount of available remission declines over time. This recognises that smaller investors should not avoid paying the rate entirely. It also recognises that fixed contracts provide for periodic Market Rent Reviews, which over time should see returns to owners reflect the impact of the APTR.

49. Officers note that the remission of rates for miscellaneous purposes remission scheme could still apply if the criteria in that scheme are met in the 2018/19 year, such as where there are exceptional circumstances that the council believes would make it equitable to remit the rate.

Alternative options to the proposed APTR remission scheme

50. Council could choose to:

· not offer a remission for the APTR. This option is not recommended as it does not address the financial hardship likely to be experienced by some investors.

· provide full remission of the APTR for the duration of contracts. This option is not recommended as it increases the cost of the scheme by $10 million (uninflated) over the life of the remission scheme. It also results in recipients continuing to receive support even as the impact of APTR is offset by subsequent rent reviews.

· not adopt a specific scheme and continue to consider applications for remission under the miscellaneous remissions scheme in the same way the council did in the 17/18 year. ($2.6m has been remitted to date). This option is not recommended as officers consider that there is merit in having in place a specific scheme.

Regional schemes conclusions and recommendations

51. Officers recommend the changes to the regional schemes in the draft Rates Remission and Postponement Policy be adopted as proposed.

52. The council could choose to retain the existing schemes but this would create inequities as residents of license to occupy retirement villages would be able to access the remission and rates rebates. It would also retain administrative complexity for penalty remissions.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe /
Local impacts and local board views

53. Under the proposal boards will be provided with additional asset based service funding to maintain the existing level of support for local community and sports groups in their board area that currently receive remissions (or postponements in the case of Great Barrier Island).

54. The amount of support provided by the Rates Remission and Postponement Policy varies significantly by local board area. (A summary of the amount of remissions by board area is in Attachment D.) In other areas, support may be provided through grants, discounted rentals, and the direct provision of facilities and services by council. Within the three year transition period, officers will report back on options for integrating funding mechanisms across the region.

55. Local board feedback on the proposal is summarised in the report. The boards’ full resolutions can be found on Attachment B.

Tauākī whakaaweawe Māori / Māori impact statement

56. No significant feedback was received from Māori or Māori organisations. Māori land is eligible for support under the Rates remission for Māori freehold land policy. This policy is not under review.

Ngā ritenga ā-pūtea / Financial implications

57. The financial implications are set out in the report.

Ngā raru tūpono / Risks

58. There are no identified risks.

Ngā koringa ā-muri / Next steps

59. The Rates Remission and Postponement Policy adopted by the Committee will take effect from 1 July 2018. A transitional grants programme would be effective from the same date.

60. Officers will develop options for ongoing support for the organisations and activities currently receiving legacy remissions and postponement within the next three years.

Ngā tāpirihanga / Attachments

No.	Title	Page
a ⇩	Rates Remission and Postponement policy for Adoption	173
b ⇩	Local Boards and Rural Advisory Panel Feedback on the Rates Remission and Postponement Policy proposal	183
c ⇩	Public Feedback on the Rates remission and postponement policy	195
d ⇩	Value of legacy schemes by local board area	197
e ⇩	List of all community and sporting remissions by local board area - Confidential

Ngā kaihaina / Signatories

Author

Beth Sullivan - Principal Advisor Policy

Authorisers

Ross Tucker - Acting General Manager, Financial Strategy and Planning

Matthew Walker - Acting Group Chief Financial Officer

Chairperson	Cr Ross Clow
Deputy Chairperson	Cr Desley Simpson, JP
Members	Cr Josephine Bartley	IMSB Member Terrence Hohneck
	Cr Dr Cathy Casey	Cr Penny Hulse
	Deputy Mayor Bill Cashmore	Cr Mike Lee
	Cr Fa’anana Efeso Collins	Cr Daniel Newman, JP
	Cr Linda Cooper, JP	Cr Greg Sayers
	Cr Chris Darby	Cr Sharon Stewart, QSM
	Cr Alf Filipaina	IMSB Member David Taipari
	Cr Hon Christine Fletcher, QSO	Cr Sir John Walker, KNZM, CBE
	Mayor Hon Phil Goff, CNZM, JP	Cr Wayne Walker
	Cr Richard Hills	Cr John Watson