Agenda of Extraordinary Meeting of the Governing Body

Governing Body

29 June 2023

Adoption of the Annual Budget 2023/2024

File No.: CP2023/08039

Te take mō te pūrongo

Purpose of the report

1. To formally adopt Auckland Council’s Annual Budget 2023/2024, including 21 local board agreements.

Whakarāpopototanga matua

Executive summary

2. Auckland Council consulted on its Annual Budget 2023/2024 from 28 February 2023 to 28 March 2023. Consultation feedback was then presented to the Governing Body on 26 April 2023.

3. On 8 and 9 June 2023 after considering feedback received and other relevant information, the Governing Body agreed the key decisions needed to finalise the Annual Budget 2023/2024. (Resolution number GB/2023/100)

4. The annual budget document has been prepared reflecting those decisions and includes:

• prospective financial statements and other financial information

• a funding impact statement and rating policy, reflecting decisions made on 9 June 2023

• the Summary of the Tūpuna Maunga Authority Operational Plan 2022/2023 agreed on 8 June 2023

• local board agreements and other local content adopted by the 21 local boards.

5. The Local Government Act 2002 requires the council to adopt the annual budget before setting rates for the 2023/2024 year. The setting of rates is the subject of another report on this agenda. Following adoption, staff will finalise documentation for publication and distribution.

6. Given that the annual budget documents recommended for adoption today reflect the decisions made by the Governing Body on 8 and 9 June 2023, only limited minor changes can be made at this stage of the process.

Ngā tūtohunga

Recommendation/s

That the Governing Body:

a) whai / adopt the Auckland Council Annual Budget 2023/2024, as the council’s annual plan for 2023/2024, including 21 local board agreements

b) tautapa / delegate authority and responsibility for jointly agreeing any required editorial changes to the Auckland Council Annual Budget 2023/2024 document to the Mayor and the Group Chief Financial Officer.

Horopaki

Context

Background

7. All councils are required by legislation to adopt an annual plan (referred to by Auckland Council as the annual budget) every year, except once every three years when the long-term plan acts as the annual plan. This plan sets out intended service levels and agreed budgets and provides the basis on which the council’s rates are set.

8. For each financial year, the council must have a local board agreement (as agreed between the Governing Body and the respective local board) for each of the 21 local board areas. These local board agreements set out priorities and intended levels of service for local activities, and the capital and operating expenditure budgets required to fund these activities. The local board agreements for the 2023/2024 financial year have been developed as part of the annual plan process and have been adopted by the local boards.

9. For each financial year, the Tūpuna Maunga Authority and the council must agree an annual operational plan to provide a framework in which the council will carry out its functions for the routine management of the maunga and administered lands. The Tūpuna Maunga Authority Operational Plan must be prepared and adopted concurrently with the council’s annual plan and be included in summary form. On 8 June 2023, the Governing Body approved the Tūpuna Maunga Authority Operational Plan 2023/2024 and the Summary of the Tūpuna Maunga Authority Operational Plan 2023/2024 for inclusion in the Annual Budget 2023/2024.

Consultation process

10. On 15 December 2022, the Governing Body agreed the proposals to be consulted on for the Annual Budget 2023/2024.

11. Between December 2022 and February 2023, the Annual Budget 2023/2024 Consultation Document and Supporting Information were prepared.

12. On 15 February 2023, the Emergency Committee adopted the Consultation Document and Supporting Information and agreed the approach to consultation.

13. Public consultation on the council’s proposed Annual Budget 2023/2024 was open between 28 February and 28 March 2023. Due to the council’s proposals for the Annual Budget 2023/2024 including a proposed amendment to the 10-year Budget 2021-2031, the council used the special consultative procedure for its consultation on the Annual Budget 2023/2024.

14. The following approach was used to ensure decision-makers were well informed about feedback received:

· subject matter experts (SMEs) reviewed the feedback received relevant to their areas of expertise and summarised the issues raised.

· reports were prepared which summarised the feedback and were discussed at a Governing Body workshop on 26 April 2023. Analysis of the implications of the feedback received in relation to specific proposals was included in decision-making reports considered by the Governing Body on 8 and 9 June 2023.

· Consultation feedback for each local board area was considered by each local board in May 2023.

15. In addition to the feedback summary reports, all feedback received was made available to elected members. In May 2023, the feedback summary reports, along with all submissions, were made available to the public via the Auckland Council website.

Amendment to the 10-year Budget 2021-2031 and risk management oversight

16. The Audit and Risk Committee plays a key role in advising the Governing Body on key matters of governance, risk management and internal control, including legislative compliance. Among other things, the committee is also responsible for oversight of the preparation of the 10-year budget (including amendments), annual report, and key risks relating to the annual budget.

17. On 2 June, the Audit and Risk Committee considered a report on the final status update on key controls employed and management of significant risks related to the development of the proposed amendment to our 10-year Budget 2021-2031. The Audit and Risk Committee passed resolutions to provide advice to the Governing Body to support decision-making at the Governing Body meeting on 8 and 9 June 2023.

18. The Governing Body’s decision to adopt an amendment to the 10-year Budget 2021-2031 is reflected in the final document for the Annual Budget 2023/2024.

Final decision making

19. On 8 and 9 June 2023, the Governing Body also agreed the final decisions required to finalise the Annual Budget 2023/2024. These included decisions required to finalise local board agreements.

20. Following these decisions, agreements were prepared for each local board that reflected:

· the impact of the decisions made by the Governing Body on 8 and 9 June 2023

· allocation of locally driven initiative (discretionary) budgets

· the allocation of central costs (including depreciation, interest, corporate overheads and staff costs)

· minor administrative adjustments, if any.

21. The local boards have adopted their Local Board Agreements 2023/2024 and other local content. This is included in Volume 2 of the annual budget which will be distributed to Governing Body members ahead of today’s meeting.

22. Other decisions made on 8 and 9 June 2023 by the Governing Body have been incorporated into the Annual Budget 2023/2024 materials recommended for adoption today.

23. On 20 June 2023, a draft of the budget document was provided to Governing Body members and a follow up drop-in session was held to provide members with the opportunity to provide feedback. The opportunity to provide feedback in writing was also provided to members.

Tātaritanga me ngā tohutohu

Analysis and advice

24. Following the decisions on 8 and 9 June 2023, two volumes have been prepared that make up the final documents for the Annual Budget 2023/2024.

25. The contents of these two volumes are:

· Volume 1 – provides an overview of the key highlights and priorities for 2023/2024. It includes the prospective financial statements and funding impact statement, other key financial information, and the summary of the Tūpuna Maunga Authority Operational Plan 2023/2024. Volume 1 will be provided to members separately ahead of the meeting.

· Volume 2 – contains the local board agreements for 2023/2024 (which outline local activity initiatives and budgets for each of the 21 local boards) and Allocation of Decision-Making responsibilities of Auckland Council's Governing Body and Local Boards. Volume 2 will be provided to members separately ahead of the meeting.

26. When preparing, consulting on, and making decisions on the annual budget, the council has followed a thorough process, including consulting using the special consultative procedure, and considering:

· the significance and materiality of council’s proposals

· the extent of the council’s resources

· decision-making obligations in Part 6 of the Local Government Act 2002

· content requirements for an annual budget

· prudent financial management requirements.

27. At the time of writing this report, council’s internal legal team is in the process of reviewing the final annual budget documents for legislative compliance. That review will be completed ahead of the meeting and an update will be given at the meeting to confirm that the budget documents presented for adoption comply with the requirements for an annual plan in the Local Government Act 2002, the Local Government (Auckland Council) Act 2009, and other related legislation.

28. Given the annual budget documents recommended for adoption today reflect the decisions made on 8 and 9 June 2023 and will have been reviewed for legislative compliance only limited minor changes can be made at this stage of the process.

Tauākī whakaaweawe āhuarangi

Climate impact statement

29. There are no direct impacts to climate related to the recommendations included in this report

30. Funded climate initiatives for 2023/2024 have been included in the final budget documents.

31. Digital copies of the final budget documents will be promoted to avoid overproduction of printed versions.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

32. Staff from the council-controlled organisations (CCOs) and council departments have been directly involved in the development of the final budget documents where appropriate.

33. All CCOs and council departments will be affected by decisions made for the Annual Budget 2023/2024. Budget updates have been made on a regular basis to the Executive Leadership Team, council departments and the CCOs.

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

Local impacts and local board views

34. Local boards have been involved in developing the Annual Budget 2023/2024. Prior to making final decisions, discussions were held between the Governing Body and local boards on 17 May 2023. On 8 June 2023, the Governing Body was also provided with a summary report which included all resolutions on advocacy and regional issues passed by local boards regarding decision making for the annual budget.

35. The local board agreements for the 2023/2024 financial year have been developed as part of the annual budget process and have been adopted by the local boards.

Tauākī whakaaweawe Māori

Māori impact statement

36. Engagement with mana whenua and mataawaka was a focus for the wider engagement strategy which was presented as part of the communications and engagement approach to the Governing Body on 15 February 2023 for approval. Targeted engagement with mana whenua and mataawaka was held during the consultation period.

37. As part of the public consultation process on the annual budget, 2,683 submissions were received from individuals who identified as Māori, eight informal submissions from mataawaka organisations (during briefing workshops and one-on-one sessions), 13 submissions from mana whenua organisations and three entities also made presentations to the Governing Body in March.

38. An in-depth report analysing the feedback from Māori entities was included as an attachment to the regional feedback report presented to the Governing Body at a workshop on 26 April 2023.

39. The views of and impacts on Māori were considered by the Governing Body in making recommendations for decision on 8 and 9 June 2023.

40. Auckland Council’s Māori Outcomes budget is included in the final documents as well as our priority areas of focus to improve outcomes for Māori in Tāmaki Makaurau.

Ngā ritenga ā-pūtea

Financial implications

41. The Annual Budget 2023/2024 sets the council’s budget for the 2023/2024 financial year. The financial decisions made on 8 and 9 June 2023 have been reflected in the final annual budget documents.

42. The Annual Budget 2023/2024 project has been funded as part of existing operational budgets.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

43. There are no significant risks relating to the adoption of the Annual Budget 2023/2024 itself.

44. Legal Services’ review of the final documentation will be completed ahead of the Governing Body meeting in order to confirm legislative compliance prior to the adoption by the Governing Body.

45. The Audit and Risk Committee has had an important oversight role for risks associated with the annual budget and has received updates on key risks and mitigations as part of the process.

Ngā koringa ā-muri

Next steps

46. Adoption of the Annual Budget 2023/2024 is required before the council can set rates for 2023/2024, which will be considered in a separate report following adoption on today’s meeting agenda.

47. Following adoption, staff will prepare the final Annual Budget 2023/2024 documentation for publication. A digital version of the document will be available on the council’s website and printed copies will be available to view at libraries, service centres and local board offices. Hard copies will also be available on request.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇨	Annual Budget 2023/2024 - Volume 1 (will be provided separately prior to the meeting)
b ⇨	Annual Budget 2023/2024 - Volume 2 (will be provided separately prior to the meeting)

Ngā kaihaina

Signatories

Author

Tamsyn Matchett - Programme Manager

Authorisers

Ross Tucker - General Manager, Financial Strategy and Planning

Peter Gudsell - Group Chief Financial Officer

Jim Stabback - Tumu Whakarae / Chief Executive

Governing Body

29 June 2023

Adoption of the Revenue and Financing Policy

File No.: CP2023/07278

Te take mō te pūrongo

Purpose of the report

1. To adopt the amended Revenue and Financing Policy in Attachment A to this report.

Whakarāpopototanga matua

Executive summary

2. As part of the Annual Budget 2023/2024 the council consulted on pausing the Long-term Differential Strategy (LTDS) for 2023/2024 to help reduce the immediate impact of proposed rates increases on non-business (residential and farm/lifestyle) ratepayers. The LTDS is set out in the council’s Revenue and Financing Policy, so pausing the LTDS would require an amendment to the Revenue and Financing Policy. The proposed amendment to the Revenue and Financing Policy was consulted on between February and March 2023 alongside consultation on the Annual Budget 2023/2024.

3. Feedback on the proposed changes to the Revenue and Financing Policy was received from 145 individuals and Property Council New Zealand. Of the feedback received from individuals, 68 per cent supported the proposed change and 28 per cent did not. 4 per cent responded either “Other” or “I don’t know”.

4. Comments were received from 85 individuals. The main themes in support were that business can afford it and concern about the impact of rates increases on residents. Of those who did not support, the main theme was that business should pay less rates.

5. Property Council New Zealand did not support the proposal. They were concerned about the increased costs on businesses, that business rates were already too high, and that council should continue reducing rates for businesses.

6. Around 400 pieces of feedback on the proposal to pause the LTDS for 2023/2024 were also received in response to consultation on the Annual Budget 2023/2024. Of these, 61 per cent supported the proposal and 39 per cent did not.

7. On 8 June 2023 the Governing Body agreed to mitigate the impact of the average general rates increase on non-business (residential and farm/lifestyle) ratepayers by pausing the LTDS for 2023/2024 as part of the Annual Budget 2023/2024.

8. The decision to pause the LTDS for 2023/2024 is reflected in the final Annual Budget 2023/2024 documents and the proposed rates for 2023/2024 that are being presented to the Governing Body for adoption and agreement under separate reports on today’s agenda.

Ngā tūtohunga

Recommendation/s

That the Governing Body:

a) whakatau / adopt the amended Revenue and Financing Policy in Attachment A of the agenda report.

Horopaki

Context

9. The council is required to adopt a Revenue and Financing Policy under s102 of the Local Government Act 2002. The purpose of the Revenue and Financing Policy is to provide predictability and certainty about sources and levels of funding available to the council. It explains the rationale for, and the process of selecting various tools to fund the operating and capital expenditures of the council.

10. On 8 June 2023, the Governing Body agreed to mitigate the impact of the average general rates increase on non-business (residential and farm/lifestyle) ratepayers by pausing the LTDS for 2023/2024 as part of the Annual Budget 2023/2024.

11. Staff recommend that the Revenue and Financing Policy be amended to provide for a one-year pause to the LTDS to ensure that the Revenue and Financing Policy is consistent with the decisions made in respect of the Annual Budget 2023/2024 and to enable rates to be set for the 2023/2024 financial year.

Tātaritanga me ngā tohutohu

Analysis and advice

12. Alongside consultation on the Annual Budget 2023/2024, the council consulted on a proposal to amend the Revenue and Financing Policy to pause the Long-term Differential Strategy (LTDS) for 2023/2024 to help reduce the immediate impact of proposed rates increases on non-business (residential and farm/lifestyle) ratepayers in 2023/2024.

Feedback on the Revenue and Financing Policy

13. The feedback form for consultation on the proposed amendment to the Revenue and Financing Policy stated “We propose pausing the Long-term Differential Strategy (LTDS) for 2023/2024 to reduce the immediate impact of rates increases on residential ratepayers in 2023/2024”. Submitters were asked “What do you think of this proposal?”. Submitters were given the option to tick “Support”, Do not support”, “Other”, and “I don’t know”. Submitters were also provided with an option to provide comments.

14. Feedback was received from 145 individuals and Property Council New Zealand. Of the feedback received from individuals:

· 99 (68 per cent) ticked support

· 41 (28 per cent) ticked do not support

· 5 (around 4 per cent) ticked other

· 1 ticked I don’t know.

15. Of the individuals who supported the proposed changes:

· 22 commented that business can afford it

· 11 were concerned about the impact of rates increases on residential ratepayers

· 7 commented that business make use of more council services.

16. Of the individuals who did not support the proposed changes:

· 9 commented that business should pay less rates

· 4 commented that business should pay more rates.

17. Eight of the individuals identified as being Māori. 4 supported the proposal, 3 did not support the proposal, and 1 ticked “Other”.

18. Property Council New Zealand did not support the proposal. They were concerned about the increased costs on businesses, that business rates were already too high, and that council should continue reducing rates for businesses.

Annual budget feedback

19. In addition to the specific process for consultation on the proposed changes to the Revenue and Financing Policy, around 400 pieces of feedback were also received on the proposal to pause the LTDS as part of the broader consultation process for the Annual Budget 2023/2024.

20. Analysis of these comments showed 61 per cent supported the LTDS proposal and 39 per cent did not support it. There were no significant themes in terms of reasons for support or opposition to this. Submitters either generally supported the LTDS as a whole or they didn’t.

Response to feedback

21. Submitters did not identify any new issues that have not already been considered which might require amendments to the proposed Revenue and Financing Policy.

22. On 8 June 2023, feedback on the pausing the LTDS was considered as part of the council’s decision making on the Annual Budget 2023/2024, when the proposed pause to the LTDS was agreed by the Governing Body. The proposed amended Revenue and Financing Policy attached to this report (Attachment A) reflects the decisions made for the Annual Budget 2023/2024.

23. From 1 July 2023 the Climate Action Targeted Rate (CATR) will be renamed the Climate Action Transport Targeted Rate (CATTR). The change in name better reflects that around 98 per cent of the Climate Action Targeted Rate program will fund transport initiatives and around 2 per cent will be used to fund Urban Ngahere. The Mayor and elected members of the Climate Action Targeted Rate Governance and Oversight Group have been consulted on the change of name for the rate.

24. Staff do not recommend any changes to the proposed amended Revenue and Financing Policy in response to feedback. The proposed amended Revenue and Financing Policy complies with the relevant requirements of the Local Government Act 2002 and also includes updated reference to the renamed Climate Action Transport Targeted Rate.

25. Staff recommend the policy be adopted as attached (Attachment A).

Tauākī whakaaweawe āhuarangi

Climate impact statement

26. Pausing the LTDS has a neutral climate impact as the change relates to how council makes funding decisions, rather than decisions on activities to be undertaken.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

27. The issues in this report do not impact on the wider council group.

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

Local impacts and local board views

28. Sixteen local boards gave feedback on the proposed amendment to the Revenue and Financing Policy. Twelve local boards expressed support for the proposal (Albert-Eden, Devonport-Takapuna, Franklin, Howick, Kaipātiki, Māngere-Ōtāhuhu, Manurewa, Maungakiekie-Tāmaki, Ōtara-Papatoetoe, Papakura, Puketāpapa and Rodney local boards).

29. Three local boards did not support the proposal (Aotea / Great Barrier, Ōrākei, Upper-Harbour local boards).

30. Waitematā Local Board supported a decrease of 50 per cent of the projected differential reduction and a pause of 50 per cent of the yearly decrease for the 2023/2024 year.

Tauākī whakaaweawe Māori

Māori impact statement

31. The council does not hold information on the ethnicity of ratepayers so is not able to identify the exact impact of the proposed changes on Māori. The impact of the recommended rates on Māori will be similar to that on other residents in Auckland.

32. Feedback received from Māori has been included under the Analysis and Advice section of this report.

Ngā ritenga ā-pūtea

Financial implications

33. There are no financial implications for council from the recommendations in this report. Amending the Revenue and Financing Policy to pause the LTDS does not affect the amount of rates revenue council collects. Decisions on the LTDS only changes the balance of rates assessed between business and non-business properties.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

34. The council’s final Annual Budget 2023/2024 documents and proposed rates decisions (as set out in separate reports on today’s agenda) reflect the decision made at the 8 June 2023 meeting of the Governing Body to pause the LTDS for 2023/2024.

35. Legally, rates must be set in accordance with the Long-term Plan (including the Revenue and Financing Policy) and the Funding Impact Statement for the respective year. If the proposed amendments to the Revenue and Financing Policy are not adopted, then this will create inconsistencies with some of the proposed rates changes for 2023/2024.

36. This report has been reviewed by Legal Services to check compliance with relevant legislation.

Ngā koringa ā-muri

Next steps

37. The amended Revenue and Financing Policy will be effective from its adoption.

38. Following the adoption of the amended Revenue and Financing Policy, at the same meeting the Governing Body will be asked to adopt the Annual Budget 2023/2024 and set rates for the 2023/2024 financial year.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇨	Proposed amended Revenue and Financing Policy

Ngā kaihaina

Signatories

Authors

Aaron Matich - Principal Advisor – Financial Policy

Andrew Duncan - Manager Financial Policy

Authorisers

Ross Tucker - General Manager, Financial Strategy and Planning

Peter Gudsell - Group Chief Financial Officer

Jim Stabback - Tumu Whakarae / Chief Executive

Governing Body

29 June 2023

Rates setting 2023/2024

File No.: CP2023/07852

Te take mō te pūrongo

Purpose of the report

1. To set the rates for the 2023/2024 financial year.

Whakarāpopototanga matua

Executive summary

2. Legislation requires that rates are set by resolution of the Governing Body after the adoption of the annual plan (also referred to as the Annual Budget 2023/2024) and that they must be set in accordance with the:

· relevant provisions of the council’s long-term plan (including the Revenue and Financing Policy); and

· Funding Impact Statement (FIS) for the 2023/2024 financial year (contained in the annual plan).

3. The FIS and recommendations have been prepared to reflect the decisions made by the Governing Body at its 8 June meeting. A report recommending amendments to the Revenue and Financing Policy has been included as another item on the agenda for this meeting. This report has been prepared on the basis that the Governing Body has agreed to those amendments.

4. The recommendations in this report also set the instalment dates, early payment discount, and penalties to be applied for late payment of rates for the 2023/2024 financial year.

Ngā tūtohunga

Recommendation/s

That the Governing Body:

a) whakatau / resolve under the Local Government (Rating) Act 2002 to set rates and due dates for the 2023/2024 financial year and to authorise the addition of penalties as follows:

i) that a Uniform Annual General Charge be set, for all rateable land, at $529 (including GST) per separately used or inhabited part of a rating unit (SUIP)

ii) that a general rate be set for all rateable land on the capital value of the land and at different rates in the dollar for different categories of land (as defined for rating purposes in the Funding Impact Statement in the council's Annual Budget 2023/2024) as set out in the table below:

Property category	Rate in the dollar for 2023/2024 (including GST) ($)
Urban business	0.00474136
Urban residential	0.00180422
Rural business	0.00426722
Rural residential	0.00162380
Farm and lifestyle	0.00144338
No road access	0.00045106
Zero-rated	0.00000000
Urban moderate-occupancy online accommodation provider	0.00327279
Rural moderate-occupancy online accommodation provider	0.00294551
Urban medium-occupancy online accommodation provider	0.00253850
Rural medium-occupancy online accommodation provider	0.00228465

iii) that a Water Quality Targeted Rate be set on the capital value of all rateable land except land categorised as zero-rated, as defined for rating purposes, of an amount of $0.00002022 (including GST) per dollar of capital value applied to all rateable land categorised as business (Urban business and Rural business), and $0.00001147 (including GST) per dollar of capital value to all rateable land not categorised as business (Urban residential, Rural residential, Farm and lifestyle, urban medium-occupancy online accommodation provider, rural medium-occupancy online accommodation provider, urban moderate-occupancy online accommodation provider, rural moderate-occupancy online accommodation provider, and No road access) as defined for rating purposes

iv) that a Natural Environment Targeted Rate be set on the capital value of all rateable land except land categorised as zero-rated, as defined for rating purposes, of an amount of $0.00002936 (including GST) per dollar of capital value applied to all rateable land categorised as business (Urban business and Rural business), and $0.00001666 (including GST) per dollar of capital value to all rateable land not categorised as business (Urban residential, Rural residential, Farm and lifestyle, urban medium-occupancy online accommodation provider, rural medium-occupancy online accommodation provider, urban moderate-occupancy online accommodation provider, rural moderate-occupancy online accommodation provider, and No road access) as defined for rating purposes

v) that a Climate Action Transport Targeted Rate be set for all rateable land on the capital value of the land at different rates in the dollar for different categories of land as defined for rating purposes as set out in the table below:

Property category	Rate in the dollar for 2023/2024 (including GST) ($)
Urban business	0.00008708
Urban residential	0.00005010
Rural business	0.00007837
Rural residential	0.00004509
Farm and lifestyle	0.00004008
No road access	0.00001253
Zero-rated	0.00000000
Urban moderate-occupancy online accommodation provider	0.00009088
Rural moderate-occupancy online accommodation provider	0.00008179
Urban medium-occupancy online accommodation provider	0.00007049
Rural medium-occupancy online accommodation provider	0.00006344

vi) that waste management targeted rates be set differentially for different categories of land at different fixed amounts, as set out in the table below:

Service	Differential group	Amount of targeted rate for 2023/2024 (including GST) ($)	Charging basis
Standard recycling	Rating units in the former Auckland City with approved opt-out arrangement in place	96.18	Per service provided
Standard recycling	All other rating units, where a service is available	96.18	Per SUIP
Minimum base service	All rating units	59.39	Per SUIP
Standard refuse (120 litre bin or equivalent)	Rating units in the former Auckland City with approved opt-out arrangement in place	172.91	Per service provided
Standard refuse (120 litre bin or equivalent)	All other rating units in the former Auckland City and Manukau City, where a service is available	172.91	Per SUIP, except for any SUIP which is provided with either a large refuse or a small refuse service
Small refuse (80 litre bin)	Rating units in the former Auckland City and Manukau City	143.71	Per service provided
Large refuse (240 litre bin)	Rating units in the former Auckland City and Manukau City	287.03	Per service provided
Additional recycling	All rating units	96.18	Per service provided
Food scraps	Rating units in the former Papakura District, Waitākere City and North Shore City, where a service is available	77.20	Per SUIP
	Rating units in Group A of the former Auckland City (as identified for rating purposes), where a service is or will be available in 2023/2024	64.33	Per SUIP
	Rating units in Group B of the former Auckland City (as identified for rating purposes), where a service is or will be available in 2023/2024	70.77	Per SUIP
	Rating units in the former Manukau City, where a service is or will be available in 2023/2024	54.68	Per SUIP
	Rating units in the former Franklin District and Rodney District, where a service is or will be available in 2023/2024	51.47	Per SUIP

Note to table: For these purposes the various waste services are as set out in the Auckland Waste Management and Minimisation Plan and the Funding Impact Statement in the council’s Annual Budget 2023/2024.

vii) that a City Centre Targeted Rate be set differentially for all rateable land in the urban business, urban residential, urban moderate-occupancy online accommodation provider, and urban medium-occupancy online accommodation provider differential categories, as defined for rating purposes, and in the city centre area, of an amount of $0.00116674 (including GST) per dollar of the capital value of the rating unit for urban business rating units and of a fixed amount of $69.25 (including GST) per separately used or inhabited part (SUIP) of a rating unit for urban residential, urban moderate-occupancy online accommodation provider, and urban medium-occupancy online accommodation provider rating units

viii) that a Rodney Local Board Transport Targeted Rate be set for all rateable land in the Rodney Local Board area except land categorised as zero-rated as defined for rating purposes, of an amount of $150 (including GST) per separately used or inhabited part of a rating unit (SUIP)

ix) that an Electricity Network Resilience Targeted Rate of $12,075,000 (including GST) be set on Vector’s electricity network utility rating unit where tree management service is provided

x) that Rodney Drainage District Targeted Rates be set for all land located entirely or partially within the Te Arai drainage district or the Okahukura drainage district (as identified for rating purposes) respectively, as set out in the table below:

Drainage district	Rate for each square metre of Class A land for 2023/2024 (including GST) ($)	Rate for each square metre of Class B land for 2023/2024 (including GST) ($)	Rate for each square metre of Class C land for 2023/2024 (including GST) ($)
Te Arai	0.00212374	0.00106187	0.00000000
Okahukura	0.00304001	0.00152001	0.00000000

xi) that Business Improvement District (BID) targeted rates be set for all rateable land in the urban business or rural business differential categories, as defined for rating purposes, within the defined Business Improvement District areas, of a fixed amount per rating unit and/or a rate in the dollar of capital value of the rating unit, as set out in the table below:

BID area	Fixed rate per rating unit for 2023/2024 (including GST) ($)	Rate in the dollar for 2023/2024 (including GST) ($)
Avondale	0.00	0.00099486
Birkenhead	0.00	0.00082731
Blockhouse Bay	0.00	0.00151207
Browns Bay	0.00	0.00043909
Central Park Henderson	250.00	0.00008002
Devonport	250.00	0.00064840
Dominion Road	0.00	0.00046146
Ellerslie	0.00	0.00170042
Glen Eden	0.00	0.00072926
Glen Innes	0.00	0.00080472
Greater East Tāmaki	195.00	0.00002836
Heart of the City	0.00	0.00035260
Howick	0.00	0.00085842
Hunters Corner	0.00	0.00051989
Karangahape Road	0.00	0.00043551
Kingsland	0.00	0.00035763
Mairangi Bay	250.00	0.00124130
Māngere Bridge	0.00	0.00105995
Māngere East Village	0.00	0.00017332
Māngere Town	0.00	0.00299617
Manukau Central	0.00	0.00025673
Manurewa	0.00	0.00080721
Milford	0.00	0.00059810
Mt Eden Village	0.00	0.00053819
New Lynn	0.00	0.00055458
Newmarket	0.00	0.00056185
North Harbour	150.00	0.00008178
North West District	250.00	0.00013945
Northcote	0.00	0.00218281
One Mahurangi	575.00	0.00000000
Onehunga	0.00	0.00096031
Orewa	0.00	0.00080875
Ōtāhuhu	0.00	0.00058975
Ōtara	0.00	0.00127952
Panmure	0.00	0.00119309
Papakura	0.00	0.00058550
Papatoetoe	0.00	0.00077535
Parnell	0.00	0.00053271
Ponsonby	0.00	0.00076494
Pukekohe	0.00	0.00040819
Remuera	0.00	0.00110328
Rosebank	0.00	0.00026269
Silverdale	400.00	0.00018525
South Harbour	0.00	0.00030113
St Heliers	0.00	0.00103270
Takapuna	0.00	0.00037120
Te Atatu	0.00	0.00107826
Torbay	0.00	0.00087261
Uptown	0.00	0.00023149
Waiuku	0.00	0.00086814
Wiri	0.00	0.00011778

xii) that the Ōtara-Papatoetoe and Māngere-Ōtāhuhu swimming pool targeted rates be set for all rateable land in the urban residential, rural residential, urban moderate-occupancy online accommodation provider, urban medium-occupancy online accommodation provider, rural moderate-occupancy online accommodation provider, or rural medium-occupancy online accommodation provider differential categories, as defined for rating purposes, located in the respective Māngere–Ōtāhuhu Local Board or Ōtara-Papatoetoe Local Board area, of a fixed amount per separately used or inhabited part of a rating unit (SUIP), as set out in the table below:

Local board area	Fixed rate for each separately used or inhabited part of a rating unit for 2023/2024 (including GST) ($)
Māngere-Ōtāhuhu	37.65
Ōtara-Papatoetoe	35.72

xiii) that the Swimming/Spa Pool Fencing Compliance targeted rate be set for all rateable land on the council’s register of pool fence and barrier inspections, set differentially based on whether the council provides inspection, as a fixed amount per rating unit as set out in the table below:

Inspection service provided	Fixed rate per rating unit for 2023/2024 (including GST) ($)
Council inspection required	63.33
No council inspection required – successful inspection carried out by an Independently Qualified Pool Inspector (IQPI)	31.67

xiv) that the Riverhaven Drive targeted rate be set on land in Riverhaven Drive, Rodney, in respect of which the council has provided financial assistance for the construction of a road that gives access to the rating units, of an amount of $10,045.09 (including GST) per rating unit

xv) that the Waitākere Rural Sewerage targeted rate be set for all land in the Waitākere Ranges Local Board area which has an on-site waste management system and in respect of which the council has available the service of pumping out the system and which is scheduled to take place within the three-year period commencing 1 July 2021, of an amount of $296.75 (including GST) for each such on-site waste management system utilised in conjunction with the rating unit

xvi) that the Retro-fit Your Home targeted rate be set on land in respect of which the council has provided financial assistance under the Retro-fit Your Home scheme, at different levels based on the extent of the outstanding assistance by reference to the year that the ratepayer started repaying the financial assistance by this targeted rate, of an amount set out in the table below:

Year of repayment	Rate in the dollar for 2023/2024 to be multiplied by the ratepayers outstanding balance as at 30 June 2023 (including GST) ($)
1	0.14004200
2	0.15372600
3	0.17138400
4	0.19500600
5	0.22817000
6	0.27803400
7	0.36129800
8	0.52805600
9	1.02876600

xvii) that the Kumeu Huapai Riverhead Wastewater targeted rate be set on land in respect of which the council has provided financial assistance to connect to the Kumeu Huapai Riverhead pressurised wastewater scheme, at different levels based on the extent of the outstanding assistance by reference to the year that the ratepayer started repaying the financial assistance by this targeted rate, of an amount set out in the table below:

Year of repayment	Rate in the dollar for 2023/2024 to be multiplied by the ratepayers outstanding balance as at 30 June 2023 (including GST) ($)
9	0.19709160
11	0.26239550

xviii) that the On-site Wastewater Systems (Septic Tank) Upgrades targeted rate be set on land in respect of which the council has provided financial assistance for the replacement or upgrade of failing on-site wastewater systems (septic tanks) in the west coast lagoons (Piha, Te Henga and Karekare) and Little Oneroa (Waiheke Island) catchments, at different levels based on the extent of the outstanding assistance by reference to the year that the ratepayer started repaying the financial assistance by this targeted rate, of an amount set out in the table below:

Year of repayment	Rate in the dollar for 2023/2024 to be multiplied by the ratepayers outstanding balance as at 30 June 2023 (including GST) ($)
6	0.14913200

xix) that the Point Wells Wastewater targeted rate be set on land in respect of which the council has provided financial assistance to connect to a pressure wastewater collection system in Point Wells, of an amount per rating unit based on the extent of the financial assistance as shown in the following table:

Total assistance provided	Amount of targeted rate per rating unit for 2023/2024 (including GST) ($)
$8,000	662.56
$8,500	703.97
$9,000	745.38
$9,500	786.78
$10,000	828.20

xx) that the Jackson Crescent Wastewater targeted rate be set on land in respect of which the council has provided financial assistance to connect to a wastewater collection scheme in the Jackson Crescent, Martins Bay area, of an amount of $598.01 (including GST) per rating unit

xxi) that for the purposes of the above rates, the definitions of the city centre area, the various Business Improvement Districts, the expression "separately used or inhabited part of a rating unit" and the differential categories for rates charged on a differential basis are as set out in the Funding Impact Statement in the council's Annual Budget 2023/2024

xxii) that for the 2023/2024 financial year, all rates be payable in four equal instalments, on the following due dates:

Instalment	Due Date
1	31 August 2023
2	30 November 2023
3	28 February 2024
4	31 May 2024

xxiii) that a penalty of 10 per cent of any portion of any instalment of rates assessed in the 2023/2024 rating year that is not paid by the due date for payment of that instalment be added to the amount of unpaid rates. The penalty will be added on the day following the due date, being 1 September 2023, 1 December 2023, 29 February 2024, and 1 June 2024 respectively

xxiv) that a further penalty of 10 per cent of any rates assessed in any financial year prior to 1 July 2023 that remain unpaid on 7 July 2023, be added on 8 July 2023

xxv) that a further penalty of 10 per cent of any rates to which a penalty has been added under resolution (xxiv) above if those rates are unpaid on 8 January 2024, be added on 9 January 2024.

b) whakaae / agree that in accordance with the council’s Early Payment Discount Policy the discount for the early payment of rates be set at 2.06 per cent of the 2023/2024 rates, if those rates, together with any outstanding prior years’ rates and penalties, are paid in full on or before the due date of the first instalment (31 August 2023).

Horopaki

Context

5. The FIS and the recommendations in this report reflect the following annual budget decisions made by the Governing Body at its meeting on 8 June 2023:

i) Increase the general rates for existing ratepayers by an average 11 per cent

ii) pause the Long-term Differential Strategy for one year and extend the time by which the target share of 25.8 per cent of rates to be raised from business properties is achieved to 2038/2039

iii) temporarily reduce the Natural Environment Targeted Rate by 48.8 per cent and Water Quality Targeted rate by 77.7 per cent for one year

iv) introduce the option of an 80 litre bin refuse service in the former districts of the Auckland City and Manukau City Councils, to be funded by a targeted rate of $143.71, from 1 July 2023

v) adopt a food scraps targeted rate in the former districts of Auckland City, Manukau City, Franklin District and Rodney District councils (excluding islands) to fund the food scraps collection service to those areas, to be applied from 1 July 2023 to all residential and lifestyle SUIPs to which the service is made available, on a pro rata basis reflecting the approximate number of months the service is available to each SUIP as set out in the staff report

vi) agree to the extension of council’s waste management services and associated targeted rate charges to the commercial areas in the former Manukau City, with commercial properties in Howick, Hunter’s Corner and Papatoetoe starting to receive council services from 2023/2024 on an opt-in basis

vii) adopt a standard recycling targeted rate and a minimum base service targeted rate, effective from 1 July 2023, to replace the waste management base service targeted rate that is currently in place

viii) adopt the increases to the waste management targeted rate charges as specified in the staff report, to ensure cost recovery

ix) increase the targeted rate for swimming/spa pool compliance to $63.33 per year

x) adopt a Business Improvement District (BID) targeted rate to fund the new Silverdale BID

xi) agree that the Accommodation Provider Targeted Rate (APTR) will not be reinstated in the Annual Budget 2023/2024.

Tātaritanga me ngā tohutohu

Analysis and advice

Rates resolution

6. For the council to assess rates for the 2023/2024 financial year, section 23 of the Local Government (Rating) Act 2002 (LG(R)A) requires the council to set the rates by resolution. The draft resolutions contained in the recommendations in this report are consistent with the relevant legislation and the Annual Budget 2023/2024.

7. The LG(R)A requires that the instalment due dates and any penalties must also be set in the same resolution as those used to set the rates. The resolutions necessary for the Governing Body to set the rates, instalment due dates, penalties, and early payment discount for the 2023/2024 financial year are included in the recommendations in this report.

Early payment discount, late payment penalties and instalment dates

8. This report recommends that all rates be payable in four equal instalments on:

· instalment 1: 31 August 2023

· instalment 2: 30 November 2023

· instalment 3: 28 February 2024

· instalment 4: 31 May 2024.

9. Officers recommend that a 10 per cent penalty be payable for late payment of rates for each rates instalment due date, and that a 10 per cent penalty on the previous years’ rates arrears be added at the beginning of the financial year (or five working days after the rates resolution, whichever is the later) and then again six months later. It is recommended that the council set the penalty rate at 10 per cent to discourage the use of the council as a bank by ratepayers. Costs incurred by the council from the late payment of rates must inevitably be met by those ratepayers that pay on time. Most councils use a 10 per cent penalty.

10. The early payment discount policy is available to ratepayers who pay their full year’s rates before the due date of the first rates instalment. Under this policy, the council provides a discount based on the council’s forecast short-term borrowing cost, 5.5 per cent for 2023/2024. This passes on council’s interest cost saving to those ratepayers who pay early. For the early payment discount to remain cost neutral, the early payment discount rate should be set at 2.06 per cent.

Tauākī whakaaweawe āhuarangi

Climate impact statement

11. Recommendations in this report have a primarily neutral climate impact as they relate to the setting of charges rather than decisions on activities to be undertaken.

12. The setting of the Climate Action Transport Targeted Rate will assist in funding an accelerated regional climate action programme to help mitigate the impact of climate change.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

13. This report has been reviewed by Legal Services.

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

Local impacts and local board views

14. The Governing Body has decision-making authority for setting rates. Local boards’ views on the rating policy proposals were considered as part of the decision-making for the Annual Budget, and as part of the adoption of the Annual Budget 2023/2024 at this meeting.

Tauākī whakaaweawe Māori

Māori impact statement

15. The council does not hold information on the ethnicity of ratepayers, so is not able to identify the exact impact of the policy options on Māori. The rates recommendations in this report will have a similar impact on Māori as it will on other ratepayers.

16. The views of Māori on the rating policy proposals were considered as part of the decision-making for the Annual Budget, and as part of the adoption of the Annual Budget 2023/2024 at this meeting.

17. As part of the public consultation process for the annual budget, 2,683 submissions were received from individuals who identified as Māori.

18. The council contacted all Mana Whenua and Mātāwaka entities in the Auckland region about the annual budget consultation and invited them to provide feedback. 13 Mana Whenua entities made written submissions. Three of them also made presentations to the Governing Body in March. Eight Mātāwaka entities provided informal feedback during briefing workshops and one-on-one sessions.

19. Responses from Māori submitters and mana whenua were similar to the overall feedback.

Ngā ritenga ā-pūtea

Financial implications

20. The financial implications of the rates set through this report are reflected in the annual budget document. It is projected that the total rates revenue for 2023/2024 will be around $2.5 billion after adjusting for rates on properties owned by the council and council controlled organisations (CCOs).

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

21. Rates may be set any time after the Annual Budget 2023/2024 is adopted. However, the budget has been prepared based on the assumption that rates will be invoiced in early August. Delays in setting the rates, or setting rates that are inconsistent with decisions made by the Governing Body at its meeting on 8 June 2023 may cause late delivery of the first instalment rates assessment/invoice and delay when penalties can be applied. This would result in increased interest costs through the late receipt of rates revenue and result in increased administrative costs.

22. The recommendations in this report have been checked by Legal Services for legislative compliance.

Ngā koringa ā-muri

Next steps

23. A copy of the rates resolution will be publicly available on council’s website within 20 working days of adopting the rates resolution.

24. Ratepayers will receive the first instalment invoice from 1 August 2023.

Ngā tāpirihanga

Attachments

There are no attachments for this report.

Ngā kaihaina

Signatories

Authors

Andrew Duncan - Manager Financial Policy

Eric Wen - Senior Advisor - Financial Policy

Authorisers

Ross Tucker - General Manager, Financial Strategy and Planning

Peter Gudsell - Group Chief Financial Officer

Jim Stabback - Tumu Whakarae / Chief Executive

Mayor	Wayne Brown
Deputy Mayor	Cr Desley Simpson, JP
Councillors	Cr Andrew Baker	Cr Mike Lee
	Cr Josephine Bartley	Cr Kerrin Leoni
	Cr Angela Dalton	Cr Daniel Newman, JP
	Cr Chris Darby	Cr Greg Sayers
	Cr Julie Fairey	Cr Sharon Stewart, QSM
	Cr Alf Filipaina, MNZM	Cr Ken Turner
	Cr Christine Fletcher, QSO	Cr Wayne Walker
	Cr Lotu Fuli	Cr John Watson
	Cr Shane Henderson	Cr Maurice Williamson
	Cr Richard Hills