No.	Title	Page
a ⇨	NZTA update - Puhoi to Warkworth, Presentation

Transport, Resilience and Infrastructure Committee

07 November 2024

Recovery Office Update

File No.: CP2024/13162

Te take mō te pūrongo
Purpose of the report

1. To provide an update on progress with the Tāmaki Makaurau recovery programme, including community and social support, the categorisation and buy-out process, plans for managing council-purchased Category 3 sites, the transport flood recovery programme, Making Space for Water and the Storm Response Fund.

Whakarāpopototanga matua
Executive summary

2. Twenty-one months after the Auckland Anniversary Weekend floods and Cyclone Gabrielle, recovery continues to be a challenging journey for communities. We are helping where we can, through the storm recovery navigation service, local recovery planning, and support for local mental health initiatives. (See the Recovery Dashboard in Attachment A).

3. Some issues continue to be unresolved, including the eligibility limitations of the Temporary Accommodation Assistance, and the impact of damage on council-owned road reserves on neighbouring properties. Staff are working with relevant partners to identify options. Advice concerning the road reserve issue is provided for consideration in a separate report.

4. Property risk assessment registrations have now closed, with 3509 property owners opting in. Awareness raising efforts before the 30 September deadline were successful, with around 40% of identified high-risk properties choosing to opt in.

5. The categorisation process continues. As of 21 October, the council has categorized 2,494 properties. Of that, 862 properties are Category 3 and 102 are Category 2P. 658 Category 3 properties have had a valuation communicated, and 319 have completed their sale and purchase agreements. (See Attachment A for key metrics).

6. With higher than predicted opt-ins to the risk assessment process, Category 3 numbers are likely to end up higher than the current forecast of around 900. Funding for additional Category 3 property purchases, above the original allocation of $774 million, will need to be redirected from Category 2C funding (Risk Mitigation Projects). Approval for flexibility in Crown funding has already been secured from central government. The financial implications of increasing Category 3 properties will be reported to Governing Body once revised forecasts are complete.

7. Once purchased, Category 3 houses need to be removed or made safe, and future uses of sites need to be decided. Staff are developing processes and protocols for three aspects of council ownership: interim site management, house removal, and future land use decisions. These will be reported in further detail in December 2024.

8. The Transport Flood Recovery Programme is on track, with 74% of identified sites completed, and 61% of budget spent (as of 30 September 2024).

9. Healthy Waters has secured approval for Making Space for Water projects in Māngere, and is progressing a number of other designs for blue-green network solutions. The Order in Council for the Māngere projects was approved by Cabinet on 21 October 2024. Smaller-scale projects are enabling improved stormwater and stream management and community engagement in flood-related issues (see Attachment B).

10. The first year of the $20m Storm Response Fund has made a positive difference to stormwater maintenance and community preparedness, supporting 31 projects across the Council group (see Attachment C).

Ngā tūtohunga

Recommendation/s

That the Transport, Resilience and Infrastructure Committee:

a) tuhi-ā-taipitopito / note the update and progress with the Tāmaki Makaurau recovery programme.

Horopaki

Context

One year since funding was agreed with the Crown, recovery is well underway

11. In the aftermath of the severe weather events of Auckland Anniversary Weekend 2023 and Cyclone Gabrielle, Auckland Council has been leading a programme to support impacted communities, whānau and individuals to recover from the disruptive and often traumatic effects on their lives.

12. On 6 October 2023, Auckland Council agreed a funding agreement with central government to enable the purchase of ‘Category 3’ properties, and to support repairs to the transport network, ‘Category 2P’ properties, and community-scale ‘Category 2C’ resilience projects (GB/2023/187). Significant progress has been made in implementing this funding agreement, which forms an important part of Auckland’s recovery effort.

13. This report to the Transport, Resilience and Infrastructure Committee provides an overview of progress with Auckland’s storm recovery, including notable achievements and upcoming challenges and decisions. The Recovery Dashboard (Attachment A) provides an update on key measures.

Tātaritanga me ngā tohutohu

Analysis and advice

Recovery continues to be a challenging journey for communities – we are helping where we can

14. Navigators are currently supporting 810 whānau. Since its establishment in September 2023, the Storm Recovery Navigation Service has supported 1,942 whānau, conducted door knocks at over 1,000 homes, and attended over 40 events, all while maintaining active caseloads. Now that registrations for risk assessments have closed, the service is focusing on continuing to support whānau already connected to the Recovery Office.

15. Auckland Council will continue to fund a reduced service after the original 12-month period ends – central government partners have confirmed that they will provide no further funding for navigation services. The total number of Navigators will reduce from 36 to 15 by February 2025. Based on our current forecasting, we are confident that we will have enough capacity to continue to support whānau as they navigate the long tail of recovery. We will review this if we see an increase in demand for the service.

16. Local Recovery Planning is underway, with three workstreams within the programme:

· Mana whenua: Enabling iwi to exercise kaitiakitanga within their rohe to address the impacts of the severe weather events and to respond to the changing climate.

· Priority Communities: Three-year community-led recovery projects to support priority communities in Māngere, Roskill//Wesley and Henderson/Rānui to lead their own recovery and resilience building efforts.

· Impacted Communities: Enabling local groups and organisations to engage a facilitator to support development of local recovery plans.

17. More information on local recovery planning can be found on OurAuckland.

18. Mental health is a key element of recovery. Mental Health Awareness Week (September 23-29) focused on the theme "Community is… what we create together." This highlighted the vital role of community in recovery following the extreme weather events of early 2023, with videos featuring four individuals who navigated their recovery by staying connected to their communities.

19. A learning review is underway with organisations funded via the Recovery Office to support mental wellbeing activities across the region. This will add to the growing body of research into the impacts, needs and wellbeing of individuals following the 2023 extreme weather events.

20. No change to temporary accommodation provisions. The most recent reports show that 132 whānau are receiving Work and Income Temporary Accommodation Assistance (TAA, as of 1 October 2024), and 24 whānau are being housed by the Temporary Accommodation Service (TAS, as of 10 July 2024). The Ministry of Social Development, with support from the Recovery Office, continues to explore options to extend TAA support to households with properties held in Trust.

21. MSD and the Ministry of Business, Innovation and Employment (MBIE) have confirmed that Category 2P homeowners are not eligible for TAA and TAS. There are no other central government products to support households with accommodation costs related to 2P mitigation work. We are assessing how many households this might impact and providing advice and guidance on a case-by-case basis.

22. Road reserve damage is impacting private properties. Recovery Office and Auckland Transport staff are developing an analysis in response to the Notice of Motion and subsequent resolution TICCC/2024/113 at the October Transport Resilience and Infrastructure Committee. The advice is presented in a separate report to this committee.

Risk assessment registrations have now closed, and categorisation continues

23. The deadline for impacted property owners to opt into the flood and landslide assessment process was 30 September 2024 (GB/2024/20). In total, we have received 3509 opt-ins, compared to around 7000 properties assessed as being impacted by the storms.

24. The Recovery Office ran a proactive campaign from June to encourage homeowners to register before the deadline, particularly in areas with high-risk properties. A final push in September included a reminder mailout, door-knocking and follow-up phone calls, ethnic media advertising, a media release/video from the Deputy Mayor and a round of media interviews. As a result, 120 high-risk properties registered in September. Overall more than 40% of the identified high-risk properties have registered to participate in the voluntary scheme.

25. In mid-September an additional mail-out was sent to 350 homeowners with a Category 3 property in the immediate vicinity. We extended the closing date for these owners to 18 October 2024 to give them a month to consider their options, and a further 20 opted in.

26. As of 21 October, categorisations are as follows:

· 862 Category 3, with 658 properties having received a valuation as part of the voluntary buy-out support scheme, and 319 sale and purchase agreements completed

· 102 Category 2P, with 3 design and consent grants and 3 construction grants approved

· 1 Category 2C. The Muriwai 2C project will not proceed, so four 2C properties have been recategorised as Category 3

· 1,507 Category 1

· 22 ineligible / withdrawn.

Category 3 numbers are being re-forecast

27. As a result of the high opt-in numbers, the Recovery Office is re-running the forecast number of properties in each category. We now expect to have more than 900 properties assessed as Category 3. These properties will be eligible to join the Voluntary Buy-out Support Scheme.

28. Funding for additional Category 3 property purchases, above the original allocation of $774 million would need to be reallocated from the Category 2C risk mitigation project funding. Approval for flexibility in the Crown contribution has already been agreed in principle from central government. Any funding reallocation will have the impact of reducing the scope and/or extending the delivery timeframes of blue-green network programme and other community risk mitigation projects, however will still meet the overarching objective of removing people from situations of intolerable risk to life.

29. A further update will be provided once forecasts are revised. Approval to change the co-funding agreement will be sought from the Crown. Any changes to council budgets will be considered through annual planning processes.

Once purchased, Category 3 houses need to be removed or made safe, and future uses of sites need to be decided

30. The council needs to determine the fate of purchased Category 3 dwellings and properties. These decisions are being managed in three interlinked parts: interim site management, the home removal programme, and the future land use programme.

31. Interim site management is important for communities. Properties may have been empty for a long time before the council purchase. Some sites do not look well maintained, and are attracting anti-social behaviour including dumping, theft and vandalism. The Recovery Office is working with Parks and Community Facilities to agree the best approach.

32. The Category 3 house removal programme has removed 39 homes to date. Depending on site and building characteristics, houses will be either relocated (expected to be around 30%), deconstructed (around 45%), or demolished (around 25%). Auckland Council has budgeted $46.5m over four years for removal, which equates to around $52,000 per site.

33. The first home removals in Muriwai and Titirangi have been particularly challenging, due to land instability, difficult site access and onsite hazards including asbestos. Costs have been higher than the expected average cost, averaging $84,000. We expect this average to come down as we move into less challenging environments. However, given fixed costs such as service disconnections and asbestos removal, and the potential for more than 900 Category 3 properties, it is possible that costs will exceed the budget.

34. Staff are developing a revised forecast for Category 3 and will update the home removal programme accordingly. We will report back in December, including an estimated total cost of programme, average cost per property, and options for finding efficiencies.

35. The process for future land use decisions will be reported in February 2025. Interim Guidelines for decisions on land acquired by Auckland Council as a result of the 2023 severe weather events were approved by the Governing Body on 30 May 2024 (GB/2024/55), and set out to ensure that acquired land is managed responsibly, efficiently and effectively.

36. Once purchased, Category 3 land is being held by council as ‘non-service land’ – this will be the case until such time as the Recovery Office can re-evaluate sites with a view to other non-residential uses. As we work through that process, council asset owners and local boards will have the opportunity to review whether any sites are needed for their funded service needs.

37. A report on the proposed implementation approach to future land use decisions will be presented to the Transport, Resilience and Infrastructure Committee in February 2025. This will set out the processes by which we identify potential future land uses, and the steps needed to implement decisions. This will include risk assessment, site opportunity assessments (including the potential for sites to meet Auckland Council group service needs), and processes for divestment of land where it is safe to do so.

38. In the meantime, we are aware of growing interest in the future use of storm-impacted land. Where community members are identifying suggestions for specific Category 3 sites, the information can be emailed to recoveryoffice@aucklandcouncil.govt.nz. It will be recorded in our expressions of interest register for consideration in the Future Land Use process.

39. Multi-unit buildings will require a case-by-case approach. Units with shared party walls and units held in cross lease or as part of a Unit Titles Act development bring additional complexity to the buy-out and land management processes. It may not be possible to remove dwellings in these situations, so the council will need to explore options to make spaces safe by removing the potential for residential activity.

Transport projects are on track

40. More than 2000 landslides impacted the transport network after the severe weather events. 592 minor and 215 major sites have been identified in the Auckland Transport Flood Recovery Programme. Of these, 604 sites (74%) have been completed to date, including 123 major sites. A further 22 major sites and 7 minor sites are currently under construction.

41. By the end of September 2024, Auckland Transport had spent $236m million addressing sites and communities affected by the 2023 weather events. This is 61% of the projected total forecast Flood Recovery cost of $390 million.

Making Space for Water has secured approval for Māngere projects

42. The Making Space for Water programme, delivered by Healthy Waters, continues to make good progress (see Attachment B for a detailed overview of work underway). Of particular note:

· Business case approval for physical works in two Māngere catchments has been received

· The Order in Council was approved by Cabinet on 21 October

· Early concept design is underway for five other focus catchments

· The land stability bund on Domain Crescent in Muriwai will not progress, but associated stormwater renewals will go ahead in late 2025

· Small-scale projects for network maintenance, stream management, and community engagement are complementing the larger-scale projects

· The completion of categorisations, largely by December 2024, is expected to enable more certain planning and design

· Targets have been set for the 2024/2025 financial year for each initiative and will form the basis of reporting through the rest of the financial year.

The Storm Response Fund is making a difference to stormwater maintenance and community preparedness

43. An update on the Storm Response Fund is provided at Attachment C. The $20m fund supports 31 council group programmes, organised in four packages. Highlights from the first year include:

· Substantial additional proactive stormwater maintenance and stream clearance

· Strengthened AEM response teams for south, north and west

· New early warning systems, including hotspot cameras for stormwater intelligence, pilot early flood warning systems for the roading network, and a forecasting model to predict river and groundwater flooding

· Community and youth-led projects in high-risk communities

· Region-wide Land Susceptibility Mapping

44. With much of the first year spent establishing new work programmes, there was a $6.9m underspend for the 2023/24 financial year. Approximately $5.6m has been carried forward to this financial year. Moving forward, it is expected that spending will align more closely to annual allocated funding.

Climate impact statement

45. Climate change remains a key consideration for the Recovery Office. The Tāmaki Makaurau Recovery Plan sets out specific actions and describes work at a regional level that will contribute to Auckland’s ability to adapt to the impacts of climate change. This includes elements of the Resilient Auckland programme which will help to ensure Auckland’s resilience in the long-term and also prioritise adaptation planning for communities that have less adaptive capacity.

Council group impacts and views

46. The Recovery Office is working across the council group to ensure alignment with council policy and priorities, and to deliver necessary work programmes. Key business partners are identified in the attached Transition Plan.

Financial implications

47. There are no financial implications from this report. The financial implications of increasing Category 3 properties will be reported to the Transport, Resilience and Infrastructure Committee once revised forecasts are complete.

Risks and mitigations

48. PwC has been engaged to assess the design and operation of processes and controls that are in place within the recovery programme, and to understand whether the processes were carried out according to the requirements that have been set out by the Recovery Office. The review found a number of areas of strength, including the use of qualified specialists to conduct risk assessments, the opportunity for homeowners to provide feedback on assessments, and the use of templates to ensure consistency in communication. Regular reporting on fund payment is also recognised, with the opportunity for more granularity of data and reporting.

49. The review also identified areas for improvement, including security of data access and storage, and processes for independent checks of grants allocations, reimbursements and claims assessments. All observations have been accepted, and action plans, with due dates, agreed with management and respective owners.

50. The ongoing key risks and mitigations for the recovery effort are identified in Table 1.

Table 1. Priority Risks for the Recovery Office

	Risk	Mitigation
1. Sufficient funding	It is now very likely that the number of Category 3 properties will be higher than initially forecast.	Cabinet has agreed to allow flexibility to move funding from Category 2 to Category 3 if Category 3 properties are higher than expected. Council also has some flexibility to manage funding across recovery budgets. Once an updated forecast is available, discussion will be progressed with the Crown and elected members on the financial implications.
2. Delivery timeframes	Communities expect that categorisation and risk mitigation projects will be implemented quickly. Sometimes decisions take longer than the community expects.	The Recovery Office has obtained additional resource to help accelerate the categorization programme, Category 3 buy-out process and Category 2P grant scheme. An additional $5m acceleration fund from central government has supported this action.
3. Fit for purpose systems	Rapid deployment of systems to support recovery need to be fit for purpose, demonstrate value for money, and able to be transitioned back into the council’s regular business when the Recovery Office is wound down.	Recovery Office staff are focused on improved data management and reporting systems, working with relevant staff in the wider council group to ensure smooth transition and to manage further risk of cost escalation.
4. Further severe weather events	Another severe weather event could occur before recovery efforts are complete.	Storm Response funding is increasing proactive maintenance and improving the council’s ability to respond quickly to events. Recovery continues to focus on the most vulnerable communities.

Tauākī whakaaweawe Māori

Māori impact statement

51. The recovery is an opportunity to partner with iwi, mataawaka, marae and Māori businesses. Regular contact from council will be important moving forwards to strengthen relationships with mana whenua, and ensure they are able to meaningfully participate in the recovery effort. In response to feedback received last year that mana whenua expect to be involved in the recovery effort at a local level, council are resourcing and enabling mana whenua to develop and implement recovery plans for their rohe, and involve them in project development.

52. Staff have regularly attended the Interim Resilience and Infrastructure Mana Whenua Forum to provide updates on Recovery Office activity and seek feedback.

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

Local impacts and local board views

53. Local boards have been engaged with throughout the recovery process, including development of the Tāmaki Makaurau Recovery Plan and Making Space for Water programme. Further targeted engagement with local boards will happen throughout the implementation of the Recovery Plan, particularly in areas with impacted communities. Some local boards are expressing particular interest in the future of council-owned Category 3 land. Opportunities for their input will be provided through the Future Land Use process.

Ngā koringa ā-muri

Next steps

54. Updated categorisation forecasts, budget implications, and a more detailed analysis of the Home Removal Programme (approach and budgets) will be reported to the Transport, Resilience and Infrastructure Committee in December 2024.

55. As the storm recovery progresses, staff are initiating processes to capture lessons learned. Lessons will be embedded into business practices and help to build future capacity. A Councillor workshop on ‘lessons learned’ will be held in February 2025.

56. The proposed implementation plan for the future of council-owned severely affected land will be presented to the Transport, Resilience and Infrastructure Committee in February 2025.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇨	Recovery Office Dashboard
b ⇨	Making Space for Water programme update
c ⇨	Storm Response Fund programme update

Ngā kaihaina

Signatories

Authors

Craig Hobbs - Natural and Built Environment Lead

Tanya Stocks - Recovery Office Strategic Support

Megan Howell - Programme Manager

Authorisers

Mace Ward - Deputy Group Recovery Manager

Phil Wilson - Chief Executive

Barry Potter - Director Resilience and Infrastructure

Transport, Resilience and Infrastructure Committee

07 November 2024

Resolving road reserve damage due to 2023 severe weather events

File No.: CP2024/15175

Te take mō te pūrongo

Purpose of the report

1. To report back to the Transport, Resilience and Infrastructure Committee with definitive advice on solutions to issues raised by the Stickered Titirangi Area Residents group and any associated financial impacts and the potential precedents.

Whakarāpopototanga matua

Executive summary

2. Following the extreme weather events of early 2023, some homeowners have been impacted by land slips on road reserves, causing damage to land and restricting owners’ ability to safely access their homes. With repairs requiring private assets to be built on public (council-owned, Auckland Transport-managed) land, owners are reporting they are unable to access insurance or bank loans and therefore unable to undertake the works themselves. The Stickered Titirangi Area Residents (STAR) group is seeking funding support and streamlined consenting / licensing processes from the council group.

3. The STAR group has identified situations where access to properties has been impacted by slips, and others where slips on road reserves have had stability impacts on adjoining properties.

4. A Notice of Motion and subsequent resolution (TICC/2024/113) has called for definitive advice on solutions to the issues raised by the STAR group. This paper presents that advice, and is strictly limited to damage on the road reserve caused by the 2023 North Island Weather Events. Even so, as with other responses to these events, there remains a risk of establishing precedent for how the council group may choose to respond to future events.

5. Staff estimate there may be 40 – 50 properties in this situation following the 2023 storms (with 37 currently known, estimated to cost $6.4m to repair), and acknowledge the difficult position these property owners find themselves in. Twenty-one months after the weather events, some homeowners have been unable to find a solution and move on with their lives.

6. Slips are a frequent natural hazard in Auckland, on both public and private land. The council group has established processes for addressing slips where there is a public benefit, such as maintaining the transport network or public access to amenities, or where a public safety risk needs to be managed.

7. Impacts of natural hazards on private property are considered a private responsibility, even where the natural hazard has occurred on adjoining public land, or where a private asset requires repairs (such as a retaining wall or vehicle crossing) and is located on public land. This means that there is no established process for council group support for situations where property owners need to undertake private works on public land, beyond providing information and permissions.

8. There is no precedent or legal requirement for the council group to repair road reserves impacted by natural hazards, and no funding source allocated to undertake this work. Undertaking or providing funding for these repairs would risk establishing a precedent for repairs to other natural hazards on council-owned land, in situations where the benefit of undertaking the work is largely private. The severe weather events of early 2023 led to thousands of slips on public and private land across the region. Given this scale, the financial consequences for Auckland Council (and ratepayers) would be significant if a precedent was established.

9. While there is a lack of precedent, each case should be assessed on its own merits, and there may be situations where the balance of what is ‘reasonable’ might suggest that the council group could take a more proactive approach. In the situations identified by the STAR group, the loss of access to a property as a result of the 2023 North Island Weather Events and the barriers to private funding of solutions could be the basis for further consideration.

10. Support could be provided for property owners whose access across road reserves has been impacted by the 2023 North Island Weather Events through establishing a dedicated case manager to support homeowners as they work through the remedial design and consenting process, continued provision of Storm Recovery Navigation services, support from the Recovery Office’s insurance and banking team, and prioritisation of the allocation and processing of permissions and consent applications.

11. While not recommended, elected members could decide to provide financial support to the impacted property owners by utilising a potential $5m underspend of the local portion of the 2023 North Island Weather Events Crown-council funding for transport network repairs. This could create significant financial risk for Auckland Council and ratepayers as it could set precedent for further such expenditure in many other circumstances. To minimise this risk, any such funding should be provided by way of a grant for property owners to undertake the repairs, be capped at $5 million, have carefully defined terms, clearly be a one-off response and provided on a ‘no fault, no liability’ basis, and be directly attributed to the 2023 North Island Weather Events.

Ngā tūtohunga

Recommendation/s

That the Transport, Resilience and Infrastructure Committee:

a) whakaae / agree to support property owners impacted by natural hazard damage in the road reserve by establishing a case manager service for property owners undertaking repairs in the road reserve, and offering other non-financial support through the Storm Recovery Navigation Service, the Recovery Office insurance and banking team, and prioritising the allocation and processing of consenting and licensing applications.

Horopaki

Context

Some homeowners have been impacted by land slips on road reserves

12. Areas of council-owned road reserves were damaged in the severe weather events of early 2023, impacting adjacent property owners’ land and/or their ability to safely access their homes. The extreme weather was beyond infrastructure design standards, where assets could be reasonably expected to withstand the events.

13. The owners of some adjacent properties, represented by the Stickered Titirangi Area Residents (STAR) group, are seeking that the council either repairs the impacted road reserve land, or supports homeowners to undertake the repairs. They have requested funding support and streamlined council processes. They would like to reduce the time and cost of consenting and monitoring requirements.

14. There is no precedent or legal requirement that the council is generally obliged to repair road reserves impacted by natural hazards. Further, there is no pathway to fund repairs within existing funding agreements and budgets:

· Auckland Transport does not routinely repair or maintain road reserves where there is no threat to the roading infrastructure and is not funded to do so. NZTA has confirmed that such repairs would be outside the scope of the funding that they provide to Auckland Transport, and that AT should not utilise funding it has received from NZTA towards the cost of repairing private vehicle accessways and/or the construction of retaining walls to retain private land above the road.

· Where the slips do not pose an intolerable risk to life for residents, they are not in scope for the Category 3 Voluntary Buy-out Support Scheme or Category 2P Grants Scheme. (Several of the properties originally identified have now received Category 3 or 2P assessments and are progressing through those channels.)

· Proposals to include road reserve repairs in the crown’s North Island Weather Events and Flood Recovery funding have been firmly declined by the government.

15. In response to a Notice of Motion brought to the Transport, Resilience, and Infrastructure Committee by Councillor Turner on 3 October 2024, the committee resolved (TICC/2024/113):

tono / request the Chief Executives of Auckland Council and Auckland Transport to report back to the November Transport, Resilience and Infrastructure Committee with definitive advice on solutions to issues raised by the STAR group and any associated financial impacts and the potential precedents.  

The factors that make this situation challenging

16. The main issue that makes these repairs difficult is the split of responsibilities for road reserves – between Auckland Transport, Auckland Council and adjacent property owners (license-holders). We acknowledge the frustration and stress for adjacent property owners who have been looking for a solution since early 2023. The scale of the impact of the North Island Weather Events on thousands of households across the region has been significant, and this is a situation that is not encompassed within the voluntary buy-out support scheme.

17. For adjacent property owners: the STAR group reports that people are finding that they can’t access finance (either insurance or bank loans) to undertake repairs on council-owned land and propose that liability sits with the council to repair its own land.

18. For the council group: repairing road reserves for private benefit (or funding adjacent homeowners to undertake such repairs) would run contrary to established council practice and is not funded. It would risk establishing a precedent for repairs to other natural hazards on council-owned land, where the benefit of undertaking the work is largely private.

Being clear about roles and responsibilities

19. Any consideration of repairs to road reserves needs to begin from a clear understanding of the roles and responsibilities of the different parties:

20. Auckland Council is the underlying landowner. It owns the roads,^{^[1]} including road reserves.

21. Auckland Transport manages roads owned by Auckland Council, as set out by ss46 and 51 of the Local Government (Auckland Council) Act 2009 (LGACA). This includes the power to construct, upgrade and repair all roads with such materials and in such manner as Auckland Transport thinks fit (LGA 1974 s.319(1)(a)). It does not typically carry out works on the undeveloped portions of road reserves, except where there is an impact on the transport network or public safety. (Under s50 of the LGACA, Auckland Council is expressly prohibited from performing or exercising Auckland Transport’s powers and functions.)

22. Adjacent property owners are responsible for vehicle crossings^{^[2]} and other private assets such as retaining walls associated with vehicle crossings or protecting adjoining private property within the road reserve. Vehicle crossings are approved through a Vehicle Crossing Permit. Other structures are managed through a permission for road encroachment. Vehicle crossings and encroachments are controlled by Part Four of the AT Activities in the Road Corridor Bylaw 2022. Where private assets are in the road reserve, AT may require the owner to register an encumbrance instrument (on AT’s standard terms) against the record of title to the property adjoining the road encroachment.

23. Other utility providers may also have a license to encroach in the road reserve, e.g. for water, gas and power services.

Scaling the issue: around 40 to 50 properties may be affected

24. Staff have reviewed the list of known properties who have reported issues on the road reserve after the 2023 storms (not other council administered reserve land) and compared the list with information provided by the STAR group.

25. For reasons discussed below, we have limited the scope of consideration to slips on road reserves where:

· Damage occurred in the severe weather events of January and February 2023

· Damage is within the boundary of the road reserve (i.e. not including damage on private property, although that may also be present)

· There is an identified stability risk

· The damage and/or risk is materially impacting access to the adjoining residential dwelling, compared to access prior to the storm events

· Repairs will not be undertaken in the normal course of Auckland Transport works (i.e. there is no risk for the transport network or public safety)

· The adjoining property has not been assessed as Category 3 or Category 2P

· Private assets / remediations need to be constructed within the boundary of the road reserve (i.e. not on private property).

26. This means that we have excluded properties where damage is on private properties (these are no different to many Category 1 properties across the region and assessed under the Council Policy for the 2023 North Island Weather Events ), or where a natural hazard on council-owned land means that private property owners need to take some action to manage risk to their own property (consistent with the council and Auckland Transport’s established practices).

27. Combining these lists, we have identified 37 properties across Auckland where there is an outstanding issue on the road reserve that is impacting access to the adjacent property, and where no works are needed for public benefit. Estimated repair costs for each slip vary significantly, from $50,000 to $590,000. These estimates are rough order only and have been provided by Auckland Transport and property owners. The total estimated cost is around $6.4m, with an average cost of around $173,000 per property.

28. There may be other properties who meet the criteria described above, that we are unaware of. As a result of media coverage following the last Transport, Resilience and Infrastructure Committee, a small number of other property owners with road reserve damage have made contact with the council group, asking to be considered in the same way.

Thousands of slips occurred on council land as a result of the 2023 storms

29. Land instability is a feature of Auckland’s geology, and landslides are one of the most commonly occurring natural hazards in the region. The severe weather events of early 2023 led to thousands of slips on public and private land. The council is remediating public land where there are compelling reasons based on public benefit and amenity (including public safety), or where council assets are at risk. Many private landowners are undertaking similar repairs on their own properties – some of these have been assessed as ‘Category 1’ within the voluntary buy-out support scheme because the damage, while significant, does not pose an intolerable risk to life for people living on those properties.

Parks and Community Facilities

30. Parks and Community Facilities estimated the cost to repair storm damage to on parks, including slips, as in the range of $60m. Not all slips will be repaired. A process to prioritise repairs has been put in place, based on the impact of the slip on public access and public assets such as walkways.

31. Where there are potential impacts on neighbouring properties, the council investigates the slip, shares information with any potentially affected neighbours, and may reasonably facilitate any actions by the neighbour (for example, providing permissions to access their site across council land). Decisions are made on a case-by-case basis, and it is possible that some circumstances may require more significant intervention – this has not been the experience to date.

Auckland Transport

32. More than 2000 landslides impacted the transport network after the severe weather events. 592 minor and 215 major sites have been identified in the Auckland Transport Flood Recovery Programme, where slips have impacted the functioning of the road network or pose a public safety risk. Of these, 604 sites (74%) had been completed by the end of September 2024, including 123 major sites. A further 22 major sites and 7 minor sites are currently under construction. Slips that impact private land are not in scope of this programme, except where they also have a public impact.

33. Joint funding from the Crown and Auckland Council has supported this programme of work, for the purposes of regional recovery and improved resilience, with a budget of $390 million. By the end of September 2024, Auckland Transport had spent $236m million addressing sites and communities affected by the 2023 weather events. The remaining sites are the most complex and expensive to repair. The programme is on track to be substantially completed within the 2024/2025 year.

Processes for private activity / building in the road reserve are well established

34. Building private assets in the road reserve involves obligations that may come as a surprise to adjacent landowners who are not aware of the underpinning regulations. Concerns have been raised about the length of time and cost for design and consenting, and ongoing requirements for public liability insurance, and maintenance and inspections of assets built in the road reserve.

35. The Activities in the Road Corridor Bylaw 2022 codifies Auckland Transport’s approach to private structures in the road reserve, and the Unitary Plan and engineering standards set out requirements for design and construction. The overall approach is consistent with engineering standards and practices across the country. Like many processes involving construction and infrastructure, the approach is more thoroughly documented and managed than it was in the past. This is to ensure assets are built and maintained at the necessary standard and that risks are properly managed.

36. Conditions related to enroachment licenses create an ongoing responsibility for homeowners, including public liability insurance, inspection and maintenance. There is an annual license fee for use of the road reserve land (e.g. for carports, garages, building encroachments). This is determined by the value of the land being used, with a minimum fee of $1000 per annum. The licensing fee is, however, waived for retaining structures that support primary vehicle crossings and pedestrian accessways. Regular inspection and maintenance are normal asset management practices to ensure the continued reliability and performance of infrastructure, for example identifying stormwater ingress before it undermines a structure.

Tātaritanga me ngā tohutohu

Analysis and advice

A “measured” duty of care where natural hazards may impact neighbours

37. The civil legal principles that apply to road reserves are the same that apply to any land that, due to its natural condition or a natural hazard on the land, is causing a nuisance. The owner of the land has a duty to take reasonable steps to prevent or abate the nuisance (also known as a “measured” duty of care). Relevant considerations include what is practicable in the circumstances, and the ease or otherwise of remediation. Every situation needs to be considered individually in light of the specific circumstances.

38. The case law makes it clear that the duty does not (generally) require expensive or onerous actions. In many cases, investigating and sharing information is sufficient to discharge the duty. This is council’s response in the majority of cases involving council reserves.

39. That said, the duty is always case specific. There may be factors in some of the road reserve cases that justify a greater degree of intervention in order to discharge the duty to take reasonable steps in the circumstances. In these cases, this may include inability to access property – which is a fundamental need, and which the property owner is finding difficult to fix.

The case to uphold existing processes

40. The Chief Executives of Auckland Council and Auckland Transport have been asked to provide ‘definitive advice on solutions’ to these issues.

41. As a general principle, officers recommend applying the established and legally-supported approach that is already in place. That is:

· the council group, like all landowners, has a “measured” duty of care towards neighbours when a natural hazard occurs. This duty needs to be considered on a case by case basis, but generally the circumstances do not support intervention beyond investigating and providing information

· the responsibility to maintain access to private properties remains with the private land owner – this includes the construction and maintenance of private assets within the road reserve necessary to enable access

· established processes for permissions, design, consenting, construction, maintenance and regular inspection of private assets in the road reserve need to remain in place to manage risk and meet the council group’s legal obligations.

The case for a different approach in these limited circumstances

42. The severe weather events of 2023 were of an unprecedented scale and have led to an unprecedented response by Auckland Council. Funding has been secured to support homeowners in situations of intolerable risk to life, and the council has proceeded to purchase ‘Category 3’ homes.

43. The situations outlined by the STAR group do not meet the threshold of intolerable risk to life, however they do pose some particular challenges that have been brought to councillors’ attention. The property owners:

· Have an identified stability risk caused by the 2023 severe weather events, which were of a scale likely beyond design standards for infrastructure

· Have had access to their homes materially impacted, compared to pre-storm access

· Need to build private assets on public land or on their boundary, and report that they are encountering barriers to private insurance and finance.

44. This combination of factors is different to the challenges being faced by many other storm-impacted Aucklanders. Given these circumstances, elected members may consider it reasonable for the council to offer more than the baseline level of support.

45. A limited pool of potential funding has been identified, from the local (rates funded) contribution portion of the Crown-council funding for transport network repairs. Based on current forecasts, Auckland Transport estimates there may be a $5 million underspend of budget that could be directed to this issue. Crown Infrastructure Partners and NZTA have confirmed that this approach would be acceptable. Given that the funding is from the North Island Weather Events storm recovery budget, any expenditure must be able to demonstrate the connection to the 2023 storms.

Options for a bounded council group response

46. If there is acceptance that there is a case for a different approach to these situations, due to the factors identified above, a small number of options could be pursued. Staff have identified five primary options that Auckland Council and Auckland Transport could put in place, if so directed.

Primary options

47. The primary options considered in Table 1 are:

48. Option A. Case management and other non-financial support. The supports that the council group could provide are:

· Creating a case manager service to support property owners to engage with the council and Auckland Transport through the design and consenting process.

· Offering Storm Recovery Navigator support services to impacted property owners. This service is already available, and around 12 of the 37 identified property owners have had or are currently working with a Navigator.

· Offering support from our recovery insurance and banking team.

· Prioritising the allocation and processing of consent applications. While it is not possible to waive consent fees, as this service is run on a cost recovery basis, we can continue to prioritise applications for storm-related repairs.

49. Option B. Auckland Transport undertakes repairs directly. This option has been proposed by the STAR group. Auckland Transport would procure the works, and would either become the asset owner for any structures such as retaining walls, or would deliver the work on behalf of the adjacent property owner.

50. Option C. A loan facility to support adjacent property owners to undertake repairs. Officers are working to verify that private loans are not available to property owners in these situations, as has been reported by the STAR group, and whether the council group could provide information to support owners to communicate the technical details of any proposal.

51. If it remains the case that private finance is unavailable, then the council could explore the potential for a loan facility. This could complement a grant scheme.

52. There are a number of challenges to the council around providing a loan facility to owners. Legislation currently provides for a council to lend to a property owner with repayments via a voluntary targeted rate without the need to comply with comprehensive consumer lending compliance requirements, however this is limited to works that occur within the rating unit. Further work would be required to investigate other loan options, including questions of security, documentation, systems and compliance.

53. Auckland Council does not currently offer loans to individual properties and establishing and administering a scheme would result in relatively significant additional operating costs.

54. Option D. Selling the road reserve to adjacent property owners. A process is available to ‘stop roads’ and convert the land to private land. This would be likely to be technically possible in these cases, and would resolve issues of access to finance for private assets on public land, as well as ongoing public liability insurance and maintenance requirements. However, the process is expensive and lengthy and, on balance, would not be a practical solution to the immediate issues facing owners. It is an option that could be considered in the long term, should property owners want to reduce their liability for assets on public land. However, the cost-benefit / dis-benefits would need to be carefully considered.

55. Option E. A grant to support adjacent property owners to undertake repairs exclusively related to the 2023 severe weather events. Using the $5 million funding from the transport network repairs budget, we could establish a grant fund to support property owners where access has been impacted by slips on the road reserve as a result of the North Island Weather Events. This would be a one-off grant, as a limited and non-precedent-setting response to the storms. Property owners could apply for a contribution towards the funding of their repairs to private assets in the road reserve. We would recommend that this amount be up to 50% of the value of the project, up to a maximum value of $75,000 per project (noting that one slip may be impacting access to multiple dwellings). The scope would need to be limited to works on the road reserve (i.e. not including any proportion of works on private land) and exclude the cost of the reinstatement of the carriageway outside the area of the slope failure. If adopted, any grant scheme would be established on a ‘no fault, no liability’ basis. The criteria for the grant would be designed to reflect the distinguishing features of these situations (such as access to property), and minimise - to the extent possible - the potential for establishing precedents across a broader range of scenarios.

56. A grant scheme could invite expressions of interest before a set date, then assess all applicants’ eligibility and distribute funds according to the number of eligible applications. The council group’s overheads to administer the scheme would need to be included within the total $5m budget cap.

Table 1. Options for a bounded council response

Option	Benefits	Drawbacks	Officer view
A. Case management and other non-financial support	· Would maintain existing practice, and remove risk of setting precedents · Provides additional support to navigate council processes, insurance and banking requirements	· Leaves some property owners in difficult situations	Recommended
B. Auckland Transport undertakes repairs directly, either as asset owner or on behalf of private owners	· Procurement may be more cost-effective · Reduces stress for adjacent property owners	· Sets a precedent – Auckland Transport and Auckland Council seen as taking responsibility for the stability of the underlying land and the vehicle crossing. Given the scale this could have a significant financial impact for Auckland Council and ratepayers. · Reduces adjacent property owners’ ability to influence design decisions · Auckland Transport could repair and then transfer assets to adjacent property owners – this still leaves liabilities for delivery and performance · If assets remain in Auckland Transport ownership, there is no funding for maintenance · Risk of precedent, in case of future storms · Expectations of standards will be high	Not recommended
C. A loan facility to support adjacent property owners to undertake repairs	· Could provide a ‘backstop’ for property owners who are unable to secure private funding	· Administrative burden for council with additional costs and significant compliance risks · Minor impacts on council debt	Possible, only if private finance proves to be unobtainable
D. Selling the road reserve to adjacent property owners	· Would enable homeowners to secure private funds for work · Removes bylaw requirements from repair work and assets (e.g. licensing, insurance, inspections) · Decisions about asset maintenance rest with homeowner	· Requires legal process to stop the road · Costly and time-consuming, est. $50,000 for process plus cost of land · Does not directly resolve the slips · Would need to include consideration of future road widening requirements	Not recommended
E. A grant to support adjacent property owners to undertake repairs	· Upholds established arrangements for ownership and liability · Supports property owners to fund some of the needed works · Cost-sharing reduces risks of betterment or scope creep · Smaller contractors will have the opportunity to complete the works	· Risk of precedent, in case of future storms · Will not help if property owners can’t get access to private finance for the balance of the cost · Risk of over-subscription with unidentified sites	Not recommended If adopted, clear definitions must be established for eligibility, scope and budget, in accordance with established legal principles.

Tauākī whakaaweawe āhuarangi

Climate impact statement

57. Climate change is expected to increase the frequency and severity of extreme weather events in the Auckland Region. Land slips, floods, and other natural hazards are likely to become more frequent occurrences. Assets such as vehicle crossings in steep terrain are likely to become more vulnerable to failure. These issues are anticipated in Te Tāruke-ā-Tāwhiri: Auckland’s Climate Plan, which highlights the need to adapt to changes and improve infrastructure resilience.

58. Auckland Council is progressing work on a change to the Auckland Unitary Plan to increase resilience to natural hazards. This will strengthen the standards that must be met by developers when applying to build in areas that are at a high risk of flooding, land subsidence, coastal erosion and inundation.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

59. This paper has been prepared jointly by Recovery Office and Auckland Transport officers, with input from Parks and Community Facilities, legal and finance.

60. Accepting liability for natural hazards in the road reserve would not be supported by the council group. However, given the unusual circumstances of these natural hazard events, and the significant impacts on adjacent landowners, it may be acceptable to provide adjacent landowners with some support mechanisms to enable them to resolve their situations for themselves.

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

Local impacts and local board views

61. At their 26 September 2024 meeting, the Waitākere Ranges Local Board resolved ‘to urge the Government and Auckland Council to fund the repairs of slips in road reserves which are impacting residents’ abilities to access and use their homes (WTK/2024/155).^{^[3]}

62. The Chair and Deputy Chair of the Waitākere Ranges Local Board presented to the Transport Resilience and Infrastructure Committee on 5 September 2024, describing the predicament for property owners adjacent to slips on road reserves and seeking council group support.

Tauākī whakaaweawe Māori

Māori impact statement

63. The Recovery Office continues to partner and support mana whenua with recovery in their rohe. The Recovery Office will engage with mana whenua within the scope of areas subject to the works outlined, as the property owner of the road reserve, including facilitating any engagement for consents, accidental discovery and or biosecurity controls (e.g. Kauri Dieback).

Ngā ritenga ā-pūtea

Financial implications

64. The financial implications of each option proposed are included in Table 2 below.

Table 2. Financial implications of options

Option	Financial implications
A. Case management and other non-financial support	The underspend in the storm-related transport network repairs budget would result in lower than currently projected group borrowing and debt. Case management would need to be funded within existing budgets.
B. Auckland Transport undertakes repairs directly, either as asset owner or on behalf of private owners	Given that cost estimates exceed the identified $5 million underspend in the storm-related transport network repairs budget it is likely that this option would require additional council funding. This would require higher council rates and debt. If Auckland Transport undertook the work and took responsibility for the assets then this would also result in future requirements for maintenance and renewals, and associated funding requirements.
C. A loan facility to support adjacent property owners to undertake repairs	Establishing a loan scheme would result in significant operational costs to set up and maintain a scheme, including ongoing systems and compliance requirements.
D. Selling the road reserve to adjacent property owners	The financial implications of selling the land would depend on the consideration for the sale and assessment of public infrastructure in the future. If the land were sold at a price to cover the costs of stopping the road and converting the land the implications may be neutral although Council would be losing control of these assets and flexibility for any future needs they may serve. Implementation costs of this option are likely to be material.
E. A grant to support adjacent property owners to undertake repairs	It is proposed that grants would be funded from underspends in the storm-related transport network repairs budget. Given this budget is funded from debt, the underspend would otherwise reduce group borrowing. So long as the programme, including dedicated specialist case management support, does not exceed the $5 million underspend, debt would not exceed planned levels but would be higher than option A. There is a significant risk that the costs to address the issue escalates due to more properties than currently identified being affected, properties that have previously self-funded remediation works in the road reserve seeking reimbursement and costs for works to remediate slips escalating. These additional costs could increase council rates and debt. The future financial implications of the precedent effect of providing grant support is difficult to quantify but would likely be significant, leading to significant impacts on council rates and debt.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

65. A high-level assessment of risks and mitigations is provided in Table 3.

Table 3. Risks and mitigations

Risk	Mitigation
Property owners are unable to access finance and unable to undertake the repairs in the road reserve necessary to restore access their properties.	The Recovery Office’s insurance and banking specialists can work with property owners to support accurate communication with financial institutions. A grant scheme would provide the basis for owners to begin works and reduce the amount needed from private finance.
Providing support to adjacent property owners impacted by natural hazards in the road reserve establishes a precedent for future claims against the council group.	This is a significant financial risk which could lead to higher council rates and debt. It can be partially mitigated by treating each situation on a case by case basis and assessing what would constitute ‘reasonable’ action. Funding through Auckland Transport’s storm recovery funding pool would limit the scope to repairing natural hazard damage that eventuated from the 2023 severe weather events.
The number of impacted property owners may be higher than currently known, and more owners seek financial support.	If expectations of material assistance cannot be met within the funding available a financial risk is created. A grant scheme could be managed through an expression of interest with a fixed application closing date. This would enable the council group to evaluate the scale of the issue before disbursing the fixed amount of funding to applicants. If the number of applicants was significantly higher, the value of the grants would need to be lower. The total grant funding available would be capped at $5 million. The number of affected properties could be significantly higher than currently known.
Auckland Transport assumes liability for private assets in the road reserve – either through constructing the assets on behalf of the adjoining owners, or by owning the assets.	Auckland Transport does not routinely repair or maintain private assets in the road reserve, and is not funded or structured to do so. The public assets that it does own are connected to either the functioning of the transport network, or public safety. Any solution to the current predicament should maintain the private ownership of, and responsibility for, private assets. A residual risk of public expectation for ongoing council group maintenance and renewal would exist.
Other transport network repair projects over-run their budgets and the $5 million is needed to complete works with public and/or transport network benefits	Auckland Transport have made allowances that account for any over-run in project budgets, and will continue to monitor programme budget forecasts.

Ngā koringa ā-muri

Next steps

66. Staff will implement the decisions of the Transport, Resilience and Infrastructure Committee. Should the Committee decide to adopt a grant scheme to provide capped match funding to support adjacent property owners to construct private assets in the road reserve in response to the impacts of the North Island Weather Events, the Chief Executive will work with the Chief Executive of Auckland Transport to finalise the grant scheme criteria and process.

Ngā tāpirihanga

Attachments

There are no attachments for this report.

Ngā kaihaina

Signatories

Authors

Tanya Stocks - Recovery Office Strategic Support

Craig Hobbs - Natural Environment Lead, Recovery Office

Jeremy Pellow - Programme Director Flood Recovery (AT)

Authorisers

Mace Ward - Deputy Group Recovery Manager

Dean Kimpton - Chief Executive (AT)

Barry Potter - Director Resilience and Infrastructure

Transport, Resilience and Infrastructure Committee

07 November 2024

Update on Water Reform

File No.: CP2024/17015

Te take mō te pūrongo

Purpose of the report

1. To obtain delegated authority to provide feedback on the Watercare Services Ltd charter and business plan, including details of economic regulation.

Whakarāpopototanga matua

Executive summary

2. The council proposed provisions for Watercare Services Ltd (Watercare) that were agreed by the Government in May 2024 as the Local Water Done Well – Auckland Solution.

3. Local Government (Water Services Preliminary Arrangements) Act (the Act) was enacted in September 2024 as the first of a suite of reform legislation. The Act includes the following regarding Watercare:

i) Watercare remains a Council-controlled organisation of Auckland Council.

ii) Obligation for the provision of water supply and wastewater services has passed from Auckland Council to Watercare.

iii) Watercare achieves financial separation from Auckland council by 1 July 2025. Auckland Council cannot provide financial support to Watercare.

iv) Watercare is subject to interim economic regulation prior to the establishment of full economic regulation for the sector to be established through future legislation.

v) The Minister of Local Government is enabled to appoint a Crown review team, Crown observer, or Crown manager to Watercare in the event of significant problems.

4. As part of interim regulation, the Government is establishing a charter for Watercare. Part 1 of the charter must contain minimum service quality standards for Watercare (which may include the time frame during which Watercare must meet the standards) and financial performance objectives. Part 2 of the charter must contain a price-quality path for Watercare and specify the time period during which the charter applies. The Watercare charter must be prepared in consultation with Auckland Council.

5. The Commerce Commission has been appointed as the Crown monitor for Watercare during the interim regulation and will be the economic regulator for the enduring regulatory regime. The Commission will monitor and report on Watercare’s performance against the charter.

6. Under the Act Watercare must also submit a ten-year business plan to the Department of Internal Affairs that is consistent with its charter and that sets out its approach to funding, revenue and pricing (including growth charging), financial strategy, efficiency improvements and infrastructure investment priorities, and information about how the plan helps to achieve Watercare’s proposed activities and intentions (as set out in its Statement of Intent).

7. To provide for financial separation by July 2025, the preparation of the Watercare charter and business plan is proceeding at pace, with the objective of both being substantially complete in early December 2024 per the timeline diagram shown below.

8. Council will need to respond to consultation on the charter in November, followed by review of the business plan in early December to meet the minister’s deadline for presentation to Cabinet.

9. To enable the council to participate effectively during the short timeframe to develop the Watercare charter and business plan it is proposed that political oversight is delegated to selected members to approve council’s feedback.

Ngā tūtohunga

Recommendation/s

That the Transport, Resilience and Infrastructure Committee:

a) tautapa / delegate Auckland Council’s review of and feedback on Part 1 and Part 2 of the Watercare Services Ltd charter and business plan, as provided for in the Local Government (Water Services Preliminary Arrangements) Act, to Mayor W Brown, Deputy Mayor D Simpson, Councillor A Baker, Councillor K Turner and a member of Houkura - Independent Māori Statutory Board.

b) tuhi ā-taipitopito / note that Bill Three of the Local Water Done Well reform is expected to be introduced into the House prior to Christmas and staff will advise of the content and timeframes for submissions when that information becomes available.

Horopaki

Context

10. The Local Government Water Services Preliminary Arrangements Act 2024 provides:

i) mechanisms to enable the financial sustainability of Watercare including,

- prohibition on Auckland Council providing financial support of Watercare;

- separation of Treasury functions; and,

- repayment of historical debt balances to Auckland Council

ii) interim economic regulation of Watercare including revenue and price path, as well as levels of service;

iii) consequential changes to other Acts, such as Local Government (Auckland Council) Act 2009, as required to effect the above policy amendments; and,

iv) the requirement for Auckland Council to provide a one-off Auckland Stormwater Delivery Plan by September 2025 outlining levels of service, and details of the financial sustainability of stormwater delivery operations

11. The legislation specifies that interim economic regulation of Watercare will be established by way of the development of a charter stating target levels of service and price-quality path settings, and a ten-year business plan outlining Watercare’s sources and intended approach to funding, revenue and pricing, financial strategy, efficiency improvement targets and investment priorities for infrastructure.

12. Interim economic regulation is intended to benefit consumers of water services provided by Watercare and to ensure that Watercare manages its operations efficiently and maintains the long-term integrity of its assets.

13. Bill Three of the Local Water Done Well reform is expected to be introduced to the House prior to Christmas. We are expecting the Bill to deal with the enduring settings for economic regulation, as well as addressing bylaw-making powers, changes to Taumata Arowai legislation and environmental regulations, and stormwater network management updates.

Tātaritanga me ngā tohutohu

Analysis and advice

14. As part of the preparation of the Watercare charter, the Secretary must consult with Auckland Council on the contents of the charter, prior to presentation to Cabinet for approval and then finalised through Order in Council.

15. The legislation also sets out that Watercare’s ten-year business plan, aligned to the charter, be filed with the Secretary of Local Government.

16. Critical steps in the process to achieve financial separation of Watercare from Auckland Council are dependent on the completion of both the charter and an approved business plan.

17. In order to achieve this milestone, an accelerated timetable of work is underway with officials from the Department of Internal Affairs, Commerce Commission, Watercare and Auckland Council to ensure that the charter and business plan are substantially completed, and key Cabinet directions are made by the end of December 2024.

18. A draft of the Watercare charter is expected in mid-November for consultation with Auckland Council, with any feedback included in the final draft to Cabinet in mid-December.

19. The business plan is being developed by Watercare with the Watercare Board reviewing a final draft in the second week of December. Following this step, and any necessary revisions, the Minister plans to present to Cabinet.

20. The Mayor has been working with the Minister to direct officials since the May 2024 announcement and to agree the timeframe for this work. The investment included in Auckland Council’s Long-term Plan 2024-2034 forms the starting point for the price-path and business plan.

21. Auckland Council staff have been working with officials to ensure that Watercare achieves financial separation from Auckland Council by 1 July 2025. Key directions need to be made by Cabinet in December and therefore this work requires specific political input from Auckland Council.

22. Accordingly, this report requests delegated authority be given to the Mayor, Deputy Mayor, Chair of the Transport, Resilience and Infrastructure Committee, Lead Councillor for Watercare, and a member of Houkura - Independent Māori Statutory Board. to review and feedback on the work over the coming weeks. The charter and business plan gives effect to the Governing Body’s previous resolutions (GB/2024/65) on water reform and the Government’s May announcements and will enable us to meet the tight timeframes for Watercare to achieve financial separation by 1 July 2025.

Tauākī whakaaweawe āhuarangi

Climate impact statement

23. This report does not seek any decisions that would impact climate or would be impacted by climate change. However, it is noted that the water reform legislation addresses climate change to varying degrees.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

24. Council staff are working closely with Watercare to support achieving financial separation from Council by 01 July 2025.

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

Local impacts and local board views

25. There has been no engagement with local boards on the work to prepare the Watercare charter or business plan. This work gives effect to the Government’s announcements in May 2024 and are an important step in enabling Watercare to achieve financial separation from Council by 01 July 2025.

26. Local Boards will be involved in engagement on any submission to Bill Three, which is expected to be introduced to the House prior to Christmas. Timeframes and process will be confirmed once this information is made available.

Tauākī whakaaweawe Māori

Māori impact statement

27. Water is a taonga to Māori and the nature of water reform is of critical importance to Māori.

28. The Mayor led engagement with Tāmaki Makaurau iwi on water reform including hui with iwi leaders on 24 April 2024 and 01 May 2024, leading up to the Government’s important decision on the Local Water Done Well – Auckland Solution.

29. There has been no further engagement with iwi on the reform since that time. The next engagement expected will be as part of Auckland Council’s submission on Bill Three. Timeframes and process will be confirmed once this information is made available.

Ngā ritenga ā-pūtea

Financial implications

30. Council’s Treasury and finance teams are involved in supporting Watercare to set up its Treasury function, its financial settings and what that means for Auckland Council and its work to obtain a credit rating.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

31. It is important that council reviews and provides feedback on the Watercare charter and business plan to ensure it achieves the outcomes that Auckland needs from this reform. The risk is that council will not be able to provide effective input as this work is moving at pace and a delegation is sought as mitigation to this risk.

Ngā koringa ā-muri

Next steps

32. Staff will brief the delegated group and provide expected timeframes for the charter and business plan review.

Ngā tāpirihanga

Attachments

There are no attachments for this report.

Ngā kaihaina

Signatories

Authors

Rose Ernst - Programme Coordinator

Trudi Fava - Principal Advisor

Authorisers

Megan Tyler - Director Policy, Planning and Governance

Barry Potter - Director Resilience and Infrastructure

Transport, Resilience and Infrastructure Committee

07 November 2024

Auckland Transport Quarter One Performance Report 2024/2025

File No.: CP2024/16184

Te take mō te pūrongo

Purpose of the report

1. To receive a high-level summary of Auckland Transport (AT)’s first quarter report (period ending 30 September 2024).

Whakarāpopototanga matua

Executive summary

2. AT’s first quarterly report for the period ending 30 September 2024 is provided in attachment A. The measures and targets in the quarterly performance report are measured against the 10-year budget 2024 – 2034 and AT’s Statement of Intent 2024-2027 (SOI).

3. AT has 23 SOI performance and financial measures and is currently meeting or exceeding 15 out of 23 measures. Three measures are yet to be reported, and five measures are currently not meeting forecasts.

4. Reputation, trust and confidence continues to be a priority. The measure ‘AT listens and responds to Aucklanders’ needs’ is still just below the target of 33 per cent, however there has been an improvement from the June quarter up to 31 per cent.

5. Highlights for the quarter include:

· no deaths or serious injuries on Auckland roads in July 2024, the first month without a death since April 2020

· the $50 weekly fare cap was introduced in July 2024

· the accelerated ferry programme is nearing completion, with Gulf Harbour services resuming full schedule in September 2024

· the Main Highway dynamic timing project is now live, piloting bus lane operation based on congestion.

6. Safety has become an increased concern in the quarter with an increase in violence, threats and aggression towards staff and customers. AT continues to work alongside New Zealand Police and other partners to improve safety on the network.

7. Understanding the funding impacts on programmes with the release of the National Land Transport Programme 2024 – 2027 (NLTP) by New Zealand Transport Agency Waka Kotahi (NZTA) has been a focus for this quarter. This has confirmed the lower funding levels previously signalled.

8. The Governing Body has confirmed an updated three-year capital programme for AT in response.

9. AT will now update their annual capital plan for 2024/2025 and the Statement of Intent (SOI) to reflect the confirmed programme and these changes will be reflected in quarter two performance reporting.

Ngā tūtohunga

Recommendation/s

That the Transport, Resilience and Infrastructure Committee:

a) whiwhi / receive the Auckland Transport 2024/2025 first quarter performance report, provided at Attachment A.

Horopaki

Context

10. As a council-controlled organisation (CCO), AT is required under the Local Government Act to provide a quarterly report to the relevant council committee. They are required to:

· summarise the CCO’s performance against the approved budget and agreed targets in the 10-year Budget and SOI

· provide a forecast of the CCO’s performance

· identify the cause of major variances

· highlight major achievements for the quarter

· signal any potential or developing issues.

11. As outlined in their SOI, AT will continue to report to the Department of Internal Affairs (DIA) mandatory measures annually and report on Long-Term Plan (LTP) measures to committee twice a year as included in 6-month (Q2) and year-end reports.

12. The National Land Transport Programme 2024-2027 (NLTP) was approved by the New Zealand Transport Agency Waka Kotahi (NZTA) in August which confirmed the constrained National Land Transport Fund (NLTF) funding levels previously signalled.

13. The Governing Body approved an updated three-year capital programme for AT in response to the NLTP on 24 October 2024 as per resolution GB/2024/150.

14. This decision confirmed Auckland Council will continue to allocate the full local share of $2.2 billion for transport as confirmed in the Auckland Council Long-term Plan 2024-2034.

15. AT as a result will now update their annual capital plan for 2024/2025 and the SOI to reflect the confirmed programme. The quarter two report will reflect changes to the SOI that come as a result of this process.

Tātaritanga me ngā tohutohu

Analysis and advice

Financial performance

16. AT’s year-to-date surplus from operations, excluding depreciation of $22 million, is $20 million favourable to budget.

17. This favourable variance is driven primarily by lower organisational costs including personnel costs, contractor maintenance and other expenditure. It was however slightly offset by lower NZTA income.

18. Capital expenditure in the year to date is $258 million representing 77 per cent of the planned spend. The underspend is mainly due to pausing projects whilst awaiting NZTA approval of the NLTP as well as the phasing of some projects such as Ferry, Rail and the Eastern Busway.

19. Capital revenue was received from Auckland Council (41 per cent) and NZTA and other crown agencies (59 per cent) against a budget which assumes an approximately 50 per cent funding split due to higher than planned Crown Infrastructure Partners (CIP) funding for flood response work.

Non-financial performance and other issues

20. This quarter one report reflects the new measures outlined in the Statement of Intent 2024-2027.

21. The updated SOI acknowledges the ongoing need to deliver transport outcomes for Auckland quickly and AT has based its SOI and deliverables around five ‘accelerators’ AT believes can achieve this.

22. The updated performance expectations are structured into five areas, which align with the strategic accelerators in the corporate strategy:

1) Making every interaction count

2) Taking public transport from good to great

3) Improving network productivity

4) Effective governance and advocacy for transport outcomes

5) Value for money (including growing external revenues accelerator)

23. A section on core business is also included.

24. Under the Local Government Act, AT is required to report against five additional measures. The road resurfacing measure has now been included in the SOI and the remaining four do not currently have results for the YTD. These will be included in the quarter two report.

SOI and other performance measures

25. In this first quarter, AT has met or exceeded 15 of its 23 SOI performance measures.

26. Three measures have not yet been reported and five are currently not meeting forecasts.

27. The measure, ‘AT listens and responds to Aucklanders' needs’ continues to be a priority as this measure was not met in FY24. Although still not met, there has been continued progress for this measure, with a quarter one result of 31 per cent, up 9 per cent from the June quarter. The FY25 target is 33 per cent.

28. The AT report notes that a reduction in negative media coverage combined with improved reliability has helped this improvement.

29. The other measures not currently met are:

· Public Transport boardings – The YTD result is 23.7m boardings, slightly below the target of 23.9m. September achieved 7.5m boardings which is 9 per cent above September 2023, but 3.1 per cent below the YTD target.

· Farebox recovery Ratio – The YTD result is 32.2 per cent, slightly below the YTD target of 33.5 per cent and the full year target of 35%. The farebox revenue was impacted by poor weather and ongoing track issues in rail.

· Percentage of capital budget invested – The YTD result is 76.8 per cent, which is below the FY target of 90 percent. The NLTP uncertainty has meant some programmes progressing slower than planned.

· Percentage of procurement spend with Māori-owned business – The FY target is 3 per cent and the YTD result is 2.91 per cent. AT is anticipating an increase in spend through several large projects throughout 2025.

30. The measures not yet reported are:

· Local board satisfaction – this is a half-yearly measure and will be reported in the second quarter report.

· Emission reduction – data will be received in November and will be reported in the second quarter report.

· Percentage of capital delivery completed on time - AT is still developing the measurement methodology.

31. Highlights for the quarter include:

· no deaths or serious injuries on Auckland roads in July 2024, the first time there has been a month without deaths since April 2020.

· the $50 weekly fare cap was also introduced in July 2024. Since its launch, over 20,000 Aucklanders have already benefited from this initiative.

· the accelerated ferry programme is nearing completion with Gulf Harbour services resuming full schedule in September 2024. An uplift in customers was observed immediately.

· the Main Highway dynamic timing project went live in Ellerslie in August 2024 to pilot the length of time bus lanes will operate based on congestion.

SOI performance targets outcome areas	Exceeded	On track / Met	Not on track / Not met	Not reported this quarter	Total
Every interaction counts	2		1	1	4
Improving network productivity	2	2			4
PT Good to Great		3	1		4
Value for money			1		1
Core business and other activities	2	4	2	2	10
TOTAL	6	9	5	3	23

Table 1. SOI performance targets summary

Risks and issues

32. Reputation, trust and confidence has recovered this quarter but continues to be a priority for the AT board and executive team.

33. A rising concern during this quarter has been the increase in incidents of violence, threats and aggression towards both customers and staff.

34. To improve the safety of bus drivers, AT will be installing safety screens on the bus network. AT are currently reviewing quotations to this and to resolve legal issues with the existing ADL contract. AT are intending to have procurement plans signed off and contracts confirmed with the view to begin installation in early 2025.

35. AT also continues to deliver the Public Transport Operations Accelerator initiative which focuses on community safety through crime prevention in collaboration with the community, Auckland Council and Police.

36. In this last quarter, AT in collaboration with community stakeholders promoted a safer community hui in Albany and the Hibiscus coast and will now continue this work in Manukau and Manurewa.

Progress against SOI deliverables and performance expectations

37. The Statement of Performance expectations outline AT’s organisational priorities and the associated activities to deliver on these.

38. For quarter one, 34 out of 38 SOI deliverables are currently on track.

39. Three have been completed, including the development of the Ka Tupu, Ka Wana, Achieving Māori Outcomes Plan and introduction of the weekly fare cap.

40. The four that are currently at risk to deliver less than expected outcomes are due to the NLTP funding impacts.

AT Deliverables	Completed	On track	Not completed	Not on track
Every interaction counts		4		1
Improving network productivity		11		1
PT Good to Great	2	6		1
Value for money		4
Effective governance & advocacy		3
Core business and other activities	1	6		1
TOTAL	3	34		4

Table 2. AT Deliverables summary

Asset condition

41. A new addition to the reporting is a section on asset condition which provides more detail of the state of asset condition.

42. Each asset class considers count differently. For PT it is the number of facilities, for pavements it is the length (km) of road and for structures it is the number of assets.

43. The previous SOI included traffic signals in the definition of critical assets. Due to the high number of traffic signals (over 51,000) this skewed the data and so the updated definition excludes them.

Asset Class	Very good	Good	Moderate	Poor or very poor	Total	Percentage acceptable	Percentage unacceptable
Transport Network (Road pavement)	208	211	231	272	922	70.4%	29.6%
Public transport	25	17	13	32	87	63.2%	36.8%
Structures	538	1790	1680	612	4620	86.8%	13.2%
TOTAL	771	2018	1924	916	5629	83.7%	16.3%

Table 3. Asset condition summary

44. As a total, the performance measure ‘proportion of key assets in moderate or better condition’ has met the performance target of 85 per cent as it is within 2.5 per cent. Assessing individual elements however, 29.6 per cent of the road pavement network is below the acceptable standard.

45. Increased renewal investment combined with initiatives to drive lower-cost delivery of renewals such as ‘dig once’, is helping maintain asset conditions.

46. The report states that increased funding is required to keep up with network demand. Maintenance and Renewal funding has been increased this year and through the LTP so the impact this has on asset condition, particularly pavements will be closely monitored.

Tauākī whakaaweawe āhuarangi

Climate impact statement

47. AT’s operation emissions for quarter one is not currently available and additional reporting will be included in the quarter two report.

48. AT in consultation with Auckland Council have been focused on a review of previous climate disclosures to refine the reporting process and ensure climate reporting obligations are met.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

49. AT’s quarter one performance report contains information on how it is contributing to the council’s outcomes and objectives.

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

Local impacts and local board views

50. Oversight, monitoring and direction of AT is delegated to this committee. The views of local boards have not been sought. AT reports to local boards directly.

Tauākī whakaaweawe Māori

Māori impact statement

51. In August 2024, the AT board approved the Ka Tupu, Ka Wana Achieving Māori Outcomes Plan 2024-2027 which sets out specific actions and measures to ensure AT is contributing to the delivery of Auckland Council’s Kia Ora Tāmaki Makaurau Māori outcomes performance measurement framework.

52. AT will be reporting against the outcomes in Ka Tupu Ka Wana in future quarterly reports.

53. The report also notes ongoing engagement with mana whenua through forums for operations and governance matters, and fortnightly hui throughout the region primarily for resource matters.

54. AT’s procurement with Māori owned business is $14 million or 2.91 per cent of the total spend.

55. AT has also continued the roll out of Te Reo Māori across the transport network and will be completing an audit of this in 2025 to assess the extent of Te Reo Māori signage across the network.

Ngā ritenga ā-pūtea

Financial implications

56. AT’s financial performance is provided in paragraphs 16 to 19.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

National Land Transport Programme 2024-2027

57. The reduced funding levels confirmed from the National Land Transport Fund (NLTF) will impact maintenance spend and capital projects, including renewals.

58. AT will be updating their SOI and will submit this to the council for approval. Future quarterly reports will reflect the revised SOI.

Operational risks

59. The report also highlights concerns around safety on the network as outlined in paragraphs 33 to 36.

60. Work to ensure a smooth transition of City Rail Link (CRL) to AT continues to ensure compatibility of systems and operations happen in real time. Risks are regularly tabled and managed through the CRL Programme Control Group with an Independent Quality Assurance process also in progress.

Ngā koringa ā-muri

Next steps

61. The next quarterly report (quarter two, October to December 2024) will be provided to the Transport, Resilience and Infrastructure Committee in February 2025.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇨	Auckland Transport Quarterly Report ended 30 September 2024

Ngā kaihaina

Signatories

Author

Dave Jaggs - Senior Policy Advisor

Authorisers

Anna Bray - General Manager Group Strategy, Transformation and Partnerships

Max Hardy - Director Group Strategy and Chief Executive Office

Barry Potter - Director Resilience and Infrastructure

Transport, Resilience and Infrastructure Committee

07 November 2024

Use of Artificial Intelligence to deliver transport outcomes

File No.: CP2024/16725

Te take mō te pūrongo

Purpose of the report

1. To provide an overview of Artificial Intelligence (AI) and the impact and types of opportunities that Auckland Transport (AT) has or is intending to explore using it.

Whakarāpopototanga matua

Executive summary

2. AT has used AI for several years, to improve its customer outcomes and experience and to also improve operational efficiency.

3. With the emergence of Chat GPT and products like Microsoft Co-Pilot, the use of AI has become more widely used, presenting larger and new opportunities.

4. This presentation outlines some of the examples AT has implemented and some of the possibilities it is exploring with the use of AI that will improve transport outcomes for Aucklanders and deliver increased value for money.

Ngā tūtohunga

Recommendation/s

That the Transport, Resilience and Infrastructure Committee:

a) whiwhi / receive the presentation from Auckland Transport on its use of Artificial Intelligence in delivering transport outcomes.

Horopaki

Context

5. AI is the development of computer systems able to perform tasks normally requiring human intelligence or intervention, such as visual recognition, understanding what is said, making decisions based on data.

6. AI has been under development since the 1950s, starting with machine learning, which is the ability of machines to make decisions or predict things based on historical data. It has now evolved to deep learning which involved computers making decisions based on process data and more real time information. The latest term is Generative AI, which looks to create new content based on a range of data, including sensor data, visual data, voice, and where the questions asked are more like a conversation as compared to having to computer code the questions.

7. The advent of Generative AI opens up the ability for anybody with access to a computer to ask a question in common English and have the answer returned. This means that businesses, including organisations like AT, now have the ability more than ever to understand their customers and their own processes and options, providing they have access to the data.

8. AT has a large catalogue of information gained over the years from its real time systems on the rail, bus, and ferry network. It also collects customer feedback and has access to social media content. This means AT is well placed to leverage AI across a wide range of opportunities, issues and known problems, as well as identify new patterns or issues not previously identifiable by a human due to the volume and range of data.

Tātaritanga me ngā tohutohu

Analysis and advice

9. AT has leveraged machine learning and AI over the years to solve known problems and issues to improve customer experience. The ferry to bus and bus to bus connections decision making are examples where using a range of historical data along with current data, we can predict the impact of a late running connection on the current known patronage, as well as the people waiting downstream at other bus stops.

10. AT has many use cases (opportunities) in the pipeline and as a business is working to prioritise and implement the best ones that have the biggest impact. An example of this is working with the likes of Microsoft, Google and HPE to try and solve traffic congestion in Customs Street. This aims to try and better synchronise six intersections on a congested road, with other key bus routes also coming in from side streets.

11. AT also has a small team working on other initiatives, such as CCTV analytics that monitor our rail and ferry infrastructure to provide customer safety as well as help to protect assets. Additional examples are outlined in the presentation.

Tauākī whakaaweawe āhuarangi

Climate impact statement

12. The use of AI can be used to model a range of environmental factors based on the information that feeds into the model. For instance, given the material data it can calculate differences in construction materials and environmental impacts for various plans.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

13. The learnings for the use of AI and some of the solutions developed to date have been shared with other council entities, including the Local Government Official Information and Meetings Act (1987) (LGOIMA) response pilot which is being considered by Auckland Council for adoption.

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

Local impacts and local board views

14. The use of AI will open opportunities for AT to make information more accessible to local boards by being able to differentiate information based on geographic area. This would be time consuming if attempted by manual methods.

Tauākī whakaaweawe Māori

Māori impact statement

15. The use of AI can help with translation of information by staff and customers, and in the preparation of documents in both English and Te Reo.

16. In time it is expected that the ability for customers to interact with AT in Te Reo will be greatly enhanced as AI will be able to translate a range of information between the two languages quickly and with increased accuracy.

Ngā ritenga ā-pūtea

Financial implications

17. AT is currently working on cost benefit analysis for the use of AI by selected staff through the use of the Microsoft Co-Pilot.

18. As part of any specific project or initiative, AT identifies the actual real and perceived benefit values which it quantifies for each of the initiatives. These are then able to be measured.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

19. Without appropriate oversight and governance, information gained by users using AI may be incorrect, and there may also be unintended sharing of information by staff. It is important that the systems are properly tested to ensure that information security is in place to manage the right access to the right people when they are using AI.

20. In respect of public access using AI on the websites, the ability to surface out of date information is enhanced. AT has implemented this type of access as a pilot to obtain feedback from customers, which will be used to improve the quality of information available on the website.

Ngā koringa ā-muri

Next steps

21. AT will continue to develop its use of AI and share lessons and insights with the wider council group.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇨	Use of AI in Delivering Transport Outcomes - Presentation

Ngā kaihaina

Signatories

Author

Roger Jones - Chief Technology Officer (AT)

Authorisers

Dean Kimpton – Chief Executive (AT)

Barry Potter - Director Resilience and Infrastructure

Transport, Resilience and Infrastructure Committee

07 November 2024

Auckland Transport Fare Review

File No.: CP2024/16784

Te take mō te pūrongo

Purpose of the report

1. To advise Auckland Council of the proposed 2025 public transport fare increase recommended in the annual review of public transport (PT) fare schedules, and of changes being made to simplify the fare structure.

Whakarāpopototanga matua

Executive summary

2. Auckland Transport (AT) will be raising PT fares, as part of the 2025 Annual Fare Review (AFR) and implementing structural changes to the PT fare system, following an independent review of the fare structure by L.E.K. Consulting (LEK).

3. The fare increase is required to keep pace with operating costs, improve farebox recovery and ensure we meet our obligations under the current Statement of Intent (SOI).

4. The fare reforms simplify the fare structure, making it easier for customers to understand and use the services, which aligns with AT's strategic priorities to grow PT, enhance revenue, and improve customer experience.

Ngā tūtohunga

Recommendation/s

That the Transport, Resilience and Infrastructure Committee:

a) tuhi ā-taipitopito / note the proposed 2025 public transport fare increases recommended in the annual review of public transport fare schedules and of changes being made to simplify the fare structure.

Horopaki

Context

5. PT operating costs are met through a combination of user pays (fares), ratepayer public subsidy through Auckland Council funding, the National Land Transport Fund through New Zealand Transport Agency Waka Kotahi (NZTA) and other funding such as commercial advertising.

6. AT has experienced an unparalleled increase in PT operating costs in recent years due to contract indexation, increased track access charges and additional service provision.

7. While indexation and cost pressures are starting to ease, the 5.2% fare increase is budgeted and necessary to increase overall farebox recovery.

8. Several factors have now led AT to seek a review of its fare strategy. These include: COVID-19 pandemic and work-from-home impacts, increased cost of living pressures, farebox recovery targets, ambitious emission reduction targets, and the forthcoming National Ticketing System (NTS).

9. In January 2024, AT engaged LEK to conduct an extensive review of its fare structure. This review was concluded in August 2024 and recommended a phased approach to fare structure change implementation (Figure 1).

Figure 1: Fare structure phased implementation

10. In conjunction with the annual fare review, AT will be implementing Package 1A of the fare reforms. This strikes a balance between AT’s strategic priorities and customer and community priorities.

Tātaritanga me ngā tohutohu

Analysis and advice

Annual fare review

11. 2024 benchmarking shows that Auckland continues to offer relatively low cost short-distance fares, ranking well against peers at 7th place overall for affordability. Longer-distance fares (15km or more) benchmark poorly, ranking 33rd place for affordability, out of 44 global cities included in the benchmark.

12. AT did not review PT fares between 2020 and 2022, keeping them at nil increase as part of our COVID-19 pandemic response, despite significant operating cost increases over the same period.

13. While annual inflation (measured via NZTA published indices) and the consumer price index (CPI) have started to decrease, these have been high for the past two years.

Year	Consumer Price Index (CPI)	Increase in fares
2018	1.5%	2.4%
2019	1.7%	1.9%
2020	1.5%	3.2%
2021	3.3%	0.0%
2022	7.3%	0.0%
2023	6.0%	6.5%
2024	3.3%	6.2%

Table 1: Annual CPI (12 months to the June 2024 quarter)

14. NZTA indexation was 4.9% for the past financial year and CPI is 3.3% as at June 2024.

15. PT operating costs have increased by $63m in the last financial year through contract indexation, increased track access charges and additional service provision.

Figure 2: PT Operating costs

16. Ferry cost recovery has declined due to the integration of ferry fares in 2020, because these fares are directly linked to zones within the integrated fare table. The current fare integration has not allowed AT to proportionately adjust ferry fares without negatively affecting bus and rail passengers.

17. AT proposes an increase to ferry fares as a part of the fare structure review, as this enables us to utilise zones 5 to 9 exclusively for ferry fares.

Fare structure review

18. AT has not reviewed its PT fare structures since the current zone-based fare structure was introduced in 2016.

19. LEK was commissioned to conduct the fare structure review based on their expertise in PT pricing and payment strategies.

20. The objective of the review was to help AT identify opportunities to revise the fare system, with the primary focus on responding to passenger behavioural changes, simplifying the product suite, adding customer value, improving transport equity, and supporting growth in PT patronage and revenue.

21. Changing the fare structure to flat or distance-based fares was considered as an alternative to the current zonal structure.

22. Evolving the current zonal structure is seen as the optimum path forward as it would allow for better transport outcomes and minimise the risks associated with the transition to the future-state fare system.

23. Seven distinct reforms have been recommended to evolve AT’s fare system to meet these objectives. AT has gained board approval to implement Package 1A of the fare reforms, which include the following changes:

a) Consolidation of fare zones from 14 to 9 to simplify the system and reduce fare complexity, thus making it easier for customers to understand and potentially increasing patronage.

b) Simplification of the fare table to four zones, which will cover 99% of current journeys and reduce the number of unique peak travel fares from 59 to a more manageable number, thereby decreasing administrative overheads and customer confusion.

c) Enable ferry fare flexibility to better align ferry operation costs with revenue, ensuring sustainable service provision without excessively burdening other transport modes.

d) Removal of the off-peak discount, which has not been successful in modifying travel behaviour as intended.

24. In addition, a $50 seven-day fare cap was successfully implemented in July 2024, which benefits bus, rail and inner harbour ferry customers.

25. Fare structure changes described as Package 1B and Package 2 (refer Figure 1) are subject to further investigation.

26. Some examples of fare changes are summarised below in Table 2 below

Journey Examples	Current Fare	From 9 February 2025	Change %
Beachlands to Sylvia Park	$6.00	$4.65	-22.5%
Gulf Harbour to Westgate	$6.00	$4.65	-22.5%
Kumeu to Takapuna	$6.00	$4.65	-22.5%
Pukekohe to Albany	$9.60	$7.65	-20.3%
Hibiscus Coast to City	$7.40	$6.25	-15.5%
Helensville to City	$8.50	$7.65	-10.0%
Rosedale to Penrose	$7.40	$7.65	3.4%
Airport to New Lynn	$6.00	$6.25	4.2%
Westgate to Penrose	$6.00	$6.25	4.2%
Mission Bay to Pt Chevalier	$4.45	$4.65	4.5%
Panmure to Henderson	$4.45	$4.65	4.5%
Kingsland to Parnell	$2.60	$2.80	7.7%
Botany Downs to Airport	$2.60	$2.80	7.7%

Table 2: Fare change examples

Tauākī whakaaweawe āhuarangi

Climate impact statement

27. A reduction in public transport patronage associated with the fare increase may increase transport emissions and climate change impacts.

28. The benefits of simplifying the fare structure and making it easier for customers to understand and use public transport will offset the negative impact of the fare increase being implemented.

29. While increasing the farebox recovery rate allows AT to continue to invest in efficient, frequent, low emission public transport. Which leads to a reduction in greenhouse gas emissions, air pollution, and traffic congestion.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

30. The Council group has not been engaged in the annual fare review or the independent review of the fare structure.

31. Package 1B for the proposed fare reforms contain considerations which are under further investigation and will require engagement with Auckland Council.

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

Local impacts and local board views

32. The consolidation of fares zones from fourteen to nine has a positive local impact across the following areas:

a) Helensville, Hibiscus Coast, Huapai and Upper North Shore

b) Manukau North and Beachlands

c) Manukau South and Franklin

33. Communities living furthest from the city centre will benefit directly from the simplification of the fare table, as they will be capped at a 4-zone fare regardless of the distance travelled.

34. Ferry users will be affected by larger fare increases, enabled by the structural fare changes, to increase cost recovery on ferries. Ferry fares had not increased proportionately in prior years, due to the current ticketing system configuration.

35. Local board engagement has not been sought in relation to the annual fare review or the independent review of the fare structure.

Tauākī whakaaweawe Māori

Māori impact statement

36. Māori engagement has not been sought in relation to the annual fare review or the independent review of the fare structure.

Ngā ritenga ā-pūtea

Financial implications

37. The average publicly funded cost per customer has escalated considerably in recent years. This has disproportionately impacted train services due to supressed demand with on-going disruption and increased track access charges.

Average publicly funded portion*		Average fare cost to customer
Bus	$4.66	$1.91
Train	$12.34	$3.06
Ferry	$9.85	$3.25
Overall	$6.18	$2.17

Table 3: Average public funding by mode

38. The average fare cost to customer recognises fares across all concession types, including SuperGold which has a zero cost to customer allocation.

39. A forecast will be provided in March 2025 on the impact of increased utilisation across all modes.

40. The forecast financial impact from the annual fare review changes are:

Mode	Average weighted increase	Revenue increase (excl. GST)	Change in Farebox	Patronage impact
Integrated Fares	+5.2%	$4.3m (+2.4%)	+1.15% to 34.79% (from 33.64%)	-1.0m journeys (-1.4%)

Table 4: Forecast financial impacts

41. The average weighted fare changes of +5.2% is above CPI of +3.3% (annualised to June 2024), and necessary to assist in the ongoing Farebox recovery efforts. The patronage impact is modelled using AT’s standard fare review elasticities.

42. Implementing fare reforms in package 1A along with the annual fare review allows AT to balance multiple objectives, including simplifying the fare structure, improving farebox recovery, and enhancing fairness and accessibility.

43. The additional farebox impact of package 1A is +$3.3m in revenue.

Figure 3: Revenue impact of farebox reforms

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

44. Aligning implementation of these fare reforms to coincide with the annual fare increase in February 2025 is dependent on successful completion of Open Loop and Auckland Integrated Fare System (AIFS) infrastructure work currently underway. These programmes of work are both on track, however the risk to be managed is to ensure sufficient test resource and the availability of test environments for proposed changes.

45. Removing the off-peak discount and simplifying concession fares are expected to increase revenue but could also discourage some users. The proposed ferry fares increase could have a similar impact on frequent commuters who rely on these services for daily commuting.

46. A proactive communications strategy to inform, educate and engage with affected customers and the wider public will be developed to ensure rationale and benefits are well understood.

47. A pre-launch phase with targeted communications activity for media, key stakeholders and their communities in November and December will ensure there is adequate time for people to understand how the changes affect them and provide opportunities for further clarification.

48. The recent addition of the $50 seven-day fare cap will mitigate the cost increase for frequent commuters. Noting the $50 fare cap itself will be reviewed periodically.

49. Not to increase fares as proposed will impact our ability to offer PT services that meet the operational performance and farebox recovery expectations of our funders (council and government).

Ngā koringa ā-muri

Next steps

50. Milestones and timelines are detailed as follows:

Activity	Date
Establish project group to prepare and test fare changes	November 2024 / December 2024
Develop marketing & communications strategy and campaign materials, begin targeted communications activity.	November 2024 / December 2024
Launch campaign and circulate materials across network	January 2025
Distribute new fares schedule to operators	January 2025

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇨	Proposed Fare Schedules FY24-25

Ngā kaihaina

Signatories

Author

David Stephenson - Public Transport Growth Manager (AT)

Authorisers

Dean Kimpton – Chief Executive (AT)

Barry Potter - Director Resilience and Infrastructure

Resolution Number	Item	Status
TICCC/2024/113	Item 9 - Notice of Motion - Cr Ken Turner - Storm damage to Council Road Reserves	Reports to the Transport, Resilience and Infrastructure Committee meeting 7 November 2024: · Resolving road reserve damage due to 2023 severe weather events. · Recovery Office Update.
TICCC/2024/114	Item 10 - Annual Reporting of Asset Management Maturity and Policy Implementation Update	Presenting a tailored asset management report to the Community Committee at its next meeting. Scheduling meetings with Finance team to ensure information presented is incorporated into budget making (annual budget and LTP)

No.	Title	Page
a ⇨	Transport, Resilience and Infrastructure Committee Forward Work Programme
b ⇨	Memorandum: Notice of Motion - Chairperson K Smith
c ⇨	Memorandum - Release of the final LTR - Setting of Speed Limits 2024

[1] Roads are defined as the area from the private property boundary on one side to the property boundary on the other. This includes the berm (grass verge), footpath and carriageway.

[2] The term vehicle crossing describes the facility for vehicle access between a road carriageway and a site boundary. A driveway is a vehicle access lane located on private property.

[3] Pursuant to Standing Order 1.9.7, the dissenting vote of Member L Potauaine was recorded.

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

Date	Subject
30/09/2024	Memorandum: Notice of Motion - Chairperson K Smith – Request for a review of Central Crosstown Bus Changes 2024, in regard to changes proposed for Route 64
18/10/2024	Memorandum: Release of the final Land Transport Rule: Setting of Speed Limits 2024

Date	Subject
18/10/2024	Site visit: Waikato Water Treatment Plant
23/10/2024	CONFIDENTIAL: Transport, Resilience and Infrastructure Workshop – Delivering Room to Move – Our parking and kerbside space plan

Author	Taryn Muir - Executive Officer
Authoriser	Barry Potter - Director Resilience and Infrastructure

Author	Lata Smith - Kaitohutohu Mana Whakahaere Matua / Senior Governance Advisor
Authoriser	Barry Potter - Director Resilience and Infrastructure