Late Reports Agenda of Ordinary Council Meeting

Ordinary Council Meeting Agenda

21 April 2020

1 Business

1.1 Chief Executive Report

File Number: A11393220

Author: Marty Grenfell, Chief Executive

Authoriser: Marty Grenfell, Chief Executive

Purpose of the Report

1. This report is to provide an update and summary of some of the key areas within Council.

Recommendations

That the Council:

(a) Receives the Chief Executive Report;

(b) Approves a funding contribution of $350,000 (being a ‘bring forward’ of capital expenditure from the 2021/22 financial year) for the next phase of the Memorial Park Recreation & Leisure project, subject to BVL securing the remaining $350,000 from TECT.

Tauranga REcovery plan

2. A Tauranga Recovery Plan is being developed to provide community and stakeholder reassurance that the Council is focussing on the recovery phase and providing support to businesses and communities to help them through the challenges they are facing due to COVID-19.

3. A draft copy of this document will be tabled at the meeting for your reference. Decisions made at the 21 April Council meeting will be reflected in this document, which will then be prepared for community and stakeholder engagement.

COVID Planning Team

4. A pandemic planning team was formed early in 2020 as the global pandemic situation started to develop. This team began meeting on a regular basis, in particular to review and update the organisation’s pandemic and business continuity plans, and to look closely at what resources would be needed to support a more remote way of working. In early March, as the seriousness of the situation developed, the frequency of meetings increased; with the team channelling its focus specifically on COVID-19 and the impacts and risks that were likely to affect Tauranga City Council, our community, and our residents. The team was renamed the COVID Planning Team (CPT) at this time.

5. By mid-March, it was evident the Government was planning significant restrictions on the population in an effort to stamp out COVID-19. CPT was meeting daily by this stage, in an effort to prepare for and to support the organisation through the transition from business-as-usual to a new way of working. The purpose of CPT was to “look after our people and ensure our essential services can continue for the community”.

6. The announcement on Monday 23 March of an impending move to Alert Level 4, and the associated lockdown, saw CPT step into a lead role to help guide the organisation through the upcoming transition. Communication with staff in an open, honest and transparent way was fundamental, as was providing the resource needed to ensure the essential services that Council provides for the community could continue. Staff were instructed to go home and make appropriate arrangements to ensure that they and their loved ones were safe and ready for lockdown. The Digital Services team upgraded, in record time, the Council’s internet connection so the entire organisation could work remotely. All of Council’s public-facing facilities and services were closed to the public, including those managed by our CCOs. Our essential service teams enacted their business continuity plans and made ready to deliver their BAU in a new way. In essence, in the space of a little over 48hours, the entire organisation moved from BAU into a completely new and different way of working, without fuss or drama, and without dropping the ball on the delivery of any of our essential services.

7. The following weeks have seen the need for CPT’s support and guidance decrease on a daily basis, as problems have been solved and as the organisation adjusts to a “new normal”. Staff redeployment plans are in place and ready as needed, Council continues to support the operation of the EOC by providing staff on secondment, teams have installed appropriate COVID-19 signage all over the city to support the Government’s physical distancing messaging, the majority of our staff are successfully working from home, and our essential services continue to operate without issue or incident. Most importantly, people managers are checking in with staff on a very regular basis to ensure they are safe, well and have everything they need to operate in their bubbles.

8. Over the last 10 days, CPT has focused more specifically on:

(a) planning and preparing the organisation for a change in Alert Level, while continuing to ensure the ongoing welfare of our people and ensure our essential services can continue for the community; and

(b) setting up a team and beginning work on the short-, medium- and long-term recovery of the organisation and the city.

Community Welfare

9. The Community Development team has been working closely with the Emergency Operations Centre (EOC) to support the coordination and delivery of welfare services to our vulnerable and at-risk local communities. Initiatives include:

(a) Collating information on community organisations in the city and the services they are providing during the lockdown period – this information is available on Council’s website here and updates are provided to the EOC daily;

(b) Compiling a list of funding options for circulation to community organisations, so they know where they can get financial assistance;

(c) Creating a flyer with essential numbers and information for those who do not have internet access, or who find using technology difficult – hard copies have been provided to the Foodbank, Good Neighbour and other agencies for distribution;

(d) A similar flyer with information specific to migrant communities is being drafted in five languages;

(e) Developing a simplified fact sheet (based on an Office for Seniors media release) that has all the key information and local contact numbers to support our older population – a lot of feedback has been received that older people are overwhelmed by the volume of COVID-19 information currently available;

(f) Supporting the TCC Contact Centre and their joint project with MSD to call vulnerable older people, to provide advice and ensure they have information on how to get ongoing support, especially those feeling lonely and socially isolated from their normal networks;

(g) Regular communication with Age Concern and other agencies to address any gaps in the support services for older people during the lockdown;

(h) Providing support to the EOC to streamline food relief and assistance with grocery shopping for those in need – good work is being done in this space and it will be better supported with a coordinated referral system soon;

(i) Supporting the Police and other social agencies, including The People’s Project, to house Tauranga’s homeless population in temporary motel accommodation – although there are enough motel units for all the known rough sleepers, at least one and maybe more, for a variety of complex reasons, are refusing to go and this is going to require some additional work;

(j) Being in constant contact with many community organisations, so there is regular and timely visibility of the community’s concerns and queries – these are being dealt with as appropriate and/or escalated to the EOC for resolution.

employees and contractors

10. People & Engagement have been focused on supporting external and internal stakeholders during the COVID-19 pandemic. COVID-19 requires workplaces across NZ to consider new and different ways of working.

11. TCC has considered and acted upon several initiatives to maximise the efficiency of Council operations during Alert Level 4, whilst balancing the need to deliver core essential services, support Civil Defence emergency management operations and prepare for our city’s recovery.

12. Council has an important and on-going role in providing services to our community and will be instrumental in supporting the region as we move to a ‘rebuild’ phase. We therefore need to ensure we balance cost efficiencies with an ability to meet current and upcoming needs in key priority areas. Specific workstreams are underway to alleviate cost pressures as follows.

13. A workstream is underway to identify and match the people resource needed for our key priority areas with people who are unable to work from home, or have capacity. Redeployment has focused on ensuring we deliver essential services, support the Civil Defence Emergency Operations Centre (EOC) and related workstreams, and resource other important TCC projects or initiatives that need to continue or that are new because of COVID-19. In addition, within and amongst teams, general redeployment has been organised by people leaders outside of these priority areas.

14. All but essential recruitment has stopped. If contracts with new staff had already been signed, start dates have been renegotiated, where possible.

15. We have reviewed the use of casual, fixed-term, contract and agency resource. Notwithstanding contractual provisions, only resources critical to key priority areas remain. All casual staff have been contacted and advised we are unable to offer any further work.

16. We have ceased any non-essential work activities, such as training, across the business and placed low-priority projects on hold.

17. All staff who are not in essential services or COVID-related work have been encouraged to consider taking annual leave. Whilst our focus has been on supporting the wellbeing of our staff (who are juggling families with work), this also serves to reduce our leave liability.

18. TCC does not qualify for the Government wage subsidy, however this is being reviewed regularly, in the event that the hurdles for entry are relaxed.

Communications & Engagement

19. The move to Alert Level 4 on 25 March required immediate and sustained communication to our stakeholders and public on service and facility closures. This included media advisories, website changes, social media posts and design of signage for all public facilities, such as parks, beaches, boat ramps and Mauao. Internal communications centred around proactively communicating with our people, providing information on working from home, running teams remotely, juggling families with work and maintaining the wellbeing of our workforce. For the Engagement team - some of our community engagement projects will continue – albeit with the team’s support for new and innovative ways of reaching our communities.

20. Customer Services continues to operate a 24/7 Contact Centre for our communities and has expanded its offer to provide proactive phone support for the city’s elderly, via the EOC. The team has made 200-300 calls per day to the elderly, under the guidance of the Ministry of Social Development.

21. Takawaenga is working closely with hapu and iwi on behalf of TCC and the EOC.

22. Democracy Services is being challenged to explore new ways of ensuring democratic and transparent processes continue, via technology use.

project investment post Covid-19

23. This commentary is triggered by:

(a) COVID-19 implications for the construction sector;

(b) The need to identify shovel-ready projects, and seek efficiencies to bring these to the market quicker than ever before, to meet the demand of stimulus packages, while maintaining rigour around decision-making and expenditure; and

(c) The current state of the sector, which is being investigated by sector partners and central Government through the Construction Accord. This work seeks to get to the bottom of exhausting, expensive, litigious and combative pathways where, in a pre-COVID boom-time, construction companies struggle to be sustainable, suffer losses or even go into liquidation, with blown budgets or project objectives that are not met for clients like us.

24. The opportunity that central Government is providing around economic stimulus packages, particularly the “Shovel-Ready Projects” should be fully taken advantage of. This is not limited to just receiving the funding and making TCC’s financial position stronger, but also our obligation to the local economy to pass this funding on as quickly as possible, to support businesses though the recovery phase, in a sustainable way.

25. To enable this, we will start developing strategies and propose potential changes in policies, both for how we procure services and delivery, and the contract forms we use to enable appropriate risk apportionment. These may be broader policies, or be sought on a project-by-project basis, depending on scale and complexity.

Procurement

26. We will need to be agile when engaging the professional services industry (design, planning etc) as early as possible, to expediate designs so that construction can begin within tighter timeframes. Depending on the availability of stimulus funding for our region, these resources may become scarce, particularly where there are niche specialities. When central Government funding is confirmed with local authorities across the country and the sector looks to lock in these services for their projects, it is likely many companies will already have shed resources, and some resource capacity will be scarce.

27. This approach should also include how we approach the contracting market. Alternative procurement methods such as Design & Build, Early Contractor Involvement, cost-plus arrangements, or alliances should all be considered, where they provide a mechanism that allows contractors to be engaged earlier than our normal procurement processes provide for. This allows contractors to provide valuable input during the design process and also provides opportunities to start construction significantly earlier than for traditional procurement.

Contract forms

28. Alternative procurement methods such as Design & Build, Early Contractor Involvement, cost-plus arrangements or Alliances should also be associated with different contract forms, which change the way contracts are executed, risks apportioned, works are paid for, and disputes are resolved. We will need to look at contracts differently and change the way we think about the contractor-principal-subcontractor relationships and apply a bespoke approach to contracts, where it would suit the demands of stimulus packages and our own needs.

Partnerships

29. Partnerships for funding, financing, delivery, ownership and operation should also be open to new ways of working. We see opportunities in partnering with neighbouring councils (to create attractive scale) and central Government for expertise, stimulus and even delivery. We also see opportunities in partnering with the private sector for early contributions, financing options, and risk identification and mitigation. These all align with procurement models and contract forms as discussed earlier.

30. As opportunities become clearer with regard to the level of stimulus investment available, and for what projects, we expect to seek council endorsement/approvals for situations where these partnership models will generate good value propositions.

COVID-19 Economic Stimulus Opportunities

31. The Government is considering a range of opportunities for COVID-19 related economic stimulus. The key workstreams TCC has been involved with are outlined below:

(a) SmartGrowth submission of Urban Growth Transformational projects, which was submitted to the Ministry of Housing and Urban Development (MHUD) on 6 April 2020. This focused on infrastructure to support both greenfields development and residential intensification, providing water, wastewater, stormwater, transport accessibility and connection (with focus on multi-modal) and community amenity.

(b) Crown Infrastructure Partners submission of over $1 billion of shovel-ready projects (approved by formal Council resolution 14 April 2020). TCC submitted its application on 14 April. There was also a letter signed by the Mayors of the wider Bay of Plenty Region and Chairman Leeder, which supported the application.

(c) Input into the MFE process to consider opportunities to fast-track RMA processes, to enable economic stimulus activities to proceed at pace.

(d) Growth Council Consortium of Tauranga City Council, Hamilton City Council and Queenstown City Council is continuing discussions on opportunities for support for growth councils with heavily constrained balance sheets.

Memorial park recreation and leisure hub

32. When considering the Crown Infrastructure Partners (CIP) Economic Stimulus application on 14 April Council resolved to include the Memorial Park Recreation and Leisure Hub. Unlike most of the other priority projects in the CIP package, this project does not have an agreed project development budget in the 2019/20 or 2020/21 financial years. For the project to be ‘shovel ready’ by May next year, project development work estimated at $700k is required to be started imminently. Key cost components would include project management and due diligence, detailed design, engagement and consenting.

33. TECT has advised BVL that if Council contributes $350k towards the project development work, they are likely to be able to match that sum. We propose to bring forward $350k of the project’s capital budget from the 2022 financial year to undertake the work. This would have a total rates impact of $14k (TBD) in the coming financial year.

34. Note that much of this work will need to be undertaken, irrespective of the response from the CIP, for the project to be considered through the Long Term Plan and as an investment proposition to potential co-funding parties. Should the CIP application be rejected and the project timetable be slowed or stopped due to capex shortfalls, we can defer components of the project development work. It should be noted that the recently completed Needs Assessment and the Te Papa intensification project have both identified the need for these upgraded community facilities. Proceeding with the project development investment at this time should not result in abortive costs, as the work will be able to utilised at a later date if the capital funding is unable to be secured in the near term.

35. Staff propose to report to an upcoming meeting to confirm project governance and engagement plans and to provide for more detailed consideration of project scope.

Annual Plan Consultation

36. Consultation for the draft Annual Plan 2020/21 opened on 3 April and runs through until 5pm on 3 May. We are promoting the consultation through our website, media releases, radio (NZME and Mediaworks stations), social media (Facebook, Neighbourly, LinkedIn), digital advertising (NZME, Sun Live) and print advertising in the Bay of Plenty Times. Planned advertisements in the Weekend Sun have been cancelled, as the newspaper is not being printed during the lockdown. Some other advertising channels, such as billboards and bus backs, were considered not to be cost-effective during the lockdown.

37. A media release announcing the start of consultation was issued to local media, along with the Consultation Document and summary. We’re aware that there will be some concern about going out with a 7.6% average rate rise proposal, but in short, the statutory consultation process has to start now. We have endeavoured to make it clear in these communications that we will be taking a flexible approach which will take into account the impacts of the pandemic lockdown in our decision-making. But whatever the final shape of the annual plan is, it’s vital that we have a budget that will allow us to focus on and invest in the recovery of our city once the lockdown is over.

38. As at 16 April we have received 43 submissions.

Engagement on Growth-Related Projects

39. Community engagement on growth-related projects continues, to enable the projects involved to progress.

40. The Te Papa Plan and Housing Choice Plan Change projects commenced community engagement on Tuesday, 7 April 2020, under the ‘Shape Your City’ brand.

41. Given COVID-19, we have significantly revised our communications and engagement methodology from a combination of face-to-face and digital channels to a digital-focused approach. This will allow our community to engage with the projects in their respective bubbles, if and when they feel they can give us their time and brain space.

42. The project teams have developed a series of ‘ideas’ (projects and other initiatives) for the Te Papa Plan, and proposals for city plan rules and urban design guidelines for duplexes, townhouses and apartments. For this phase of communications and engagement, we have two main goals:

(a) to inform and update the community about the progress of these projects, why they are important for our future and how they support us in managing growth; and

(b) to seek the community’s feedback on the ideas and proposals by engaging them through an online survey, via our website and social media channels. We are also working with our project stakeholders to disseminate the information through their networks and channels.

43. During this period, the project teams will also be engaging with key stakeholders, including SmartGrowth forums, Government agencies (e.g. Kāinga Ora, MHUD), Accessible Properties Limited, New Zealand Institute of Architects and other professional bodies, the Sustainable Business Network and wider community representatives.

Cameron Road Short-Term Multi-Modal Project

44. The project team is continuing with concept option refinement and will shortly be determining a preferred option for preliminary design.

45. In light of the current lockdown, engagement is continuing through webinars commencing on 13 April for all stakeholders and Community Liaison Group representatives. The webinars will provide participants with a project progress presentation and run through the 3D concept designs as video flyovers, enabling attendees to provide live feedback. All engagement feedback will be recorded and utilised during the Multi Criteria Analysis phase, to determine a preferred option by the end of April, from which to develop a preliminary design. This process meets the NZTA Business Case requirements and will enable the project to be progressed, whilst still “taking the local community on the project journey”.

KerbSIde Waste Collection and Facilities RFP

46. The RFP process was placed on hold until 24 April 2020 when we entered Alert Level 4. This timeframe is being reviewed weekly, to take account of any changes to alert levels and was agreed by both TCC and WBOPDC.

47. The reason a hold was introduced was that many of those who have responded to the tender are providing essential services (either on behalf of our council or for other councils/businesses in the region), under very trying conditions. We wanted to respect the pressure that this may have placed on them and give them some breathing space in order to put their best effort forward, on a level playing field.

48. We will continue working with the respondents to ascertain their ability to participate in the procurement process in a meaningful way, considering the impacts that COVID-19 will undoubtedly have on their business, and ability to respond. Once we can confirm a new timetable, we will share this with the Waste Project Advisory Board. Unfortunately, the original target of presenting a report to Council in June is already compromised. Please keep in mind that the RFP responses have an expiration of 6 months, and that the responses cover waste facilities in our city which need significant investment over the coming year/s (NB: CIP applications have been completed for the facilities).

49. We are looking to provide a comprehensive review of project timing, once we know how and when the lock-down finishes, and will also provide a comprehensive update to the community at that time.

Mauao Base Track

50. The Mauao base track slip remedial work is complete. The bulk of the works were completed prior to Christmas 2019, but a decision was made to halt works so the track could be used over the busy summer holiday period. It closed again in late-January, so contractors could install the remainder of the soil nails/anchors on the bottom slope. The project engineer has received QA documentation from the contractor and has signed-off that the works have met the design, so the project is now complete. The approved budget was $718,610 and the project was completed $43,387 under budget at a total cost of $675,223. The track was opened and was being well-used by the public prior to its closure due to the COVID-19 lockdown. At some point later in the year, Heritage New Zealand has indicated that they expect the temporary stairs to be removed, but an exact date for this is still to be confirmed.

Cruise Ship CBD Shuttle Buses

51. In February, under Council delegation, the CE confirmed that $20K would be made available to Downtown Tauranga (DT) to support a free shuttle bus service to the CBD for cruise ship passengers. At the time, there were 18 planned cruise ship days remaining in the season. Due to COVID-19, cruise ships were banned from New Zealand waters and only 10 of the 18 planned cruise ship days eventuated. It is proposed that a fair contribution to reflect those 10 days would be 55% of the $20K contribution. This results in a final contribution amount of just over $11K.

Tauranga Western Bay of Plenty Safer Communities (TWBSC) re-accreditation

52. Tauranga City and the Western Bay of Plenty sub-region are on track to achieve re-accreditation and remain an International Safe Community. Our application – including letters of support from key strategic stakeholders – was sent to Safe Communities Foundation New Zealand (SCFNZ) on 18 March. From Monday, 6 April our application began a five-week panel review process where delegates from Australia, America and NZ review the application against accreditation criteria. At the end of the five-week review period, TWBSC will receive feedback and recommendations via video conference. A planned review panel site visit to Tauranga set for 7 May has been cancelled, but at this stage, the reaccreditation ceremony, official signing of the application and awarding of plaques to Mayor Tenby and Mayor Webber on behalf of the city and sub-region, has not changed. This is still set for Friday, 15 May, but this may change. Tauranga has been accredited as a safe city since 2008 and WBOPDC since 2014. This will be Tauranga’s third accreditation and WBOPDC’s second.

Harington Street Transport Hub

53. Work continues to complete design and costings for the completion of the building, albeit at a slower rate due to the lock-down. Feedback from designers, reviewers and builders has indicated a minimum of a two-week delay, with the biggest impediment being access to the site.

54. Designers are still having to redesign components of the building. We had been looking for the design to be completed by now, and for a pricing confidence level where we could have a lump sum price. It is unlikely that we will have a cost-to-complete, in time for a PAB meeting on 23 April. However estimates will provide a detailed picture for consideration and recommendations.

55. Because of the demanding original design principles and the INERD system, the project team has looked at options to strengthen the building by conventional methods, to find sufficient horizontal and lateral bracing to either complement or replace some of the original design. Although this does not provide a stand-out solution, there may be cost savings to pursue. A disadvantage of using a traditional method of internal walls for bracing is that it may require ventilation jet fans, which could offset the structural cost saving. The design team is looking at this in more detail.

56. While the project team is dealing with structural complexities and increasing costs, the objectives and strategic fit of the HSTH are being considered. How does it fit with Council’s direction of transport, parking and utilisation of space in the CBD, as well as the lack of alternative uses for this particular design (sloping floors) in the future? Stakeholder Strategies are engaged to carry out this work.

57. Additionally, affordability, in light of COVID-19 related revenue reductions, puts pressure on our prioritised expenditure for the next few years.

58. We are expecting to formally report this matter to Council within the next month.

Regulatory and Compliance

59. The key focus of the Regulatory and Compliance Group while under lockdown has been to process as many resource consent and building consent applications as possible, to ensure we are up to date when the lockdown is lifted. The number of applications received during this period has only been slightly lower than normal and while there are some constraints being in isolation, we are processing greater numbers than those received, so making progress. The number of enquiries regarding new applications remains constant.

60. The Environmental Health Team is spending time preparing for their annual audit. Several staff have been assisting in the Emergency Operating Centre (EOC) and one staff member has been seconded to Toi Te Ora to assist with contact tracking.

61. Staff whose role is predominantly inspection-based have, where expertise allows, assisted in processing applications. There has also been a focus on training, completing annual competencies and updating processes and procedures in line with Quality System requirements.

62. Planning for post COVID-19 - the team is also developing protocols that will be put in place when we are able to resume inspections.

Bella Vista Prosecution

63. The prosecutions relating the Bella Vista development at the lakes commenced on 16 March 2020 in the Tauranga District Court. The hearing was set down for a five-week trial. With the nationwide lockdown, and following the first week of trial, the matter has been adjourned, part-heard.

64. The court will now need to find a new date to recommence the trial. The next call-over is in May 2020.

Ministry of Business, Innovation and Employment (MBIE) Report

65. As a consequence of the failed Bella Vista Development, MBIE reviewed Council processes in 2018 and submitted a report identifying 10 areas where process and procedure improvements needed to be made, including the requirement to implement a Plan Change in relation to sediment control. Council was required to report in June 2019 on progress on the matters raised in the report, and again in March 2020.

66. I am pleased to advise that Council’s report submitted on 20 March 2020 has been accepted and MBIE has confirmed that there will be no further formal reporting required on the matters raised within the report. However, they have requested a further update on Proposed Plan Change 30, relating to Large Scale Earthworks and Associated Infrastructure, which was scheduled to be considered by Council in April 2020.

67. This is a very good result for Council, in that MBIE has endorsed the procedures and practices that have been introduced and improved since the failed development and has confidence in Council to continue performing its regulatory functions in administering the requirements of the Building Act.

Strategic Finance Project Update

68. The strategic finance project (aka SAP project) was due to ‘go-live’ over the Easter long weekend. With the impacts of COVID-19, the steering committee agreed to delay the project ‘go-live’ date (timeframe yet to be determined). The primary drivers behind this were:

(a) Impact on staff due to the COVID-19 restrictions and the need for staff to transition to a remote working environment;

(b) Inability to remotely train our people sufficiently in such a short timeframe;

69. The COVID-19 restrictions did not however stop the project. The project has still been able to:

(a) Successfully complete User Acceptance testing (i.e. the selected user community, including the finance team, confirmed that the SAP solution met the requirements set by the project);

(b) Completed a technical ‘Go-Live’ (i.e. the production system has been built and fully configured, with the exception of migrating users and data).

70. These achievements are a credit to the project team, staff and partners involved, who have continued progress through the COVID-19 alert level 4 lockdown.

71. In order to complete the project and officially ‘go-live’, the following still needs to be completed:

(a) Staff training in the system and processes

(b) Migration of users and data from Ozone into the new SAP system

72. In order to determine how we complete the project and in what timeframes, the project team is currently working with the steering committee to define options that consider time, quality, cost and risk. This includes understanding risks and impacts of slowing down the project - e.g. cost impact, impact on project team retention. Other impacts such as the financial end of year are also being considered, along with our ability to deal with training approximately 400 staff, possibly remotely.

The project is currently tracking to the “likely case” funding scenario in terms of cost. However, new forecasting will not be available until the preferred ‘Go-Live’ date option has been decided. It is expected there will be a financial impact, but the scale has yet to be determined.

Bayfair Underpass

73. Waka Kotahi NZ Transport Agency has confirmed that an underpass for pedestrians and cyclists will again be included as part of the BayLink project. The underpass will be a completely new structure and construction will cost $26 million. Our commitment to that is ‘up to $2M’ including our NZTA subsidy, with the real cost to Council being $900K.

74. Council’s continued advocacy, on behalf of the community, for the retention of a grade-separated crossing at Bayfair has had an essential influence in this decision.

Waiari Tender

75. The contract for the Waiari Water Treatment Plant construction is currently out to tender. Following an initial Registration of Interest process, two contractors were shortlisted to participate in the tender. The tender close date is currently 11 May 2020.

76. As sustainable pricing is critical to us, we have queried the two contractors on the effects of COVID-19 and their ability to provide a tender response within the current deadline. Their feedback is that in the current situation, it is challenging to understand what costs will look like even in the near future, and to get pricing from their international suppliers. We intend to continue to monitor the local and international situation and will make a call on whether or not to extend the tender period by 24 April. A short extension would not affect the critical path for the overall project.

77. In addition, we are working with the supplier of the treatment membranes (a separate design and construct contract) to clarify our options and the risks associated with early-delivery and storage of the membranes.

urban form and transport initiative

78. The Urban Form and Transport Initiative is progressing. It will deliver an integrated, strategic and shared funding programme, which defines immediate and future priorities and funding opportunities.

79. Work to date to support the development of a preferred programme can be found at the following link: https://ufti.org.nz/reports/

80. Supporting reports include:

(a) UFTI Interim Report

(b) Multi Criteria Assessment Analysis

(d) Regional Freight Flows

(e) UFTI Constraints Maps

(f) Informing UFTI: A summary of economic information for the Western Bay of Plenty sub-region

(g) Targeted Community Insight report

(h) Phase 1 – Eastern Corridor Report.

81. The Mode Shift and Multi-Modal Solutions Report will also be available in the near future. Other reports are being added as they are completed.

TCC Submission to proposed boundary alteration for Tauriko West

82. The purpose of the proposed boundary change is to enable TCC to progress planning for Tauriko West and enable an efficient planning process in regard to RMA and infrastructure planning. Last year the Local Government Commission, after accepting the boundary change request, called for alternate proposals. Having considered those applications (which included applications to also change the WBoPDC/TCC boundary for land in Lower Belk Road, Keenan Road and Tara Road), the LGC determined it would progress with the Tauriko West boundary change ahead of the other three areas, with consultation being initiated on 20 March 2020. Submissions to the proposal closed on 17 April 2020.

83. Following the close of the submission period, the LGC will consider the submissions received before making a final decision on whether or not to proceed with the boundary change. If it decides to proceed, it will adopt a “reorganisation plan” setting out the details of the change. This is then given effect by an Order in Council. After that, the remaining processes towards development of the land would be subject to planning undertaken by Tauranga City Council.

84. Given the timeframe to make the submission (17 April), TCC staff drafted a submission for Chief Executive approval and lodging.

New transport appointments

85. Brendan Bisley has been appointed to the Director of Transport position and will take up the role on 11 May. Brendan has a depth of experience in building and leading high-performing teams in the transport sector, engaging with central Government agencies, stakeholders and the community. For the last six years, Brendan has been at the Christchurch City Council, managing large infrastructure programmes across the city. These ranged from major general transport projects to the redevelopment of the city centre post-earthquake, delivery of the major cycleway programme, PT priority projects and transport safety projects. Brendan was the chair of the NZ Chapter of the Road Engineering Association of Asia and Australasia for six years.

86. Another key appointment made is the Manager: Transport Network Operations. Russell Troup took up this role on 1 April. This role reports to the Director of Transport and is responsible for leading the operations team, enabling delivery of day-to-day roading, transport services and operational activities, in addition to activities associated with the Council’s Long Term Plan. Russell brings over 20 years’ experience in the civil operations and construction industry, working for a range of local government, consultants and contractors – most recently as an Asset Integrator in Waikato and BOP for NZTA, as well as carrying a national role in asset management operations. Russell is also about to complete his MBA.

Elizabeth Street upgrade

87. Community engagement commenced on the Elizabeth Street upgrade and closed on 25 March. This supports a timeline of bringing a report to Council in June, for a decision on the scope of works to take through to detailed design and implementation. The Farmers redevelopment is a once-in-a-generation development for Tauranga’s city centre, which will bring a significant anchor store back to the area, as well as hundreds of new residents. Council is investing in the streetscape, in partnership with Farmers, and the proposed upgrade will be completed in time for the opening of the Farmers store, currently scheduled for April 2021. The area in front of the development on Elizabeth Street and the adjacent Elizabeth Lane are the main focuses for the upgrade and the recent consultation sought feedback on the concept designs for those areas. Staff are also working closely with Mana whenua, Ngāi Tamarāwaho and Ngāti Tapu, through the design process.

Wharf Street upgrade

88. The upgrade of Wharf Street is one step closer, with confirmation of Higgins Contractors Limited as the construction partner to undertake the works. The upgrade will create a safe and attractive pedestrian environment, to reflect the redevelopment of Tauranga’s city centre as a place for people. The project has strong support from businesses in the street and the contractor will work closely with these stakeholders, and the Urban Spaces team, to ensure impacts are mitigated as much as possible during the construction phase. Staged construction will allow for the lowest impact possible on businesses and their customers, and include upgrade and renewal of underground services such as sewer, water and stormwater. Works were planned to commence on 23 March but have been delayed due to the COVID-19 lockdown. The revised programme for construction will be confirmed, in consultation with businesses on the street, after the lockdown has lifted. Works are expected to be completed by summer 2020.

Attachments

Nil

Ordinary Council Meeting Agenda

21 April 2020

1.2 COVID-19 Council financial relief measures

File Number: A11390378

Author: Ross Hudson, Strategic Advisor

Authoriser: Christine Jones, General Manager: Strategy & Growth

Purpose of the Report

1. To seek approval for a set of COVID-19 response measures that can ease financial pressure on local businesses, community organisations and ratepayers.

Recommendations

That the Council:

(a) Agrees to provide funding provision of up to $100,000 for User Fees and Charges relief until 30 September 2020, to allow consideration of requests for case by case exemptions on the basis of hardship; agrees that this fund should be loan funded and delegates to the Chief Executive responsibility for decisions on that fund.

(b) Direct the Transactional Services Manager to remit water rates penalties set in the 2019/2020 Rates Resolution on all rating units for late payment penalties assessed on 20 April 2020 and 20 July 2020. In accordance with section 80 of the Local Government Act 2002, Council acknowledges that this remission is inconsistent with Council’s Rates Remission Policy, the reason is to recognise the financial impact of COVID-19, and Council does not intend to review the Rates Remission Policy.

(c) Consider amending the Rates Remission Policy as part of the 2020/2021 Annual Plan deliberations, in order to retain a consistent remission for future emergency events.

(d) Continues to work with Central Government to extend its rates rebate scheme; but does not create a ratepayer funded rates rebate scheme.

(e) Provides, for commercial and residential Licence to Occupy, Lease and Grazing agreements, a 50% rent relief for those organisations that meet the Government’s COVID-19 support package criteria, to the end of this financial year (30 June 2020); with any further adjustments and longer-term rent freezes to be considered on a case-by-case basis and factored into revenue assumptions through the 2021 Annual Plan process.

(f) Provides a full rent abatement for community organisations at the Historic Village for the last three months of this financial year and a 50% abatement for commercial tenants; with a further 3-6 month rent abatement for community organisations, and commercial tenants with proven hardship, to be considered in through 2021 Annual Plan process.

(g) Provides a full rent abatement for community organisations and sports groups leasing land directly from Council for the last three months of this financial year; and considers a further 6-12 month rent abatement through the 2021 Annual Plan process.

(h) For Airport leases, that commercial tenants are offered a 50% rental reduction for May and June 2020; with any further rent deferrals to be negotiated tenant by tenant and an estimate of the impact on revenue incorporated in the 2021 Annual Plan process.

Executive Summary

2. On 14^th April Council gave initial consideration to a set of measures that it could undertake to relieve the financial pressure on local businesses created by COVID-19 (See the report on Short-term Business Sector Relief Options) and asked staff to provide further detail of financial implications and recommendations on measures to proceed with.

3. Attachment 1 to this report pulls together potential financial relief measures for businesses, community groups and ratepayers, considers their financial implications and recommends actions.

4. Where we are in a position to make recommendations for resolution at this meeting, we have done so. Some potential measures will require further analysis and will be brought to subsequent meetings or addressed through the Annual Plan process.

5. Of the recommended measures, most impact net debt, with only rent relief proposed for sporting groups ($135,000) impacting on rates funded activity.

6. The principles that we have applied to our analysis have been that relief should –

(a) be short-term and not significantly impact on service delivery;

(b) not significantly impact Council’s revenue, which is being considerably impacted by COVID-19, jeopardising employment creating infrastructure investment;

(c) be flexible and equitable: where feasible be needs-based and dealt with case-by-case rather than through a blanket response;

(d) be generally consistent with current Financial Strategy and not require policy changes unless the benefit to the ratepayer is high and the cost to Council low;

(e) where appropriate and known, be consistent with approaches being put in place in other councils.

7. Alongside these financial relief measures, we continue to work on a summary Recovery Plan that captures the efforts Council and its partners are making, to support Priority One and partners on a detailed plan for recovery and rebuild across our economic sectors, and to work with the Government to access its economic stimulus investment streams.

Background

8. Attachment 1 to this report – Relief Measures for Council Consideration – provides details of our analysis of potential relief measures. In that attachment, we have sought to address both business sector financial relief measures that Council has responsibility for – as identified in the report to the 14^th April Council meeting – and a wider set of measures that cover costs that Council places on community groups and ratepayers.

9. The most effective and efficient measures that Council can implement immediately and without further significant impact on revenues or levels of service are those that cover leases on Council property. A set of relief measures are recommended above.

10. Changes to other user fees and charges are not recommended when weighed against the principles outlined above. It is recommended instead that a time-limited fund (or funding capacity) be created to address applications for relief from user fees and charges on a case-by-case basis, with the Chief Executive being delegated to make decisions on the use of that funding capacity.

11. Rates relief measures are not recommended due to their significant impact on Council’s balance sheet and ability to invest in infrastructure projects that create and retain jobs. Council can consider further rates level and distributional adjustments through the Annual Plan process.

Community Wellbeing Support

12. The economic impact of COVID19 will result in significantly increased need for support across all of our existing at risk and vulnerable communities. In addition, it is anticipated that a new vulnerable group is likely to emerge over the next few weeks and months made up of people who have never had to rely on the welfare and community support system before, but who are now facing a significant change in circumstances.

13. We are also anticipating very real need amongst our community organisations as the impact of increased demand from the community and reduced funding from gaming organisations, private donations, business sponsorships and event fundraising starts to bite. It is anticipated that some central government support for community organisations may be forthcoming but there will continue to be a very real role for local government and funders in this space.

14. Council has been working closely with other major funders across the sub-region to meet the immediate needs of community organisations facing increased demand and/or costs as a result of the nation-wide lockdown via the establishment of a new $600,000 Rapid Response Fund. Community Development contributed the remaining $70,000 of this year’s community match fund budget to the fund. TECT are leading this piece of work and the other funders involved are Bay Trust and Acorn Foundation. (Please note that Council’s contribution is only being allocated to organisations operating within the city boundaries.)

15. With the immediate needs of the community sector being met, the focus has now turned to developing a collaborative, funder-led approach to supporting community organisations through the recovery phase. SociaLink is currently undertaking a brief survey of the sector to understand the impact of COVID-19 and the emerging needs of the social sector. This information, along with the information from the wider Not for Profit (NFP)/community sector and details of upcoming government announcements will help inform the development of a detailed, sub-regional plan which is expected to be completed as soon as possible.

Water rates penalty remissions

16. Staff do not consider it appropriate to set and send out water rates penalties at this time. We have reviewed options for waiving water rates penalties and have identified that it is possible to consider a blanket remission in light of the circumstances of COVID-19.

17. Council resolved the Rates Resolution (DC151) on 27 June 2019 to set the rates for the 2019/2020 rating year. Council also resolved to set a charge (penalty) of 10% on outstanding volumetric water rates, set under section 19, and the water supply base rate for metered connections, set under section 16, of the Local Government (Rating) Act 2002, on 14 October 2019, 27 January 2020, 20 April 2020 and 20 July 2020, at the conclusion of each of the four quarterly meter reading cycles.

18. Although Council’s Rates Remission Policy authorises staff to consider reasons for remissions on a case-by-case basis, a blanket remission is not clearly contemplated by the Rates Remission Policy. To ensure the blanket remission of water rate penalties on all rating units for April and July 2020 is properly authorised, it is prudent to obtain Council authorisation under s80 of the Local Government Act 2002 (which is the mechanism to authorise decisions which are inconsistent with a policy).

19. Section 80(1) of the Local Government Act 2002 specifies:

(a) “If a decision of a local authority is significantly inconsistent with, or is anticipated to have consequences that will be significantly inconsistent with, any policy adopted by the local authority or any plan required by this Act or any other enactment, the local authority must, when making the decision, clearly identify (a) the inconsistency; (b) the reasons for the inconsistency; and (c) any intention of the local authority to amend the policy or plan to accommodate the decision.”

20. Staff considered whether it was possible to change the Rates Resolution. However, the process of effectively resetting the rates is complicated and would not meet the timeframes required to remit the water rates penalties.

21. Staff also considered whether the Transactional Services Manager could remit the water rates penalties under clause 4.4 (Rates Penalty) or clause 4.12 (Exceptions) of Council’s Rates Remission Policy. However, although these clauses would authorise penalty remissions during the COVID-19 pandemic on a case by case basis, it is not clear that Council had extended this authority to allow a blanket remission of rates penalties.

22. Clause 4.9 (Remission for Natural Disasters and Emergencies) of the Rates Remission Policy enables Council to resolve to remit all or part of any rate or charge to provide relief to ratepayers where it considers it fair to do so “where a natural disaster or other type of emergency affects one or more rating units’ capacity to be inhabited, used or occupied for an extended period of time.” This authority has not been delegated to staff and requires a resolution of Council.

23. While the capacity to be inhabited, used or occupied may apply to many (but not all) commercial premises in the district during the COVID-19 lockdown, it will not apply to most residential premises. This means that although a resolution by Council to provide relief in an emergency (which could be considered to cover a pandemic) is contemplated by the Policy, the wording relating to capacity to be inhabited, used or occupied limits this clause. As such, although the spirit of the clause may cover the proposed blanket water rates penalty remission, the proposed remission is technically inconsistent with this clause. Council has the option to consider amending this clause of the Policy as part of the 2020/21 Annual Plan deliberations.

24. Staff can continue to apply their delegated authority under the existing rates remission policies to remit rates penalties on a case by case basis.

25. Based on the previous two water rates penalties set earlier in the rating year, it is estimated that around $20,000-$25,000 of water rates penalties would be remitted under the proposed blanket remission for April and July 2020.

26. Legal staff have reviewed the options, including the option to resolve a blanket remission that is inconsistent with Council’s Rates Remission Policy under section 80 of the Local Government Act 2002. There is no requirement to consult with the community for this decision, and it is not expected that any member of the community would object to council deciding not to apply/charge water rates penalties under the circumstances of COVID-19.

Consultation / Engagement

27. The measures recommended for immediate implementation do not require consultation. Where measures do require consultation, this will be via the 2021 Annual Plan.

Next Steps

28. Where measures have been agreed, we will begin to implement them as urgently as possible. The decisions will also be reflected in the Recovery Plan. Where Council is interested in considering measures that require further analysis, we will bring those back for consideration at the earliest opportunity.

Attachments

1. Relief measures for Council consideration - A11387675 ⇩

Ordinary Council Meeting Agenda

21 April 2020

Attachment 1 - COVID-19 Financial Relief Measures for Consideration, 21/04/20

	Potential relief measure	Considerations	Financial implications	Recommended action
1	Remove user fees and charges for building and resource consent amendments, extensions of time and cancellations (Chamber proposal was until 30 June 2020).	There are policy provisions in place to allow this. Further loss of revenue will inhibit the city’s ability to raise debt to deliver on the current capital programme that is supporting the growth agenda. The building consents and resource consent teams are comfortable that this would not inhibit the provision of their service.	For building consents the combined impact of these remissions would be around $15,000 per month. For resource consents the combined impact of these remissions would be around $7,000 per month. The duration of the removal of this fee will determine its impact on TCC service. A full year reduction in revenue is circa $264,000. Two months (May/June) would be $44,000. While building consent activity is not rate funded so the shortfall in revenue would impact debt. In the case of planning activity the loss of revenue would be rate funded and may contribute to a deficit for the year.	Staff recommendation is that this fee reduction is not supported as staff are still required to undertake this work with costs incurred.
2	Remove user fees and charges for retailers and hospitality businesses (e.g. until 30 June 2020). This includes registration fees, food safety plans and licences to occupy footpaths.	Further loss of revenue will inhibit the city’s ability to raise debt to deliver on the current capital programme that is supporting the growth agenda. This process would be extremely difficult to administer, for limited benefit. · Liquor licencing is charged both annually and 3 yearly (two parts). The fee is set by legislation and a portion needs to be passed to the Crown. · Food safety is paid irregularly (6-18 months). · Hairdressers (and others) are paid annually in September each year so no impact for next 3 months. This means only a small number of those effected would benefit from this and those people would benefit significantly compared to other similar businesses. In the short term, we suggest we continue to work with retailers on a case by case basis in terms of providing any assistance we can.	Council collects approximately $38,000 per month in relation to liquor licences and $2,500 in relation to food permits. There may be additional administration costs in relation to this as it appears complicated to administer. Depending on the Alert level we are operating at, there may be less demand for new licences. The application of this change on existing licence holders would be very inconsistent.	Because of the administrative complexity and uneven distribution of the benefits, this option is not recommended. Council could elect to make a provision (funded from rates) to which these organisations could apply for financial assistance.
3	Provision of a COVID-19 Response fund (funded from rates) to which organisations could apply for financial assistance toward their council-related costs.	Further work would be required to clarify basis under which hardship would be recognised.	The cost of such a fund would include the amount of funding provided, e.g. $100,000 plus administration.	Council to consider whether to approve funds up to an amount of $100,000 and agree that this fund, although operational in nature, should be loan funded.
4	Councils to work with Government to urgently pass emergency legislation to streamline RMA and Building Act approval processes. This includes the ability for council inspectors to approve minor consent amendments while on site.	Fully support and a work stream is in progress. TCC are fast tracking the development of software that would enable remote building inspections, further streamlining this process.	For building consents any reduction in revenue is likely to be offset by reduced costs. For Resource consents, this is expected to result in lower revenue generation, but we are unable to assess the level at this stage.	This is already happening
5	Defer application fees until the building or resource consent or consent amendments are decided.	We do not charge the fee on building consents until it is ready to be collected, which includes all amendments.	Not expected to have any financial implications for building consents or resource consent applications.	No additional response recommended.
6	Councils to pay accounts payable invoices within five working days.	This is a possibility that can be considered noting for regular payees this only creates a one-off cash flow benefit. We have capacity to pay approved invoices where urgent payment is requested. Council’s revenue loss and high debt levels constrain the ability to look at large forward payments.	Where payment is for agreed services provided there would be no significant cost to paying a week or so earlier than standard terms. However, current resourcing levels and the nature of claims review means that it would not be possible to bring forward all payments to a shorter processing time.	Council continues to process claims under contracts and undertake payments as efficiently as we can under current resourcing levels. Where a request is made for early payment for business cash flow purposes we would endeavour to respond supportively subject to agreement on the items being claimed for payment.
7	Refund deposits for bookings at council-owned venues and parks impacted by COVID-19.	Refunds are being provided for cancelled events. BayCourt Deposits for cancelled events have already been refunded. Bay Venues Ltd Deposits for cancelled events have already been refunded. Open Space No deposits held Historic Village No deposits held City Events No deposits held Beachside Holiday Park Deposits for cancelled bookings have already been refunded.	BayCourt Deposits of $1,400 have been refunded for events cancelled due to COVID-19. A further $40,000 of deposits have been carried over to future events. Bay Venues Ltd Deposits of $45,000 have been refunded for events cancelled due to COVID-19. Deposits for future events still being held. Beachside Holiday Park Deposits for visits cancelled due to COVID-19 have been refunded. A further $50,000 of deposits are being held for future bookings. There is still strong demand at the Holiday Park.	No action required as deposits for events cancelled due to covid-19 are already being refunded.
8	Councils to develop principles that will guide their future decisions, with employment being the highest priority outcome.	Employment and housing are already two key considerations in council decision making. A primary focus of our applications to the government response programmes is employment. A discussion on core principles underlying the 2020/21 Annual Plan is scheduled for the 21 April Council meeting.	A number of requests for government support under CIP proposals were identified as providing employment opportunities. Most of these proposals were capital investments that had been approved in the draft 2020-21 annual plan prior to Covid19. Given reduced financial capacity to deliver capital investment as a result of Covid19, the undertaking of these projects is largely reliant on government funding.	Consider through Annual Plan and following feedback from CIP and MHUD processes.
9	Maximising existing rating policies whereby ratepayers can approach council for rates postponement in times of hardship	TCC’s current policy has a number of conditions that must be met before postponement will be considered: · paying the first $1,000 · applying for a rates rebate · not being able to access financial assistance from private sector banking (i.e. being added to a mortgage). Postponed rates are registered as a statutory land charge title and has a postponement fee. The existing policy is not available to commercial rating units.	Estimate $38,500 for each $1M residential postponed rates and $200 cost to register and deregister each statutory land charge on the title. All charges recoverable through the fee that is charged against the postponed rates.	This is available to residential ratepayers with extreme financial hardship. Making postponement less complex than our current policy would move the risk to other ratepayers but the option is proposed later in this table Note: Some work is separately under way to explore a wider NZ-wide rates postponement scheme. However, this work is in early stages of scoping a proposal only and testing central government interest
10	Remission of penalties on water rates whilst in lockdown	Council can decide to blanket remit the water rates penalties on 20 April 2020 and 20 June 2020 through Section 80 of the Local Government Act.	Revenue would be reduced by approximately $50,000 if penalties were remitted on both the April and June water bills. This penalty revenue is normally received across 1300-1400 residential and commercial water users. Water activity is operated as a cash balance activity so any shortfall in revenue remains within that activity (affecting the level of surplus or net debt) and would not impact the wider council rates requirement.	Recommended to blanket remit the water rates penalties on 20 April 2020 and 20 July 2020 through Section 80 of the Local Government Act. Recommend new penalty remission policy (rates and water rates) to assist in 2020/2021 rating year, and future similar emergencies.
11	Rates postponement through the development and approval of a new rates postponement policy.	This is only an option for the next financial year. TCC only has two instalments; so, we have already charged and collected the vast majority of rates for the current year. Implementing a new rates postponement policy may be difficult to achieve by 30 June. It would also exacerbate TCC’s current debt levels and could create some default risk. If a new postponement option was created for commercial property the risk would be on the property owner, not the tenant. TCC would have no assurance that any relief provided to the property owner was passed on to the tenant. Note that most councils talking about postponement are referring to the final instalment of the 2019-20 year. They are also not actually meaning rates postponement. They are talking about changing the due date on the rates payment date and remitting the penalty charge when they pay as discussed in the option below.	The estimated cost of $38,500 for each $1M postponed and $200 cost to register and deregister each statutory land charge on the title. All charges recoverable through the fee.	Do not recommend new postponement policies.
12	Allowing later payment of rates due and remitting penalties for some affected ratepayers in 2020-21	A simpler way to achieve some cashflow relief would be to consider on a case by case basis remitting penalties for late payment. As with other councils this should be done with criteria in place to confirm financial hardship	Alternative option: postponing due date through remission: would costs $19,250 for each $1M of rates delayed payment for 6 months. If 10% of ratepayers were impacted going into 2020/2021and were eligible for a remission this equates to an estimated $224,000 in interest for delayed payment	Recommendation to provide options to extend payment dates in certain circumstances through remitting the penalties under hardship criteria. Recommend new penalty remission policy (rates and water rates) to assist in 2020/2021 rating year, and future similar emergencies to be agreed through the current annual plan process.
13	Extend rates rebate scheme	TCC are already having conversations with Government about extensions to the rates rebate scheme. Note that some councils are establishing their own rebate scheme for those in hardship. Whilst this is an option it would need to be funded across the wider ratepayer base and hence would not be recommended by staff given the ongoing costs on other ratepayers.	Extending the existing DIA scheme would have no costs to council. Creating a rates rebate scheme similar to Hamilton City Council would cost an estimated $600,000 based on TCC’s volume of existing claimants.	Recommend working with Central Government to extend the rates rebate scheme. Do not recommend a ratepayer funded rates rebate scheme.
14	Longer term rental increase freezes	Lease terms vary for each lease. Various rent review dates, some are every 3 years and longer. Restricted immediate benefit when business need. Already reduced rents below market value to allow for TCC flexibility & use.	Based on say a 2% increase the revenue impact of a rent freeze would be about $40,000 per annum.	As this option only applies next year it is recommended that no specific decision be taken at this stage, but any adjustment to budgets could be considered as part of the 2020-21 annual plan process.
15	Rent Relief for Commercial & Residential Licence to Occupy, Lease and Grazing agreements under TCC Property Management. Airport agreements are considered separately below.	277 agreements held with Commercial entities, Residential Tenancies and individuals held directly with TCC Property team.	Total revenue budget $2m for the full year. Forecast reduction of revenue from 50% rent relief till end of year approximately $200,000-$300,000. As property activity is not rate funded this loss of revenue would impact on net debt but not on rates.	50% Rent relief for those organisations that meet the government support package criteria, to the end of this financial year (30 June 2020) For next financial year to consider any further adjustment on a case by case basis to be factored into revenue assumptions during the 2020-21 annual plan process.
16	Historic Village - Rent relief for Community Organisations, and Commercial enterprise at Historic Village.	54 agreements held directly with TCC. Level 4 & 3 restrict return to work opportunities and use of space. Rent relief requests from Tenants has been received. Proposal to help to maintain variety of community services with potential for community benefit exceeding monetary loss.	The cost of 3 months’ rent abatement as proposed to the end of this financial year would be a loss of revenue of about $80,000. If 6 months continued rent abatement for next year the revenue loss for 2020-21 would be $160,000. Because this activity is operated as a cash balance activity this loss of revenue would impact on net debt but not on rates.	For the last three months of this financial year rent relief is proposed of full rent abatement for community groups and for commercial tenants 50% rent abatement. For next year it is proposed that we consider 3-6 month rent abatement for Community Groups and tenants with proven hardship with proposals to be considered in the 2020-21 annual plan process.
17	Open Space - Rent relief for Community Organisations, Sports Groups leasing land directly from Tauranga City Council for the remainder of this year and next year. Any agreements with BVL & Tauranga Race Course Trust are outside this proposal and considered separately.	151 agreements held directly with TCC across Open Space Portfolio. Alert Levels 4,3 & 2 restrict gatherings and therefore impact membership and revenue for organisations. Rent relief requests from Tenants received. Council proposal would help to maintain variety of clubs in Tauranga, with potential for community benefit exceeding monetary loss? Community groups related to open space are different to those in Historic Village as they have a more limited period of the year in which to collect their revenue and so have been treated slightly differently to the group in 16 above.	Full rent abatement for the last 3 months of this year is proposed of $135,000. Total Annual income of $555,824 which would be lost for 2020-21 annual plan if a proposed full rent abatement was considered. Because this activity is rate funded the proposed rent abatement will impact on rates requirement and may contribute to a rates deficit.	For the last three months of this financial year rent relief is proposed of full rent abatement for community groups For next year it is proposed that we consider 6-12 month rent abatement for Community Groups with proposals to be considered in the 2020-21 annual plan process.
18	Airport Commercial Leases	The commercial lease portfolio operated by the Airport has tenants from across the board i.e. Bunnings to car dealers and food manufacturers. There have been varying requests for some form of rent relief in the short to medium term due to the lock down period and the associated loss in revenue.	The monthly income from these leases is $250k approx. pcm. The recommendation to reduce rent by 50% for the last two months of this year would have the recommendation would have a cost of $250k. Because there is no rates funding in the airport activity this loss of revenue would be reflected in net debt but not in rates requirement.	That commercial tenants are offered a 50% rental reduction for 2 months. Any rental consideration applying to next financial year should be a deferral rather than relief with details to be negotiated tenant by tenant. An estimate of the impact on revenue would be incorporated in the 2020-21 annual plan process.
19	Review procurement processes to ensure local contractors have greater opportunity to bid for/secure work and for work to come on stream quickly to support retention of local skilled workers	Staff are developing a procurement strategy to enable greater use of streamlined procurement processes. The strategy will reflect some of the disaster recovery procurement options that were built into the rules governing public-sector procurement following the Christchurch and Kaikoura earthquakes. It is not considered that any change to Council policy or approach is needed as there is already flexibility to look at alternate ways of procurement. However, the strategy will consider: Engaging early with local businesses so they are aware of opportunities and appropriately supported to have the right information to put in bids for work; How projects are framed so we present different packages to the market - a mix of big, medium and small to make sure that the smaller operators have the opportunity to bid (or larger suppliers use local companies in their own bids); Placing high value on suppliers who support the local economy, reduce local unemployment and generally recognise “wins” for the local community.	Streamlined procurement processes should not have a detrimental financial impact. Local suppliers where appropriate are already used. However, it is important that Council and our contractors source appropriate skills and materials which may involve going outside the region. Otherwise project risks including financial risks would be increased.	If we are successful with CIP shovel ready bid there is further work required to ensure that we can complete the proposed work efficiently and work collaboratively rather than competitively with other councils and agencies in the region. Consider options through procurement strategy review.
20	Revision of User Fees	Council could review the proposed increases in user fees. An example of this relates to dog registrations (see separate report to this meeting). Due to the impact of COVID-19 it has been recommended to keep this unchanged from the current fee. A second example relates to parking fees. Parking fees will be set as part of the 2020/21 Annual Plan Process.	Not increasing the registration fee for dogs would reduce Council revenue by approximately $57,000 (excl GST). Not increasing the parking fee would have the impact of reducing revenue by $885,000 in the 2020/21 year. This revenue reduction is likely to be further exacerbated by COVID-19 induced delays in the opening of Harrington St carpark and reduced parking demand. This loss of revenue would be reflected in net debt but not in rates requirement.	Note the dog registration fee is the subject of a separate paper at today’s council meeting. Consider parking and other user fees and charges as part of the current Annual Plan consultation process.


AGENDA Late Reports Ordinary Council Meeting Tuesday, 21 April 2020

Date:	Tuesday, 21 April 2020
Time:	1pm
Location:	Tauranga City Council By video conference
Please note that this meeting will be livestreamed to Council’s YouTube channel if possible; a recording will be publicly available on Tauranga City Council's website: www.tauranga.govt.nz.
Marty Grenfell Chief Executive