Agenda of Extraordinary Meeting of the Governing Body

Governing Body

18 October 2018

Review of representation arrangements - recommendations of Joint Governance Working Party

File No.: CP2018/18925

Te take mō te pūrongo / Purpose of the report

1. To decide Auckland Council’s final proposal for a review of its representation arrangements for the 2019 elections.

Whakarāpopototanga matua / Executive summary

2. On 26 July 2018 the Governing Body delegated to the Joint Governance Working Party (Working Party) the responsibility to hear and consider submissions on representation arrangements for the 2019 elections.

3. This report contains the recommendations of the Working Party for the Governing Body to consider in finalising the proposal for the review of Auckland Council representation arrangements.

4. The Local Electoral Act 2001 (Act) requires that a council must consider all submissions received and may, by resolution, make such amendments to its initial proposal as it sees fit. Because the consideration of submissions was delegated to the Working Party, this meeting needs to ensure it takes full consideration of all submissions if it wishes to change any of the Working Party’s recommendations. An overview of the number of submissions including those in support of or opposed to the council’s proposals is contained in Attachment B. The written comments for each proposal are contained in Attachments C to G.

5. The recommended changes increase the number of non-complying ward arrangements. The final proposal will be forwarded to the Local Government Commission which will uphold or amend the council’s non-complying decisions.

6. The council’s final proposal will be publicly notified. Any appeals and objections will be forwarded to the Local Government Commission for determination. The Commission may, in due course, wish to engage with the council about its final proposal.

7. A report from Richard Northey, the chairperson of the Joint Governance Working Party, is contained in Attachment A.

Ngā tūtohunga / Recommendation/s

That the Governing Body:

a) receive the report from Richard Northey, Chairperson of the Joint Governance Working Party, contained in Attachment A of the agenda report.

b) receive the submissions of members of the public as contained in Attachments B to G.

c) note the feedback from local boards as contained in Attachment H

d) receive the minutes of the Joint Governance Working Party meeting at which submissions were presented and considered as contained in Attachment I.

e) adopt the following recommendations of the Joint Governance Working Party, with reference to the maps contained in Attachment J, as the Auckland Council’s final proposal arising from its review of representation arrangements for the 2019 elections:

Isthmus wards

i) retain all of Grey Lynn and Westmere in the Waitematā and Gulf Ward, by keeping the western boundary of the ward unchanged from its present location (Meola Creek and Motions Road). (Area A on Attachment J)

ii) move parts of Grafton along with the Domain and the Carlaw Park area, to the Ōrākei Ward. The areas of Grafton to be moved, broadly speaking, include:

A) that area south of the Southern Motorway, bounded by Symonds Street, Mt Eden Road, Boston Road and the motorway (Area B); and

B) the area to the north of the Southern Motorway, bounded in the west by Grafton Gully and in the east by Mountain Road and Park Road. (Area C)

iii) move that part of the Eden Terrace/Grafton area which was not subsequently changed to Ōrākei Ward by the recommendations of the Joint Governance Working Party noted above, from Waitematā and Gulf Ward to Albert-Eden-Roskill Ward. (Area D)

iv) move the communities of Parnell and Newmarket from the Waitematā and Gulf Ward to the Ōrākei Ward. (Area E)

v) retain the part of Mt Roskill, which under the initial proposal was to be moved to the Whau Ward, within the Albert-Eden-Roskill Ward. (Area F)

vi) move a small area around Royal Oak from the Maungakiekie-Tāmaki Ward to the Albert-Eden-Roskill Ward. (Area G)

vii) move part of Ellerslie and St Johns (between College Road and the Glen Innes Railway Station) from the Ōrākei Ward to the Maungakiekie-Tāmaki Ward.
(Areas H + I)

viii) with the exception of the recommendations above, retain all other current boundaries of isthmus wards.

Manukau Ward

ix) retain the two-member Manukau Ward using the current boundaries, which respects the overwhelming views of submitters and which still reasonably reflects existing communities of interest.

Rodney Local Board Subdivision boundaries

x) adjust the subdivision boundaries in the Kaipara Coast area of the Rodney Local Board such that the Kaipara Coast area is changed from the Wellsford Subdivision, as per the initial proposal, to a combination of the Kumeu (south of the Hoteo River) and Wellsford (north of the Hoteo River) Subdivisions. (area J)

xi) move the boundary between the Warkworth and Wellsford Subdivisions north to include a small area north-west of Matakana in the Warkworth Subdivision. (area K)

Additional non-complying decisions not changed from the initial proposal

xii) retain the existing Rodney Ward boundaries

xiii) retain the existing Manurewa-Papakura Ward boundaries

xiv) retain the existing Howick Local Board Subdivisions

Renaming

xv) rename the Great Barrier Local Board to Aotea Great Barrier Local Board

xvi) rename the Albert-Eden-Roskill Ward to Albert-Eden-Puketāpapa Ward

f) delegate to His Worship the Mayor the responsibility of identifying representatives of the Auckland Council to engage with the Local Government Commission on the council’s final proposal should this be required.

g) confirm that it wishes to be able to review the number of members of the Governing Body and will continue to seek the required legislative change.

Horopaki / Context

Overview

Process

8. The process for conducting this review was agreed by the Governing Body in 2017 and included the Working Party developing the council’s initial proposal with feedback from local boards.

9. The Governing Body, on 26 July 2018, considered recommendations by the Working Party and made the council’s initial proposal. It was publicly notified on 8 August 2018, with a closing date for submissions of 11 September 2018. The initial proposal is attached in Attachment K.

10. The Governing Body delegated to the Working Party the responsibility and power to hear and consider submissions and to report recommendations to the Governing Body to take into account when making its final proposal. Those recommendations are presented in this report. The Working Party heard submissions on Thursday 20 September 2018 and heard local board feedback on Friday 21 September 2018.

11. The Governing Body will decide the council’s final proposal at this meeting. It needs to be careful about making changes to the Working Party recommendations and should only do so on the basis of having considered all submissions.

12. The final proposal will be publicly notified for appeals and objections. Any appeals and objections that are received will be forwarded to the Local Government Commission for determination. The Local Government Commission must also uphold or amend any non-complying decisions (decisions which do not comply with the ten per cent rule). The Working Party’s recommendations increase non-compliance with the ten per cent rule and will need to be forwarded to the Local Government Commission.

13. Any person who made a submission on the initial proposal can lodge an appeal. The appeal must address only those matters raised in the submission. Any person may object to any changes made by the council to its initial proposal.

Engagement

14. An engagement plan was developed with the council’s engagement team. For engagement options in the Manukau area discussions were held with the Ōtara-Papatoetoe and Māngere-Ōtāhuhu Local Boards and a specific engagement plan developed on their advice. The engagement plan included:

· a double-page public notice in the New Zealand Herald (8 August), which is required by law

· a half-page display advertisement in the Manukau Courier (14 August), East and Bays Courier (15 August), Central Leader (16 August) and Rodney Times (14 August)

· media releases – including to ethnic media channels

· information booklets and leaflets containing frequently asked questions

· a single page document outlining issues on the Manukau Ward

· information including posters, booklets, frequently asked questions sheets and feedback forms, in key libraries, service centres, local board offices and an email to identified stakeholder groups across the region such as residents and ratepayers associations

· comprehensive information on the council’s “Have your say” website

· survey sent to the People’s Panel

· working with a community partner to directly engage with the public in the Manukau Ward area, targeting Pasifika communities

· attendance at a Papatoetoe Indian Sikh Temple and at a meeting of Business Grey Lynn

· presentations to the Youth Advisory Panel and the Pacific Peoples Advisory Panel.

15. The community partner attended Mangere Markets, Ōtara Flea Market and Mangere Bridge Markets and spoke at a number of south Auckland church services and their community gatherings over the consultation period. The impact of this engagement directly resulted in a significant number of submissions from Pasifika people – out of the 900 people who responded with their ethnicity, 636 identified as Pasifika.

Submissions

16. A total of 1,265 submissions were received. These were received through the online feedback form, hard-copy submission forms and emails to the email account for the review. Comments on Facebook were also taken into account.

17. A summary of all submissions is attached in Attachment B and written comments on each proposal are contained in Attachments C to G.

18. Thirteen members of the public made oral submissions to the Working Party as outlined in the minutes of the Working Party’s meeting, in Attachment I.

19. All submitters who provided an email address were notified of the Working Party’s recommendations following its consideration of submissions.

Local boards

20. The legal timeframe for considering submissions did not allow for formal reporting of submissions to local boards for their comment. Local boards were invited to present their feedback to the Working Party following the hearing of public submissions. Feedback additional to that provided in July on the initial proposal was received from the following local boards:

i) Albert-Eden Local Board – written and oral presentation

ii) Great Barrier Local Board – oral comments

iii) Howick Local Board – oral comments

iv) Māngere-Ōtāhuhu Local Board - written and oral presentation

v) Maungakiekie-Tāmaki Local Board – written comments

vi) Ōtara-Papatoetoe Local Board – written and oral presentation

vii) Papakura Local Board – written comments

viii) Puketāpapa Local Board – written and oral presentation

ix) Rodney Local Board – written comments

x) Waitematā Local Board – oral comments

21. The written feedback from local boards is contained in Attachment H.

Local Electoral Act requirements

22. The Act requires the council to consider both:

· effective representation of communities of interest

· fair representation (as expressed by the ten per cent rule).

23. The sections of the Act that apply are attached in full in Attachment L.

24. The ‘ten per cent rule’, as contained in section 19V of the Act, and the population data that should be used, have been the source of some debate during the consultation. Sub-section (1) requires a territorial authority to ensure that the electors of a ward receive fair representation having regard to the population. Subsection (2) states that the territorial authority gives effect to this by ensuring the population of each ward, divided by the number of members in the ward, produces a result that is within ten per cent of the average for the whole of Auckland.

25. Section 19X of the Act requires the Government Statistician to provide the ordinarily resident population for the purposes of sections 19H to 19W. In practice, the Local Government Commission forwards this information to councils conducting reviews.

26. The Local Government Commission’s office has confirmed that the statistics that the council must use are those issued from the Government Statistician that are passed on to the council by the Local Government Commission. These statistics are the ordinarily resident population and are a 2017 estimate based on the 2013 census.

27. The council is able to not comply with the requirements of subsection (2) (the ten per cent rule) if compliance would lead to splitting communities of interest or joining disparate communities of interest ((3)(a)(ii) (3)(a)(iii)).

28. If the council makes a non-complying proposal, the proposal needs to be referred to the Local Government Commission, which will uphold or alter the proposal. The Local Government Commission’s own decisions must comply with the requirements in the Act, including section 19V.

29. Some of the Working Party’s recommendations for changes to the council’s initial proposal arise from considering the balance between the requirement for effective representation of communities of interest and the requirement for fair representation. The revised proposal for the Waitematā and Gulf Ward is better recognition of communities of interest but there is now non-compliance with the ten per cent rule.

30. Non-complying proposals require that the council makes a convincing case to the Local Government Commission that non-compliance is necessary to avoid splitting communities of interest or joining disparate communities of interest. The submissions received by the council will support the proposal to not comply.

Number of councillors

31. A number of submitters to boundary changes in the Waitematā and Gulf Ward stated that the preferred solution was to increase the number of councillors. This reflects the council’s own position. The Local Government (Auckland Council) Act 2009 sets the number of councillors at twenty and the option to increase the number of councillors is not currently open to the council. The council has recently made a submission to the Local Electoral Matters Bill which included a submission to remove the cap and to provide a process for keeping ward and local board boundaries aligned. The select committee is due to report back on the bill in November 2018 and it is unlikely any change will affect the current representation review.

32. Staff note that increasing the number of councillors would enable under-representation in the Waitematā and Gulf ward to be addressed with less disruption to boundaries and would improve the over-representation in the Rodney because the number of people per councillor would decrease.

33. When considering submissions, the Working Party resolved to “urge the Governing Body again to make representations for an urgent law change that would enable an increase in the number of governing body members.”

Future changes to ward boundaries

34. With rates of population growth varying over the whole of the Auckland and a potential future change in the number of councillors, it is likely that ward boundaries will continue to change and become more unaligned with local board boundaries although there is the legal requirement to keep them aligned as far as is practicable.

35. Some submitters felt that this review should take a future-proofing approach so that change is not required into the future. However, the current recommendations should not be seen as long-lasting. Each future review will need to consider the balance between the requirement for the effective representation of communities of interest and the requirement for fair representation in the context of changing population growth.

Tātaritanga me ngā tohutohu / Analysis and advice

Waitemata and Gulf Ward boundaries

Summary of initial proposal

36. To meet the ten per cent rule, the council’s initial proposal included shrinking the boundaries of the Waitematā and Gulf Ward. This led on the eastern side, to the Ōrākei Ward boundaries being extended to include Newmarket and Parnell and on the western side, the boundary being through the shopping areas of Grey Lynn and West Lynn.

37. There were consequential effects arising from this initial proposal. To prevent the Ōrākei Ward becoming non-complying, the Maungakiekie-Tāmaki Ward was extended to include parts of St Johns and Ellerslie. To prevent the Albert-Eden-Roskill Ward becoming non-complying, the Whau Ward was extended into the Albert-Eden-Roskill Ward as was part of the Maungakiekie-Tāmaki Ward.

Submissions

38. There were 104 submissions which supported this proposal and 234 which opposed it. The most common areas of concern from those who opposed the initial proposal were the effects on communities in the Grey Lynn, Grafton and Ellerslie areas.

Grey Lynn community of interest

39. There were 47 submissions opposing the council’s proposal on the basis it would split the Grey Lynn community of interest. There were no written submissions that specifically expressed support for the proposed new Grey Lynn / Westmere boundary. Submitters are particularly concerned about the proposed boundary through the Grey Lynn and West Lynn shopping areas, such that shops on different sides of the street will be in different wards.

40. The Working Party noted the reference to the postal code 1021 area in the submission from the Grey Lynn Residents Association and considered that as an option for amending the initial proposal to better represent the Grey Lynn community of interest. That option includes the Grey Lynn and West Lynn shopping areas in the Waitematā and Gulf Ward but excludes Westmere. A number of submitters stated that Westmere belongs in the same community of interest.

41. The Working Party recommends, therefore, that the boundary of the Waitematā and Gulf Ward on the western side of the ward stays as it is. As well as retaining the current communities of interest, this recommendation assists the alignment of the ward boundary with the local board boundary.

Grafton

42. There were ten submissions which objected to splitting Grafton from Newmarket and Parnell, including from the Grafton Residents Association.

43. Moving Grafton to Ōrākei assists the quota issue with the Waitematā and Gulf Ward but increases the variance in the Ōrākei Ward. There are no obvious options for passing more of Ōrākei’s population to Maungakiekie-Tāmaki without affecting communities of interest and therefore Ōrākei becomes non-complying. The growth in Ōrākei is slower than the rest of Auckland and the extent of non-compliance will decrease in time.

44. The Working Party therefore recommends moving parts of Grafton, and the Domain and Carlaw Park, along with Newmarket and Parnell into the Ōrākei Ward.

Ellerslie

45. Out of a total of 12 submissions which referred to Ellerslie, eight submissions supported the initial proposal. Four submissions stated that the Ellerslie Racecourse should not be split from the part of Ellerslie that will become part of the Maungakiekie-Tāmaki Ward.

46. Although the name of the racecourse, which is operated by the Auckland Racing Club, refers to Ellerslie in its title, the Working Party noted that it is not necessary to consider the racecourse in terms of the community of interest requirements of the Local Electoral Act. It was not historically in the Ellerslie Borough and it is a regional facility. For example, it is not used more by Ellerslie residents than Ōrākei residents. Furthermore, the area in which it is located does not contain a residential population of any significance.

47. The Working Party is not recommending any changes to council’s proposal as a result of these submissions.

Local board feedback

48. The Ōrākei Local Board stated that its preference was for legislative change to allow the number of councillors for the Waitematā and Gulf Ward to be increased without an overall increase. The board supports Parnell moving to the Ōrākei Ward but not Newmarket. It also considers that the St Johns area that is proposed to move to the Maungakiekie-Tāmaki Ward should remain in the Ōrākei Ward and that west of the racecourse should remain in Ōrākei.

49. The Maungakiekie-Tāmaki Local Board expressed concern that ward and local board boundaries being unaligned would create confusion.

50. The Puketāpapa Local Board supports single member wards, decoupling ward and local board boundaries and being able to increase the number of councillors.

51. The Albert-Eden Local Board supports legislative change to allow the number of councillors to be increased.

52. The Waitematā Local Board acknowledged the strength of concern in the Grey Lynn area and expressed concern about confusion arising due to mis-alignment of ward and local board boundaries. The board also expressed concern about many people in the area not knowing about the proposed changes.

Working Party recommendations regarding Waitematā and Gulf Ward

53. The Working Party recommends the following changes to the initial proposal:

ii) move parts of Grafton along with the Domain and the Carlaw Park area, to the Ōrākei Ward. The areas of Grafton to be moved, broadly speaking, include:

a) that area south of the Southern Motorway, bounded by Symonds Street, Mt Eden Road, Boston Road and the motorway (B); and

b) the area to the north of the Southern Motorway, bounded in the west by Grafton Gully and in the east by Mountain Road and Park Road. (C)

iii) move that part of the Eden Terrace / Grafton area which was not subsequently changed to Ōrākei Ward by the recommendations of the Joint Governance Working Party noted above, from Waitematā and Gulf Ward to Albert-Eden-Roskill Ward. (D)

iv) move the communities of Parnell and Newmarket from the Waitematā and Gulf Ward to the Ōrākei Ward. (E)

v) retain the part of Mt Roskill, which under the initial proposal was to be moved to the Whau Ward, within the Albert-Eden-Roskill Ward. (F)

vi) move a small area around Royal Oak from the Maungakiekie-Tāmaki Ward to the Albert-Eden-Roskill Ward. (G)

vii) move part of Ellerslie and St Johns (between College Road and the Glen Innes Railway Station) from the Ōrākei Ward to the Maungakiekie-Tāmaki Ward. (H + I)

viii) with the exception of the recommendations above, retain all other current boundaries of isthmus wards.

54. These changes are shown in the map in Attachment J.

55. The following table shows the change in the per cent difference from quota of the recommended boundaries as compared to the current boundaries and those in the council’s initial proposal.

Ward	Per cent difference from quota
	Current	Initial proposal	Recommended final proposal
Waitematā and Gulf Ward	43.74	9.22	17.19
Whau Ward	2.22	9.58	2.22
Albert-Eden-Roskill Ward	3.91	10.07	7.29
Ōrākei Ward	10.43	10.91	15.86
Maungakiekie-Tāmaki Ward	-3.81	10.43	10.43

Manukau Ward

Summary of initial proposal

56. As part of reviewing current representation arrangements, the Working Party considered whether any current two-member wards should be split into single-member wards. Existing local board boundaries were used as representing communities of interest. The only two-member ward that can be split along local board boundary lines and still comply with the ten per cent rule is the Manukau Ward.

57. Opinion was divided on whether this should be pursued. The two local boards in the Manukau Ward area were opposed. The Governing Body included the proposed split of Manukau Ward so that the community could comment.

Submissions

58. There were 953 responses from across all of Auckland to this proposal:

· 78 per cent opposed the proposal

· 22 per cent supported the proposal.

59. When only submitters from the affected areas are considered:

· from Māngere‐Ōtāhuhu, there were 256 submitters with 20 per cent supporting and 80 per cent opposing the proposal

· from Ōtara‐Papatoetoe, there were 297 submitters with 23 per cent supporting and 77 per cent opposing the proposal.

Comments made in submissions

60. Those submissions supporting the proposal made comments summarised as follows:

i) Enhanced engagement by the two councillors

ii) Councillors will be more focussed and able to give more attention to local matters

iii) All wards should be single-member

iv) All wards should have same boundaries as local boards

v) Parliamentary electorates are single-member

vi) Simplify choosing a representative (only have to choose one instead of two)

vii) Current ward is too big

viii) Election campaigning less expensive

ix) Increase councillor accountability

x) Workload is high and pace is slow

61. Those submissions opposing the proposal made comments summarised as follows:

i) Papatoetoe would dominate Ōtara

ii) Current arrangement is working well and no need to fix it

iii) All double-member wards should be split, not just Manukau

iv) Splitting the ward to make it easier for the councillors is not a good reason

v) Manukau is currently a community of interest which shares common issues

vi) Splitting up the ward is not going to help with councillors getting involved in local issues

vii) The entire ward is similar demographically, culturally and politically

viii) Ōtara will get marginalised

ix) Splitting the ward is reinforcing first past the post, multi-member wards are required for proportional representation

x) Would split the Pasifika population

xi) Families are spread over the whole Manukau Ward

xii) The community benefits by having two councillors – one may have qualities the other lacks.

62. Some submissions misunderstood the legislative requirement to conduct the review and took the view that the council was conducting the review unnecessarily or that there was an agenda to undermine south Auckland. The submissions advocated no need for change.

Communities of interest

63. Although the number of submissions speaks for itself, the council is required to consider the effective representation of communities of interest.

64. The matter of fair representation is not an issue – both the status quo and the proposed split of the ward comply.

65. The Māngere and Ōtāhuhu communities currently exist in one local board area without subdivisions. The Ōtara and Papatoetoe communities currently exist in one local board area but the Local Government Commission recognised they were separate communities by creating separate subdivisions:

“We looked for the existence of distinct communities in other local board areas and considered the relative size of these and whether they were physically separated from each other as factors in determining the need for subdivisions. As a result, we have also established electoral subdivisions in the Hibiscus and Bays, Albert-Eden, Maungakiekie-Tāmaki and Ōtara-Papatoetoe Local Boards. In two of these board areas, Maungakiekie-Tāmaki and Ōtara-Papatoetoe, it was not possible to create equal-sized subdivisions without drawing what we saw as arbitrary boundaries splitting communities of interest as a result of the ‘+/-10% fair representation rule’.”

66. Given that the Local Government Commission considered Ōtara and Papatoetoe to be distinct communities rather than similar communities, information is contained in Attachment M comparing ethnicity, socio-economic status and voter turnout, which provides data supporting the differences between the two communities.

67. As well as the two communities being dissimilar, submissions noted that Ōtara shares community activities and family ties with Mangere.

Effective representation

68. The reason for splitting the ward is based on the size of wards in Auckland Council. A smaller ward might promote more effective representation. A single member represents, on average, 82,860 people and two members represent, on average, 165,720 people. In a double-member ward, the ward is not split and both councillors are expected to support the total electorate.

69. The Local Electoral Act 2001 requires the Local Government Commission to publish guidelines identifying factors and considerations for councils to take into account in making decisions. Included in those guidelines are the following comments, which help to define what may be considered when in terms of effective representation:

5.17 When practicable, the following factors need to be considered when determining effective representation for the local authority:

· avoiding arrangements that may create barriers to participation, for example, not recognising residents’ familiarity and identity with an area during elections

· not splitting recognised communities of interest between electoral subdivisions

· not grouping together two or more communities of interest that have few common interests

· accessibility, size, and configuration of an area, including:

○ the population’s reasonable access to its elected members and vice versa

○ the elected members’ ability to:

- effectively represent the views of their electoral area

- attend public meetings throughout the area, and provide reasonable opportunities for face-to-face meetings.

5.21 Consider the relative merits of one and multi-member wards/constituencies:

· single-member wards/constituencies provide a close direct link between local electors and their representative

· multi-member wards/constituencies can provide:

○ greater choice for voters

○ following the election, provide greater choice for residents on who to approach on local issues

○ allow sharing and specialising in responsibilities between the ward/constituency representatives.

70. Some submitters stated that having two members provides more effective representation. Each elector in the ward can elect two representatives and there are two representatives across the whole ward who can be called on.

Balancing the issues

71. In balancing more effective representation through smaller wards against the dissimilar nature of communities that would result from splitting the wards, the clear majority of submissions from members of the public is that the ward should not be split. From the community’s perspective, the current arrangements work well. The whole area within the current ward can elect two representatives and call on two if needed.

Local board feedback

72. The formal resolutions of both the Ōtara-Papatoetoe and Māngere-Ōtāhuhu local boards acknowledged the large number of responses to the consultation from their communities being overwhelmingly opposed to splitting the ward. Members of both wards attended the hearing and their chairpersons made oral presentations.

Working Party recommendations regarding the Manukau Ward

73. The Working Party recommends that the council’s initial proposal is amended by removing the proposal to split the Manukau Ward.

Rodney Local Board Subdivisions

Summary of initial proposal

74. The council proposed changing the local board subdivisions to recognise:

· communities along the Kaipara Harbour, and which are currently in the Warkworth Subdivision, do not share a community of interest with Warkworth

· communities in the Matakana area, currently in the Wellsford Subdivision, have a greater community of interest with the Warkworth Subdivision.

75. The southern boundary of Wellsford was moved southwards along the Kaipara Harbour and the boundary of Warkworth was moved inwards on the western side and northwards to encompass the area north-west of Matakana.

Submissions

76. There were 78 submissions received on this proposal. The written comments were generally supportive of including the Matakana area in the Warkworth Subdivision. Four submissions opposed moving the Wellsford boundary south along the Kaipara Harbour on the basis it was already geographically large and only had one board member. Submissions from Federated Farmers and Grant Kirby stated that it is more appropriate to bring the Kumeu boundary northwards rather than bring the Wellsford boundary south. Submissions noted that schooling lies to the south and east, rather than to the north, as does shopping. Those who commute to work, travel south.

77. A submission was received from the Kumeu-Huapai Residents and Ratepayers Associations advocating there should be two local boards.

Local board feedback

78. Feedback from the Rodney Local Board was to confirm its support for the initial proposal.

Working Party recommendations regarding the Rodney Local Board Subdivisions

79. The Working Party recommends the council’s initial proposal is amended, as illustrated in the map in Attachment J, by moving the northern boundary of the Kumeu Subdivision boundary northwards and changing the Wellsford / Warkworth boundary

i) west of Hoteo such that it follows the Hoteo River south-west to the Kaipara Harbour, and

ii) in the vicinity of Matakana, northwards to encompass the area north-west of Matakana in the Warkworth Subdivision.

80. The effect of these recommendations is as follows:

Subdivision	Population (2017 Est.)	Members	Population per member	Difference from quota	Per cent difference from quota
Dairy Flat Subdivision	7,510	1	7,510	367	5.13
Kumeu Subdivision	30,400	4	7,600	457	6.39
Warkworth Subdivision	20,200	3	6,733	-410	-5.74
Wellsford Subdivision	6,210	1	6,210	-933	-13.07
Rodney Local Board Total	64,290	9	7,143

Other recommendations of the Working Party

Name of the Albert-Eden-Roskill Ward

81. Feedback from the Puketāpapa Local Board included a request to change the name of the Albert-Eden-Roskill Ward to Albert-Eden-Puketāpapa.

82. The Working Party noted that this change of name has not been consulted on but also noted that any changes in the council’s final proposal that were not part of the initial proposal are open to the public to object to the Local Government Commission.

83. The proposed change reflects the names of both local boards contained in the ward.

84. The Working Party recommends that the change of name is included in the final proposal.

Other changes to current arrangements that were included in the initial proposal

85. The council’s initial proposal included the following arrangements that have not been separately addressed elsewhere in this report.

86. The Rodney Ward boundaries will not change and this will be a non-complying decision because over-representation is currently 22 per cent. There were 29 submissions which supported and 12 which opposed this proposal. The comments opposing the proposal tended to favour a strict approach to the fair representation rule across all wards. The Working Party does not recommend changes to the initial proposal.

87. The Great Barrier Local Board will be renamed Aotea Great Barrier Local Board. There were 70 submissions which supported this proposal and 42 which opposed it. The Working Party does not recommend changes to the initial proposal.

88. There were no submissions regarding the Botany Subdivision of the Howick Local Board being over the quota. There were no submissions regarding the Manurewa-Papakura Ward as being under the quota (other than submissions of a general nature advocating strict compliance with the ten per cent rule throughout).

Summary of all Working Party recommendations

89. The wards for electing members of the Auckland Council Governing Body will be as follows:

Ward	Population (2017 Est.)	Members	Population per member	Difference from quota	Per cent difference from quota
Rodney Ward	64,300	1	64,300	-18,560	-22.40
Albany Ward	169,800	2	84,900	2,040	2.46
North Shore Ward	156,800	2	78,400	-4,460	-5.38
Waitākere Ward	176,500	2	88,250	5,390	6.50
Waitematā and Gulf Ward	97,100	1	97,100	14,240	17.19
Whau Ward	84,700	1	84,700	1,840	2.22
Albert-Eden-Puketāpapa Ward	177,800	2	88,900	6,040	7.29
Ōrākei Ward	96,000	1	96,000	13,140	15.86
Maungakiekie-Tāmaki Ward	91,500	1	91,500	8,640	10.43
Howick Ward	150,200	2	75,100	-7,760	-9.37
Manukau Ward	168,900	2	84,450	1,590	1.92
Manurewa-Papakura Ward	148,900	2	74,450	-8,410	-10.15
Franklin Ward	74,600	1	74,600	-8,260	-9.97
Total Auckland	1,657,200	20	82,860

90. The subdivisions for those local boards having subdivisions will be as follows:

Local board	Population	Members	Pop per member	Difference from quota	% Diff from quota
Rodney Local Board
Wellsford Subdivision	6,210	1	6,210	-933	-13.07
Warkworth Subdivision	20,200	3	6,733	-410	-5.74
Kumeu Subdivision	30,400	4	7,600	457	6.39
Dairy Flat Subdivision	7,510	1	7,510	367	5.13
Total	64,290	9	7,143

Hibiscus and Bays Local Board
Hibiscus Coast Subdivision	53,300	4	13,325	263	2.01
East Coast Bays Subdivision	51,200	4	12,800	-263	-2.01
Total	104,500	8	13,063

Albert-Eden Local Board
Owairaka Subdivision	53,800	4	13,450	-200	-1.47
Maungawhau Subdivision	55,400	4	13,850	200	1.47
Total	109,200	8	13,650

Maungakiekie-Tāmaki Local Board
Maungakiekie Subdivision	31,200	3	10,400	-971	-8.54
Tāmaki Subdivision	48,400	4	12,100	729	6.41
Total	79,600	7	11,371

Howick Local Board
Pakuranga Subdivision	45,800	3	15,267	-1,422	-8.52
Howick Subdivision	45,900	3	15,300	-1,389	-8.32
Botany Subdivision	58,500	3	19,500	2,811	16.84
Total	150,200	9	16,689

Ōtara-Papatoetoe Local Board
Papatoetoe Subdivision	51,600	4	12,900	343	2.73
Ōtara Subdivision	36,300	3	12,100	-457	-3.64
Total	87,900	7	12,557

Franklin Local Board
Waiuku Subdivision	15,350	2	7,675	-619	-7.47
Pukekohe Subdivision	35,900	4	8,975	681	8.20
Wairoa Subdivision	23,400	3	7,800	-494	-5.96
Total	74,650	9	8,294

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

91. The Auckland Council has the most complex governance arrangements in the country, having 21 local boards in addition to the Governing Body. The process for conducting this review included the development of an initial proposal by the Working Party with feedback from local boards.

92. Staff expected the Working Party would communicate with the Governing Body about the representation arrangements for the Governing Body and with local boards about each local board’s representation arrangements. The extent of interest by local boards in Governing Body arrangements was more than anticipated. The Ōtara-Papatoetoe and Mangere-Otahuhu local boards objected to the Working Party changing its recommendations to the Governing Body on the Governing Body arrangements for the Manukau Ward after the feedback from the local boards was received.

93. Apart from this issue, local boards have had opportunities to provide feedback on both the development of the council’s initial proposal and on the submissions received. The local board submissions are described throughout the report.

Tauākī whakaaweawe Māori / Māori impact statement

94. The change of name of the Great Barrier Local Board to Aotea Great Barrier Local Board acknowledges the Treaty settlement in that area. The Working Party’s recommendation to change the name of the Albert-Eden-Roskill Ward to Albert-Eden-Puketāpapa Ward recognises the Māori name for Mt Roskill. Puketāpapa means “flat-topped mountain”.

Ngā ritenga ā-pūtea / Financial implications

95. The total cost of the review is $83,000 and will be covered from existing budgets.

Ngā raru tūpono / Risks

96. In deciding its final proposal, the council has had to balance the requirements for effective representation of communities of interest and fair representation. Non-complying decisions will need to be either upheld or altered by the Local Government Commission. There is the risk that the Commission will not uphold the council’s decisions.

Ngā koringa ā-muri / Next steps

97. Once the Governing Body has decided the council’s final proposal it will be publicly notified for objections and appeals, closing on 30 November 2018. The council is required to forward these to the Local Government Commission, along with its non-complying decisions. The Commission has until 11 April 2019 to make its determinations.

Ngā tāpirihanga / Attachments

No.	Title	Page
a ⇩	Report of the chairperson of the Joint Governance Working Party	25
b ⇩	Overview of all submissions	29
c ⇩	Comments on isthmus wards	41
d ⇩	Comments on Manukau ward	89
e ⇩	Comments on Rodney ward	111
f ⇩	Comments on Rodney subdivisions	119
g ⇩	Comments on Great Barrier name	125
h ⇩	Summary of local board feedback	129
i ⇩	Minutes of the Joint Governance Working Party hearing	133
j ⇩	Maps showing changes to initial proposal	143
k ⇩	Council's initial proposal	145
l ⇩	Local Electoral Act 2001 requirements	149
m ⇩	Data on Ōtara and Papatoetoe communities	151

Ngā kaihaina / Signatories

Author

Warwick McNaughton - Principal Advisor - Democracy Services

Authorisers

Marguerite Delbet - General Manager Democracy Services

Phil Wilson - Governance Director

Stephen Town - Chief Executive

Governing Body

18 October 2018

Contributions Policy 2019 Consultation

File No.: CP2018/19745

Te take mō te pūrongo / Purpose of the report

1. To adopt a draft Contributions Policy 2019 for consultation.

Whakarāpopototanga matua / Executive summary

2. It is estimated that the Auckland region is short 45,000 dwellings to meet current demand for housing. A further 313,000 dwellings and work places to support 250,000 jobs will be required by 2050 to meet expected growth. To manage this growth the council has identified the:

i) location and nature of growth - through the Auckland Plan and Unitary Plan

ii) location and type of infrastructure required to support growth - through the Development Strategy and structure plans

iii) when and where it will invest $7.2 billion of growth-related infrastructure in the next 10 years to support development - through the Long-term Plan 2018-2028 (10-Year Budget).

3. Growth related capex has risen from $5.1 billion in the LTP 2015-2025 to $7.2 billion in the current 10-Year Budget. We have also updated our projection of development growth across the next 10 years. The council will repay the borrowing raised to pay for the investment in infrastructure through general rates, targeted rates, user charges, third party funding (like New Zealand Transport Agency (NZTA) subsidies) and development contributions.

4. Officers have reviewed the current contributions policy and recommend a number of changes be included for consultation in the draft Contributions Policy 2019 (see Attachment A).

5. To recover the increased investment in growth related infrastructure the indicative urban development contribution (DC) price rises from around $21,000 to $26,000 (excluding GST). As a result, the DC revenue the council expects to collect will rise to $2.7 billion from $2.23 billion under the current policy.

6. Officers have reviewed the demand placed on transport by different types of development. The analysis shows that retail and commercial development place substantially higher demand on transport infrastructure than is reflected in the current policy. The draft policy includes higher unit of demand factors for transport, and hence prices, for retail and commercial development with smaller decreases for other development types. This would more fairly reflect the demand different development types place on the need to invest in infrastructure.

7. The draft Contributions Policy 2019 also proposes:

· extending the timeframe for the payment of DCs on residential construction. This will better align the time that residential builders pay their DCs with the time when they sell their developments

· refining and changing funding areas to better match investment with beneficiaries, including adding areas for:

i) transport to reflect areas where significant local infrastructure investment is planned

ii) reserves to provide more detail on projects and their location

· minor amendments including changes to development types.

8. Consultation on the draft Contributions Policy 2019 is required to enable council to adopt an updated policy before the current policy expires on 31 January 2019. To support consultation, officers have prepared a draft Consultation Document and Supporting Information, Attachments B and C respectively, which set out:

· an overview of how the council is responding to growth and how development contributions fit within this context

· describes how we set development contributions charges

· details the key changes in our draft Contributions Policy and why we have proposed them.

9. Officers propose a consultation period from 19 October to 15 November 2018 including:

· Five “Have Your Say” events held across the region

· engagement with Mana Whenua Kaitiaki Forum

· opportunity for submitters to personally present their feedback to councillors on 16 November 2018.

Ngā tūtohunga / Recommendation/s

That the Governing Body:

a) agree to consult on the attached draft Contributions Policy 2019

b) delegate the authority and responsibility for agreeing any required changes to the draft Contributions Policy 2019 and consultation material to the Chair of the Finance and Performance Committee and the Group Chief Financial Officer

c) agree to the consultation process set out in this report.

Horopaki / Context

10. The current policy is known as the Contributions Policy 2015 (Variation A) and reflects the Long-term Plan (LTP) 2015-2025. Development contributions have recovered approximately $400 million of funding for growth projects in the last three years.

11. Council reviewed the current policy and recommended that it be amended to reflect changes to capital expenditure in the 10-Year Budget. At its meeting on 30 April 2018 the Governing Body agreed to consult on the draft Contributions Policy 2018 in May 2018.

12. Feedback from the development community requested more detailed supporting information and a longer period for consultation on the draft policy. In response, at its meeting on 27 June 2018 the Governing Body agreed to extend the current policy until 31 January 2019 so that additional supporting information for the policy could be prepared and further consultation on the 2019 policy undertaken.

13. The policy has been reviewed in accordance with the following principles:

· purpose and principles of development contributions under the Local Government Act 2002

· equitable sharing of costs of growth between ratepayers, developers and other members of the community having regard to such matters as who causes the costs and who receives the benefits

· equitable sharing of costs of growth between different types of development and different funding areas

· revenue predictability for the council and cost certainty for developers

· administrative simplicity

· ensuring legislative compliance.

14. Schedule Five to the attached draft Contributions Policy 2019 considers the appropriateness of development contributions as a funding source in accordance with the requirements of section 101(3) of the Local Government Act 2002. Our Revenue and Financing Policy sets out how the council will fund capital and operating expenditure for each of its activities including its decisions to use DCs to fund growth capital expenditure.

Tātaritanga me ngā tohutohu / Analysis and advice

Capital expenditure and funding for Auckland’s growth

Capital investment and DC revenue

15. The table below sets out the changes in DC revenue by activity between the current policy and the draft Contributions Policy 2019.

DC revenue by activity ($ billion)	Draft DC policy 2019	Current DC policy
Transport	1.1	0.7
Stormwater	0.5	0.5
Parks and community infrastructure	1.1	1.0
Total	2.7	2.2

Contributions pricing

16. The 10-Year Budget assumes that a Contributions Policy 2019 will be adopted reflecting the Revenue and Financing Policy position that growth-related infrastructure investment should be funded from development contributions. The 10-Year Budget assumes that the policy will provide for DCs to recover $2.7 billion of the cost of the planned investment in growth infrastructure.

17. The indicative urban DC will rise from around $21,000 to $26,000 (excluding GST). DCs vary widely depending on the type of development and the infrastructure needed to support growth in different locations.

18. Some infrastructure investments provide benefits across the region or respond to cost pressures driven by growth irrespective of location. Under the proposed policy, to recover these costs every development would pay $8,433 per household equivalent unit (HEU) for regional infrastructure. However, the sub-regional and local requirements for infrastructure vary depending on the infrastructure required to support growth in that area and the capacity of existing infrastructure. As a result, DC prices would vary across the region e.g.

· Manurewa-Papakura - new DC price will be $42,182 to reflect increase in stormwater and parks investment

· Manukau Central - new DC price will be $22,572 as there is capacity available in existing network infrastructure.

Impact of increasing DC price

19. Raising the price of DCs:

· better aligns DCs with actual cost of infrastructure

· increases certainty that infrastructure will be delivered

· encourages developers to more accurately price land purchased for development to reflect future DC costs

· negatively impacts developers who have paid for land based on current DC prices.

20. Economic research indicates that increasing the DC price does not generally increase house prices. House prices are determined by the balance of supply and demand. Development is only cost plus where the value of land for housing is the same as its value in alternative uses i.e. agriculture. The price of land that can be developed for housing or business use in Auckland is much higher than its value in agricultural use.

21. Developers generally establish the price they will pay for land based on:

Expected sale price of finished house (as set by the market – supply and demand)

- Land development costs

- Construction costs

- Council cost including DCs

- Profit margin

- Price paid for land

Alternative options considered

22. There are two alternatives to the proposed increase in development contributions;

· defer or halt planned capital projects supporting growth

· increase ratepayer funding of these projects.

23. The increase in development contributions price over the period of the 10-Year Budget is forecast to provide an additional $500 million of revenue. Without this revenue the council would need to reduce its planned capital expenditure by between $1 billion and $4 billion depending on which projects were prioritised. This sum exceeds the loss in revenue because development contributions make up varying proportions of the funding of individual projects ^{^[1]}. Officers do not recommend this option as these investments are vital to:

· maintaining service levels in the face of growth pressures

· supporting making land available for new development in both the greenfields and brownfields.

24. To maintain the planned level of investment without increasing development contributions would require an increase in rates funding of between $50 million and $200 million per annum. This is equivalent to an additional general rates increase of between 3 and 13 per cent. Land owners, developers and the owners of new construction are the beneficiaries of the portion of investment in infrastructure that supports growth. Officers do not recommend this option as it is appropriate that the growth share of funding comes from the beneficiaries via development contributions not general ratepayers.

Possible legislative changes to funding of Community Infrastructure

25. Central government has recently introduced the Local Government (Community Well-being) Amendment Bill which would restore the Council’s ability to use DCs to fund a broader range of community infrastructure (including, for example, public swimming pools and libraries). Officers understand that the government intends to pass this bill in December. Once the legislation has been passed the council can consider changing its capital budgets and amending the policy to include the growth component of any qualifying expenditure.

Unit of demand factors

26. Different types of development place different demands on infrastructure. The council uses unit of demand factors to fairly share the cost of infrastructure across development types.

27. Demand factors are set relative to the standard residential dwelling of between 100m² and 249m². A standard residential dwelling is referred to as a household equivalent unit (HUE). For example, a retirement unit is charged 30 per cent of the rate for transport that a residential dwelling pays i.e. 0.3 HUE.

Non-residential transport

28. Transport demand factors are calculated using data on the daily volume of trips generated from each development type. For residential development the demand factor is adjusted for relative occupancy levels between residential development types.

29. Officers have undertaken a review of transport demand factors. A review of the statistical trip generation data shows that retail and commercial developments generate substantially more trips than residential and other development types. These results are consistent with officers’ experience of case by case analysis undertaken by the former councils of the transport impacts of this type of development.

30. The transport demand factors proposed are set out in the tables below. Because non-residential developments are usually larger than residential dwellings the demand factors are translated into HUEs per 100m².

Units of demand per 100m²
Development Type	Current DC Policy	Draft DC Policy 2019
Commercial	0.37 HUE	0.73 HUE
Retail	0.47 HUE	2.79 HUE
Education and Health	0.37 HUE	0.37 HUE
Production and Distribution	0.29 HUE	0.10 HUE
Other non-residential not specified above	0.36 HUE	1.00 HUE

31. These transport demand factors are comparable with those for other councils. Hamilton sets the rate for high demand non-residential at 2.75 HUEs (which includes retail) and Queenstown 2.83. Christchurch and Wellington also use higher factors for commercial and retail development.

32. The demand factors derived from the analysis above produce substantial price changes for retail and commercial development. As this type of development represents a small proportion of overall development the price reduction for other development types is lower.

33. As the transport component of DCs varies across the region based on the need for investment in each area the exact price effects will vary. In broad average terms the DC transport price for retail will rise by $18,000 per 100m² and $2,900 for commercial if the proposed demand factors are used in comparison to the current factors. It will fall by $1,450 per 100m² for production and $500 for a standard residential dwelling. The impact is illustrated with examples based on two recent developments below

· 5,000m² retail mall development in the North would pay $1.3 million under the proposed demand factors whereas they would have paid $224,000 under the current demand factors.

· 50,000m² production development in the South would pay $410,000 under the proposed demand factors whereas they would pay $1.15 million under the current demand factors.

34. Officers considered two alternative options to making the changes to non-residential transport unit of demand factors:

· retaining the status quo

· move to the new factors in equal steps over a three year period.

35. Retaining the status quo was rejected on the basis that the evidence clearly shows that transport demand is much higher for retail and commercial development than for other development types. At present other development is effectively subsidising retail and commercial development. Large developers operating nationwide will be aware of these differences in DC prices.

36. As the price increases are substantial the council could consider a three year transition. This option was rejected as it would extend the current subsidisation. The price changes are substantial however the subsidisation is also large. It is likely that developers operating nationwide will have been expecting this change for some time.

37. Officers also note that a transition could create administration issues and present revenue risks that may be difficult to forecast. Developers often lodge consents early when they become aware of pending changes to contributions prices. A transition of this nature would create incentives for all development types around the staging of transitional price changes. Retail developers may try to lodge consents prior to the date of changes and others may delay applications. This is likely to have implications for both our revenue forecasts and our consenting and DC assessment teams.

Reserves acquisition, reserve development and community facilities

38. The council’s unit of demand factors for reserves acquisition, reserve development and community facilities are based primarily on the relative occupancy of different types of residential development compared to a standard residential dwelling.

39. Officers are reviewing the relative use of reserves and community facilities by the occupants of different residential development types. Part of this review involves undertaking an extensive survey of usage of reserves and community facilities by Aucklanders. To ensure this survey provides the best information it needs to cover Aucklanders’ use across seasons.

40. The results of the survey are expected to be available early next year. Officers will report the results of the review, including the survey data, in the first quarter of next year. If the review suggests changes should be considered to the units of demand for reserves acquisition, reserve development and community facilities the policy can be amended at that time following consultation, if appropriate.

Remissions for Māori development and social housing

41. The current contributions policy does not provide for remissions or waivers of DCs. Feedback from Māori and social housing developers is that the requirement to pay DCs is an additional challenge to overcome that presents a further barrier to development. Iwi have raised the many difficulties associated with developing Māori land, as well as noting their recent gifting of land for parks and the historic confiscation of land for public works.

42. Officers do not recommend the use of DC remissions. Support for Māori development and social housing is better made transparently from a fixed grant budget or considered on a case by case basis. Grants enable the council to make decisions on the relative merits of individual proposals rather than automatically supporting or rejecting applications on predetermined criteria.

43. The council currently offers support for DCs for Māori development through the Marae and Papakāinga grant made available through the Māori Cultural Initiatives Fund. The policies governing the fund are currently being reviewed and will be considered by the Community Development and Safety Committee later this year.

44. Council does not currently offer a regional grant scheme that enables funding of DCs for social housing. The council’s position to date has been that social housing is a government responsibility. However, the council did provide a one-off grant of $475,000 to the City Mission for the development of the HomeGround facility. The grant was based on an estimate of DCs and consenting costs. Officers recommend that if the council wishes to consider extending support for DCs for social housing then this should be through the development of a grants scheme as part of the Annual Plan 2019/2020. A grant can be used to fund any development costs and not just council fees, as was the case with the HomeGround grant.

45. DCs are set to recover the cost of planned growth infrastructure from developers. Any remission of DCs would reduce revenue. The loss of revenue from a remission scheme cannot be recovered from other developers as they are only required to pay the cost of the demand they place on infrastructure. Remissions of DCs for some developers do not change the level of demand for infrastructure from other developers.

46. Revenue would instead need to be made up by reductions in expenditure or increases in general rates. Remissions administered under the Contributions Policy would need to provide for automatic trigger tests and hence an unconstrained budget.

47. Further discussion of remissions for Māori development and social housing is set out in Attachment D.

Payment timing

48. Developers prefer to pay development contributions as close as possible to the potential realisation of their investment e.g. sale of land or buildings. The current payment timing for the main development types (other triggers make up a very small proportion of development contributions) are at the issue of:

· land title for subdivisions – around one year before sale

· building consent for residential development – around six to twelve months before sale

· code compliance certificate for non-residential development – around time of sale.

49. DCs invoiced on building consent for residential development are approximately 25 per cent of total DC revenue. Residential developments are currently required to pay DCs when the building consent is issued. Officers propose to adjust the payment timing for residential developments as follows:

· a consent that creates five or more dwelling units will be treated as non-residential development. This will allow the DCs to be invoiced at time the Code Compliance Certificate (CCC) is applied for. This will extend the time until council receives payment by an average of 12 months.

· all other residential consents will be invoiced six months after building consent is issued.

50. This change will support residential developers by better aligning the requirement to pay DCs with developers’ cash flows. Reducing the amount of capital investment required prior to construction will make it easier for developers to finance and progress residential projects. This proposal formed part of consultation on the draft Contributions Policy 2018 in May and was supported by all of the 17 submissions that commented on it.

51. The proposed changes will lead to a one-off reduction in the council’s DC revenue of $10 million for 2018/2019. The council can manage this change within its present budget. The change is not material over the 10-Year Budget period as all developments will still pay, just slightly later.

52. The council includes the interest cost of the difference between the receipt of DCs and the timing of investment in growth related projects. The cost of receiving DC payments on residential building development slightly later will be factored into the DC price. The proposal will increase the DC price by between $100 and $200 (or less than 1 per cent) on average depending on the units of demand used for transport.

53. Officers also considered retaining the status quo. However, preference was given to the easing of cash flow demands on residential builders rather than land developers focusing on subdivision and non-residential builders. Residential builders are often operating at a smaller scale with more limited access to capital. Providing them additional time eases their cash flow demands and supports the dwelling construction the council is seeking.

54. Neither the proposal or the status quo presents any risk to the council in terms of payment security. The council has statutory powers to recover unpaid DCs, including registering a statutory charge on property where DCs have not been paid. While the council has some aged DC debt this is a very small proportion of the DCs invoiced over the last eight years. In this time the council has written off less than $100,000 of DC debt out of $740 million invoiced.

55. Two administrative changes are also proposed to payment timing and enforcement. Developers who require a land use consent but cannot be assessed for DCs on a resource consent or building consent will be required to pay on land use consent. At present non-residential developments are required to pay on issue of a code of compliance certificate (CCC) or certificate of public use (CPU). Some developments do not require a CCC or CPU to operate and are avoiding payment. It is proposed that all non-residential developments will be required to pay at the latest 24 months of issue of a building consent. This provides sufficient time for developers to realise their investment whilst ensuring securing of payment for council.

Other proposed changes to the Policy

Funding areas

56. The draft Contributions Policy 2019 includes seven additional funding areas for transport. These funding areas allocate the cost of transport infrastructure to the priority growth areas in Northwest, Dairy Flat/Wainui/Silverdale, Greater Tamaki and Albany, and transport infrastructure, solely, mainly road sealing, for the benefit of rural areas in the North, West and South.

57. Changes have also been made to the funding areas for reserves to provide a more refined allocation of these costs to development areas. The Greenfield, Urban and Rural funding areas have been replaced with Northern Greenfield, Southern Greenfield, Northwest Greenfield and Urban funding areas. As a result, the DC costs better reflect the differences in investment required to meet the needs of future growth. A new funding area has also been created for reserves and community facilities in Greater Tamaki to reflect the specific needs and plans for that area.

58. We have added two new stormwater funding areas where investment is now planned - Hauraki Gulf Islands and Omaha/Matakana.

Development Types

59. Officers also recommend amendments to the following development types to better reflect the demand they place on infrastructure or clarify definitions. Maintaining the status quo for these areas was rejected to ensure an appropriate level of cost was recovered and reduce the administration costs associated with customer confusion.

Student accommodation

60. Create a new ‘student accommodation units’ category for student accommodation (administered by schools/universities). This category will have a lower price for transport and open space than a standard residential dwelling because of lower occupancy.

Small ancillary dwelling units

61. Change the ‘size’ definition of small ancillary dwelling units to those with a gross floor area less than or equal to 65m². This aligns the Contributions Policy with the definition in the Unitary Plan to avoid customer confusion.

Retirement villages

62. Amend the definition of a ‘Retirement Village’ to align with the Unitary Plan to avoid customer confusion.

Accommodation units for short term rental

63. Amend the definition of Accommodation Units to clarify that they include properties used for short term rental. Long-term rentals will continue to be treated as dwelling units.

A long-term view of growth infrastructure costs

64. The 10-year Budget 2018-2028 includes over $26 billion of investment for Auckland including significant investment to support new development over the next 10 years. This investment is not, however, sufficient to enable all the future urban areas to be developed now or all of the intensification projects to proceed immediately.

65. The proposed contributions policy seeks to recover a fair share of the infrastructure costs currently planned from developments that are enabled by or benefit from this planned infrastructure. In areas that already have sufficient infrastructure, or it is planned within the next ten years, the policy describes the contribution to the cost of this infrastructure that will be charged to different types of development.

66. For areas where the infrastructure provision is not already provided or scheduled for the 2018-2028 period development cannot yet proceed due to the infrastructure constraints. We will continue to work on determining the cost and funding arrangements for the infrastructure required. The development charges for these areas included in the draft Contributions Policy 2019 do not yet fully reflect the true cost of providing infrastructure in those areas. For some of these development areas, particularly greenfield areas, the council infrastructure cost per house has been estimated at around $70,000. Once the costs and funding arrangements are clear growth charges will be updated to ensure they are paying their fair share when the areas are able to be developed.

67. Limits on the council’s ability to borrow mean that additional investment, even if it is eventually funded by developers, would require new or alternative financing mechanisms. We continue to work on new ways to partner with others to build and finance infrastructure. If we can do this successfully this will enable more development areas to be supported earlier.

Consultation

68. Consultation is planned for 19 October to 15 November.

69. Five Have Your Say Events (HYSE) have been planned to take place during the consultation period:

· South - Manukau

· North - Takapuna

· Central – CBD

· Retirement village developers - CBD

· Western Springs Garden Hall (evening).

70. The location and timing of HYSE are scheduled to provide opportunities for developers and the public to engage with the council at locations and timings to suit their needs and preferences. These five HYSE events provide an opportunity for developers and other interested parties to learn more about the draft policy and provide feedback. All comments will be captured and reported through to the Finance and Performance Committee to inform decision-making on the final policy.

71. Feedback received from developers during the last consultation process was for more opportunities to engage with the council on the policy. Some developers specifically requested the opportunity to present their feedback in person to elected members after they have finalised their submissions.

72. In recent years, the council has moved away from holding traditional hearings in favour of less formal and more interactive “Have Your Say Events” (HYSE). However, staff consider that for this consultation there is merit in providing stakeholders with an opportunity to present their feedback in a more traditional setting alongside the HYSE events. These merits need to be balanced against practical considerations such as the availability of councillors’ time.

73. It is planned to ask those providing written feedback if they would like to register their interest in personally presenting their feedback to councillors on Friday 16 November. This will provide time for 30 presentations allowing 15 minutes for each presentation including questions. 17 submitters expressed an interest to be heard following the May consultation. The invitation will note that it may not be possible to make time to hear everyone if the event is over-subscribed given the need to manage costs and limitations on councillors’ available time. If necessary, slots would be allocated on a “first come, first served” basis.

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

74. The DC price varies by location depending on the cost of infrastructure required to support development in an area. The funding areas are set out in the attached policy documents.

75. Officers will provide briefings on the draft Contributions Policy 2019 to local board cluster meetings in October. Officers will report to local boards seeking their feedback on the draft policy at their meetings in November. This feedback will be reported to the Governing Body in December when they make their decision on the adoption of the policy.

Tauākī whakaaweawe Māori / Māori impact statement

76. Council does not hold information on the ethnicity of developers. The impact on Māori will be similar to the impact on other developers.

77. Feedback from Māori received in the May consultation has been considered as part of the development of the revised draft Contributions Policy 2019. Key issues raised were that the Contributions Policy should:

· reflect the Auckland Plan 2050 outcome to support Māori identify and wellbeing, for example by exempting (remitting) DCs for Māori developments

· include specific development types for Māori development.

78. The remission of DCs for Māori development is discussed in this report.

79. Development types are created based on evidence that different types of development generate different levels of demand for infrastructure. The policy does not currently contain specific Māori development types. Māori developments are categorised under broader development types based on the demand they generate. For example, kaumātua housing is treated the same as retirement villages, and marae fall under community facilities. As more Māori developments occur, evidence of demand generation can be used to reclassify developments or create new development types.

80. Māori have expressed aspirations for their land that includes new forms of development that may not fit into existing development types. Legislation provides for the reconsideration of DC assessments for individual developments where evidence is available to show that the demand it will generate is less than its classification under the existing policy. Council also proactively reviews the availability of evidence for demand and amends the Contributions Policy for new or adjusted development types and demand factors as evidence becomes available. Council will continue to work with Māori to ensure that the Contributions Policy, in its design and its application, appropriately reflects the realities of Māori development.

81. Feedback from iwi on the draft Contributions Policy 2019 will be sought as part of consultation and via engagement with the Mana Whenua Kaitiaki Forum. Mana Whenua will also be invited to present their feedback to the councillors through the formal engagement for stakeholders referred to in the consultation section above.

Ngā ritenga ā-pūtea / Financial implications

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

Ngā raru tūpono / Risks

83. Investment in DC funded growth-related infrastructure carries the risk of development projections, and therefore DC revenue, not being met. These risks will be managed through monitoring consent applications and DC revenue.

Ngā koringa ā-muri / Next steps

84. Public consultation on the draft Contributions Policy 2019 is proposed to be held from 19 October to 15 November 2018 as proposed above. Feedback would be reported to the Finance and Performance Committee workshop on 29 November. Officers would report on adoption of the final policy to the 13 December 2018 meeting of the Governing Body.

Ngā tāpirihanga / Attachments

No.	Title	Page
a ⇩	Draft Contributions Policy 2019	167
b ⇩	Consultation Document	249
c ⇩	Supporting Information	271
d ⇩	Remissions of Development Contributions for Maori develpoment and social housing	291

Ngā kaihaina / Signatories

Authors

Andrew Duncan - Manager Financial Policy

Bobbi Parkinson – Principal Advisor Financial Policy

Beth Sullivan - Principal Advisor Policy

Felipe Panteli - Senior Policy Advisor

Authorisers

Ross Tucker - Acting General Manager, Financial Strategy and Planning

Matthew Walker - Group Chief Financial Officer

Stephen Town - Chief Executive

[1] The proportion of DC funding differs for different projects i.e. reserve acquisitions are primarily DC funded whereas transport projects have a mix of general rates, NZTA and DC funding. Lower DC funding for parks would reduce capex by a similar amount. Lower DC funding for transport would remove projects of a higher value as we would lose access to the associated NZTA funding.

Mayor	Hon Phil Goff, CNZM, JP
Deputy Mayor	Cr Bill Cashmore
Councillors	Cr Josephine Bartley	Cr Mike Lee
	Cr Dr Cathy Casey	Cr Daniel Newman, JP
	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 Paul Young
	Cr Penny Hulse