I hereby give notice that an ordinary meeting of the Governing Body will be held on:

 

Date:

Time:

Meeting Room:

Venue:

 

Thursday, 27 May 2021

10.00am

Reception Lounge
Auckland Town Hall
301-305 Queen Street
Auckland

 

Tira Kāwana / Governing Body

 

OPEN ADDENDUM AGENDA

 

 

 

 

MEMBERSHIP

 

Mayor

Hon Phil Goff, CNZM, JP

 

Deputy Mayor

Deputy Mayor Cr Bill Cashmore

 

Councillors

Cr Josephine Bartley

Cr Daniel Newman, JP

 

Cr Dr Cathy Casey

Cr Greg Sayers

 

Cr Fa’anana Efeso Collins

Cr Desley Simpson, JP

 

Cr Pippa Coom

Cr Sharon Stewart, QSM

 

Cr Linda Cooper, JP

Cr Wayne Walker

 

Cr Angela Dalton

Cr John Watson

 

Cr Chris Darby

Cr Paul Young

 

Cr Alf Filipaina

 

 

Cr Christine Fletcher, QSO

 

 

Cr Shane Henderson

 

 

Cr Richard Hills

 

 

Cr Tracy Mulholland

 

 

(Quorum 11 members)

 

 

 

Sarndra O'Toole

Kaiarataki Kapa Tohutohu Mana Whakahaere / Team Leader Governance Advisors

 

25 May 2021

 

Contact Telephone: (09) 890 8152

Email: sarndra.otoole@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz

 

 


Governing Body

27 May 2021

 

 

ITEM   TABLE OF CONTENTS                                                                                         PAGE

 

16        Regional Fuel Tax Variation Proposal                                                                         5

 


Governing Body

27 May 2021

 

 

Regional Fuel Tax Variation Proposal

File No.: CP2021/06348

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To present consultation feedback and outline the process for finalising a variation to the Regional Fuel Tax scheme. 

Whakarāpopototanga matua

Executive summary

2.       Following conclusion of public consultation, this report seeks an “in-principle” decision to adopt, for submission to relevant ministers, the attached funding allocation as the basis for a proposal to vary Auckland’s Regional Fuel Tax Scheme, and a delegation of responsibility to adopt the final version once the Regional Land Transport Plan (RLTP) has been adopted. 

3.       The final decision to adopt the proposal can only be made once the RLTP has been adopted (scheduled for 28 June 2021). In the meantime, however, staff need to reflect the provisional funding numbers in the council’s long-term plan, known as the Recovery Budget, 10-year Budget 2021-2031 (10-year Budget). That is why an “in-principle” decision is sought now: it will provide a mandate for staff to reflect this provisional funding allocation in the 10-year Budget over the coming month.

4.       The Regional Fuel Tax (RFT) for Auckland was established in 2018 and is a key funding source for investment in our transport network. The RFT scheme (“scheme”) is projected to generate $1.5 billion of revenue and enable over $4 billion of additional investment.

5.       Following material changes to aspects of the scheme, primarily the funding of some projects directly by central government, council consulted with Aucklanders on a variation to the scheme in line with statutory requirements.

6.       A draft proposal to vary the scheme was prepared and consultation took place alongside consultation on the draft RLTP from 29 March 2021 to 2 May 2021.

7.       The proposed changes are minor. There is no proposal to alter the level of the RFT, the period for which the scheme runs, or the area covered by the tax.

8.       The draft proposal retained the 14 projects identified in the original programme but updated the specific initiatives within these projects along with cost and timing projections. Certain projects with historic RFT funding allocations such as Penlink and Mill Road remain in the scheme but are not proposed to receive any further allocation of RFT funding due to the projects being funded by the crown.

9.       4,693 submissions were received on the draft proposal with 36 per cent in support. Key proposal-specific themes in the feedback included:

·        projects that should be funded

·        projects that should not be funded; and

·        general support and opposition of the proposal to vary.

10.     All local boards (excluding the exempt Aotea / Great Barrier) passed supporting resolutions for the draft proposal.

11.     Decisions around the overall investment programme for transport and the funding of this are made through the 10-year Budget and RLTP processes. The allocation of projects within the RLTP to the RFT programme is a key step to support implementation.

12.     The allocation of RFT funding to projects has not changed from the version published for consultation. If necessary, this will be further updated to reflect the final RLTP decisions in June 2021.

13.     The Regional Transport Committee has supported the draft variation proposal at its 25 February 2021 meeting and has workshopped the feedback and proposed process to finalise the variation at its 24 May 2021 workshop. No significant issues or concerns were raised and formal views from the committee will be provided in due course.

Ngā tūtohunga

Recommendation/s

That the Governing Body:

a)      note feedback from public consultation and local boards on the proposal to vary Auckland’s Regional Fuel Tax Scheme.

b)      adopt, in principle, the Funding Allocation Table in Attachment A as the basis for the proposal to vary Auckland’s Regional Fuel Tax Scheme (for submission to relevant ministers), subject to finalisation of the Regional Land Transport Plan.

c)      delegate to the Mayor, Deputy Mayor, and Planning Committee Chair decision-making responsibility for approval of:

i)        the final proposal to vary Auckland’s Regional Fuel Tax Scheme (for submission to relevant ministers); and

ii)       the accompanying report on consultation undertaken, as required under the Land Transport Management Act.

Horopaki

Context

Auckland’s RFT scheme

14.     Work on an aligned strategic approach to transport in Auckland (ATAP) began in 2016. This work made clear that the level of investment needed was not affordable with the existing funding mechanisms.

15.     Following legislative change and public consultation, a Regional Fuel Tax for Auckland began on 1 July 2018.

16.     Auckland’s RFT scheme collects 10 cents per litre (plus GST) and applies to sales of petrol and diesel by retailers within the boundaries of Auckland Council (excluding Aotea Great Barrier Island) from 1 July 2018 to 30 June 2028.

17.     Revenue from the scheme is projected to be $150 million per annum, with a total of $1.5 billion across the ten years to fund the following key objectives:

·    provide for and encourage a step-change in public transport and cycling mode-share in Auckland

·    continue to enable housing and employment growth 

·    improve access as a result of the provision of more congestion-free alternatives for travel and changes in land use enabled by rapid transit investment

·    improve safety outcomes with an expected significant reduction in deaths and serious injuries each year; and

·    reduce the transport system’s environmental impacts.

 

Progress of the scheme to 31 December 2020

18.     Since the RFT was introduced, $376 million of revenue have been received by Auckland Council. Auckland Transport has spent $346 million on designated projects, which was funded by $162 million of RFT, $135 million of Waka Kotahi NZ Transport Agency subsidies and $49 million of development contributions.

19.     The programme was always planned to ramp up over the ten years, reflecting the need to complete projects that were already on track in 2018, and to gear up to a much higher level of delivery. Unspent funds at any stage in the programme are held in reserve, with this reserve being ring-fenced to exclusively fund the future delivery of this programme. This reserve totalled $197 million as at 31 December 2020.

Subsequent government funding announcements

20.     Two key announcements by central government have reduced the requirement for RFT funding for some of the projects included in the scheme:

New Zealand Upgrade Programme (NZUP)

COVID-19 Shovel ready stimulus

· Announced on 29 January 2020, this programme included direct crown investment of $3.48 billion in transport infrastructure for Auckland.

· NZUP provided funding for two projects included in the RFT scheme, Penlink (allocated $411 million) and Mill Road (allocated $1.354 billion).

· Following this, the responsibility for the delivery of these two projects was transferred to Waka Kotahi NZ Transport Agency.

·  The Government announced on 1 April 2020 a programme to fund ‘shovel ready’ infrastructure projects as part of its stimulus package to support the economy in the face of the COVID-19 pandemic.

·  Council made successful applications to support projects, including the Downtown Ferry Terminal (part of the Downtown Ferry Redevelopment RFT project) and the Puhinui Bus/Rail Interchange project (which forms part of the Improving Airport Access RFT project).

21.     Staff considered that this, along with proposed changes to funding allocations through the current reviews of ATAP and the draft RLTP, constituted a change to a “material aspect” of the capital projects supported by the RFT as enacted in 2018, which meant that a formal variation proposal and consultation were required (as per the Land Transport Management Act).

Proposed variation to the scheme

22.     Staff prepared a draft proposal to vary the existing RFT scheme as required by the Land Transport Management Act 2003 (the LTMA) (section 65G(1)).

23.     No changes were proposed to the rate, period, or subjected areas of the RFT scheme.

24.     The draft proposal maintained the same 14 projects (with the special consideration of Penlink and Mill Road staying in the scheme without further allocation of RFT due to a change in delivery and funding management) with changes made to:

·        project descriptions, identified initiatives within projects, projected benefits and any changes of scope

·        the level of projected total expenditure and indicative RFT contribution to each project to reflect where new funding has become available or where project costings have been updated

·        project timings following decisions made through the draft RLTP development; and

·        the renaming of project Downtown Ferry Redevelopment to Ferry Network Improvements to reflect the incorporation of initiatives aimed to help decarbonise the public transport fleet through purchasing new electric ferries.

25.     The Regional Transport Committee met on 25 February 2021 in consideration of the scheme and supported the draft proposal.

26.     On 11 March 2021, the Planning Committee recommended to the Governing Body that it approve the draft proposal for consultation, which was approved by the Governing Body on the same day.

Tātaritanga me ngā tohutohu

Analysis and advice

Consultation

27.     Staff have concluded a joint consultation process with Auckland Transport on the draft proposal and RLTP respectively, through a combined feedback form and engagement process that ran from 29 March to 2 May 2021.

28.     Staff recommend that the consultation summary required under the LTMA to submit to the ministers be provided to the Mayor, Deputy Mayor, and Planning Committee chair to approve under delegated authority once finalised.

29.     The consultation process involved:

·        11 drop-in community events

·        website content

·        online webinars

·        presentations to all local boards

·        business reports to all local boards for formal feedback

·        public hearings at Auckland Transport on 28 and 30 April 2021

·        mana whenua hui.

RFT consultation feedback

30.     4,693 pieces of feedback were received through the consultation process on the draft proposal.

31.     There were 549 proforma submissions.

32.     36 per cent of submissions supported the draft proposal while 32 per cent did not support (29 per cent did not know and 3 per cent provided other feedback).

33.     Consultation materials made clear that the objective was to elicit feedback on the proposal to vary and not the general concept of a regional fuel tax.

34.     Consultation materials provided the option for project-specific comments identified in the proposal. 

35.     Staff consider that upon closer analysis of submissions, the overall percentages are an inaccurate gauge of support due to:

·        the perception of consultation being for a general RFT instead of the draft proposal to vary

·        the inability to indicate variances of agreeability for aspects of the proposal.

36.     Submission comments reflect more accurate and proposal-specific feedback.

37.     Key proposal-specific themes from feedback comments include:

·        projects that should be funded

·        projects that should not be funded; and

·        general support and opposition of the proposal to vary.

38.     Most submissions asking for project funding highlighted disincentivising personal use vehicles as part of, or alongside the proposal and that the proposal should focus more on projects that reduce emissions and pollution.

39.     Submissions asking for projects not to be funded highlight Penlink and Mill Road. Staff note that Penlink and Mill Road remain identified in the scheme due to historic RFT funding allocations but are not proposed to receive any further allocation of RFT funding due the projects being funded by the crown.

40.     General support of the proposal to vary the RFT was around road corridor improvement projects, especially those identified in submitters’ local board areas, as well as the delegated delivery and funding management of Penlink and Mill Road projects to Waka Kotahi NZ Transport Agency.

41.     Opposition of the proposal primarily related to the reduction of funding for active transport and to the road corridor improvement projects. Staff note that the reduction of funding for the active transport project does not detract from the significant amount of walking and cycling improvements to be delivered as part of other projects, such as improving airport access and bus priority improvements. The road corridor improvement project was met with some opposition as many interpreted the increase in funding to encourage private vehicles.

42.     No changes are recommended to the RFT variation proposal as a result of feedback. The proposed allocation of RFT to projects has not changed from what was consulted upon and is included in Attachment A.

43.     The feedback results and the proposed process to finalise the RFT variation proposal following final RLTP decisions was workshopped with the Regional Transport Committee on 24 May 2021. No significant issues or concerns were raised and formal views from the committee will be provided in due course.

44.     Subject to final RLTP decisions, it is proposed that the allocation in Attachment A form the basis for the final variation proposal to ministers.

Tauākī whakaaweawe āhuarangi

Climate impact statement

45.     Staff consider that the decisions sought in this report do not have a significant climate impact – those decisions being (a) an “in principle” adoption of funding allocation; and (b) related delegations for final adoption.  These decisions relate purely to funding allocations within the overall ATAP/RLTP indicative package.

46.     Any climate change considerations that do arise in relation to the projects to be funded by the RFT form part of the decision-making process on the RLTP and ATAP.  

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

47.     Council staff have worked closely with Auckland Transport staff in the development of the proposal.

48.     The Regional Transport Committee has supported the draft variation proposal at its 25 February 2021 meeting and has workshopped the feedback and proposed process to finalise the variation at its 24 May 2021 workshop.

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

Local impacts and local board views

49.     The alignment of the RFT and RLTP engagement process as outlined in point 27 has allowed for extensive local board consultation and feedback. The combination of in-person local board-specific cultural events and online webinars has encouraged feedback from all.

50.     Reports on the draft proposal were presented to all local boards. Board resolutions are included in Attachment B.

51.     All local boards (excluding the exempt Aotea / Great Barrier Island) support the proposal.

52.     Generally, projects that take place within local board areas for local community benefit were supported. Wider projects such as park and rides, road corridor improvements, and Mill Road received support due to planned improvements for local residents such as new facilities to road upgrades or walking and cycling extensions.

53.     Key projects supported include active transport and road safety.

54.     Certain material aspects of active transport were supported, such as the focus on reductions in congestion from increased walking and cycling through new items being added to the programme. While some local boards flagged the reduction in funding for the active transport project as an area of concern, the concern is mitigated by the significant amount of walking and cycling improvements to be delivered under the Connected Communities programme included in the bus priority improvements project. Walking and cycling improvements are also being delivered as part of other projects, such as the Mangere Cycleways scheme included in the improving airport access project.

55.     An overall concern for transport operations was highlighted including:

·        support for increasing local procurement by employing and training more Māori, Pasifika, and low-income earners

·        ensuring that staff procurement is conducted on the basis of Auckland Council’s Living Wage commitment; and

·        increasing subsidies on public transport to allow affordable and accessible fares for members of the community impacted by the increase in the petrol price.

56.     These recommendations were noted and relayed accordingly to Auckland Transport staff for future planning.

Tauākī whakaaweawe Māori

Māori impact statement

57.     The proposal to vary the RFT scheme constitutes a change in an allocation of funding within the overall ATAP indicative package. The impacts of the indicative package on Māori have been reported to the Planning Committee regarding the Auckland Transport Alignment Project 2021-2031. 

58.     The proposal has been presented at joint RLTP/RFT mana whenua hui on 25 March, 14 April, and 5 May 2021 yielding feedback most relevant to RLTP projects. Relevant RFT feedback was focused on the perceived inequity of the RFT cost, which is not proposed to change at this time.

59.     Staff note that a report was prepared by Sapere Research Group for the Independent Māori Statutory Board in July 2018, which overlapped with the establishment date of the 2018 Regional Fuel Tax scheme in Auckland. This report specifically identified local board areas that would likely experience above average inequitable impacts with their above average Māori representation, some of which are listed below:

·        Papakura

·        Manurewa

·        Franklin; and

·        Māngere-Ōtāhuhu.

Ngā ritenga ā-pūtea

Financial implications

60.     The RFT scheme is projected to deliver around $1.5 billion of revenue over the 2018-2028 period which constitutes a significant portion of the transport investment in Auckland.

61.     Without an RFT, council would need to either:

i)        utilise another of the currently available funding mechanisms (general rates or an Interim Transport Levy); or

ii)       fund transport at the level of renewals and committed projects only.

62.     The rating options would result in ratepayers facing significant increases (10-11 per cent) in addition to the existing general rates increase and paying according to their property value rather than based on their use of the transport system. To fund the transport budget at the level of renewals and committed projects only will have significant impacts on the growth and economy of Auckland.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

63.     The key risk is a potential misalignment of the RFT scheme from the ATAP programme and the RLTP. This variation proposal looks to mitigate this risk by updating the scheme and the RLTP in tandem.

Ngā koringa ā-muri

Next steps

64.     The Regional Transport Committee and Planning Committee will consider the updated draft RLTP and make recommendations to the Auckland Transport Board.

65.     The Auckland Transport Board is scheduled to adopt the final RLTP on 28 June 2021.

66.     Following final adoption of the RLTP, staff will:

i)    prepare a final variation proposal – updating the numbers in the version consulted on, and set out in Attachment A (Funding Allocation Table) – plus any further amendments required as a result of changes to the final RLTP;

ii)   prepare a final report on the undertaken public consultation as required under the Land Transport Management Act;

iii)   provide these two documents to the Mayor, Deputy Mayor, and Planning Committee Chair for them to approve (under delegated authority) for submission to the appropriate ministers; and

iv)  send these documents to the ministers for their consideration to decide whether to send it on to the Governor-General to give legal effect to the variation through an Order in Council (LTMA, sections 66J and 65K).

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Regional Fuel Tax Funding Allocation Table

13

b

Local Board Resolutions on the Regional Fuel Tax Variation Proposal

15

      

Ngā kaihaina

Signatories

Authors

Justine Yu - Senior Advisor - Financial Policy

Michael Burns - Manager Financial Strategy

Authorisers

Ross Tucker - General Manager, Financial Strategy and Planning

Peter Gudsell - Group Chief Financial Officer

Jim Stabback - Chief Executive

 


Governing Body

27 May 2021

 

 

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27 May 2021

 

 

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