Agenda of Governing Body - Thursday, 26 September 2024

Governing Body

26 September 2024

Recommendations from Arts, Sports, Social and Community Political Working Group

File No.: CP2024/13312

Te take mō te pūrongo

Purpose of the report

1. To endorse the recommendations from the Arts, Sports, Social, and Community Political Working Group (Political Working Group or PWG), and request that staff carry out the necessary work to implement these recommendations.

Whakarāpopototanga matua

Executive summary

2. In July 2023, the Mayor established the Political Working Group to review and improve Auckland Council’s relationship with the main regional cultural organisations, including the Auckland War Memorial Museum (Auckland Museum), the Museum of Transport and Technology (MOTAT) and the amenities funded through the Auckland Regional Amenities Funding Act 2008 (ARAFA amenities).

3. The PWG was tasked with identifying ways to enhance the outcomes of council funding of the regional cultural organisations, including those which can levy the council,^{^[1]} and to address longstanding issues with existing legislation governing the sector. This work follows a history of council commissioned external reviews dating back to 2015 which have identified issues with the sector but have not led to tangible changes to address the issues.

4. The PWG held a series of meetings with Auckland Museum, MOTAT and Stardome to understand their perspectives and identify areas for improvement. The PWG also met with Tātaki Auckland Unlimited (TAU) who own and operate the Auckland Art Gallery, Maritime Museum and Auckland Zoo and have resources and expertise in the cultural sector. The PWG made some key findings which led to a series of recommendations that it believes will lead to improvements for the cultural organisations and overall sector.

PWG Key Findings:

5. Cultural sector is a valuable asset - An overarching finding of the PWG is that the cultural sector is a valuable asset that contributes positively and adds value to the city. Key cultural sector organisations should continue to depend on sustainable ratepayer funding.

6. Greater collaboration could achieve better outcomes and value - The PWG identified that the lack of alignment and collaboration between the cultural organisations is a significant barrier to better outcomes. The consensus from consulting with the organisations is that more collaboration (e.g. on shared services, ticketing, promotion and programming) could address some existing issues and achieve better outcomes without requiring immediate legislative changes. The TAU Board has begun engaging with the sector to explore improvements. The PWG are supportive of TAU’s leadership in this area.

7. Legislative reform remains necessary - A key finding (aligned with previous reviews) is that while improvements can be made without requiring law change, ultimately legislative reform is necessary to address the structural issues within the governing legislation.

PWG Recommendations:

8. The PWG's recommendations, based on their findings and aimed at addressing the identified issues and achieving improved outcomes, are divided into three parts:

· General Recommendations: The general recommendations are intended to guide the overall direction of the ongoing work to improve the sector.

· Track One Recommendations – Enhanced collaboration & an Alliance of Auckland Council Funded Cultural Organisations:

o Focused on progressing and embedding the collaboration between the organisations and other improvements that can be implemented relatively quickly without requiring law change.

o A specific Track One recommendation is that PWG wants the working relationship between the organisations to be formalised by forming an alliance of council funded cultural organisations.

o The Alliance should seek to achieve improved outcomes and efficiencies for the sector through implementing shared metrics to enhance transparency and accountability, shared services, better alignment on programming, advertising and marketing, telling a cohesive Auckland story, ticketing – such as a shared “Auckland pass”, and leveraging TAU’s expertise and resources.

o An Alliance could also enable new possibilities for Auckland Council and other key funders to be involved in setting the strategic direction to the sector and, in particular, to specify the outcomes being sought from ratepayer funds.

· Track Two Recommendations – Strategic legislative reform: Addressing the fundamental issues through law change. The PWG recommends pursuing comprehensive legislative changes to improve oversight and strategic alignment.

9. The full recommendations are set out at paragraph 0. The substantive recommendations are split into two tracks because Track Two, which involves legislative changes, will take time to develop and progress through the parliamentary process. Therefore, the PWG recommends that the Track One recommendations, which do not require law changes, be implemented immediately while the legislative process for Track Two is underway. The PWG is clear that both tracks should be worked on at the same time.

10. Staff have considered alternative options (paragraph 49) and recommend that Governing Body endorse the PWG’s recommendations and request that staff carry out the necessary work to give effect to the recommendations.

11. The Mayor has agreed that the PWG, chaired by the Deputy Mayor, will remain active to oversee the implementation of these recommendations, ensuring that both immediate and long-term actions are pursued effectively

Ngā tūtohunga

Recommendation/s

That the Governing Body:

a) ohia / endorse the recommendations of the Arts, Sports, Social and Community Political Working Group as set out in this report.

b) tono / request that staff to carry out the necessary work to give effect to the recommendations.

Horopaki

Context

Legislative and financial context

12. Three Acts of Parliament require the council to fund specific regional organisations and amenities through an annual levy:

· Auckland War Memorial Museum Act 1996.

· Museum of Transport and Technology Act 2000 (MOTAT Act).

· Auckland Regional Amenities Funding Act 2008 (ARAFA), which relates to the following amenities: Auckland Arts Festival, Auckland Philharmonia Orchestra, Auckland Rescue Helicopter Trust, Auckland Theatre Company, New Zealand Opera, Stardome Observatory, Surf Life Saving Northern Region, and WaterSafe Auckland / Drowning Prevention Auckland (the ARAFA amenities).

13. In the 2024/2025 financial year, the council is to be levied $70.9 million. This includes $17.9 million for the ARAFA amenities, $19 million for MOTAT and $34 million for Auckland Museum.

14. Despite these significant sums, the council cannot set conditions of funding or specify any outcomes it seeks with funding. Its oversight is limited to appointing board members and providing feedback on the organisation’s annual plans. While it can seek arbitration of the levy, it has never done so.

15. This legislation was passed pre-amalgamation. A primary justification for the legislation (especially the more recent MOTAT Act and ARAFA) was to avoid unfairness in funding arrangements, given the organisations served the whole region but funding fell disproportionately on the ratepayers of the legacy Auckland City Council.

Review History

Royal Commission and Auckland Transition Agency

16. The Royal Commission on Auckland Governance suggested the repeal of ARAFA,^{^[2]} noting that “[w]ith the establishment of the proposed Auckland Council, the Auckland Regional Funding Amenities Act 2008 will become redundant, or at least largely so.”

17. In 2009, the Auckland Transition Agency (ATA) suggested that the Government’s Auckland law reform legislation enable the new Auckland Council to seek repeal or amendment to the three Act.

18. The Cabinet Paper which considered these suggestions noted that such changes were outside the scope of the Government’s planned legislation.^{^[3]} It noted, instead, that “the Auckland Council could make recommendations after 1 November 2010 seeking a Government Bill to amend the private or local Acts”.

Council commissioned reviews

19. Since at least 2015, the council has raised concerns about the legislative framework and funding relationship between itself and the main regional cultural organisations. To address these issues, the council has commissioned several external reviews.

20. Although these reviews have identified problems with the legislation and relationship with the council and recommended changes, they have not led to significant reforms. This lack of progress is primarily due to resistance from the cultural organisations and a lack of political will to implement the suggested legislative changes.

21. The PWG has utilised these reviews to inform their work but has also re-examined the issues to identify realistic and achievable improvements.

Walker Report

22. In April 2015, at the request of the council’s chief executive, Auckland Museum and Regional Facilities Auckland (RFA) jointly commissioned a report on a strategic framework for thinking about the current and future needs of the Auckland cultural heritage sector (the Walker Report).

23. The Walker Report outlined a series of strategic outcomes which should underpin ongoing and new council investments. It also identified gaps in current infrastructure, and key investment opportunities for the council and the cultural organisations. It stressed that to make progress, change would be needed: “To unlock current and future value, it is imperative that Auckland considers a more integrated approach to governance and funding. Auckland has a plethora of cultural infrastructure but the way they are governed and funded results in a fragmented outcome…”

O’Connor Sinclair Review

24. In 2016 RFA commissioned O’Connor Sinclair to review how the Auckland museums (Auckland Museum, MOTAT, Stardome, Maritime Museum) were broadly working in the changing Auckland context, particularly given the age of the legislation and the formation of Auckland Council in 2010. The review was to facilitate an informed decision on what the sector may require. The findings of that review included:

· The legislative frameworks regarding governance structure are outdated and reflect a pre-amalgamation context where the legislation sought to ensure all authorities contributed to the levy and protected the museums from a conflict between contributing authorities.

· The legislatively defined levy limits for the Auckland Museum and MOTAT pose significant financial risks for the council. They are linked to property values, and while there is provision for an early conversation in respect of the levy, this is limited.

· The reviewers considered that the current legislation effectively encourages the museums to compete against one another for funding and discouraged collaboration and a shared agenda.

Cultural Heritage (Stafford) Review

25. In 2018 the Governing Body commissioned a comprehensive independent review from Stafford Strategy, a consultancy based in both Australia and New Zealand. Stafford Strategy considered there was a “strong case for change” based on (among other things):

· The significant complexity in the existing sector governance arrangements

· The lack of clear accountability mechanisms over the cultural organisations which the council directly and indirectly funds

· Specifically, the lack of ability for the council to influence the amount of funding to Auckland Museum, MOTAT and the ARAFA entities, because of the legislation governing those organisations

· The lack of direction from the council of its annual priorities for the cultural organisations

· The lack of robustness in the current Museums of Auckland collaboration, given its simple “goodwill” basis.

26. The Stafford Report proposed a unified statutory body through which funding would be channelled to each of the organisations. This would have required a devolution of RFA and legislative change for Auckland Museum and MOTAT.

27. The Stafford Review was not received well by the organisations. In response, the council set up a second stage of this process to collaborate with them to find solutions. The result was reported to the council in September 2020, with the key conclusion that structural change would be necessary before any significant strategic alignment was possible”.

Independent review of Auckland Council’s council-controlled organisations (July 2020)

28. In 2019, the Governing Body commissioned a review of council’s CCOs, undertaken by an independent panel which was chaired by Miriam Dean KC. The panel noted “from a long-term perspective, and in the interests of ratepayer accountability, we consider there is a need to bring all of the city’s cultural institutions into one entity so Aucklanders can benefit from having an integrated group of museums working together in a collaborative manner.”

29. Recommendation three from the independent panel was that the council explores with the Auckland Museum and MOTAT bringing both institutions into the merged entity (TAU) and seeks such legislative change as is necessary.

Finance and Performance Committee September 2022

30. In September 2022, the Finance and Performance Committee approved a set of messages for the cultural organisations to guide their 2023/24 annual plan processes. During that meeting, the Committee expressed long-standing frustration with the legislative framework and resolved that the council would:

“Resolution number FIN/2022/55

g) continue political advocacy to central government for the repeal of redundant pre-amalgamation legislation governing the relationship between council and the Auckland War Memorial Museum, Museum of Transport and Technology and the amenities covered by the Auckland Regional Funding Amenities Act 2008.”

Mayor’s Manifesto for Auckland (2023)

31. In September 2023, the Mayor released the “Manifesto for Auckland”. The manifesto asked the Government to pass legislation – to be proposed by Auckland Council – to reform the three funding Acts. It notes that no other council in New Zealand is specifically mandated to fund cultural organisations in legislation.

Political Working Group

32. In July 2023, the Mayor established the PWG to review and improve the council’s relationship with the main regional cultural organisations, including the Auckland Museum, MOTAT, the ARAFA amenities.

33. The PWG’s primary focus has been on addressing the long-standing issues with the out-of-date legislation and improving the outcomes from council funding for the cultural organisations.

Issues

34. The PWG started their programme of work by clearly identifying issues with the cultural sector which are summarised below:

· The current legislation is out of date and unprincipled – reflects pre-amalgamation local government.

· Council has limited formal say in strategic priorities of these entities.

· Timing – levy decision making is not aligned with council budget consultation and decisions.

· Lack of accountability and performance monitoring tools.

· Lack of control and flexibility for how the council funds the cultural sector.

· Entities are independent and thus not incentivised to work together for the benefit of Auckland's overall cultural sector.

· Independence of entities also limits efficiencies that could be gained from shared services

· Levy caps are obsolete as tied to property values – AWMM is $200m+, MOTAT is $30m+

· Board sizes are large 10+ (compared to CCOs with 7-8 members)

· Annual levy processes consume significant time and resources.

Objectives

35. After identifying the issues, the PWG set out clear objectives which have guided their work. The objectives of the PWG are:

· Improved strategic direction for cultural entities

· Accountability for the council’s funding

· Improved value for funding

· Collaboration and cohesion in cultural sector

· Fix out-of-date and unprincipled legislation

· Overall: Better outcomes for council funding provided to regional cultural organisations

Consultation with the Organisations

36. The PWG held a series of meetings with Auckland Museum, MOTAT and Stardome to discuss and receive feedback on how to address the identified issues. The PWG also met with Tātaki Auckland Unlimited who own and operate Auckland Art Gallery, Maritime Museum and Auckland Zoo and have resources and expertise in the cultural sector.

37. The consensus among the organisations is that there are issues with their governing legislation and that there is an opportunity to carefully consider amendments to improve it and create better outcomes. However, they also believe that improvements can be made to achieve the council’s objectives without requiring changes to the law.

38. The below table sets out a summary of the feedback on the recommendations of the PWG.

Organisation	Summary of Feedback
Auckland Museum	The Auckland Museum supports the general direction of the PWG’s recommendations. In summary the Museum: · strongly support the “Track One” recommendations that will lead to better collaboration and coordination across the sector. There is an opportunity to make much‐needed improvements in the short‐to medium‐term, and these can be effected without legislative change. · support the recommendation for Council and the Museum to work on mutually agreeable changes to improve the AWMM Act. They acknowledge that the Act is almost 30 years old and parts are out of date. The Museum Trust Board has already approved a process to consider modernising the Act although no substantive decisions on possible changes have been made. · thinks there is a great opportunity for long‐term and sustainable reform of the sector and support implementing a process to consider this. · consider that the rationale for their legislation is still relevant despite local authority amalgamation. The Museum also consider that the council does have an appropriate degree of influence over the organisation through board appointments and input into the annual plan process.
MOTAT	Supportive of PWG recommendations. Key points of feedback from engagements with the PWG have included: · MOTAT are very enthusiastic about entering into a three-year funding agreement (similar to that agreed with AWMM) · MOTAT have significant heritage infrastructure asset maintenance capital funding needs (approx. $55 million) not covered by existing or projected annual plan budgets. $6.1 million of which is required over the next three years for the Tram tracks, Pumphouse and Blister Hangar. Note that MOTAT is not funded for depreciation (the value of which would be approximately $2 million per annum). · MOTAT note that repealing a Private Act is difficult and time-consuming · MOTAT were unclear on benefits of any structural integration (noting recent budget and FTE cuts at TAU), although would be keen to access Long-term Plan capital funding. Following discussions with TAU since April 2024 at a Board and Operational level, close alignment with TAU, especially the Zoo, is a very positive initiative. Of note the MOTAT Chief Executive has specific key performance indicators to meet with regards to this close alignment · MOTAT note there is currently a lack of an effective overarching arts, culture and heritage strategy in Auckland, but are very happy to assist with creating a new strategy. · MOTAT support pragmatic initiatives to explore; alignment of systems and services, shared director/board members and greater collaboration amongst institutions.
Stardome	Open to options that will improve the sector including integration with the council group. But would need to see clear benefits for Stardome to support any options that alter the status quo.
TAU	· TAU has seen new levels of success at the Auckland Zoo, Auckland Art Gallery and New Zealand Maritime Museum with patronage, financial performance, current and future investment/master-planning and exhibition pipeline. This results from improvements to the quality/efficiency of systems and infrastructure over the last three years. · TAU supports the opportunities that can be realised as result of the PWG recommendations, in particular with a focus on: o A shared set of metrics (which allows for benchmarking and includes Net Cost of Service) o Sharing of common infrastructure and systems to improve efficiency and effectiveness o a joined-up Auckland cultural sector offering (telling Auckland’s cultural story and selling as a cultural destination) o opportunities with MOTAT and Auckland Zoo/TAU at Western Springs · TAU is already making progress with a number of the PWG recommendations in regards to shared metrics, potential for shared services and MOTAT board appointments.

Tātaritanga me ngā tohutohu

Analysis and advice

PWG Key Findings

39. The PWG made findings based on their work and the engagement with the organisations. The overarching finding of the PWG is that the cultural sector is a valuable asset that contributes positively and adds value to the city. The cultural sector organisations will continue to depend on sustainable ratepayer funding.

Alliance of Council Funded Cultural Organisations

40. The PWG consider that many of the issues stem from a lack of alignment and collaboration between the cultural organisations and the council. The organisations have expressed a willingness to collaborate to achieve better outcomes. Encouraged by the PWG, TAU has begun engaging with the organisations to explore improvements that can be made through better collaboration and without requiring law change.

41. The PWG wants the organisations to formalise their working relationship by forming an alliance of the council funded cultural organisations (the Alliance). TAU should be included in the Alliance to ensure its resources and expertise are effectively utilised across the sector. The Alliance will build on the progress already made and work towards achieving the improvements sought by the PWG. The initial focus of the Alliance should be on:

· Establishing common metrics across the sector to help the council understand how its funding is used, measure impact, and provide stronger accountability for the investment made on behalf of ratepayers.

· Collaborating to achieve efficiencies and better outcomes through shared services, improved alignment on programming, telling a cohesive Auckland story, exploring a shared “Auckland pass,” and leveraging TAU’s expertise and resources.

· Considering the strategic direction needed for the entire sector.

MOTAT Integration/Alignment

42. In line with the goal of better alignment and collaboration, the PWG sees MOTAT as uniquely positioned to benefit from closer alignment with TAU, the Auckland Zoo, and potential development of the Western Springs precinct.

43. MOTAT has indicated to the PWG that it faces significant capital maintenance needs (approximately $55 million) not covered by current or projected budgets. MOTAT and TAU are best placed to consider arrangements to ensure MOTAT’s long-term sustainability.

Law Change

44. While the Alliance can work towards immediate improvements, it will not address the fundamental issues with the legislation governing the Auckland Museum, MOTAT, and the ARAFA amenities. Therefore, the PWG recognises that legislative change is necessary.

45. The MOTAT Act and ARAFA are Private Acts, which limit options for quick, pragmatic law changes. Thus, a comprehensive reform of the legislation is needed.

46. The PWG is clear that the aim of pursuing legislative change is not to cut funding, but to improve the outcomes from council funding of regional cultural organisations. The reforms should enable the council to sustainably fund these organisations while ensuring appropriate democratic oversight and decision-making.

47. The PWG acknowledges that consultation with Māori (mana whenua and mataawaka) will be crucial due to the role these organisations play in safeguarding taonga Māori.

Recommendations of the PWG

48. The PWG's recommendations are based on their findings and aimed at addressing the identified issues and achieving improved outcomes. The recommendations are divided into three parts:

· General Recommendations: The general recommendations are intended to guide the overall direction of the ongoing work to improve the sector.

· Track One Recommendations: Focused on progressing and embedding the collaboration between the organisations and other improvements that can be implemented relatively quickly without requiring substantial law change.

· Track Two Recommendations: Addressing the fundamental issues through law change.

49. The substantive recommendations are split into two tracks because Track Two, which involves legislative reform, will take time to develop and progress through the parliamentary process. Therefore, the PWG recommends that the Track One recommendations, which do not require substantial law changes, be implemented immediately while the legislative process for Track Two is underway. The PWG is clear that both tracks should be progressed at the same time.

50. The recommendations in full are set out below:

General Recommendations
a) Council staff should provide advice to the Governing Body on improving the outcomes from council funding for regional cultural organisations consistent with the recommendations of the PWG.
b) The PWG acknowledges that the council-funded regional cultural organisations are valuable assets that contribute positively and add value to the city. They will continue to depend on sustainable ratepayer funding.
c) The PWG also recognises that there are fundamental issues with the status quo and there are benefits that can be found through integration and amendments to the overall legislative framework.
d) The PWG acknowledges the important role in safeguarding taonga Māori by the institutions of the region, and furthermore that engagement with tangata whenua will be critical, particularly before legislative change as discussed in Track Two below can be agreed.
Track One Recommendations – Alliance and Pragmatic Changes
*Alliance of council funded cultural organisations and TAU*
e) The PWG supports the cultural organisations collaborating with each other and with TAU to achieve the outcomes set out in recommendations f) – g) below. The PWG would like to see the relevant organisations formalise this working relationship and form an alliance of council funded cultural organisations.
f) TAU Board should lead discussions with the relevant cultural organisations to agree shared KPIs. Having common metrics across the sector will allow the council to understand how its funding is being utilised to achieve key outcomes, better measure impact and provide stronger accountability for the investment the council makes on behalf of ratepayers. TAU Board will report back to the council in time for the KPIs to be included in the cultural organisations’ 2025/2026 Annual Plans.
g) TAU board should continue their work with the relevant cultural organisations to achieve efficiencies and improved outcomes for the sector through shared services, better alignment on programming, telling a cohesive Auckland story, exploring a shared “Auckland pass” and leveraging TAU’s expertise and resources.
*MOTAT related recommendations*
h) The PWG consider that MOTAT is uniquely placed to benefit from closer alignment with TAU. The TAU Board should engage with the MOTAT Board on the following: i) Explore MOTAT’s legislative purposes, current opportunities, challenges, capital needs and MOTAT’s strategic capital investment plan and how it might fit in with plans for Auckland Zoo and Western Springs Precinct. ii) Recommend to Council the appointment of an appropriate person(s) to the MOTAT board who can facilitate stronger alignment between the two organisations. iii) Explore the best arrangements for MOTAT to ensure MOTAT’s long-term sustainability. iv) Following completion of i)-iii) above, consider whether to recommend to council a three-year funding agreement with MOTAT in lieu of the annual levy process.
*ARAFA related recommendations*
i) TAU Board should explore with Stardome whether they would benefit from closer alignment or integration with TAU as per the successful integration of Maritime Museum.
j) Request staff to provide Governing Body advice on whether there are alternative arrangements for current Auckland Regional Amenities Funding Act specified amenities to facilitate the objective of better alignment of similar organisations within the sector and improve outcomes.
k) Council staff should in particular engage the Auckland Regional Amenities Funding Act entities that provide safety related services to consider whether they would benefit from having three-year funding agreements. The funding agreements would be managed by the relevant community outcomes related council department as per the proposed approach with Coastguard NZ.
*AWMM related recommendation*
l) Council staff should work with AWMM on mutually agreeable changes to improve the Auckland War Memorial Museum Act 1996.
Track Two Recommendations – Law Change
m) At the same time as track one is progressed, council staff should work on a proposal to amend or replace the legislation governing specific regional organisations and amenities (i.e. ARAFA, AWMM Act and the MOTAT Act). The underlying reasons to pursue legislative change is not to make funding cuts rather, it is to improve the outcomes obtained from council funding of regional cultural organisations. The proposal should provide a mechanism for the council to continue to sustainably fund the specified regional organisations, but be consistent with an appropriate degree of democratic oversight and decision-making.
n) Staff will need to consult with the cultural organisations, central government, mana whenua and Māori, and key stakeholders including relevant institutes, societies in the development of this work.

Political Working Group – oversight of implementation

51. The Mayor has agreed that the PWG, chaired by the Deputy Mayor, will remain active to oversee the implementation of these recommendations, ensuring that both immediate and long-term actions are pursued effectively.

Staff advice

Options analysis

52. Staff have identified some alternative options for the Governing Body to consider:

	Alternative Option	Advantages	Disadvantages
A	Not endorsing PWG recommendations Not endorsing the PWG recommendations and remaining with the status quo.	Does not use council and cultural organisations resources. Avoids any possible opposition from stakeholders.	This option does not address the issues that have been identified by the PWG and external reviews dating back to 2015. Council remains exposed to risk of unsustainable funding requirements. Sector collaboration is not achieved. MOTAT may not be sustainable under status quo given asset maintenance and capital investment needs.
B	Not endorsing PWG recommendations and seeking central government solution Not endorsing the PWG recommendations and instead asking central government to create all new overarching legislative framework for cultural sector.	Comprehensive solution from central government would likely address some of the identified issues. Removes the burden from the council to replace the existing legislation with a suitable replacement.	Central government have not indicated that this work is a priority for them – would result in a considerable delay. Risk of not getting a suitable Auckland solution if central government was to design and implement changes. Would lose the benefit of a collaborate approach to designing a better solution for Auckland’s cultural sector. organisations.
C	Partial Endorsement of PWG recommendations The Governing Body may choose to not endorse some of the recommendations.	Benefit of not using resources on recommendation(s) that do not have Governing Body support.	The PWG’s recommendations are designed to work together to achieve overall improvement for the sector. This option would not achieve the full suite of benefits identified by PWG.

Staff Recommend PWG Recommendations in Full

53. Staff support the PWG’s recommendations, which effectively balance immediate and long-term needs in Auckland’s cultural sector. The dual-track approach—focusing on immediate improvements through collaboration and practical enhancements (Track One) and pursuing necessary legislative reforms (Track Two)—is seen as a strategic way to address both current challenges and systemic issues.

54. The establishment of the Alliance will promote greater collaboration and operational efficiencies among the organisations, resulting in improved outcomes from council investments. It is encouraging to observe the organisations actively participating in the process and demonstrating a readiness to enhance sector collaboration and work with the council on comprehensive legislative reform, albeit with caution.

55. Meanwhile, legislative changes will aim to modernise governance frameworks and provide more effective oversight, ensuring that funding contributes to a more integrated and impactful cultural sector.

56. Staff consider that this approach not only provides quick wins but also sets the stage for sustained impactful changes. This balanced strategy will enhance the effectiveness of council funding and foster a more integrated cultural sector.

Council-Controlled Organisations Reforms

57. The PWG’s recommendations were made before the Mayor announced the Council-Controlled Organisations (CCO) reform process. The PWG recommends that TAU be involved in the work to improve the sector because TAU owns and operates the Auckland Art Gallery, Auckland Zoo and the Maritime Museum and has resources and expertise that can benefit the sector. Regardless of the outcomes of the reform process, the overall intention of the recommendations to improve collaboration and alignment will still be relevant.

58. The TAU Board has demonstrated significant leadership and possesses relevant expertise and resources to support the proposed work of the Alliance and closer alignment with MOTAT. If this were to become unavailable, this may need to be addressed or factored into any resulting changes from the CCO reform work.

Climate impact statement

59. The cultural organisations play an important role in climate education. Enhanced collaboration and alignment, as aimed for by the PWG, will further improve the impact and effectiveness of these educational efforts.

Council group impacts and views

60. The PWG recommends that TAU be involved in the ongoing work because TAU owns and operates the Auckland Art Gallery, Auckland Zoo and Maritime Museum and has resources and expertise that could benefit the sector. TAU supports the opportunities that can be realised as result of the PWG recommendations. A summary of their feedback is at paragraph 0.

Financial implications

61. An analysis of financial implications will be included as part of the work resulting from the PWG’s recommendations. The PWG's goal is not to reduce funding but to enhance the outcomes of council support for the organisations. Any changes or legislative reforms should ensure the council can sustainably fund the organisations in the future.

Risks and mitigations

62. The cultural organisations may resist changes related to the integration of services, potentially delaying Track One implementation. Mitigation: Maintain open dialogue with organisations, address their concerns early, and demonstrate the benefits of collaboration.

63. Legislative reforms (Track Two) might face delays due to parliamentary procedures or stakeholder resistance, affecting the overall timeline. Mitigation: Develop a clear legislative reform strategy with timelines and stakeholder engagement plans. Build support from key stakeholders and prepare contingency plans for potential delays.

64. The success of the Alliance depends on effective collaboration, and inadequate alignment may undermine the benefits of shared services. Mitigation: The members should create a framework with defined roles and objectives for the Alliance. The Alliance will need to facilitate collaboration through meetings/workshops and foster a culture of transparency and mutual benefit.

65. Lack of consultation with tangata whenua could result in overlooking cultural sensitivities, impacting the legitimacy of reforms. Mitigation: Engage tangata whenua early and meaningfully and ensure reforms respect cultural values. Address feedback to demonstrate commitment to cultural inclusivity.

Tauākī whakaaweawe Māori

Māori impact statement

66. Under the current legislative framework, the cultural organisations each have obligations to Māori and relating to Te Tiriti o Waitangi / Treaty of Waitangi. Both MOTAT and the Auckland Museum Boards have legislative obligations relating to the spirit of partnership and goodwill envisaged by the Treaty of Waitangi. Additionally, the Auckland Museum Board is required to respect mana Māori and the specific care of Māori cultural property, which necessitates Māori input. One of the members appointed by the council to the ARAFA Funding Board must be a person who, in the opinion of the council, is appropriate to represent the interests of Māori in the Auckland region.

67. The Auckland Museum legislation established the Taumata-a-Iwi, a Māori Committee that supports the Auckland Museum Board in aligning Board policies with Māori values and Treaty of Waitangi provisions. The Taumata-a-Iwi reviews certain proposed policies and offers recommendations to the Board. Staff and the PWG would consult with the Taumata-a-Iwi on recommendations concerning the Auckland Museum.

68. The PWG specifically acknowledged the important role in safeguarding taonga Māori by the institutions of the region in the recommendations and that engagement with tangata whenua will be critical, particularly before legislative change as discussed in the Track Two recommendations can be agreed.

69. In addition, the PWG includes a member from Houkura - Independent Māori Statutory Board. The Houkura member will continue to contribute to the ongoing oversight of the recommendations as the PWG remains active.

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

Local impacts and local board views

70. Although the organisations are regional and so relate primarily to the decision-making responsibility of the Governing Body, the impacts on and views of Local Boards and the local communities will be considered in the implementation of the recommendations and included in future advice to the Governing Body.

Ngā koringa ā-muri

Next steps

71. If the Governing Body endorses the PWG recommendations, staff will develop a comprehensive work plan, including a reporting schedule to keep the Governing Body informed of progress. The cultural organisations will be urged to promptly establish the Alliance, with an initial focus on defining shared KPIs for inclusion in their annual plans. Track One initiatives will be advanced by the responsible parties, such as council staff and TAU, to implement immediate improvements.

72. Simultaneously, council staff will begin developing a legislative reform strategy to address the fundamental issues with existing legislation. This process will include engaging with all stakeholders and tangata whenua to ensure their perspectives are integrated.

73. The PWG will oversee the execution of these activities, ensuring coordinated progress and alignment with the recommendations.

Ngā tāpirihanga

Attachments

There are no attachments for this report.

Ngā kaihaina

Signatories

Author

Chris Levet - Principal Advisor

Authorisers

Alastair Cameron - Manager CCO/External Partnerships team

Max Hardy - Director Group Strategy and Chief Executive Office

Phil Wilson - Chief Executive

Governing Body

26 September 2024

Review of representation arrangements for the 2025 elections - final proposal

File No.: CP2024/08052

Te take mō te pūrongo

Purpose of the report

1. To receive the recommendations of the Joint Governance Working Party (JGWP) and agree the council’s final proposal for representation arrangements for the 2025 elections.

Whakarāpopototanga matua

Executive summary

2. On 27 June 2024 the Governing Body resolved the council’s initial proposal for representation arrangements for the 2025 elections and delegated to the JGWP the responsibility to hear and consider submissions and make recommendations to the Governing Body. The initial proposal is attached as Attachment A.

3. Submissions closed on 8 August and the JGWP heard oral submissions on 2, 3 and 6 September 2024. Local boards made submissions following the receipt of public submissions. Submissions from the public are compiled by local board area and provided on the AK Have Your Say webpage under ‘Written Feedback’. A feedback analysis report on the submissions is attached as Attachment B. Local board submissions are attached as Attachment C.

4. At this meeting the Governing Body must resolve the council’s final representation proposals, and give public notice of them, within 8 weeks following the close of submissions (3 October 2024). There is then an opportunity for appeals and objections to the final proposal to be lodged with the council, which the council must refer to the Local Government Commission for determination. It is expected the Local Government Commission will hear these on 4 February 2025. The council will need to present its final proposal to that hearing.

5. Maps showing changes to the initial proposal that are recommended by the JGWP are attached in Attachment E. All other areas are as in the initial proposal or unchanged from current arrangements.

6. Matters relevant to, but not forming part of, representation arrangements, were brought to the attention of the JGWP. The recommendations of the JGWP on these are included in the report recommendations.

Ngā tūtohunga

Recommendation/s

That the Governing Body:

a) whiwhi / receive the submissions from members of the public on the review of representation arrangements for the 2025 elections as provided on the AK Have Your Say webpage under ‘Written Feedback’.

b) whiwhi / receive the submissions of local boards as contained in Attachment C of the agenda report.

c) whiwhi / receive the report and recommendations of the Joint Governance Working Party on the submissions made to the council’s review of representation arrangements for the 2025 elections which is contained in Attachment D of the agenda report.

d) whakatau / resolve the Auckland Council’s final proposal for representation arrangements for the 2025 elections as follows:

Central Auckland wards

i) Amend the initial proposal in regard to wards in central Auckland so that the areas of Parnell and Newmarket remain in the Ōrākei ward and the area of St Johns remains in the Maungakiekie-Tāmaki ward (Attachment E, Map 1 of the agenda report).

Rodney Local Board subdivisions

ii) Amend the initial proposal in regard to Rodney Local Board subdivisions as follows:

A) The proposed subdivisions are named:

Northern Rodney (2 members)

Southern Kaipara (2 members)

Warkworth (2 members)

Kumeū (2 members)

Dairy Flat (1 member)

B) The boundary between the Northern Rodney and Southern Kaipara subdivisions is changed to include Kaukapakapa in the Southern Kaipara subdivision such that all subdivisions are compliant with the fair representation rule (Attachment E, Map 2).

Remainder of the initial proposal

iii) Confirm the council’s initial proposal in regard to all other matters in the initial proposal.

e) whakaae / agree the recommendation of the Joint Governance Working Party for work to be undertaken with the local community, through the Rodney Local Board and with mana whenua, on the appropriate names for Rodney Local Board subdivisions in the future, to be determined at the next representation review or any earlier opportunity such as a reorganisation process.

f) tautapa / delegate to the Joint Governance Working Party the presentation of the Auckland Council’s final proposal to any hearing convened by the Local Government Commission, should this be required.

g) tuhi ā-taipitopito / note the need for future work on the following matters:

i) for the next representation review or earlier reorganisation work:

A) The impact of residential growth south of the Tāmaki river on boundaries of wards and local boards in that area

B) Naming of wards, local boards and subdivisions to reflect local identity, working with mana whenua in addition to the work specific to the Rodney Local Board area as in e)

C) North Shore/Albany ward and Kaipātiki, Devonport/Takapuna, Hibiscus and Bays and Upper Harbour local board boundaries issues

D) Local board boundary issues in relation to Ōrākei and Waitematā around Newmarket and Parnell.

ii) for the council organisation and partners to address before the 2025 elections:

A) Local board practice around subdivisions, including a possible publicity campaign prior to the 2025 elections around the nature of subdivisions within a local board area, and their purpose for electoral rather than organisational matters

B) Civics education regarding the roles of local boards and governing body, and elected members of the different parts of the structure, to increase community understanding and effective participation, including in voting.

Horopaki

Context

Timeframe

7. Auckland Council’s representation arrangements must be reviewed this year. The outcome will apply at the 2025 elections and the 2028 elections (unless the council chooses to conduct another review for the 2028 elections).

8. The process in the Local Electoral Act 2001 (the Act) requires the council to make its initial proposal by resolution, which is then publicly notified for submissions. After considering submissions, the council resolves its final proposal, which is also publicly notified, with any appeals, objections and proposals that do not comply with the 10 per cent rule, being forwarded to the Local Government Commission to make the final determination.

9. The council must publicly notify its initial proposal within two weeks of making the resolution and has eight weeks following the close of submissions to publicly notify its final proposal. Within those eight weeks, the council must hear submitters, consider submissions and resolve its final proposal.

10. Auckland Council has the most complex representation arrangements in New Zealand, with one governing body and twenty-one local boards. Because of the effect on both Governing Body and local board electoral arrangements, the Governing Body requested the Joint Governance Working Party (“Working Party”), which comprises both Governing Body and local board members, to develop recommendations for an initial proposal for consideration by the Governing Body.

11. The Working Party’s recommendations for the council’s initial proposal were reported to the Governing Body meeting on 30 May 2024 for agreement in principle then on 27 June 2024 for decision. The Governing Body also resolved to:

tautapa / delegate to the Joint Governance Working Party the responsibility and power under section 19M (3) of the Local Electoral Act 2001 to hear and consider oral submissions and make recommendations to the Governing Body on its initial proposal.

12. The council’s initial proposal was publicly notified on 8 July 2024 with submissions closing on 8 August 2024. The council must notify its final proposal by 3 October 2024. Any appeals and objections on the final proposal must be forwarded to the Local Government Commission for determination. A tentative date for the Local Government Commission to hear appeals and objections has been set for 4 February 2025.

Action	Required timeframe	Actual / planned timeframe
Resolution of initial proposal	By 31 July 2024	27 June 2024
Public notice of initial proposal	Within 14 days of resolving initial proposal	8 July 2024
Public consultation	Period of no less than 1 month	8 July – 8 August 2024
Hearings	-	2 – 13 September 2024
Resolve final proposal	-	26 September 2024
Public notice of final proposal	Within eight weeks of close of submissions	3 October 2024 (latest date)
Receive objections and appeals to final proposal	Period of no less than 1 month	3 October – 3 November 2024
Forward objections and appeals to the Local Government Commission for final determination	As soon as practicable but no later than 1 December 2024	4 November 2024
Local Government Commission hears objections and appeals		4 February 2025
Final determination by the Local Government Commission	No later than 11 April 2025	-

Consultation with the public

13. Early engagement on the representation review initial proposal and a potential reorganisation of local boards took place during February and March 2024 as overseen by the Working Party. Early engagement included workshops with elected members and provided an opportunity to test initial thinking with mana whenua, mataawaka entities, the Peoples Panel, advisory panels and a range of community organisations. This was reported more fully to the meeting on 27 June 2024. The Governing Body decided to not proceed with the matter of local board reorganisation.

14. Following the Governing Body resolution on the council’s initial proposal for representation arrangements a HaveYourSay webpage was set up with comprehensive information for the public. This included:

i) the council’s initial proposal

ii) documentation

iii) all reports to local boards on options for resolving non-complying subdivisions in their area

iv) dates of webinars and other engagement events

v) an interactive map viewer where people could view the effect of proposed changes to boundaries.

15. Recordings of webinars and of the hearings held by the JGWP are available on the website.

16. People wanting to submit had the options of completing an online survey form or emailing to a dedicated account. Hard copy feedback forms were available in all Auckland Council libraries, service centres and local board offices, and were accepted in libraries and through the mail via a freepost number.

17. Consultation activity included a region-wide consultation for one month, with three online information webinars, nine targeted drop-in sessions, and a marketing campaign across radio and social media, and media interviews.

18. In addition, targeted community engagement aimed to increase awareness and opportunities to provide feedback with typically underrepresented communities, including Pasifika, Asian communities, youth, and online workshops with Māori (mana whenua and mataawaka groups).

19. In line with the LEA requirements, the scale of proposed changes to representation, and the drive for civic education through this opportunity, the public consultation plan included the following:

Included in the consultation plan	What was delivered
Online region wide events with targeted sessions in affected areas via zoom	· Three online sessions (1 x regional, 1 x Rodney and North Auckland, 1 x Howick and Central Auckland).
In-person region wide events with targeted sessions in affected areas	· Nine drop-in information sessions were held in Auckland Central, Howick, Rodney and West Auckland (details available on the AKHYS webpage).
Digital engagement via the ‘AK Have Your Say’ webpage	· AK Have Your Say website · Information awareness about the consultation topic, online feedback survey and downloadable forms, details about HYS events and opportunities.
Targeted engagement stream with Māori	· 2 x mana whenua sessions, 2 x mataawaka sessions, 1 x Ara Kōtui presentation, targeted online session with Ngā Maunga Whakahii o Kaipara.
Marketing campaign to aid civic education and encourage participation in consultation	· Communications · Raising awareness of the consultation through the AKHYS Engagement newsletter. This went out prior to and during the consultation period to a database of 20,000-plus subscribers. · OurAuckland articles and media release on 27 June, 9 July and 1 Aug. Media coverage included Radio New Zealand, Mahurangi Matters, the Times Online, Local Matter, the Greater Auckland blog plus ethnic media. · Stuff local newspaper inserts –Western Leader, Rodney Times, North Shore Times, Central Leader, East & Bays Courier, Manukau and Papakura Courier · Articles in local board e-newsletters · Local board social media posts at start, middle and end of the consultation period · People’s Panel article – 10,000 members region-wide plus a follow-up email to 57,000 members.
Other events	· Rural Advisory Panel, Warkworth community groups targeted workshop.
Libraries, local board offices and service centres	· Consultation information including summaries available in all languages (English, Te Reo Māori, Simplified Chinese, Traditional Chinese, Korean, Hindi, Samoan, Tongan, Easy Read). Large scale maps in affected areas.
Engaging with community partners where possible for diverse communities	· Raising awareness of the consultation and collecting submissions on behalf of the council amongst diverse groups through community partner networking. A range of activities took place to target youth, Pasifika and ethnic communities plus an online workshop took place with disability representatives.

20. Key information relevant to providing feedback on the representation review initial proposal was available in the following languages: Te Reo Māori, Chinese – traditional and simplified, Korean, Hindi, Tongan, Samoan, New Zealand Sign Language, Easy Read.

21. A total of 2,359 submissions were received. There were 21 submissions presented orally to the hearings from individuals and organisations. The report and recommendations of the JGWP provide more information about submissions.

Local boards

22. Prior to the Governing Body resolving the council’s initial proposal local boards had provided feedback. Those local boards which had specific issues of subdivision non-compliance provided feedback on the basis of reports addressing those issues.

23. 19 of the 21 local boards also made written submissions on the initial proposal, with eight local boards electing to be heard by the Working Party as well. The written submissions were submitted following the public consultation period, in order to ensure the local boards could take into account feedback from the public when providing their submissions. Eight local boards presented their submissions orally to the hearing.

Legislative requirements

24. Sections 19T and 19V of the Act requires the council and the Local Government Commission to take into account two key matters:

(i) effective representation of communities of interest; including aligning local board and ward boundaries as far as is practicable

(ii) fair representation such that the number of people per member in a ward or subdivision does not vary from the average across the whole area by more than 10 percent; the council can decide to not comply with this requirement if compliance would split communities of interest or join unlike communities of interest.

25. The requirements relating to resolving the final proposal are for the council to consider all submissions and make such amendments as the council thinks fit. The Governing Body delegated the hearing and consideration of submissions to the JGWP. The Governing Body is the decision-maker but if it decides to depart from the JGWP recommendations it should ensure there are reasons and that they are articulated. Governing Body members should acquaint themselves with submissions.

26. The requirements in section 19N for publicly notifying the final proposal include a requirement to state both the reasons for any amendments and the reasons for any rejection of submissions.

Tātaritanga me ngā tohutohu

Analysis and advice

27. The council’s initial proposal for representation arrangements for the 2025 elections (Attachment A) included the following changes to current arrangements. Having considered all submissions the JGWP recommends either that the Governing Body confirms each of these changes or amends them. No other current representation arrangements are changed.

	Initial proposal	Recommendation
Central Auckland wards	The boundaries of the Waitematā and Gulf, Ōrākei, Maungakiekie-Tāmaki and Albert-Eden-Puketāpapa wards realign with local board boundaries except for the Eden Terrace area.	Parnell and Newmarket will remain in the Ōrākei ward. St Johns will remain in the Maungakiekie-Tāmaki ward.
North Shore / Albany wards	The boundary between the wards will move to include the Bayview area and align with the proposed local board boundary along Sunset Road.	No change to initial proposal
Rodney Local Board subdivisions	Five subdivisions: North Rural, 2 members South Rural, 2 members Warkworth, 2 members Kumeū, 2 members Dairy Flat, 1 member	Subdivisions will be: · Northern Rodney, 2 members · Southern Kaipara, 2 members · Warkworth, 2 members Kumeū, 2 members Dairy Flat, 1 member The boundary between Northern Rodney and Southern Kaipara is amended so that Kaukapakapa is included in Southern Kaipara and all subdivisions comply.
Howick Local Board subdivisions	Howick, 3 members (no change) Pakuranga, 3 members (no change) Botany, 2 members (changed area) Flat Bush, 3 members (new subdivision).	No change to initial proposal.
Local boards with subdivisions not complying with 10 percent rule	28. Hibiscus and Bays Local Board 29. Maungakiekie-Tāmaki Local Board 30. Ōtara-Papatoetoe Local Board Franklin Local Board.	No change to initial proposal.
Local board minor boundary changes
Upper Harbour / Devonport-Takapuna: – all Saunders Reserve to be in Upper Harbour Kaipātiki / Upper Harbour: – boundary will run along Sunset Road – land near Kereru Reserve to Upper Harbour – area near Bayview, north of Glendhu Road, to Kaipātikti Puketāpapa / Maungakiekie-Tāmaki: – all of Taumanu Reserve to Maungakiekie-Tāmaki 31.		No change to initial proposal

Climate impact statement

32. The changes to electoral boundaries and other representation arrangement matters do not impact on climate.

Council group impacts and views

33. The implementation of changes at the end of the review process will affect GIS and other map-based areas that need to show electoral boundaries.

34. The rationalization of local board boundaries in regard to reserves should assist council operations involved in reserves (for example, not having to operate two management plans because a reserve is split between two local boards).

Financial implications

35. There are costs associated with undertaking public consultation on the representation review initial proposal. The estimated total cost is $170k, broken down at a high level below.

· $30k for work undertaken by community partners to reach diverse communities

· $30k for marketing and communications campaign

· $25k on translations and print and distribution of consultation material

· $6k on analysis of the feedback

· $66k for the review of representation arrangements including mapping costs charged by LINZ.

Risks and mitigations

36. In accordance with the Act, people may appeal or object to the council’s final proposal, with the risk that the Local Government Commission might not uphold all parts of the council’s proposal.

37. The mitigation to this is ensuring all decision-making is robust.

Tauākī whakaaweawe Māori

Māori impact statement

38. The Governing Body has not included Māori representation in its representation arrangements for 2025. It has resolved instead:

That the Governing Body:

a) whakaae / agree that further work is required to determine the appropriate arrangements for Māori representation on Auckland Council, including in discussion with Māori and the Auckland public, and request that this be considered by the Joint Governance Working Party and reported back to the Governing Body by 31 December 2024.

(Resolution GB/2023/195, 26 October 2023)

39. Mana whenua and mataawaka groups were included in both early engagement conversations in February and through the Māori engagement plan for public consultation on the representation review initial proposal in July. During the consultation period, staff became aware of a request for targeted engagement with Ngā Maunga Whakahii o Kaipara and held a session with representatives of two of the five marae.

40. Although outside of the scope of this representation review as a result of the above Governing Body resolution, feedback from Māori largely focused on Māori representation on both local boards and the Governing Body. This feedback has been reported to the JGWP on 23 August 2024, who have been tasked with overseeing further work on Māori representation on Auckland Council. A report back to Governing Body on this matter is due by 31 December 2024.

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

Local impacts and local board views

41. Many of the changes impact on local boards and in some cases have been requested by local boards.

42. Local boards received reports for their feedback at their March meetings. Their feedback was reported to the Governing Body meeting on 30 May 2024 and the council’s initial proposal reflected the views of local boards.

43. Following the public consultation, 19 of the 21 local boards have made submissions at their August meetings which have been considered by the JGWP. As submitters to the process, local boards will have an opportunity to appeal the council’s final proposal, should they so wish.

Ngā koringa ā-muri

Next steps

44. Following the Governing Body resolving the council’s final proposal, it will be publicly notified for appeals and objections.

Ngā tāpirihanga

Attachments

No.	Title	Page
a	Representation review intial proposal
b	Representation review intial proposal - feedback analysis report
c	Representation review initial proposal - local board submissions
d	Report and recommendations of the Joint Governance Working Party
e	Maps

Ngā kaihaina

Signatories

Author

Warwick McNaughton - Principal Advisor Governance

Authorisers

Oliver Roberts - Planning & Operations Manager

Lou-Ann Ballantyne - General Manager Governance and Engagement

Phil Wilson - Chief Executive

Governing Body

26 September 2024

Investment in IPAs (Investment Priority Areas)

File No.: CP2024/13501

Te take mō te pūrongo

Purpose of the report

1. To endorse for consultation, a 30-year programme of infrastructure investment required to support the full development planned for identified spatial priority areas in Auckland.

Whakarāpopototanga matua

Executive summary

2. Auckland’s population continues to grow rapidly, and infrastructure is needed to provide services and amenities to new residents.

3. The Future Development Strategy identifies spatial priority areas for growth. The Long-term Plan 2024-2034 (LTP), and its associated 30-year infrastructure strategy, prioritises infrastructure investment in these areas, identified as Investment Priority Areas (IPAs). The IPAs are the:

· Auckland Housing Programme (Mt Roskill, Māngere, and Tāmaki)

· City Centre (City Rail Link (CRL) stations at Maungawhau and Karanga-a-Hape)

· Inner Northwest (Redhills, Westgate and Whenuapai)

· Drury.

4. In April 2023 the council endorsed a 30-year programme of works that it intends to deliver in Drury. This provided greater clarity about the council’s intentions for investment and supports better alignment of land-use decisions, including the phasing of development, and planning for other network infrastructure providers. The programme was subsequently included in the council’s contributions policy to ensure a fair allocation of the full cost of growth infrastructure between all parties that benefit from, or cause the need for, this infrastructure.

5. The planned investment programme for Drury has been updated to reflect the latest information and to incorporate some key stormwater infrastructure investment.

6. Work has now also been undertaken on other IPAs, where practicable, to identify infrastructure requirements to similarly inform the contributions policy and support a fairer allocation of the infrastructure costs. Detailed work has now been completed on the investment required over the next 30 years in transport and parks and community facilities in the Inner Northwest and the Auckland Housing Programme areas.

7. The stormwater investment required for the Inner Northwest^{^[4]} and Tāmaki has also been assessed. The standard of piped drainage for Tāmaki has been planned to deliver the same level of service as in the Inner Northwest and Drury. This is higher than the service level presently provided by historical investment in the other brownfields areas that aren’t expected to develop. Accordingly, the scale of and cost of the investment required to redevelop the area is substantial. Work on assessing the stormwater investments required in Mt Roskill and Māngere will be completed next year.

8. The total additional investment planned by the council is set out in the table below and includes $652 million in the LTP period to 2034 and $8.2 billion beyond 2034. The proposed investments are based on the infrastructure required to meet the council’s service standards. The proposed investments are listed in Attachment B: 30-year capital expenditure programme for Investment Priority Areas: Project List.

9. IPA area	Investment in $ millions
9. IPA area	Transport	Stormwater	Parks and Community Facilities	Total
Northwest	3,221	0	1,375	4,596
Mt Roskill	1,659	0	15	1,674
Tamaki	622	873	148	1,643
Mangere	958	0	23	981
Total	6,460	873	1,561	8,894

10. Watercare has projected the infrastructure investment requirement for the IPA areas through its asset management plan based on the same growth projections. These are included in the LTP and 30-year infrastructure strategy but are funded independently through user charges and Infrastructure Growth Charges.

11. There are some areas of uncertainty with the infrastructure planning in these spatial areas including decisions on government funding. The proposed investments include projects in the Auckland Housing Programme areas that may be funded by the Housing Acceleration Fund and transport projects with assumed funding from the National Land Transport Fund. These projects are subject to central government approval processes which are still underway. The council is also undertaking a review of the 2016 Whenuapai Structure Plan which is currently underway.

12. The uncertainty associated with long-term planning is managed through the three-yearly review of our infrastructure planning priorities and funding through the council’s LTP. This allows the council to manage the risk of the pace of growth changing from our forecasts and consequent changes in the required infrastructure.

13. Continuing with a 10-year focus would continue the uncertainty for developers, landowners, and other infrastructure providers. It would also make it difficult to recover a fair share of the funding of expected capital expenditure in years 11-30 from early developers to address the longer-term cumulative impacts of their development. This would risk development occurring without adequate infrastructure and place more demand on future ratepayers.

14. Staff consider that we have sufficient certainty to endorse the proposed investments for consultation.

Ngā tūtohunga

Recommendation/s

That the Governing Body:

a) tuhi ā-taipitopito / note that the council’s Long-term Plan 2024-2034 and its associated 30-year Infrastructure Strategy identifies the Investment Priority Areas of the Inner Northwest (Redhills, Westgate, and Whenuapai) and the Auckland Housing Programme areas (Māngere, Mt Roskill, and Tāmaki) in which the council intends to focus its investment to support growth.

b) tuhi ā-taipitopito / note that the long-term planned investment programme for Drury has been updated, as set out in Attachment A, to reflect the latest information and to incorporate some key stormwater infrastructure investments.

c) tuhi ā-taipitopito / note that the proposed 30-year programme of proposed Auckland Council and Auckland Transport capital expenditure for the other Investment Priority Areas set out in Attachment B to this report includes $8.9 billion of investment broken down into:

i) $652 million in the first 10 years, which is already included in the Long-term Plan 2024-2034; and

ii) an additional $8.2 billion of investment for delivery beyond 2034.

d) ohia / endorse for consultation alongside the draft Contributions Policy 2025 the 30-year programme of proposed works for Investment Priority Areas set out in Attachments A and B as those which it intends to deliver, subject to available funding and to (e) below.

e) tuhi ā-taipitopito / note the inclusion in the proposed investment programme of some projects is subject to:

i) approval of the Regional Land Transport Plan and

ii) government decisions on projects within the Auckland Housing Programme areas to be funded by the Housing Acceleration Fund.

Horopaki

Context

15. Auckland's population has grown substantially over the 10 years to the end of 2022, from 1.4 million to over 1.7 million at an average of 1.4 per cent annually. It is forecast to continue to grow, with a further net 200,000 Aucklanders expected by 2034. Over the next 30 years the population is expected to grow to 2.3 million.

16. Rapid growth is creating substantial demand for infrastructure investment in both brownfield (previously built on) and greenfield (never built on) areas. Significant investment in infrastructure is required to cope with the cumulative impacts of growth expected over the next 30 years.

17. The Future Development Strategy sets out the expected timing of development areas across Tāmaki Makaurau. This includes the identification of spatial priority areas for housing and employment growth. The growth forecasts used in this report are based on the Auckland Growth Scenario, AGS23v1, which forecast growth to 2052.

18. The LTP, and its associated 30-year infrastructure strategy, prioritises investment in the spatial priority areas identified in the Future Development Strategy areas in the next decade identified as IPAs. The IPAs are the:

· Auckland Housing Programme (Mt Roskill, Māngere, and Tāmaki)

· Inner Northwest (Redhills, Westgate and Whenuapai)

· City Centre (CRL stations at Maungawhau and Karang-a-Hape)

· Drury.

19. Proceeding with new development in areas without public infrastructure in place could create major problems like the safety of services and amenities such as water and sewage, or transport systems that do not allow people to move communities around safely and easily.

20. The need to prioritise spending in the LTP means that the planned investment in growth infrastructure in priority geographical areas over the next decade is less than what is preferable to support the growth expected in this timeframe, and some projects have been deferred into future periods.

21. The council agreed at its meeting on 9 December 2021 to endorse a programme of proposed works in Drury planned for delivery beyond the period of the 10-year budget 2021-2031. Development contribution funding of that programme of works was subsequently provided for by way of an amendment to the contributions policy. At this time, the council agreed in principle for longer term investment in other IPAs to be identified and endorsed in the same way. If this is done, then the proposed contributions policy can similarly provide for an appropriate contribution to the capital expenditure of that infrastructure to be met thorough development contributions.

22. These decisions to better reflect the cost of growth in our contributions policy have been confirmed in the LTP which notes that the council is moving to matching the full costs of infrastructure required (which can take up to 30 years) with the full development anticipated in the area serviced. The LTP notes that this change will take time and is being completed in stages.

23. To support faster housing development in the coming decade, staff have continued work with Kāinga Ora and central government to enable further investment in the Auckland Housing Programme areas using the Housing Acceleration Fund, additional National Land Transport Funding, and development contributions. This would allow for an acceleration of investment in the transport, stormwater, parks, and community infrastructure to support growth in these areas in the next decade that would otherwise not be possible with council’s resources alone.

24. The projects that may be funded by the Housing Acceleration Fund have been included in the proposed investments. Proposed investments in transport projects are also subject to the approval of co-funding through the National Land Transport Funding by the New Zealand Transport Agency/Waka Kotahi. The Housing Acceleration Fund and National Land Transport Funding are awaiting decisions through government processes that are still underway.

Whenuapai Structure Plan

25. The Whenuapai Structure Plan was adopted in August 2016. The structure plan guides the layout of urban residential and business zones, open space, and infrastructure for urban development in the area. It anticipated the area would provide somewhere between 8,100 to 10,700 dwellings, 8,600 jobs and over 300 hectares of new business land over 10 to 20 years. Development was to be built out in stages, taking into account the growth identified in the whole of the northwest. The Whenuapai Structure Plan is currently being updated.

Tātaritanga me ngā tohutohu

Analysis and advice

26. Detailed plans have been developed to identify the scale and timing of infrastructure investment required over the next 30 years to meet the growth forecast for the IPA areas of the Inner Northwest and the Auckland Housing Programme through to their expected full development. These plans identify the desired timing of the investments relative to the expected timing of growth.

27. The status of infrastructure requirements assessments for the IPAs is shown in the table below:

	Transport	Stormwater	Parks and Community infrastructure
Drury	Endorsed in 2023 Minor updates included here	Added in this programme	Endorsed in 2023
Inner Northwest	Full assessment included in this programme	Expected to be largely covered by developer mitigation	Full assessment included in this programme
Mt Roskill	Full assessment included in this programme	Work ongoing and full assessment planned for 2025	Full assessment included in this programme
Māngere	Full assessment included in this programme	Work ongoing and full assessment planned for 2025	Full assessment included in this programme
Tāmaki	Full assessment included in this programme	Full assessment included in this programme	Full assessment included in this programme
City Centre (CRL stations)	Full assessment planned for 2025	Full assessment planned for 2025	Full assessment planned for 2025

28. While the council has prioritised the IPAs for investment, LTP prioritisation requirements mean that not all the desired investments can be supported in the next decade. The timing of investment has been adjusted into the following decades (beyond 2034) reflecting these constraints.

Transport infrastructure

29. Proposed transport investment priorities for the IPA areas have been identified from investment business cases produced by Auckland Transport in conjunction with the New Zealand Transport Agency/Waka Kotahi for the North-West and brownfield areas. Business case assumptions have been updated for the latest growth forecasts and central government plans for transport investment.

30. The 30-year transport costing methodology developed for Drury has been revised to ensure alignment with Auckland Transport’s Cost Estimation Guide released in May 2023, and adapted for application in the brownfield IPA areas.

Parks and community infrastructure

31. The requirements for parks and community infrastructure are based on the provision metrics in the Open Space Provision Policy, the Community Facilities Network Plan, and operational planning in the short-term. For the Inner Northwest, we have considered the timing and nature of forecast development identified in the Whenuapai Structure Plan and the Future Development Strategy.

Stormwater infrastructure

32. Stormwater investment priorities have been assessed for the Inner Northwest, Drury, and the Tāmaki IPA areas. Hydraulic structures within these areas that might be impacted by growth were identified and assessed. The assessment considered the pre- and post-development flows, the impact this would have on the capacity of the structures to convey flow, and if this would increase flooding of habitable floors or increase flood hazard. The service levels planned have been set to deliver the same outcomes in terms of the drainage network in both the greenfields areas of the Inner Northwest and Drury and in the brownfield area Tāmaki. This will deliver a higher service level in Tāmaki than in other brownfield areas of the city that aren’t expected to develop to the scale forecast in Tāmaki.

Water and wastewater

33. Watercare Services Limited (Watercare) provides for investment in water and wastewater services within its budgets. They have assessed transmission infrastructure required to provide water and wastewater services across the Inner Northwest and Auckland Housing Programme areas. Watercare’s investment in water and wastewater infrastructure for growth is funded by Infrastructure Growth Charges and user charges.

34. In the Tāmaki, Mt Roskill, and Māngere Auckland Housing Programme areas there is some existing capacity in the bulk water and wastewater network to support the developments proposed. Watercare has provided for $205 million of water and wastewater investment in the 10-year Budget 2024-2034 to support the initial development in the Auckland Housing Programme areas. In the Northwest area the bulk water supply network has capacity to cater for substantial short to medium term growth. Wastewater upgrades are underway in the Northwest to enable further development. Additional investment in the longer-term network required for the IPAs will be scoped as development progresses.

Detailed investment plans

Updates to Drury investment programme

35. In April 2023 the council endorsed a 30-year programme of works that it intends to deliver in Drury. This provided greater clarity about the council’s intentions for investment and supports better alignment of land-use decisions, including the phasing of development, and planning for other network infrastructure providers. This programme has been updated to reflect the latest information and to incorporate some key stormwater infrastructure investments

36. A stormwater assessment for the Drury development area has been completed and this identified that most of the requirements would be met through direct mitigation investment by developers. The council, however, will be required to invest in upgrades to some trunk infrastructure to support the planned development.

37. The transport investment programme has been updated to reflect investment decisions made by the government through their New Zealand Upgrade Programme and to align projected costs with Auckland Transport’s Cost Estimation Guide. The key impact of these updates is the removal of the Waihoehoe Road project and some state highway intersections, and to increase the contingency provision in all transport projects.

38. The expected timing of projects has also been updated to reflect latest information, including decisions made through the LTP. The primary impact of this has been that some parks projects are now expected to be delivered after 2034.

39. The table below shows the full 30-year infrastructure investment programme for Drury as agreed in April 2023, the proposed changes, and the updated programme.

Drury	30-year investment programme $million
Activity	April 2023	Changes	Updated
Transport	1,627	91	1,719
Stormwater	0	36	36
Reserves	522	281	803
Community facilities	183	18	201
Total	2,332	427	2,759

Inner Northwest (Westgate, Whenuapai, and Redhills)

40. Over the next 30 plus years the Inner Northwest growth area is forecast to accommodate an additional 87,000 people, 35,000 new households and 27,000 additional employees.

41. As a greenfield area we expect all new local roads and a majority of collector roads to be delivered by developers. Our proposed transport programme includes intersection upgrades, delivery of new /upgraded active mode cycling and walking routes, new or upgraded arterial roads and improved connectivity over State Highways 16 and 18.

42. 39 new parks are planned to be acquired alongside investment in the development of 44 parks. An aquatic-recreation space is planned for the wider northwest with the benefiting catchment including the Huapai and Kumeu areas. Additional library and community centre spaces are required for the Inner Northwest to supplement the facility at Westgate.

43. No requirement for council stormwater infrastructure has been identified for the Inner Northwest, as all stormwater infrastructure required to support development will be delivered by developers as developer mitigation. The table below sets out the planned investment.

Inner Northwest	Investment $million
Activity	Pre 2034	Post 2034	Total
Transport	155	3,066	3,221
Reserves	139	1,021	1,160
Community facilities	0	215	215
Total	294	4,302	4,596

Tāmaki, Māngere and Mt Roskill

44. By 2060, the Tāmaki, Māngere and Mt Roskill Auckland Housing Programme growth areas are forecast to accommodate an additional 118,000 people, 38,000 new households and 22,000 additional employees.

IPA Area	Households		Population		Employment
IPA Area	2024	2060	2024	2060	2024	2060
Māngere	18,175	30,195	74,446	111,742	14,777	22,951
Mount Roskill	26,999	41,821	83,996	130,547	19,391	29,542
Tāmaki	10,523	21,626	31,644	65,853	10,571	14,064
AHP Totals	56,237	93,642	190,126	308,142	44,739	66,557

45. As these are brownfield areas, only limited developer mitigation works for transport infrastructure are expected. The majority of the proposed transport investment will be upgrades within existing transport corridors. This includes upgrading intersections, improving active mode connectivity and pedestrian safety, undertaking works to support railway station upgrades, and bus prioritisation.

46. The proposed parks investment focuses on upgrading and optimising existing assets but will also provide for two new parks. Investment in new community space is limited to library space in Tāmaki late in the 30-year horizon as there is sufficient capacity in existing spaces to accommodate growth.

47. The proposed stormwater investment in Tāmaki extends and upgrades the pipe network to respond to existing flooding and accommodate higher peak flows due to the growth-related increase in impermeable surface area and to climate change. A number of catchment scale projects have also been identified, largely in existing reserves, to improve conveyance and water quality. The proposed level of investment will deliver the same drainage and flood management outcomes as in the developing greenfield areas.

48. This service level will deliver a higher capacity drainage system in Tāmaki than in other existing brownfield areas. The system will overflow less often, and the frequency of overland flows impacting roads, parks, and private land will be reduced. However, this requires a substantial level of investment in a larger piped stormwater network. A significant proportion of the catchment discharges stormwater to soakage and does not have piped stormwater drainage. Soakage will not be able to absorb the additional runoff from intensified development so a new piped network will be necessary to drain these areas. Extending pipes into the soakage areas and upgrading the rest of the network will require a lot of costly work in the road reserve. The alternative is to invest only to the level required to maintain the existing drainage capacity. Officers have not recommended this as the network will overflow more frequently as rainfall intensity increases with climate change and given the scale of development it is appropriate to provide a similar level of service to these properties as is planned to be provided in greenfield areas.

49. Stormwater infrastructure requirements for Māngere and Mt Roskill have not been assessed at this stage as the stormwater requirements for growth are related to the Making Space for Water Programme and the designs are still being developed. This work is ongoing, and a full assessment is planned for 2025.

50. The tables below set out the planned investment in each area.

Tāmaki	Investment $ millions
Activity	Pre 2034	Post 2034	Total
Transport	76	546	612
Stormwater	67	806	873
Reserves	87	0	87
Community facilities	1	60	61
Total	231	1,412	1,643

Mt Roskill	Investment $ millions
Activity	Pre 2034	Post 2034	Total
Transport	44	1,615	1,659
Reserves	15	0	15
Community facilities	0	0	0
Total	59	1615	1,674

Māngere	Investment $ millions
Activity	Pre 2034	Post 2034	Total
Transport	46	912	958
Reserves	23	0	23
Community facilities	0	0	0
Total	69	912	981

Options assessment

Endorse the 30-year programme now (recommended option)

51. Endorsing the programme provided in Attachments A and B will provide increased clarity about the council’s current intentions for investment. This will support better alignment of land-use decisions, including the phasing of development, and planning for other network infrastructure providers.

52. For the council, the increased detail will support funding and financing of the required investment utilising tools currently in use (including development contributions and rates) and potentially new tools such as targeted rates and those enabled under the Infrastructure Funding and Financing Act 2020.

53. The council will continue to update both its LTP and Infrastructure Strategy every three years. The agreed capital expenditure programme for these IPAs will be reviewed at the same time, to ensure that it reflects the latest information on central government investment, progress and nature of development, and technological advances.

54. Endorsing the 30-year approach involves risks associated with over or underestimating the scope and cost of investment that will be incurred many years in the future. That risk is greater than with a 10-year programme. However, the 30-year programme can be revised and refined as circumstances change, in the normal way, and the possibility of changes should not prevent endorsement of the programme.

55. If development is slower than projected, the council can make changes to the timing of its investment. If a sector of greenfield development is not rezoned to urban, and the development is no longer predicted, the required infrastructure can be reviewed through future plans and scaled back.

Continue with 10-year planning approach

56. The council could choose to continue to only include detailed infrastructure plans for these IPAs in its 10-year budget and continue to identify further investment over years 11-30 without itemisation, cost, or phasing of this investment.

57. A 10-year planning approach reduces the risks associated with over or underestimating the scope and cost of investment that will be incurred many years in the future.

58. This approach would continue the current level of uncertainty around the infrastructure provision over the longer term (i.e. beyond the current LTP period) and could lead to misaligned investment plans between the public and private sectors.

59. Planning only for 10-year phases of the development will limit the council’s ability to recover the costs of all the investments from all the beneficiaries. A fair and appropriate share of later expenditure that looks to address the cumulative impacts of the development would not be able to be collected from early developers.

60. Failing to plan adequately for the long-term has the potential to lead to underinvestment (or delayed investment) in infrastructure resulting in lost productivity, higher congestion, worse climate outcomes and poorer safety outcomes.

Conclusion

61. Auckland Council has prioritised these IPAs for investment in growth through the Development Strategy (2017) and the Future Development Strategy (2023, replaced the Development Strategy). This prioritisation has led to better coordination of public and private investment in development. The LTP recognises that the capacity to support growth across the region with infrastructure was limited and focuses investment in the IPAs.

62. Extensive work has been undertaken by the council group, alongside partners in central government, to identify the infrastructure required over the life of the development to support a well-functioning urban environment.

63. Endorsing the 30-year programme that will in time support the full buildout of these areas will provide for better transparency around the nature, cost, and phasing of investment, as well as improved alignment of funding sources to the cost drivers and beneficiaries.

Climate impact statement

64. Planning now for the funding of investments to support growth, particularly transport investment, will ensure that the council is better able to deliver the infrastructure required for development to connect to the rest of the city with a reduced climate impact. The detailed investment identified in this report provides for the delivery of an enhanced public transport network, which should reduce the negative climate impact of development in the IPAs through mitigating some of the expected additional transport emissions. Early introduction of public transport services to new growth areas is important to support the establishment of multi-modal travel habits^{^[5]}.

65. Similarly, early integration of public transport in a development can encourage property developers to create transit-oriented communities, reducing car dependency and promoting designs that prioritise walkability and access to public transport over private vehicle use. This would contribute to reducing emissions.

66. Based on the above, better planning of public transport investments would contribute to mitigating the transport greenhouse gas emissions from the future users of the development (compared to a scenario without a public transport network where users would be generating higher transport emissions). A reduction in embodied emissions from the development could also be noted from the lower investment in roading infrastructures and reduced building footprint design.

67. On the opposite, if roading infrastructure is brought forward in a development, it can lead to increased car dependency, shaping travel behaviour towards greater reliance on private vehicles over the short to long term (even if public transport infrastructure is put in place later). This can also discourage property developers from creating transit-oriented, sustainable designs, resulting in developments that are going to generate higher transport emissions compared to a public transport orientated scenario.

68. In addition, the planned stormwater investments aim to ensure that development in the priority growth areas is sufficiently resilient to the expected impacts of climate change.

Council group impacts and views

69. The advice in this report was developed in conjunction with the following council-controlled organisations and council units:

· Auckland Transport

· Public Law

· Planning and Resource Consents

· Service Strategy and Partnerships

· Policy Department

· Watercare Services Limited

· Healthy Waters and Flood Resilience

· Chief Economists Unit

· Spatial Analysis and Modelling.

Financial implications

70. A significant portion of the proposed investment could be funded from development contributions. Endorsing the programme now and setting contribution levels in order to spread the cost of all the infrastructure across all the expected development, ensures that the costs of growth are appropriately recovered, and do not place an undue impact on ratepayers across Auckland.

71. The Long-term Plan 2024-2034 assumes development contributions revenue of $2.0 billion. This is based in part on including in the Contributions Policy 2025 investments required to provide for growth in the IPAs planned for delivery beyond 2034.

Risks and mitigations

72. Forecasting the pace and scale of growth and hence the required infrastructure investment and DC charges over a long time period presents risks to the council. There is also risk associated with the cost forecasts over such a long timeframe. These can be managed through our triennial long-term plan and adjusting the investment plans.

73. There are some key areas of uncertainty with the infrastructure planning in these spatial areas. They are related to Kāinga Ora development intentions and availability of the Housing Acceleration Fund to support infrastructure requirements, the National Land Transport Fund funding allocations, and the update to the 2016 Whenuapai Structure Plan which is currently underway. If changes are made to these projects through government decision making, including funding decisions which make them unviable, the investment programme will be revised accordingly.

Tauākī whakaaweawe Māori

Māori impact statement

74. Māori will have views on the kinds and forms of infrastructure solutions that are required to meet community needs while mitigating any significant negative environmental impacts to the extent possible.

75. The purpose of developing a 30-year infrastructure programme is to give a level of certainty about council’s intentions, to support further decision-making. The investment programme outlined in this document is based on high level assumptions, using indicative designs and similar recently completed projects.

76. The investment programme will be reviewed and revised over time as more detailed information becomes available. Projects within the programme will go through council and Auckland Transport’s consultation, engagement and partnership processes, including with Māori, before developing and agreeing final design solutions.

77. The decisions as to the proposed investment programme made in response to this report will be subject to public consultation alongside the proposed investment in IPAs, where the public and mana whenua will have an opportunity to present their feedback.

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

Local impacts and local board views

78. The decisions made in response to this report will inform decisions on the following report on this agenda, Development Contributions Policy – 2025 consultation. Local boards have received a memorandum to update them on the review of the Contributions Policy which is being pursued in parallel and the decision-making process.

79. A local board briefing session is planned for 30 September to brief members on this topic. Staff will brief local boards on feedback from consultation in December.

80. Staff will also attend a Local Board Chairs’ Forum and will report to the December local board business meetings seeking local board views. Local board views will be incorporated into the decision-making report to the Governing Body planned for February 2025.

Ngā koringa ā-muri

Next steps

81. The decisions made in response to this report will inform decisions on the next report on the 26 September Governing Body agenda, Development Contributions Policy – 2025 consultation. The subsequent steps if the recommendations in this report and following report are adopted are set out therein.

Ngā tāpirihanga

Attachments

No.	Title	Page
a	Updated Drury investment programme
b	30-year investment programme for other Infrastructure Priority Areas

Ngā kaihaina

Signatories

Author

Andrew Duncan - Manager Financial Policy

Authorisers

Michael Burns - General Manager Financial Strategy

Ross Tucker - Group Chief Financial Officer

Phil Wilson - Chief Executive

Governing Body

26 September 2024

Development Contributions Policy - 2025 consultation

File No.: CP2024/13499

Te take mō te pūrongo

Purpose of the report

1. To adopt the draft Contributions Policy 2025 for consultation.

Whakarāpopototanga matua

Executive summary

2. Auckland’s population continues to grow rapidly, and infrastructure is needed to provide more services and amenities to more new residents and businesses.

3. The contributions policy sets out how the council will recover a fair, equitable, and proportionate share of the cost of infrastructure investment attributable to growth from new development. Growth, both now and into the future, benefits from and creates the need for the infrastructure.

4. The Contributions Policy 2022 was adopted in December 2021 (FIN/2021/119) to recover contributions for the investments planned in the 10-year Budget 2021 to 2031. Capital expenditure plans have changed following the adoption of the council’s Long-term Plan 2024-2034 (LTP).

5. The LTP also anticipates projects to be delivered beyond 2034 in the Investment Priority Areas (IPAs) will be included in the Contributions Policy. This ensures that the costs of cumulative infrastructure investment required to support growth are fairly shared between ratepayers and both early and later developers. The first step in implementing this strategy was to add to the policy investments beyond 2031 to support growth in Drury in April 2023 (Variation A to the Contributions Policy). At that time, the council also agreed in principle to add such investments in other IPAs, in stages. The draft Contributions Policy 2025 is the first stage in that process.

6. The draft Contributions Policy 2025, see Attachment A: Draft Contributions Policy 2025^{^[6]}, is broadly the same as the current policy apart from the updates to the capital expenditure of which a portion is to be funded by development contributions. The draft policy and Attachment B: Schedule 8 - Assets for which development contributions (DCs) will be used, have been updated to reflect:

· new information including:

- capital expenditure decisions made in the Long-term Plan 2024-2034

- updated forecasts for growth and interest rates

- updates to the costs of projects in the existing policy

- updates to the longer-term investments in Drury

· capital expenditure planned beyond 2034 for the 30-year investment programme for the other IPAs

- transport, reserves and community facilities in the Inner Northwest (Redhills, Westgate, and Whenuapai), Māngere, Mt Roskill, and Tāmaki

- stormwater in Tāmaki.

7. The policy has also been updated to reflect the latest forecasts for growth based on the Future Development Strategy, and policy changes to refine the allocation of costs and support efficient administration.

Long-term plan capital expenditure updates

8. The draft policy provides for the recovery of $2.3 billion of the investment planned over the 10-year period of the LTP from development contributions, this being the growth share of projects in the LTP that have an estimated cost of $10.3 billion. This includes $801 million for projects in the IPA areas, $149 million in Drury and $652 million in the additional IPAs discussed in the following section.

9. The key investments that have been added to, or updated in, the draft policy over this timeframe are:

· level crossings – Takanini ($550 million)

· development of new town square in Henderson ($12.5 million)

· Waterview catchment separation ($59 million) – updated costs.

10. The table below sets out the capital expenditure in the LTP for the next decade with a growth component and the funding sources proposed in the draft Contributions Policy 2025.

Funding source	CAPEX investment type $ millions
Funding source	Transport	Reserves	Community spaces	Stormwater	Total funding
Total NZTA/Waka Kotahi	3,569	0	0	0	3,569
Total rates	3,072	557	301	463	4,393
Total development contributions	893	1,005	127	309	2,334
Total CAPEX	7,534	1,562	428	772	10,296

11. Updates have also been made to the capital expenditure planned for Drury including the addition of a stormwater project, changes to the timing of delivery for some of the projects and costing and growth forecasting. This report recommends that the council endorse these changes. The DC price in Drury will move from an average of $70,000 to $83,000.

12. In combination these updates raise the Auckland-wide average DC price for a Household Equivalent Unit^{^[7]} (HUE) from $21,000 to $30,000.

Inclusion of projects beyond 2034 to support growth in the IPAs

13. In the previous item on this agenda, the Governing Body was asked to endorse the 30-year programme of capital expenditure for the Inner Northwest and the Auckland Housing Programme areas. The recommendations in this report assume that the Governing Body decided to do so. These add $8.2 billion infrastructure investment to the $652 million to be delivered in these IPAs before 2034. The table below shows the resulting average DC price for these areas.

Changes to average contributions pricing
Area	Current DC	Proposed DC: Investment within LTP period incl. regional and sub-regional DCs	Proposed DC: Investment beyond LTP period 2034	Total proposed DC
Inner North-west	$25,167	$27k ($27k to $34k)	$71k ($61k to $75k)	$98k ($89k to $101k)
Māngere	$18,123	$22k ($21k to $23k)	$7k	$29k ($28k to $30k)
Mt Roskill	$20,406	$32k ($25k to $59k)	$20k	$52k ($46k to $80k)
Tāmaki	$31,157	$40k	$79k	$119k

14. Our economic analysis shows that higher DCs do not generally lead to higher house prices as these are determined by the wider housing market. Higher DCs flow back into lower pre-development land prices. The option of consulting on a proposal for a price transition was considered but is not recommended as while it would phase in the impact on developers it would increase the burden on general ratepayers across the city without them receiving a commensurate share of the benefits. A transition was also considered but not adopted when longer term investments were added to Drury in 2023.

15. The key driver of higher DCs in Tāmaki is the delivery of a stormwater drainage system designed to deliver this growth area the same standard of service that is planned for the greenfield areas of the Inner Northwest and Drury.

16. Officers are continuing to work on the possibility of using targeted rates or the financing and funding tools under the Infrastructure Funding Financing Act (IFF Act) alongside DCs as mechanisms to fund growth infrastructure. The council will continue to work with central government on its programme of work to review the financing and funding of growth infrastructure.

Conclusion

17. The proposed policy, including the proposed changes, will result in recovery of a fair, equitable and proportionate share of the cost of infrastructure investment from the development community. It will also extend the approach that has already been applied to Drury to the other IPAs identified in the policy, as foreshadowed in Governing Body decisions from 2023.

18. The combined impact of the proposed changes is a weighted average DC price of around $50,000 ($21,000 under the current policy). Officers recommend that the policy be adopted for consultation.

Consultation

19. Consultation is scheduled for seven weeks from 30 September to 15 November including two online and two face-to-face Have your Say events and an opportunity for stakeholders to present submissions directly to councillors. To support the consultation, a draft Consultation Document has been prepared, see Attachment C: Contributions Policy 2025 Consultation Document. Decision making is planned to take place in February 2025 with a new policy planned to be implemented in March 2025.

Ngā tūtohunga

Recommendation/s

That the Governing Body:

a) tuhi ā-taipitopito / note its endorsement of the 30-year programme of proposed works for Investment Priority Areas, including Drury, as referred to in the previous Governing Body agenda item – Investment in Investment Priority Areas

b) whakaae / agree to consult on the attached draft Contributions Policy 2025 which updates the Contributions Policy 2022 – Variation 1 to include the following key proposed changes:

i) capital expenditure since 2021 not reflected in the 2022 amendment

ii) capital expenditure in the Long-term Plan 2024-2034 and updates to the investment programme to support growth in Drury over the long-term

iii) addition of capital expenditure planned beyond 2034 that is part of the 30-year programme of investment in the Inner Northwest, including Redhills, Westgate and Whenuapai,

iv) addition of capital expenditure planned beyond 2034 that is part of the 30-year programme of investment for the Auckland Housing Programme areas at Tāmaki, Māngere and Mt Roskill.

d) whakaae / approve the consultation document attached to this report as the basis for consultation

e) tautapa / delegate the authority and responsibility for agreeing any required changes to the draft Contributions Policy 2025 and consultation material to the Mayor and the Group Chief Financial Officer.

f) whakaae / agree to the consultation process set out in this report.

Horopaki

Context

Auckland’s growth

20. Auckland's population has grown substantially over the 10 years to the end of 2022, from 1.4 million to over 1.7 million at an average growth rate of 1.4 per cent annually. It is forecast to continue to grow, with a further net 200,000 Aucklanders expected by 2034 and 409,000^{^[8]} more by 2054.

21. In November 2023, the council adopted its Future Development Strategy, an evidence-based requirement of the NPS-UD (National Policy Statement on Urban Development) to demonstrate how Auckland is likely to grow over the next 30 years. The Future Development Strategy identifies the Inner Northwest (Redhills, Westgate and Whenuapai), Drury, the City Centre (CRL stations at Maungawhau and Karanga-a-Hape), and the Auckland Housing Programme areas as spatial priority areas for investment to support growth. Current planning law is allowing growth to proceed without plans for financing and funding of the necessary infrastructure in place. The cumulative effects of this out of sequence development will present the council with strong expectations in the future to, at a minimum, invest to address level of service issues such as safety and congestion issues that arise from this ‘underserviced’ growth.

22. The rapid growth is creating demand for infrastructure investment in transport, stormwater, reserves, and community facilities in both brownfield (previously built on) and greenfield (never built on) areas. Further changes to increase the planning systems’ responsiveness have also been signalled by central government (Going for Housing Growth).

Funding growth

23. Development contributions allow for a fair, equitable and proportionate share of the total cost of growth-related capital expenditure to be recovered from the development community. Different types of development place different demands on existing and future infrastructure, and therefore on the need for the council to invest in various types of infrastructure. Higher or lower demand factors are applied to different types of development accordingly. A detailed explanation of the process used to determine DCs is set out in Attachment D: Methodology for calculating DCs.

24. The council’s Revenue and Financing Policy provides for the use of DCs and targeted rates to fund the growth share of the cost of infrastructure investment. Officers are continuing to explore the use of targeted rates for this purpose as well as the use of the financing and funding tools in the Infrastructure Funding and Financing Act.

25. In cabinet papers released by the Minister of Infrastructure^{^[9]}, there is a proposed work programme, which includes the broadening and enhancement of the funding and financing tools available to the Crown and councils. The minister expects to report back on the work programme in late 2024. Staff will provide advice on implications of changes in future reporting on DCs.

Long-term Plan 2024-2034

26. The LTP prioritises investment in the spatial priority areas in the Future development Strategy identified as Investment Priority Areas (IPAs). The IPAs are the:

· Auckland Housing Programme areas (Mt Roskill, Māngere, and Tāmaki)

· City Centre (CRL stations at Maungawhau and Karanga-a-Hape)

· Inner Northwest (Redhills, Westgate and Whenuapai)

· Drury.

27. In December 2021 the council agreed in principle to include in the Contributions Policy projects planned for delivery beyond 2031 in the IPAs starting with Drury. Investments beyond 2031 to support growth in Drury were added to the Contributions Policy in April 2023 and the council noted plans to add investments to support growth in the remaining IPAs.

28. The need to prioritise spending in the LTP means that the investment in growth infrastructure in the IPAs over the next decade is less than what is preferable to support the growth expected in this timeframe. The LTP states that in order to recover the costs more fairly, the council is moving to matching investment in the IPAs to the full costs of infrastructure required (which can take up to 30 years) with the full development anticipated in the area serviced. This is to be implemented by including projects planned for delivery beyond the LTP period in the contributions policy.

IPA investment

29. Redhills, Westgate and Whenuapai in the Inner Northwest are expected to grow to around 38,000 households and 38,000 employees over the next 30 plus years. The Auckland Housing Programme is a joint council and central government propriety focus. Growth across these areas, at Tāmaki, Mt Roskill, and Māngere, could result in the need for up to 40,000 additional dwellings by 2060. Drury is expected to grow by around 22,000 houses over the next 40 years.

30. The early development occurring now in the IPAs in combination with future development will generate a cumulative demand for infrastructure well above that required by each development individually. Including all the projects required to support cumulative impacts of growth in these areas in the contributions policy will ensure the early developers pay a fair share of the costs that would otherwise fall on ratepayers, as foregone revenue from early developers in these areas cannot be recovered from future developers. None of the council’s current funding tools (targeted rates, DCs, or IFF levies) would allow the council to charge the full long-term growth share of the cost of future investments to the future marginal developer(s). This growth share of the cost would fall on general ratepayers who do not create the need for and receive either no or little benefit from these investments (any non-growth-related benefits ratepayers do receive is identified in the methodology for calculating DCs and allocated to them accordingly).

31. In addition, it would be difficult for the council to retrospectively fund the growth share of the investment costs attributable to early developers by a charge on properties developed after a decision not to increase DCs as proposed in this report. The council cannot impose DCs after development has occurred.

32. Without the revenue from early developers, there is a risk that future infrastructure investments will not be delivered, or that the level of investment will not meet the standards we have set for a well-functioning urban environment or managing the climate impacts of growth.

33. In the previous item on this agenda, the Governing Body considered endorsement of the 30-year programme of capital expenditure for the Inner Northwest and Auckland Housing Programme areas set out in Attachment A to that report. The recommendations in this report assume that the Governing Body decided to do so. Officers note that the precise nature and timing of investment included in the programme will be subject to review as part of the development of future council long-term plans, Infrastructure Strategies, and government decision making such as the final make-up of the National Land Transport Programme and specific decisions on national land transport funding made by the New Zealand Transport Agency, Waka Kotahi.

Tātaritanga me ngā tohutohu

Analysis and advice

34. The Contributions Policy 2022, Variation A came into effect on 1 June 2023, reflecting the capital expenditure within the ten-year investment horizon of the LTP 2021-2031 and investments required in Drury over a 30-year horizon. This section sets out the proposed changes to the contributions policy:

· capital expenditure and forecast updates including:

- capital expenditure decisions made in the Long-term Plan 2024-2034

- updated forecasts for growth and interest rates

- updates to the costs of projects in the existing policy

- updates to the longer-term investments in Drury

· capital expenditure planned over a longer horizon (30 years) for additional IPAs:

- transport, reserves and community facilities in the Inner Northwest (Redhills, Westgate, and Whenuapai), Māngere, Mt Roskill, and Tāmaki

- stormwater in Tāmaki. While stormwater investment will be required in the Northwest it has been determined that this is of a nature that doesn’t require council investment and will be delivered by developers as a condition of resource consent.

· other changes to refine the allocation of costs and support efficient administration.

35. Further updates to the Contributions Policy are planned for 2025 to add capital expenditure over a longer horizon (30 years) in the remaining IPA City Centre (CRL stations at Maungawhau and Karanga-a-Hape). In addition, the policy will be updated for further transport requirements for Drury, and stormwater in Mt Roskill and Māngere.

Long-term plan capital expenditure and Drury updates

36. The draft Contributions Policy 2025 has updated the capital expenditure projects to reflect the decisions made since 2021 and the associated investment planned over the 10-year timeframe of the LTP.

37. The key changes include:

· Level crossings – Takanini ($550 million)

· Development of new town square in Henderson ($12.5 million)

· Waterview catchment separation ($59 million) – updated costs.

38. The current contributions policy included projects which are now funded as part of the NZ Upgrade Programme. Government decisions on the NZ Upgrade Programme had not been made at the time the Contributions Policy 2022 Variation A was adopted and we are now removing these projects from the policy as they are not being paid for by council, there is no basis to recover any costs for them. Contributions collected for these projects to date will be re-allocated against similar projects within the same funding area.

39. The assessment of requirements for stormwater infrastructure in Drury has now been completed. This identified one project the council would need to deliver in addition to those that would be provided by developers as a condition of resource consent, and this has been included in the draft policy. Some adjustments have now also been made to the timing of projects including reducing investment and deferral of the timing of open space acquisitions. The assumptions made for investments in Drury over the longer horizon have also been reviewed based on the latest available information and the capital expenditure included in the policy has been updated. This includes updated land cost assumptions, alignment with the Cost Estimation guide published by Auckland Transport, and the latest growth forecasts. The changes are reflected in the attachment to this report, Schedule 8 - Assets for which development contributions (DCs) will be used.

40. The council endorsed the current list of projects for Drury when adopting the Contributions Policy Variation A in April 2023 as most of these were for delivery outside the timeframe for the 10 Year Budget 2021-2031. Amendments to the investment programme for Drury were considered in the previous item on this agenda. Officers recommend that the updated programme is included in the draft contributions policy for consultation.

41. The draft policy will include a list of over 1,700 programmes and projects for which the council will seek to recover the growth share of costs through development contributions (see Attachment B).

42. The table below shows the total investments with a growth component in transport, stormwater, reserves, and community facilities over the LTP period and their funding source under this proposal. In this analysis and that which follows later it is assumed that National Land Transport Fund from Waka Kotahi will fund 51 per cent funding of qualifying projects.

Funding source	CAPEX investment type $ millions
Funding source	Transport	Reserves	Community spaces	Stormwater	Total funding
Total NZTA/Waka Kotahi	3,569	0	0	0	3,569
Total rates	3,072	557	301	463	4,393
Total development contributions	893	1,005	127	309	2,334
Total CAPEX	7,534	1,562	428	772	10,296

43. Forecasts of dwelling construction which drive 94 per cent of DCs revenue have been updated based on a revised forecasting methodology. Over the next 10 years, dwelling construction is predicted to increase 13 per cent compared with the forecast in the Contributions Policy 2022 Variation A of 102,000 household unit equivalents rising to 115,500. Previous forecasting was based on broader population growth predictions which don’t directly translate to new housing construction. The new forecasting methodology uses recent information on resource and building consents to forecast medium term dwelling construction. For the later years of the ten-year forecast period, this is combined with broader economic indicators.

44. As a result of the capital expenditure changes in the period to 2034, updated forecasts of NZTA/Waka Kotahi funding and dwelling construction, and adjustments to the investments in Drury before and after 2034 the weighted average development contributions price for a standard residential unit will rise from $21,000 under the Contributions Policy 2022, Variation A to $30,000 under the draft Contributions Policy 2025. The price rises because of the increased level of investment within the LTP period in the IPA areas. This is a weighted average and varies widely by location depending on the investments the council plans to make to support growth in each area.

Additional investments over a longer horizon

45. Staff now propose to update the contributions policy to include more investments over the longer 30-year horizon identified in the previous report on this agenda. These are the transport, reserves and community infrastructure projects required to support growth in the investment priority areas in the Inner Northwest at Redhills, Westgate and Whenuapai and in the Auckland Housing Programme areas at Tāmaki, Mt Roskill, and Māngere. Stormwater investments for Tāmaki are also included. While stormwater investment is required in the Inner Northwest, assessment shows that the nature of projects is such that these will be delivered by developers. The assessment of the stormwater requirements for Māngere and Mt Roskill will be completed in 2025 as the design of the Making Space for Water Programme is developed.

46. Further updates to the policy are planned as more information becomes available. This includes adding the last IPA, the City Centre (CRL stations at Maungawhau and Karanga-a-Hape), additional transport requirements for Drury, and stormwater in Mt Roskill and Māngere. This is planned for 2025.

47. These changes will not materially impact on house prices, which are driven by supply and demand and are not determined via a cost-plus methodology. That is, the developers are price takers. Their market power is limited, given they are part of a larger market, and their products are substitutable for near equivalents. Higher DC prices will eventually flow through to lower prices for raw land as the cost of enabling infrastructure is capitalised into the land value. However, they may have a short-term negative impact on the pace of development as developers respond to the change. Developers must absorb the cost into a lower land value. Depending on their financial position, they may either proceed with development, defer development and hold the land awaiting future value uplift, or on-sell the land to another developer. Staff consider that these short-term effects are outweighed by better cost signalling and associated longer-term benefits.

48. Staff note that as these investments are being planned over decades, they are subject to refinement as investment plans are developed further, development intentions change, and economic conditions fluctuate. Future contributions policies will be updated as more refined information becomes available.

49. The council could gradually phase in the proposed new DC prices in the IPAs to give the land markets time to adjust to the new DC prices. This may soften the effect on landowners and developers. However, phasing the change in DCs prices in over three years is estimated to lead to $70 million less revenue being collected in this period. Setting a lower price for early developers would result in foregone revenue which would need to be recovered from general ratepayers across the city. The approach of recovering 30 years costs in the IPAs via DCs was signalled as far back as December 2021, so developers have several years’ notice of this proposed change. This option was considered but not adopted when longer term investments were added to Drury in April 2023.

50. Officers do not recommend this option as it does not fairly allocate the costs of growth to those who benefit from and create the need for the infrastructure.

51. The previous report on this Governing Body agenda, Investment in IPAs, sets out the scale and basis for the council’s investment in each of the additional IPA areas and the updates to investments in Drury. The investment planned for each of the additional IPAs and the resulting change in DC price for these areas is set out below.

Inner Northwest

52. The LTP provides for investment of $155 million in transport and $139 million in reserves between 2024 and 2034. The table below shows the investments with a growth component in transport, reserves, and community facilities beyond 2034 and their funding sources. No stormwater investment is required by the council as the nature of infrastructure needed in this area is such that it will be delivered by developers as a condition of resource consent.

Total investments and funding source by activity in the Inner Northwest over a longer horizon $ millions
Funding source	Transport	Reserves	Community facilities
Total NZTA/Waka Kotahi	1,142	0	0
Total rates	558	118	82
Total development contributions	1,366	903	133
Total CAPEX	3,066	1,021	215

53. The additional revenue requirement raises the current contributions price for the Inner Northwest from an average of $25,167 per household equivalent unit (HUE) to an average of around $98,000 per HUE when the investments beyond 2034 are added. Different charges apply to different geographical areas based on the relevant activity funding areas in the proposal. The proposed charges are set out in the table below.

Changes to funding area charges in the Inner Northwest over a longer horizon
Funding area	Current DC charge	Proposed DC for investments within the LTP period incl regional and sub-regional DCs	Proposed DC price for investments beyond LTP	Total proposed price including all investments incl regional and sub-regional DCs
Whenuapai	$25k	$27k	$75k	$102k
Redhills	$25k	$27k	$62k	$89k
Westgate	$23k	$34k	$61k	$95k

Māngere Auckland Housing Programme area

54. The LTP provides for investment of $46 million in transport and $23 million in reserves between 2024 and 2034. The table below shows the transport investments with a growth component beyond 2034 and their funding sources. Investments in stormwater infrastructure will be added in 2025 once further work is completed.

Total investments and funding source by activity in Māngere over a longer horizon $ millions
Funding source	Transport	Reserves	Community facilities
Total NZTA/Waka Kotahi	292	0	0
Total rates	531	0	0
Total development contributions	89	0	0
Total CAPEX	912	0	0

55. The additional revenue requirement raises the current contributions price for the Māngere Auckland Housing Programme from an average of $18,123 per household equivalent unit (HUE) to an average of around $29,000 per HUE when the investments beyond 2034 are added.

Mt Roskill Auckland Housing Programme area

56. The LTP provides for investment of $44 million in transport and $15 million in reserves between 2024 and 2034. The table below shows the transport investments with a growth component beyond 2034 and their funding sources. Investments in stormwater infrastructure will be added in 2025 once further work is completed.

Total investments and funding source by activity in Mt Roskill over a longer horizon $ millions
Funding source	Transport	Reserves	Community facilities
Total NZTA/Waka Kotahi	594	0	0
Total rates	677	0	0
Total development contributions	344	0	0
Total CAPEX	1,615	0	0

57. The additional revenue requirement raised the current contributions price for the Mt Roskill from an average of $20,406, per household equivalent unit (HUE) to an average of around $52,000 per HUE when the investments beyond 2034 are added. Different charges may apply depending on the combination of activity funding areas a development falls within. The primary driver of the higher DCs in the above range is the recovery of historic stormwater investments in the Inner West Triangle and the Waitematā Central funding areas.

Tāmaki Regeneration area

58. The LTP provides for investment of $76 million in transport, $67 million in stormwater, $87 million in reserves, and $1 million in community facilities between 2024 and 2034. The table below shows the investments with a growth component in transport, community facilities and stormwater beyond 2034 and their funding sources.

Total investments and funding source by activity in Tāmaki over a longer horizon $ millions
Funding source	Transport	Reserves	Community facilities	Stormwater
Total NZTA/Waka Kotahi	181	0	0	0
Total rates	194	0	41	18
Total development contributions	171	0	19	788
Total CAPEX	546	0	60	806

59. The standard of service for stormwater in Tāmaki has been planned to deliver the same level of service as in the Inner Northwest and Drury. This is higher than the service level presently provided by historical investment in the other brownfields areas that aren’t expected to develop. Accordingly, the scale of and cost of the investment required to redevelop the area is substantial.

60. The additional revenue requirement raised the contributions price for the Tāmaki from $31,157 per household equivalent unit (HUE) to $119,114 per HUE when the investments beyond 2034 are added.

Combined impact of proposals

61. The table below shows the total capital expenditure that will be included in the draft Contributions Policy 2025 for consultation, including investments that reflect decisions made in the LTP and investments over a longer time horizon, and the funding sources.

Funding source $ millions	Proposed funding within LTP plus investment in Drury beyond 2034	Proposed funding beyond LTP - new IPAs	Total
NZTA/Waka Kotahi	4,270	2,210	6,480
Rates funded	4,763	2,218	6,981
Development contributions	3,874	3,813	7,687
Total CAPEX	12,907	8,241	21,148

62. The revenue from contributions in the LTP period based on the inclusion of these investments in the Contributions Policy is projected to be $2.6 billion.

63. The additional and updated capital expenditure discussed above and included in the draft Contributions Policy 2025 raises the DC price by an average of an additional $29,000, per household equivalent unit (HUE) from $21,000 under the Contributions Policy 2022 Variation A to $50,000 under the proposal. Different charges apply to different geographical areas based on the relevant activity funding areas in the proposal.

Other proposed changes to the policy

Funding areas

64. Changes have been made to funding areas to provide a more refined allocation of costs to development areas to better reflect beneficiaries of the planned infrastructure. The new funding areas include

· new sub-regional funding areas at Paerata, Whau, Inner Northwest

· new local funding area at Avondale.

Changes to neighbouring funding areas have been adjusted to accommodate these new areas.

65. A number of other refinements have been made to local and sub-regional funding areas to better reflect the beneficiaries of infrastructure. Details of these changes are included in Attachment E: Funding area maps.

Other changes

66. Some technical changes have been made to the policy to clarify its intent and ensure fairness. Changes have been highlighted in the draft policy in Attachment A.

67. Aside from the proposed changes discussed, the Contributions Policy 2022, Variation A remains appropriate and fit for purpose and it is proposed to continue the unamended provisions in the current policy into the new policy.

Consultation process

Pre-engagement

68. Staff have updated stakeholders on progress throughout the development of the policy. Preliminary meetings have been held with the Property Council New Zealand, the Urban Development Institute of New Zealand, and Kāinga Ora. Developers on the contributions policy stakeholders’ list were also invited to attend an online session. The Property Council also wrote to us setting out a summary of their key questions and concerns, see Attachment F: Property Council of New Zealand - Re. Pre-engagement on Auckland Council’s Development Contributions Policy Proposal.

69. These sessions provided developers with an indication of the key policy issues the council would be considering and preliminary analysis showing the scale of investment and potential impact on DCs prices. The information was provided in the context that it was preliminary and subject to review by management and consideration by the council. The proposed timing for consultation and decision making was also shared.

70. Participants noted the impact that cost escalation over time, particularly on the price of land, has on the cost to be recovered. In addition, the size of the cost of some of the council projects irrespective of timing was questioned. Given the uncertainty associated with the timeframes developers were concerned that there was potential for overcharging for inflated costs and the risk that projects wouldn’t be delivered.

71. They also asked whether the council was considering other funding options in addition to development contributions such as targeted rates and levies under the Infrastructure Funding and Financing Act.

72. Developers attending the sessions considered that the indicative pricing would increase their costs and the price of houses. In their view, the higher costs could mean that developments could become unfeasible, slowing the pace of development of new houses and encouraging land banking.

73. The scale of stormwater costs in Tāmaki was noted and questions were asked about the potential for developers to provide onsite stormwater management to reduce the cost to be funded through contributions. Developers also observed the scale of contributions charges in the brownfields Auckland Housing Programme areas appeared at odds with the view that infrastructure costs would be lower than in greenfield areas. It was suggested that a discount should be provided to encourage development in these areas.

74. Given the complexity of the analysis, clarity was sought on the methodology used to calculate costs and the resulting DCs.

Formal consultation

75. Formal public consultation is planned for seven weeks from 30 September until 15 November 2024. A draft consultation document setting out the changes proposed in the draft Contributions Policy 2025 has been prepared to support consultation, see Attachment C, Contributions Policy 2025 Consultation Document.

76. Two online events and two face-to-face events are planned to support this consultation. This will provide an opportunity for developers and other interested parties to learn more about the draft policy and provide feedback. There will also be an opportunity for stakeholders to present submissions directly to councillors. All comments will be captured and reported through to the Governing Body to inform decision-making on the final policy. Feedback will be reported to local boards and the Governing Body in December. Decision making is planned to take place in February 2025 with a new policy planned to be implemented in March 2025.

77. In addition to consultation with developers, staff will seek to engage with the broader community on this topic and encourage a wide range of stakeholders to provide feedback on this important matter that could have significant impacts on their local area for decades to come.

Conclusions and staff recommendations.

78. The purpose of the DCs set out in section 197AA of the LGA is to enable territorial authorities to recover from those persons undertaking development a fair, equitable, and proportionate portion of the total cost of capital expenditure necessary to service growth over the long term. The draft Contributions Policy 2025 includes the updates to capital expenditure in both the medium and long-term and other changes to ensure that DCs continue to fairly share all the costs of growth between:

· ratepayers and developers

· current and future developers

· different types and locations of development.

79. Staff recommend that the draft Contributions Policy 2025 be adopted for consultation.

Next steps

Remaining IPAs investments

80. Investigation of investments required beyond 2034 in the remaining IPAs will begin in late 2024 and further proposed changes to the Contributions Policy will follow. The further work will include the last IPA, the City Centre (CRL stations at Maungawhau and Karanga-a-Hape), additional transport requirements for Drury, and stormwater in Mt Roskill and Māngere. Once this work is completed, further consultation will be proposed for the inclusion of these investments in the contributions policy.

Future demand factor review

81. COVID-19 has changed the way in which Aucklander’s work and play. Officers have research underway to establish if these are temporary or permanent phenomena, and how this may change the way in which the costs of infrastructure to support growth is shared between development types. This work is scheduled for completion in 2025.

Climate impact statement

82. Greenfield development in Auckland is correlated with an increased use of private vehicles, potentially leading to an increase in vehicle kilometres travelled and higher transport emissions. This has been derived from mode share data from the 2018 census for journeys to work and education, with the commuting mode share from areas of greenfield development compared against the Auckland average. The findings show the use of sustainable modes of transport for travel to education and work is less in recent areas of greenfield development than the rest of Auckland. This finding is consistent with research from Australia which found proximity to the centre to be a stronger predictor of average household vehicles kilometres travelled than proximity to good public transport or density of urban development.

83. Development in the Inner Northwest is expected to result in an increased use of private vehicles and higher overall vehicle kilometres travelled and a likely increase in transport emissions. Decisions on plan changes to permit development in Whenuapai have already been made. The recommendations of this report relate only to the funding of the necessary infrastructure investment.

84. As discussed in a separate report on this agenda, planning now for the funding of investments will ensure that the council is better able to deliver the infrastructure required for development to connect to the rest of the city with a reduced climate impact. The proposal provides for early developers in IPAs to meet a share of the costs of the infrastructure, they will benefit from and create the need for, to address the cumulative impacts of growth. Securing this revenue stream will ensure the council can meet its plans to make the investments required to deliver an enhanced transport network, which should reduce the negative climate impact of development in the IPAs through mitigating some of the expected additional transport emissions.

85. Additionally, both greenfield and brownfield development creates additional impervious surfaces in the natural environment and therefore investment is required to manage stormwater. The impacts of climate change exacerbate this need and the investment proposed to be funded from DCs is focused on delivering a resilient stormwater network for the future.

86. If plans for securing a share of funding with DCs from early developers aren’t made now, a greater proportion of the cost will fall on future ratepayers to fund the delivery of this infrastructure. While adjustments can be made to the contributions policy in the future, these can’t retrospectively secure revenue from early developers. General rates are the only practical alternative funding source to make up this shortfall. Given the competing demands on general rates there is a real risk that all the funding required won’t be available in the future. This will mean the council won’t be able to deliver the level of investment required in IPAs, leading to an even greater negative climate impact.

87. If a greater share of funding for infrastructure is not secured from early developers, there would be an increased requirement for public funding and opportunity costs associated with the investment in terms of reduced public funding being available for investment in infrastructure upgrades in the existing urban area where it could be more effectively deployed to support and enable mode shift to sustainable transport.

Council group impacts and views

88. The information presented on the projects included in the draft Contributions Policy 2025 was developed in conjunction with the following council-controlled organisations and council units:

· Auckland Transport

· Public Law

· Policy

· Planning and Resource Consents

· Eke Panuku Development Auckland

· Healthy Waters and Flood Resilience

· Service Strategy and Partnerships

· Chief Economist Unit

· Spatial Analysis and Modelling.

Financial implications

89. The Long-term Plan 2024-2034 assumes DCs revenue of $2.0 billion over the LTP period. After completing the analysis of the cost of investments in the LTP that can be recovered with DCs and the impact of the proposed policy changes, it is estimated that the revenue will be $2.6 billion. The achievement of this revised revenue forecast requires as a first step the implementation of a contributions policy updated for the capital expenditure decisions in the LTP, and the other changes proposed in this report.

Risks and mitigations

90. Forecasting the pace and scale of growth and hence the required infrastructure investment and DC charges over a long time period presents risks to the council and developers. There is also risk associated with the cost forecasts over such a long timeframe. These can be managed through our triennial long-term plan and adjusting the investment plans. If investment plans change the DC policy can be amended accordingly, and if particular planned infrastructure assets are not provided then DCs already collected can either be refunded or reallocated to fund different assets that serve the same general function or purpose, as provided for under the LGA. This is discussed in more detail in the relevant sections of the report.

91. Investment in DCs funded growth-related infrastructure carries the risk that forecast development projections, and therefore DCs revenue, are not met. These risks will be managed through monitoring consent applications and DCs revenue.

92. The council is careful to ensure its contributions policy is compliant with legislation, taking into account guidance from court decisions. The recommendations in this report, the draft Contributions Policy 2025, and consultation materials have been checked by Legal Services for legislative compliance. Nevertheless, given the level of increases in DCs some developers may be incentivised to challenge the council’s decision-making in relation to the proposed Contributions Policy 2025.

Tauākī whakaaweawe Māori

Māori impact statement

93. One of the purposes of the policy is to support the principles set out in the preamble to Te Ture Whenua Māori Act 1993. DCs are assessed against the demand that different types of development generate on council infrastructure. Māori developments are assessed under broader development types based on the demand they generate. For example, kaumātua housing is treated the same as retirement villages, and marae are considered under community facilities. As more Māori developments occur, evidence of demand generation can be used to reclassify developments or create new development types.

94. Auckland Council recognises that land is a taonga tuku iho of special significance to Māori people. The council is committed to promoting the retention of that land in the hands of its owners, their whānau, and their hapū, and to protect wāhi tapu.

95. The council supports the facilitation of the occupation, development, and utilisation of that land for the benefit of its owners, their whānau, and their hapū through grants available under the Cultural Initiatives Fund for development of marae and papakāinga and Māori housing. Grants made under this fund can cover costs associated with development including development contributions payable under this and former policies. Providing support through grants rather than remission of development contributions under this policy provides greater transparency and more flexibility in terms of looking at the broader range of costs and barriers to development which extends beyond just the issue of development contributions.

96. Mana whenua and mātaawaka will also be provided an opportunity to present their feedback in a more formal setting referred to in the consultation section above.

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

Local impacts and local board views

97. The DC price varies by location depending on the cost of infrastructure required to support development in an area. These locations do not usually align to local board areas.

98. Local boards have received a memorandum to update them on the review of the contributions policy and the decision-making process. A local board briefing session is planned for 30 September to brief members on this topic.

99. Staff will brief local boards on feedback from consultation in December. Staff will also attend a Local Board Chairs’ Forum and will report to the December local board business meetings seeking local board views.

100. Local board views will be incorporated into the decision-making report to the Governing Body planned for February 2025.

Ngā koringa ā-muri

Next steps

101. If agreed, public consultation on the draft Contributions Policy 2025 will be held from 30 September until 15 November 2024.

102. Feedback received is planned to be reported to the Governing Body in December 2024.

103. Staff will report to Governing Body for the final policy adoption, planned for February 2025.

Ngā tāpirihanga

Attachments

No.	Title	Page
a	Draft Development Contributions Policy 2025
b	Schedule 8 Asset for which development contributions (DCs) will be used
c	Consultation Document - Contributions Policy 2025
d	How we set Development Contributions – Cost Allocation Methodology
e	Funding area maps
f	Property Council of New Zealand - Pre-engagement on Auckland Council’s Development Contributions Policy Proposal

Ngā kaihaina

Signatories

Author

Andrew Duncan - Manager Financial Policy

Authorisers

Michael Burns - General Manager Financial Strategy

Ross Tucker - Group Chief Financial Officer

Phil Wilson - Chief Executive

No.	Title	Page
a	Forward Work Programme

Governing Body

26 September 2024

Preparation of the draft Auckland Council Annual Report 2023/2024 and the draft Auckland Council Summary Annual Report 2023/2024

File No.: CP2024/13399

Te take mō te pūrongo

Purpose of the report

1. To note the basis for preparation of the draft Auckland Council Annual Report 2023/2024 and the draft Auckland Council Summary Annual Report 2023/2024 (together referred to as the annual reports) and the process followed.

Whakarāpopototanga matua

Executive summary

2. The Local Government Act 2002 requires the council to prepare and adopt an annual report and a summary of the annual report each year. Preparing and publishing the annual reports is a legislative requirement and ensures transparency of the group’s performance to investors and ratepayers.

3. The annual reports, covering the 12 months to 30 June 2024, have been prepared by council staff. Volumes 1, 2 and 3 of the draft Annual Report, and the draft Summary Annual Report have been audited by Audit New Zealand on behalf of the Auditor-General. The Auditor-General’s representatives will attend this Governing Body meeting for the adoption of the annual reports and may wish to address the Governing Body on the audit of these reports and other matters of interest during the confidential section of this meeting.

4. The annual reports compare and comment on the performance of Auckland Council and the Auckland Council Group against the budgets and operating targets set in the 10-year Budget 2021-2031 (Recovery Budget) and Annual Budget 2023/2024.

5. At its meeting on 17 September 2024, the Audit and Risk Committee reviewed the annual reports and the preparation processes and recommended the annual reports for adoption by the Governing Body (Attachment A).

6. The Deputy Auditor-General attended the Audit and Risk Committee on 17 September 2024 to comment on the:

· audit process

· draft letter of representation

· draft proposed audit opinion, including commentary on the key audit matters

· status of the annual reports.

7. All matters raised by the Audit and Risk Committee in relation to the annual report content have been resolved.

8. At the time of writing this report, there were no outstanding issues relating to the audit.

Ngā tūtohunga

Recommendation/s

That the Governing Body:

a) tuhi ā-taipitopito / note the confirmation by the Audit and Risk Committee that the audit process in respect of the draft Auckland Council Annual Report 2023/2024 and the draft Auckland Council Summary Annual Report 2023/2024, has been completed satisfactorily and these reports are recommended for adoption by the Governing Body

b) tuhi ā-taipitopito / note the draft Auckland Council Annual Report 2023/2024 and the draft Auckland Council Summary Annual Report 2023/2024 will be discussed later in this meeting in confidence.

Horopaki

Context

9. Section 98 of the Local Government Act 2002 requires the council to prepare, adopt and publish an annual report and a summary annual report within four months following the financial year end.

10. As an issuer of debt on the NZX, the council is subject to the NZX listing rules. This requires the release of unaudited group primary financial statements and commentary on changes from the prior year, within 60 days of the financial year end. In addition, the NZX listing rules require the audited annual report to be released no later than three months from the financial year end.

Annual report contents

11. The annual reports detail the activities and performance of the Auckland Council Group. They include performance results against planned levels of performance set in the 10-year Budget 2021-2031 (Recovery Budget) and the Annual Budget 2023/2024, and outline the group’s consideration of climate risks and opportunities. The summary annual report discloses the most significant matters dealt with in the annual report.

12. The annual reports cover all activities of the council, council-controlled organisations (CCOs), subsidiaries, joint ventures and associated entities.

13. The annual reports consist of four separate volumes and a summary:

· Volume 1: an overview and a summary of service performance against year three of the Recovery Budget, material issues facing the council, service and summarised financial performance of each group of activity

· Volume 2: a summary of local board achievements and their financial performance against year three of the Recovery Budget

· Volume 3: detailed consolidated statutory financial statements for the group and the council, the group’s consolidated funding impact statement with financial commentary against the Annual Budget 2023/2024 and groups of activity funding impact statements with financial commentary against the third year of the Recovery Budget

· Volume 4: a summary of the group’s integration of climate change risks and opportunities into its governance mechanisms, strategy, risk management processes, and the metrics and targets the group uses to measure progress towards climate targets

· Summary annual report: a financial and non-financial performance overview, summary financial statements, strategy and value creation model, summary of key drivers, a summary of the groups of activities.

14. The annual reports, except Volume 4, have been audited by Audit New Zealand on behalf of the Auditor-General.

15. Volume 4 was reviewed by Audit New Zealand, as part of their review of “other information” that accompanies the annual report, however, they do not express an opinion on this volume. This is the first year that it is mandatory to prepare and lodge this document with the Registrar of Financial Service Providers. From 2024/2025, Audit New Zealand will provide limited assurance over Scope 1 and 2 greenhouse gas emissions disclosures that are included in Volume 4 as required by the Financial Markets Conduct Act 2013.

Tātaritanga me ngā tohutohu

Analysis and advice

16. The unaudited Auckland Council Group 2023/2024 primary financial statements and commentary were released via the NZX on 29 August 2024 (preliminary NZX release) following recommendations and approvals by the Audit and Risk Committee, the Chief Executive and the Mayor.

17. The annual reports and the audit were completed following the preliminary NZX release.

18. On 17 September 2024, the Audit and Risk Committee reviewed the annual reports, as well as the council’s process and controls undertaken to prepare them. The committee received feedback on the audit from Audit New Zealand and the Deputy Auditor-General and made a recommendation for adoption of the annual reports (Attachment A) subject to the finalisation of disclosure items, final management review and receipt of the Independent Auditor’s Report.

19. Since the Audit and Risk Committee meeting, the annual reports have undergone final editing and review by council staff and Audit New Zealand. The Group Financial Controller will update the Governing Body at this meeting on the finalisation of the audit work.

Climate impact statement

20. This committee paper relates to financial and non-financial statutory reporting. No decision is sought in this paper that has a direct impact on the group’s greenhouse gas emissions nor the group’s approach to preparing for climate change.

21. However, it is acknowledged that the activities undertaken by the group and reported on within the annual report have the potential to be impacted by climate change and can also reinforce or weaken our climate action response.

22. Climate risk disclosures included in Volume 4 play a key role in how external organisations direct capital flow towards climate positive solutions and investments. Reporting of the group’s response to climate change risk holds the group publicly accountable, and ensures the business maintains their focus on addressing climate change risk at all levels across the group.

23. Volume 4 was prepared using the Aotearoa New Zealand Climate Standards and provides an example for other local government entities seeking to disclose their approach to managing climate-related risks and opportunities.

Council group impacts and views

24. The annual reports reflect the results of the group for the year ended 30 June 2024. The CCOs and Port of Auckland Limited are involved in the preparation of this information and have reviewed any content relating to them.

Financial implications

25. There are no financial implications directly arising from the information contained in the report as no financial decision is sought.

Risks and mitigations

26. The following risks and mitigations have been identified:

Risk	Mitigation
*Breach of confidentiality*
The information contained within the annual reports may be released to the public prior to its release to the NZX.	All Auckland Council, CCO and Port of Auckland Limited (POAL) employees who are involved in the preparation and review of the annual reports have been briefed on confidentiality requirements. A cover memo attached to the draft annual reports provided to Governing Body members provided a reminder of the NZX confidentiality obligations.
*Events subsequent to balance date may not be disclosed*
Significant events may occur between the balance date and approval date and might not be known to the preparers of the annual report, thus go undisclosed.	The Group Financial Controller has formally requested council management, CCOs and POAL confirm whether there are any events subsequent to balance date which might require disclosure. CCO draft/ issued statutory financial statements and POAL statutory financial statements have been reviewed for disclosure of subsequent events.
*Delay in issue of audit report*
There may be a delay in issuing of the audit report due to unresolved audit matters. At the time of writing this report there is no outstanding issue relating to the audit.	The council’s Financial Control and Group Performance units have been working proactively with the Audit New Zealand to address technical issues early.

Tauākī whakaaweawe Māori

Māori impact statement

27. The annual reports cover all aspects of the group’s governance and public accountability. They include commentary on the group’s contribution to outcomes for Māori, the role of the Houkura - Independent Māori Statutory Board and the council’s Ngā Mātārae - Māori Outcomes department. No decision is sought in this paper that has a direct impact on Māori.

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

Local impacts and local board views

28. Volume 2 includes a section featuring the achievements in each local board area. Local boards were engaged to collect and review this information and each local board chair has prepared a message which is included in their respective annual reports and has approved the content.

Ngā koringa ā-muri

Next steps

29. The Governing Body will discuss the annual reports in confidence with staff, the Deputy Auditor-General and Audit New Zealand, after which it will adopt the annual reports.

30. The Deputy Auditor-General will issue the audit opinion at the time of the adoption of the annual reports by the Governing Body.

31. The annual reports will then be released to the NZX and published on our website. Printed copies will be made available at libraries and service centres.

Ngā tāpirihanga

Attachments

No.	Title	Page
a	Audit and Risk Committee resolution 17 September 2024

Ngā kaihaina

Signatories

Authors

Yvonne Teo - Financial Accounting Manager

Tracy Gers - External Stakeholder Group Reporting Manager

Francis Caetano - Group Financial Controller

Authorisers

Rhonwen Heath – Acting Group Treasurer

Ross Tucker - Group Chief Financial Officer

Phil Wilson - Chief Executive

[1] This financial year the council has been levied $70.9 million – which includes $17.9 million for the entities funded through the Auckland Regional Amenities Funding Act 2008, $19 million for MOTAT and $34 million for Auckland Museum.

[2] Report of the Royal Commission on Auckland Governance at 10.33.

[3] Local Government (Auckland Law Reform) Bill: Local, Private and Provincial Acts: Transitional Issues [AGR 09 20]

[4] While stormwater investment will be required in the Inner Northwest it has been determined that this is of a nature that doesn’t require council investment and will be delivered by developers as a condition of resource consent.

[5] Better Travel Choices, Creating a more accessible, healthy, safe and sustainable Auckland by reducing our reliance on private vehicles, December 2019

[6] Schedule 8 Assets for which development contributions will be used and the Funding area maps are not included in the draft policy. When the policy is adopted, they will be able to be viewed on our website. These are attached respectively as Attachments B and E.

[7] A standard residential dwelling is currently defined as between 100m2 and 249m2, referred to as a household unit equivalent (HUE). Each development type is assigned a HUE rate to reflect its demand on community infrastructure.

[9] (2024, May 22). Cabinet Paper ECO-24-SUB-0076: Improving Infrastructure Funding and Financing. The Treasury. Retrieved June 18, 2024, from https://www.treasury.govt.nz/sites/default/files/2024-06/cabinet-paper-eco-24-sub-0076.pdf

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

Resolution Number	Item	Status
GB/2024/115	North Harbour Stadium and Domain Precinct – report back to the Governing Body c) Working Group to report back prior to December 2024 d) Chief Executive and Tātaki to establish cost-effective resourcing, funding and support	Updates on the clauses are as follows: c) report back date will be advised shortly d) resource to support the EOI process has been secured along with resource to support a final scope of work to respond to the broader work programme.
GB/2024/119	Waiheke Local Board Resolution re Palestinian refugees	Resolution forwarded to Immigration Minister on 17 September 2024
GB/2024/120	Shareholder Comments on Port of Auckland Limited Draft Statement of Corporate Intent	Letter finalised and sent 9 September 2024

Date	Subject
5.9.24	CONFIDENTIAL Information Memorandum: Inaugural board appointed to the Auckland Future Fund (No Attachment)

Author	Sarndra O'Toole - Kaiarataki Kapa Tohutohu Mana Whakahaere / Team Leader Governance Advisors
Authoriser	Phil Wilson - Chief Executive

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