2 Apologies
At the close of
the agenda no apologies had been received.
3 Declaration
of Interest
Members are reminded of the need to be
vigilant to stand aside from decision making when a conflict arises between
their role as a member and any private or other external interest they might
have.
The Auckland Council Code of Conduct for
Elected Members (the code) requires elected members to fully acquaint
themselves with, and strictly adhere to, the provisions of Auckland
Council’s Conflicts of Interest Policy. The policy covers two classes of
conflict of interest:
i)
a financial conflict of interest, which
is one where a decision or act of the local board could reasonably give rise to
an expectation of financial gain or loss to an elected member
ii)
a non-financial conflict interest, which
does not have a direct personal financial component. It may arise, for example,
from a personal relationship, or involvement with a non-profit organisation, or
from conduct that indicates prejudice or predetermination.
The Office of the Auditor General has
produced guidelines to help elected members understand the requirements of the
Local Authority (Member’s Interest) Act 1968. The guidelines discuss both
types of conflicts in more detail, and provide elected members with practical
examples and advice around when they may (or may not) have a conflict of
interest.
Copies of both the Auckland Council Code
of Conduct for Elected Members and the Office of the Auditor General guidelines
are available for inspection by members upon request.
Any questions
relating to the code or the guidelines may be directed to the Relationship Manager
in the first instance.
4 Leave
of Absence
At the close of
the agenda no requests for leave of absence had been received.
5 Acknowledgements
At the close of
the agenda no requests for acknowledgements had been received.
6 Petitions
At the close of
the agenda no requests to present petitions had been received.
7 Deputations
Standing
Order 7.7 provides for deputations. Those applying for deputations are required
to give seven working days notice of subject matter and applications are
approved by the Chairperson of the Upper Harbour Local Board. This means that
details relating to deputations can be included in the published agenda. Total
speaking time per deputation is ten minutes or as resolved by the meeting.
At the close of the agenda no
requests for deputations had been received.
8 Public
Forum
A period of
time (approximately 30 minutes) is set aside for members of the public to
address the meeting on matters within its delegated authority. A maximum of 3
minutes per item is allowed, following which there may be questions from members.
At the close of
the agenda no requests for public forum had been received.
9 Extraordinary
Business
Section 46A(7) of the
Local Government Official Information and Meetings Act 1987 (as amended)
states:
“An item that is
not on the agenda for a meeting may be dealt with at that meeting if-
(a) The
local authority by resolution so decides; and
(b)
The presiding member explains at the
meeting, at a time when it is open to the public,-
(i) The
reason why the item is not on the agenda; and
(ii) The
reason why the discussion of the item cannot be delayed until a subsequent
meeting.”
Section 46A(7A) of the
Local Government Official Information and Meetings Act 1987 (as amended)
states:
“Where an item is
not on the agenda for a meeting,-
(a)
That item may be discussed at that meeting
if-
(i)
That item is a minor matter relating
to the general business of the local authority; and
(ii)
the presiding member explains at the
beginning of the meeting, at a time when it is open to the public, that the
item will be discussed at the meeting; but
(b)
no resolution, decision or recommendation
may be made in respect of that item except to refer that item to a subsequent
meeting of the local authority for further discussion.”
|
Upper Harbour
Local Board
01 December
2020
|
|
Upper
Harbour Local Board Transport Targeted Rate
File No.: CP2020/17979
Te take mō te
pūrongo
Purpose of the report
1. To
provide advice on options for introducing additional public transport services
in the Paremoremo and Albany Heights areas and funding this from an Upper
Harbour Local Board Transport Targeted Rate.
Whakarāpopototanga matua
Executive summary
2. As
part of the Upper Harbour Local Board Plan 2020, feedback was sought on the
potential for targeted rates to fund additional public transport services in
non-serviced areas. Fifty-five per cent of respondents supported the local
board to undertake further investigation of options. Paremoremo and Albany
Heights are two areas within the local board area that are currently not
serviced by public transport.
3. The
following three options have been identified for providing public transport
services in these areas:
· Option
1: Peak only bus services in the Paremoremo area
· Option
2: Peak only bus services in the Paremoremo and Albany Heights areas
· Option
3: Peak only on-demand rideshare service for Paremoremo.
4. These
options provide a balance between service levels and the impact on ratepayers
in the service area. Service levels can be increased in the future if the
services are successful in attracting customers.
5. Options
1 and 2 require around $1 million of additional capital investment for four
pairs of bus stops. In rural areas, providing bus stops requires additional
infrastructure such as footpaths and culverts over drainage ditches. Option 3
provides a public transport service to a larger area than Option 1 as on-demand
services are not limited by proximity to bus stops and can be delivered to
serve any specified area.
6. Having
considered the matters set out in section 101(3) of the Local Government Act
2002, staff recommend that the new public transport services, and new bus
stops, should be funded by a mixture of fares and a targeted rate on ratepayers
in the service areas. Users of the new service and landowners in the service
area will be the primary beneficiaries of the new services.
7. Staff
recommend that a targeted rate for each Separately Used or Inhabited Part be
set on properties in the service area to fund the balance of the costs of
running the service. Fare revenue from these new services will not be material.
The table below sets out the level of the targeted rate required to fund the
new service along with the average impact of the targeted rate on residential,
business and farm/lifestyle properties in the service areas. This will be in
addition to the increase in general and other rates.
|
Option
|
Targeted rate required
(GST incl)
|
Average rates impact (% increase)
|
|
Residential
|
Business
|
Farm/lifestyle
|
|
Option 1:
Bus service in Paremoremo area only
|
$259
|
11.5%
|
2.5%
|
8.4%
|
|
Option 2:
Bus service in Paremoremo and Albany Heights areas
|
$133
|
5.0%
|
1.2%
|
4.2%
|
|
Option 3:
On-demand rideshare service for Paremoremo only
|
$137
|
5.8%
|
0.2%
|
4.5%
|
|
Ngā tūtohunga
Recommendation/s
That the Upper Harbour Local
Board:
a) agree
to either:
i) recommend
that the Governing Body consult on the introduction of an Upper Harbour Local
Board Transport Targeted Rate of $259 per Separately Used or Inhabited Part
on properties in the serviced area to fund a Paremoremo - Albany bus service
as part of the 10-year Budget 2021-31.
or
ii) recommend
that the Governing Body consult on the introduction of an Upper Harbour Local
Board Transport Targeted Rate of $133 per Separately Used or Inhabited Part
on properties in the serviced area to fund a Paremoremo - Albany Heights
– Albany bus service as part of the 10-year Budget 2021-31.
or
iii) recommend
that the Governing Body consult on the introduction of an Upper Harbour Local
Board Transport Targeted Rate of $137 per Separately Used or Inhabited Part
on properties in the serviced area to fund an on-demand rideshare service for
Paremoremo as part of the 10-year Budget 2021-31.
or
iv) continue
to investigate options for enhancing transport options for Paremoremo and
Albany Heights.
|
Horopaki
Context
Upper Harbour 2020 Local Board Plan
8. A
key objective of the Upper Harbour Local Board Plan 2020 is an affordable,
frequent and reliable public transport network that encourages higher use
uptake. Consultation on the 2020 Local Board Plan included asking residents and
communities if they supported investigating targeted rates to fund additional
public transport routes through areas that do not currently have public
transport options.
9. Fifty-five
per cent of respondents supported investigation of options to fund public
transport services from a targeted rate. Twenty-two per cent of respondents
were not in support.
10. Key themes in
support were:
· a
desire for improvements to the public transport network within the local board
area
· acknowledgment
of the reductions of carbon emissions if less people drove cars and more people
had access to public transport options
· a
number of specific requests for public transport services within individual
areas with a large number requesting a bus service from Paremoremo in
particular.
11. Key themes opposed
were:
· submitters
felt that public transport services should be provided by Auckland Transport
and should be a user pays service, not an additional cost to ratepayers
· concerns
regarding the additional cost to ratepayers
· non-public
transport users that would not benefit from the service did not support the
proposal.
12. The local
board requested staff report back on options for a targeted rate to fund
additional public transport routes. Paremoremo and Albany Heights are areas
that meet the key criteria where no public transport services are currently
provided.
Statutory decision-making criteria
13. The council
is required to consider and consult on any changes to funding for services that
involve targeted rates. The sources of funding for the proposed transport
improvements in the Upper Harbour Local Board area must be considered against
the statutory criteria in section 101(3) of the Local Government Act 2002. The
key elements of this assessment are set out in the analysis below. A full analysis
against the statutory criteria is set out in Attachment A: Assessment against
statutory criteria.
14. The
introduction of a targeted rate to fund additional public transport services in
the Upper Harbour Local Board area from 2021/2022 requires consultation as part
of the 10-year Budget 2021-31. Decisions are required at this meeting to meet
the timeframes for including the proposal in the 10-year Budget 2021-31. The
next opportunity after this will be the Annual Budget 2022/2023.
Tātaritanga me ngā
tohutohu
Analysis and advice
Passenger transport options and costs
15. Options for
public transport services in the Paremoremo and Albany Heights areas are set
out in the table below:
|
Option
|
Service
|
Annual OPEX[1]
|
10-year CAPEX
|
|
Option 1: Peak
only bus services in the Paremoremo area
|
3 round trips am
4 round trips pm
weekdays only
|
$160,000
|
$1m
|
|
Option 2: Peak
only bus services in the Paremoremo and Albany Heights areas
|
3 round trips am
4 round trips pm
weekdays only
|
$240,000
|
$1m
|
|
Option 3: Peak
only on-demand rideshare service for Paremoremo
|
6am to 9am
4pm to 7pm
weekdays only
|
$160,000[2]
|
$0
|
16. The
proposed options have been identified for consideration by the local board as
they provide a balance between service levels and the impact on ratepayers in
the service area. Service levels can be increased in the future should there be
sufficient demand to extend the offering.
17. Options
1 and 2 will be provided using small buses and require additional capital
investment for bus stops. Option 2 is more expensive as it requires an
additional bus to maintain service levels. Better outcomes may be achieved
under Option 2 by running separate services to each area. The larger service
area under Option 2 spreads the cost of the service over more ratepayers.
Option 3 does not require any additional capital investment. However, the
service will be provided by a single van which may at times result in long wait
times for users.
18. Fare levels
for the public transport network are set on a regional basis and at a level to
optimise public transport outcomes while maximising revenue. If fares are set
too high, then this may discourage the use of public transport services. The
services are not expected to attract significant patronage and revenue from
fares is not expected to be material. Targeted rates revenue is therefore
expected to be required to make up most of the cost of running the service.
Benefits of service options
19. The public
transport services have been designed to provide services to Paremoremo and
Albany Heights areas only. These services will provide feeder services to the
wider public transport network. Benefits to the wider Auckland area are
expected to be very low or non-existent.
20. Users of the
services will directly benefit from using these services. Users will partially
fund the service through fares.
21. Landowners
will be the other primary beneficiaries through the availability of the
service. The service will provide alternative transport options to Albany and
from there, to the rest of the city via the wider public transport network.
They will also benefit from a marginal localised decongestion effect, although
this benefit is unlikely to be noticeable.
22. The benefits
from bus services to landowners is generally limited by proximity to bus stops.
On-demand services are provided by smaller vehicles that pick up and drop off passengers
in very close proximity to their destination. The service area for on-demand
services can be set to cover any service area. For Option 3, the service area
has been initially set to encompass the larger Paremoremo area. Service areas
for Options 1 and 2 (set out in Attachment B: Bus service area map - Paremoremo
and Attachment C: Bus service area map - Albany Heights) cover a smaller
geographic area than on-demand service (set out in Attachment D: On-demand
service area map - Paremoremo).
Paremoremo and Albany Heights ratepayers
23. A high-level
analysis of the ratepayers in the Paremoremo and Albany Heights under each of
the service areas are set out in the following tables.
Option 1: Paremoremo bus service area
|
|
|
Residential
|
Business
|
Farm/lifestyle
|
|
Properties
|
Total
|
646
|
104
|
184
|
|
Proportion
|
69%
|
11%
|
20%
|
|
Separately
used or inhabited parts (SUIPs)
|
Total
|
785
|
198
|
229
|
|
Proportion
|
65%
|
16%
|
19%
|
|
Capital value
|
Total
|
$660.8m
|
$366.3m
|
$343.7m
|
|
Proportion
|
48%
|
27%
|
25%
|
24. Land
in the Paremoremo bus service area is a mixture of residential, business and
farm/lifestyle properties. On average, there are more businesses per property
than dwellings which shows that parts of the service have significant business
development. Very few of the farm/lifestyle properties have two or more
dwellings. A targeted rate set on a per Separately Used or Inhabited Part
(SUIP) basis would result in 65 per cent of the revenue coming from residential
land, 16 per cent from business land and 19 per cent from farm/lifestyle land.
Option 2: Paremoremo and
Albany Heights bus service area
|
|
|
Residential
|
Business
|
Farm/lifestyle
|
|
Properties
|
Total
|
2,157
|
139
|
217
|
|
Proportion
|
86%
|
6%
|
9%
|
|
Separately
used or inhabited parts (SUIPs)
|
Total
|
2,532
|
245
|
270
|
|
Proportion
|
83%
|
8%
|
9%
|
|
Capital value
|
Total
|
$2,592m
|
$500m
|
$418m
|
|
Proportion
|
74%
|
14%
|
12%
|
25. Land
in the Paremoremo and Albany Heights bus service area is dominated by
residential properties with a relatively smaller proportion of properties used
for business or farm/lifestyle purposes. A targeted rate set on a per SUIP
basis would result in 83 per cent of the rates revenue requirement coming from
residential land, with 8 per cent from business and 9 per cent from
farm/lifestyle land.
Option 3: Paremoremo
on-demand rideshare service area
|
|
|
Residential
|
Business
|
Farm/lifestyle
|
|
Properties
|
Total
|
746
|
17
|
354
|
|
Proportion
|
67%
|
2%
|
32%
|
|
Separately
used or inhabited parts (SUIPs)
|
Total
|
901
|
17
|
429
|
|
Proportion
|
67%
|
1%
|
32%
|
|
Capital value
|
Total
|
$812.4m
|
$251.8m
|
$627.1m
|
|
Proportion
|
48%
|
15%
|
37%
|
26. Land
in the Paremoremo on-demand rideshare service area is a mixture of residential
and farm/lifestyle properties. There are very few business properties. This
shows that the service area is more oriented to the rural areas of Paremoremo
than the bus service and away from the business area. A targeted rate set on a
per SUIP basis would result in 67 per cent of the rates revenue requirement
coming from residential land, 32 per cent from farm/lifestyle land, and only
around 1 per cent from business land.
Rates funding options
27. Staff
recommend that the targeted rate be set as a fixed rate per SUIP. The proposed
enhanced public transport services will uniformly benefit landowners in the
service area by providing improved personal transport choices and outcomes
(public transport services and bus stops). Properties located closer to the bus
stops will have slightly greater accessibility; however, the difference is not
materially higher.
28. Given the
nature of the benefits:
· business
owners and farms will benefit at a similar level to residential properties
rather than in proportion to their scale of activity or capital value
· residential
properties of differing capital value will benefit similarly.
29. As the direct
transport benefit to all properties is relatively similar, staff recommend that
a rate set as a fixed charge per SUIP of a rating unit is the most appropriate
basis of distribution of benefits.
30. As there is a
strong relationship between capital value and income, a rate applied on capital
value would place more charge on those potentially better able to afford it. A
rate applied on capital value would also increase the share paid by business
and farm/lifestyle properties as they tend to have higher property values.
Business and farm properties can claim back GST and expense rates for tax
purposes.
Rates impact
31. The table
below sets out the level of the targeted rate required to fund the new service
along with the average impact of the targeted rate on residential, business and
farm/lifestyle properties in the service areas for each option. This will be in
addition to the increase in general and other rates.
|
Option
|
Targeted rate required
(GST incl)
|
Average rates impact (% increase)
|
|
Residential
|
Business
|
Farm/lifestyle
|
|
Option 1:
Bus service in Paremoremo area only
|
$259
|
11.5%
|
2.5%
|
8.4%
|
|
Option 2:
Bus service in Paremoremo and Albany Heights areas
|
$133
|
5.0%
|
1.2%
|
4.2%
|
|
Option 3:
On-demand rideshare service for Paremoremo only
|
$137
|
5.8%
|
0.2%
|
4.5%
|
32. Ratepayers
with affordability issues can access the council’s rates postponement
scheme or apply for the rates rebate which the council administers on behalf of
the Department of Internal Affairs. Business properties and farm/lifestyle
properties can expense rates and claim back GST which means the net cost to
them will be lower.
Capital investment required
33. Options 1 and
2 require around $1 million of additional capital investment in bus stops. In
urban areas, providing bus stops is relatively inexpensive due to the existence
of other infrastructure such as stormwater network and footpaths. In rural
areas, providing bus stops is significantly more expensive as additional
infrastructure is required such as a footpath, culverts over drainage ditches,
etc. The additional capital investment is for four new pairs of bus stops in
rural areas. If the costs of the capital expenditure end up being lower, then
this will be passed on to ratepayers through a reduction in their annual
targeted rate.
34. Capital
investments are funded from borrowing. The capital costs of bus stops have been
included in the rates revenue requirement calculations. The capital costs
include the repayment of initial capital investment over 10 years as well as
the interest that the council will incur until the borrowings are repaid.
35. Capital
investments also incur ongoing consequential operational costs such as
maintenance and depreciation. Auckland Transport will be funding the ongoing
consequential operating costs out of their existing budgets. These will not be
recovered from the targeted rate.
36. The local
board may wish to consider whether to use the Local Board Transport Capital
Fund for some or all of the capital investment. The budget for the Local Board
Transport Capital Fund was reduced in the Emergency Budget 2020/2021. If the
budget is reinstated as part of the 10-year Budget 2021-31, then this will be
an option that the local board may consider using. This would reduce the impact
on ratepayers in the Paremoremo and Albany Heights areas to around:
· $152
per SUIP (GST incl) under Option 1, a reduction of $107
· $91
per SUIP (GST incl) under Option 2, a reduction of $42.
NZTA funding
37. The proposed
options for public transport services in Paremoremo and Albany Heights are
unlikely to qualify for a New Zealand Transport Agency (NZTA) subsidy given
their priority in the Regional Land Transport Plan (RLTP). A comprehensive
business case is required to support applications for NZTA funding. Fifty-one
per cent of a qualifying project may be funded by NZTA. If an NZTA subsidy
becomes available, the local board can decide whether to fund additional
services in the area or reduce the rates for affected ratepayers.
Future funding of the services
38. Public
transport services in the Paremoremo and Albany Heights areas are not a
priority for funding in the RLTP. The forecast level of patronage does not meet
the threshold for funding public transport in Auckland from general rates.
Should the level of patronage meet a sufficient level, then Auckland Transport
will reconsider funding these services. If this occurs, then the full costs
will be met by Auckland Transport and the targeted rate will cease.
Tauākī whakaaweawe
āhuarangi
Climate impact statement
39. Additional
public transport services in the Paremoremo and Albany Heights will provide an
increase in sustainable transport options for residents in the service area.
These new services will not have a material impact on emissions.
Ngā whakaaweawe me
ngā tirohanga a te rōpū Kaunihera
Council group impacts and views
40. This report
has been prepared and agreed on by Auckland Transport. The report has also been
reviewed by Legal Services.
Ngā whakaaweawe
ā-rohe me ngā tirohanga a te poari ā-rohe
Local impacts and local board views
41. The Governing
Body has decision-making authority for setting rates. The Upper Harbour Local
Board will provide its recommendation to the Governing Body if they wish to
proceed. The public transport options and potential targeted rate
discussed in this report do not impact on any other local board.
Tauākī whakaaweawe
Māori
Māori impact statement
42. The council
does not hold information on the ethnicity of ratepayers so is not able to
identify the exact impact of policy changes on Māori. The impact of the
policy options on Māori will be similar to that on other residents in the
proposed service areas in the Upper Harbour Local Board.
43. Consultation
on the 10-year Budget 2021-31 includes formal engagement with the 19 iwi
authorities recognised by council (including the regional forum), and two of
the largest mataawaka authorities that council has a formal relationship with.
Other Māori hapori groups and individuals will be included in the public
consultation.
Ngā ritenga
ā-pūtea
Financial implications
44. The capital expenditure
proposed as part of Options 1 and 2 require additional borrowing of around $1
million. As the council is operating at close to its borrowing limits, the
Governing Body’s approval is required.
45. To mitigate
the impact on council’s borrowing constraints, the targeted rate proposal
recovers the costs of the capital investment over 10 years. This is a shorter
timeframe than the useful life of the assets. If the capital costs were spread
over 20 years, then the targeted rate would reduce to $211 under Option 1 and
$114 under Option 2. Under this scenario, the targeted rate would need to run
for the full 20 years to recover the cost of capital investment even if the
service was cancelled.
Ngā raru tūpono me
ngā whakamaurutanga
Risks and mitigations
46. There is a
risk that the capital and operational costs for the public transport services
for Paremoremo and Albany Heights may be more than the estimates provided in
this report. This will be managed by Auckland Transport providing updated
advice to the local board before commitments are entered into.
Ngā koringa ā-muri
Next steps
47. If the Upper
Harbour Local Board wishes to procced with one of the options identified, then
the next steps are set out in the table below:
|
Date
|
Step
|
|
December
2020
|
Governing Body
will consider whether to include the proposed option in the consultation
material for the 10-year Budget 2021-31
|
|
February/March
2021
|
Consultation on
the 10-year Budget 2021-31
|
|
April/May
2021
|
Local board
considers feedback from consultation and makes a recommendation to the
Governing Body on the proposal
|
|
May 2021
|
Governing Body
considers the local board recommendation for inclusion in the 10-year Budget
2021-31
|
|
June 2021
|
Governing Body
adopts 10-year Budget 2021-31 and sets rates for 2021/2022
|
|
August 2021
|
Rates invoices
issued, including the new targeted rate (if agreed)
|
Ngā tāpirihanga
Attachments
|
No.
|
Title
|
Page
|
|
a⇩
|
Assessment against statutory criteria
|
17
|
|
b⇩
|
Bus service area map - Paremoremo
|
21
|
|
c⇩
|
Bus service area map - Albany Heights
|
23
|
|
d⇩
|
On-demand service area map - Paremoremo
|
25
|
Ngā kaihaina
Signatories
|
Authors
|
Aaron Matich - Principal Advisor – Financial
Policy
Eric Wen - Senior Advisor - Financial Policy
Andrew Duncan - Manager Financial Policy
|
|
Authorisers
|
Ross Tucker - General Manager, Financial Strategy and
Planning
Kevin Ramsay - Acting Group Chief Financial Officer
Lesley Jenkins - Local Area Manager
|
