Agenda of Emergency Committee

Emergency Committee

21 May 2020

Annual Budget 2020/2021 consultation part 1 - local board feedback

File No.: CP2020/05832

Te take mō te pūrongo

Purpose of the report

1. To provide an overview of local board feedback on the Emergency Budget 2020/2021 first round of consultation (at that time the Emergency Budget was referred to as the Annual Budget).

Whakarāpopototanga matua

Executive summary

The report would normally go before the Finance and Performance Committee, however, in light of COVID-19, it must now be considered by the Emergency Committee

2. As part of Auckland Council’s shared governance model, local boards have a legislative role to provide input on regional plans, such as the annual plan. For this year’s Emergency Budget, local boards achieve this in two key ways:

· Preparing local board agreements to be included in the Emergency Budget (Volume 2) – this includes local board projects, budgets, performance measures and local fees and charges for 2020/2021

· Providing feedback on regional proposals

3. From 21 February to 22 March 2020, the council consulted with the public on the Annual Budget. Each local board has now considered community feedback received for their local area and resolved feedback on the Annual Budget for the consideration of the Governing Body.

4. Local boards will adopt their local board agreements between 20 to 24 July 2020 and the Governing Body will then adopt the Emergency Budget on 30 July 2020.

5. This report summarises feedback from local boards and focuses on common themes. As such, it does not include all of the matters raised in local board resolutions. A complete set of the local board resolutions are provided in Attachment A.

6. Key themes arising from those local boards that resolved on regional issues include:

· The majority of local boards support all three key proposed changes to targeted rates for:

o waste management (14 support / 1 do not support)

o refuse collection in the former Auckland City and Manukau City areas (15 support)

o Waitākere rural sewerage service (12 support).

· A few local boards provided feedback on the other proposed changes. Those that did support the:

o changes to charges for pool fencing inspections (5 support)

o changes to some building and resource consent fees (2 support)

o new and increased regulatory fees and charges to recover costs (2 support)

o draft Tūpuna Maunga o Tamaki Makaurau Authority – Operational Plan 2020/2021 (2 support)

o introduction of a targeted rate scheme to assist ratepayers in Clevedon with connection to Watercare’s reticulated wastewater and water system (1 support).

· The only proposal that was not supported by local boards was the introduction of HomeFit assessments to the Retrofit Your Home Scheme (2 do not support)

7. The council is now considering what the impacts of COVID-19 are likely to be, and plan to ask Aucklanders for their views on a proposed Emergency Budget.

8. The local boards would normally resolve on their advocacy initiatives for inclusion in their local board agreements. However, due to the pressure on timeframes, staff capacity and budget, this year’s Emergency Budget document will only include the parts that are statutory requirements to the local board agreements. As advocacy initiatives are not a statutory requirement for the council’s Emergency Budget and local board agreements, they will not be included in this year’s Emergency Budget document.

Ngā tūtohunga

Recommendation/s

That the Emergency Committee:

a) consider feedback from local boards when making decisions on the Annual Budget 2020/2021 consultation part 1.

Horopaki

Context

9. An annual plan sets out Auckland Council’s priorities for a financial year and how the council plans to pay for them. The Governing Body is responsible for the regional elements of the annual plan and local boards develop annual local board agreements which are agreed between the local boards and Governing Body, and are included in the annual plan.

10. From 21 February to 22 March 2020, the council consulted with the public on the proposed Annual Budget 2020/2021. Overall, the council received feedback through written feedback (including online and hardcopy) and in-person feedback (e.g. Have Your Say events). In total there were more than 4750 pieces of feedback, which included:

· 3820 written responses, with two thirds of these received digitally

· over 900 people attending one of 44 Have Your Say or community events, providing over 930 feedback points.

11. Local boards considered consultation feedback related to their local board area and then passed resolutions detailing their feedback.

Tātaritanga me ngā tohutohu

Analysis and advice

12. After considering feedback from their communities, local boards resolved on their regional feedback at their business meetings between 4 – 15 May 2020. This report summarises feedback from local boards and focuses on common themes. As such, it does not include all the matters raised in local board resolutions. The full set of local board resolutions are provided in Attachment A (local board resolutions on the Annual Budget 2020/2021).

13. As part of consultation, Aucklanders were asked their opinion on several proposed rating and fee changes, the three key proposals related to the:

· waste management targeted rate

· refuse collection in the former Auckland City and Manukau City areas

· Waitākere rural sewerage service and targeted rate.

14. The other proposals were:

· changes to charges for pool fencing inspections

· changes to some building and resource consent fees

· new and increased regulatory fees and charges to recover costs

· the draft Tūpuna Maunga o Tamaki Makaurau Authority – Operational Plan 2020/2021

· the introduction of HomeFit assessments to the Retrofit Your Home Scheme

· the introduction of a targeted rate scheme to assist ratepayers in Clevedon with connection to Watercare’s reticulated wastewater and water system

· the expansion or establishment of five Business Improvement Districts (BIDs) and targeted rates.

Waste management targeted rate

15. Aucklanders were asked if they support a $19.97 increase to the waste management targeted rate to cover increased costs. The cost of responsibly dealing with Auckland’s kerbside recycling (paper, cardboard and plastics) has increased due to international market conditions. The council proposed to charge only those who use the service by increasing the targeted rate. If we do not do this, we would have to fund the shortfall by increasing general rates for all ratepayers, including those who don’t get a kerbside collection service.

16. The majority of local boards that provided feedback on this change supported an increase to the waste management targeted rate to cover increased costs. These local boards are: Albert-Eden, Devonport-Takapuna, Franklin, Henderson-Massey, Hibiscus and Bays, Howick, Kaipātiki, Manurewa, Maungakiekie-Tāmaki, Papakura, Puketāpapa, Rodney, Upper Harbour, and Waitematā local boards (14 local boards).

17. Ōrākei Local Board (1 local board) did not support an increase to the waste management targeted rate, and requests further consultation be undertaken on this proposal considering the COVID-19 pandemic.

Refuse collection in former Auckland City and Manukau City

18. Aucklanders were asked if they support a $14.23 increase to the refuse collection in former Auckland City and Manukau City targeted rate to cover increased costs. In other parts of the city, residents pay for their collection via Pay As You Throw. The targeted rate for the former Auckland City and Manukau City Council areas no longer meets the cost of collection. If we do not do this, we would have to increase general rates for all ratepayers, including those living outside these two areas who would subsidise residents within them.

19. All local boards that provided feedback on this change supported an increase to the refuse collection in former Auckland City and Manukau City targeted rate to cover increased costs. These local boards are: Albert-Eden, Devonport-Takapuna, Franklin, Henderson-Massey, Hibiscus and Bays, Howick, Kaipātiki, Manurewa, Maungakiekie-Tāmaki, Ōrākei, Papakura, Puketāpapa, Rodney, Upper Harbour, and Waitematā local boards (15 local boards).

Waitākere rural sewerage service and targeted rate

20. Last year we consulted on removing the septic tank pumpout service funded by a targeted rate. While feedback indicated a willingness to go ahead with the removal of this service in the Henderson-Massey and Upper Harbour Local Board areas, residents of the Waitākere Ranges Local Board area said they wanted to keep the service. The cost of delivering this service is higher than the current targeted rate of $198.43.

21. This year, Aucklanders were asked if they support removing the septic tank pumpout service funded by a targeted rate in the Henderson-Massey and Upper Harbour Local Board areas, and continuing it for those in the Waitākere Ranges Local Board area and recovering the full cost by increasing the targeted rate to between $260 and $320 a year (incl. GST). This increase would apply from July 2021.

22. If we do not do this, the council could end the service, or continue to subsidise the cost of the service to septic tank users in the Waitākere Ranges Local Board area from all general ratepayers, including those who don’t use the service.

23. The majority of local boards that provided feedback on this change supported an increase to the Waitākere rural sewerage service targeted raterate to cover increased costs. These local boards are: Albert-Eden, Devonport-Takapuna, Franklin, Hibiscus and Bays, Howick, Kaipātiki, Maungakiekie-Tāmaki, Ōrākei, Puketāpapa, Rodney, Upper Harbour, and Waitematā local boards (12 local boards).

24. The Waitākere Ranges Local Board, whose area includes the ratepayers who will be most affected by this change, supports the Waitākere rural sewerage pump out service continuing without increasing the targeted rate, recognising that rural sewerage systems are part of the regional infrastructure and recognising the public good outcomes it supports.

25. Waitākere Ranges Local Board has provided detailed feedback on this proposal which can be found on pages 34-35 of Attachment A (local board resolutions on the Annual Budget 2020/2021).

26. Henderson-Massey noted the minimal impact for Henderson-Massey residents, and support bringing on-site wastewater systems under a regional compliance scheme, noting that improving water quality is a major issue for Auckland.

Changes to charges for pool fencing inspections

27. The council proposed to replace the $130 first inspection fee for pool fencing inspections with an annual targeted rate of $44 for all private pool owners.

28. All of the local boards that provided feedback on this change supported it. These local boards are: Manurewa, Ōrākei, Papakura, Puketāpapa, and Waitematā local boards (5 local boards).

Changes to some building and resource consent fees, and new and increased regulatory fees and charges to recover costs

29. The council proposed changes to some building and resource consent fees and deposits to better align with actual costs and improve customer experience, such as changes to the structure and level of some resource consent and building control fees.

30. The council proposed to introduce some new regulatory fees (or deposits) and raise some fees including:

· scooter licensing – new deposit to be introduced for commercial operators

· the high impact commercial event permit - increase fee from $1,100 to $1,500 (including GST)

· Auckland Botanic Gardens – introduce an entry charge of $20 for international visitors.

31. Only Manurewa and Papakura local boards (2 local boards) provided feedback on these changes. They both supported the changes to some building and resource consent fees to improve transparency. They also both supported the proposed new and increased regulatory fees to recover costs. Both specifically stated their support for the introduction of an international visitor fee for the Auckland Botanic Gardens to fund the upgrading of facilities and promotion to overseas markets.

The draft Tūpuna Maunga o Tāmaki Makaurau Authority – Operational Plan 2020/2021

32. The Ngā Mana Whenua o Tāmaki Makaurau Collective Redress Act 2014 (the Act) requires that the Tūpuna Maunga Authority prepare an Annual Operational Plan to provide a framework in which the council will carry out the routine management of the 14 Tupuna Maunga, under the direction of the Maunga Authority. This must be prepared and adopted concurrently with the council’s annual plan and included in summary form. A summary of the draft Operational Plan 2020/2021 was included in the Supporting Information for the Annual Budget Consultation Document.

33. Hibiscus and Bays, and Rodney local boards (2 local boards) supported the draft Tūpuna Maunga o Tāmaki Makaurau Authority – Operational Plan 2020/2021.

34. The Devonport-Takapuna Local Board have provided detailed feedback on the draft Tūpuna Maunga o Tāamaki Makaurau Authority – Operational Plan 2020/2021 in a memo to the Tūpuna Maunga o Tāmaki Makaurau Authority members. This can be found on pages 6-9 of Attachment A (local board resolutions on the Annual Budget 2020/2021). No other local boards provided feedback on this.

Introduction of HomeFit assessments to the Retrofit Your Home Scheme

35. The council proposed to change the Retrofit Your Home scheme to require a New Zealand Green Building Council HomeFit Assessment for all new applications of more than $2,000. The HomeFit assessment will help homeowners make the best decisions about upgrading their home. The HomeFit assessment costs $260 (excluding GST) and this will be added to the amount of financial assistance provided.

36. Manurewa and Papakura local boards (2 local boards) did not support the Introduction of HomeFit assessments to the Retrofit Your Home Scheme, stating the additional cost and bureaucracy may discourage some homeowners from taking part in the scheme.

37. The Puketāpapa local board did not state if they support or do not support this proposal but noted that it aligns well with the local board’s Low Carbon Action Plan particularly the action area "Low Carbon Homes and Buildings".

Introduction of a targeted rate scheme to assist ratepayers in Clevedon with connection to Watercare’s reticulated wastewater and water system

38. Water and wastewater networks have recently been extended to the Clevedon area. Residents now have the opportunity to switch from their on-site systems to the reticulated network. To help Clevedon ratepayers with their connection costs, the council proposed introducing a voluntary financial assistance scheme. Ratepayers within the service area will be able to apply to us to pay their upfront connection costs. They will pay this back through a targeted rate over 15 years.

39. The only local board to provide feedback on this proposal was Franklin Local Board, whose local board area includes Clevedon. The board supported the provision of an ‘opt-in’ targeted rate to facilitate connection to the reticulated and wastewater supply in Clevedon repay through rates, noting that connection is not available to all Clevedon residents at this time.

The expansion of or establishment of five Business Improvement Districts (BIDs) and targeted rates

40. The council proposed five changes to BID targeted rates to support the following business associations:

· establishment of Central Park Henderson and One Warkworth BIDs and new targeted rates

· extension of the Glen Innes, Manukau Central and Manurewa BIDs and increasing the targeted rates.

41. The proposed new BIDs and BID expansions are in six local board areas. These are: Henderson-Massey, Rodney, Ōrākei, Maungakiekie-Tāmaki, Ōtara-Papatoetoe, and Manurewa local boards.

42. Local boards are required to endorse any new local targeted rate proposals or BID targeted rate proposals in their local board area (noting that any new local targeted rates and/or BIDs must have been consulted on before they can be implemented).

43. Most of the local boards supported the BIDs proposals in their local board area. These local boards are: Henderson-Massey (subject to receiving further information, intended at the 19 May 2020 business meeting), Rodney, Ōtara-Papatoetoe, and Manurewa local boards (4 local boards). Ōrākei and Maungakiekie-Tāmaki local boards noted the Glen Innes BID expansion has been postponed.

44. In addition, Whau Local Board note that the majority of submitters from the local board area generally supported the proposals set out in the consultation document.

45. Three local boards; Hibiscus and Bays, Māngere-Ōtāhuhu and Rodney Local Boards, deferred providing feedback until after Emergency Budget consultation part 2 has been completed and feedback reported to local boards.

Local board advocacy

46. The council is now considering what the impacts of COVID-19 are likely to be, and plans to ask Aucklanders for their views on certain aspects of Auckland Council’s proposed Emergency Budget (Consultation part 2).

47. This will put considerable pressure on the timeframes and staff capacity. For this reason, this year’s Emergency Budget document will only include the parts that are statutory requirements. Normally local boards are requested to approve any advocacy initiatives for consideration by the Governing Body and inclusion (as an appendix) to the local board agreements. As it is not a statutory requirement to include this, these will not be included this year.

48. This triennium a longer-term approach has been taken to progress initiatives that are unable to be funded by local board budgets. This approach used the annual plan, long-term plan (10-Year Budget) and local board plan processes to progress and advise on a narrower range of local board initiatives, in a more comprehensive way.

49. As part of the 10-Year Budget 2018-2028, additional funding was provided to progress the priority advocacy initiative of each local board (the One Local Initiative (OLI)). All OLIs are progressing with funding either allocated or earmarked in the 10-Year Budget.

50. Some of the local boards have recommended that the Governing Body continue the commitment to their OLIs. These local boards are: Franklin, Hibiscus and Bays, Howick, Rodney, Waitākere Ranges, and Waitematā local boards. Some local boards also noted that the projects may generate local employment opportunities, which is significant for the economic recovery from COVID-19.

51. Other advocacy initiatives have been included in the local board’s resolutions; these can be found in Attachment A (local board resolutions on the Annual Budget 2020/2021).

Tauākī whakaaweawe āhuarangi

Climate impact statement

52. There is a neutral climate impact from the matters outlined in this report. The report summarises feedback on proposals that relate to the allocation of charges, rather than decisions on activities to be undertaken.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

53. The changes proposed in the consultation had been communicated to and agreed on by the following departments or business units of the Auckland Council group prior to this consultation:

· Waste Solution

· Healthy Waters

· Regulatory Services

· Parks Sports and Recreation

· Arts Community and Events

· CCO/External Partnerships

· Legal and Risk.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe

Local impacts and local board views

54. Local boards have been involved throughout the development of the Annual Budget, including:

· local board chairs attending Finance and Performance Committee workshops on the Annual Budget

· engaging with communities on the Annual Budget.

55. Local board views and feedback on the regional aspects of the Annual Budget are provided in this report.

Tauākī whakaaweawe Māori

Māori impact statement

56. Many local board decisions are of importance to and impact on Māori. The annual plan, including local board agreements, are important tools that enable and can demonstrate the council’s responsiveness to Māori.

57. The total number of submissions relating to the first round of consulation from individuals who identified as Māori was 262 (compared to 115 in the 2019/2020 Annual Budget consultation), this represents 9 per cent of all submitters.

Ngā ritenga ā-pūtea

Financial implications

58. The annual plan is a statutory process which must be completed every year. The Council budget provides for the resourcing to deliver this project.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

59. The Governing Body needs to consider feedback from local boards as this is a legislative requirement and part of Auckland Council’s shared governance model.

60. The council plans to ask Aucklanders for their views on certain aspects of Auckland Council’s proposed ‘emergency budget’ in response to the financial impacts of COVID-19 (consultation part 2).

61. Local boards will receive the feedback from Aucklanders from consultation part 2, and will provide their feedback to the Governing Body following this.

Ngā koringa ā-muri

Next steps

62. Decisions made from the Annual Budget consultation part 1 will be incorporated into the Emergency Budget 2020/2021.

63. The council will ask Aucklanders for their views on certain aspects of Auckland Council’s proposed Emergency Budget. This consultation will take place from 29 May 2020 to 19 June 2020.

64. Local boards will adopt their local board agreements between 20 to 24 July 2020 and the Governing Body will then adopt the Emergency Budget on 30 July 2020.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇩	Local Board resolutions on the Annual Budget 2020/2021	19

Ngā kaihaina

Signatories

Author

Beth Corlett - Advisor Plans & Programmes

Authorisers

Louise Mason – General Manager Local Board Services

Kevin Ramsay - Acting Group Chief Financial Officer

Phil Wilson - Governance Director

Emergency Committee

21 May 2020

Rates and Fees Issues for the Emergency Budget 2020/2021

File No.: CP2020/05842

Te take mō te pūrongo

Purpose of the report

1. To seek agreement on minor changes to rating policy and some fees for inclusion in the Emergency Budget 2020/2021 and consequential amendments to the Revenue and Financing Policy.

Whakarāpopototanga matua

Executive summary

2. In February and March 2020, the council consulted on a number of minor changes to rating policy and some fees for inclusion in the Emergency Budget 2020/2021. These changes were proposed to ensure cost recovery and improve the efficiency and transparency of charging methods. Feedback received on these proposals was presented at the Finance and Performance Committee workshop on 13 May 2020.

3. Consideration of feedback is one part of the decision-making process alongside assessment of options to address their advantages and disadvantages. Consultation provides an opportunity for those who may be affected by decisions to have their say and for any new issues to be raised. Officers have considered the feedback in developing their advice to the council.

4. As consultation took place over February and March 2020, feedback on the proposed changes was provided before respondents were able to fully understand the impact of COVID-19. However, staff have reviewed the proposed changes in light of COVID-19, and assessed that the reasonably practicable options for each of these matters have not changed. The changes proposed ensure users are paying for services or improve the customer experience through more transparent and efficient pricing of services. To continue to provide these core services the costs will need to be funded by either users, general ratepayers or from savings made in other service areas. None of the proposed increases are anticipated to be material in terms of household budgets.

Increases to the waste management targeted rates

5. The council proposed to increase the region-wide base service waste management targeted rate by $19.97 (38 cents per week) and the standard refuse rate in the former Auckland City Council and Manukau City Council areas by $14.23 (27 cents per week) to recover increased costs. Sixty-five per cent of all feedback received was in support of the proposal. Increasing the waste management targeted rate to cover the cost increases ensures that costs are paid for by the recipients of the service.

6. The cost increases are market and contractually driven. Some savings have been made allowing further increases due to market disruption in fibre and plastic recycling costs to be absorbed. Also, some potential cost savings mean officers now recommend a reduction in the increase to the standard refuse rate to $11.67 (23 cents per week).

7. These are cost increases for a core council service that if not funded by service users would add $9.5 million and $3.0 million respectively to the costs the council would need to fund from general rates. This would add 0.8 per cent to the general rates increase or require the council to reduce other expenditure by $12.5 million.

8. Officers recommend adopting an increase to the base service waste management targeted rate of $19.97, and an increase to the standard refuse rate in the former Auckland City Council and Manukau City Council areas of $11.67.

Changes to Waitākere rural sewerage service and targeted rate

9. The council proposed to stop providing the septic tank pump-out service to ratepayers in the Henderson-Massey and Upper Harbour local board areas and continue to provide the service to ratepayers in the Waitākere Ranges Local Board area with an increased targeted rate to fully recover costs.

10. Sixty-seven per cent of feedback received on the proposal supported it, commenting that it was fair that households receiving the services should pay. Ten per cent of those who did not support the proposal wanted the subsidy to continue and 23 per cent commented that the service should end.

11. Officers recommend that the proposal be adopted as consulted on.

Charging for pool fencing inspections

12. The council proposed to replace the $130 first inspection fee for pool fencing inspections with an annual targeted rate of $44 for all private pool owners. 36 per cent of feedback from consultation supported this proposal while 40 per cent did not. The main argument against the proposal was from pool owners who didn’t want to pay in advance for the service. People in favour agreed that the proposed change would spread the cost over three years for pool owners and improve efficiency.

13. Officers recommend that the proposal be adopted as consulted on.

Other proposals

14. Feedback on the other proposals was mixed. No significant issues were raised that weren’t considered when the proposals were adopted for consultation. Officers recommend the adoption of the following proposals for 2020/2021 as consulted on (with adjustment to fees to reflect the council’s revised rate of inflation of 1.25 per cent):

· Changes to some consent fees and deposits to better align with actual costs and improve customer experience such as changes to the structure and level of some resource consent and building control fees

· Increase the permit fee for high impact commercial events to $1,500 (incl. GST)

· Introduction of a targeted rate scheme to assist ratepayers in Clevedon with connection to Watercare’s reticulated wastewater and water system

· Inclusion of HomeFit assessment cost of $260 plus GST in the Retrofit-your-home targeted rate for all new applications of more than $2,000.

· Establishment of the One Warkworth BID with a new targeted rate introduced

· Expansion of the Manukau Central BID.

15. Officers are recommending changes to the following consultation proposals:

· deferring the introduction of a $20 entry fee for international visitors to the Auckland Botanic Gardens for further consideration until our borders are reopened

· consulting again as part of the Emergency Budget on the establishment of the Central Park Henderson BID and associated targeted rates as the required ballot returns could not be achieved before the country moved to Alert Level 4.

16. Officers also recommend lowering the annual resource consent charges for larger marine farms to better reflect actual costs.

17. Decisions made at this meeting will be incorporated into the Emergency Budget 2020/2021 that will be presented to the Governing Body for adoption on 30 July 2020.

Ngā tūtohunga

Recommendation/s

That the Emergency Committee:

a) recommend to the Governing Body as part of the final Annual Budget 2020/2021 to:

i) adopt the changes to pool fencing compliance charges as set out in Table 1 of the report

ii) amend the Rating mechanism in the Funding Impact Statement to:

A) increase the waste management base service targeted rate to $141.03 (including GST)

B) increase the waste management standard refuse rate in the former Auckland City and Manukau City council areas to $141.60 (including GST) and increase the large refuse rate for those areas to $66.55 (including GST)

C) include a pool fencing compliance targeted rate as per a) above

D) include a Clevedon wastewater and water connection targeted rate

E) include the cost of HomeFit assessment ($260 plus GST) in the Retrofit-your-home targeted rate for all new applications of more than $2,000

F) include a new targeted rate for the One Warkworth BID

G) provide for the expansion of the Manukau Central BID

b) agree to consult further on the establishment of the Central Park Henderson BID and associated targeted rate

c) recommend to the Governing Body to adopt

i) the changes to fees as specified in Attachment A of the report

ii) the increase in the permit fee for high impact commercial events to $1,500 (including GST) for 2020/2021

iii) the annual resource consent functions, powers and duties charges for marine farms as specified in Table 2 of this report

d) recommend to the Governing Body that it agree to amend the Revenue and Financing Policy to identify targeted rates as a funding source for the regulation activity.

e) recommend to the Governing Body that it agrees to:

i) discontinue the rural sewerage pump-out service and targeted rate for ratepayers in the Henderson-Massey and Upper Harbour local board areas effective from 1 July 2021

ii) retain the rural sewerage pump-out service for ratepayers in the Waitākere Ranges Local Board area and increase the targeted rate from 1 July 2021 to recover the full cost of providing the service.

Horopaki

Context

Decision making

18. When making decisions the Local Government Act 2002 requires the council to:

· identify all reasonably practicable options to achieve the objective of the decision

· assess these options in terms of their advantages and disadvantages

· give due consideration, with an open mind, to the views and preferences of people who will or may be affected by, or to have an interest in the decision.

19. The consultation process ensures those interested in or affected by decisions have an opportunity to have their voices heard by their elected representatives prior to decisions being made. Feedback received during public consultation is one key part of many components that need to be considered when making final decisions. Comments provided as part of the feedback should be considered in order to understand the context and the meanings behind the numbers and percentages presented.

20. The council must weigh up the information provided on the advantages and disadvantages of each option, consider the feedback received, and then arrive at what it determines to be the best decision.

Consultation and feedback

21. The council consulted on the proposed changes to rating policy and some fees as part of the first round of Annual Budget 2020/2021 consultation in February and March 2020. Implementation of the council’s proposal for the pool fencing inspection charges also requires amendments to the Revenue and Financing Policy. These proposed amendments were consulted on separately from the consultation on the Annual Budget.

22. Analysis of feedback received during the Annual Budget 2020/2021 consultation was contained in the Summary of Feedback report to the Emergency Committee meeting on 21 May 2020. Analysis of feedback received during the Revenue and Financing Policy consultation is included in this report under the section on pool fencing inspection charges.

Tātaritanga me ngā tohutohu

Analysis and advice

23. The following sections set out for each of the proposed changes to council’s financial policies and fees:

· the proposal that was consulted on

· a summary of feedback received

· consideration of feedback including the advantages and disadvantages of the options

· local board feedback

· recommendations.

24. The analysis below records brief summaries of local board feedback on the proposals. Local board feedback is set out in full in a separate report also on this agenda. A number of local boards did not comment on many of the proposals given they did not directly impact on their areas.

Waste management targeted rate base service charge

Proposal

25. The council consulted on an increase in the waste management base service targeted rate by $19.97 (incl. GST) from $121.06 (incl. GST) to $141.03 (incl. 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.

Feedback

26. Of the 2,965 pieces of written or in-person feedback received on this topic, 67 per cent supported the proposal and 24 per cent did not. Those in support commented that the cost increase should be borne by those who receive the service, and that the proposed increase was fair and reasonable and needed to be done. Respondents opposing the change argued that the increase would be unaffordable, and that the financial burden should be shared among all ratepayers as one community. Some submitters also commented that the current system needed improving and the council needed to look at the option of local recycling.

Consideration

27. The proposal maintains a standard level of regional charges for base waste management services and keeps the costs transparent. Raising the base rate means the users and beneficiaries of the services are meeting the costs. If the waste management targeted rate is not increased it will add $9.5 million to the costs required to be funded from general rates. The additional costs are equivalent to a general rates increase of 0.6 per cent above the level set in the 10-year Budget 2018-2028. This would create issues with fairness and transparency when the 37,000 ratepayers who don’t receive the service would have to bear some of the costs.

28. It is not reasonably practical for council to reduce the current costs or service levels for recycling or the inorganic service as these are subject to contract terms and would be inconsistent with the Waste Management and Minimisation Plan. During Alert Level 4 we were unable to provide for recycling of our fibre waste and this was sent to landfill. The costs associated with this were managed with use of the waste levy. There has also been a further contraction of the fibre and plastic recyclables market leading to a $2 million cost increase which will be managed by savings.

29. We have also rejected the option of permanently sending all recyclables to landfill as it would end up costing ratepayers more than continuing the recycling service and would be an environmentally unsound decision.

Local board feedback

30. Fourteen local boards supported the proposal and one were opposed.

Recommendation

31. Officers recommend the waste management base service targeted rate be increased by $19.97 (incl. GST) to $141.03 (incl. GST) as proposed.

Waste management targeted rate refuse charge

Proposal

32. The council consulted on an increase in the waste management refuse targeted rate for the former Auckland City and Manukau City areas as follows to cover cost increases of $3.5 million.

· Standard refuse rate to increase by $14.23 (incl. GST) from $129.93 (incl. GST) to $144.16 (incl. GST)

· Large refuse rate to increase by 20.91 (incl. GST) from $191.00 (incl. GST) to $211.91 (incl. GST).

Feedback

33. Of the 2,837 pieces of written or in-person feedback received on this topic, 65 per cent supported the proposal and 23 per cent did not. Those in support commented that the cost increase should be borne by those who receive the service. Respondents opposing the change argued that the service was too expensive.

Consideration

34. We may be able to make some costs savings as a result of delays to the introduction of the new collection contracts arising from restrictions on activity during Alert Level 4. This will reduce the required increase to $11.67 with the total rate $141.60. Officers will update the rate at adoption if the proposed level of savings can’t be achieved.

35. Raising the refuse rate means the users and beneficiaries of the services are meeting the costs. If the refuse targeted rate is not increased the council will need to fund an additional $3.0 million from general rates or the base waste management targeted rate. General rates would have to increase by a further 0.2 per cent or the waste management base service rate by a further $7 per annum, to cover the shortfall. These options will see either general rate payers or all those who receive a waste service across the region meeting the increased costs of refuse services provided in the former Auckland City and Manukau City areas.

36. The average refuse charge in the waste management targeted rate for former Auckland City and Manukau City ratepayers was $141.75 in 2012/2013 (the first year when the rating policies of the former councils were integrated). The amended rate proposal of $141.60 for 2020/2021 would mean a cumulative decrease of 0.1 per cent over eight years.

37. It is not practical for the council to reduce the current costs or service levels for refuse collection as it is an essential service for Aucklanders and council has an obligation to effectively manage potential health and sanitary implications.

Local board feedback

38. All of the fifteen local boards that provided feedback on the proposal supported it.

Recommendation

39. Officers recommend the waste management standard refuse rate in the former Auckland City and Manukau City council areas be increased to $141.60 (including GST) and the large refuse rate in those areas be increased to $66.55 (including GST).

Waitākere rural sewerage targeted rate

Proposal

40. The council proposed to, effective from 1 July 2021,

· stop providing the septic tank pump-out service to 656 ratepayers in the Henderson-Massey and Upper Harbour local board areas

· continue to provide the septic tank pump-out service to the 3,210 ratepayers in the Waitākere Ranges Local Board area, funded from an increased targeted rate (likely to be between $260 and $320 per year) to fully recover costs.

Feedback

41. Overall, 1,611 responses were in favour of the proposal while 796 were against. Of the 796 responses that did not support the proposal, 549 said the service should be ended.

42. The most common theme for those who were in support was that user pays was the most equitable way to fund the service. Those against the proposal argued that the pump-out service should be subsidised by the council to acknowledge the lack of access to council services in remote areas, or that the targeted rate might be unaffordable for low income households. Feedback received through have your say events was of much lower volume but generated similar themes.

Consideration

43. The sewerage pump-out is a service that benefits individual tank owners. A targeted rate that recovers the full cost from properties that receive the service is therefore an appropriate mechanism to fund the service. Rural properties in other areas of Auckland already manage and pay for their own pump-outs without council involvement. The current rate is $198.43 year. The proposed targeted rate is estimated at an amount between $260 and $320 per year, or $5 to $6.15 per week (subject to the tendering process). Auckland households on average pay $690 per annum, or $13.30 per week to Watercare for the disposal of their wastewater.

44. The council consulted on removal of the service and the targeted rate as part of its 2019/2020 Annual Budget consultation. Feedback received from residents in the Waitākere Ranges Local Board area was strongly against the proposal, citing convenience of the service. However, the potential to increase the targeted rate for full cost recovery was not incorporated in the consultation. During this year’s consultation (Annual Budget 2020/2021), the proposal to continue the service in the Waitakere Ranges Local Board area with full cost recovery was put forward, alongside the option to stop the service. Among those respondents who identified themselves as tank owners (84), a higher number (36) supported the proposal than those who favoured a service removal (25). This indicated the service is still likely to be popular even with the general rate subsidy removed.

Local board feedback

45. Eleven local boards supported the proposal and one was opposed. The Waitākere Ranges Local Board supported continuing the service in the board area with costs subsidised by general ratepayers. They argued that the setting of the targeted rate should recognise the public good outcome delivered by the rural sewerage systems noting that the west coast and northern Manukau Harbour beaches are popular visitor destinations for all Aucklanders.

Recommendation

46. Officers recommend that the proposal be adopted as consulted on. From 1 July 2021, the council will:

· stop providing the septic tank pump-out service to ratepayers in the Henderson-Massey and Upper Harbour local board areas

· continue to provide the service to ratepayers in the Waitākere Ranges Local Board area, funded from an increased targeted rate (likely to be between $260 and $320 per year subject to the final tendering process) to fully recover costs.

Pool fencing compliance charges

Proposal

47. The council proposed to replace the $130 first swimming pool fencing inspection fee with an annual targeted rate of $44 for all private pool owners. If the pool owner arranges an inspection from an independently qualified pool inspector (IQPI), then the targeted rate will be reduced to $22 (incl. GST) which will cover the council’s costs of administering and maintaining the swimming pool inspection register. Any follow-up inspections will continue to be charged separately.

48. Including the first inspection charge on the rates invoice (as a targeted rate) makes it easier for pool owners to pay for their inspection by:

· bundling the cost in with their rates

· spreading the cost over three years

· giving them access to a range of rates’ payment options.

49. If we don’t make these changes then the three-yearly fee for inspection will remain and increase to $135 for 2020/2021. This is higher than $132 ($44 times three) because the proposed targeted rate has incorporated efficiency gains in administration costs which would not be realised if the current charging mechanism remains. The current inspection fee of $130 does not fully recover costs.

50. To implement the proposed changes required separate consultation to amend the Revenue and Financing Policy to identify targeted rate as a funding source for the Regulation activity.

Feedback

51. Of the 451 respondents to the Annual Budget 2020/2021 consultation who specifically commented on this proposal, 153 supported the proposal and 209 did not. Another 62 respondents thought the proposal was to increase the frequency of pool inspection to once every year. Submissions that supported the proposal agreed that the annual targeted rate would spread the financial burden for pool owners (8 feedback points) and improve efficiency (6 feedback points). Of the feedback points that opposed the proposal, common themes were:

· Don’t want to pay council in advance (before an inspection is carried out) (36 feedback points)

· Pool inspections are not necessary (21 feedback points)

52. Of the 128 respondents to the proposed changes to the Revenue and Financing Policy, 61 supported the proposal and 67 did not. Comments received for and against the proposal were in line with those received to the Annual Budget 2020/2021 consultation.

53. Over both consultations, a total of 579 feedback points on the proposed swimming pool fencing inspection targeted rate were received. Of these, 38 per cent were in support and 43 per cent did not support the proposed changes.

Consideration

54. The proposal was to spread the charge for the first inspection over a period of three years. The frequency of the inspection remains unchanged (once every three years), with a small price increase to cover cost inflation.

55. The Building Act 2004 requires that councils ensure all residential pools within their jurisdictions be inspected at least once every three years to determine whether the pool complies with safety standards set out in the Act. It is important to note that some of the feedback points against the proposal argued that pool inspections were not necessary which is inconsistent with the legislative requirements. The remaining feedback was evenly balanced and no significant issues were raised that weren’t considered when the proposal was adopted for consultation.

56. Under the proposal, some targeted rate amounts will be paid before the inspection takes place, and some will be after. Given the size of the proposed targeted rate, the cost to ratepayers of paying early in terms of foregone interest, or the cost to council of receiving payment after the service is provided, is negligible.

Local board feedback

57. All of the five local boards that provided feedback on the proposal supported it.

Recommendation

58. Officers recommend adoption of the proposal as consulted on. This is set out in the table below.

Table 1: Proposed changes to pool fencing compliance charges

Service		Current		Proposed
Service		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
First inspection^[1]	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
Subsequent inspection^[3]	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
IQPI inspection^[4]	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.

Changes to some fees and deposit levels

Proposal

59. The council consulted on changes to some fees and deposits. These were to 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

· user charges are introduced where appropriate to replace ratepayer funding.

60. The proposed changes were in the following categories:

· changes to some consent fees and deposits (attached as Attachment A)

· increase the permit fee for high impact commercial events from $1,100 to $1,500

· introduce a $20 entry fee to Auckland Botanic Gardens for international visitors

Feedback

Consent fees and deposits

61. Consultation sought feedback on the introduction of a deposit for an application for a licence for micro-mobility devices including e-scooters. No feedback was received on the deposits. However, 24 feedback points were received on e-scooter fees (although e-scooter licensing costs are recovered from hourly rates which were being adjusted for inflation only and were not consulted on as part of this annual budget). Another four submitters expressed concern over the current resource consent annual charge for marine farms (also not an issue consulted on as part of this annual budget) and commented that the method to calculate the fee was not transparent.

Commercial event permit fee

62. 18 feedback points were received on the proposal with eight in support and 10 against. Those who were not in support commented that the commercial event fee is unreasonable and may discourage event holders.

Botanic Gardens entry fee

63. 55 feedback points were received on the proposal with eight in support and 34 against. Seven of those opposing the proposal commented that the proposed fee was too high (six said they would support the fee if it were lower). A further four observed that an entry fee would be unmanageable due to the multiple entry points and the cost of administration.

Consideration

Consent fees and deposits

64. No issues were raised on the proposed changes consulted on. The proposed changes would improve transparency and cost certainty for consent applicants and simplify the fee structure for some customers. There were also changes in response to legislative change (works on earthquake prone buildings). The proposed increases have been adjusted downward to reflect the council’s revised rate of inflation of 1.25 per cent. The estimated increase in revenue as a result of these changes is now less than $10,000.

Marine farms – functions, powers and duties charge

65. Officers consider that the current resource consent functions, powers and duties (FPD) charges on marine farms could be lowered for larger farms to better reflect costs.

66. The FPD charge covers the resource consent holder’s contributions to the council’s monitoring programmes, environmental research and investigations, education and advisory programmes. It is charged on a per hectare basis for marine farms. The majority of marine farms in the Auckland region are relatively small, in the order of 5 to 15 hectares, which attract a charge that is largely commensurate to the cost of the council performing the related functions.

67. The council has recently approved a number of large farms. Some of these are in the order of 130 to 460 hectares in size. The FPD charge based on a flat fee per hectare for these larger farms would no longer reflect the actual cost associated with the relevant programmes undertaken by the council. Officers recommend introducing lower FPD charges for larger marine farms to better reflect actual costs:

Table 2 Recommended changes to annual FPD charges for marine farms

	Annual FPD Charge per hectare (incl. GST)
Size of farm	2019/2020	2020/2021
0-10 hectares	$209.00	$209.00
Areas between 10-20 hectares	$209.00	$104.50
Areas greater than 20 hectares	$209.00	$52.25

68. These changes are in line with feedback received during this consultation from consent holders of the large marine farms.

69. Proposed changes to regulatory fees and deposits including marine farm fees are included in Attachment A.

Commercial event permit fee

70. 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 of $400 would reduce the ratepayer subsidy and is not considered unaffordable for high impact event organisers. Fees for community and other commercial events will either remain unchanged or be adjusted for cost inflation.

71. While major events cannot proceed at time of writing, they may be able to take place at COVID-19 Level 1. At this time the council may incur additional regulatory costs to ensure compliance with social distancing or other measures.

72. While the COVID -19 situation may reduce the additional revenue from the proposed change, the underlying principle of the proposal remains sound.

Botanic Gardens entry fee

73. The proposed fee is comparable with that of similar facilities in Auckland such as Auckland Art Gallery ($20), Auckland Museum ($25) and New Zealand Maritime Museum ($20). In the first year a “soft” introduction was proposed to keep administration costs to a minimum:

· 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.

74. Officers recommend that the proposed entry fee be reconsidered when our borders are reopened. As a result of COVID -19 it is unlikely that there will be many international visitors this year with the prospect of our border remaining closed for the foreseeable future (for example, until a vaccine is available, which has been suggested could be up to 18 months away). While there is discussion of an open border with Australia, visitors from across the Tasman are a small proportion of entrants to the gardens.

Local board feedback

75. Two local boards provided feedback on the proposed changes to regulatory fees and deposits and the proposed introduction of entry fee to Auckland Botanic Gardens for international visitors. Both supported the proposals. No local board feedback was received on the proposed change to the high impact commercial event permit fee.

Recommendation

76. Officers recommend the adoption of the changes to fees and charges as included in Attachment A. Officers also recommend the adoption of annual FPD charges for marine farms as set out in Table 2 above. Officers recommend that the proposed Botanic Gardens entry fee be reconsidered when our borders are reopened.

Other changes

Proposal

77. The council also consulted on the following proposals as part of the draft Annual Budget 2020/2021.

· introduction of a voluntary scheme where ratepayers in Clevedon who are able to connect to Watercare’s reticulated network can apply for financial assistance from the council and pay it back through a targeted rate over 15 years

· inclusion of a HomeFit assessment at the cost of $260 plus GST in the Retrofit-your-home targeted rate for all new applications of more than $2,000

· potential changes to Business Improvement Districts (BID) and related targeted rates

- establishment of Central Park Henderson and One Warkworth BIDs

- extension of the Glen Innes, Manukau Central and Manurewa BIDs

Feedback

78. Sixteen feedback points were received on these proposals.

· All seven feedback points that commented on the Clevedon voluntary scheme supported the proposal.

· Of the five feedback points that commented on the inclusion of HomeFit assessment cost in the Retrofit-your-home targeted rate, four supported the proposal and one did not.

· Four feedback points were received on the BID proposals with two supporting the establishment of the One Warkworth BID and one opposing the expansion of the Glen Innes BID.

Consideration

79. 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.

80. The HomeFit assessment will give homeowners a better understanding of how well their home meets ventilation, insulation, heating and energy efficiency standards, and therefore help them make the best decisions about upgrading their home. The cost of $260 plus GST is proposed for new applications of $2,000 or more only. This ensures that existing scheme holders and low value loans won’t be affected.

81. We currently have six financial assistance schemes to help ratepayers with the costs of installing home heating and insulation, connection to water/wastewater networks, replacement of failing on-site wastewater systems, or construction of a local road. Ratepayers who enter these schemes repay the financial assistance through a targeted rate over a number of years. Around 14,000 ratepayers are currently enrolled in these schemes.

82. Our previous consultation noted that some changes had been made to the Credit Contracts and Consumer Finance Act 2003 and that we were working through the implications of these for our various voluntary financial assistance schemes. We are now aware that we will be unable to make the changes to our systems and processes that we know are required in time to set rates for the 2020/2021 year. Without implementing these changes, we cannot recover interest on the financial support these schemes provide. This requires amendments to the Funding Impact Statement in relation to the rates set to recover the cost of these schemes. We will therefore include reference to these changes in the draft materials for the Emergency Budget consultation.

83. The Glen Innes BID Association has decided to withdraw the proposed expansion of the Glen Innes BID for 2020/2021. The ballot for Manurewa BID expansion was unsuccessful.

84. The ballots for the One Warkworth BID establishment and the Manukau Central BID expansion were successful.

85. The ballot for the establishment of Central Park Henderson BID was affected by the Covid-19 lockdown. The total number of votes returned (23.4%) fell just short of the minimum of 25% the BID policy^{^[1]} usually requires for a successful ballot. However, of the votes returned a clear majority of the votes were in support of the BID programme (of those returned, 64.42% voted Yes, 35.34% voted no).

86. The BID Policy generally requires a threshold of 25% of total voting forms to be returned. However, the policy anticipates that there may be occasions where exceptional or unexpected circumstances, such as an earthquake or a major extended business interruption, have impacted the voting and ballot process.

87. Council and the independent election services agent, who conducted the ballot, are satisfied that the COVID-19 virus is an exceptional or unexpected circumstance that has had an impact on the ballot. As the 25% threshold was very close to being met with a clear majority in favour, the council proposes to proceed with the BID programme but with a slightly lower targeted rate of $400,000 for the 2020/2021 year. The original targeted rate proposed was $500,000. This means, each BID rateable property, on average, will pay approximately $392 plus GST per year. Given that the requirements of the BID Policy regarding a successful ballot were not quite met, officers recommend including this matter in the further consultation on the Emergency Budget.

88. In response to COVID-19, the following BIDs, along with the proposed Central Park Henderson BID, have voted to decrease their grant budget for 2020/2021. The setting of the BID targeted rates for 2020/2021 will incorporate these changes.

BID	Decrease in budget
Ellerslie	6 per cent
Karangahape Road	5 per cent
Mangere Town Centre	5 per cent
Manukau Central	7 per cent
New Lynn	4 per cent
Newmarket	3 per cent
North Harbour	3 per cent
North West District	3 per cent
Parnell	8 per cent
Wiri	2 per cent

Local board feedback

89. Franklin Local Board supported the proposed introduction of the voluntary Clevedon water and wastewater connection scheme. One local board supported the proposed inclusion of HomeFit assessment cost in the Retro-fit Your Home targeted rate and two were opposed.

90. The proposed establishments of the One Warkworth BID and the Central Park Henderson BID, and the propose expansion to the Manukau Central BID were all supported by the relevant local boards.

Recommendation

91. Officers recommend that

· the voluntary financial assistance scheme be set up as consulted on assist properties in Clevedon with connection to reticulated water and wastewater systems, including a targeted rate scheme to be applied from 2021/2022.

· a HomeFit assessment at the cost of $260 plus GST be included in the Retrofit-your-home targeted rate for all new applications of more than $2,000

· the One Warkworth BIDs be established with a new targeted rate introduced as consulted on

· the Manukau Central BID be expanded as consulted on

· the establishment of the Central Park Henderson BID and the associated targeted rate be consulted on again as part of the Emergency Budget.

Tauākī whakaaweawe āhuarangi

Climate impact statement

92. 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.

93. 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.

94. 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.

95. 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 recommended 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

96. 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

· Legal and Risk.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe

Local impacts and local board views

97. Local boards views on the impacts of regional decisions on their local community are included in a separate report on this agenda.

Tauākī whakaaweawe Māori

Māori impact statement

98. The council does not hold information on the ethnicity of ratepayers, building and resource consent applicants 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

99. The financial implications of the recommended charges are noted in the relevant sections above.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

100. There are no risks associated with recommendations in this report.

Ngā koringa ā-muri

Next steps

101. Decisions made at this meeting will be incorporated into the Emergency Budget 2020/2021. On 30 July 2020, the Governing Body will be asked to adopt the Emergency Budget 2020/2021 and set rates for the 2020/2021 financial year. Changes to fees arising from decisions made in response to this report will be implemented from 1 July 2020.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇩	Changes to Fees and Deposits 2020/2021	75

Ngā kaihaina

Signatories

Authors

Melva Yee – Programme Manager and Data Analyst

Andrew Duncan - Manager Financial Policy

Eric Wen - Senior Advisor - Financial Policy

Authorisers

Ross Tucker - General Manager, Financial Strategy and Planning

Kevin Ramsay - Acting Group Chief Financial Officer

Phil Wilson - Governance Director

Emergency Committee

21 May 2020

Rates Postponement for properties affected by COVID-19

File No.: CP2020/05929

Te take mō te pūrongo

Purpose of the report

1. To recommend a COVID-19 rates postponement scheme to be adopted for consultation alongside the Emergency Budget 2020/2021.

Whakarāpopototanga matua

Executive summary

2. The economic fallout of COVID-19 is confronting many residents and businesses with both immediate cash challenges and medium to longer term uncertainty. The council is providing short term assistance using existing policies to allow ratepayers to defer the fourth quarter rates instalment until 31 August 2020.

3. Economic recovery is forecast to take two to three years and many ratepayers may still be in the early stages of adjusting their financial position as we enter the 2020/2021 rating year. The council is also facing a fall in revenue and must operate within its borrowing limits.

4. Officers recommend a targeted postponement scheme to support struggling ratepayers with their 2020/2021 rates. This balances support for ratepayers with the council’s need to maintain services and support economic recovery. Under the proposed scheme postponement will be available to all ratepayers (residential and business) financially stressed as a result of COVID-19 (excluding government entities, utilities and overseas based owners); specifically:

· residential and lifestyle ratepayers with a mortgage (property owners without a mortgage are very unlikely to be financially stressed)

· financially stressed business and farm ratepayers

5. To focus support on small and medium business all postponement will be capped at $20,000 (GST incl) per property. This will make full support available to 85 per cent of business properties. Larger businesses tend to be better capitalised and have greater access to finance. Properties with higher rates will be able to postpone the first $20,000 (GST incl) of rates. A cap reduces the council’s exposure to uptake of postponement in excess of forecasts. Postponement of rates over $20,000 could be assessed on a case by case basis against more stringent criteria but this could present administrative challenges and greater uptake risk.

6. Not for profit ratepayers will be eligible for postponement under either the residential or business criteria depending on the rating classification of the property they are applying for. Not for profit applications for residential property will not be required to have a mortgage.

7. The proposed scheme provides for applications to be made up until 31 December 2020 by which time we expect ratepayers to have a clearer view of their financial position. It will be available to properties owned prior to 26 March to ensure that the council is not taking on the risk of decisions made by ratepayers after the full impact of COVID-19 was becoming clear.

8. The proposed scheme is primarily targeted at postponement of rates for the 2020/2021 rating year but has provision for extension to subsequent years by committee resolution.

9. The scheme will provide for the council to set a postponement fee to cover the costs of interest and administration.

10. A draft scheme to be added to our Rates remission and postponement policy is set out in Attachment A: Draft COVID-19 Rates postponement scheme.

11. We forecast that up to 11,000 ratepayers will postpone up to $85 million of rates for the 2020/2021 year under this proposed scheme. The council can manage the reductions in cashflow arising from the forecast increase in ratepayers taking up the option to postpone their rates. The proposal is cost neutral as recipients will meet our interest and administration costs.

Ngā tūtohunga

Recommendation/s

That the Emergency Committee:

a) agree to consult alongside the Emergency Budget 2020/2021 on the addition to the Rates remission and postponement policy of a COVID-19 Rates postponement scheme in Attachment A to this report

b) note that the consultation materials for the COVID-19 Rates postponement scheme will be included in the Consultation Document and Supporting Information for the Emergency Budget 2020/2021

c) delegate to the chair of the Finance and Performance Committee and Group Chief Financial Officer to authorise any minor amendments and corrections to the proposed scheme and consultation materials.

Horopaki

Context

Economic impact

12. Many of our ratepayers are facing immediate financial stress and an uncertain future. Nationally around 1.6 million workers have received the wage subsidy through nearly 500,000 businesses. Across New Zealand 100,000 homeowners have reduced or deferred their mortgage payments. Economic forecasts include major falls in output, rising unemployment and a recovery that could take two to three years.

13. To assist with the short term impacts the council is allowing financially stressed ratepayers to defer their fourth quarter rates instalment, due on 28 May, to 31 August 2020. As of 13 May, $17 million of the fourth quarter instalment have been deferred for 4,139 residential and 1,449 business properties. This temporary respite will allow some ratepayers to reorganize their finances as restrictions on economic activity are lifted. As we move into the new rating year some of these ratepayers will remain short of cash having consumed capital reserves and savings. They will be facing a longer period with greatly reduced incomes and the prospect of unemployment or business failure.

14. Auckland Council will also be severely impacted. However, council has an important role to play continuing to provide essential services and supporting the government’s efforts to maintain stability and stimulate recovery. In order to fulfil that role with reduced income and constrained borrowing the council needs to ensure cashflow remains robust.

Cost of rates to property owners

15. Rates are a fixed cost for property owners. For those who have become unemployed, or are facing major falls in business or personal income, rates may present a demand on cash they cannot easily meet now or over the next few months. However, rates are a small proportion of business and household costs.

16. The Productivity Commission’s notes that residential rates are only 5 per cent of income for the lowest 20 per cent of household income earners. The average residential rates in Auckland are $2600 per year, $650 per quarter or around $50 per week. In comparison the average residential mortgage is around $387,000 which costs $525 per week over 20 years at current interest rates.

17. For businesses rates are also a small proportion of outgoings and much lower than rents. The return sought on commercial property is generally more than 5 per cent which is ten times business rates.

18. Any rates relief is also small relative to the support being offered by government through wage subsidies, tax deferrals and loan guarantees.

Current council support for ratepayers

19. The deferral of the fourth quarter instalment at no cost is available to all ratepayers who are financially stressed. Prior to COVID-19 only 490 ratepayers were on payment plans including 20 businesses.

20. In addition to the deferral the council:

· offers rates postponement to residential ratepayers who have owned their property for two years and have sufficient equity while they live at the property

· administers the government’s rates rebates scheme which provides rates relief of up to $640 for those on incomes below a specified level

· supports ratepayer’s applications for the government’s Accommodation Supplement. This is the primary assistance for accommodation costs and can include help with rates payments. People do not need to receive a main benefit to be eligible.

Tātaritanga me ngā tohutohu

Analysis and advice

21. Within the context set out above officers consider that a rates postponement scheme addressed to the challenges presented by COVID-19 should balance:

· targeting support to those ratepayers who are financially stressed

· aligning the length of postponement to predicted recovery timeframes

· maintaining the council’s cashflows

· providing security for future payment of postponed rates.

22. Officer’s propose that a COVID-19 Rates postponement scheme be added to the Rates remissions and postponement policy. The scheme will allow ratepayers to defer payment of their 2020/2021 rates for one year until 30 June 2021.

23. The support being proposed extends beyond the timeframe of Alert Levels 3 and 4. Many ratepayers will have consumed their capital reserves or savings while activity was restricted. We recognise that reorganizing their financial position may take longer than one year for some ratepayers. The council will be able to review the scheme over the coming year and extend the postponement scheme if it is considered that further assistance for some ratepayers is required.

24. Officers recommendations and alternative options for targeting financially stressed ratepayers along with the terms and conditions for postponement are discussed in the sections below.

25. The analysis of eligibility criteria groups ratepayers into two classifications, business and residential. The current differential groupings (residential, business and farm/lifestyle) are based on the council’s decisions on the distribution of the rates burden. Officers do not consider these classifications represent the basis on which financial stress from COVID-19 will manifest or can be managed. We have therefore split the farm/lifestyle differential group placing farms alongside businesses and lifestyle in the residential category.

Targeting the impacts of COVID-19

26. Applications for the proposed postponement will be open until 31 December 2020. While the economic impacts may extend well beyond this period unemployment is forecast to peak by the end of 2020. Officers therefore consider most ratepayers will have more clarity about their future financial position by this time.

27. Officers also recommend that postponement be limited to applications from ratepayers who owned their property, or entered into agreement to buy their property, before 26 March 2020. The purpose of this criteria is to limit council’s financial exposure to situations that are out of ratepayer’s control due to COVID-19.

28. Some ratepayers may have purchased or transferred properties after 26 March 2020 while being in a financially secure situation only to find their situation changes. While this change in circumstances may not be the ratepayer’s fault, they would have been aware of the economic uncertainty and associated risk. The council will consider applications from residential ratepayers in these circumstances on a case by case basis. Business ratepayers have a greater responsibility to undertake due diligence.

Targeting options: excluded properties

29. To balance provision of support to financially stressed ratepayers within the council’s financial constraints officers consider that the offer of postponement should not be available to:

· government entities

· utilities

· overseas owners of residential properties or businesses without a physical presence in New Zealand.

30. Officers have rejected the option of making this postponement open to all ratepayers. Limiting support to financially stressed ratepayers reduces the risk of excessive uptake. It also ensures other ratepayers aren’t bearing the cost of supporting those who don’t need assistance.

31. Officers consider that it isn’t necessary to provide assistance to government entities including the Ministries and Departments of the public service, State enterprises and Crown entities. Government entities can draw on the resources of the Crown to ensure they can meet their commitments. We also consider that utilities while facing reduced demand will continue to have strong cashflows.

32. The intention of the scheme is to support ratepayers who may be facing financial stress. Officers consider that it will not be practical to establish the financial position of overseas based ratepayers unless this can be verified by use of New Zealand government sources.

33. To qualify, owners of residential properties should be citizens or New Zealand residents living here. For business properties, the property owner must be the recipient of the wage subsidy which requires proof of New Zealand operation or where receiving other forms of government support the property owner will be required to provide similar evidence to the council.

Supporting residential and lifestyle

34. Officers recommend that all residential and lifestyle ratepayers financially stressed due to COVID-19 be eligible to apply for postponement of the first $20,000 (GST incl) of their 2020/2021 rates per property. Only 285 residential and lifestyle properties that aren’t businesses owning residential land pay more than $20,000 rates. These ratepayers aren’t operating in the sectors most effected by COVID-19 economic fall-out and will still be able to postpone the first $20,000 of their rates if they are in financial hardship.

35. Officers consider that residential and lifestyle rates postponement should be available to property owners with a mortgage. Residential ratepayers with a mortgage free property are unlikely to be under significant financial stress given that rates are a small proportion of household costs and may be able to access the rates rebate scheme. Residential ratepayers with mortgage-free properties who have owned their property for two years may, however, qualify for postponement under the existing residential postponement policy.

36. The postponement will be available to landlords who can display that they are under financial stress. While landlords may hold more wealth than owner occupiers, they too may face financial stress. Some landlords support mortgage payments through paid employment which may have been affected by COVID-19.

37. Officers will assess financial stress for residential and lifestyle ratepayers based on evidence provided by applicants which may include amongst other factors whether they have:

· suffered a 30 per cent drop in income

· become unemployed.

Supporting businesses and farms

38. Officers recommend that all business and farm ratepayers financially stressed due to COVID-19 be eligible to apply for postponement of the first $20,000 (GST incl) of their 2020/2021 rates per property.

39. The cap is proposed per property rather than per ratepayer because of the difficulty of establishing ownership by related parties. Around 5,900 business properties (15 per cent of the total) pay more than $20,000 (GST incl). For the most impacted sectors, 94 percent of accommodation properties will be under the cap along with 86 per cent of retail/restaurant properties. This may favour some large businesses who own multiple properties over those with one large value property. However, it isn’t administratively practical to determine ownership reliably for complex corporate structures so capping per ratepayer was rejected.

40. A cap of $20,000 (GST incl) will focus the support on small and medium businesses. Compared to smaller businesses, large businesses are more likely to have greater:

· asset bases

· diversity of income streams

· potential to cut costs

· access to finance and alternative funding e.g. share issues

· access to financial and legal advice.

41. This does not mean that all large businesses will be able to weather the effects of the current crisis without assistance. Larger businesses particularly in the hospitality, accommodation and travel industries will likely face severe disruption in the short to medium term, regardless of size.

42. To support these businesses the council could allow for postponement in the case of severe financial hardship. However, this option was rejected because of the cost to council of the higher potential value of postponement and the administrative challenges in determining severe financial hardship for large businesses. The owners of these properties would still be able to postpone the first $20,000 of their rates.

Financial stress test

43. Officers consider that all business and farm properties should be able to postpone their rates if they are financially stressed. Possible tests of financial stress include:

· have or are a recipient of the government’s wage subsidy

· deferral of tax payments

· receipt of a government guaranteed business loan

· reduction in income of 30 per cent year on year.

Commercial landlords

44. Many small and medium businesses are tenants and are required to pay the rates under their lease. However, the council’s relationship is with the landlord as ratepayer. The landlord is ultimately liable for payment of the rates. Commercial landlords in financial stress are eligible under the conditions for business properties above.

45. Officers considered either requiring commercial landlords in financial stress, and/or allowing those not in financial stress, to apply for postponement if they were passing the benefits on to their tenants. However, commercial landlords have a long-term interest in the viability of their tenants and therefore should take the first responsibility for managing the economic challenges.

Not for profits

46. Many not-for-profit community organisations may also be struggling as their donor pool is impacted by a contracting economy. Key fund-raising activity may also have been curtailed by the restrictions on activity during Alert Levels 3 and 4. Rates postponement should also be available to these groups given their important role in supporting communities and bringing people together.

47. Not for profit properties will be assessed under criteria above based on the rating classification for the property, or part of the property, for which the application is made. However, given that many not for profit community organisations do not have robust financial positions, applications for properties classified as residential will not need to have a mortgage to qualify.

Qualifying conditions

48. Allowing ratepayers to postpone their rates imposes costs on the council and presents risks to council, the ratepayer and other lenders.

Statutory land charge

49. The proposed scheme does not require a statutory land charge (SLC) to be placed on the title of a property postponing rates but reserves the right to do so. The council will record the outstanding rates under this scheme on any requested Land Information Memorandum (LIM). However, unlike placing a SLC on the title and because LIMs are not sought in every case, this does not guarantee that lenders and potential buyers will be aware of the outstanding rates. To increase the chances that lenders and buyers are aware of this element of our new postponement scheme we will communicate with all the relevant institutions (realtors, lawyers and lenders) and their professional bodies.

50. Our current remission policy requires a SLC to be placed on the title for a property on which rates have been postponed. Placing a SLC on the title does not materially improve the council’s security of payment in the majority of cases as rates are a charge on the land by statute. On the sale of the land rates would almost invariably be required to be fully cleared by the buyer from the proceeds of sale. However, a SLC prevents further registration against the title without the consent of the Council. This also ensures that other lenders whose debt is secured against the property and potential buyers are aware of the outstanding rates. This additional security may be useful in certain circumstances. The placement and removal of a SLC costs $165 plus staff time.

Postponement fee

51. Officers recommend that the proposed postponement scheme provide for the addition of a postponement fee to cover the council’s interest and administration costs. This will ensure that the costs of the support are borne by postponing ratepayers and only those who need the additional time to pay take up the offer.

52. The council will incur costs associated with additional borrowing to replace the delayed receipt of the cash from rates deferral. The interest cost would add around $50 to the postponed rates for the average residential ratepayer in the first year and an additional $100 if the ratepayer does not repay until 30 June 2022. If the council were to require a statutory land charge, as discussed above, for a one year postponement the postponement fee would be around $200 or 8 per cent of average residential rates. If the council were to meet these costs for residential ratepayers, the cost would be around $160,000 for every 1,000 postponing ratepayers.

Other terms and conditions

53. The other terms and conditions that can be used to address these issues are discussed in the table below.

Condition	Proposal	Comment
Level of postponement	· Full or partial at ratepayers’ discretion	· Provides time for all ratepayers to recover their financial position · Allows ratepayers discretion to set payment period to suit their circumstances · Allows ratepayers to spread repayment over a year
Repayment	· In full at end of postponement period or · Up to 30 June 2022
Early termination
· Early termination at ratepayer’s discretion · At sale	· Allows ratepayer to withdraw as their financial position changes or to effectively postponement for less than a year · Postponement not required if no longer owning
Equity requirement	· No minimum equity requirement	· Current policy requires ratepayer equity over 20 per cent (after postponed rates, mortgages and other encumbrances) · Current policy has no time limit so accumulated rates and compound interest may erode equity · Only a 3 per cent of mortgage holders are in negative equity or have less than 20 per cent equity · One years of postponed rates is very small proportion of property value

Forecast uptake

54. For the 2020/2021 year it has been assumed that up to $85 million of rates will be postponed under the proposed COVID-19 Rates postponement scheme.

55. This assumes that only the most impacted businesses, such as accommodation providers, will wish to continue to postpone their rates for the 2020/2021 year. Most businesses that deferred their rates for the fourth quarter will not seek to take up ongoing postponement and will seek to clear any outstanding balance during the next rating year. Some additional businesses may join the scheme, but most small and medium sized businesses will not want to take on additional debt in what will still be an uncertain trading environment. Overall, we forecast around 6,000 business ratepayers will apply for rates postponement of around $78 million.

56. Historically residential ratepayers haven’t been attracted to rates postponement and we don’t expect this to change. While many residential ratepayers have taken out mortgage holidays, we aren’t forecasting this to translate into equivalent rates postponements. Mortgage repayments are much higher than rates obligations and accordingly these mortgage holidays will address many ratepayers cash flow situations.

57. In addition, banks usually require mortgage holders to keep up with their rates payments. Over the next six months most financially stressed ratepayers will have determined whether they can meet their mortgage repayments and rates and have resolved their financial situation going forward. As a result, the council will continue to receive the rates for these properties. Overall, we forecast between 3,000 and 5,000 residential ratepayers will apply for rates postponement of between $8 million and $13 million.

National rates postponement scheme

58. Auckland Council along with other growth councils are promoting a national rates postponement scheme. A terms of reference for this work is presently being prepared for consideration by the Department of Internal Affairs. A national postponement scheme financed with third party capital would eliminate cashflow risk to the council from a higher than expected volume of uptake of the postponement scheme proposed in this report.

Tauākī whakaaweawe āhuarangi

Climate impact statement

59. 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

60. The annual budget is an Auckland Council Group document and includes financial information consolidated at a group level. Consultation items and updates to budgets to reflect decisions and new information may include items from across the group.

61. Forecast uptake of the proposed new postponement scheme were prepared in association with the Chief Economist.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe

Local impacts and local board views

62. Local board representatives have been involved in workshops with the Emergency Committee on issues relating to the Emergency Budget consultation 2020/2021. This includes discussion on the proposed new rates postponement scheme discussed in this report.

63. Following Emergency Budget 2020/2021 consultation in June, local boards will also have opportunity for input at workshops and decision making meetings in July before the Annual Budget 2020/2021 and the COVID-19 rates postponement scheme is adopted.

Tauākī whakaaweawe Māori

Māori impact statement

64. Māori have a lower than average home ownership rates so will benefit less from the proposed postponement scheme. Residential tenants needing support can access central government’s accommodation supplement scheme.

65. Remissions for Māori land currently offered by Auckland Council will not be affected by the proposed postponement scheme. Current support for Māori land includes remissions for:

· unused Māori land

· land used for community benefit

· Māori land rates that are in arrears

· marae and urupā

· land unable to developed to its full potential

· multiple units used as a single economic unit

· tenants of Maori housing developments that are unable to access the rates rebate scheme because they occupy the property under a license to occupy.

Ngā ritenga ā-pūtea

Financial implications

66. The financial implications of the proposed postponement scheme are discussed in the report. The council can manage the reductions in cashflow arising from the forecast increase in ratepayers taking up the option to postpone their rates.

67. Ratepayers postponing rates under the proposed scheme will meet the council’s additional borrowing costs and the cost of registering a statutory land charge. If the scheme is popular the council will incur some additional administration cost which can be managed within current resources.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

68. There are no risks associated with the recommendation in this report to consult on a draft postponement scheme.

69. There are two risks associated with the subsequent adoption of the scheme proposed in this report. The first is that the uptake of the scheme exceeds the forecasts above. This will be managed by the monitoring the uptake of the scheme. If the scheme looks likely to exceed our forecasts the council can make amendments to the scheme to ensure it remains affordable. Any amendments would require consultation.

70. There is also the risk that some ratepayers not requiring assistance may apply for postponement to take advantage of the councils relatively low interest rates. This will be managed by requiring applicants to declare that they are in financial difficulty and to provide evidence to support that claim. Council staff will review the evidence supplied by all applicants. In addition, we will undertake an in-depth audit of a sample of applicants.

Ngā koringa ā-muri

Next steps

71. Decisions on the consultation items will be made by the Emergency Committee and Governing Body on the 21 May 2020. Adoption of the Consultation Document and Supporting Information will be sought from the Emergency Committee and Governing Body at their 28 May 2020 meeting. All consultation material will then be finalised and made available online in time for the start of the consultation at 12 noon on 29 May 2020. Copies of the material will also be available at libraries, local board offices and service centres on request.

72. The key steps for finalising the Emergency Budget are:

Event	Date
Consultation Closes	19 June 2020
Finance and Performance Committee workshop: present feedback from consultation	8 July 2020
Finance and Performance Committee and Local Board workshop: present Local Board Views	14 July 2020
Finance and Performance Committee and Governing Body meetings: Annual Budget decision-making	16 July 2020
Governing Body adoption of Annual Budget	30 July 2020

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇩	Draft COVID-19 Rates postponement scheme	89

Ngā kaihaina

Signatories

Authors

Andrew Duncan - Manager Financial Policy

Aaron Matich - Principal Advisor – Financial Policy

Beth Sullivan - Principal Advisor Policy

Authorisers

Ross Tucker - General Manager, Financial Strategy and Planning

Kevin Ramsay - Acting Group Chief Financial Officer

Phil Wilson - Governance Director

Emergency Committee

21 May 2020

Annual Budget 2020/2021 Emergency Budget public consultation approach

File No.: CP2020/05993

Te take mō te pūrongo

Purpose of the report

1. To agree the proposed Emergency Budget 2020/2021 Communications and Engagement approach to support the public consultation process.

Whakarāpopototanga matua

Executive summary

The report would normally go before the Finance and Performance Committee, however, in light of COVID-19, it must now be considered by the Emergency Committee

2. As a part of the Annual Budget process, the council consults the public to get feedback on proposals which include significant or material differences from what is set out in the council’s 10-year budget. The council carried out consultation on its proposed Annual Budget 2020/21 in February/March 2020, the results of which were presented to the Finance and Performance Committee on 13 May 2020.

3. Due to the consequences of the COVID-19 pandemic the council is proposing to consult on further matters for the Emergency Budget 2020/2021.

4. A range of online, mail and phone options will be available across the region enabling Aucklanders to have their say on the engagement while maintaining and encouraging compliance with the COVID-19 regulations around social distancing. Targeted engagement will take place for the various groups specifically affected by specific proposals in addition to general engagement on other topics.

5. This engagement with Aucklanders will inform and lead to high quality decisions.

6. Once the Emergency Budget is adopted, the decisions made will be communicated widely to all submitters and stakeholder groups involved in the process.

Ngā tūtohunga

Recommendation/s

That the Emergency Committee:

a) agree to recommend to the Governing Body to endorse the recommended engagement approach for further consultation on the Annual Budget 2020/2021, noting:

i) public consultation will run from 29 May 2020 to 19 June 2020

ii) feedback can be provided through written, telephone and digital channels

iii) regional and local reports will be prepared to provide a summary of public feedback received across all channels

iv) a summary of the final decisions made will be prepared in July and widely communicated.

b) agree to recommend to the Governing Body to delegate to the following elected members and staff the power and responsibility to engage with the public via online webinar events as part of the consultation approach on proposals for the Annual Budget:

i) Councillors

ii) Local board chairs and local board members

iii) Tier two and tier three staff and any additional staff approved by the Group Chief Financial Officer

Horopaki

Context

Engagement at Auckland Council

7. The Council views engagement as a genuine dialogue with Auckland’s communities to help us make better decisions. High quality engagement with Aucklanders will allow us to make robust decisions that benefit communities and produce plans that are fit for purpose.

8. We are also statutorily required to engage with communities on decision making through the Local Government Act 2002 and other statutes. Our engagement practices must meet any applicable obligations, including the principles of consultation set out in section 82 of the Local Government Act 2002.

Significance and Engagement Policy

9. Auckland Council’s Significance and Engagement Policy was adopted on 1 December 2014 as required under the Local Government Act 2002. The policy specifies how and when communities can expect to be engaged with about decisions and enables council and our communities to understand the significance that council places on certain issues. The recommended approach is consistent with this policy.

Annual Budget

10. Once every three years, councils are required to adopt a long-term plan (referred to by council as the 10-year Budget), and in the intervening years an annual plan (referred to by council as the Annual Budget). In 2018 the Council adopted the 10-year Budget 2018-2028 and this year will adopt an Annual Budget called the Emergency Budget 2020/2021.

11. Attached to this report is a summary of the feedback received during the first round of consultation in February/March 2020. The scope of feedback includes written submissions, digital channels and feedback comments recorded at community events. The summary aims to capture key views and preferences rather than detail every point of feedback received.

~~12.~~ The council is now proposing to undertake further consultation. This is because of the changes caused by the economic and social impact of the COVID-19 pandemic. As set out in this report, this further consultation is scheduled for May/June 2020.

Best practice for engagement

13. Auckland Council follows the International Association of Public Participation (IAP2) approach, which is the most widely recognised international body for public participation.

14. The wording and format of the feedback questions to be contained in the consultation document have also been peer reviewed by experts at the University of Auckland to ensure technical alignment with best practice.

Tātaritanga me ngā tohutohu

Analysis and advice

15. The options for managing the second round of consultation on the proposed Annual Budget 2020/2021 are:

· Option 1 of using a digitally led engagement approach with the additional option of providing feedback via phone calls and the availability of hard copy feedback forms upon request at libraries, service centres and local board offices that are open at Level 2

· Option 2 which includes all of option one as well as a letter drop to all Auckland households to alert people to the consultation and how to give feedback

Option

Online webinars

Call centre option

Online engage-ment

Paper material posted on request

Texts or emails to those with mobile numbers

Addressed physical mail to ratepayers

Key considerations

Option 1

Recommended
Standard Engagement

· Reaching those with and without internet.

· Wide reach using several databases meaning ratepayers and non-ratepayers will be contacted directly

· Low cost

Option 2
Standard Engagement with mailed letter to those on ratepayer database

· Every resident will have clear information on the proposal

· Prohibitively expensive (approx. 300k additional to Option 1))

· Bauer Media /Our Auckland no longer an option

Have Your Say events

16. To enable social distancing, in person Have Your Say events will not be held across Auckland. In order to meet the requirement to provide people with a reasonable opportunity to become informed on the consultation topics, we are instead proposing to have online events where people can ask questions of and receive information from decision makers, SME’s and other council staff online.

17. These online events will be scheduled webinar style events which will accommodate up to 100 people maximum and allow elected members and subject matter experts to answer questions. We do not plan to receive feedback at these events but provide information to attendees and then direct them to give feedback online.

18. A regional stakeholder event for interest groups will be conducted through online streaming rather than in person, but the format would be the same as for previous years.

19. People who attend these online events will be asked to register for the event. At this stage they will be asked to provide contact details and demographic information. This will not be compulsory but should give an indication as to who has participated at these events.

Digital Activity

20. The consultation will be promoted via Council’s official digital channels:

· Auckland Council and the 21 local board Facebook pages.

· OurAuckland online (multiple articles each week over the course of the consultation period).

· Auckland Council Twitter.

· Auckland Council Instagram.

· A schedule of online advertising across external websites.

Communications: Media Channels

21. Promotion of the campaign will run across a range of non-digital channels, including print, and radio. The council magazine, OurAuckland, is not currently in production and is therefore unable to be used for this consultation.

· Press: advertising will run across the NZ Herald, Stuff’s 11 local community newspapers, and a number of complementary local community and ethnic newspapers.

· Radio: a schedule of activity across multiple stations.

· Posters: depending on availability and COVID-19 alert levels, posters will be used across council facilities and by community partner organisations.

· Targeted communications, where appropriate, will be sent to customers to highlight the opportunity to give feedback.

· Targeted placements within radio, print and digital will upweight reach against Maori, Pasifika, ethnic and youth audiences.

Engaging with diverse communities

22. Auckland is home to communities of many different cultures and backgrounds and Auckland Council is committed to supporting and including voices from diverse communities across Auckland.

23. Our community partners will deliver a range of online activities and digital forums to reach different demographic groups and communities while keeping within COVID-19 protocols.

Consultation documentation and translations

24. In order to support Aucklanders to be able to provide feedback, all information will be available online and in hard copy. Hard copies will be available upon request at those libraries, service centres and local board offices that are open at Level 2.

25. To enable a wide reach across Auckland’s diverse communities, a high-level summary and the feedback form will be translated into New Zealand Sign Language, Te Reo Māori, Samoan, Tongan, Korean and simplified Chinese.

26. All consultation material will also be available online at www.akhaveyoursay.nz which takes users through to the Have Your Say section of the Auckland Council website. People will be able to read through all the reference information before providing their feedback in an online form.

Independent quantitative survey

27. The option to run an independent quantitative survey alongside the consultation ~~are being~~ has been prepared and was presented to councillors 13 May 2020. There is a significant risk that the consultation process will only represent the views of a narrow cross-section of Aucklanders due to its scale. Given the significance of the decisions to be made, this survey ensures the views of Aucklanders is statistically representative of the Auckland population at regional and local board level. Survey sampling would use socio-demographic quotas and statistical weighting to ensure representativeness by variables such as age, gender and ethnicity. A stringent peer review process conducted by the University of Auckland to verify the reliability of the survey results is also included. Fieldwork dates for this survey would align with the consultation dates with a report due to councillors in early July. The investment required for this independent survey is less than 50% of the cost of the LTP survey conducted in 2018.

Engagement Channels to collect feedback

28. Feedback will be gathered in a number of ways:

· Written feedback received through feedback forms (online and hard copy) and emails

· Letters, etc. and proforma submissions

· Verbal feedback conducted via phone

· Social media comments which are in scope of the engagement, although people will be encouraged to go to the online form to make a formal submission.

Processing Feedback

29. All Annual Budget feedback will be analysed and collated into a report for decision makers to consider prior to making decisions on the final plan.

Tauākī whakaaweawe āhuarangi

Climate impact statement

30. With option 1, digital feedback channels will be used almost exclusively with paper copies available upon request from libraries, service centers and local board offices that are open at Level 2. No physical events will occur limiting impacts of travel. However, with option 2 there would be paper copies sent to houses in Auckland.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

31. Subject matter experts (SMEs) from across the council will work to analyse the feedback in order to produce a summary of feedback report for the Annual Budget for political consideration prior to final decisions being made.

Tauākī whakaaweawe Māori

Māori impact statement

32. Auckland Council has obligations under Te Tiriti o Waitangi and the Significance and Engagement Policy to take special consideration when engaging with Māori to enable Māori participation in council decision making to promote Māori well-being.

33. The engagement programme includes:

· Raising awareness of the opportunity to give feedback through the current Māori database

· Mana whenua meeting with the Governing Body and Independent Māori Statutory Board on 17^th June 2020: opportunity to discuss priorities and feedback on the Annual Budget 2020/2021.

· Targeted Māori community engagement through partners, covering our high population areas and regionwide, supporting feedback through online and hard copy submission forms.

· Live discussions and Q&A with elected members and SMEs through Radio Waatea, with a focus on high population areas in the West and South and including the opportunity for audience and online feedback direct to decision-makers.

· Māori-focused social media campaign.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe

Local impacts and local board views

34. The role of local boards in the public consultation process is an integral part of the engagement approach. If local board priorities are included in the consultation material, additional locally targeted engagement activities will be held to collect feedback on local issues.

Ngā ritenga ā-pūtea

Financial implications

35. The overall budget for consultation is $281,100 which is made up of $210,100 for engagement, research and consultation analysis and $71,000 for communications. The budget for the first consultation in February 2020 was $194,100. Due to the compressed timeframe and safety considerations during COVID-19 a different approach needs to be taken to ensure we engage with our communities, including additional research, which while relatively expensive will provide quantitative data for consideration.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

36. Risks and mitigations are discussed in the table.

Risk	Mitigation
Confusion about further consultation on new proposals for the annual budget and what council has done to the feedback provided previously	Clear and simple information explaining the reason for the further consultation and that previous feedback is still included in the decision
Limited chances to engage with those without or unable to use the internet	Options set up for people to give feedback over the phone and availability of hard copies on request
Public concern that the consultation is happening under restricted conditions as a chance to avoid thorough consultation	Communications explaining the need to consult at this time and the constraints due to COVID-19
Need for extra trained staff to receive feedback online and via phone	Use existing council staff to assist with phone calls, coding and analysis

Ngā koringa ā-muri

Next steps

37. Consultation will take place from 29 May 2020 to 19 June 2020.

38. Following consultation, all Annual Budget feedback will be analysed and collated into regional and local briefing reports to provide summaries of public feedback received across all channels. A summary of the final decisions made will be prepared and widely communicated with all submitters following adoption of the Annual Budget 2020/2021 in July 2020.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇩	Annual Budget 2020/2021 Feedback Summary Report	99

Ngā kaihaina

Signatories

Authors

Wendy Filip – Principal Citizen and Customer Engagement

Tim Aitken – Head of Planning and Channel, Communications

Authorisers

Kenneth Aiolupotea - Head of Citizen Insights & Engagement

Kevin Ramsay - Acting Group Chief Financial Officer

Phil Wilson - Governance Director

[1] In order for a BID proposal to proceed these ballots require a 25 per cent return rate and of those over 51 per cent must be in support of the proposal.

Mayor	Hon Phil Goff, CNZM, JP
Deputy Mayor	Deputy Mayor Cr Bill Cashmore
Councillors	Cr Josephine Bartley	Cr Tracy Mulholland
	Cr Dr Cathy Casey	Cr Daniel Newman, JP
	Cr Fa’anana Efeso Collins	Cr Greg Sayers
	Cr Pippa Coom	Cr Desley Simpson, JP
	Cr Linda Cooper, JP	Cr Sharon Stewart, QSM
	Cr Angela Dalton	IMSB Chair David Taipari
	Cr Chris Darby	Cr Wayne Walker
	Cr Alf Filipaina	Cr John Watson
	Cr Christine Fletcher, QSO	Cr Paul Young
	Cr Shane Henderson	IMSB Member TBC
	Cr Richard Hills

Author	Sarndra O'Toole - Kaiarataki Kapa Tohutohu Mana Whakahaere / Team Leader Governance Advisors
Authoriser	Phil Wilson - Governance Director