Agenda of Governing Body - Thursday, 27 July 2023

27 July 2023

Acting Chief Executive and Group Chief Financial Officer Update

File No.: CP2023/05500

Te take mō te pūrongo

Purpose of the report

1. To provide a monthly update to the Governing Body on key matters from the Auckland Council Acting Chief Executive and Group Chief Financial Officer.

Whakarāpopototanga matua

Executive summary

Interim Chief Executive and Group Chief Financial Officer’s Update

2. Phil Wilson, Acting Chief Executive and Peter Gudsell, Group Chief Financial Officer (GCFO) will provide a summary of highlights and key activities and updates for the following:

· Local Board Plans consultation

· Water Services Reform

· FIFA Women’s World Cup 2023

· Annual Report update

· Financial performance for Auckland Council and the Auckland Council Group

· Economic/ market update.

Local Board Plan Consultation update

3. All 21 local boards have released their three-year plans for public consultation and the feedback process will close on 14 August.

Water Services Reform

4. The Water Services Entities Amendment Bill was introduced to Parliament last month.

5. It formalises ten water entities across New Zealand from the four in the original legislation. Importantly for Auckland, the northern entity (Entity A) remains unchanged, and the Bill requires this entity to be established by 1 July 2024.

6. The Bill also creates the Water Services Funding Agency – similar concept to the Local Government Funding Agency (LGFA)

FIFA Women’s World Cup 2023 update

7. The FIFA Women’s World Cup 2023 is underway in New Zealand and Australia from 20 July to 20 August 2023. It is the first time the event has been held in the southern hemisphere.

8. Nine matches will take place in Tāmaki Makaurau Auckland at Eden Park, including the opening match, a quarter final, and a semifinal. Eleven Auckland Council sports parks and other stadia have been set aside as training sites. In addition to hosting the tournament itself, Tāmaki Makaurau Auckland hosted the Official Draw (in October 2022) and a Play-Off Tournament in February 2023 to determine the last 3 qualifying places.

9. The opening matches in both New Zealand and Australia set records for both attendance and online viewership.

10. We acknowledge the tragic event that preceded the opening match in New Zealand and both those impacted by the events, and the first responders who worked to secure and create a safe space in Auckland’s downtown area.

Annual Report update

11. The Local Government Act 2002 (LGA 2002) requires the council to prepare and adopt an annual report and summary annual report each year. The council is also required to publish an annual report under the NZX listing rules.

12. The financial year ended on 30 June 2023 and the annual report and summary annual report are currently being prepared.

13. Auckland Council has bonds quoted on the NZX and as a result, has various obligations arising from the NZX listing rules and the Financial Markets Conduct Act 2013.

14. These obligations affect the ways that the Auckland Council Group deals with information that may potentially affect the price of our bonds.

15. Obligations that relate to the annual report are:

· annual results must be released to the NZX within 60 days of balance date, before being made public. We obtain Audit New Zealand’s clearance on this information, so have planned the timing for Monday 29 August 2023. This release contains limited information compared to the full annual report and is known as the NZX preliminary release.

· the full annual report must be released within three months of balance date.

16. Key dates for the 2022/2023 Annual Report and Summary Annual Report are:

Dates	Items
Monday 21 August	Audit and Risk Committee review of the NZX Preliminary release
Tuesday 29 August	NZX Preliminary release
Tuesday 12 September	GCFO sign off full Annual report, Summary Annual Report and NZX Release
Friday 15 September	Audit and Risk Committee review of Annual Report, Summary Annual Report and NZX release
Tuesday 19 September	Provide draft Annual Report and Summary Annual Report to Elected members for feedback
Thursday 28 September	Governing Body meeting to adopt the Annual Report and Summary Annual Report
Friday 29 September	Final NZX release including release of audit opinion, Annual Report and Summary Annual Report on Auckland Council’s website

17. To ensure that all market participants get the benefit of the information at the same time, and no one can hold, buy, or sell our bonds with the benefit of “insider Information”, our financial results and commentary is required to remain confidential until they are released on the NZX.

Financial performance for Auckland Council and the Auckland Council Group

18. A high-level overview of the council and the group’s financial performance to 30 June 2023 is covered in the confidential Acting Chief Executive and Group Chief Financial Officer Update report on this agenda. The monthly financial dashboard is also attached to the confidential report. This information is required to remain confidential until the preliminary results are released to the NZX on the 29 August 2023.

Economic/ market update

19. Key economic/ market activity and updates are:

· Annual inflation rate – Consumer Price Index was 6 per cent at end of June 2023 (updated quarterly, next due 17 October 2023).

· Unemployment rate – 3.4 per cent to the end of March 2023 (updated quarterly, next due 2 August 2023).

· Gross Domestic Product decreased by 0.1% in the March2023 quarter, bringing annual growth to 2.9% (next update is 21 September 2023)

· Auckland new dwellings consented numbers – 21,688 for the year ended May 2023 (11 per cent higher than the year ended May 2022).

· The Official Cash Rate (OCR) rate remained at 5.5 per cent on 12 July 2023 (next update is 16 August 2023)

Ngā tūtohunga

Recommendation/s

That the Governing Body:

a) whiwhi / receive the information provided in this report, the monthly financial dashboard circulated prior to the meeting and the verbal updates by the Acting Chief Executive and Group Chief Financial Officer.

Ngā tāpirihanga

Attachments

There are no attachments for this report.

Ngā kaihaina

Signatories

Authors

Karuna Dahya - Manager Group Performance Reporting

Tracy Gers - Group Accounting & Reporting Manager

Authorisers

Peter Gudsell - Group Chief Financial Officer

Phil Wilson - Acting Chief Executive

Governing Body

27 July 2023

Rates relief for properties uninhabitable as a result of storm events

File No.: CP2023/09425

Te take mō te pūrongo

Purpose of the report

1. To advise the Governing Body on rates relief for the 2023/2024 and 2024/2025 rating years for properties uninhabitable as a result of the severe weather events in the first half of 2023 and to report on the disbursement of funds from the Auckland Council Emergency Relief Fund.

Whakarāpopototanga matua

Executive summary

2. It is estimated that between 327 and 836^{^[1]} properties affected by the severe weather events in the first half of the 2023 remain uninhabitable as at 1 July 2023.

3. For the second half of the 2022/2023 financial year, uninhabitable homes were given rates relief via a grant from the Auckland Council Emergency Relief Fund. Moving into a new financial year, it would be more appropriate to provide rates relief via a remission under the Miscellaneous Remissions Scheme in the Rates Remission and Postponement Policy. This recognises that the rates for these properties for the 2023/2024 financial year cannot be assessed fairly due to the impact of an extraordinary event on their current valuations.

4. It has not been practical to adjust affected properties’ rating valuations as yet due to owners’ concerns about insurance and compensation claims, incomplete information, and the significant demand on the limited valuation resource required to carry out these rating valuation reviews. Rates for 2023/2024 have been assessed on the valuation held at the time of the events, as will the rates for 2024/2025.

5. To ensure that uninhabitable properties are rated fairly relative to others for the 2023/2024 and 2024/2025 rating years, officers recommend that their rates be remitted by 50 per cent and that all their waste management rates be remitted as they can’t use the relevant services.

6. Some properties’ rating valuations may have been more affected than 50 per cent and others less. As noted above, the work has not been undertaken to establish how much each property’s rating valuations has been impacted. Officers, therefore, recommend that applicants are able to seek an additional remission where they consider the damage to their property would result in lower rates. These will be assessed by the council on a case-by-case basis.

7. The cost of these recommended remissions is estimated to be between $600,000 and $1.5 million in 2023/2024. As the rates for 2023/2024 have already been set this will have to be debt funded this financial year.

8. All properties that may have been impacted by the storms will have their rating valuations updated as part of the regional revaluation that will apply to rates set for the 2025/2026 year.

9. Irrespective of the recommendations above, property owners may, if they wish, request a review of the rating valuation of their property. Any resulting alterations to a rating valuation would be changed under section 14 of the Rating Valuations Act 1998. If a requested review resulted in a lower rates liability than under the remission recommended above, their rates will be adjusted accordingly. If the review resulted in higher rates for the relevant year, the rates will not be adjusted until the following year.

Ngā tūtohunga

Recommendation/s

That the Governing Body:

a) whakaae / agree that officers use the Miscellaneous Remissions Policy to remit the waste management targeted rates (minimum base service, standard recycling, refuse, and foods scraps) for the 2023/2024 and 2024/2025 rating years for all properties that are uninhabitable as a result of recent severe weather (including red-stickered, yellow-stickered and white-stickered properties) as this is a service-based charge for services which these ratepayers cannot use.

b) whakaae / agree that officers use the Miscellaneous Remissions Policy to remit 50 per cent of rates assessed in 2023/2024 for all properties that are uninhabitable as a result of recent severe weather (including red-stickered, yellow-stickered and white-stickered properties).

c) whakaae / agree that officers use the Miscellaneous Remissions Policy on a case-by-case basis to remit above 50 per cent of rates assessed for the 2023/2024 for properties that are uninhabitable as a result of recent severe weather (including red-stickered, yellow-stickered and white-stickered properties) where it is fair and equitable to do so.

d) whakaae / agree that officers use the Miscellaneous Remissions Policy to remit rates assessed in 2024/2025 for properties that remain uninhabitable as a result of recent severe weather (including red-stickered, yellow-stickered and white-stickered properties) at the same proportion as remitted in 2023/2024.

e) tuhi ā-taipitopito / note that properties that are uninhabitable as a result of recent severe weather (including red-stickered, yellow-stickered and white-stickered properties) will have their property’s rating valuation reassessed as part of the next triennial revaluation which will apply to rates for the 2025/2026 rating year.

Horopaki

Context

Extreme weather has led to financial hardship for some

10. Auckland has experienced five extreme weather events since January 2023. These have caused flooding and land instability throughout the region, with a devastating and lasting impact on many communities and individuals. It is estimated that between 327 and 836 properties affected by the severe weather events in the first half of the 2023 remain uninhabitable as at 1 July 2023. There are currently around 642 properties that have a short-term entry only yellow placard, some of which may not have applied for additional rates relief for 2022/2023.

11. Many impacted households report significant financial hardship as a result of the extreme weather events.

Rates relief has been in place since March

12. At its meeting on 23 March 2023 the Governing Body GB/2023/30 resolved to:

· provide a grant based on need for the rates for the second half of the 2022/2023 year for uninhabitable properties (whether red, yellow, or white stickered)

· remit the base waste management targeted rate and the refuse waste management targeted rate for the second half of the 2022/2023 year for properties red stickered.

· request that officers report back to the Governing Body on how these funds have been allocated and other options for relief if there is unmet need.

13. The council has provided rates relief, in the form of grants from the Auckland Council Emergency Relief Fund for all the rates for the second half of 2022/2023 to the value of $1.4 million to 836 properties. A remission of waste rates has also been provided to 328 properties at a cost of $27,416.16.

14. At its meeting on 22 June the Governing Body (GB/2023/107) resolved to request staff to provide advice at the 27 July Governing Body meeting on how valuations and rating may change from 1 July 2023 for properties that remain uninhabitable as a result of the severe weather events in the first half of 2023, and for the advice to include information on available rates relief mechanisms.

The Emergency Relief Fund has provided further support, unmet need remains

15. The Auckland Council Emergency Relief Fund, opened by the Mayor on January 31, has provided further financial support to individuals, community groups and marae. $3.7 million was raised for the fund, including $1.4 million from central government, $1.1 million from Auckland Council (including around $1.0 million specifically for rates relief), and $1.2 million from corporates, organisations and the public.

16. $3.67 million has been paid out, including the rates relief described above. The remainder of successful applications are being processed for payment. The most requested support was towards items such as bedding, food, home appliances and furniture.

17. The fund was significantly oversubscribed, with applications totalling over $20 million. Around 30 per cent of applications came from south and southeast Auckland, and a similar amount from suburbs in central Auckland and the isthmus. Around a quarter were from the west, and around 15 per cent from the North Shore.

18. Unmet need continues to be a concern. Financial mentors and budgeting services are reporting an increase in need from impacted households, often related to essential items including food and warm clothing.

19. As temporary accommodation payments from insurance companies are coming to an end, financial difficulties will become more acute for some households, faced with paying rent at the same time as they pay mortgages on their uninhabitable homes. In a recent survey of residents in Muriwai, Piha and Karekare, one third of respondents said that, on their current financial trajectory, they will be forced to foreclose on their mortgage. Half of these expect to foreclose before Christmas this year, the remainder within 12 months.

20. The Community and Social Recovery programme, in the Recovery Office, is coordinating and supporting government and community-based support services and assistance to severe weather impacted residents and communities. This includes support with housing assistance, psycho-social and wellbeing support, financial assistance, and initiatives to support community-led recovery. Applicants are also referred to other agencies where that is the best outcome and where their request did not meet the criteria for the Auckland Council Emergency Relief Fund.

Tātaritanga me ngā tohutohu

Analysis and advice

Equity in rates setting

21. Rates pay for the public and merit good elements of the services that Auckland Council provides to the community. The council’s rates revenue requirement is shared across the region’s properties, based primarily on their property’s rating value as at 30 June of the preceding year. Some targeted rates, such as waste management and swimming/spa pool inspections, are set on a user pays basis.

22. The owners of properties rendered uninhabitable as a result of the storm events are in an uncertain and stressful situation. While their rating valuation has not yet been adjusted, it is clear that many properties in these circumstances may have their rating values affected negatively and hence their rating liability should be lower in 2023/2024. However, the extent to which these properties’ rating valuations will ultimately be impacted can’t be determined at this time. Some may have a much lower future rating valuation while others may be more modestly impacted once remediation works are completed.

23. Officers’ advice to the Governing Body in March 2023 on the treatment of rates for red and yellow stickered properties was based on rating valuations for affected properties being adjusted for the 2023/2024 rating year, and therefore the 2024/2025 year also. This was to ensure that the rates for these properties for those years would be assessed fairly in relation to other properties until formal reviews of the rating valuations could be completed.

24. The council has taken a prudent approach to adjusting the rating valuation of the uninhabitable properties for the reasons set out below. Rating valuation reviews have been available on an “as requested” basis. Only one owner of an uninhabitable property has contacted the council about their rating valuation in the three months between the March 2023 Governing Body decision and the 1 July 2023 start of the 2023/2024 rating year. The request was to ensure that the property data was accurate and that the rating valuation of the property prior to the storm events was correct. The data was updated but no changes to the rating valuation were required.

25. Given the uncertainty around the future status of their properties, ratepayers have generally been reluctant to seek an adjustment to their rating valuation. Concerns have been expressed that a lower capital value might impact on any entitlement to insurance and potential buyout compensation, as proposed by recent government announcements.

26. In addition, in order to conduct a review of a property’s rating valuation, the council requires detailed information on the current and future status of the property. A valuation review for these properties is more complex than usual given the variable nature of storm damage and the time that would be required to fairly assess the impact. The required information still isn’t available or sufficiently reliable for many properties. At the same time our valuation resource is considerably constrained working through the objections arising from the last regional revaluation. The objection work isn’t expected to be completed until the latter half of this year.

Assessing rates equitably for 2023/2024 and 2024/2025

27. Officers recommend that council provide immediate rates relief for properties affected by the severe weather events in the first half of 2023 that remain uninhabitable as at 30 June 2023, by using the Miscellaneous Remissions Scheme in the Rates Remission and Postponement Policy to remit 50 per cent of the rates assessed for 2023/2024. This will also apply to any properties that subsequently become uninhabitable as a result of the 2023 storm events.

28. Officers also recommend that ratepayers whose properties may be more severely impacted, and who would, with an updated rating valuation, be liable for rates lower than this, may apply for an additional remission which will be assessed by officers on a case-by-case basis. For properties that remain uninhabitable as a result of severe weather events in the first half of 2023 the rates remission for the 2024/2025 year will be at the same proportion as that remitted in 2023/2024.

29. Officers also recommend the full remission of the waste management targeted rates (base charge, recycling, refuse, and food scraps) for the 2023/2024 and 2024/2025 years for properties uninhabitable as a result of the severe weather events in the first half of 2023. These rates are primarily a payment for services that these ratepayers are currently unable to use.

30. Where the council is aware of a property’s uninhabitable status, the remissions above will be applied automatically. This will be reflected in the first rates invoice for the year scheduled for delivery in August. Other property owners who aren’t identified will be able to apply for the remission. They will not have any penalties applied until their application has been assessed.

31. The cost of these remissions is estimated to be between $600,000 and $1.5^{^[2]} million in 2023/2024. This expenditure is unbudgeted and will impact negatively on the council’s overall financial position. As rates have already been set for 2023/2024 it will have to be debt funded this year as we cannot raise rates for all the other properties to make up the foregone revenue to fund the remission but for 2024/2025 will be rates funded requiring a rates increase of up to 0.07 per cent. However, it would be inequitable to rate these properties based on the valuations presently in the rating database.

32. Owners of uninhabitable properties impacted by the storm events may request a review of their rating valuation. A review can be requested where there have been significant physical changes to the building and/or land, which have a lasting impact on the value of the affected property. Alterations to a rating valuation as a result of a rating valuation review would be changed under section 14 of the Rating Valuations Act 1998. Rating valuations are not market valuations and cannot be changed to reflect potential market value decreases as a result of storm damage or sticker status.

33. If a review of a property’s rating valuation would result in a rates liability lower than that assessed after application of the remissions above, the rates for that property will be adjusted accordingly. If it would result in higher rates for the relevant year their rates will only be adjusted for the following year. This ensures that ratepayers can have certainty about their rates liability at the time they are initially advised.

34. Officers do not consider grants are an appropriate mechanism to provide continued rates relief. Grants were an appropriate option for the second half of 2022/2023 where the rates had already been set and assessed appropriately. This is no longer the case. Rates for 2023/2024 for these properties cannot be assessed fairly based on the current valuation, so a remission (being a rates-based mechanism), is now appropriate. The council provides the Miscellaneous Remission Scheme to address fairness and equity issues. It is appropriate to use this scheme to ensure rates for uninhabitable properties are set as fairly as possible.

35. Officers also considered adding a specific remission scheme for these purposes to the Rates Remission and Postponement Policy. This option was rejected as providing for an amendment to the policy would require consultation. A decision on the rates for these properties would therefore not be able to be made quickly which would continue uncertainty for these property owners. In addition, a new scheme is unnecessary given that the existing scheme already provides for this purpose.

36. Providing a 100 per cent remission was also considered but rejected as it would be unfair to other ratepayers. While the properties are uninhabitable at present, they now and will in the future, have value to which rating liability should attach. It would be unfair from a rating perspective to require other ratepayers to meet all this cost burden which would be between $1.2 million and $3 million.

General revaluation

37. The next general revaluation is scheduled for 2024 and will be used to assess rates from the 2025/2026 rating year. All properties in Auckland will be included in the general revaluation, including properties uninhabitable severe weather events in the first half of 2023.

Tauākī whakaaweawe āhuarangi

Climate impact statement

38. Recommendations in this report have a neutral climate impact as they relate to the allocation of rates rather than decisions on activities to be undertaken.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

39. The proposals in this report have been agreed on by the following departments or business units of the Auckland Council group:

· Group Recovery Office

· Rates Valuations & Data Management

· Financial Strategy and Planning.

40. The proposals in this report have been reviewed by Legal Services.

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

Local impacts and local board views

41. Local board views have not been sought due to the urgent nature of decision making related to this issue.

42. Decisions on rates and rates remissions are a Governing Body responsibility.

Tauākī whakaaweawe Māori

Māori impact statement

43. Māori have a unique relationship with the natural environment and wai through te ao Māori and mātauranga Māori. As a result of Māori whenua, marae and urupa often being located on or near the coast and waterways, it is expected that iwi and hapu will be disproportionately impacted by more frequent extreme weather events. The Government has advised that matters relating to Māori land and communities, including Te Tiriti obligations and approaches, will be undertaken in parallel to the government’s Category 3 work programme.

44. The Recovery Office will consider how the proposed approach for categorisation will impact Māori and their interests at a property level.

45. The council does not hold information on the ethnicity of ratepayers so is not able to identify the exact impact on the proposed changes on Māori. Some of the property owners impacted will be Māori and they will be affected in a similar way to other residents in Auckland whichever approach the council takes.

Ngā ritenga ā-pūtea

Financial implications

46. The financial implications of recommendations considered in this report are covered in the relevant sections of this report.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

47. There is a risk that some properties’ rating values may have been impacted by more than the 50 per cent provided for by the recommended remission. This is managed by the provision for the council to provide a higher level of remission on a case-by-case basis. The level of resource required to administer the remission is uncertain as there may be demand from property owners beyond current forecasts stating that their property is uninhabitable that will require individual investigation.

48. There are also risks that may arise from property owners requesting rating valuation reviews. If a large number of these requests are made it will put pressure on our valuation resource and require a prioritisation of other tasks. In addition, the outcome of these rating valuation reviews could lower the rates for some properties below the 50 per cent remission adding to the costs estimated in this report. While this is an additional cost it will reflect a fair assessment of their rates liability.

49. There is also a risk that more properties may become uninhabitable requiring more remissions as a result of more information becoming available about properties impacted by these storms or because of future storm events.

Ngā koringa ā-muri

Next steps

50. Any Governing Body decisions will be implemented, and any additional required communications actioned as soon as possible after decisions have been made.

Ngā tāpirihanga

Attachments

There are no attachments for this report.

Ngā kaihaina

Signatories

Authors

Andrew Duncan - Manager Financial Policy

Aaron Matich - Principal Advisor – Financial Policy

Authorisers

Ross Tucker - General Manager, Financial Strategy and Planning

Mat Tucker - Group Recovery Manager

Peter Gudsell - Group Chief Financial Officer

Phil Wilson – Acting Chief Executive

Governing Body

27 July 2023

Update of Fees Framework and Expenses Policy for Appointed Members

File No.: CP2023/03610

Te take mō te pūrongo

Purpose of the report

1. To consider, update and adopt the Fees Framework and Expenses Policy for Appointed Members which proposes to increase the hourly rate for independent hearings commissioners along with other minor amendments.

Whakarāpopototanga matua

Executive summary

2. The Auckland Council Fees Framework and Expenses Policy for Appointed Members (the framework) is used for setting fees and guiding the reimbursement of expenses for appointed members of committees, advisory panels or boards that have been established by the mayor, governing body or its committees, local boards or their committees and independent hearings commissioners.

3. Staff have reviewed the framework in light of the current recruitment for the 2024-2026 pool of independent hearings commissioners and are recommending an increase to the fees paid to independent hearings commissioners.

4. Along with the increase to the commissioner hourly rate, there are some minor amendments required such as updating the titles and department names.

5. A recent survey of other New Zealand councils shows that Auckland Council’s independent hearings commissioners are paid less per hour on average than other councils. Auckland Council’s independent hearings commissioner fees have not changed since July 2017.

6. Staff recommend an increase in fees based on an assessment of the market and the wage-based inflation since 2017 when the hourly rate was last increased to bring the fees more in line with other councils.

7. Without an increase, council may find it challenging to recruit and retain quality candidates that are trusted to make good decisions on behalf of the council. The availability of commissioners to sit on Auckland Council hearings may also be compromised due to commissioners sitting for other councils with higher rates.

8. The cost of an increase for independent hearings commissioners is approximately $38,000 per annum to the council which will be met within existing operational budgets and $355,000 per annum which is borne by the applicants.

Ngā tūtohunga

Recommendation/s

That the Governing Body:

a) whakaae / approve an increase to the independent hearings commissioner fees to take effect from 1 January 2024 from $187 an hour for a chair to $235 an hour, and from $165 an hour for a panel member to $208 an hour to be met within existing operational budgets

b) whai / adopt the updated Fees Framework and Expenses Policy for Appointed Members noting the minor amendments to job titles and department names in Attachment A of the agenda report.

Horopaki

Context

9. The Auckland Council Fees Framework and Expenses Policy for Appointed Members (the framework) was last amended by the previous term’s Governing Body on 12 December 2019 (GB/2019/142). The independent hearings commissioner fees were not updated at that time. The framework sets fees and guides the reimbursement of expenses for appointed members of committees, advisory panels or boards such as independent hearings commissioners and demographic advisory panel members.

10. It is timely to review the hourly rates for independent hearings commissioners as recruitment has commenced for a new pool of commissioners who will be contracted for three years from 1 January 2024.

11. Staff have updated the framework and recommend an increase in fees paid to independent hearings commissioners along with minor editorial changes to the policy.

12. The increased hourly rates would take the chair hourly rate from $187 an hour to $235 an hour and the panel member hourly rate from $165 an hour to $208 an hour.

13. An amended version of the framework with tracked changes can be found in Attachment A to this report.

Tātaritanga me ngā tohutohu

Analysis and advice

14. A survey of 56 councils was undertaken in the first quarter of 2023. The purpose of this survey was to establish the current market rate for independent hearings commissioners sitting on council hearings. Of those 56 councils, 37 shared the rate they pay their independent hearings commissioners.

15. The survey asked:

· What hourly rate they pay their independent hearings chairperson and panel members

· Do they have a set rate or does the commissioner charge their own rate

· Do they pay for travel time

· Do they pay for accommodation for out of town commissioners

· Do they pay travel expenses i.e., flights and/or mileage

· Do they on-charge those expenses to the applicants.

16. The results of the survey were:

· Only two of the 37 councils have a set hourly rate

· 24 councils pay travel time i.e., time spent driving to the site visit or hearing venue

· 32 councils pay accommodation for out-of-town commissioners

· 32 councils pay travel expenses i.e., flights and\or mileage

· 28 councils on-charge those expenses to the applicants.

For the most part, councils paid commissioners at the hourly rate set by the commissioner themselves.

17. The Auckland Council Fees Framework and Expenses Policy for Appointed Members does not automatically allow for travel time, accommodation or flights to be reimbursed. Independent hearings commissioners can charge mileage from the Auckland border ie Te Hana or Bombay. Staff are not recommending any change to this.

18. Auckland Council has a set hourly rate for its independent hearings chairperson and panel members. That rate was set on 1 July 2017 and is $187 an hour for a chairperson and $165 an hour for a panel member.

19. The vast range in hourly rates makes it difficult to directly compare hourly rates across surveyed councils. The recent survey results can be found at Attachment B which shows that Auckland Council’s independent hearings commissioners are paid less per hour on average than other councils.

20. Staff reviewed wage-based inflation through the Reserve Bank website to further inform the survey findings. The inflation calculator shows that private sector wages have increased by 28.8 per cent since July 2017, when the fees were last increased as indicated on the following diagrams.

A graph of the year

Description automatically generated

21. Based on the above wage-based inflation rate and the comparatively higher fees across surveyed councils, staff propose an increase to the current commissioner hourly rates taking the chairpersons hourly rate to $235 an hour and the members hourly rate to $208 an hour. These rates sit below the average mid-range hourly rate in the survey findings being $244 for a chair and $233 for a panel member.

22. Staff have looked at a number of approaches and consider the following two options are available at this time:

Option	Consideration
1) No change, rate remains at: · $187 per hour for chairpersons; and · $165 per hour for members	Pros: · no financial impact to the council or applicants Cons: · risk that the existing rate is not competitive with fees offered by other councils and we will be unable to recruit and retain quality commissioners with appropriate professional experience and expertise. This will have a negative impact on the quality of decision-making
2) Increase rate to: · $235 per hour for chairpersons; and · $208 per hour for members	Pros: · fee increase linked to current market rate and known wage price inflation and applied equally across chairpersons and members · ability to recruit and retain quality commissioners that are trusted to make good decisions on behalf of the council · fee increase sits conservatively within the fee range of recently surveyed councils Cons: · fee increase on-charged to applicants for applications where a commissioner is used which may result in public opposition · marginal increase to council for unrecoverable hearings · fee increase may not be large enough to mitigate recruitment and retention of commissioners

Option

Consideration

1) No change, rate remains at:

· $187 per hour for chairpersons; and

· $165 per hour for members

Pros:

· no financial impact to the council or applicants

Cons:

· risk that the existing rate is not competitive with fees offered by other councils and we will be unable to recruit and retain quality commissioners with appropriate professional experience and expertise. This will have a negative impact on the quality of decision-making

2) Increase rate to:

· $235 per hour for chairpersons; and

· $208 per hour for members

Pros:

· fee increase linked to current market rate and known wage price inflation and applied equally across chairpersons and members

· ability to recruit and retain quality commissioners that are trusted to make good decisions on behalf of the council

· fee increase sits conservatively within the fee range of recently surveyed councils

Cons:

· fee increase on-charged to applicants for applications where a commissioner is used which may result in public opposition

· marginal increase to council for unrecoverable hearings

· fee increase may not be large enough to mitigate recruitment and retention of commissioners

23. Independent hearings commissioners are quality professionals considered outstanding in their areas of expertise. They act under delegated authority to make decisions on behalf of Auckland Council that stand up to appeal in the Environment Court. Independent hearings commissioners must be accredited with the Making Good Decisions certification, which is obtained at their own cost.

24. Auckland hearings often involve complex and / or challenging matters so it is important that Auckland Council has very competent, high-quality commissioners in its pool.

25. Independent hearings commissioners sit on resource consent hearings, public and private plan change hearings as well as other matters such as Reserve Act hearings. It is important that Auckland Council maintains a high level of quality decision-makers. It is these commissioners who decide on applications proposing amendments to the Auckland Unitary Plan and the council therefore needs to have a high-level of trust in the decision-makers to achieve good outcomes for Auckland.

26. Independent hearings commissioners sit on hearings for Regional Authorities and Territorial Authorities all around the country. Sixty per cent of Auckland Council’s commissioners sit on hearing panels for other councils. Feedback from some of those Auckland Council commissioners is that they prioritise other council hearings over Auckland due to the hourly rate and other expenses they receive at those councils. For those independent hearings commissioners who do consultancy work or work for private companies, their professional charge-out rates are much higher than commissioner work which can also lead to commissioners turning down Auckland hearings.

27. There is a high probability that while commissioners may be appointed to the pool, they will not necessarily be available for Auckland Council work due to them prioritising other council commissioner work. This could lead to hearings not being held within statutory timeframes which would lead to council being liable to pay a 1 per cent discount per working day on administrative charges, up to a maximum of 50 per cent.

28. There is a risk that a decision to keep the commissioners’ hourly rates unchanged will negatively impact the recruitment and retention of quality professionals. This risk must be balanced by the financial impact to those who bear the cost of commissioner fees, including applicants and the council generally. An increase of any amount could have a reputational impact for the council.

29. Most independent hearings commissioner costs are on-charged to applicants, with a small proportion of costs borne by the council. Over the previous four years, on average 90 per cent of the commissioner fees have been on-charged to applicants, while 10 per cent has been borne by the council. Only a very small percentage of applicants will be affected by an increase in commissioner fees.

30. Independent hearings commissioners earn fees by considering applications on the papers as duty commissioners or through hearings. Approximately three per cent of resource consent applications are considered by duty commissioners and less than 0.1 per cent of applications went to a hearing in 2022.

31. Along with resource consent hearings, independent hearings commissioners also hear and decide on plan change matters including private plan changes and make recommendations on Notice of Requirements (NoR). A private plan change applicant and a Requiring Authority will experience the same increase to commissioner fees as a resource consent applicant would. The council bears the commissioner costs for a public plan change.

32. Since 2019, there have been 61 private plan changes or NoR hearings and 16 public plan changes resulting in 80 per cent of these hearings costs being borne by the applicants.

33. Applications that go to hearing would be more costly for applicants, however as noted above, less than 0.1 per cent of resource consent applications go to hearing. A review of hearings information for the period 2019 to 2022 indicates that the impact of the proposed increase in independent hearings commissioner fees for hearings is approximately $355,000 per annum which is borne by the applicants and $38,000 per annum for the council which will be met within existing operational budgets.

34. On balance, staff recommend Option 2 – increasing fees to $235 an hour for the chair and to $208 an hour for the panel members.

Tauākī whakaaweawe āhuarangi

Climate impact statement

35. The decision to amend the Framework is administrative and does not have any direct climate change impacts.

36. The minor impacts from greenhouse gas emissions relating to travel associated with applications held under the Resource Management Act 1991 and the Reserves Act 1977 are mitigated by holding hearings as close as possible to the site relating to the application.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

37. Any applications made under the Resource Management Act 1991 by a Council group that goes to a hearing or is dealt with by a Duty Commissioner will see an increase in the commissioner fee component of the application. This is a small impact that will be managed by those parts of council who oversee each individual application.

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

Local impacts and local board views

38. Local board members are not directly affected by an update of the Fees Framework and Expenses Policy for Appointed Members, as their fees and expenses are set out in the Elected Members Expenses Policy and approved by the Remuneration Authority.

39. Local boards have been delegated powers under the Reserves Act 1977 that enable them to make specific decisions over local reserves. Where these decisions are significant and require a public hearing, local boards have the option of including an independent hearings commissioner to be part of the hearing panel.

40. As remuneration of commissioners does not impact local board budgets, I have not sought local board feedback for the Governing Body’s consideration.

41. Any cost associated with an independent hearings commissioner sitting on a Local Board hearing is met by the Democracy and Engagement Department within existing operational budgets.

Tauākī whakaaweawe Māori

Māori impact statement

42. Auckland Council appoints specific independent hearings commissioners who are experts in Te Tiriti o Waitangi and Te Ao Māori, to ensure better decision-making by, and for, Māori. All commissioners are expected to have an understanding of Te Tiriti o Waitangi and Te Ao Māori and this expectation is built into the recruitment and selection process through shortlisting criteria and targeted interview questions.

43. The proposed increase to the independent hearings commissioner rate applies equally across all commissioners including Māori commissioners and is intended to improve the recruitment and retention of high-quality commissioners.

Ngā ritenga ā-pūtea

Financial implications

44. The proposed changes to the Fees Framework and Expenses Policy for Appointed Members will cost the council approximately an additional $38,000 per year for independent hearings commissioner fees for unrecoverable hearings.

45. The impact to applicants of an increase in commissioner fees for recoverable hearings is approximately $355,000 per year spread across all the applicants.

46. The additional council costs above will be met within existing operational budgets.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

47. It is six years since the last increase in hourly rate for independent hearings commissioners. Without an increase from 1 January 2024, the ability to recruit and retain quality candidates that are trusted to make good decisions on behalf of the council will be challenging.

48. The retention of existing panel members on long-running hearings may be at risk.

49. Without high quality and experienced decision-makers, council could find itself re-litigating decisions in the Environment Court and/or High Court which incur a substantial cost to the council.

50. Council is required to provide a discount on administrative charges when a consent is not processed within the statutory timeframes of the Resource Management Act. If a hearing is delayed beyond the statutory timeframes because independent hearings commissioners are not available, council is liable to pay a 1 per cent discount per working day on administrative charges, up to a maximum of 50 per cent.

Ngā koringa ā-muri

Next steps

51. The minor wording changes to the Fees Framework and Expenses Policy for Appointed Members will come into effect upon adoption by the Governing Body, with the exception of the new independent hearings commissioner fees, which will be effective from 1 January 2024 to align with the start date of the new commissioner contracts.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇨	Updated Fees Framework and Expenses Policy for Appointed Members
b ⇨	Survey results of other New Zealand councils

Ngā kaihaina

Signatories

Author

Julie McKee - Hearings Manager

Authorisers

Angeline Barlow – Acting General Manager Democracy and Engagement

Anna Bray - Acting Director - Governance and CCO Partnerships

Phil Wilson – Acting Chief Executive

Governing Body

27 July 2023

Submission on the Ngāti Paoa Claims Settlement Bill

File No.: CP2023/09699

Te take mō te pūrongo

Purpose of the report

1. To approve a submission for the Māori Affairs Committee on the Ngāti Paoa Claims Settlement Bill.

Whakarāpopototanga matua

Executive summary

2. Submissions on the Ngāti Paoa Claims Settlement Bill must be lodged with the Māori Affairs Committee by 2 August 2023. The proposed submission from Te Kaunihera o Tāmaki Makaurau - Auckland Council acknowledges the importance of the settlement to Ngāti Paoa and the people of Auckland (Attachment A).

3. It also acknowledges the ongoing relationship between Auckland Council and Ngāti Paoa and describes, for the benefit of the Māori Affairs Committee, aspects of the settlement that have involved direct consideration by Auckland Council. In this manner the submission seeks to assist the Committee in their deliberations and contribute positively to the relationship between Auckland Council and Ngāti Paoa.

Ngā tūtohunga

Recommendation/s

That the Governing Body:

a) whakaae / approve the Auckland Council submission in Attachment A of the agenda report, to the Māori Affairs Committee in support of the Ngāti Paoa Claims Settlement Bill.

Horopaki

Context

4. On 20 March 2021 Ngāti Paoa signed a deed of settlement with the Crown.

5. The Ngāti Paoa Claims Settlement Bill, which gives effect to the deed, was introduced into Parliament on 16 December 2022 and had its first reading on 21 June 2023. Parliament has referred the Bill to the Māori Affairs Committee. Submissions on the Bill are due by 2 August 2023.

6. Ngāti Paoa is an iwi in the Auckland Council area. They also have interests in the Hauraki District Council, Thames Coromandel District Council, and Waikato Regional Council areas. A summary of the Ngāti Paoa settlement is provided as Attachment B.

Tātaritanga me ngā tohutohu

Analysis and advice

7. The proposed submission refers to the ongoing relationship between Ngāti Paoa and the council and the opportunities provided to Ngāti Paoa by the settlement. The submission otherwise notes the importance of the Treaty settlement to Ngāti Paoa and the people of Auckland.

8. No changes are sought to the Bill. It is not proposed that Auckland Council will appear to speak to the submission.

9. The balance of the proposed submission refers to the redress involving Auckland Council, namely Omaru Recreation Reserve (Point England Reserve), Te Iwi Rahirahi Local Purpose (Esplanade) Reserve, Te Waero Awe Houkura Recreation Reserve (Blackpool Park) and Māwhitipana Recreation Reserve.

10. During settlement negotiations Auckland Council was advised by the Crown of the proposed redress and council views were sought on these four cultural redress sites.

Omaru Recreation Reserve / Point England Reserve

11. Point England Reserve is the largest contiguous area of open space land on the western side of the Tāmaki River, generally servicing the suburbs of Point England, Tāmaki, Glen Innes and Panmure. The reserve comprised around 48.3 hectares, of which 45.8 hectares has underlying Crown title.

12. In 2014 the Crown offered land within the reserve to Ngāti Paoa for a marae. The initial offer was for 1.0 hectare, which was supported by the Governing Body (GB/2014/11, GB/2014/25) and the Maungakiekie-Tāmaki Local Board (MT/2014/2). Later engagement between Auckland Council and the Crown saw an increased footprint to 2.0 hectares, including the need to provide car-parking and to ensure marae buildings were not overly crowded on the site.

13. In 2017 approximately 11.7 hectares of Point England Reserve was set apart for state housing purposes by the Point England Development Enabling Act 2017. The intention was for the Crown to provide a commercial opportunity to Ngāti Paoa, by selling them the 11.7 hectares for residential housing development.

14. At the time Auckland Council had significant concerns about the impact of this proposal on open space provision and the environment. Auckland Council submitted on the Point England Development Enabling Bill, raising these concerns (GB/2017/8).

15. In late 2017, following the change of government, the Crown put a revised proposal to Ngāti Paoa that did not involve intensive housing development. The revised proposal was for most of reserve to transfer to Ngāti Paoa as a reserve (including the land designated for state housing), with Auckland Council appointed as the administering body. The new reserve would be called ‘Omaru Recreation Reserve’. Rather than establish a reserves board for governance, it was proposed that Auckland Council would be required to ‘jointly prepare and agree’ a reserve management plan with Ngāti Paoa. This was seen as a form of partnership that avoided establishing an unnecessarily complex reserves board.

16. The Crown also proposed that 2.0 hectares transfer to Ngāti Paoa as cultural redress for the construction of a papakāinga, with this land being located within the state housing area. This was in addition to the 2.0 hectares that had been previously offered to Ngāti Paoa as a local purpose (marae) reserve, and sought to meet longstanding Ngāti Paoa aspirations to rebuild their community in the Tāmaki area.

17. On 24 May 2018 the Governing Body resolved to support the Crown’s revised Treaty settlement offer to Ngāti Paoa (GB/2018/88). On 20 March 2021 Ngāti Paoa signed a deed of settlement with the Crown, which included the revised offer.

18. It should be noted that since its enactment the Point England Development Enabling Act 2017 has had no significant impact on the reserve. The Ngāti Paoa Claims Settlement Bill, once enacted, will repeal the Point England Development Enabling Act 2017.

Te Waero Awe Houkura (Blackpool Park) and Māwhitipana Recreation Reserve

19. In 2014 the Crown consulted with Auckland Council over the provision of two areas of reserve land to Ngāti Paoa – Blackpool Park at Oneroa, and Māwhitipana at Palm Beach. Ngāti Paoa would administer Māwhitipana as a reserve, ensuring ongoing public access and protection of reserve values, while Auckland Council would remain as the administering body for Te Waero Awe Houkura (Blackpool Park).

20. The Governing Body noted the proposed redress and supported Auckland Council remaining as the administering body for Blackpool Park, which was to take the name “Te Waero Awe Houkura Recreation Reserve” (GB/2014/74). Auckland Council is to remain the administering body for the reserve, with the requirement to jointly develop and agree a reserve management plan for the reserve with Ngāti Paoa. This provides for a partnership-like arrangement for the land, the same as that provided for Omaru Recreation Reserve at Point England.

21. It should be noted Te Waero Awe Houkura has three historic school buildings on it, ownership of which will transfer to Ngāti Paoa. It has also been agreed that Ngāti Paoa will lease these buildings back to Auckland Council for five years, with two rights of renewal each of five years. The revised reserve management plan developed with Ngāti Paoa will guide the use of the buildings over this period.

Te Iwi Rahirahi

22. Te Iwi Rahirahi, otherwise known as Whitford Point, is on the Clevedon-Kawakawa Road at Kawakawa Bay. In 2014 the Crown proposed transferring the Crown-owned portion of the local purpose (esplanade) reserve, which comprises approximately a third of the Whitford Point, to Ngāti Paoa as a reserve. The Franklin Local Board was consulted and the Governing Body later briefed (attachments in CP2014/15843).

23. Although consideration was initially given to Ngāti Paoa being the administering body for the reserve, the Crown later decided the reserve was best administered as a whole. On that basis, it was agreed Auckland Council should remain the administering body for the area transferred to Ngāti Paoa, plus the balance of the reserve owned by council. Ngāti Paoa will be able to “accept, grant, or decline to grant any interest in land that affects the reserve land, or renew or vary such an interest” in the portion owned by them, but Auckland Council will have decision-making over other interests. The Bill also provides the option for Ngāti Paoa to become the administering body for the reserve at a future date, if both Ngāti Paoa and Auckland Council agree.

Tauākī whakaaweawe āhuarangi

Climate impact statement

24. While this report does not directly impact on climate change, the involvement of Ngāti Paoa in the preparation and approval of the relevant reserve management plans is expected to improve the future management direction for the reserves in respect to the role of local parks in climate change mitigation and adaptation.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

25. The council group was involved in the negotiations between Ngāti Paoa and the Crown during the reaching of this settlement.

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

Local impacts and local board views

26. Local boards relevant to the proposed redress involving Auckland Council were consulted during the development of the deed of settlement. Local boards with relationships with Ngāti Paoa are otherwise aware of the Ngāti Paoa deed of settlement and pending settlement legislation.

Tauākī whakaaweawe Māori

Māori impact statement

27. The Ngāti Paoa Claims Settlement Bill settles the unsettled historical grievances of Ngāti Paoa and provides redress. The proposed Auckland Council submission supports the Bill.

Ngā ritenga ā-pūtea

Financial implications

28. While there are some financial implications for council arising from the joint preparation and approval of reserve management plans that form part of the settlement redress, these are considered to be minimal and will be met by existing budget.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

29. The meeting of council’s obligations to Māori and honouring of its Treaty obligations is a priority objective.

Ngā koringa ā-muri

Next steps

30. If approved the submission will be lodged with the Māori Affairs Committee.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇨	Auckland Council’s submission on the Ngāti Paoa Claims Settlement Bill
b ⇨	Ngāti Paoa Settlement Summary

Ngā kaihaina

Signatories

Author	Sam Bunge - Senior Advisor - Maori Outcomes
Authoriser	Phil Wilson - Acting Chief Executive

Governing Body

27 July 2023

Summary of Governing Body and Committee information memoranda and briefings (including the Forward Work Programme) - 27 July 2023

File No.: CP2023/05705

Te take mō te pūrongo

Purpose of the report

1. To receive a summary and provide a public record of memoranda or briefing papers that may have been distributed to the Governing Body or its committees.

Whakarāpopototanga matua

Executive summary

2. This is a regular information-only report which aims to provide greater visibility of information circulated to Governing Body members via memoranda/briefings or other means, where no decisions are required.

3. For openness and transparency the Hauraki Gulf Forum minutes will now be included in this report following their most recent meeting.

Date

Meeting

12.6.23

Hauraki Gulf Forum (held at Maraetai Beach Boating Club)

Minutes can here access here

4. The following memos or information were circulated to members of the Governing Body:

Date	Subject
28.6.23	Information Memorandum: Future for Local Government Review
13.7.23	Information Memorandum: Consultation on local board plan 2023
19.7.23	Information Memorandum: Food Scraps Targeted Rate Remission
21.7.23	Action from Kaipātiki Local Board Meeting of 19 July 2023 relating to the Kaipātiki Local Board Chairperson’s Report
24.7.23	Action from Devonport-Takapuna Local Board Meeting of 18 July 2023 relating to the Local Board Transport Capital Fund

5. The following workshops/briefings have taken place for the Governing Body:

Date	Subject
17.7.23	CONFIDENTIAL: Category 3 Storm Recovery Political Advisory Group (no attachment)
19.7.23	CONFIDENTIAL: Future Redevelopment of the Ports Land (no attachment)

6. This document can be found on the Auckland Council website, at the following link:

http://infocouncil.aucklandcouncil.govt.nz/

o at the top left of the page, select meeting/Te hui “Governing Body” from the drop-down tab and click “View”;

o under ‘Attachments’, select either the HTML or PDF version of the document entitled ‘Extra Attachments’.

7. Note that, unlike an agenda report, staff will not be present to answer questions about the items referred to in this summary. Governing Body members should direct any questions to the authors.

Ngā tūtohunga

Recommendation/s

That the Governing Body:

a) whiwhi / receive the Summary of Governing Body and other committee information memoranda and briefings – 27 July 2023.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇨	Forward Work Programme (Under Separate Cover)
b ⇨	Information Memorandum: Future for Local Government Review (Under Separate Cover)
c ⇨	Information Memorandum: Consultation on local board plan 2023 (Under Separate Cover)
d ⇨	Information Memorandum: Food Scraps Targeted Rate Remission (Under Separate Cover)
e ⇨	Action from Kaipātiki Local Board Meeting of 19 July 2023 relating to the Kaipātiki Local Board Chairperson’s Report (Under Separate Cover)
f ⇨	Action from Devonport-Takapuna Local Board Meeting of 18 July 2023 relating to the Local Board Transport Capital Fund (Under Separate Cover)

Ngā kaihaina

Signatories

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

[1] 327 properties currently have red placards, 836 properties received rates relief in 2022/2023 due to being uninhabitable

[2] The current number of uninhabitable properties due to the storm is uncertain. It will likely range between 327 properties that currently have a red placard and 836 properties that received rates relief in 2022/2023 due to being uninhabitable, some of which may be habitable now.

Mayor	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

Exclusion of the Public: Local Government Official Information and Meetings Act 1987