Terms of Reference
Responsibilities
The purpose of the committee is to:
a)
advise and support the mayor on the development of the Long-term Plan
(LTP) and Annual Plan (AP)
b)
monitor the overall financial management and performance of the council
parent organisation and Auckland Council group
c) make financial
decisions required outside of the annual budgeting processes.
The committee will establish an annual work programme
outlining key focus areas in line with its key responsibilities, which include:
·
advising and supporting the mayor on the development of the LTP
and AP for consideration by the Governing Body including:
o local
board agreements
o financial
policy related to the LTP and AP
o setting
of rates
o preparation
of the consultation documentation and supporting information, and the
consultation process, for the LTP and AP
·
monitoring the operational and capital expenditure of the council
parent organisation and Auckland Council Group, and inquiring into any material
discrepancies from planned expenditure
·
approving the financial policy of the council parent organisation
·
establishing and managing a structured approach to the approval
of non-budgeted expenditure (including grants, loans or guarantees) that
reinforces value for money and an expectation of tight expenditure control
·
approve the council insurance strategy and annual insurance
placement for Council
·
performance measures and monitoring
·
write-offs
·
acquisition of property in accordance with the LTP
·
disposals in accordance with the LTP
·
recommending the Annual Report to the Governing Body
·
funding for achieving improved outcomes for Māori.
Powers
(i) All
powers necessary to perform the committee’s responsibilities, including:
(a) approval of a
submission to an external body
(b) establishment
of working parties or steering groups.
(ii) The
committee has the powers to perform the responsibilities of another committee,
where it is necessary to make a decision prior to the next meeting of that
other committee.
(iii) If
a decision is a budgetary or financial decision that relates primarily to the
Finance and Performance Committee responsibilities, the Finance and Performance
Committee has the powers to make associated decisions on matters that would
otherwise be decided by other committees. For the avoidance of doubt, this
means that matters do not need to be taken to multiple committees for
decisions.
(iii) The
committee does not have:
(a) the
power to establish subcommittees
(b) powers
that the Governing Body cannot delegate or has retained to itself (section 2)
Exclusion of the public – who
needs to leave the meeting
Members of the public
All members of the public must leave the
meeting when the public are excluded unless a resolution is passed permitting a
person to remain because their knowledge will assist the meeting.
Those who are not members of the public
General principles
·
Access to confidential information is managed on a “need to
know” basis where access to the information is required in order for a
person to perform their role.
·
Those who are not members of the meeting (see list below) must
leave unless it is necessary for them to remain and hear the debate in order to
perform their role.
·
Those who need to be present for one confidential item can remain
only for that item and must leave the room for any other confidential items.
·
In any case of doubt, the ruling of the chairperson is final.
Members of the meeting
·
The members of the meeting remain (all Governing Body members if
the meeting is a Governing Body meeting; all members of the committee if the
meeting is a committee meeting).
·
However, standing orders require that a councillor who has a
pecuniary conflict of interest leave the room.
·
All councillors have the right to attend any meeting of a
committee and councillors who are not members of a committee may remain,
subject to any limitations in standing orders.
Independent Māori Statutory Board
·
Members of the Independent Māori
Statutory Board who are appointed members of the committee remain.
·
Independent Māori Statutory Board
members and staff remain if this is necessary in order for them to perform
their role.
Staff
·
All staff supporting the meeting (administrative, senior
management) remain.
·
Other staff who need to because of their role may remain.
Local Board members
·
Local Board members who need to hear the matter being discussed
in order to perform their role may remain. This will usually be if the
matter affects, or is relevant to, a particular Local Board area.
Council Controlled Organisations
·
Representatives of a Council Controlled Organisation can remain
only if required to for discussion of a matter relevant to the Council
Controlled Organisation.
|
Finance and
Performance Committee
10 December
2019
|
|
Annual Budget 2020/2021 - consultation
material overview
File No.: CP2019/19534
Te take mō te
pūrongo
Purpose of the report
1. To
provide an overview of the Annual Budget 2020/2021 process and to agree a base
set of information used to prepare the consultation material.
Whakarāpopototanga matua
Executive summary
2. The
council is required to prepare and adopt an annual plan (referred to by
Auckland Council as the Annual Budget) for each financial year.
3. Before
adopting an annual budget, the council must consult on any significant or
material differences from the content of the long-term plan for the financial
year to which the proposed annual budget relates. The consultation document
must also include:
· content
relating to local board agreements
· a
summary of the draft Tūpuna Maunga o Tāmaki Makaurau Authority
Operational Plan 2020/2021 (draft operational plan)
4. Local
boards adopt local material for inclusion in the consultation document and
supporting information at their business meetings in December 2019.
5. The
Maunga Authority will be asked to adopt the draft operational plan and the
summary at a hui on 3 February 2020. These documents will then be presented to
the Governing Body meeting on 12 February 2020 for agreement.
6. On
10 December 2019 the Finance and Performance Committee will consider items for
consultation on the annual budget and make recommendations to the Governing
Body. The Governing Body will consider these recommendations at its meeting
immediately following the Finance and Performance Committee meeting.
7. Staff
will then prepare a consultation document and supporting information for adoption
at the Governing Body meeting on 12 February 2020. The Governing Body will also
be asked to approve the consultation approach for the Annual Budget 2020/2021.
8. The
consultation process will run from 21 February to 22 March 2020. Following
feedback from the community, local boards and the Finance and Performance
Committee will reconsider budgets and final decisions will be made in May 2020
before the Governing Body adopts the Annual Budget 2020/2021 in June 2020.
|
Ngā tūtohunga
Recommendation/s
That the Finance and
Performance Committee:
a) agree
to recommend to the Governing Body that consultation material for the Annual
Budget 2020/2021:
i) is
based on year three of the 10-year Budget 2018-2028 updated for subsequent decisions
and new information
ii) includes content
to support the development of local board agreements
iii) includes
the summary of the draft Tūpuna Maunga o Tāmaki Makaurau Authority
Operational Plan 2020/2021 as agreed between the Maunga Authority and the
council.
|
Horopaki
Context
9. The
council is required by legislation to prepare and adopt an annual plan
(referred to by Auckland Council as the Annual Budget), every year, except once
every three years when the long-term plan (LTP) acts as the annual budget.
10. The annual
budget outlines what we plan to do and how we plan to pay for it over the
coming financial year.
11. Auckland
Council is also required to include local board agreements and a summary of the
Tūpuna Maunga Authority Operational Plan in its annual budget. Content
relating to each local board agreement and a summary of the draft Maunga
Authority Annual Operational Plan must also be included in the annual budget
consultation document.
12. Auckland
Council and the Tūpuna Maunga Authority must agree the Tūpuna Maunga
Annual Operational Plan each year pursuant to section 60 of Ngā Mana
Whenua o Tāmaki Makaurau Collective Redress Act 2014.
Developing the Annual Budget 2020/2021
13. The process
to develop the council’s Annual Budget 2020/2021 began in early November
2019 with the Mayor’s direction setting memorandum where he invited
feedback. Following this communication, a number of workshops were held to
discuss the Annual Budget.
14. The council
must consult on any significant or material differences from the content of the
10-year Budget 2018-2028 (also known as the LTP) for 2020/2021 financial year.
Items for consultation will be agreed on 10 December 2019 at Finance and
Performance Committee for recommendation to the Governing Body for approval.
15. Staff will
then prepare a consultation document and supporting information for adoption by
the Governing Body on 12 February 2020.
Tātaritanga me ngā
tohutohu
Analysis and advice
16. The starting
budget for 2020/2021 is year three of the 10-year Budget 2018-2028 (also known
as the Long-term Plan). This is updated to incorporate any council decisions
made since the 10-year Budget was adopted, and any changes to our significant
forecasting assumptions.
17. Staff have
been working with the Tūpuna Maunga Authority to develop content relating
to its draft annual operational plan. The Tūpuna Maunga Authority will be
asked to adopt its draft annual operational plan and summary at a hui on 3 February
2020. These documents will then be presented to the Governing Body meeting on
12 February 2020 seeking agreement.
Tauākī whakaaweawe
āhuarangi
Climate impact statement
18. There are no
climate implications based on decisions requested in this report.
Ngā whakaaweawe me
ngā tirohanga a te rōpū Kaunihera
Council group impacts and views
19. The annual
budget is an Auckland Council Group document and will include budgets at a
consolidated group level.
20. Consultation
items and updates to budgets to reflect decisions and new information may
include items from across the group.
Ngā whakaaweawe
ā-rohe me ngā tirohanga a te poari ā-rohe
Local impacts and local board views
21. Local boards
have been engaged since the Mayoral direction memorandum was sent out in early
November, followed by the first workshop held on 27 November 2019. Local board
chairs were invited to attend Finance and Performance Committee workshops held
in November and December 2019 and will continue to be invited to workshops in
2020.
22. Local boards
adopt their consultation content for their proposed local board agreements in
December 2019. These include the proposed key priorities for each local board
for 2020/2021.
23. Local boards
will present their views on regional issues to the Finance and Performance
Committee on 13 May 2020 following public consultation on the proposed Annual
Budget.
Tauākī whakaaweawe
Māori
Māori impact statement
24. Engagement
with mana whenua and mataawaka will be considered and planned for once the
items for consultation are confirmed. Information on the communication and
engagement approach will be presented to the Governing Body on 12 February 2020
seeking approval.
Ngā ritenga
ā-pūtea
Financial implications
25. In order to
support the consultation material for the Annual Budget 2020/2021 the budget is
based on year three of the 10-year Budget 2018-2028 updated for subsequent
decisions and new information.
Ngā raru tūpono me
ngā whakamaurutanga
Risks and mitigations
26. There are no
risks associated with the recommendations in this report.
Ngā koringa ā-muri
Next steps
27. Decisions
made by the Finance and Performance Committee on 10 December 2019 are recommended
to the Governing Body for agreement immediately following the meeting. The
Governing Body decisions will inform the preparation of the consultation
document and supporting information for consultation on the Annual Budget
2020/2021.
28. The table
below sets out the remaining steps in the process (at a high level) to finalise
the annual budget during 2020.
Table One: Finalising the annual
budget following decisions made on 10 December 2019
|
Phase
|
Timing 2020
|
|
Governing Body
workshop: to review the consultation document, supporting material and
consultation approach ahead of the meeting
|
5 February
|
|
Governing Body
meets to adopt the consultation document and supporting material and approve
the consultation approach
|
12 February
|
|
Public
consultation
|
21 February
–
22 March
|
|
Finance and
Performance Committee receive regional feedback
|
29 April
|
|
Finance and
Performance Committee receive feedback relating to the Tῡpuna Maunga
Draft Operational Plan (incl. Tῡpuna Maunga Authority board members)
|
29 April
|
|
Local boards
meet to receive local feedback
|
5 - 7 May
|
|
Finance and
Performance Committee workshop budget discussions
|
6 – 20
May
|
|
Finance and
Performance Committee workshop where local boards provide feedback on
regional issues.
|
13 May
|
|
Finance and
Performance Committee workshop - Mayor’s Proposal and decision making
|
20 May
|
|
Finance and
Performance Committee meeting on final decisions
|
27 May
|
|
Local boards
workshop local board agreements
|
2 – 11
June
|
|
Local boards
adopt Local board agreements
|
16 – 18
June
|
|
Governing Body
workshop to adopt the final annual budget
|
17 June
|
|
Governing Body
meet to adopt the final Annual Budget 2020/2021
|
23 June
|
|
Final annual
budget documentation and information relating to the decisions made (e.g.
reports) will be made available to the public and closing the loop with
submitters will be completed
|
July
|
Ngā tāpirihanga
Attachments
There are no attachments for
this report.
Ngā kaihaina
Signatories
|
Authors
|
Kylie Thompson - Programme Manager
Michael Burns - Manager Financial Strategy
|
|
Authorisers
|
Ross Tucker - General Manager, Financial Strategy and
Planning
Matthew Walker - Group Chief Financial Officer
|
|
Finance and
Performance Committee
10 December
2019
|
|
Rates and Fees Issues for Annual Budget
2020/2021 Consultation
File No.: CP2019/20128
Te take mō te
pūrongo
Purpose of the report
1.
To recommend minor changes to rating policy and fees for consultation as
part of the Annual Budget 2020/2021. To also recommend consequential amendments
to the Revenue and Financing Policy for consultation alongside the Annual
Budget 2020/2021.
Whakarāpopototanga matua
Executive summary
2. Officers
recommend some minor changes to rates and fees and charges to:
·
ensure that costs of council provided services are recovered from
the users where appropriate. (This avoids general ratepayers subsidising the
costs of providing these services)
·
adjust charges to make customer transactions easier and costs
more transparent.
Increasing waste management targeted rates to reflect cost pressures
3.
Waste management, including recycling and refuse
collection, is a core council service and key to the achievement of the
council’s waste management goals. The council collects 130,000
tonnes of recyclables each year and disposes of 180,000 tonnes of refuse to
landfill.
4.Costs of providing waste management base
services have increased by $9.5 million (excluding GST). The primary
driver is an increase in recycling costs of $7.7 million (excluding GST) due to
declining international demand and lower prices for recyclables.
5.
Officers recommend an increase in the base service charge of $19.97 to
$141.03 (including GST) to recover these additional costs. Alternatives
are to raise general rates by a further 0.6 per cent or landfilling recycling
which would be more expensive and inconsistent with our waste management goals.
6.
The council has nearly completed new standard waste collection contracts
set on a volume basis for refuse and food scraps. The
new contracts will encourage greater diversion of materials from landfill and
deliver better financial outcomes. In the short-term volume-based
refuse collection contracts increase costs in the former Auckland City and
Manukau City areas. In the medium term when the food scraps service is in
place the costs of refuse disposal in these areas will fall.
7.
Officers recommend an increase in the standard refuse rate by $14.23 to
$144.16 (including GST) and large refuse by $6.68 to $67.75 (including GST) in
these areas subject to the decision on the contract tender process by the
Strategy Procurement Committee at its meeting on 10 December. The average cost
for residents will be on a par with, or lower than, the costs in the rest of
the city.
8.
Alternatives are to raise general rates by a further 0.2 percent or
raise the base waste management rate spreading the cost over all service users.
Making it easier for pool owners to pay fencing inspection fees
9.
There are around 26,500 pools in Auckland that require pool fencing safety
inspections every three years. Owners of these pools are currently charged a
$130 fee (including GST) for the first council provided inspection. To cover
increased cost the fee would rise to $132 (including GST) for 2020/2021.
If a subsequent recheck is required, then an additional fee of $130 (including
GST) is charged ($65 if no site visit is needed). No fee is charged for pools
that have an inspection by an independent third party (less than one per cent).
10.
Officers recommend that the first inspection charge be replaced with a
targeted rate of $44 (paid annually) (including GST). Where owners arrange an
independent third-party inspection a new targeted rate of $22 per annum
(including GST) is proposed to cover council costs of monitoring swimming pool
inspections. Subsequent rechecks would continue to be invoiced separately.
11.
Charging the first inspection charge by way of a targeted rate makes it
easier for owners of swimming pools to pay their first inspection fee while
leveraging previous council investment in information systems to improve cost
recovery and lower administration costs.
Helping Clevedon residents connect to water and wastewater systems
12.
Water and wastewater networks have recently been delivered in the Clevedon
area. Local residents can now switch from their on-site systems to the
reticulated network. However, the large upfront costs for Watercare connection
charges and onsite works ($30,000 to $50,000) may deter residents with limited
means from connecting.
13.
Officers recommend introducing a voluntary financial assistance scheme
to help residents with their connection costs. This would be recovered by a
targeted rate of between $3,000 and $5,000 (including GST) per year over 15
years. This would have minimal impact on council debt levels.
Potential changes to the Business Improvement District Programme
14.
Business Improvement District (BID) establishment ballots for One
Warkworth and Central Park Henderson are scheduled to take place by June 2020.
Extension ballots are also scheduled for Glen Innes, Manukau Central and
Manurewa. Changes to BID targeted rates will be required if any of these
ballots are successful.
Increasing transparency and cost recovery for some fees
15.
Officers recommend the following fee changes to align fees charged to
actual costs incurred and to increase transparency of the overall costs
involved:
·
changes to structure and level of some resource consent and
building control fees
·
an increase to the high impact commercial event permit fee
·
the introduction of a Micro-mobility device (i.e. e-scooter)
license deposit.
16.
Officers also recommend the introduction of an international visitor fee
for the Auckland Botanic Gardens to align with fees charged by the Auckland Art
Gallery, Auckland War Memorial Museum and international practice.
Other consultation issues
17.
On 10 September 2019 the Environment and Community Committee recommended
to the Governing Body consultation on changes to the:
·
Retrofit Your Home Targeted Rate
·
Waitakere Rural Sewerage Targeted Rate.
|
Ngā tūtohunga
Recommendation/s
That the Finance and Performance Committee:
a)
recommend to the Governing Body that it agree to consult as part of
the draft Annual Budget 2020/2021 on
i)
increasing the waste management base service targeted rate to $141.03
(including GST)
ii)
increasing the standard refuse rate and the large refuse rate in the
former Auckland City and Manukau City council areas to $144.16 and $67.75
(including GST) respectively subject to the decision of the Strategic
Procurement Committee on the contract tender at its meeting on 10 December
iii)
replacing the three yearly $130 fee (including GST) for the first
swimming pool fencing inspection with a targeted rate of $44 per year (including
GST) and amending the remaining swimming pool fencing inspections fees as set
out in Table 3 in this report
iv)
introducing a Clevedon water and wastewater connection targeted rate
v)
introducing business improvement district (BID) targeted rate for Central
Park Henderson
vi)
introducing business improvement district (BID) targeted rate for One
Warkworth, subject to local board support
vii)
expanding the BID targeted rate boundary for Glen Innes
viii)
expanding the BID targeted rate boundaries for Manukau Central and Manurewa,
subject to support from the relevant local boards
ix)
changing regulatory fees and deposits as specified in Attachment C of
the agenda report.
x)
introducing an entry fee of $20 (including GST) for international
visitors to the Auckland Botanic Gardens
xi)
increasing the high impact event permit fee from $1,100 to $1,500
(including GST)
b)
note that at its meeting on 10 September 2019 the Environment and
Community Committee recommended that the Governing Body include in the
consultation document for the Annual Budget 2020/2021 the proposed changes to
the:
i)
Retrofit Your Home scheme and the associated targeted rate
ii)
legacy Waitākere City Council septic tank pump-out service and
the associated targeted rate.
|
Horopaki
Context
18.
The council is required to consult on changes to its rating policy and
certain changes to regulatory fees and charges, including where fees are
prescribed under the Resource Management Act or where the changes are
considered “significant” under its Significance and Engagement
Policy. The council can also choose to consult where it considers it
appropriate to do so. As provided for in the Revenue and Financing Policy
other regulatory fees are increasing in line with inflation where necessary to
maintain cost recovery.
19.
The council is also required to consult on changes to the Revenue and
Financing Policy when proposing changes to sources of funding.
20.
At its meeting on 10 September 2019 the Environment and Community
Committee recommended to the Governing Body consultation on changes to the:
·
Retrofit Your Home Targeted Rate requiring a compulsory HomeFit
Assessment on all applications with a value over $2,000 with the cost of $260
to be recovered through the rate
·
Waitakere Rural Sewerage Targeted Rate including limiting the
septic tank pump-out service to the Waitākere Ranges Local Board area
after 30 June 2021 and fully recovering the cost of the service from the
targeted rate.
21.
The recommendations of that meeting are included in Attachment A.
Tātaritanga me ngā tohutohu
Analysis and advice
22.
Officers recommend an increase in the waste management base service
targeted rate by $19.97 (including GST) from $121.06 (including GST) to $141.03
(including GST) to cover cost increases of $9.5 million (excl. GST). The
cost increases (excl. GST) are made up of:
·
Recycling - declining demand for recyclables: $7.7 million
·
Hauraki Gulf Islands service $0.3 million
·
higher take-up rate for the inorganic service $1.2 million
·
other – $0.3 million
Recycling cost increase
23.
Waste management services are a core council activity. The recycling
service forms a key component of our waste management strategy to achieve the
aspirational goal of zero waste to landfill by 2040. This service collects
around 130,000 tonnes of recyclables each year.
24.
The council faces the risk of further recycling cost increases. In
January 2018, China implemented a policy setting tight contamination limits on
imported waste. This included a 0.5 per cent contamination threshold on
recyclable paper and plastics. While this is not strictly a ban, the
industry is currently unable to meet this requirement without significant
post-sorting reprocessing. China’s change in policy has resulted in a
global reduction in demand for mixed paper and plastic. As a result, commodity
prices for these products have dropped significantly as there is over supply to
other existing markets. The long-term impacts of this on recycling markets are
still not clear.
25.
International recycling markets remain volatile presenting challenges to
governments around the globe. Should the cost of recycling reach a level
comparable to landfill the council might need to consider options for changing
the recycling service and revisit its waste management and minimisation
strategy.
26.
Council is proactively working with the New Zealand recycling industry
and the Ministry for the Environment as well as other local authorities
throughout New Zealand to better understand the constraints and opportunities
around an onshore, nationwide response to recycling processing. The focus of
these discussions has primarily been in relation to plastics and fibre.
Alongside this the Ministry for the Environment have recently consulted on a
Priority Products
discussion document which council submitted on. We are also aware of imminent
calls for submissions on a review of the New Zealand Waste Levy. Both responses
from the government would be enacted through the Waste Minimisation Act 2008
and would have an impact on the current recycling market challenges. These discussions
and proposed initiatives continue to inform council’s strategic response
to the development and use of our own services and waste infrastructure.
27.
Table 1 below sets out the options for managing increases in the cost of
providing base waste management services.
Table 1: Options for managing waste
management cost increases
|
Option
|
Customer and general ratepayer impact
|
Link between charge and service
delivered
|
Transparency of costs
|
Waste minimisation outcomes
|
|
Increase waste management targeted rate
|
$19.97 per property
|
Charge to all properties receiving the service
|
Costs of service clear to ratepayers
|
n/a
|
|
Fund some or all of increase from
general rates
|
0.6 per cent added to general rates increase if all the
cost increase is funded
|
Greater proportion of costs borne by business ratepayers
Some costs borne by 37,000 ratepayers who do not receive
the service (such as vacant sections, utilities, carparks)
|
Overall cost of waste management no longer transparent
|
n/a
|
|
Send recycling to landfill
|
Higher refuse charges for ratepayers as landfilling
remains more expensive than recycling
|
|
Costs of refuse management and other waste management
services not individually transparent
|
Increased waste to landfill
|
Refuse targeted rate in the former Auckland City and Manukau City
28.
The other element of council’s core waste management service is
the weekly refuse collection. This service is provided to all urban Auckland
except the former Rodney District Council area. Refuse collection
services in the Rodney area are currently provided by the private sector.
Planning is underway to introduce a council provided refuse service in the
former Rodney District Council area from July 2020.
29.
Council provided refuse services collect and send to landfill around
180,000 tonnes of waste each year. In the former Auckland City and
Manukau City areas the service is funded by a fixed annual targeted rate of
$129.93 (including GST) per 120 litre bin (or equivalent). An additional
annual targeted rate of $61.07 (including GST) per bin is charged where a
ratepayer requests a larger 240 litre bin. In the remainder of the serviced
region residents purchase bin tags at $3.95 (including GST) for each 120/140
litre bin set out or $5.70 (including GST) for each 240-litre bin set out.
30.
In all areas residents can choose to use a service provided by private
operators. For residents in the former Auckland City and Manukau City if they
choose to use a private operator, they must still pay for the rates funded
council provided service. In the other areas residents are not required to pay
for any council provided refuse service.
31.
The council has different contracts for the collection of refuse and
recycling in different parts of the city. Many of these contracts will
expire soon. Officers are nearing the conclusion of negotiations to
finalise new collection contracts. The new contract structure splits the waste
services in Auckland into seven areas. Contractors in each area will be
required to provide all the waste collection services in that area, including
the rollout of the region-wide food scraps services.
32.
Pricing structures for the new contracts will all be the same and are
focused on the overall strategic goals set out in the Waste Minimisation and
Management Plan. They will allow the council to deliver:
·
services at a lower overall cost than forecast in the 10-Year
Budget 2018-2028
·
a more integrated and consistent service to customers
·
improved health and safety outcomes
·
encourage greater diversion of materials from landfill
·
environmental improvements and a lower carbon footprint.
33.
One of the key changes occurring in the former Auckland City and Manukau
City areas is a move to paying the collectors on a per tonne basis for refuse
and food scraps. As a result of this change costs for refuse collection in
these areas will rise in the short term. This requires an increase in the
standard refuse rate from $129.93 to $144.16 (including GST) and in the large
bin rate from $61.07 to $67.75 (including GST). The contracting model and
service delivery method in the pay as you throw areas was different and higher
cost than the former Auckland City and Manukau City areas. The new
collection contracts don’t impact on the overall cost for services in the
pay as you throw areas.
34.
The annual cost of residential refuse services across the region is
expected to reduce once the food scraps service is introduced and the refuse
service moves to a pay as you throw model. However, ratepayers will be required
to pay an additional annual targeted rate for the additional food scraps
service, currently $68 (including GST).
35.
Officers recommend consultation on an increase in the rates funded
refuse services in the former Auckland City and Manukau City areas as the
increase is more than the expected council rate of inflation. The recommended
increases are:
·
$14.23, from $129.93 to $144.16 per service (including GST) or
per SUIP for the standard refuse service (120 litre bin)
·
$6.68, from $61.07 to $67.75 per service (including GST) for the
large refuse service (240 litre bin).
36.
For the 120-litre bin this equates to a presentation rate of around 37
weeks, at $3.95 per bin, per year in the bin tag areas.
37.
The table below sets out the options for managing the increases in costs
of providing refuse service in the former Auckland City and Manukau City areas.
Table 2: Options for managing waste
management cost increases
|
Option
|
Customer and general ratepayer impact
|
Link between charge and service
delivered
|
Transparency of costs
|
Waste minimisation outcomes
|
|
Increase the refuse service targeted rates in the
former Auckland City and Manukau City areas
|
$14.23 per standard refuse service and $6.68 per large
refuse service
|
Charge to all properties receiving a refuse service
|
Costs of service clear to ratepayers
|
Does not affect contracted services – allows for
future outcomes to be delivered
|
|
Increase waste management base service
targeted rate
|
Approximately $7 per property receiving a waste service
|
Charge all properties receiving a waste service
Refuse services for former Auckland City and Manukau
City area subsidised by other ratepayers receiving a waste service
|
Overall cost of waste management no longer transparent
|
Does not affect contracted services – allows for
future outcomes to be delivered
|
|
Fund some or all of increase from general rates
|
0.2 per cent added to general rates increase if all the
cost increase is funded
|
Greater proportion of costs borne by business ratepayers
Refuse services for former Auckland City and Manukau
City area subsidised by all other ratepayers including those that do not
receive a waste service
|
Overall cost of waste management no longer transparent
|
Does not affect contracted services – allows for
future outcomes to be delivered
|
Swimming
pool fencing inspection charges
38.
Officers recommend changing swimming pool fencing inspection charges so
that the first inspection fee is included in the rates invoice, as a targeted
rate. Currently the first swimming pool inspection is invoiced as a
one-off fee ($130 including GST) after each three-yearly inspection. Including
the charge on the rates invoice will make it easier for pool owners to pay by:
·
bundling the costs with rates
·
spreading the cost over three years
·
giving them access to a range of rates payment options.
39.
The recommended changes to swimming pool fencing inspection charges are
set out in the table below.
Table 3: Proposed changes to swimming
pool fencing inspection charges
|
Service
|
Current
|
Proposed
|
|
Charge 2019/2020 (incl. GST)
|
Charging method
|
Charge 2020/2021 (incl. GST)
|
Charging method
|
|
First inspection[1]
|
Single household
|
$130 per inspection
|
Fee invoice
|
$44 per year
|
Rates invoice
|
|
Shared[2]
|
$130 per inspection
|
Fee invoice
|
$132 per inspection
|
Fee invoice
|
|
Subsequent inspection[3]
|
Site visit required
|
$130 per inspection
|
Fee invoice
|
$132 per inspection
|
Fee invoice
|
|
Site visit not required
|
$65 per inspection
|
Fee invoice
|
$66 per inspection
|
Fee invoice
|
|
IQPI inspection[4]
|
Single household
|
No charge
|
n/a
|
$22 per year
|
Rates invoice
|
|
Shared
|
No charge
|
n/a
|
$66 per record update
|
Fee invoice
|
Notes to the
table:
1. This also
includes inspections carried out by the council to confirm that a pool has been
removed.
2. Pools
shared by multiple rating units (such as one owned by a body corporate and used
by all units of an apartment building) will continue to be charged an
inspection fee instead where there is no separate rates account for the shared
area.
3. Pools
failing the first inspection require subsequent inspections until all defects
have been remedied. Approximately 50 per cent of the pools require more than
one inspection. This also includes pools that fail their first inspection
by an independently qualified pool inspector (IQPI) (see note 4 below) and are
passed back to the council for subsequent inspections.
4. Pool
owners can choose to have their pools inspected by an IQPI. Over 99 per cent of
the pools in Auckland are currently inspected by the council. Pool owners
who use an IQPI will be charged a reduced amount to recover costs required to
maintain swimming pool data to ensure council compliance with the Building Act.
40. Including
the first inspection charges on the rates invoice as a targeted rate will
deliver savings of around $74,000 (excluding GST) from:
·
improved revenue recovery
·
lower administration costs.
41.
Remaining charges will still be recovered by fees. Subsequent
inspections are required for pools that do not meet safety standards.
Inspections are also required when a pool is removed.
42.
Fees are expected to increase annually by the council rate of inflation,
as provided for in the council’s Revenue and Financing Policy.
Background
43.
There are around 26,500 properties in Auckland with a registered
swimming pool and/or spa pool. Around 8,800 properties are inspected each year.
All pools must be inspected once every three years to ensure compliance with
the Building Act 2004 and the Building (Pools) Amendment Act 2016. In 2019/2020
the budgeted revenue for this service is $1.4 million (excluding GST).
44.
The council is undertaking a Swimming Pool Inspection Improvement
project aiming at significantly improving the success rate for first
inspections. This is aimed at;
·
making it easier for pool owners to comply
·
improving pool safety
·
lowering administration costs associated with second inspections.
Options
45.
The table below sets out an analysis of the options for funding swimming
pool fencing inspections.
Table 4: Options for funding swimming
pool fencing inspections
|
Option
|
Customer convenience and impact
|
Link between service delivered
and charge
|
Transparency of costs
|
Impact on general ratepayers
|
|
Charge first inspection on the rates invoice
(recommended)
|
First inspection charges included in rates invoice.
Cost is spread over three years with yearly charges
payable in 4 instalments
Small inflation cost change
|
Strong link
|
Costs of service clear to ratepayers
|
$74,000 savings from reduced administration
costs and improved revenue recovery
|
|
Charge first and subsequent inspections
on the rates invoice
|
As above, with cost of subsequent
inspections added as a rate charge to relevant properties the year following
the re-inspection.
|
Some house buyers may not be aware of
liability for second inspections if inspection occurs prior to sale but rate
charge is not applied until after settlement.
|
Costs of service clear to ratepayers
however the charge for follow-up inspections would not align with the
inspection cycle
|
$105,000 savings from reduced
administration costs and improved revenue recovery
|
|
Charge all swimming pool inspections as a flat
charge on the rates invoice
|
Convenience as noted above
Higher charge of $63 (including GST)
per year
|
Compliant pool owners covering costs of those
not meeting safety standards
|
Costs of service clear to ratepayers
however the costs would not match the level of service provided to individual
pool owners
|
$105,000 savings from reduced
administration costs and improved revenue recovery
Under-recovery if subsequent
inspections more than forecast
|
|
Retain current fees
|
Less convenient for customers whose
pools are compliant
|
Strong link
|
Costs of service clear to ratepayers
|
None
|
46. An
assessment of the swimming pool inspection related service against the criteria
set out in section 101(3) of the Local Government Act 2002 is included
in Attachment B: Assessment against statutory criteria –
Swimming pool inspection targeted rate.
Implementation
47.
The recommended changes to swimming pool fencing inspection charges
requires consultation as part of the Annual Budget 2020/2021. This will include
consultation on a new targeted rate to cover the first inspection charge. These
changes also require consultation amendments to the Revenue and Financing
Policy which also need to be consulted on alongside the Annual Budget
2020/2021. All affected property owners will be contacted as part of the
consultation process alerting them to the proposed change and encouraging them
to provide feedback.
Clevedon water and wastewater connection
48.
Officers recommend setting up a scheme to assist properties in Clevedon
with connection to reticulated water and wastewater systems.
49.
Water and wastewater infrastructure recently installed by Watercare in
Clevedon to support housing developments has the capacity to connect around 140
nearby rural properties which currently rely on on-site systems for water
supply and wastewater disposal. Engagement with the local community showed
strong willingness to connect to the reticulated network. However, there was
concern over the affordability of the upfront cost which is estimated at around
$30,000 to $50,000 per connection (including GST).
50.
Council encourages connection with the reticulated network as it reduces
the risk of environmental pollution. Connection to the water supply network
also ensures safe and reliable drinking water supply for households.
51.
Officers propose setting up a scheme whereby the Clevedon ratepayers
within the service area can apply for council’s assistance with payment
of the upfront connection cost and pay back the council through an annual
targeted rate. The targeted rate will be structured on a table mortgage loan
basis and pays back the principal and interest of the initial financial assistance
over a period of 15 years. The targeted rate amount will range between $3,000
and $5,000 per annum (including GST). For a typical loan amount of $40,000
(including GST) the annual targeted rate amount will be around $4,000
(including GST).
52.
At a workshop on 19 November 2019, the Franklin Local Board indicated
its support in principle for the proposal to set up a wastewater and water
supply connection loan repayment targeted rate for Clevedon Village. The
board will formally consider the proposal at its 3 December meeting.
53.
The maximum level of borrowing the council would incur in relation to
the scheme is expected to range between $0.5 million and $2.1 million over the
next 10 years, peaking at $2.14 million in 2021/2022. This is not expected to
have a significant impact on the council’s prudential ratios although it
does use up some debt capacity.
54.
Officers annually review fee levels and fee structures for the wide
range of services the council provides. These reviews ensure that:
·
fees continue to meet the cost recovery levels set by the council
·
service costs are transparent to customers
·
fees are set appropriately for new legislative requirements
·
ongoing consideration is given to introducing new fees to replace
ratepayer funding with user charges.
55.
Officers note that a broader review of fees and charges across the
spectrum of council services usually forms part of the three yearly 10-year
Budget process.
56.
Proposed changes to fees and charges are discussed below. The
proposed changes are not expected to generate significant additional revenue.
57.
As provided for in the Revenue and Financing Policy other regulatory
fees are increasing in line with inflation where necessary to maintain cost
recovery.
Building control, resource consent and
licensing fees
58.
A review of fees and actual charges billed to customers was carried out
over the six months to June 2019. After considering the results of
the review officers are proposing changes to provide:
·
new fees which respond to customer application types and
legislative changes
·
improved billing process for customers
·
provide customers with more clarity of the likely cost at their
first point of contact
·
lower administrative costs.
59.
A full list of proposed regulatory fee changes recommended for
consultation is included as Attachment C.
New Fees
60. Officers
recommend the introduction of new fees and deposits (calculated using average
hourly rates required to complete the work) for:
·
works on earthquake prone buildings (legislative change)
·
deposit for applications to license micro mobility devices, such
as e-scooters
·
less complex work e.g. minor plumbing and minor structural
engineering design.
Deposit levels closer to final
cost
61.
Officers recommend the adjustment of some deposit levels to ensure
customers are better informed about the likely cost. 95 per cent of
regulatory fees require the payment of an upfront deposit. Customers are
then invoiced on an hourly rate basis for the staff time required to process
their application.
Fee structure changes
62.
Officers recommend the following structural changes to fees and
deposits.
Moving from annual to
three yearly registration for Independent Qualified Persons
63.
This aligns the process with the producer statement author registration
and lowers costs for the customer and the council. The initial registration fee
of $179 (including GST) and the annual renewal fee of $115 (including GST) fee
will be replaced by a three yearly registration fee of $350 (including GST).
Consolidating lower value project bandings for building consent
applications
64.
Introducing a fixed fee category for work under $5,000 and a deposit for
the new upper level categories. The proposed fixed fee for project values
under $5,000 will provide certainty for customers with lower value
applications.
Setting base fees that
reflect minimum processing times
65.
A minimum amount of staff time is required to process some
applications. Applications that take more time will be charged an hourly
rate for additional hours. The minimum charge fixed fee will reduce the costs
of invoicing for small additional costs beyond current deposits.
High impact commercial event permit fee
66.
Officers recommend increasing the high impact commercial event permit
fee from $1,100 to $1,500 (including GST). Significant
staff effort is required to facilitate and process a high impact (5,000
participants or more) commercial event application e.g. St Jerome’s
Laneway Festival. The council needs to ensure that the event meets
all safety and other legislative and bylaw requirements. The permit fee has not
been changed since its introduction in 2015/2016. An increase in the fee to
$1,500 would improve cost recovery and reduce ratepayer subsidy.
Entry fee for international visitors to
Auckland Botanic Garden
67.
Officers recommend the introduction of an entry fee of $20 (including
GST) for international tour groups visiting the Auckland Botanic Gardens.
The fee will be primarily collected through arrangements
with commercial guided tour operators so no entry gates or barriers will be
required for implementation. Entry signage will direct
international visitors to a welcome desk to purchase tickets on arrival but
this will not be enforced. The additional revenue will be used
facilities upgrades and enable better destination marketing.
Potential changes to the Business Improvement District Programme
68.
Changes to Business Improvement Districts (BIDS) and the associated
targeted rates require:
·
consultation as part of the Annual Budget 2020/2021
·
ballot of the effected ratepayers and business owners run by the
local business association with a 25 per cent return rate and more than 51 per
cent support
·
endorsement from the relevant local board.
69.
The results of the ballots are reported to the respective local boards
in May. Following consideration of the proposed changes and ballot
results the local board reports its recommendations to the Governing Body in
May.
70.
BID establishment ballots for One Warkworth and Central Park Henderson
are scheduled to take place by June 2020. Extension ballots are scheduled for
Glen Innes, Manukau Central and Manurewa. Changes to BID targeted rates will be
required if any of these ballots are successful.
71.
The new BIDs and proposed changes to existing BIDs have been proposed by
the relevant business associations. The proposed establishment of the Central
Park Henderson BID and the proposed expansion of the Glen Innes BID have been
approved by the respective local boards. The proposed establishment of One
Warkworth BID and the proposed expansions of the Manukau Central BID and the
Manurewa BID will be considered by the relevant local boards at their December
meetings.
Tauākī whakaaweawe āhuarangi
Climate impact statement
72.
Recommendations in this report have a neutral climate impact as they
relate to the allocation of charges rather than decisions on activities to be
undertaken.
73.
The recommended Clevedon Water and Wastewater Connection Targeted Rate will
have minimal impact on greenhouse gas emissions within the Auckland region. Greenhouse
gas emissions from onsite wastewater systems are not recognised as a
significant contributor to emissions, although they do contribute towards the
cumulative emissions from the Auckland region. Decommissioning these onsite
systems and directing the effluent to the Mangere Wastewater Treatment Plant
will allow for these wastewater volumes to be managed through a more efficient
and technical treatment process. Connecting the residents to a more secure
potable water supply will also provide for additional resilience to adapt to
the effects of climate change by ensuring they are not fully reliant on tank
water supply.
74.
Climate change related issues and impacts were considered as part of the
criteria for identifying and assessing waste services provided under the
Auckland Waste Management and Minimisation Plan. The recommended changes to
waste management targeted rates are consistent with this plan.
75.
Climate impacts for the recommended changes to the Retrofit Your Home
Targeted Rate were considered by the Environment and Community Committee when
it made its recommendations on the proposed changes. The recommendation of the
Environment and Community Committee to consult on changes to the Waitakere
Rural Sewerage Targeted Rate have a neutral climate impact as the onsite
wastewater system servicing will continue whether it is provided privately or
by council.
Ngā whakaaweawe me ngā
tirohanga a te rōpū Kaunihera
Council group impacts and views
76.
The changes proposed in this report have been communicated to and agreed
on by the following departments or business units of the Auckland Council
group:
-
Waste Solution
-
Healthy Waters
-
Regulatory Services
-
Parks Sports and Recreation
-
Arts Community and Events
-
CCO/External Partnerships.
Ngā whakaaweawe ā-rohe me
ngā tirohanga a te poari ā-rohe
Local impacts and local board views
77.
Local Boards will have opportunities to express their views on the
impacts of regional decisions on their local community before final decisions
are made in May 2019.
78.
At a workshop on 19 November 2019, the Franklin Local Board indicated
its support in principle for the proposal to set up a wastewater and water
supply connection loan repayment targeted rate for Clevedon Village. The
board will formally consider the proposal at its 3 December meeting.
79.
The proposed establishment of the Central Park Henderson BID and the
proposed expansion of the Glen Innes BID have been approved by the respective
local boards. The proposed establishment of One Warkworth BID and the proposed
expansions of the Manukau Central BID and the Manurewa BID will be considered
by the relevant local boards at their December meetings.
Tauākī whakaaweawe Māori
Māori impact statement
80.
The council does not hold information on the ethnicity of ratepayers so
is not able to identify the exact impact on the proposed changes on Māori.
The impact of the proposed changes on Māori will be similar to that on
other residents in Auckland.
Ngā ritenga ā-pūtea
Financial implications
81. The financial
implications of the recommended charges are noted in the relevant sections
above.
Ngā raru tūpono me ngā
whakamaurutanga
Risks and mitigations
82. There are no
risks associated with recommendations in this report.
Ngā koringa ā-muri
Next steps
83.
Resolutions passed at this meeting will be used
to develop the consultation material for Annual Budget 2020/2021.
84.
On 12 February, the Governing Body will be asked
to agree the consultation material. In designing the recommended consultation
process officers will develop targeted approaches to ensure that ratepayers
affected by the proposed changes are made aware of the proposals and the ways
in which they can provide feedback.
Ngā tāpirihanga
Attachments
|
No.
|
Title
|
Page
|
|
a⇩ 
|
Environment and Performance Committee resolutions 10
September
|
29
|
|
b⇩ 
|
Assessment against statutory criteria – Swimming
pool fencing inspection charges
|
31
|
|
c⇩
|
Proposed regulatory fees and charges table
|
33
|
Ngā kaihaina
Signatories
|
Authors
|
Andrew Duncan - Manager Financial Policy
Aaron Matich - Principal Advisor – Financial
Policy
Eric Wen - Senior Advisor - Financial Policy
Beth Sullivan - Principal Advisor Policy
|
|
Authorisers
|
Ross Tucker - General Manager, Financial Strategy and
Planning
Matthew Walker - Group Chief Financial Officer
|
