I hereby give notice that an ordinary meeting of the Franklin Local Board will be held on:

 

Date:

Time:

Meeting Room:

Venue:

 

Tuesday, 24 October 2023

9.30am

The Leslie Comrie Board Room
Level One Franklin: The Centre
12 Massey Ave
Pukekohe

 

Franklin Local Board

 

OPEN ADDENDUM AGENDA

 

 

 

 

MEMBERSHIP

 

Chairperson

Angela Fulljames

 

Deputy Chairperson

Alan Cole

 

Members

Malcolm Bell JP

Andrew Kay

 

Sharlene Druyven

Amanda Kinzett

 

Gary Holmes

Logan Soole

 

Amanda Hopkins

 

 

(Quorum 5 members)

 

 

 

Denise Gunn

Democracy Advisor

 

19 October 2023

 

Contact Telephone: 021 981 028

Email: denise.gunn@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz

 

 


Franklin Local Board

24 October 2023

 

 

ITEM   TABLE OF CONTENTS            PAGE

 

12        Franklin Local Board Paths Targeted Rate       5

 


Franklin Local Board

24 October 2023

 

 

Franklin Local Board Paths Targeted Rate

File No.: CP2023/15823

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To provide advice on a proposal for additional investment in paths in the Franklin Local Board area and funding this from a Franklin Local Board Paths Targeted Rate.

Whakarāpopototanga matua

Executive summary

2.       Active transport modes (walking and cycling) are a priority focus for the transport connections programme for the Franklin Local Board. Franklin Local Board communities have shown a consistent interest in options that would enable them to contribute to climate action at the local level. To date, Franklin Local Board has allocated around $2.4 million of its discretionary funding to progress paths in partnership with community groups. There are no new footpaths or footpath improvements budgeted for Franklin in the Regional Land Transport Plan. Parks and Community Facilities have a three-year programme of Locally Driven Initiative expenditure to support path development in the Franklin Local Board area. 

3.       The Franklin Local Board have developed a programme for additional paths investment summarised in the table below:

Investment

10-year operating expenditure

10-year capital expenditure

Partnership coordination and programme management

$1,666,043

$0

Franklin Regional Connection Plan

$67,000

$0

Waiuku Sub-division Investment Programme

$612,682

$5,275,880

Pukekohe Sub-division Investment Programme

$812,587

$18,591,747

Wairoa Sub-division Investment Programme

$263,673

$4,308,661

Total

$3,421,985

$28,176,288

 

4.       The Franklin Local Board Paths Programme provides an additional investment lever to support modal shift to meet the timeframes outlined in Te Tāruke-ā-Tāwhiri: Auckland's Climate Plan. Where possible the Franklin Local Board will work with communities, through community-led delivery, to leverage council funds to deliver the larger investment programme. The scale of projects that will ultimately be delivered will depend on the extent that community-led delivery can be incorporated into the programme.

5.       Having considered the matters set out in section 101(3) of the Local Government Act 2002, staff recommend that the additional paths investment programme be funded by a targeted rate on all ratepayers in the Franklin Local Board area. Investment in paths infrastructure is a public good. The paths generate benefits to the entire local board area and all property types through improved connections between residential, transport, and urban hubs.  Council’s approach to funding public goods is from ratepayers through either the general rate or targeted rates applied across all ratepayers throughout the region.

6.       Staff recommend that a targeted rate for each Separately Used or Inhabited Part (SUIP) be set on properties in the Franklin Local Boad area to fund the investment programme. The proposed investments in paths are an additional public good that will primarily benefit Franklin Local Board residents. The benefits they receive are more closely aligned to the incidence of SUIP’s rather than capital value. The table below sets out the impact of a targeted rate of $52 (GST inclusive) per SUIP per annum required to fund the additional investment on all properties in the Franklin Local Board area. This charge (with annual inflation increases) is forecast to generate around $20 million in revenue[1] over the period of the 10-year Budget 2024-2034. The rates increase shown below will be in addition to any increase in general or other rates.

Category

Number of properties

Average Annual Rates (GST incl)

Additional Average Rates Increase (%)[2]

Urban Residential

10,424

$2,577

2.0%

Urban Business

763

$15,268

0.3%

Rural Residential

11,771

$2,748

1.9%

Rural Business

613

$12,358

0.4%

Farm and Lifestyle

10,192

$4,256

1.2%

All categories

33,763

$3,608

1.4%

 

Ngā tūtohunga

Recommendation/s

That the Franklin Local Board:

a)      whakaae / agree to recommend that the Governing Body consult on the introduction of a Franklin Local Board Paths Targeted Rate of $52 (GST inclusive) per Separately Used or Inhabited Part per annum, increasing each year with inflation, on all rateable properties in the Franklin Local Board area to fund additional investment in paths in the Franklin Local Board as part of the 10-year Budget 2024-2034.

Horopaki

Context

Franklin Local Board Paths

7.       Active transport modes (walking and cycling) are a priority focus for the transport connections programme for the Franklin Local Board. Active mode paths are typically around 5km or less in length and connect residential, business, educational and transport hubs and are located within, or near to, urban areas. The projects in the proposed investment programme have been selected to best support active modes outcomes. The path programme also includes a smaller number of priority footpath improvements and pedestrian crossings to improve mobility and safety.

8.       Franklin Local Board communities have shown a consistent interest in options that would enable them to contribute to climate action at the local level. Environment and transport outcomes are regularly prioritised by locals in public engagement events.

9.       To date, Franklin Local Board has allocated around $2.4 million of its discretionary Locally Driven Initiatives (LDI) operating expenditure funding to progress paths in partnership with community groups. Parks and Community Facilities (PCF) have a LDI funded three-year programme to support path development in Franklin.  Developers are delivering portions of networks as development occurs.

10.     There are no new footpaths or footpath improvements budgeted for the Franklin Local Board area in the Regional Land Transport Plan. These funding constraints are reducing the potential of this programme to support modal shift to meet the timeframes outlined in Te Tāruke-ā-Tāwhiri: Auckland's Climate Plan. The Franklin Local Board Paths Programme is the last investment lever available to the board.

11.     The Franklin Local Board Paths Programme proposal was tested with the Franklin community as part of the consultation on the Annual Budget 2022/2023. Of the 862 responses, 48 per cent were in support, 41 per cent opposed and 11 per cent responded ‘don’t know’ or ‘other’.

Statutory decision-making criteria

12.     The council is required to consider and consult on any changes to funding for services that involve targeted rates. The sources of funding for the proposed paths improvements in the Franklin Local Board area must be considered against the statutory criteria in section 101(3) of the Local Government Act 2002. The key elements of this assessment are set out in the analysis below. A full analysis against the statutory criteria is set out in Attachment A: Assessment against statutory criteria.

13.     The introduction of a targeted rate to fund additional paths infrastructure in the Franklin Local Board area from 2024/2025 requires consultation as part of the 10-year Budget 2024-2034. Decisions are required at this meeting to meet the timeframes for including the proposal in the 10-year Budget 2024-2034. The next opportunity after this will be the Annual Budget 2025/2026.

Tātaritanga me ngā tohutohu

Analysis and advice

Proposed additional investment in paths

14.     The table below sets out the proposed investment[3] in paths in the Franklin Local Board area. Full details of the investment programme can be found in Attachment B: Walking and cycling improvements - investment options for Franklin Local Board:

Investment

10-year operating expenditure

10-year capital expenditure

Partnership coordination and programme management

$1,666,043

$0

Franklin Regional Connection Plan

$67,000

$0

Waiuku Sub-division Investment Programme

$612,682

$5,275,880

Pukekohe Sub-division Investment Programme

$812,587

$18,591,747

Wairoa Sub-division Investment Programme

$263,673

$4,308,661

Total

$3,421,985

$28,176,288

 

15.     The proposed investment programme has been developed by the Franklin Local Board to reflect the distribution of revenue from each local board sub-division area while balancing additional paths investment and the impact on ratepayers.  Projects will be delivered based on relative priority, to be determined by the board, at the time the projects are agreed by the board.

16.     There is some uncertainty around the costs of delivering the full programme, particularly for investments in the later years. Investment in most paths will be subject to further feasibility assessment. All paths will also need to meet acceptable design standards set by Auckland Transport and Park & Community Facilities as they will be responsible for their ongoing maintenance once the targeted rate ceases. Reprioritisation of the programme may be required to maximise outcomes and different paths may be substituted in place of paths identified in the proposal. If this occurs path investments will be at the same general cost and location within the Franklin Local Board area to ensure that investments are aligned to the communities that fund them.

17.     Costs for delivery of the projects have been estimated based on commercial contracting rates that includes an allowance for contingency. The estimated cost of the proposed investment exceeds the funding available from the proposed targeted rate. Where possible the council will work with communities, through community-led delivery, to reduce construction costs and leverage council funds to deliver the larger investment programme. The scale of projects that will ultimately be delivered will depend on the extent that community-led delivery can be incorporated into the programme. Not all projects may end up being delivered if community-led delivery doesn’t achieve the level of cost savings anticipated.

18.     The Franklin Local Board will also explore opportunities to use the targeted rate funding to align expenditure in support of active modes outcomes. It will also seek to attract non-council co-funding to increase the overall budget available for investment. 

19.     Delivery of the projects will be phased over the duration of the 10-year programme and investment will be aligned with revenue received each year from the targeted rate. The design phase for paths (i.e. investigation to construction) is around one year for straight forward sites and up to two years for complex sites. For pedestrian crossings design is around two years for straight forward sites and up to three for complex sites. Delivery of the paths programme will start in year 2 for simple and high priority projects. However, due to the design phase lead in times, the programme will mainly be delivered in years 3-99.

Benefits of proposed investment

20.     The proposed investment in paths has been planned to provide infrastructure across the Franklin Local Board in relation to the relative share of rates revenue that would be sought from each local board sub-division area. The proposed paths will mainly be in urbanised areas (including satellite towns and communities) and connect with existing paths network as well as the wider public transport network. There are no material benefits to the wider Auckland area.

21.     Users of the paths will directly benefit from their use. However, as paths investment is a public good the benefits accrue generally across all residents. There are no mechanisms available to charge users.

22.     Landowners will be the other primary beneficiaries through the availability of the paths infrastructure. All properties (including business, farm, and lifestyle) located near the new paths will benefit by providing safe and sustainable transport choices to nearby locations and to the rest of the city via the wider public transport network. Properties located in the wider Franklin Local Board area will benefit as they will be relatively near to the new paths, increasing alternative active recreation options. All properties in the Franklin Local Board area will benefit from an improved urban environment, localised decongestion effect, and reduced air pollution from reduced use vehicles due to mode switching, As with all public goods these benefits are unable to be reliably measured.

23.     Due to the geographic nature of the Franklin Local Board, some properties (particularly remote farm and lifestyle properties) will not receive the same level of benefits as other properties in the Franklin Local Board area. Council’s existing general rates differentials include a urban and rural categories based on overall levels of service provision. The benefits of proposed paths investment programme do not align with the general rate categories as the benefits span areas that are classified as both urban and rural for general rates.

24.     Development of the Franklin Regional Connection Plan will benefit all residents equally throughout the Franklin Local Board area.

Analysis of Franklin Local Board ratepayers

25.     A high-level analysis of the ratepayers in the Franklin Local Board area is set out in the following table.

 

 

Residential

Business

Farm/Lifestyle

Properties

Total

22,195

1,376

10,192

Proportion

65.7%

4.1%

30.2%

Separately used or inhabited parts (SUIPs)

Total

23,426

2,099

11,290

Proportion

63.6%

5.7%

30.7%

Capital value

Total

$23.6b

$3.7b

$23.5b

Proportion

46.4%

7.4%

46.2%

26.     Land in the Franklin Local Board area is a mixture of residential, business and farm/lifestyle properties. On average, business and farm/lifestyle properties have higher capital values than residential properties. The property with the highest capital value is the Glenbrook Steel Mill. Within the farm/lifestyle category around 9,300 (82 per cent) of the Separately Used or Inhabited Part’s (SUIP’s), and $17.3 billion (74 per cent) of the capital values, are for lifestyle properties.

27.     A targeted rate set on a per SUIP basis would result in 63.6 per cent of the revenue coming from residential land, 5.7 per cent from business land, 25.2 per cent from lifestyle land and 5.5 per cent from farmland. A targeted rate set on a capital value basis would result in 46.4 per cent of the revenue coming from residential land, 7.4 per cent from business land, 34.1 per cent from lifestyle land and 12.1 per cent from farmland.

Rates funding options

28.     Staff recommend that the targeted rate be set as a fixed rate of $52 per SUIP per annum across all rateable properties in the Franklin Local Board area. Staff also recommend that the targeted rate increases each year in line with the forecast increase in costs (inflation) to deliver the paths programme. To fully fund the paths investment programme from the targeted rate[4] would require the rate to be around $82 per SUIP per annum across all rateable properties in the Franklin Local Board area.

29.     Investment in paths infrastructure is a public good. Council’s approach to funding public goods is from ratepayers through either the general rate or targeted rates applied across all ratepayers throughout the region.

30.     Given the nature of the benefits noted above:

·        business owners and farms in, or near, urban areas do not receive benefits in proportion to their scale of activity or capital value

·        residential properties of differing capital value will benefit similarly.

31.     There is a strong relationship between capital value and household income. A rate applied on capital value would place more charge on those potentially better able to afford it. This would significantly increase the share of rates paid by farm and lifestyle properties and materially increase the share of rates paid by business. It would also result in a lower alignment between payment of rates and receipt of benefits. However, business and farm properties can claim back GST and expense rates for tax purposes.

32.     Some properties, particularly farm and lifestyle properties in remote areas, will not be near to the new paths. Additionally, business properties may not receive the same level of benefits that residential properties do. Rating differentials can be used to adjust the relative level of the targeted rate charged to each category of property.

33.     Using differentials to reduce the level of the targeted rate to farm and lifestyle, or business properties would either reduce the level of funding available for investment or require higher levels of rate to be charged to residential properties to maintain overall revenue. For example, reducing the targeted rate to $26 for farm and lifestyle properties would result in either an increase of the rate charged to residential and business properties to $63.50 or a reduction in the size of the investment programme of around 15 per cent.

34.     As paths are a public good it is appropriate for these investments to be funded across all ratepayers.

Rates impact

35.     The table below sets out the average impact of a targeted rate of $52 per SUIP on all properties in the Franklin Local Board area for the proposed investments. This is forecast to generate around $20 million in revenue over the period of the 10-year Budget 2024-25. The rates increase shown below will be in addition to the increase in general and other rates.

Category

Number of properties

Average Annual Rates (GST incl)

Additional Average Rates Increase (%)[5]

Urban Residential

10,424

$2,577

2.0%

Urban Business

763

$15,268

0.3%

Rural Residential

11,771

$2,748

1.9%

Rural Business

613

$12,358

0.4%

Farm and Lifestyle

10,192

$4,256

1.2%

All categories

33,763

$3,608

1.4%

 

36.     A breakdown of forecast rates revenue and rates impact for each local board sub-division can be found in Attachment C: Rates impact by local board sub-division.

37.     Ratepayers with affordability issues can access the council’s rates postponement scheme or apply for the rates rebate which the council administers on behalf of the Department of Internal Affairs. Business properties and farm/lifestyle properties can expense rates and claim back GST which means the net cost to them will be lower.

Tauākī whakaaweawe āhuarangi

Climate impact statement

38.     Additional investment in paths in the Franklin Local Board area will provide an increase in sustainable transport options, increase connectivity, enhance safety, improve localised amenity, and promote sustainable forms of transport for residents in the area. These new services will contribute to an overall reduction in vehicle emissions, however the impact is not likely to be able to be reliably measured.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

39.     This report has been prepared with input from Auckland Transport and Parks and Community Facilities. The report has also been reviewed by Legal Services.

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

Local impacts and local board views

40.     The Governing Body has decision-making authority for setting rates. The Franklin Local Board will provide its recommendation to the Governing Body if they wish to proceed.  The paths investment proposal and potential targeted rate discussed in this report do not impact on any other local board.

Tauākī whakaaweawe Māori

Māori impact statement

41.     The council does not hold information on the ethnicity of ratepayers so is not able to identify the exact impact of policy changes on Māori. The impact of the policy options on Māori will be similar to that on other residents in the proposed service areas in the Franklin Local Board area.

42.     Consultation on the 10-year Budget 2024-2034 includes formal engagement with the iwi authorities recognised by council (including the regional forum), and larger mataawaka authorities that council has a formal relationship with. Other Māori groups and individuals will be included in the public consultation.

43.     The proposed project was presented at the August 2023 South-Central Mana Whenua engagement forum attended by Mana Whenua with interests in the Franklin Local Board area. Staff are currently engaging with Ngāti Te Ata in relation to a path project in Waiuku which has significant cultural values associated with the historical Awaroa Waka Portage. Staff will consult with mana whenua as projects are developed and/or sites with significant cultural values are identified.

Ngā ritenga ā-pūtea

Financial implications

44.     Delivery of the additional investment will primarily take place from the second year of the 10-year Budget 2024-2034 and be evenly spread throughout duration of the rate. This will not materially impact on council’s debt levels.

45.     To mitigate the impact on council’s borrowing constraints and align investment with revenue, the targeted rate proposal recovers the costs of the capital investment over 10 years. This is a shorter timeframe than the useful life of the assets.

46.     The proposed targeted rate will cover the increased maintenance costs of the new paths for the duration of the 10-year Budget 2024-2034 at which point Auckland Transport and Parks & Community Facilities will incorporate this into their operational budgets. Additional depreciation costs will be met from Auckland Transport and Parks & Community Facilities budgets as individual projects are delivered.

47.     The proposed investment proposal of $31.6 million exceeds the estimated revenue from the proposed targeted. To fully deliver the programme costs savings of around $11.6 million  will be required from the community-led delivery model. The alternative will be to reduce the scope of the investment proposal to fit within budget or increase the targeted rate to around $82 per SUIP per annum.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

48.     There is a risk that the capital and operational costs for the additional paths investment may be more than the cost estimates outlined in this report.  This will be managed by Auckland Transport and Parks & Community Facilities providing updated advice to the local board before commitments are entered into. This will also be managed by providing sufficient scope in public consultation so that the paths investment programme can be adjusted to fit within overall budget constraints.

Ngā koringa ā-muri

Next steps

49.     If the Franklin Local Board wishes to procced with the proposed investment in additional paths to be funded by a local targeted rate, then the next steps are set out in the table below:

Date

Step

December 2023

Budget Committee will consider whether to include the proposed option in the consultation material for the 10-year Budget 2024-2034

February/March 2024

Public consultation on the 10-year Budget 2024-2034

April/May 2024

Franklin Local Board considers feedback from consultation and makes a recommendation to the Governing Body on whether to proceed with the proposal

May 2024

Governing Body considers Franklin Local Board’s recommendation for inclusion in the 10-year Budget 2024-2034

June 2024

Governing Body adopts 10-year Budget 2024-2034 and sets rates for 2024/2025

July 2024

Paths programme initiated

August 2024

Rates invoices issued, including the new targeted rate (if agreed)

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Assessment against statutory criteria (Under Separate Cover)

 

b

Path targeted rate - investment options for Franklin Local Board (Under Separate Cover)

 

c

Rates impact by local board sub-division (Under Separate Cover)

 

      

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

Georgina Gilmour - Senior Local Board Advisor

 



[1] The estimated cost of the proposed investment exceeds the funding available from the proposed targeted rate. Where possible the council will work with communities, through community-led delivery, to reduce construction costs and leverage council funds to deliver the larger investment programme.

[2] Assumes 1 SUIP per property

[3] The value of investment shown in this report are inflated inline with forecast inflation over the duration of the investment programme. The costs of the investment programme shown in the attachment are uninflated costs.

[4] Assumes no savings from community-led delivery approach.

[5] Assumes 1 SUIP per peroperty